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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. 

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.
 

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

Submitted by Guest Contributor

By Dinah Koehler and Chris Park

Part of the Business Trends series

Earlier this year, Deloitte published its inaugural Business Trends 2013 report, a collection of articles that summarize eight emerging trends that influence top-line strategy. One of the trends, The Responsible Enterprise, explored the accelerating interest in environmental, social and governance (ESG) issues and provided insights on how companies can reap the benefits of the trend and use ESG to drive shareholder value.

In a series of blog posts over the next several weeks Deloitte will provide an overview of the trend, explore the drivers behind the trend, provide lessons learned and share insights on what can be expected in the future.

----------------------

Our last post explored the significant shift underway, with companies increasingly expected to address ESG issues head-on, and ESG becoming a C-Suite priority. Today, we will explore the drivers behind the trend.

What’s Driving This Trend?

Five factors account for much of the accelerating growth of corporate interest in ESG issues and none of these factors show any sign of letup. A new era of the responsible enterprise appears to be here to stay.

1. Loss of Trust

According to the 2012 Edelman Trust Barometer, public trust in business continues to decline, dropping to 45 percent in the United States, compared to 51 percent in 2010. Trust in government is even lower. These findings indicate a growing perception that large institutions are not serving the public interest well.

Trust goes hand in hand with reputation. After regulatory pressure and commodity price volatility, respondents to our Deloitte ESG survey ranked potential damage to corporate reputation and brand as a primary risk arising from environmental and social issues. Protecting the brand and reputation has historically been a top reason companies focus more on managing ESG issues. [Eric Hespenheide, Kate Pavlovsky, Steve Wagner, “The Responsible and Sustainable Board”, Deloitte Review, issue 4, 2009]

An outside-in focus helps companies better anticipate and manage these reputational risks, and ultimately protect their valuation. Without a foundation of trust, it is harder for managers to establish a solid track record with their stakeholders that builds reputation. [A Risk Intelligent view of reputation: An outside-in perspective, Deloitte and RIIR, 2011]

2. Stakeholder Pressures

Pressure from consumers and investors is an important motivator for businesses to take action on ESG issues. Stakeholders have always mattered to a company. However, in an age of transparency, any stakeholder – including many that may not have been considered stakeholders a few years ago – can act, and many do.

How stakeholders view a company, what they expect of a company, and how they understand the company’s impact on society and the environment matters to business value. Quite often, stakeholder perception of the risks differs from that of corporate managers and experts. Rather than argue on a scientific basis, many companies find it best to acknowledge stakeholder concerns and reduce or remove the risk altogether. [Dinah Koehler and Eric Hespenheide, “Drivers of Long-term Business Value, Stakeholders, stats and strategy”, DU Press, 2012]

Globally, stakeholder pressure is increasing, especially as the ranks of the middle class expand in emerging markets such as China and India. A wealthier and more educated middle class tends to have higher expectations for corporate ESG performance, as illustrated by growing public outcry over air and water quality in China. In fact, academic research finds evidence that today’s investors react more strongly to information on a company’s ESG performance compared with past decades, as shown by steeper stock price drops after the information is known.  

And companies that disclose more ESG information tend to be rewarded by investors. The number of S&P 500 companies that issued sustainability reports jumped from 19 percent in 2010 to 53 percent in 2011—and is expected to continue rising. [See: New University of California Study Uses CSRwire to Prove 'Voluntary Disclosure Theory] Without a deeper understanding of stakeholder judgment, a company risks being adrift in a vast sea of information, facing difficulty in crafting a strategic response and mapping a course to long-term business value creation.

3. Natural Resources Pressures

Growing global demand and supply constraints are generally pushing up prices for energy, agricultural products, and raw materials—an upward trajectory punctuated by periods of extreme volatility, according to the IMF Commodity Price System database.

For example, precious metal prices have increased fourfold since 2005. Also, last year’s drought, which affected nearly two-thirds of the U.S. contiguous states, was the worst in 60 years and drove up cereal prices by 17 percent. In fact, the cost to the U.S. economy has been estimated at 1 percent of GDP.

