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General Motors is investigating why it took a decade to recall cars found to have potentially lethal ignition switches.

The Detroit-based multinational acknowledges the defective part was involved in 13 road deaths in the US during those years, and one victim’s mother claims it caused at least 29 fatalities.

The switch, which the company knew fell below its own specifications, can cause the engine to cut out in traffic, disabling power steering, power brakes and airbags and making vehicle control difficult. The replacement costs 57 cents (34p, 41 euro cents).
General Motors has now recalled 2.6 million cars.

Mary Barra, appearing before a US Congress energy and commerce sub-committee, said she first learnt of the problem when she became chief executive in January. The company then acted “without hesitation”.

Barra said: “We told the world we had a problem that needed to be fixed. We did so because, whatever mistakes were made in the past, we will not shirk from our responsibilities now and in the future.”

When asked why the company used the switch in the first place she drew a distinction between components below specifications and those that are defective and dangerous. Representative Joe Barton accused her of talking “gobbledygook”.

She admitted General Motors took too long to act but promised changes to prevent a recurrence.

Barra said: “Sitting here today, I cannot tell you why it took years for a safety defect to be announced … but I can tell you that we will find out.” She suggested one reason was poor liaison between departments.

She has already created the post of safety vice-president, who will appoint an executive to oversee safety issues.
Terry DiBattista, whose daughter was killed when the ignition failed causing her car to crash, said: “It’s clear GM’s concern was with its bottom line and not the safety of our loved ones.” She wants a criminal investigation into General Motors’ conduct.

Barra assured the sub-committee that the company had since moved from a cost culture to a customer culture.

General Motors has hired the mediation lawyer Kenneth Feinberg to consider compensation for victims’ families. Feinberg handled compensation funds after the World Trade Centre atrocity, the Boston marathon bombing and the BP oil spill. However, Barra did not commit the company to establishing a fund.

The inaction at General Motors mystifies Professor Cary Cooper, a business organisation specialist at Lancaster University.
Cooper said: “I can’t believe they haven’t got a systematic method of dealing with this sort of thing, but I doubt whether there was planned avoidance.

“Perhaps people weren’t speaking to one another, and for a long time. Maybe somebody didn’t want to take the matter to another level.”

He pointed out: “Big organisations often have bad communication.”

Toyota, too, has just discovered safety defects. It is recalling 6.4 million vehicles worldwide to remedy faults in spiral cable assemblies, seat adjustment rails and steering columns.

Toyota, the world’s biggest carmaker, faces a recall bill of more than £300m ($500m, €363m).

The company assured owners: “Worldwide there have been no reports of any accidents or injuries relating to these issues.”
 

Most companies importing garments from the south Indian state of Tamil Nadu refuse to disclose whether or how they tackle bonded labour abuses at their supplying factories.

Many of the abuses are said to be committed under the sumangali scheme, in which young women work to save money for their dowry and are easily exploited.

The clothing companies’ silence is highlighted in a report on the industry’s treatment of girls and young women compiled by FNV Mondiaal, part of the Dutch trade union confederation, and the India Committee of the Netherlands, a Dutch NGO that helps deprived groups on the sub-continent.

Altogether 100,000 children and teenage girls, mostly from the dalit lower caste, are thought to be victims of bonded labour in Tamil Nadu. The report says they live in hostels, have little freedom of movement, are underpaid and work long hours in unhealthy conditions.

Indian newspapers revealed that two girls escaped from the PV Spinning Mill in the Erode district last October and complained of being compelled to work 12-hour days on a sub-standard diet.

Local organisations confirmed that forced overtime, poor food and harsh treatment were common at the mill.
District officials and NGOs then rescued 47 young labourers, mostly women and girls.

The report says the women working under the sumangali scheme can lose much of their pay if they fail to complete contracts of three to five years. In addition, companies retain contributions intended for a compulsory social security fund until contract completion instead of depositing them with a public agency.

Specific discrimination, says READ, an NGO dedicated to empowering women and marginalised groups, is directed at dalit girls, who make up almost 60% of those working under the sumangali scheme in the mills. Many of the girls are in the arunthatiyar sub-caste, called the “dalits among the dalits”.

