Five 2014 CSR Game-Changers
In 2013 corporate social responsibility moved from "do good" actions to a business best practice. The following five 2014 CSR game-changers will accelerate the links between profits, environmental responsibility and social good.
1. Climate change economics
Climate change remains the 800-pound gorilla in the room for CSR. The politics of climate change are unlikely to change in 2014. But the path to profits through deployment of proven best practices that cut costs and reduce emissions will accelerate. The three economic drivers that make climate change a 2014 CSR game-changer are:
- CFO focus. The CFO’s office is now recognizing that climate change does impact profits. 2014 will see the accounting profession move forward by reporting how climate change impacts a company’s risks and financial performance. Today 27 of the S&P 500 corporations assign a cost to their carbon footprint as part of their budgeting process. This increasing CFO focus upon climate change is moving CSR into a reporting requirement that fulfills a corporation’s fiduciary responsibility.
- Marketing focus. Customers are searching for "in me, on me and around me" solutions. The millennial generation that was born into climate change are adopting lifestyles that both save money and reduce emissions. In 2014, this marketing mega-trend accelerates as the millennial generation expands its buying power toward being the largest U.S. consumer group by 2017. Businesses that sell solely on value will continue to hit a revenue growth wall from consumers that are increasingly demanding products that align value with values.
- Cutting costs through energy efficiency. The world is awash in fossil fuels. But the economic reality of "drill baby drill" has turned out to be higher prices, increased emissions and climate change. Higher energy prices combined with increasing price competitiveness of energy efficiency technologies will make energy efficiency a superior 2014 CSR leverage point that delivers measurable near-term ROI results and reportable environmental benefits.
2. Wage crisis
If climate change is the CSR 800-pound gorilla in the room, then wages will be the 2014 CSR "hot potato." The U.S. faces a wage crisis driven by wage deterioration among the middle class that constrains their ability to finance a middle class lifestyle. The resulting middle class financial weakness is undercutting our economy’s ability to achieve sustained economic growth. Business revenues are now hostage to the inability of the middle class to sustain its buying power.
Income disparity is a fuel accelerant that is turning this economic issue into a social fire. Income disparity is at historic highs last seen during the Great Depression. Since 2007 the federal minimum wage has been frozen at $7.25 per hour. If the minimum wage had been adjusted for inflation since 1968 it would be approximately $10 per hour. If it had been adjusted for worker productivity it would be approximately $18 per hour. Instead, the Economic Policy Institute calculates that all wage increases over the last 15 years have gone to the wealthiest 10 percent. Trickle-down economics that assumed a rising tide for the highest earning class would also float the boats of all has not delivered sustainable economic growth.
The economic solution is obvious: wages must rise. This can be counter-intuitive for C-suite leaders just as raising taxes during the Clinton administration was counter-intuitive but resulted in budget surpluses and economic growth. Successfully raising wages without accelerating unemployment will enable the middle class to grow wealth. Higher wages will grow consumer confidence plus increase buying power enabling consumers to buy more and save more - the two keys to economic growth.
Convincing a C-suite measured by 90-day performance metrics that wage growth is key to revenue growth will be the greatest CSR challenge in 2014. Higher wages, without productivity gains, mean higher costs. This is in absolute conflict with the business profit model used since the Great Recession that grew profits by cutting labor costs. This challenge is made even more difficult as income disparity places a political spotlight on CEOs. While wages are a macro-economic issue, it will be politics (both as a country and within a company) that enables a solution.
3. Technology
If wages are CSR’s hot potato issue, then technology will be the issue that reshapes the role of CSR. In 2014 CSR will continue its maturation as an investment driver for energy efficiency, manufacturing 2.0 and renewable energy technologies that enhance productivity, cut costs, deliver targeted returns on investment and reduce environmental footprints. CSR will also be a technology investment path for enabling a greener, smarter, lower risk and more humane supply chain.
4. Women leadership
In 2014 women in business leadership will continue to be an issue defined by a few pioneering women winning high-profile jobs, while the glass ceiling that confronts women leadership advancement remains a CSR issue. 2013 was a landmark year that documented how a business with more women leaders achieved superior profit results compared to businesses with fewer women leaders.
This "it’s not personal, just business" messaging will continue to grow in 2014 as an influence on strategic human resource planning. The 2014 game-changer will be a broadening of women leadership opportunities from 2013, when a significant percentage of women that won leadership roles demonstrated acumen in finance. 2014 will see growing evidence that women leaders can grow profits based upon their marketing acumen, customer service sensitivities and management practices that reduce social and environmental risks. This 2014 CSR issue will grow in awareness near year-end with the potential that 2016 may see the election of the first female U.S. President.
5. Obesity epidemic drives CSR’s growing role in marketing
Human health will continue its growth as the top CSR issue for consumers in 2014 driven by a global epidemic of obesity and diabetes. Obesity’s threat to human health, more than any other issue, is causing consumers to question what they buy and whom they buy from. 2014 will see CSR play a crucial role in shaping product designs and marketing messages that seek to win a trust-link with customers.
Businesses like rooftop solar companies and local farmers that can offer "guilt-free" products will win customers and grow product revenues. The Age of Commoditization where all goods and services lose their meaning except for their price competitiveness will continue to face a revenue growth wall from consumers demanding products that support human health.