Such resource trends are increasingly top of mind for business leaders and managers with more than 70 percent of Deloitte’s ESG survey respondents saying their organizations were making a significant commitment to improve resource efficiency. Add to this, sprawling global supply chains, and efficiency is fast becoming a competitive advantage on a global scale.

4. Supply Chain Pressures

Executives surveyed by Deloitte also see a multitude of supply chain risks that directly affect their businesses, including climate adaptation, regulatory pressures, and the unethical practices of certain business partners.

Companies rely on global supplier networks that are largely beyond their immediate control, but those same companies are being held publicly accountable for the actions of those suppliers. Also, the strong emphasis that many companies have placed on supply chain efficiency often reduces the margin for error and makes supply chains more vulnerable to all forms of risk, including ESG risks.

In recent years alone, companies have been hit by a number of major disruptions, including floods in Thailand, the tsunami in Japan, and labor unrest in China and South Africa. The increasing frequency and financial impact of these types of supply chain risks are not going unnoticed.

5. Social and Mobile Enablement

A Deloitte risk management survey of 192 U.S. executives found that social media ranks among the top five most important sources of risk.

With social and mobile technologies becoming globally pervasive, questionable business practices have no place to hide. Problems that in the past might have remained behind closed doors can now be exposed to the world in a few minutes without a lot of advanced technology—and then scrutinized in detail, long after traditional media sources would have lost interest.

In essence, these drivers work together and jointly increase risks to a company’s operations and its entire value chain. This makes managing them a daunting task, but one that many companies are starting to approach proactively.

More on the implementation is next, so stay tuned!

Call it a win for environmentalists. For now.

What has been defended by the Obama Adminstration as a pragmatic review of the cost of carbon emissions to average Americans was challenged recently by the Conservative-leaning Landmark Legal Foundation as a political ploy by which to spin the benefits of carbon regulation.

“DOE's unannounced, dramatically increased, and improperly altered ‘Social Cost of Carbon’ valuation presented for the first time in this microwave oven regulation will certainly become the standard by which all other agencies will place a purportedly beneficial economic value on new carbon regulations.”

On June 17, 2013, the Office of Management and Budget raised the cost of carbon from $21 to $35 per metric ton (pmt). Critics called foul, saying it would raise utilities and unfairly benefit those who want stiffer regulations for carbon emissions.

In August, the LLF filed a petition to remove information regarding “social cost of carbon” from a rule governing microwaves. The organization argued that the rule contravenes the Administrative Procedure Act, which tells agencies how they can set regulations. It also said that  that the rule included information about the administration’s revised (higher) 2013 social cost of carbon estimates in it that the public should have had the right to comment on. It called attention to the Obama Administration’s earlier statement that a comment period “should generally be at least 60 days.”

The DOE’s response December 24 denied the petition, saying that it had published the rule back on August 16, 2013 and “[b]ased upon its evaluation of the petition and careful consideration of the public comments,” it had decided to deny the petition.

The heart of the LLF’s argument, it would seem, is that that the administration’s actions didn’t appear to reinforce the spirit of generosity that it had advised agencies to show when asking for comments. It gave the expected 60 days, nothing more and nothing less. Comment periods, however, have been more an issue for repeat objection during previous administrations, which is why the Obama Administration advocated for a minimum of 60-day comment periods for all agencies.

But the real bone of contention is the effect that this ruling could have to proposed projects like the Keystone XL Pipeline, which the president has vowed to stop if it appears that the project would increase global warming.

Still, it’s hard to understand how it would. The “social cost of carbon estimates” are exactly that: how carbon, being generated today, affect Americans, their pocketbooks, health and property. Would a $35 pmt assessment for carbon emissions really stand in the way of Keystone more than a cost of $21 pmt if it is recognized that there is a significant cost to carbon emissions that have already been blamed for climate change and environmental injustice issues?

