September Ethical Corporation magazine - Part 2

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This is part 2 of the September Ethical Corporation magazine. To get the full issues just click here - http://bit.ly/qcKttf

This is part 2 of the September Ethical Corporation magazine. To get the full issues just click here - http://bit.ly/qcKttf

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  • 1. Ethical Corporation • September 2011 Briefing: public relations 19 Monsieur Nature NewsLab is a strategic communications agency based in Amsterdam. NewsLab’s senior PR consultant, Isabelle Los, says that corporate responsibility is “clearly on the agenda of the companies we work for. But sometimes we have to tell clients that it is some- thing worth telling others about. They are doing something but don’t always realise that it is worth communicating about.” An example of this is the firm’s work for holiday provider Center Parcs, which is one of Europe’s largest importers of tropical plants. Center Parcs spokesman Michel Busman says that each park includes a sub-tropical area, but that the plants that populate it are imported for conservation and educational purposes. The company often rescues plants that would otherwise be destroyed. “People who are on holiday can learn about this,” Busman says. NewsLab pitched stories to journalists about the care taken by Center Parcs to source and transport tropical plants. The company says its “environmental specialists trek into the jungle themselves, in order to remove the trees carefully ... Center Parcs never sources Carefully-sourced tropical playground plants or trees from nature reserves or protected regions.” The plants then go on a long sea voyage to Europe, which they Nature de Center Parcs, Belgian biologist Jean Henkens. He has been the focus of short spend “in a state of suspended animation”. This, Center Parcs says, is part of its ethos films about Center Parcs and biodiversity, maintains a blog on conservation matters, and that “makes sure that nature runs its own course”. is much easier for customers and the media to relate to than a dry corporate responsi- Center Parcs has given its conservation work a human face in the person of Monsieur bility strategy.an approach that is “fact-based and transparent”. for investors or society at large.” Companies with a gap between what they claim To remedy this, Corporate Citizenship sets out aand what they do “will be exposed really fast”, “tax map”. Are companies engaged in what could beLaljani says. Companies are no longer just keeping construed as evasion, or setting up structures purelytheir shareholders happy, but must be concerned for tax planning purposes? Or are they in factabout the risks arising from the need to meet the paying more tax than they could legally get awayinterests of a wide variety of stakeholders. with, because they believe it is the right thing to do? One example of a subject that ultimately becomes Companies in a more risky place on the tax mapa PR issue is tax, according to Corporate Citizenship. can decide to move to where they want to be andIn a paper published in May, the company argues put the necessary policies in place. Only then willthat corporations need to communicate appropri- the company be “ready to speak to the outsideately about the amount of tax they pay because it has world”, and it should do so in language that can bebecome a corporate responsibility issue in the age of “understood by stakeholders like your employees Companies needausterity. Organisations such as UK Uncut threaten and customers – not just the lawyers and tax author-to embarrass corporations that do not fully appre- ities,” Corporate Citizenship says. to communicateciate the reputational risk, the paper says. The challenges faced by some corporations in about the tax this area are shown by examples cited in the paper.New tax approach Vodafone, Corporate Citizenship says, has articu- they payWhen it comes to tax, “the traditional defence of lated a new approach to tax, promising to align itscompliance is dead; the distinction between evasion tax risk policy with its corporate values, while HSBC(illegal) and avoidance (lawful) has dissolved in the has highlighted its “role in collecting taxes such aseyes of governments, NGOs and citizens,” Corpo- VAT and stamp duty”.rate Citizenship says. “We believe that companies But these companies are among the top targetsneed a new approach to manage and communicate for tax campaigners. UK Uncut says Vodafone istax effectively.” “fighting tooth and nail” to avoid paying tax bills in Comfortingly for the world’s biggest corporations, Britain and India, while HSBC channels moneythe paper adds: “This does not, in essence, involve through tax havens, and is threatening to move itspaying more tax.” However, it does mean that domicile to Hong Kong to avoid tighter Britishcompanies must “identify a coherent and credible financial regulations. Some companies clearly haveposition on tax and find a language to defend it”. work to do to bridge the gap between the ethics Few firms have done this so far. “Most companies they profess and the actions they take. nhave been woefully silent on the issue,” the papersays. “They have failed to put in the public domain Additional research by Boris Peters.a clear position on why their tax policy is sensible For more on tax see strategy and management p37.