Image credit: Economic Policy Institute; Bureau of Labor Statistics
Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017
MPOWERD Lantern Brings Affordable Solar to Sub-Saharan Africa
By Kerry Sinclair
Jacques-Phillippe Piverger likes to say that his company, MPOWERD, is "eradicating energy poverty through solar justice." He is doing this despite the fact that the old guard in business tends to believe that "it’s not possible to do good, and do well." MPOWERD is challenging that standard with grace. This startup, just 15 months old, already has a product jumping off the shelves - shedding light on the energy market.
Sleek-looking Luci, the solar lantern, is turning heads in firms across sub-Saharan Africa and capturing the interest of international distributors. The design of this portable powerhouse differentiates her from other lanterns on the market, just as MPOWERD’s integrated distribution model sets it apart as a social enterprise. Combine design and networked distribution with a low price point ($14.95), determined to get lower, and you have an MPOWERD business.
Conversations with co-founders, Piverger and his partner John Salzinger, make clear that they see the business as a driver for social and economic change, as well as a profitable entity. According to Salzinger, firms in Africa that pay up front for the product bolster manufacturing and help to give Luci a price advantage at home. This, in turn, creates retail visibility within the U.S. market.
When asked which market was the bread and butter for MPOWERD, the reply is "well, both…they work together right now." The integrated model helps MPOWERD keep its own lights on, while battling energy poverty in many locales. Piverger is adamant that his company and this product operate from a triple bottom line: social, environmental and economic factors. These same goals drive this energetic man to promote the company broadly. And it’s working. Luci is currently on back-order for 100,000 units to retailers worldwide, in addition to the 100,000 units already sold. The retail network boomed from zero to 60 within six months. No big deal? It’s sure refuting its critics.
Luci is a little thing. She’s made of clear plastic and weighs only 4 ounces, but she packs a nice punch. Ten thousand tiny LEDs provide 15 square feet of light that lasts for six to 10 hours on a full eight-hour charge. Just like the adage that recommends not messing with little people, Luci has managed to enable a drop in violent crimes against women, alleviate health problems related to kerosene and reduce the number of kerosene-related fires, while helping increase productivity and education for the 1.7 billion people who live off the energy grid worldwide. All because it gives a little more light.
Luci came to the rescue in New York and New Jersey during Hurricane Sandy and helps keep the energy bill down during normal times. Indeed, Luci doesn’t see borders; she just goes where she’s needed.
Of course, this rising enterprise didn’t drop onto the earth as a fully formed productive force. Piverger and Salzinger needed help from their "solar system" of stakeholders. Like any B-corp, MPOWERD needs folks to have faith. It has worked with one foundation and has given a few faithful individuals the opportunity to invest in the company. Just as the sun fuels the earth, MPOWERD’s stakeholders enabled this fledging enterprise to shine. In a recent article for the Huffington Post, Piverger explains that his company will continue to grow based on its ability to affect change in the world, developing and developed.
By wielding our market power along with cutting-edge technologies, we in the social innovation field are using business to create significant global change…In places where energy services are inaccessible—whether due to deficient infrastructure, high costs, or emergency conditions—Luci is a dependable source of light.
MPOWERD’s partners agree. Alliances with A New Course and the Amazon Conservation Association promote aid to communities in Tanzania and Peru, respectively. Moving beyond financial donations, these partnerships deliver entrepreneurship for women in Tanzania and conservation for marginalized communities in Peru. Developing a business in the U.S. can look like magic. Creating opportunities for people in places with less access to renewable resources requires the foresight to know that giving is getting. MPOWERD’s campaign encourages customers to donate Luci to their partners at a discounted price.
MPOWERD may look quirky to the status-quo, but positive acknowledgement by international organizations and media, including CNBC, Brazil’s Globo and the UN, requires that critics of the “do good, and do well” paradigm sit down and listen up. MPOWERD’s co-founders are demonstrating a different approach from the business world of 50 years ago. Blending sense and intuition, this new style of making money aids the argument that sustainability is not a trend, but a new standard in doing business.
Image credit: MPOWERD
Kerry Sinclair is an MBA candidate at Bard College, MBA in Sustainability. She is happy to be writing about the good fight.
London businesses urged to plug volunteering gaps
The City of London Corporation is urging businesses to ‘gift their skills’ as 2014 company-giving-gestures and are being asked to focus on particular charities.
Homelessness charities and those which support older people make up just nine per cent of all company volunteering support. Indeed, the research from the City of London Corporation found gaps in volunteering within several charity sectors with most London businesses opting to support charities which focus on youth, education and raising children’s aspirations, seeing young people as the ‘future asset’ and worth investing in.
Noa Burger, corporate responsibility project manager at the City of London Corporation said: “Collaboration across sectors is a powerful way to address society’s challenges, and charities can hugely benefit from the expertise of corporate volunteers.
"Areas which really need help– homelessness, the elderly and adult unemployment – particularly during the winter months, are still being somewhat overlooked and it’s important they are not forgotten. We hope more businesses across the city will take a look at not just what skills they can offer, but at where these skills are most lacking in 2014.”