The new rule does underscore the need for change. It does give that further reason to energy companies to upgrade to less-expensive power sources and work toward developing an energy grid that is multi-sourced and more environmentally supportive. And it makes it painfully clear to those who deny that there is such a thing as global warming, that there is a real and tangible way to measure climate change before it hits coastlines.

Still, it’s curious that the Obama Administration expedited this rule in the manner that it did. Presented this way, the rule clearly draws objections, not support, from the other side of the political isle and provokes debate from corners that may not have yet joined the fray. It’s likely, given the amount of criticism that the DOE's decision has received, that we haven’t heard the end of the debate about the costs of carbon emissions, or their contentious administrative rulings.

Wausau WI Power Plant - Image by Royalbroil

By Tara Gould 

Bloody Garments – the price of fast fashion

A grey arm sticks rigid out of the ruins. A woman’s crushed torso emerges through rubble, a bruise of red blood on the fabric of her sari, showing through a film of dust.

Photographs of the Rana Plaza disaster of 24 April last year are shocking.   The collapse of the Bangladesh clothing factory killed 1,127 people and injured scores more. Only days before, the building had been pronounced structurally unsafe for purpose, yet still thousands of women workers were sent in to carry on as usual.

The Western world was appalled, but how many of us have actually considered the reality of the human impact, the consequences on family members left behind, and the fact that these deaths were a result of the gross negligence of the brands involved? Has this prompted a change in legislation or consumer habits?  Months after the disaster, the profits of the biggest high street brands are still soaring.

It’s easy to feel bad about a disaster miles away, then pop into the local fast-fashion outlet the next day and buy a new T shirt. After all, you’re on a tight budget, and it’s not your fault the building collapsed, is it?

At this stage in the rapid growth of unethical fashion, how can we slow things down and be mindful of the consequences of our shopping habits? The lack of ethical consciousness or legislation of the big brands makes selfish shopping so easy.  The media and many women's magazines seem to not only condone but encourage high street fashion without a second thought about what's been involved in its production.

With 3 million people working in the garment industry, many of whom are women and children between the ages of 8 and 16, are we prepared to do more to engender positive change and stop the abuse?

Fashion takes Action

Some people are – and they want you to join them.

Last October, a trendy corner of East London hosted the gathering of an audience dressed entirely in red and pink to show their solidarity for ethical fashion. The brainwave of original ethical fashion pioneer, Safia Minney and her  People Tree label, 'Fashion takes Action'  was organized specifically to ask whether, less than a year after Rana Plaza,  we are putting people and planet first.

Campaigner Minney, whose seminal book Naked Fashion has had a profound influence on the fashion industry, was joined on a panel by iconic fashion designer and People Tree collaborator Zandra Rhodes, Lord Peter Melchett, Policy Director of the Soil Association, and journalist Liz Jones, who has travelled to Dhaka in India on a number of occasions and accompanied Safia Minney there after the Rana Plaza disaster.

The human cost of fashion

A short film of Safia Minney’s visit to Bangladesh was shown with unseen footage of protests and interviews, followed by a panel discussion which Safia began with a talk about her visit to India, through the Rag Rage campaign.

Liz Jones explained how a man featured in the film lost his wife. She was in the building when the collapse happened, and she was never found. Yet after a lengthy appeal he received only $200 compensation, he lives in a slum and has to queue everyday for rice. Still, 10 of the 11 brands involved have not coughed up any compensation. “I think it’s disgusting,” Liz said. “It makes you very ashamed that you’ve ever been in one of those stores.”

Legislation vs education

Liz expressed her belief that there is no going back on fast fashion

“We keep raising awareness but you go down Oxford Street and see people laden down with bags from Primark. The British female shopper is not going to change her habits. Legislation is the only thing that will make companies change. We need to lobby government and the people in power.”

Lord Peter Melchett urged that we need to be positive, that we refrain from scorn or attack but that we keep spreading awareness and at the same time push for hard laws to be put in place.

“Governments are afraid to act, especially against big corporate interests,” he explained. “But organic global sales are growing; they are up by 10%.  A 2012 YouGov report revealed that 49% of people believe consumers should think more about organic. There is good news, but there is still bad stuff happening.”

