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By Andrea Gellert

As someone who has spent the majority of her career as an advocate for small business financing, I am a big fan of shopping local. A recent Civic Economics report determined the economic impact of shopping local: 54 percent of the revenue from local retailers goes back into the community, as opposed to 14 percent from national retailers. And eating at local restaurants does the same thing: 79 percent of local restaurant revenue stays local, compared to only 30 percent from the national restaurant chains.

That said, I know that for a small business it can be very tough to compete with larger companies, who have economies of scale that small businesses just don't have. But small businesses have powerful ways to differentiate themselves, and here are five suggestions I think can help you beat the big box stores, or national chains, in converting even more customers to the idea of shopping local:

1. Don't forget that business is personal

2. Remember, just being good at what you do isn't good enough

3. Level the playing field online

4. Get social

5. Get out and network

Competing against the big box stores might be a challenge, but there are lots of ways to win. These five suggestions are a great place to start. What are you doing to beat the big box stores?

Image (cropped): Flickr/bisgovuk

Andrea Gellert is Senior Vice President of Marketing at OnDeck, where she brings more than 15 years of small business marketing and client service experience. Most recently, she was VP of Client Services/Operations at Group Commerce. Andrea also spent 15 years at American Express, holding key leadership positions in both the OPEN small business and Merchant Services divisions. Andrea graduated magna cum laude from Harvard and received an MBA from the Kellogg Graduate School of Management at Northwestern.

The "1600 Pandas World Tour" kicks off in Malaysia next month.

The art installation, that promotes the message of panda conservation and sustainable development, will visit more than 15 iconic landmarks across the country from 21 December 2014 to 25 January 2015.

The "1600 Pandas World Tour" which started in 2008 as a collaboration between WWF and acclaimed French artist Paulo Grangeon, has since appeared in more than 100 exhibitions across various countries/regions such as France, the Netherlands, Italy, Germany, Switzerland, Taiwan and Hong Kong. Malaysia will be the 1600 Pandas' third stop after Hong Kong in the Asian region.

Paulo Grangeon, an enthusiastic French sculptor with more than 30 years of experience, created the 1600 paper mache pandas in various poses, emotions and sizes using recycled paper, as a symbolic representation of the amount of pandas left in the wild.

In celebration of the Malaysia leg tour, Paulo Grangeon will also be creating a special version white mascot paper mache panda representing the uniqueness of Malaysian culture to be used for workshops.
 

Businesses face challenging new carbon emissions targets set jointly for the next 15 years by the US and China.
The US is committed to cut its 2005 level of emissions by 26%-28% before 2025. China aims to peak its emissions and intends to generate 20% of its energy from zero-emission sources, both by 2030.

As part of its effort China agreed to increase its zero-emission energy generation from nuclear, wind, solar and other sources by 800-1,000 gigawatts by 2030. This exceeds the output of all China’s present coal-fired power plants and is almost the equivalent of all US electricity generation capacity.

The ultimate US objective is an 80% cut in carbon emissions by 2050.

President Barack Obama and President Xi Jinping stated the targets in an agreement reached at last month’s Asia-Pacific Economic Co-operation summit in Beijing.

Obama said afterwards: “As the world’s two largest economies, energy consumers and emitters of greenhouse gases, we have a special responsibility to lead the global effort against climate change.”

He hoped all countries could endorse a global agreement before the UN climate conference in Paris in November and December next year.

Obama will encourage emissions reductions in the US by emphasising the energy cost savings and offering incentives to develop wind and solar power. A White House official said: “Consumers and businesses will save literally billions of dollars.”

Mark Kember, chief executive of The Climate Group, an international non-profit group dedicated to building a prosperous low-carbon future, said: “This is the news that many governments and businesses have been waiting for. It will help create the confidence for other national governments to follow suit and implement the measures needed to avert runaway climate change.”