  • 2. 20 Briefing: public relations Ethical Corporation • September 2011 PHMC/ISTOCKPHOTO.COM Activist organisations agency, or that we don’t employ ad agencies or do pro bono work with them. For a He who pays the piper… certain campaign, we might employ a PR company to help us with a press conference By Stephen Gardner and Jon Eldridge or a media event.” There is a healthy level of distrust between organisations that conduct campaigns Greenpeace in most cases does not need based on ethical principles and organisations that conduct campaigns for the assistance of a PR company. “We’ve fee-paying clients been in existence for 40 years and have built up quite significant relationships with t comes as no surprise to learn that non- ment was assisted by its PR agency, Bell media partners,” Townsley says. “I’m more I governmental organisations typically distrust public relations companies, often Pottinger. Its brief was to “try to show that all was well there, which was palpably not likely to come across a PR company repre- senting an industry and trying to counter a regarding them as an operational arm of the case”, Wilks says, adding that one part [Greenpeace] campaign.” corporations or governments engaged in of the PR effort, a tour to Bahrain for racing PR companies are also unlikely to earn bad behaviour. officials, would have been “laughable if it from NGOs the fees that they can command Andy Rowell of campaign group Spin- hadn’t been so serious”. from corporate clients. If Greenpeace does watch says “most PR agencies are client-led” Avaaz does not use outside PR help. “We work with a PR agency, “we usually try to and when those clients are engaged in want to stand on our two feet. Most NGOs get a relationship in which we can pay them unethical practices, the PR brief is invariably want to be independent in their actions and as little as we can get away with – hopefully to “gloss over, tone down and greenwash true to their founding ethic and purpose,” nothing”, Townsley says. some of our more controversial industries”. Wilks says. This extends to the communica- Alex Wilks, campaign director for commu- tions and PR functions. Common platforms nity campaign website Avaaz.org, says: Greenpeace International takes a similar Campaign groups can, however, be targets “Sometimes PR companies try to defend the view. Spokesman Mike Townsley says: “Some for PR agencies looking to broker reputa- indefensible, and often they are unable to PR companies on the one hand work for an tion-boosting partnerships for their clients, hold up the opinion that their clients want.” though such partnerships are not neces- Avaaz works by creating a critical mass on sarily just about polishing corporate profiles. an issue by bringing together concerned indi- “Sometimes PR companies try Alliances can be mutually beneficial, says viduals through its website. Wilks cites its to defend the indefensible” Martin Porter, managing director of Brussels recent campaign against Formula 1 racing in lobbying and PR firm Edelman The Centre. Bahrain. Avaaz put pressure on the Formula 1 Alex Wilkes, Avaaz.org Partnerships can arise because companies teams, saying that the 2011 Bahrain Grand want to make progress on a specific issue, and Prix should be scrapped after government environmental organisation and on the other this coincides with the interests of an NGO. suppression of pro-democracy protests. The hand are getting paid by some agent of the In some cases, the NGO can benefit because teams subsequently put pressure on race military-industrial complex.” This would be lawmakers might be more likely to put their organisers, and the event was duly cancelled. uncomfortable for Greenpeace. weight behind an issue if it has corporate Avaaz “managed to expose the lie”, Wilks “We have a credo of independence, backing, which can equate to a demonstra- says. “Our members sent messages to Red which means that we neither solicit nor tion of the economic benefit, Porter says. Bull, Mercedes, Ferrari and others, saying accept monies or support from commercial However, “NGOs want to make sure that they should make sure their teams stay enterprises and companies. That allows us they are not being taken for a ride”. Trust out of Bahrain.” to maintain the integrity of our agenda.” and personal relationships between the In its ultimately fruitless efforts to resist However, Townsley adds: “That’s not to participants are key, Porter says. the Avaaz pressure, the Bahrain govern- say that we have never worked with a PR He gives the example of the Coalition for