He pointed out that some of the main players in high street fashion were turning gradually towards sustainable practices and he cited H&M’s organic cotton growth targets as ambitious.

The cotton problem

He highlighted the dangers of genetically modified cotton which contaminates the land and spoke about the affects of non-organic pesticide heavy farming:

“Cotton is sprayed more than any other crop in the world – farmers who spray are not protected and often don’t have access to wash the chemicals off properly each day. 77 million people worldwide suffer or die from pesticide poisoning.”

Promotion not boycott

Safia explained that trade unions, such as the National Garment Makers Federation, don’t want a boycott of these companies, but would prefer a multi-stakeholder approach. The key is to promote safety and fairness for the workers, not cut off their income streams.

Her Rag Rage campaign collated more than 80,000 signatures calling fashion brands to sign the Fire and Building Safety Agreement in Bangladesh and to provide compensation to victims. But still most of the brands involved have not paid compensation.

Like the smoking ban?

Zandra Rhodes cited the smoking ban as an example that things can change quickly and dramatically: “We need to keep the fire alive, and hope that our small efforts make a difference.”

A point that Zandra made in jest is left with me “you can’t wear heels in India” – and in a way this is pertinent. For fashion to become benign it might just require some of us giving up some of the things we love, things that we think we should have, but don't really need.

Be the change

It's not necessary to sacrifice personal style, there should be no guilt in wanting to look good, but a certain myth seems to have been propagated, that those of us on a budget have no choices at our disposal. It's the high street or bust. This simply isn't true.  Many brands selling organic cotton are now comparable in price to non-organic, charity shops and vintage stores are plentiful and a treasure trove of rich pickings, and as more of us commit to the things we believe in, like ethical fashion, the price of ethical fashion continues to fall.

By adding your support for these campaigns, by signing petitions and putting pressure on brands and government, you are helping the victims of unscrupulous practices. But if enough of us choose to pay a few pounds more for organic cotton, or avoid the high street altogether and only buy from ethical labels, this will engender the dramatic change that all of us need in the long term.

Tara Gould is a writer and senior editorial consultant at Ethical SEO (www.ethical-seo.eu).  She writes about all aspects of sustainable and ethical business, design and culture. She lives in Lewes, UK with her family.

 

A quarter of Britain's small and medium sized enterprises (SMEs) say sustainability is one of their top three priorities for 2014, reflecting a renewed confidence and a desire to focus on developing their businesses' in the New Year, according to new research from Lloyds Bank Commercial Banking.

However the findings show that many businesses are still focused on traditional 'green' activities, including energy saving and recycling rather than the broader range of sustainable business practices relating, for example, to supply chains and sourcing. It also highlights the fact that there are still businesses who do not believe there are any benefits to be gained from implementing such practices.

Stephen Pegge, external relations director, Lloyds Banking Group, commented: "Businesses clearly see the benefits of sustainability, and they are carrying out their environmental responsibilities through recycling and being energy efficient.

"But for SMEs, sustainability also means interacting with charities, social enterprises and the community in which they operate; working responsibly within their supply chain and engaging with the next generation, through, for example, apprenticeship schemes.

"Some sectors are really leading the way and other industries across the UK economy can follow their example and help underpin the growth we are now seeing with practices that will give us all a sustainable future."
 

The start of a New Year generally means a rash of New Year resolutions. I have to admit that I’ve not made my own yet. I always get stuck between setting myself easily achievable (so where’s the challenge in that?) and something totally unachievable (am I really going to jog around the block every morning come rain, sleet and snow?) Still, as I am writing this in December I have some leeway to come up with something hopefully worthwhile.

Some companies have made some pretty big ones. Pharma giant GSK springs to mind. It’s recently announced that it is shaking up its sales process whereby sales personnel will no longer be rewarded by hitting individual sales targets. Instead GSK’s sales professionals who work directly with prescribing healthcare professionals are to be evaluated and rewarded for their technical knowledge, the quality of the service they deliver to support improved patient care and the overall performance of GSK’s business.