Evan Juska, the organisation’s head of US policy, said: “Barack Obama’s commitment to reduce emissions by 26%-28% by 2025, compared with 2005 levels, although it falls short of what the science requires, shows that the US hasn’t given up on its ambition to be a global climate leader.”

Ed Davey, the UK government’s climate change secretary, looked forward to discussions with the US and China on limiting the global temperature rise to less than two degrees.

Critics include Republican Senator Mitch McConnell, who believes reducing coal use will squeeze middle-class US families and struggling miners, raise energy prices and cut jobs.

The environmental group Friends of the Earth had further criticism. Asad Rehman, its international energy campaigner, said: “This isn’t the major breakthrough the planet needs. The US pledge represents at most a woeful 15% cut on 1990 levels – a weaker target even than that promised by Obama in Copenhagen in 2009. Much greater ambition is needed to stop the worst impacts of climate change.” 

Banks are being scrutinised by the UK’s Financial Conduct Authority (FCA) following record fines imposed in three countries over foreign exchange rigging.

On the announcement of the operation, to make all banks remove the causes of their failings, George Osborne, the UK’s chancellor of the exchequer, said: “Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone.

“It’s part of a long-term plan that is fixing what went wrong in Britain’s banks and our economy.”

The markets were manipulated in a free-for-all from 2008 to 2013, reported the FCA after the investigation that led to the fines.

There were “ineffective controls” so that traders could put their banks’ gains before clients’ interests.

In this corrupt culture traders sold foreign currency to clients at a higher price than the figure paid so that the bank profited.

Although from different banks, they formed tightly knit groups to share information about client activity. They used code names for clients, including The Players, The Three Musketeers and The A-team.

In one instance RBS was reported to have made $615,000 (£393,000, €494,000) after traders drove down the pound against the dollar and paid lower amounts to clients.

The FCA fined Citibank £225,575,000 ($352,873,000, €283,308,000), HSBC £216,363,000, JPMorgan Chase £222,166,000, RBS £217m and UBS £233,814,000.

The Commodities and Futures Trading Commission, the US fraud protection body, fined Citibank $310m, JPMorgan Chase $310m, RBS $290m, UBS $290m and HSBC $275m.

Finma, Switzerland’s supervisory authority, fined UBS 134m francs ($139m, £89m, €112m).

Separately the Office of the Comptroller of the Currency, the US finance industry regulator, fined Citibank and JPMorgan Chase $350m each and Bank of America $250m.

Barclays was named but not fined. It “concluded that it is in the interests of the company to seek a more general co-ordinated settlement”. Observers speculate that a penalty imposed on Barclays will push the fines total past £3bn.

The regulators emphasise that the banks were not penalised for currency manipulation but for failing to manage staff.

RBS chief executive Ross McEwan said: “To say I’m angry would be an understatement. We had people working in this bank who did not know the difference between right and wrong and put their interests ahead of clients.”

In its own investigation the bank is questioning 50 present and former employees, three of whom have been suspended.
RBS may claw back bonuses, is considering the implications for senior management, and will pay no more bonuses until the investigation is completed. A statement is due this month.

Martin Wheatley, the FCA chief executive, condemned conduct that “imperils market integrity or the wider UK financial system”. He said: “Senior management commitments to change need to become a reality in every area of their business.”

UK Treasury minister Andrea Leadsom said the corrupt employees “will not be back in a dealing room on a big salary”.
Professor Mark Taylor, of Warwick Business School, a former foreign exchange trader and Bank of England senior economist, observed: “The interesting thing is that there are no individuals named as yet, and no individual prosecutions. This is still a possibility, and it will be interesting to see how that pans out.

“At the moment it’s really only the shareholders – which in the case of RBS means British taxpayers – who suffer from these fines.

“This is another blow for the City of London. The world financial system centres on London and it’s vital for the UK economy that London continues in that role.”

Martin Mallett, the Bank of England’s senior foreign exchange dealer, has been sacked after an official investigation – for irregularities not involving currency rigging. 