The dalit girls, says READ, are taunted if they protest about lack of lighting and water, or other problems, and are given the heavy tasks, while non-dalits perform easier work.

Companies that did not react to the survey include Ikea and Walmart, those responding include PVH/Tommy Hilfiger Europe, and none published a list of suppliers.

The researchers said most monitored only first-tier suppliers. They reported: “Most violations take place further down the production chain, especially in the spinning mills. Only Tommy Hilfiger and O’Neill say they are monitoring further down.”

However, campaigners have had some success, notably at Eastman Exports Global Clothing, KPR Mill and SSM India, where NGOs have been able to observe conditions and train employees and management in labour rights. Now KPR pays wages into employees’ banks, workers have identity cards, parents may visit weekly, and girls occasionally visit home.

Other groups are working to eradicate sumangali, including the Ethical Trading Initiative’s Nadu Multi-Stakeholder Group (TNMS), though local NGOs claim they have too little involvement.

The Business Social Compliance Initiative, to which 1,200 customer companies belong, encourages members importing from Tamil Nadu to join the TNMS.

The report recommends external auditing to detect bonded labour and other abuses, offsite interviews, training for workers and management, grievance procedures and transparency about suppliers.

It urges retailers and other stakeholders to take the lead on supply chain transparency with the help of local civil society bodies.  

I saw a postcard the other day that stated: “To make the rich work harder you pay them more, to make the poor work harder you pay them less.” It certainly struck a chord given the ongoing debacle over bankers’ bonuses, writes Liz Jones.

Banks defend their culture of enormous bonuses by saying they have to pay top dollar for the very best people. But don’t current circumstances show that this obviously doesn’t work? Banks having been paying ridiculous bonuses for aeons and yet it doesn’t seem to stop them getting into trouble does it?

They also argue that the people they are rewarding are not in the failing areas of said institutions. I question the ethical stance there. After all, if a business isn’t doing well, does anyone these days expect to get an automatic annual pay rise? I don’t think so.

Not giving big bonuses will also hinder their competitiveness, they say. Professor John Thanassoulis, from Warwick Business School, goes further: “Barclays’ and RBS’ desire to increase bonuses when bank profits have declined will lead to a weakening of the banks’ financial stability. The increased bonus pool at Barclays alone, most of which is earmarked for investment bankers, is equivalent to 1.7 per cent of the investment bank’s Risk-Weighted Assets. To put this into perspective the global response to the financial crisis has been to increase the proportion of Risk-Weighted Assets funded by safe equity capital by a similar proportion.

He says that Barclays felt it had no choice: “The chairman Sir David Walker noted at the AGM that Barclays’ business was targeted aggressively by competitors, keen to poach Barclays’ best staff. RBS also said they had to pay more if they were to remain competitive.”

Thanassoulis believes Barclays and RBS are both victims of a system of high pay levels which lead to financial instability as banks over-reach themselves to hire those they think can bring in extra business or generate higher returns.

Research published recently from Warwick Business School studies the aggressive poaching which is the key driver of high bankers’ pay and Thanassoulis proposes that a cap on total remuneration for investment bankers in proportion to Risk-Weighted Assets applied to all banks would contribute significantly to financial stability.

“Such a cap would damp down aggressive poaching and reduce bankers’ pay levels,” he maintains. “The banks would gain in value and in safety, so this is in shareholders’ interests.”

“The pay revolt at Barclays highlights that the unfettered system of pay competition is bad for shareholders and is bad for financial stability.”

Point to ponder: the same day the news broke that the UK government had capped bonuses at RBS, a press release promoting the move towards ‘the living wage’ crossed my desk which stated that almost one in five working people in the country are currently earning less than the Living Wage (which works out at around £7.65 an hour).

Japan’s Official Development Assistance (ODA) to the less developed countries is an integral part of what it calls “values-based diplomacy,” a strategy designed to promote democracy and the rule of law in the developing world.