Picture credit: © Gunter Hofer | Dreamstime Stock Photos
Why the Google Bus Protests are a Corporate Sustainability Issue
Tempers have risen in the SF Bay Area over the past few months due to sky-rocketing rental costs (the average cost for a 1 bedroom in the city was $2800 this past July). The cost increases are attributed to an influx of well-paid tech workers, many of whom actually work outside the city, down at Google, Facebook, Yahoo, Apple or one of the numerous other tech companies that litter the Silicon Valley peninsula. Increased demand for housing among well-paid tech workers plus stagnant supply means rising costs, and boy have they risen.
The tensions have a natural focal point in so-called Google busses - private busses that cart tech workers down to their jobs every morning and back again in the evening. These busses conduct their pickups on public streets and at public bus stops and the sheer volume of them slows down traffic flow and regular public transportation for the rest of the city. Most recently, protesters blocked a bus from departing and smashed a window in frustration.
Now, it's not fair to blame these sweeping economic forces on the individual workers - who wouldn't take a great job in a great city with great pay if they had the skills? Terrorizing individual workers who bus to work (the busses are a great decision from an environmental standpoint) is a decidedly bad response to the rising economic pressures, but the protesters do have a point. The rising rent costs and crowded public streets are benefiting corporate entities outside the city by providing their workers with a great place to live. These companies are headquartered outside the city limits, minimizing their tax burden in the area they are impacting. That means they aren't held liable for the constraints on public services caused by the systemic influx of their workers.
However, those corporate entities who claim to be good corporate citizens have a responsibility to respond proactively. Here's why this is a classic corporate sustainability issue.
The Materiality Principal and Local Impacts
The Global Reporting Initiative, the standard for sustainability reporting, considers local impacts to be a key issue that reporting organizations must address in their sustainability reporting. In fact, this requirement is stated right up front, as one of the key contexts in which to consider a company's sustainability performance:
"Information on [sustainability] performance should be placed in context. The underlying question of sustainability reporting is how an organization contributes, or aims to contribute in the future, to the improvement or deterioration of economic, environmental and social conditions, developments and trends at the local, regional or global level. (emphasis mine) G4 guidelines, p 10"
What that means for reporting organizations is that it isn't enough to report on good works, like the procurement of clean energy, or community service projects. If the organization has any substantive impact - positive or negative - in the local community, it belongs in the CSR report.
GRI doesn't expect organizations to report on all impacts, only the material ones. Organizations must report on issues that "reflect the organization’s significant economic, environmental and social impacts; or substantively influence the assessments and decisions of stakeholders. G4 guidelines, p 11."
If a company like Google's operations are having a measurable impact on the city of San Francisco's rent prices, that qualifies as a significant economic and social issue. And if community stakeholders are bothered enough by the busses to protest them, well a good sustainability report would reference their concerns and plans to deal with them.
Will we see this issue mentioned in future reporting?
Despite all the calls from GRI and other reporting advocates for companies to look closely at their local impacts, actually getting these impacts into the reporting is another story. Sustainability departments are already strapped, tracking dozens if not hundreds of social and environmental issues around the globe. Despite the clear materiality of this issue for Bay Area tech organizations, it may not show up in CSR reporting unless it occurs to someone in the sustainability department and that person can successfully make the case internally that the issue crosses the materiality bar. It's admittedly a high bar, given the number of issues competing for the team's attention.
So consider this a call to action, sustainability reporters! This stakeholder believes the rent and congestion issues close to your company's headquarters deserve to be covered in your sustainability reporting.
Reporting vs. Acting
Reporting is one thing, but actually acting to positively improve is, of course, the ultimate goal. Google issued an email statement after the bus smashing incident, stating that, "We certainly don't want to cause any inconvenience to SF Bay Area residents and we and others in our industry are working with SFMTA (San Francisco Municipal Transportation Agency) to agree on a policy on shuttles in the city." So the tech giant does appear to be actively working, at least on the congestion issues. That's good news for sustainability reporters who can cover the issues raised by stakeholders in their next round of reporting, as well as their corporate progress in addressing them.
Rent prices in the city are a more difficult challenge for a corporate entity to address, as Google certainly can't control where it's employees choose to live, nor can they singlehandedly impact the zoning regulations which limit supply in the city. Nevertheless, they can use their money and power to lobby for increased housing developments in cities throughout the Bay Area. They can work with the transit agencies to increase public transit between San Francisco county and counties to the south where tech companies reside, such that the transit routes Google and Apple have created for private use become an accessible public good. They can even build some of their own corporate housing, like Facebook, or work to make Silicon Valley a more desirable place to live.
Readers, what do you think? Are the local congestion and housing cost issues a core sustainability issue for tech companies? If so, what should they do about it? Weigh in in the comments!
Interview: Ford Solar C-Max Energi Provides Relief from Pump Pain
Ford just launched a concept car called the C-MAX Solar Energi that is designed to recharge its batteries within 8 hours through the solar cells installed in the car’s roof. The car’s batteries, solar cells and Fresnel lens system are sized to allow the typical commuter to drive to and from work on free solar energy. If Ford is successful in commercializing this technology then the pump price pain of car ownership will be broken. It will also be a global technology breakthrough for reducing urban smog and greenhouse gas emissions tied to climate change.
Three Design Elements
The C-Max Solar Energi is the integration of solar cells, solar-concentrating Fresnel lens and smart software that allows the car to track the sun to optimize solar energy flowing to the car’s batteries. The foundational element in the car’s design is the installation of SunPower solar cells integrated into the vehicle’s roof. These solar cells deliver a higher solar capacity per square foot, can curve to the car's roof contours and add only a few pounds of additional weight.