Creating more uniform methods of reporting KPIs, fostering collaborations between corporations and NGOs and looking at what companies can do to improve living conditions for workers, were among prevailing topics at the BSR (Business for Social Responsibility) Conference. Laura Klepacki reports from New York

The BSR (Business for Social Responsibility) Conference, held at the Grand Hyatt Hotel in NYC last month, drew more than a thousand attendees to discuss the themes of business transformation and transparency.

In the opening session, GlaxoSmithKline ceo Andrew Witty (pictured below) set the tone saying that technology has changed everything, “so why should business operating models be the same?”

But implementing change can be challenging, acknowledged Witty. “If you are a ceo, ‘dynamic’ is a cool word. Two levels down, ‘dynamic’ means change or uncertainty.”

Among its responsible business efforts, Glaxo has ceased paying doctors to speak and also stopped rewarding its representatives on sales volume. The pharmaceutical firm has also been selectively opening up the use of its laboratories to others, as well as providing more access to its licenses to help get drugs to parts of the world where they are needed most. As Witty noted, 70% of the world’s health burden is in Africa, and yet it has only 3% of the world’s health resources. Through one employee program, Glaxo sends 100 workers to spend six months with an NGO of their choice in order to expose them to a “to system or society that is not like the one they grew up in.”

Meanwhile Pepsi ceo Indra Nooyi (pictured right) addressing the interests of investors, suggested a uniform, national scorecard that measures corporate steps toward responsible practices. It should “be simple, honest and balanced,” said Nooyi, describing the shift as a “new chapter in capitalism.” “We have to change the way financial professionals are incentivized,” said Nooyi. She also made a plea for media outlets to report more on a company’s long term mission rather than on the “short term returns.” To that end, she also suggested that business school education be reformed away from “make money at all costs.”

Additionally, Nooyi appealed to NGOs to collaborate more with companies, rather than criticize them. “Don’t keep moving the goal posts so you get more attention for yourself,” chastised Nooyi. She also lobbied for increased cooperation among competitors, particularly in the use of technologies that benefit society. “For example,” she said, “if we have a solution for solving water scarcity, we should share it much more widely.”

On the topic of women’s equality, Nooyi said in countries like Saudi Arabia where men and women are not legally allowed to work together, the company has created separate facilities, so women can be employed.

Swedish retailer H&M CEO Karl-Johan Persson (pictured bottom right) said it is testing a new fair wage programme at three garment factories – two in Bangladesh and one in Cambodia. The programme offers higher wages and more interaction between management and worker. Early results show that productivity is up and overtime is down.
But Persson stressed the topic of fair wages is a “very complex issue” and “not something one company can drive on its own.” In the environmental sphere, H&M’s garment recycling programme has been a tremendous success with more than 8,000 tons of materials collected to-date. All the materials are either reused or recycled.

Meanwhile, Maersk shipping ceo Nils Andersen has developed a shipping vessel that is 20% larger, but moves slower and uses 50% less fuel. He countered complaints of slower deliveries telling customers “if you want it faster you are going to have to pay more.” That ended that. Moreover this huge ship is completely recyclable. When it is no longer used for transportation, “everything on board can be reused,” said Andersen.

There are also new shipping containers that can extend the life of perishables. An avocado from Kenya can now makes it way to Europe because its lifecycle has been extended from 10 days to 40 days, and thus improved economic opportunities for growers.

In addition to the speeches, there were a series of breakout sessions, including one on Corporate Responsibility in the Age of Inequality which drew a standing room only crowd.

Moderator Peder Michael Pruzan-Jorgensen, vice president, EMEA for BSR, observed the packed house and pondered, “five years ago would we have had this attendance? I don’t think so.”

But the increasing concentration of wealth in the hands of a few is causing an imbalance in in purchasing ability and political power in society.

To help, panelists suggested companies pay more attention to investing in underserved communities to build business there, as well as address worker education to get more people on the path to success.