As part of this foreign policy agenda, Japan has pledged to provide ¥ 2 trillion in aid to Southeast Asian nations. It has also announced plans to expand Japan’s exports of infrastructure-related technologies and services. A vital part of this approach is that Japan should be seen as a country that does not tolerate corruption in any form.

Accordingly, there was great embarrassment when the Yomiuri Shimbun newspaper recently published an account of massive Japanese corruption in ODA projects. The newspaper revealed that the president of Japanese railway-consulting firm, Japan Transportation Consultants, Inc. (JTC), had confessed that it paid over US$780,000 in kickbacks in Vietnam to win an order for a project funded by Japanese ODA worth more than $41m.

The company also admitted allegations that it had bribed civil servants in Indonesia and Uzbekistan as well as Vietnam with a total of US$1,271,790 to win work on five Japanese ODA-funded projects in these countries. The projects related to railway construction, design, construction surveillance, and related services, and were carried out by joint ventures headed by JTC.
The illegal payments were made on about 40 occasions from February 2008 to February this year. The value of each order determined the amount of each payment.

Japanese prosecutors plan to conduct a criminal investigation into charges that JTC violated the Unfair Competition Prevention Law by bribing foreign government employees.

JTC was established in 1958 when construction began on the Tokaido Shinkansen line and is jointly owned by subsidiaries of East Japan Railway Co. and Central Japan Railway Co.

The company, which specializes in railway construction, design, and ground surveying, began expanding overseas in the 1990s. It has received 19 ODA projects totalling ¥25bn since 2000, including orders it received while participating in joint ventures.

This was not the first time there has been corruption involving Japanese ODA in Vietnam.

In June 2008, the Yomiuri Shimbun reported that Japan was investigating four former Japanese officials of Japan-based Pacific Consultants International (PCI) for bribing government officials in Southeast Asia to win ODA project contracts. This included payments of US$ 820,000 to officials in Vietnam.

PCI executives involved eventually received custodial sentences, as did their Vietnamese counterparts.  

There’s a large elephant in your server room (data centre), writes Eiríkur Hrafnsson, co-founder and coo of GreenQloud.

It’s something you’re not thinking about as you trade emails with customers, update your CRM, share files with colleagues or diligently audit your supply chain. It’s your last thought as you evangelize your remarkable CSR policies, which you promote on your social media channels. It’s the impact all of this business data is having on the environment.

You can easily visualize the global impact of CO2 emissions from your cars and business travel. In any inflight magazine you can find a world map boasting bold crisscrossing lines that connect cities through seemingly endless flight patterns. You are taught to take a look under the hood, if you will, and analyze the supply chain of the products you use. Is this coffee fair trade? Is this packaging recyclable? But how many of you look at your data supply chain and analyze its footprint?

When my business partner, Tryggvi Lárusson, and I founded GreenQloud in 2010, we set out to make cloud computing easier to use. The idea came from our experience trying to implement cloud on our open source e-government platform, Idega. The problem was, the cloud wasn’t easy to use back then and it was also unstable. To us, this presented a major barrier globally.
 

It probably goes without saying at this point that the international banking crisis, which struck Iceland first, had a deep impact on a company solely focused on bettering government. We suddenly found ourselves with some time on our hands.

 The crash also opened up a huge opportunity for us. As we began tackling hurdles in cloud computing, we also discovered through various research reports furnished by Gartner and McKinsey & Company that the Information Communications Technologies (ICT) industry was a significant contributor to global GHG emissions, which at the time equaled 2% of total global CO2 emissions, then rivaling the aviation industry.

One of the lesser-known but significant aspects of technology hypergrowth is the energy demand it creates. Online data is doubling every other year and so far only 1% of global data has been processed. Every tweet, LinkedIn status, email and file shared requires energy. If you follow the supply chain of your data, like you follow the supply chain of your products, you’ll find that the data centres that process and store your data draw power predominantly from fossil fuel-based electrical grids.

We thought maybe by delivering GreenQloud’s services globally, from Iceland, where the electrical grid is comprised 100% of hydro and geothermal energy, we’d be able to make the cloud easy to use and also actionably reduce the footprint of ICT.
 