The aim is for this new compensation system to be in place in all of the countries GSK operates in by early 2015. More transformational change than resolution in fact. It is good to see that a company the size of GSK recognises that it can reduce the possibility of undue influence by rewarding employees for providing high-quality information and education, rather than for their sales figures.

This is only one part of the pharmaceutical company’s new way of doing business. It is also stopping payments to doctors for making speeches and ending payments to healthcare professional for attending medical conferences.
Sir Andrew Witty, GSK’s ceo, explained the rationale behind the changes: “We believe that it is imperative that we continue to actively challenge our business model at every level to ensure we are responding to the needs of patients and meeting the wider expectations of society.”

I very much like that idea of ‘challenging the business model’. It’s what CSR and sustainability are all about.
GSK hasn’t always been in the good books– a decade ago it received a lot of criticism for its high price tags on HIV drugs for the developing world and it is currently embroiled in a bribery allegation in China – but its ceo’s awareness of ‘the wider expectations of society’ shows a very different approach. Its ongoing collaboration with Save the Children, recently ramped up by giving the charity a seat on GSK’s R&D board, is that mindset in action.

Talking to Procter & Gamble’s (P&G) vice president of sustainability, Len Sauers, recently (see p3), I was struck by a similar vision. Big business no longer sees itself in isolation. These huge titanic entities recognise their global impact. And more importantly they recognise that they cannot effect change on their own. (P&G has just renewed its partnership with WWF that helps it to source sustainable materials.)

I’m hoping 2014 will be the year of collaboration and increased transparency. I think we’re off to a positive start.

Happy New Year!

liz.jones@ethicalperformance.com 

A new report published by World Development Movement (‘WDM’), a London-based group, argues that tough regulation is “urgently needed” to limit speculation in the food and other commodity markets, which it claims is contributing to the global hunger crisis by driving up food prices.

The call was made in WDM’s 18-page report entitled ‘Dangerous Futures: How our Pensions Fuel Hunger’ (December 2013) as proposals were being thrashed out at a European Union-level through the Markets in Financial Instruments Directive (‘MiFID’). Noting that the British Government appeared set on “blocking agreement” in Brussels, the report’s authors stressed that “there is a risk that ordinary people’s retirement savings will continue to fund food speculation and fuel higher food prices”.

Examining short-term versus long-term speculation, investment banks “peddling” commodity investment, commodity index funds and holdings in food commodities, the report estimated that some £1.5bn of pension savings are used to “speculate” on food prices - equivalent to some £180 for every person in the UK contributing to a pension.

The report noted that institutional investors like pension funds have been putting “vast sums of money” into food and other commodity markets, effectively “placing huge, long-term bets on rising prices” and pushing food prices beyond the reach of the poor and increasing hunger and malnutrition.” And, the “amounts of money involved are only likely to increase”, WDM cautioned.

Such speculation is promoted by a number of investment banks like Goldman Sachs and Barclays Bank. And, while Barclays announced earlier in 2013 that it was withdrawing from food speculation, the bank “continues to facilitate such practices by pension funds and other institutional investors”, the report stated.

Despite acknowledging a “widespread lack of transparency” in pension funds’ holdings, WDM claims their “research has shown how the pension funds of major employers such as BT and the railway industry are speculating on commodity prices.”

For example, the BT Pension Scheme had £960m invested in a range of commodities with an estimated £240m allocated to food commodities, while the Railways Pension Scheme £330m held in commodity futures exposure with around £82m in food commodities, followed by the West Midlands Pension Fund with £202.7m (£58.2m agricultural only; £44m food commodities).

Whilst acknowledging that a “lack of hard data” made an exact estimate difficult, it contends that a conservative estimate (including large funds and small funds) of pension fund money in commodities may be at least £6bn.
Given that 8.2m people in the UK are currently saving in some kind of pension, this would mean that the average person with a pension bets around £731 on commodities - of which 25% (c.£182) is likely to be on food commodities (using an average of the weightings of four broad commodity indices as a proxy including the S&P GSCI).