Stated Audrey Choi, ceo of the Institute for Sustainable Investing at Morgan Stanley: ““Every single company that sells stuff needs to be worried about inequality.” 

Ethical trading is now a well recognised part of the wider sustainable business agenda, but there’s still a long way to go. Miranda Ingram reports

Twenty years ago there were three Fairtrade products: Green & Blacks Maya Gold chocolate, Cafedirect coffee and Clipper tea.

Campaigns and media exposes were just starting to draw our attention to unacceptable working conditions in clothes, toy and consumables factories.

Since then, major retailers have spent millions on improving their products and supply chains to become more green, recycling-friendly, fair-trading, waste-conscious, socially-responsible and energy-conserving.

Consumers are spending more on environmentally sustainable products. For example, 2013 saw 51% of all eggs sold in the UK produced using free-range methods and demand for sustainably-caught caught fish and local food continues to grow.

In the UK, the world’s largest Fairtrade market and where public awareness of the mark remains high at 77%, consumers spent around £1.7billion on Fairtrade products. Global sales rose 15% during the same period.
Today, over 4,500 products including tea, coffee, cocoa, chocolate, bananas, sugar, cotton, gold jewellery, cut flowers, wine and cosmetics carry the Fairtrade mark.

However, Fairtrade’s birthday celebrations come in the wake of the Rana Plaza disaster in Bangladesh, at a time when there are more people in slavery than at any time in human history and as price wars between supermarkets are putting small suppliers out of business.

Two large retail groups have just finished inspecting nearly 1700 garment factories in Bangladesh. The largely European Bangladesh Accord on Fire and Building Safety has 189 corporate members including H&M and Carrefour and found more than 80,000 safety problems in the 1,106 factories inspected and safety hazards in all factories, “which was to be expected” according to chief safety inspector Brad Loewen.

Anti-slavery legislation
Meanwhile - astonishingly in the twenty first century - the UK Home Office has announced that large companies will soon be obliged to report on steps they have taken to ensure their supply chains are slavery-free. The measure, which is included in the modern antislavery bill going through parliament, will apply to all large companies regardless of their products or their nature.

“Twenty years ago, ethical trade as a concept and practice was in its infancy,” says director of the Ethical Trading Initiative (ETI), an alliance of companies, trade unions and NGOs tackling global labour issues, Peter McAllister.
“Ethical trade is now a well recognised part of the wider sustainable business agenda. We’ve seen some progress in addressing some of the most concerning labour rights issues, for instance there’s been a decline in the number of child labourers globally. But as the modern slavery bill shows, we still have a long way to go before workers around the world can enjoy conditions of freedom, security and equity.”

According to Karen Bradley, minister for modern slavery and organised crime, the transparency demanded by the bill will ‘give customers, campaigners and shareholders the information they need to hold all big businesses to account while also supporting companies to do the right thing.’

Certainly, retailers who are doing the right thing want to tell shoppers about it and to gain a commercial advantage by being ethical. More and more information is being offered on corporate websites and in-store communications.
But how easy is it, really, for the ethically-minded shopper to make the best food and gift choices this Christmas? With the amount of information on offer, ethical shopping can be as confusing as nutritional information on food packaging.
Customers like labels, particularly those that offer independent verification. But do we know exactly what the different schemes like Red Tractor, Marine Stewardship, Carbon Trust, Rainforest Alliance - even organic and free range - actually mean?

Moreover, are products flaunting an ethical label necessarily better than those without?

Earlier this year researcher Christopher Cramer at SOAS University of London found that Fairtrade wage workers at research sites in Ethiopia and Uganda are among the poorest and most destitute while labourers at some smallholder independent farms and large-scale, commercial coffee operations not associated with Fairtrade, are still “extremely poor” but on average are paid and treated better.

Researchers also discovered widespread child labour at many farms, including some associated with Fairtrade certifications.