  • 3. Ethical Corporation • September 2011 Briefing: public relations 21Energy Savings. This is a multi-memberplatform pushing for the European Unionto adopt binding energy efficiency targets,similar to targets it already has for reducinggreenhouse gas emissions and for rampingup renewable energy. Edelman The Centreprovides a secretariat for the coalition. Its members include industry associations,such as the European Committee of DomesticEquipment Manufacturers and the EuropeanInsulation Manufacturers Association, along-side NGOs and foundations including theClimate Action Network Europe, Friends ofthe Earth Europe and WWF. Catherine Pearce of the European Envi-ronmental Bureau, another of the NGOmembers, says such coalitions are a reflec-tion of a move beyond a “traditional blackand white view of NGOs and businesses”.There are now “different shades of greenacross various stakeholders”, she says. Shells involvement in Niger delta pollution remains murky The Coalition for Energy Savings“evolved out of a need” on which all the members of the European Flame Retardants to protect its activities in the Niger delta,participants broadly agreed, and does not Association, a more clearly labelled lobby where problems arose in the early 1990srepresent a compromise for the NGOs group working on exactly the same issue. over pollution and the treatment of indige-involved, she adds. This raises the question of why the BSEF is nous peoples. Since then, Shell has “spent The main aim is to get things done. “As needed in the first place. millions on its PR activities”, says Spin-with every coalition, the members are not Sabine Wimpissinger, a consultant to watch’s Andy Rowell.going to agree on everything. There have BSEF with Burson-Marsteller says the forum The money was dedicated to changingbeen discussions where there is not a clear is “the bromine industry’s global organisa- the company’s image, rather than thecommon line on something.” However, the tion,” and it “ensures global coordination of company itself, Rowell says. Shell Nigeriaparticipants have a common willingness to deals extensively with pollution issues on itssee where there is agreement and where The 3D campaign: deny, website, where it emphasises that there is aprogress can be made, Pearce says. lack of security in the Niger delta and delay then dominate the “militant groups... cause massive pollutionFront groups response ... by damaging wellheads and other facili-Other initiatives that superficially look ties”. Shell says that 70% of spills are “thesimilar to the Coalition for Energy Savings the industry’s scientific and regulatory result of sabotage, oil theft and illegalcan be little more than front groups set up programmes”. BSEF commissions research refining by criminal gangs”.by PR agencies, however. The Bromine from independent scientists and sets out to But this emphasis might have been aScience and Environmental Forum (BSEF) “inform decision-makers and other stake- distraction from dealing with the environ-sounds like it could be a partnership holders about the results of this science, and to mental integrity of Shell’s own operations.between NGOs and academics, but it is in represent the bromine industry on issues of In early August 2011, Shell admitted liabilityfact a group of four companies brought environment and human health,” she adds. in a legal case about major oil spills in thetogether by PR firm Burson-Marsteller. BSEF is an example of what the Niger delta in 2008 and 2009, while, sepa- BSEF’s main aim is to prevent the regula- campaign group Spinwatch calls the “third rately, a United Nations Environmenttion of brominated flame retardants, which party technique”. This is the separation of Programme report found that in the Ogoni-are used to stop sofas and beds catching fire. an organisation behind a message – for land region, Shell had not properlyScientific evidence, published for example example, an oil company – from the maintained or decommissioned oilfieldby the United States National Institute of message it wants to put across – for example infrastructure, and that most polluted sitesEnvironmental Health Sciences, has shown that climate change is not a problem. that Shell said it had remediated “still havethat the substances can accumulate in Another strategy, according to Spin- pollution exceeding [Shell] (and govern-people and animals, and can be passed, for watch, is the “3D” campaign: denying a ment) remediation closure values”.example through breast feeding, to infants. problem, delaying action, then dominating Shell Nigeria managing director MutiuBut according to the BSEF, concerns about the response in the media or by politicians. Sunmonu says the company will do “every-brominated flame retardants have been This can be done by “promoting scientific thing in our control to reduce operational“overblown for political reasons”. uncertainty to create an impression that the spills,” but that “until effective action is In Europe, three of the four companies jury is still out over a particular issue”. taken to curb all illegal activities, there isBSEF represents – Albemarle, Chemtura Spinwatch accuses oil giant Shell of little that can be done to bring an end to theand ICL Industrial Products – are also indulging in such practices over many years problem of spills”. n