The ICT industry uses non-renewable, dirty energy resources, it is widely believed, due to a lack of available clean, renewable energy. This is categorically untrue. We sourced an additional availability zone in Seattle that utilizes between 95-98% renewable energy.

The fact of the matter is, it’s never been easier for you to clean your data supply chain. Ask your supply chain vendors from where their data centres draw power. Ask your team how they can more efficiently manage infrastructure with the cloud. And put pressure on online vendors to adopt renewable, clean energy to power their services.
 

An innovative charity has helped to create hundreds of jobs in Africa through virtual volunteer mentoring, helping to transform the lives of thousands through a simple phone call. Liz Jones reports

At the launch of BITC’s Give and Gain volunteering initiative back in January, Stephen Howard, the business charity’s ceo, put the emphasis this year on volunteering skills and experience rather than just time.

That take on volunteering is at the heart of Grow Movement, a charity that pairs up business consultants across the world with businessmen and women in Uganda, Rwanda and Malawi to give advice over Skype, phone and email.

‘Volunteer Consultants’ use their specialist knowledge to share information with anyone from chicken part sellers and tailors in Malawi, perfume shops in Uganda and rubbish collectors in Rwanda and identify areas for improvement, eventually growing the business and creating vital jobs in the community from the comfort of their desks.

It was set up by fund manager Chris Coghlan in 2009 after studying the Rwandan genocide at university and witnessing the extreme levels of human suffering when volunteering in Mozambique, the DR Congo and Rwanda. Frustrated by current methods of tackling world poverty, and seeing how easy it was to get a mobile connection in even the most remote areas, he identified a way to utilise this to empower business owners.

The charity has now helped to create almost 500 jobs – 84 in Rwanda, 27 in Malawi and 371 in Uganda - with the aim of creating another 1,000 jobs by 2015. Through this success, approximately 15,216 people have been positively affected – be they families, children, friends or the wider community. 21 % of the businesses involved have also evolved from micro to small businesses, and 41% have seen an increase in profits.

Ceo of Grow Movement Claire Jenkins, a former international fruit product manager for Tesco, has seen first-hand the difference that experienced advice can make to businesses. She tells the success story of Jean Claude, an entrpreneur in Rwanda who initially told his volunteer mentor that his business plan was to secure a loan for $300,000 to set up a mobile toilet business. His mentor advised him to rethink and with careful remodeling, Jean Claude now runs a waste business employing 26 people.
Currently the organisation has 500 volunteers. A third are in the UK, one third in the US and Canada and the rest of the world accounts for the remainder (although 10% are in India).

Jenkins told Ethical Performance that there is a strict criteria for being a volunteer mentor: “We have very high standards because we want people with lots of dedication and commitment as well as loads of business experience. Generally our volunteers do have a higher age profile because of that level of experience. We find this age profile are also more patient and tolerant.”

Survivalist entrepreneurs
In Uganda the charity works with Enterprise Uganda, a heavily subsidized government agency. They provide start up training for 5000 people a year. In Malawi it works with the National Association of Business Women and in Rwanda it works with a variety of partners including the Danish ngo, Educate, an organisation that focuses on start-up training.
Volunteers are dealing with survivalist entrepreneurs, says Jenkins. “The impact volunteers can have on such businesses is phenomenal. If a business can hire just one or two more people, that’s a massive change.”

Volunteers need to be able to adapt to cultural differences and be aware of the need to be very clear in their communications. For example, price promotions are simply seen as a way of losing money rather than a way to drive sales and copy-cat businesses pop up within days of anyone coming up with a new idea.

Mentoring is done over the phone or by Skype and therefore the possibility of miscommunications is high. Jenkins tells the story of a woman running a very small chicken farm in Uganda who when asked for a business plan thought the mentor was wanting to steal her business idea. Another entrepreneur in Rwanda when asked about her financial details, failed to understand that the mentor wanted to know if her business was profitable, not insult her.

“Awareness that you are dealing with someone from a different culture is very important,” Jenkins emphasizes. “You need to ensure that the person you are mentoring is understanding what you are saying. Very often the local culture dictates that asking questions is insulting, a factor that can get in the way of effective mentoring.”