This doesn’t mean that Fairtrade is a bad mark, of course, but that it doesn’t necessarily mean better, nor does it mean that other brands are necessarily worse.

Over the last 10 years, artisan coffee roasters such as Intelligentsia and CounterCulture in the USA, and Union in the UK, have pioneered Direct Trade, which involves agreeing prices directly with coffee growers rather than via cooperatives, as an alternative trading model. But Direct Trade does not offer a certification process so the term can be abused, leading to further confusion for customers.

In the UK, Marks and Spencer, the Co-op and Waitrose, as part of the John Lewis Partnership, are, rightly, trusted by their customers to be doing the right thing. Again, this doesn’t mean that other retailers aren’t.

The Ethical Trading Initiative (ETI) lists many popular brands, such as Debenhams, Boden, Jaeger, Next, among its 70 member companies, representing over 10 million workers worldwide. Member companies have committed to adopting the ETI Base Code of Labour Practice based on the standards of the International Labour Organisation and are expected to identify issues and improve their ethical trade performance, reporting annually on their progress. There is also a robust disciplinary procedure for companies which fail to honour this commitment.

Communicating progress
However, the ETI is not a certification scheme and does not disclose details of individual companies’ progress to the public, although consumers can check the membership list at ethicaltrade.org . “We encourage consumers to contact a brand or retailer directly to find out if it is an ETI member,” says the ETI’s Esme Gibbins. “And we encourage member companies to communicate about their ETI membership, and what they are doing to improve the lives of workers in their supply chains. But members communicate this at a company level (for instance on their website), rather than on products or packaging.”

Not shy about naming and shaming is Oxfam’s Behind the Brands scheme which points the finger at the baddies by rating the world’s top 10 biggest food companies according to their commitment to workers, women, farmers, transparency, climate, water and land, and actively invites consumer pressure on the poor performers.
According to their latest report, in October this year, Nestlé and Unilever are topping the charts with a 70% good behaviour score, followed by Coca-Cola at 59%.

General Mills comes joint last with Associated British Foods plc but Mars, Kellogg’s and Danone are doing little better.
So there is plenty of information out there, but it is up to the ethical consumer to do the legwork if they want to be fully informed. And, as the Oxfam rankings demonstrate, there are many areas in which a corporation can be rated which is another obstacle in giving consumers the precise information they want.

While many consumers want to be a bit greener and do their best for animal welfare, underpaid workers and the environment, they make choices according to different criteria. Some want 100% Fairtrade or organic, others are concerned about climate change and want a reduced carbon footprint, while yet others to know that their food is produced humanely. Most probably just want to be able to shop cheaply without being “unethical”.

However, retailers, too, are working to different priorities, be it wages, water use or waste policies. As the Centre for Retail research points out, retailers would attain their ethical goals more cheaply if they worked together more and this would also reduce the number of labelling and verification schemes, making life easier for shoppers. But, as well as having different views about what needs to be achieved, retailers also want to get maximum kudos for their efforts, which may mean adopting different goals from their competitors.

Nevertheless, there is also a greater understanding that change needs to take place at multiple levels, at the same time, says ETI director Peter McAllister. “The Bangladesh Accord is a good example of what can happen when international brands and trade unions come together over an urgent workers’ rights issue.”

But looking ahead, he says, responsible businesses face challenges of a different nature. ‘There is a lack of trust in business in general, and wariness about claims that are not independently verified,’ - the “greenwash” effect.
“While consumer and media campaigns continue to play a catalysing role in shining the light on challenging issues, ultimately, commercial, political, civil society and trade union interests must combine forces if we’re to have any real chance of improving conditions for workers around the world.”
 

KLP, Kommunal Landspensjons-kasse, Norway’s largest life insurer that was formed in 1949, announced late this November that intended to further increase its investment by NKr500 million (c.£47m) in renewable energy capacity and revealed that it was pulling out of companies deriving “a large proportion” of their revenues from coal. The company said it was pursuing this strategy as it sought to “contribute to the urgently needed switch from fossil fuel to renewable energy.”