The second design element is a carport-like structure holding a Fresnel lens - a series of lenses that concentrate the sun's rays - sending that solar energy onto the car’s solar cells when the vehicle is parked under the canopy. The third design step integrates the operation of the Fresnel lens canopy with the car through smart software that maintains solar energy focused upon the car’s solar cells as the sun travels through the sky. Working together these integrated design elements will, on-average, recharge the car’s batteries during an eight-hour day.
Exclusive interview
David McCreadie is Ford’s Manager of Electric Vehicle Infrastructure and Smart Grid. During my exclusive interview with McCreadie he surfaced the engineering promise and challenges facing the commercialization of the C-Max Solar Energi.
The key design challenge in the C-Max Solar Energi was to continuously focus the Fresnel lens upon the car’s rooftop solar panels during charging. The current design achieves this through software that autonomously moves the car in synch with the sun’s arc across the sky. McCreadie estimated that the vehicle would have to shift its location by close to six feet during an eight-hour day. This raises obvious safety issues. It raises obvious questions regarding how much space is required to house a moving car under a Fresnel lens canopy. But it is also a remarkable testament to Ford’s smart technologies to even test such an idea with a concept car. Like most technology concepts the field-testing seeks to surface more practical solutions than autonomously moving a car six feet during the day to track the sun.
Cost will also be a design challenge. At this concept-stage Ford is not even addressing the “how much” question. But the commercialization of roof rooftop solar systems might provide pricing insights. Today's rooftop solar systems can be leased for zero down with guaranteed savings for the homeowner compared to electric bills. A similar enabling lease package for the C-Max Solar Energi and its Fresnel lens infrastructure could make this technology commercially viable.
Sea-changing potential
The C-Max Solar Energi offers the promise of a sea-changing solution to fossil fuel costs, energy independence and climate changing greenhouse gas emissions. California will certainly be an early adopter market. In 2014 California is launching building code revisions targeting a Zero Net Energy (ZNE) environmental footprint. Offering onsite solar recharging as an alterative to fossil fuels aligns with California’s goal of having all new residential construction be ZNE by 2020 and all new commercial construction by 2030.
In addition, California has launched a “Charging Ahead” goal that envisions a million electric cars on California’s road. Ford estimates that the C-Max Solar Energi can reduce the annual greenhouse gas emissions for a typical owner by four metric tons. A million Californians using electric cars that recharge their batteries from solar energy would be a huge advancement toward the State’s goals for reducing emissions and fuel costs. It would also address electric grid reliability questions tied to the potential of a million electric car commuters connecting to the grid to recharge at the same time and/or during critical peak time periods.
The C-Max Solar Energi could also be a meaningful solution for countries like China and India that are struggling with the environmental consequences tied to their record setting growth in car sales. Today China annually suffers a million premature deaths due to excessive air pollution. Mass application of solar powered cars would be a huge solution to issues of air pollution, greenhouse gas emissions and balance of trade impacts created from importing oil. The C-Max Solar Energi also offers a transportation and productivity solution for locations that have limited fossil fuel or grid infrastructure.
Game changing cleantech commercialization
The C-Max Solar Energi is an example of how the commericalization of cleantech is on the cusp of being a game changer for the U.S. economy and human health. Rooftop solar is now price competitive with grid supplied electricity sourced from fossil fuels. Biofuels are gaining market penetration in premium fuels like jet fuel. Smart technologies linking big data and 3-D printing has launched manufacturing 2.0 that holds the promise of on-shoring jobs, reducing emissions and delivering competitively priced products offering superior quality. And concept cars like the C-Max Solar Energi are pioneering breakthroughs that could cut America’s cord to pump price pain.
Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017
Balancing Good News and Bad News in Sustainability Reporting
What makes you read a sustainability report and come away thinking: "This company is really honest?" How many times has that happened to you in recent years? (assuming you have read a few sustainability reports). The Openness and Honesty Category in the annual CRRA online reporting awards is always an interesting one for me, as, let's face it, if we are not convinced of the honesty of the reporting company, then pretty much everything else is a waste of time. Am I right or am I right?
CorporateRegister.com, the CRRA host, says this about the Openness and Honesty Category: "It’s sometimes difficult to tell the whole truth. It’s easy to highlight the good news and ignore the bad. Whether performance is poor or excellent is less relevant for this award. This award is for the report which ‘comes clean’, tells both the good and the bad news, and which convinces us that this is a balanced picture."
Indeed, bad news was cited as one of the most significant credibility-builders in reporting, according to research the CorporateRegister.com published in 2013. But there is bad news and there is bad news. Sometimes, bad news is so wrapped up in sugar that you don't even realize it's bad news. Sometimes, bad news is so insignificant that it's not even news, let alone bad. Sometimes bad news is also old news, and not worth wasting time on. Sometimes, bad news is simply a number in a chart which shows a target was not achieved, with no explanation or acknowledgment. Bad news is rarely that people screwed up, people made mistakes, people got it wrong, people failed. Bad news is rarely personalized (unless you are Tony Hayward), though it's usually quite personal. Maybe reports should include a section entitled: Who screwed up this year, why, and what we did about it. That would shoot any report right to the top of the Sustainability Reporting Honesty Leaderboard Rating of All Time.