Following a career in private equity at Goldman Sachs and Merrill Lynch, Ryan Wagner has been a volunteer with Grow Movement more than once now. His involvement stemmed from his desire to work with small businesses in developing markets and by chance came across Grow’s website.

The real challenge
Wagner says that working with Rwandan entrepreneur, Martial, and his farming business, was predominantly about getting Martial organised. “Martial is a bright, ambitious, young guy who has a lot of ideas, we worked towards focussing and honing in on specific goals and finding a real path for his business,” he says.

“The role as mentor is challenging in a different way from I thought,” Wagner admits. “Problems in business aren’t that dissimilar; but in emerging markets it takes more effort to make things happen, to make things work.”

He regards Martial’s ability to become more self-reliant as a major result from his involvement with Grow. “As a consultant, you gain a tremendous sense of empowering someone accomplish their goals, and the experience on both sides is very rewarding. What you have to remember when working as a mentor is it’s about coaching, not solving. That’s a real challenge.”

*BITC’s Give and Gain Day takes place on 15 May 2014. 

With the World Development Movement (‘WDM’), a UK-based campaigning group focussed on global justice, having successfully campaigned last year to make Barclays pull out of food speculation a number of their activists followed up by protesting at the bank’s annual general meeting (AGM) in London this April and called for the bank to immediately end its lending and underwriting relationships with companies engaged in ‘mountaintop removal’ (MTR).

 The move followed a report published last October by the organisation titled ‘Banking while Borneo burns’ in which WDM claimed that the top five UK banks (Barclays, HSBC, Lloyds, RBS and Standard Chartered) were “complicit in fuelling climate change” and destroying communities and the environment in the rainforests of Indonesian Borneo by their financing of an Indonesian coal boom.

 Nick Dearden, a director of WDM, commenting said: “Coal is the most destructive fossil fuel, both for the climate and for the people who have to deal with coal mining on their doorsteps.

“Barclays must stop bankrolling dirty coal, at the very least pulling out of mountaintop removal and ending its relationship with the companies mining coal in the Borneo rainforest as a first step.”

Since 2009 UK banks have lent more money for Indonesian coal than banks from any other nation.

For example, Standard Chartered, the UK’s second biggest bank, has lent more than any other bank in the world and is reported to have initiated loans of US$1bn (c.£0.64bn) in 2012 to Borneo Lumbung, an Indonesian company, which through its mining projects there polluted the river that Maruwei villagers rely upon. The river used to be clean but is now dark, dirty and undrinkable.

Further, around 83% of coal produced in Indonesia’s top coal province on the island of Borneo is mined by companies part-financed by UK banks according to WDM research.

Highlighting the magnitude of coal investments and funding, BHP Billiton, a London-listed mining giant, has received a total of £6.3bn since 2009 from Barclays, Lloyds, RBS and Standard Chartered.

As a FTSE 100 constituent virtually every pension fund in the UK invests in BHP Billiton.

For its part, Barclays has provided the global mining industry with £3.1bn of financing since 2005 and in one case loaned £127m to Bumi Resources, owner of Indonesia’s biggest coal mine and 29% owned by London-listed Bumi plc created by Nat Rothschild.

The firm’s Kaltim Prima Coal project has resulted in many people losing their land, with one indigenous village, Segading, having been displaced three times.

Put in context shares in renewable energy companies listed on the London Stock Exchange were according to recent figures worth just £5bn - or 0.56% of the value of fossil fuel shares listed on the exchange (c.£900bn).

In 2013 Barclays was also the top global financier of MTR coal mining - a practice that in the US has seen the tops of more than 500 mountains blasted off in pursuit of coal - which has resulted in water pollution and the destruction of ecosystems.

While BNP Paribas, JP Morgan Chase, and Wells Fargo have pulled out of MTR, a lead that WDM is calling on Barclays to follow, last year the bank increased its financing of the practice and closed £327m in loan and bond transactions. Collectively the top five UK banks underwrote bonds and shares in fossil fuel companies totalling some £170bn between 2009 and 2012.