As Norway’s largest pension fund manager, KLP is already a major investor in renewable energy with around NKr19 billion (bn) invested in Norway alone. Noting that while it was important to achieve a good return on investments in order to safeguard future pensions, it stressed that equally important to consider how the long-term investments that it makes can “contribute to sustainable development.”

KLP defines coal companies as coal mining companies and coal-fired power companies that derive a large proportion - at the very least “50% of their revenues” - from coal-based business activities and exclude entities identified as such.

Preliminary estimates indicated that this would result in the sale of shares and bonds worth just less than NKr500m.
Sverre Thornes, KLP’s CEO, commenting on the decisions said: “We have long been an important source of funding for Norwegian hydropower, and have significantly larger investments in renewable energy than in oil, gas and coal companies combined.”

He added a caveat: ”That does not prevent us from going further in the same direction by earmarking an additional NKr500m for new renewable energy production capacity in emerging economies, where the need is great and the alternative is often coal. At the same time, we are divesting our interests in coal companies in order to highlight the necessity of switching from fossil fuel to renewable energy.” Thornes further pointed out that KLP has a “clear ambition” to “influence the companies it invests in to lower greenhouse emissions.”

At the request of Eid local government, KLP has assessed whether it is possible to contribute to a better environment by withdrawing its investments from oil, gas and coal companies, without affecting future returns. The results of that assessment have now been published and the divestment is limited to coal.

A KLP statement accompanying these moves explained that they were “a contribution to necessary change” adding: “Society around us, public authorities, the United Nations and engaged KLP owners highlight the importance of reducing carbon emissions so that the world can achieve its target of keeping global warming below two degrees Celsius.”

The names of the companies set to be excluded were scheduled to be published in an updated KLP list on 1 December 2014. And, KLP’s divestment from coal companies would also apply to the KLP funds.

Material impact?
While their divestment from coal companies - considered to have the largest negative impact in terms of carbon emissions per unit of energy produced and local pollution in the vicinity of the coal-based facilities - will have “no material impact” on KLP’s future returns, it said that any withdrawal of investments in oil and gas companies “would probably” do so.

Separately, KLP announced early this November that it had again witnessed a significant inflow of funds during the third quarter - amounting to NKr10.4bn (c.£0.97bn) - with sixteen municipalities and around 150 enterprises becoming clients in the period.

The return on a value-adjusted basis after third quarter ended at 4.9%.  

Against the backdrop of KLP's move the World Bank indicated late this November that the organisation would only fund coal projects in circumstances of "extreme need" as climate change will undermine its efforts to tackle extreme poverty, according to the Bank's president Jim Yong Kim.

Robeco Indian Equities D EUR Acc, a £19.64m fund, top ranked amongst UK Registered funds over the past year to 31 October 2014 with a cumulative return of +36.51% versus +38.19%/73rd rank over the last three years. In second place over the past one-year was the £404.55m AXA Framlington Health R Inc fund, which posted +26.32%. However, its performance was stratospheric over the past three and five years at +90.42%/1st rank and +147.77%/1st, respectively. SUNARES lagged this sector comprising 246 funds over the past year on -13.54%, but was even worse over the last three years with -54.40%/233th rank.

In the US Mutual funds sector, which exhibited the best peer group average over three and five years at +43.83% and +75.70% respectively, the $681.65m VALIC Company II Socially Responsible fund top ranked over the past year with on +18.93% - versus +75.06%/12th rank over the last three years and +120.94%/21st over past five.