But it's not just bad news that builds credibility. A report containing only bad news would never get past legal counsel. It's the combination of both good and bad news and the consistency with which the company's overall performance impacts are reported that creates a credible report and the feeling that we are reading an honest account of performance. The result is that you believe the company has made an effort to tell it like it is, even though you always know, deep down, that the company has pre-deselected a range of things that it will not disclose.
I took a look at the ten reports shortlisted for the Openness and Honesty Category to see if I could identify a good news - bad news combination. Previous winners in the Openness and Honesty category include: Novo Nordisk Annual Report 2009 (CRRA '11), Marks and Spencer How We Do Business Report 2011 (CRRA '12) and Pacific Hydro Pty Annual Review & Sustainability Report 2012 (CRRA '13).
This time, the shortlisted lineup includes prior winner Pacific Hydro and nine other hopefuls. You can find all these reports and read them at CRRA '14 Best Openness and Honesty Category.
- British American Tobacco plc (BAT) Sustainability Summary 2012.
- Co-operative Group Limited Sustainability Report 2012.
- Fromageries Bel SA Corporate Social Responsibility Report 2012.
- Hydro Québec Sustainability Report 2012
- La Trobe University 2012 Sustainability Report.
- Microsoft Corporation Citizenship Report 2013
- Pacific Hydro Pty Limited Annual Review and Sustainability Report 2013
- Royal BAM Group nv Sustainability report 2012
- Smithfield Foods Inc 2012 Integrated Report.
- STMicroelectronics NV Sustainability Report 2012
Aside from these 19 people dying during the past two years, the rest of the BAT report is really quite good news. BAT faces the question of smoking-is-bad-for-everyone's-health head-on with wonderful news of nicotine alternatives which are safer than toxicants in tobacco, great stories of environmental added-value and support for a strict sector regulation.
The title of The Co-operative Group report - Building a Better Society - gives a hint that this report might be good-news oriented. However, the Co-op confirms that this is a balanced report. Chair Len Wardle says: "Good or bad, we report our impacts on everything from the environment to animal welfare, from people’s diet and health to diversity." Jonathon Porritt's expert commentary is only good news. Some of the superlatives in his short commentary include: remarkable, an inspiration, good story, impressive, pioneer, extraordinary. Perhaps the bad news is that there are few incredibly exceptionally admirably wonderfully astoundingly positive phrases he didn't manage to cram in.
True to its assertion, The Co-op reports the good and bad of target achievement.
Fromageries Bel's report - Sharing Smiles - is a first report. That's the good news. It's also the bad news, because it's a shame that this company did not deliver a report before now. It's a really well done report. The bad news is that there are zero women on the management committee at Bel, despite women making up 37 percent of all managers.
I had a hard time finding anything that looked like bad news in Hydro Quebec's report. That didn't make it less credible for me, but just to be on the safe side, I did a quick web search to see it I could come up with any major bloops about Hydro Quebec and I couldn't. The report, Hydro's 11th, is clear, readable and materially focused. The materiality process on the Hydro Quebec's website is impressively documented. So, no bad news. But don't let that fool you.
La Trobe University's report is another serious affair, but there is a little bit of bad news wrapped up in a little bit of good news. "While we have only achieved one of the three targets for women in senior roles, we are committed to gender equality and our Equal Opportunity for Women in the Workplace Strategic Plan 2012–2015 will provide guidance to move the University’s gender equality forward." The target was 42 percent and the achievement was 37 percent, so that's only almost bad. The other piece of good news in the La Trobe report is that target actions in all different performance areas throughout the report clearly state who is responsible for delivering (by job title). Now we know. And so do they.
Microsoft's 105 page report is rather a good news report. There is some really good news: "For the first time ever, we’ve integrated carbon use into the financial decision making of the company. Our internal carbon fee builds a more responsible corporate culture while giving us a new perspective on the external costs of our emissions." That sounds like great news. There's also good news from stakeholders. For example, Yutaio Wang from China: “ I can’t tell you how happy I was to find out I could get Microsoft training for free. I’ve always wanted to learn IT skills, but thought it was out of my reach.” There's good news about technology education, supporting NGOs, environmental performance, life-cycle impacts, human rights, online safety, data privacy, conflict minerals. In fact, it's all really really good. Why spoil it?
Pacific Hydro, on the other hand, piques our interest in bad news right on the very first page. The report gives a legend for understanding targets. Take a look at this:
Now, doesn't that make you sit up and race to try and find some little x's ? Fast forward to page 14. Oy! What a disappointment. Loads and loads of ticks and only one little x. "Did not achieve required returns due to overall reduction in forecast bundled (green and black) prices and delay in La Higuera tunnel rectification works." I thought that that might be our bad news over and done with in this report but then I came across a good bad report about the noise from wind farms and families who complained. Apparently wind farms create noise - but did you know that they create inaudible noise? Isn't that an oxymoron? "While complaints differ across the three families, they include concerns about audible and inaudible noise, vibration, and health." Well done to Pacific Hydro for reporting this sort-of bad news.