As Ethical Performance went to press, news broke of FTSE Group’s new global ex fossil fuels index series.

The £6.17m Guinness Alternative Energy C fund yet again outpaced peers in the UK Registered funds sector over the past year to 31 March 2014 with a cumulative +54.37% return albeit that the past three- and five-year performances were less stellar at -25.60%/174th and -5.59%/146th, respectively. Premier Ethical A Inc., a £73.13m fund, was runner up over the past 12 months with a +27.98% performance and exhibited robust gains of +64.49%/1st over the past three years and +142.87%/6th over the last five.

Craton Capital Renewable, Alternative & Sustainable Resources A, a £4.32m fund with a long-term capital growth objective, ranked 146th (+0.97%) over the past three years scooped third top spot over the past year with +25.48%. The £9.82m SUNARES fund again bottom ranked on a past one-year view with a worsening -27.05% out of 199 funds and -59.88%/176th over last three years.

Within the US Mutual funds sector, which had the best peer group average at +122.66% over five years, the $13.6m Firsthand Alternative Energy fund beat rivals over the past one year with +90.28%. This contrasted with its -6.42%/198th over three years, but a +51.03% performance over five years restored matters. Second top was the $25.11m Guinness Atkinson Alternative Energy fund with +62.31% over the past year versus -29.66%/201th rank over the past three years and -3.48%/185th over five.

Shelton Green Alpha, a $14.66m fund and relative newcomer, came third top with +56.09%. Eventide Gilead N, a $630.28m fund, ranked fourth top on a one-year view with +44.36% but top ranked over the past three years (+79.26%) and produced an outstanding +225.32% over five. Epiphany FFV Latin America A, another relative new fund, propped up this sector for the past year with -14.58%.

LSF Asian Solar & Wind A1 fund topped the European Funds sector with a +129.67% over the past 12 months (-25.47%/1,002th over past three years and +39.89% over five). It pipped MAP Clean Technology Fund I over the last 12-month period.

FIP Développement Durable A A/I fund was the sector lagger from 1,099 funds with -33.09% over the past year and -36.66% over three years. The UK Individual Pensions sector had the best peer group average over the past one- and three-years. 

There is a saying in Russia that ‘good people do not suffer any losses when they are helping others’, writes Vera Kurochkina, UC RUSAL’s director of corporate communications.

This could also refer to a volunteer: by helping those in need and contributing to the local community, he or she gains not only appreciation but also experience and friends.

The concept of volunteering in modern Russia started in mid-1990s, before becoming a mass trend in 2006, which was announced as the “Year of Charity” in Russia. In 2006, the federal, regional and local authorities started to support the development of volunteering organizations that would help arrange and hold large-scale charity events. Moreover, volunteers began to initiate their own projects and activities to help those in need, for example children in orphanages, socially vulnerable families, elderly people and those who had suffered from natural disasters.

A huge uptake in nationwide volunteering was observed in the 2010’s – first, when huge fires broke out in Moscow region and other Central Russia and a lot of families needed help and support, and then at the Universiade and the Winter Olympics which saw the Russian government implement and encourage volunteering. Thus, Kazan Universiade 2013 and Sochi 2014 can be regarded as a new stage in the development of volunteering in Russia.

Both Russian and international PR-campaigns were organised to promote volunteering in Russia as a positive new approach to community projects. The input of volunteers in preparing these events was incredible: 20,000 volunteers at Universiade and 25,000 volunteers at the Winter Olympics.

In terms of corporate volunteering, its development started slightly earlier – in the late 1990s-early 2000s. The mass arrival of branches and representative offices of foreign companies brought volunteering expertise with them to Russia as a part of the headquarters’ corporate policies. Russian companies followed the example and began to promote corporate volunteering in mid-2000s, however, as a trend it really took off after 2008 when the global financial crisis resulted in businesses decreasing funding of corporate social responsibility programmes and as a result rethinking the importance and potential of corporate volunteering. In order to increase the effect of social investment, businesses encouraged volunteers to help with their charity work. As a result, the corporate volunteering movement in Russia was established on a more systematic and constant footing.