The top five performing funds in this sector over the past one year were extremely tightly bunched, ranging from +18.93% to +18.59%. The $650.87m Parnassus Endeavor Fund came in runner up spot over the last 12 months with +18.89% - versus +80.91%/6th over the past three years and +119.79%/23rd over last five. Guinness Atkinson Alternative Energy, a $18.79m fund, bottom ranked this sector of 192 funds with -6.78% (+12.85%/160th over past three years/-34.28%/163rd over five). Among the 1,149 funds comprising the European Funds sector in Morningstar’s analysis, the top-five ranked €404.55m AXA Framlington Health R Acc fund proved a very robust and consistent performer over one-, three and five-year periods with performances of +36.38%, +110.01%/1st rank and +182.98%/1st, respectively.

MCO2 New Energy FEIF bottom ranked here over a past one-year horizon with -37.65% versus even worse performances of -70.05%/1,059th rank and -77.11%/913th over the past three and five years, respectively. Along with ERSTE Responsible Stock Austria T fund (-15.81%) these were the only two funds in the entire sector to post double-digit percentage losses over the past 12 months.

FL/AXA Framlington Health AP Pension fund again top ranked in the UK Individual pensions sector for the past one, three and five years on cumulative returns of +28.06%, +98.40% and +162.95%, respectively, and improved on its performance for all three periods to 30 September 2014. As a whole this sector posted the best peer group average return over the past year from the five sectors examined with +27.37%. 

As we enter the season of over-indulgence, Roland Pirmez, president of Heineken Asia Pacfic tells Ethical Performance why responsible consumption is one of the most important issues on the company’s CR agenda

What are the sustainability issues specific to the business in the Asia Pacific region?
We have made significant progress in reducing energy and water consumption at our breweries in Asia Pacific. Water scarcity is the biggest challenge we face as a business. Breweries are very much dependent on a reliable supply of good quality water. With limited water resources and ever increasing demand with the rising population in the region, we need to work with all our stakeholders, internal and external, to manage this resource well.

What would you consider to be the key highlights of achievements so far?
Our key achievements are the reduction of specific energy and water consumption, therefore reducing our carbon and water footprint. Water consumption was reduced by 9.1% in 2013 vs 2012. We reduced CO2 emissions by 4.5% in 2013 vs 2012. Through internal benchmarking, with tools like the utility benchmark model, we have reduced losses and increased efficiency in our breweries. We have also made investments in more energy and water efficient equipment to ensure long term sustainability in the way we carry out our business. To further reduce our CO2 footprint, we have invested in using bio-gas from our waste water treatment plants instead of flaring it.

What is the main challenge in water stewardship?
For us water stewardship means managing a resource that we do not own. While we make every effort internally to reduce our own consumption, we also work within our supply chain to try to motivate and stimulate suppliers to work as efficiently as possible. Water stewardship is more than improving water use efficiency in our own operations and the supply chain. It deals with preserving and protective watersheds and engaging collaborative partners. By working with internal and external stakeholders like NGOs and various government agencies we plan to compensate for the water that is not returned in a treated way to local watersheds. This is to ensure we become water neutral in breweries operating in water scarce areas.

What is the main challenge in reducing carbon emissions?
In Asia Pacific we have been constantly looking for ways to reduce our carbon emissions through the deployment of renewable energy like solar, bio-mass, wind energy etc. The cost of solar has come down significantly still it is not financially viable in most of the countries we operate in hence we have decided to go with leasing option to deploy solar energy in our breweries with a pilot planned for our brewery in Singapore. We have started using bio-mass fuel for our boilers. The biggest challenge would be to ensure proper control to ensure a sustainable source of biomass fuel throughout the supply chain.

How do you monitor sustainability in your supply chains? It must be very exacting with the number of suppliers the company deals with?
HEINEKEN expects all our suppliers to actively support and respect our values and principles in their own business practice. To ensure that this is the case, we have developed an efficient supplier engagement and monitoring system on sustainability performance through our 4-step Supplier Code Procedure; 1) Signing, 2) Supplier Risk Analysis, 3) Supplier Monitoring, 4) Audit plan. The Supplier Code applies to all suppliers from whom HEINEKEN purchases, and outlines key elements on Integrity and Business Conduct, Human Rights and Environment. This year the Asia Pacific region focused on Step 1 and we can already report that more than 3,000 of our suppliers in the region have signed our Supplier Code. Our ambition is to have the 4-step procedure in place in the region for the end of 2015.
 Are 2020 goals really achievable (for Asia Pacific)?
Yes, I believe so. We foresee a challenge in the area of water stewardship but are nevertheless committed to reaching our 2020 targets.