Royal BAM Group's report leaves nothing to chance. It includes a section entitled Where we can improve. It cites safety, carbon emissions and waste as key areas of focus, and these are all top-right quadrant material issues. Detail about how Royal BAM plans to improve are included in the relevant report sections. That's great. Now we don't have to read the entire report looking for bad news. All the credibility has been established up front in a very clear way. Way to go, BAM.
Smithfield Foods' report starts with bad news. A "forward-looking information" statement, half a page long, which I suppose only lawyers understand. My point is, if I don't understand it, and it's full of legalese, then it must be bad news. However, this is probably due to the report's integrated approach. Pages 1 - 54 are the Integrated-Sustainability Report, pages 55 to 191 are the company's Form 10K. I didn't look at the latter but the former is a sound and informative read, well-written, using the Integrated Reporting value creation framework rather than the G4 material-impact approach. Every section has a good-news piece about how much value Smithfield is creating for different stakeholders. The bad news in all of this is the recall of 216,238 lbs of portobello mushroom-flavored pork loins that may have contained an undeclared allergen. Fairly mild bad news, I guess. Unless you're allergic.
STMicroelectonics uses the by now familiar little x approach to tell us their bad news. There are actually quite a lot of little x's. Is that good news or bad news? Fortunately a new set of objectives has been established for 2013-2015, so that probably turns this into good news. The degree of data transparency is very high in this report, covering all levels of performance over a 5 year period, and that's good news even if it contains bad news.
Elaine Cohen is a CSR Consultant and Sustainability Reporter, founder/manager of Beyond Business Ltd and author of the CSR Reporting Blog
New AP Report Adds Weight to Pennsylvania Fracking Decision
The Associated Press is out with a major report on recent pollution complaints related to gas and oil fracking in Pennsylvania, Ohio, West Virginia, and Texas. The figures on Pennsylvania fracking are particularly interesting in light of last week's decision by the Pennsylvania Supreme Court. The court held that the state's new uniform zoning plan for fracking violated a part of the state constitution because it nullified any attempts by local authorities to establish more stringent requirements.
The Pennsylvania Department of Environmental Protection has appealed the ruling, but its case could be seriously undermined by a renewed focus on evidence that fracking imposes risks and hazards on local communities.
Fracking and local control
Fracking involves pumping a chemical brine deep into shale formations to loosen deposits of oil and natural gas. It has been used for decades without much notice in thinly populated areas, mainly in the western U.S.
That changed partly with the discovery of the gas-rich Marcellus shale formation in the eastern U.S., which brought fracking into contact with far more populated communities.
Local control over fracking is a critical issue because of the potential for harmful impacts on individual residents and on existing economic activity, most notably agriculture and tourism.
While a statewide standard that establishes minimum zoning regulations is not problematic, the Pennsylvania law would have effectively imposed a maximum standard that did not adapt to local conditions.
The Supreme Court took that into account in its ruling. The relevant part of the state constitution is Article 1, Section 27, the Environmental Rights Amendment:
Natural Resources and the Public EstateThe people have a right to clean air, pure water, and to the preservation of the natural, scenic, historic and esthetic values of the environment. Pennsylvania’s public natural resources are the common property of all the people, including generations yet to come. As trustee of these resources, the Commonwealth shall conserve and maintain them for the benefit of all the people.
The Associated Press fracking report
The AP article is titled "Some states confirm water pollution from drilling." Writer Kevin Begos details the findings of AP's request for information from four states, with these results from Pennsylvania:
The AP found that Pennsylvania received 398 complaints in 2013 alleging that oil or natural gas drilling polluted or otherwise affected private water wells, compared with 499 in 2012. The Pennsylvania complaints can include allegations of short-term diminished water flow, as well as pollution from stray gas or other substances. More than 100 cases of pollution were confirmed over the past five years.
The full article is well worth a read, because Begos makes the point that the raw numbers tell only part of the story. Just as significant is the practice that of isolating individual complaints, which according to Begos is characteristic of Pennsylvania.
The result is that persons alleging a fracking-related problem are largely unaware that their case is one among many, and the overall effect is to discourage individuals from coming forward to report a complaint.
Prying statewide information out of Pennsylvania officials is not something that individuals can easily engage in, either. Begos's report is the result of some determined labor by AP, which along with other news organizations engaged in a years-long battle with the Pennsylvania Department of Environmental Protection over access to statewide records.
Records from the other three states were easier to access, though only Texas provided a meaningful amount of detail. Here is a rundown of some of AP's other findings:
Ohio has confirmed six cases of water-well contamination since 2010 but none were found to be related to fracking.
Out of 122 complaints of water-well contamination in West Virginia over the past four years, four cases resulted in corrective action undertaken by the driller.
Texas provided AP with a detailed spreadsheet including 62 allegations of water-well contamination from oil and gas drilling. However, according to a Texas official the state hasn't confirmed any cases of water-well contamination related to drilling in the past ten years.
The low figures for confirmed cases are not particularly a surprise, since the fracking industry has been exempt from federal regulations requiring the disclosure of hazardous substances under the Clean Water Act, a gaping loophole that makes it virtually impossible to make a direct link between fracking-related pollutants and their source.
[Image: Pennsylvania postcard by pds209]
Winning partners
A PhD or Doctorate is a research degree, designed to demonstrate research competence, mastery of a subject area and to develop original insight – pushing the boundaries of knowledge, just a little. Doctoral candidates need to be to be able carry out original research of a quality that can be published in peer reviewed journals, write for scholarly and popular audiences and manage complex ideas at a high level.