‘Easy to Help’ programme
Why is corporate volunteering profitable for business? According to research, corporate volunteering helps businesses meet a number of goals: to strengthen corporate culture, boost employee loyalty, develop horizontal relationship among teams, and create an atmosphere where employees are better able to express themselves in the workplace.

UC RUSAL pioneered the development of corporate volunteering in Russia. Today, the development of volunteer initiatives is a fundamental part of RUSAL’s corporate social responsibility policy. The company supports the growth of a socially responsible society through creating an environment that encourages citizens to take an active part in the life of the cities they live in.

RUSAL’s projects are raising awareness about the nature of volunteering which helps people to realize that volunteering can make a real difference to the community. In the last few years, RUSAL’s volunteer movement has spread from Moscow, to Northern Russia and Siberia, to large regional centers like Krasnoyarsk and small towns like Krasnoturyinsk and Shelekhov.

RUSAL’s ‘Easy to help’ programme is at the heart of the company’s charity and volunteering work. The programme involves dealing with social challenges affecting a city or region through the participation of activities valued by local communities. In 2013, corporate volunteering actively developed through social activities and events at children’s homes, social and educational institutions, and large scale projects such as the charitable project “We believe in miracles and make them come true!” (a chain of activities and events to celebrate New Year) and environmental volunteer work, such as The Yenisei River Day.

To support the New Year project, 69 volunteer teams were formed from the company’s field employees and their family members in 15 cities across Russia. The teams conducted over 700 various social actions for 191 non-profit organizations and institutions, a thousand New Year gifts were donated by employees and delivered to children from low income families and those who lived in children’s homes. In 2013, RUSAL’s centre for social projects also mobilized many volunteer teams from local partners and organizations, thus extending the scope of the event.

‘Yenisei Day’ is regarded as a unique environmental initiative in Russia aimed at protecting the Yenisei Rivers, the largest river system flowing to the Arctic Ocean, and creating a new Siberian ecological tradition.

The project was developed by UC RUSAL together with the Krasnoyarsk branch of the Russian geographic society in 2011. In 2012, Krasnoyarsk officially approved the last Saturday of September as Yenisei Day and the idea is now also established in the neighbouring Tyva and Khakassia regions. In 2013, Yenisei Day became an “ecological marathon”, and from May to September, various activities took place such as cleaning, sport, art projects and scientific studies. As a result, in Krasnoyarsk alone, over 30 tonnes of rubbish were collected by volunteers from the river’s shore. While studying local history and the ecosystem of the Yenisei, volunteers’ eco-tourism skills helped establish ecotourism welfare for the Yenisei.

New national day?
A direct consequence has been other Russian regions are also now considering establishing holidays devoted to rivers as a way to boost eco-volunteering activities. The Penza region has already done it. RUSAL hopes that the success of Yenisei Day will one day result in the creation of a national day of river protection in Russia.

In order to build a communication platform for current and prospective volunteers, NGOs and others interested in RUSAL’s projects, the company has recently launched a new internet site www.pomogat-prosto.ru in Russian which allows anyone to join RUSAL’s volunteering team, stay updated and contribute to the company’s initiatives.  

UK companies must rediscover the lost arts of innovation, argued the PwC annual CEO survey earlier this year. In fact, companies everywhere are under pressure to adapt to the double whammy of global competition and tightening sustainability requirements, write Maximilian Martin.

Megatrends such as the $5 trillion Base of the Pyramid (BoP) market, the$546bn global virtuous consumer segment, green growth and the rise of the circular economy, as well as a modernizing welfare state are all creating new market opportunities that combine profit and impact. But seizing them requires new products and services that combine profit and impact.

With a growing number of people expressing interest in buying sustainably, the 2010s have unsurprisingly been described as the decade of the corporate ascent to sustainability. The corporate ethics and compliance bar is being raised on a regular basis; the tightening requirements on supply chain compliance as per the UK Bribery Act and the US Foreign Corrupt Practices Act are just two illustrations of the intensifying efforts underway. Larger companies running global value chains in particular are increasingly recognized as de facto actors of development with more clients in developing countries than even large development agencies. Regulators as well as consumers increasingly expect these companies to deliver positive outcomes for groups of stakeholders that reside at the different stages of their supply chains.