  • 4. 22 Briefing: public relations Ethical Corporation • September 2011 MURATOZ/DREAMSTIME.COM PR and sustainability Silence that speaks volumes The public relations industry has to develop a proper ethical approach, argues Brendan May n most sectors, vaguely enlightened I companies respond to at least some of the surveys they are sent about their sustain- ability performance. Of course, it is not possible to complete them all. But on the Is the PR industry frozen in time? whole, when a credible organisation sends out a sustainability survey, it can expect a PR firms when Ethical Corporation’s survey the survey. Its client case study was on reasonable response. arrived. the Marine Stewardship Council and the With this in mind, Ethical Corporation Indifference. For all the media wizardry role it played in advising Unilever to dispatched a PR industry survey to they deploy for their clients, PR people are establish it – in 1995. Good work, but to cite accompany this month’s briefing. The PR their own worst marketeers. Many won’t 16-year-old client engagement borders on industry cannot claim not to know about have realised this was an opportunity, not a the desperate. Ethical Corporation. They are never off the threat. But at least WPP has done something. phone plugging their clients to the editor Panic. In some agencies, the survey Most other giant communications groups and bagging conference slots or offering will have been bounced around from barely have policies beyond bribery, ethics up the columns they will ghost write for one recipient to another. No one will their clients. Which makes the response to have been in charge, and eventually the this survey all the more amusing, albeit survey will have crawled into its last inbox The PR industry remains depressing. where it is still sleeping as this briefing almost unique in its Ethical Corporation sent 103 surveys to goes to press. sluggishness to embrace people at the top PR firms in the world. Over-confidence. In some cases, a smart Responses? One. person may have spotted the opportunity to sustainability This should not really come as a surprise. land some “key messages” about their The PR industry remains almost unique in agency’s good work and done their best to and corruption. If they have environmental its sluggishness to embrace the sustainability complete the survey and provide some case policies, they will be bottom of the ladder, agenda. studies. Sadly, those at the top will have such as ISO 14001. Even Asia Pulp & Paper Companies don’t know what their carbon vetoed responding to anything that asked could get that one. footprint is. They don’t have sustainable something as outrageous as whether or not The PR industry is soundly asleep on procurement policies. They don’t report on they turn down business on environmental sustainability. It has few public champions their impacts, set targets or run employee grounds. pointing out the inevitable seismic change to programmes to green up the workplace. Arrogance. “We don’t do surveys like come. To be ahead of the game means They don’t require standards of suppliers, that.” Fair enough, perhaps. But most of making the serious commercial decisions although their clients will increasingly your clients do. Wake up. that companies such as Unilever, Nestlé and demand standards of them. They might buy In fairness, WPP which owns many of the , countless others are making. offsets, but they don’t address their biggest best-known PR firms in the world, has long If you don’t change, we won’t work with impact – air travel. attempted something of the corporate you. That’s what they have told their palm responsibility reporting now commonplace oil suppliers. It’s what supermarkets have Tail wagging the dog among multinationals. Anyone reading told unsustainable tuna brands. The PR In general, PR firms’ clients raise WPP’s annual sustainability reports would industry needs to develop a point of view, sustainability with them, not the other way easily be impressed, if not wowed, by their very quickly. It will no longer do to preach round. It is a bizarre situation in which the efforts. about sustainability on their websites (as industry that should be warning its clients of But it still falls way short of good enough. they all do) while taking dirty money from developing trends is playing a fruitless game WPP owns Cohn & Wolfe, infamous tarnished brands. n of catch-up to find out what is going on. That apologist for Asia Pulp & Paper. a client should pay thousands of pounds a Unfortunately this makes it hard to take Brendan May is founder of the Robertsbridge Group, former month to educate its own advisers is a WPP’s assertions on sustainability seriously. chief executive of the Marine Stewardship Council, and UK perverse reality. Burson Marsteller, part of the WPP chairman of the Rainforest Alliance. He is a contributing There will have been four reactions in the family, was the only agency to respond to editor to Ethical Corporation.