The key to success in doctoral research is not just intelligence; it involves creativity, networking skills, a passion for research, a passion for the chosen subject, and perseverance. In the field of CSR, it’s about as far away from being stuck in a lab with a white coat as you can imagine.
The International Centre for Corporate Social Responsibility (ICCSR) at Nottingham University believes that as society’s expectations of business responsibility increase, and as more companies claim to be responsible, it is vital that there is understanding of how and why the ethical and the social can, and should be, as core to business as the economic.
Its website states that its aim is to ‘lead the international development of responsible and sustainable corporate practice through the creation and dissemination of knowledge’. The ethos underpinning this is to ‘research and teach in an engaged and reflective manner’ with collaboration identified as a key element of its research philosophy.
University-industry collaboration is not a new phenomenon. Yet it is entering a new phase. Indeed, collaborative doctoral education is of growing importance throughout Europe. Collaborative PhDs help all participants to gain an awareness of the challenges facing organisations today: There is a general feeling of getting in touch with the problems of the “real world”, and specifically gaining knowledge of the corporate world’s current issues of interest, needs and practical know-how, which would otherwise be difficult to achieve.
Dr Wendy Chapple, Deputy Director of the ICCSR has supervised collaborative PhDs with FTSE, Business in the Community and Capital One. She outlines how ‘one criticism of Doctoral Research is its theoretical, abstract nature. In a Business School it is important that the research we carry out is relevant and useful to business and organisations, collaboration allows us to do this’.
Rieneke Slager was working as a local enterprise support consultant in Lincolnshire when she saw an advertisement for someone to work on a research project about the impact the FTSE4Good Index was having on its listed companies. Given her background as a graduate in international relations from the University of Groningen (where she had focused on CSR), and also having worked in microfinance, the project ticked all the right boxes. It turned out to be an advert for the International Centre for Corporate Social Responsibility’s first collaborative PhD, part funded by the ESRC and FTSE.
The FTSE4Good Index Series is designed to objectively measure the performance of companies that meet globally recognised environmental, social and governance (ESG) standards. Transparent management and criteria make FTSE4Good a tool for consultants, asset owners, fund managers, investment banks, stock exchanges and brokers when assessing or creating responsible investment products. Slager’s PhD project was to examine what impact the index, launched in 2001, was having on its listed companies.
Slager began the PhD in 2008 and concluded in May 2012, though in the majority of cases funding is only required for three years. “Businesses need to remember that academic research is very different from regular research. It’s not a quick, in-and-out. It takes time and has to be grounded in academic theory,” says Slager.
The subject needs to be very specific to the business. ‘It needs to be something they really want to find out. They obviously set the parameters for the research but it is then carried out by an independent voice. An independent voice that takes the time to get to know the business very well.’
Slager feels that it is the bespoke nature, depth and also the independence of the research that makes it of high value to the individual business. ‘You do get to know the organisation really well but you don’t become a part of it’.
David Harris, ESG director at the FTSE Group and key contact for this research, agrees: “The research provided some key insights into our engagement process and its impact. The rigour and independence of academic study has given the research a great deal of credibility.”
Indeed the credibility of the research is such that FTSE promotes it on its website. And while the research does address the theoretical – a PhD needs to be published to be worthwhile to the career of the student – it also addresses the practical. In Slager’s case, FTSE serves as an illustration of her theory.
One of the findings of Slager’s research examined the issue of just how much time FTSE should invest in trying to enter dialogue with companies that are at risk of deletion due to the Index’s inclusion criteria. “FTSE isn’t interested in simply deleting companies. They wanted to know how long they should keep talking to companies for an effective engagement strategy. The research found that the conversation should last up to 15 months approximately.”
For the researcher, a collaborative PhD means that they get access to organizations and people from the start – access which otherwise can take lengthy negotiation. This usually results in really good quality data which can be used in future research. “It also helps academia step outside its ivory tower and engage with business,” says Slager. As part of the FTSE collaboration on the FTSE4Good Series, a member of the ESG team regularly contributed to ICCSR teaching so this collaboration also made an impact in the classroom.
Maggie Royston, Business Development and Centre Manager of the ICCSR has been responsible for arranging many of these collaborations and describes how “for several of these organisational contacts this has been their first exposure to higher level research, it has taken a leap of faith on their part - but they have appreciated the benefit that this genuine commitment to knowledge creation will bring in the long term”. An observation which reflects well on the calibre and commitment of many individuals working in CSR and sustainability practice.
Something new under the sun roof at Ford Motors
Global car manufacturer Ford has unveiled a first-of-its-kind sun-powered vehicle.
Instead of powering its battery from an electrical outlet, the Ford C-MAX Solar Energi Concept harnesses the power of the sun by using a special concentrator that acts like a magnifying glass, directing intense rays to solar panels on the vehicle roof.
The result is a concept vehicle that takes a day’s worth of sunlight to deliver the same performance as the conventional C-MAX Energi plug-in hybrid, which draws its power from the electricity grid, says the company. By using renewable power, the car is estimated to reduce the annual greenhouse gas emissions a typical owner would produce by four metric tons.