Is the drinking culture in Asia Pacific different to Western Europe and the US?
Alcohol is a beverage that has been enjoyed during many types of occasions around the world for centuries. In many places, a majority of our consumers enjoy our products responsibly, but a minority does not. The issue of alcohol abuse exists across all regions and is a key area of focus for our business. However issues by each market are likely to differ and so we work with local partners to take into account cultural differences in attitudes towards alcohol.

How do you make 'responsible consumption' an attractive option? (when most brand ad campaigns show how attractive consuming is?)
We advocate responsible consumption in many ways. A key approach is through our brands, as we know that when brands communicate directly, the message resonates more with consumers. Our Heineken® brand encourages consumers to enjoy responsibly with its ‘Sunrise is for moderate drinkers’ and ‘Dance More, Drink Slow’ campaigns, spreading the message that if they practice responsible consumption by pacing themselves, drinking water between drinks etc, they will be able to have a great time all night long. We also convey this idea through our regional responsible drinking campaign ‘Have a Good Night Out’, which in 2013 consisted of offering tips on responsible drinking behaviour through a series of six short tongue-in-cheek videos. We want consumers to enjoy our products – but responsibly, and for a long time to come.

How are employees impacted by your work in this area?
At HEINEKEN we value our employees and see them as ambassadors for our company and products. We actively promote staff alcohol responsibility and encourage employees to enjoy responsibly. Recently in September we had a global ‘Enjoy Responsibly Day’ where 45 markets across the globe organised local activities to educate and engage employees on this important topic. We are committed to advocating responsible consumption and have made it an integral part of our company culture.

Given stakeholders' request for more local CSR initiatives, what have you been doing?
We have increased our expenditure on local CSR initiatives and shifted our focus from general philanthropy to targeted local community investment. In 2013, we spent $1.8m on 18 responsible drinking campaigns and initiatives across our region, 64% more than the previous year. An example would be our 21+ campaign in Indonesia where we partnered with local convenience stores to create awareness that alcohol can only be sold to those at or above the legal drinking age.

Our shift from philanthropy to community investment (CI) is also evident in their respective portions of the pie – 76.8% vs 23.2% in 2012 and 30.5% and 69.5% in 2013 respectively. For example, in one of our CI focus areas – water, our local operating company Vietnam Brewery Limited expanded their 2012 campaign last year to educate the community about the shortage of clean water and the importance of water conservation, and in Papua New Guinea our local operating company South Pacific Brewery Limited launched and completed its first ‘SP Brewery Clean Drinking Water Project’ in 2013.

Is working in collaboration with competitors key to a sustainable business model in the drinks industry?
My view is that working in collaboration with competitors is not essential to having a sustainable business model in our industry, but it could contribute to big advancements a key area – responsible consumption. As this is an issue which is relevant to the entire industry, working with not only competitors, but also regulators, governments and all stakeholders, can help to elevate the issue and together create and implement tangible solutions for alcohol abuse.

And finally, if you could influence one area of sustainable business practice, what would it be?
I would say again, responsible consumption. From stakeholder engagement, we found that this is the most important material issue to them and the long-term success of our business. Responsible consumption is not only relevant to consumers, but our employees too. I am influencing our business to apply responsible labelling practices and perpetuate responsible drinking practices throughout the organisation – such that it becomes part of our culture, our DNA. I also encourage our employees to play a part in advocating this topic, by being ambassadors of responsible consumption themselves.