The report examined published data on the websites of the UK’s 100 largest pension funds between May and September 2013, and initiated Freedom of Information (‘FoI’) for the 21 UK pension funds in the top 100 run by or for public bodies where there was insufficient publicly available information.

Under FoI requests only Teeside Pension fund revealed specific investments in an agricultural fund based on agricultural futures and commodity investments (corn and wheat futures) totalling £11.4m. Of the other pension funds, eight provided no response, five revealed no commodity holdings and seven indicated no direct commodity holdings.
 

$21bn paper product and nappy maker Kimberly-Clark began setting five year sustainability goals in 1994. The latest, Sustainability 2015, is a 10-point agenda that ranges from social programmes to waste fill to the introduction of environmentally innovative products. Lisa Morden, senior director, global sustainability, gives a glimpse into the company’s current sustainability mindset

 

On board since its beginning, Lisa Morden, says the change that stands out the most is the expanded focus from just the manufacturing footprint to the end user. “That is what keeps me in sustainability,” said Morden, “It changes so rapidly and dramatically.” Kimberly-Clark (K-C), which has operations in 37 countries, has earned inclusion in the Dow Jones Sustainability NA Index and the UN Global Compact 100. It also received A+ from GRI for its sustainability reporting.

Q Kimberly-Clark’s efforts are quite far reaching. What do you see as your standout programmes?
A Our strategy is divided into three buckets – people, planet and products. The ones I enjoy most are the ones that touch all three, like our water use and water replenishment program. As a tissue manufacturer we require water and restore water to parts of the world where we have operations. We currently return 94%. The remainder is lost in the process or remains in products. Our goal is to close the gap in increments of 200 million gallons per year over a 10 year period.

Q Can you give an example of a water-related programme?
A In pursuit of this goal, K-C introduced safe-water initiatives in El Salvador and Columbia in 2012. We call this Water for Life. In Columbia we began by providing clean drinking water in the homes of our employees by installing filtration units. Then we provided safe water and sanitation in local schools, followed by coordinating clean water and sanitation programmes with a nearby NGO that hosted after school activities. These projects, along with others in India and Israel, helped us meet our annual goal last year. 

Q How involved are your employees?
A Our employees are critical to drive our progress. You can’t really run these programmes from a small central team. Among the 2015 goals is to establish socially-focused programmes in all K-C communities. [Currently the company has reached 89%, up from 62% in 2011]. In the Columbia project our local team helped renovate bathrooms in the schools and then provided clean-hands hygiene education for the students. They also assembled volunteers to complete other repairs at the schools. In the US we have the Huggies `Every Little Bottom’ programme that supports diaper banks around the country. It is a big social challenge. It costs an average $18 a week, and one in three US mums suffer from diaper need. We help them get through that. Our employees drove support through donation programs that totaled $19m last year. Employee involvement is also essential to our ‘Lean Energy’ initiative which is about continuous improvement and energy conservation. We have been implementing smart metering in mill operations. 
Employees have real time information on energy they are using and can make live-time decisions to improve it. In El Salvador we’ve saved $1.8m, and are expanding this to other plants.

Q What else are you making progress with?
A A lot of our products contain wood fibre. As part of our responsible sourcing goals, we set a target that all of our fiber suppliers are certified by one of five recognized forest recertification systems. Forests are really important to our business for business continuity. Last year we achieved 100% certification of our suppliers. We don’t just mandate, it is really a working partnership. 

Q Forest sustainability is crucial to your business. Tell us more.
A It is certainly an area where we want to be seen as a leader. We have cool innovation coming along that explores alternative sources of fibre, such as a broad range of bamboo and wheat straw.

Q How are you progressing with post-consumer waste?
A It is a concern of ours. On the Huggies diaper brand, we are really hoping a pilot project in New Zealand is scalable. It is conducted in partnership with Envirocomp and a team of mums and dads who bring diapers to the facility where some material is composted and some extracted. Another example is in North America where our Blue ReNew initiative assists healthcare facilities recycle clean, used KimGuard Sterilization Wrap.