“Ford C-MAX Solar Energi Concept shines a new light on electric transportation and renewable energy,” said Mike Tinskey, Ford global director of vehicle electrification and infrastructure. “As an innovation leader, we want to further the public dialogue about the art of the possible in moving the world toward a cleaner future.”
C-MAX Solar Energi Concept will be shown at the 2014 International CES in Las Vegas, which opens tomorrow (7 January 2014). The car is a collaborative project of Ford, San Jose, California-based SunPower Corp. and Atlanta-based Georgia Institute of Technology.
Winning partners
A PhD or Doctorate is a research degree, designed to demonstrate research competence, mastery of a subject area and to develop original insight – pushing the boundaries of knowledge, just a little. Doctoral candidates need to be to be able carry out original research of a quality that can be published in peer reviewed journals, write for scholarly and popular audiences and manage complex ideas at a high level.
The key to success in doctoral research is not just intelligence; it involves creativity, networking skills, a passion for research, a passion for the chosen subject, and perseverance. In the field of CSR, it’s about as far away from being stuck in a lab with a white coat as you can imagine.
The International Centre for Corporate Social Responsibility (ICCSR) at Nottingham University believes that as society’s expectations of business responsibility increase, and as more companies claim to be responsible, it is vital that there is understanding of how and why the ethical and the social can, and should be, as core to business as the economic.
Its website states that its aim is to ‘lead the international development of responsible and sustainable corporate practice through the creation and dissemination of knowledge’. The ethos underpinning this is to ‘research and teach in an engaged and reflective manner’ with collaboration identified as a key element of its research philosophy.
University-industry collaboration is not a new phenomenon. Yet it is entering a new phase. Indeed, collaborative doctoral education is of growing importance throughout Europe. Collaborative PhDs help all participants to gain an awareness of the challenges facing organisations today: There is a general feeling of getting in touch with the problems of the “real world”, and specifically gaining knowledge of the corporate world’s current issues of interest, needs and practical know-how, which would otherwise be difficult to achieve.
Dr Wendy Chapple, Deputy Director of the ICCSR has supervised collaborative PhDs with FTSE, Business in the Community and Capital One. She outlines how ‘one criticism of Doctoral Research is its theoretical, abstract nature. In a Business School it is important that the research we carry out is relevant and useful to business and organisations, collaboration allows us to do this’.
Rieneke Slager was working as a local enterprise support consultant in Lincolnshire when she saw an advertisement for someone to work on a research project about the impact the FTSE4Good Index was having on its listed companies. Given her background as a graduate in international relations from the University of Groningen (where she had focused on CSR), and also having worked in microfinance, the project ticked all the right boxes. It turned out to be an advert for the International Centre for Corporate Social Responsibility’s first collaborative PhD, part funded by the ESRC and FTSE.
The FTSE4Good Index Series is designed to objectively measure the performance of companies that meet globally recognised environmental, social and governance (ESG) standards. Transparent management and criteria make FTSE4Good a tool for consultants, asset owners, fund managers, investment banks, stock exchanges and brokers when assessing or creating responsible investment products. Slager’s PhD project was to examine what impact the index, launched in 2001, was having on its listed companies.
Slager began the PhD in 2008 and concluded in May 2012, though in the majority of cases funding is only required for three years. “Businesses need to remember that academic research is very different from regular research. It’s not a quick, in-and-out. It takes time and has to be grounded in academic theory,” says Slager.
The subject needs to be very specific to the business. ‘It needs to be something they really want to find out. They obviously set the parameters for the research but it is then carried out by an independent voice. An independent voice that takes the time to get to know the business very well.’
Slager feels that it is the bespoke nature, depth and also the independence of the research that makes it of high value to the individual business. ‘You do get to know the organisation really well but you don’t become a part of it’.
David Harris, ESG director at the FTSE Group and key contact for this research, agrees: “The research provided some key insights into our engagement process and its impact. The rigour and independence of academic study has given the research a great deal of credibility.”
Indeed the credibility of the research is such that FTSE promotes it on its website. And while the research does address the theoretical – a PhD needs to be published to be worthwhile to the career of the student – it also addresses the practical. In Slager’s case, FTSE serves as an illustration of her theory.
One of the findings of Slager’s research examined the issue of just how much time FTSE should invest in trying to enter dialogue with companies that are at risk of deletion due to the Index’s inclusion criteria. “FTSE isn’t interested in simply deleting companies. They wanted to know how long they should keep talking to companies for an effective engagement strategy. The research found that the conversation should last up to 15 months approximately.”
For the researcher, a collaborative PhD means that they get access to organizations and people from the start – access which otherwise can take lengthy negotiation. This usually results in really good quality data which can be used in future research. “It also helps academia step outside its ivory tower and engage with business,” says Slager.
As part of the FTSE collaboration on the FTSE4Good Series, a member of the ESG team regularly contributed to ICCSR teaching so this collaboration also made an impact in the classroom.
Maggie Royston, Business Development and Centre Manager of the ICCSR has been responsible for arranging many of these collaborations and describes how “for several of these organisational contacts this has been their first exposure to higher level research, it has taken a leap of faith on their part - but they have appreciated the benefit that this genuine commitment to knowledge creation will bring in the long term”. An observation which reflects well on the calibre and commitment of many individuals working in CSR and sustainability practice.
Image credit: Unsplash/MD Duran