Generally speaking, this is good news. High ethical, environmental, and social standards are part of Western Europe’s social contract and have produced impressive progress throughout the twentieth century. The transformational power of extending such dividends to emerging markets could be equally staggering. But higher standards also mean extra costs for companies. In the industrialized world, this approach has protected social peace and enabled high productivity. But rising competition from emerging markets, in some cases from companies that are not held to similar standards, has raised the question of how to succeed in the face of international competition, while also maintaining high standards. This is to say little of the fact that many executives reported (as recently as 2013) that they are stuck on their climb to sustainability. The way corporate social responsibility is practiced today is more conducive to aiding companies to meet some of their responsibilities than it is to acting on emerging opportunities.

To stay in the game over the long haul, companies need a way forward to identify and on-board the innovations needed to compete, while also systematically raising their social and environmental performance in the core business. CSR’s contributions to this quest are valuable, but limited; its days are counting (if not fully counted), and a clear roadmap for achieving business transformation has been missing. To help address this need, Impact Economy—a global impact investment and strategy firm—has just issued “Driving Innovation through Corporate Impact Venturing: A Primer on Business Transformation.” The goal of the report is to help businesses to innovate quickly in order to serve the BoP, green growth and the other markets of tomorrow mentioned earlier, and to build new sources of comparative advantage that are relevant to their core business.
This need should not be underestimated.

Take a company such as IKEA, the world’s largest furniture retailer. It plans to generate €45-50bn in turnover in 2020, up from €27 bn in 2012. Business growth as usual will not cut it. The company is actively seeking to update its business model to remain competitive in the wake of growing consumer demand and changing consumer expectations, rising raw material prices and more stringent ecological footprint as well as social performance requirements. This changing operating environment is motivating a need to innovate—yet this would be difficult to fully achieve in practice by only using existing resources and business innovation mechanisms.

Shared value
Many companies like IKEA are converging on a need to create “shared value” in response: the process of generating value for shareholders and stakeholders alike. This is a powerful idea. To deliver on it in scale, though, we will need efficient mechanisms to locate the right ideas and execute on them. Corporate Impact Venturing (CIV) provides one such mechanism. CIV marries corporate venture capital and positive social and environmental outcomes.

Creating new ventures and investing in existing ones with sustainable value creation logic can boost innovation, equip corporates for growing competition, and help achieve ambitious sustainability targets. Until now, the missing part of the solutions puzzle has been using venture capital to this effect.

Large corporations often find it difficult to bring innovations to market, even if their industry expertise enables companies to identify many trends and business ideas before anyone else. The mouse was invented at Xerox—and later brought to market by newcomer Apple.

Corporate venturing emerged as early as the 1960s to boost innovation capacity.

Setting up an internal corporate venturing group that invests off balance sheet, creating a dedicated external corporate venturing fund, or becoming a limited partner in one or several venture funds that follow investment strategies that are relevant to the corporation, gave corporations a way to better execute on innovation rather than see their former employees turn ground-breaking business ideas into blockbuster successes elsewhere. Yet, sustainability is now increasingly driving value, and new pathways are needed for sourcing business innovations; the logical next step is to engage in CIV.

Some companies who aim to build franchises around sustainable products are already doing this. In the clothing and footwear industry, Patagonia, a sustainable outdoor apparel pioneer, launched an internal venture fund (ie “$20 Million & Change”) last year to invest in start-ups focused on clothing, food, water, energy and waste. Launching an investment fund was “a logical step to reach out beyond the framework of the apparel and outdoor industries to do business more responsibly,” according to Patagonia founder Yvon Chouinard.

With sustainability megatrends all encompassing, Corporate impact venturing can now be applied on a broad front. Adapting to achieve compliance requirements in the face of tightening regulation is prudent, but compliance is merely a necessary condition to succeed, not a sufficient condition to create value. Marrying the logic of investments and impact, CIV is a powerful pathway to systematically engage in corporate opportunity without neglecting corporate responsibility.