  • 5. Ethical Corporation • September 2011 Columnist: Peter Knight 23 GMUTLU/ISTOCKPHOTO.COMLetter from AmericaIs social media just oldnews rehashed?Living your life through Twitter and Facebook might feel cuttingedge, but you risk being a modern victim of good old-fashionedmarketing, argues Peter Knight o, they organised the Arab entiate fact from fantasy.S Spring on Twitter, or was itGroupon? Just think of how much In the old days you could easily distinguish a sales pitch fromearlier Nelson Mandela could have objective reporting – it had “adver-been released if only he had a ready tisement” written on it. No matter Fun but insulartweet or two. “@RobbenIsland. what your views were on inherentGearing up for another weekend of biases of the media, at least there more prosperous, more sustainableheavy rock crushing…” was some way of knowing what society. Despite the great excitement you were being offered: objectivity What bright, brainy graduateabout the civic promise of social or blatant bias. would not want to be Mark Zucker-media – the greatest social advance And you could teach your berg or any of the other badlyAmerica has brought to the world children how to distinguish between dressed but insanely rich socialsince it abandoned slavery – it looks the two. Even in the good old days media moguls?unlikely that Facebook et al will do when they used the medical profes-much to promote sustainability. sion to sell cigarettes, you at least Chasing the dollar There seems to be little social knew that it was the men from The sadness of the social mediapurpose to the social media Camel who were telling you about Does it matter hype is that earlier generationsindustry other than to sell more how the doctors found cigarette if society is looked for ways to find new worldsconventional stuff. smoke soothing on the throat. devising in space, or devise new medical Boosting consumerism may Not any more. The stratospheric cures, or develop advanced mate-indeed be what’s needed right now, valuations on social media busi- better ways rials to make life better.as we drag ourselves from the reces- nesses are based on the promise to encourage Now the world’s top brains aresionary mess we created by that the social and gaming media working on ways to make the socialbelieving that we could use our will once again enable doctors to greater media make money. How to infiltratehomes as ATMs. But as Twitter tell us how good their throats feel consumption? sales messages into 140 characters.reaches a value of $8bn, we are after a Camel. How to integrate more commercialslooking four square at the lie that Ironically, doctors themselves are into Facebook. These huge intellectssocial media are somehow more targeted by a free iPhone app called are heading to California where darksocially wholesome than old-fash- Epocrates (geddit?) that enables rooms, bright screens and pots ofioned media. searches for suitable drugs to gold await those who can find ways prescribe. More than half the doctors to sell more deodorant, rejuvenateConvenient truth? in the US are reported to use the app. tired shampoo brands and convinceThis belief is predicated on the idea But as with everything free, us we definitely need more blades onthat social media provide opportuni- there is a social cost because the our razors.ties for individuals and underserved doctors searching for information As the space shuttle Challengergroups to propagate and spread have first to pass through a wall of landed for the last time, I thoughttheir messages, enhancing democ- medical “alerts” which are adver- how insular America had become,racy and increasing opportunity. tisements dressed up as news. how myopic. Instead of looking to This is partly true, as it is with What does it matter if society is the heavens and dreaming of newconventional media. But when it devising better ways to encourage worlds, we turn instead to search forcomes to the commercial entities we greater consumption? Let’s forget friends on our little screens; behindcall the social media (Twitter, the obvious concern about how we which social media barons are doingFacebook and their progeny), not can possibly afford to continue very little more than devising theonly are social media no different organising our economies in exactly modern version of the 1950s Camelfrom newspapers, magazines and the same way as we have for the advertisements. Got a match? ntelevision, but their technical supe- past few centuries. Let’s just look atriority also enables them to further how the current internet bubble is Peter Knight is president of Context America.their own commercial agendas by wasting talent that could be so COLUMNIST: peter@contextamerica.comundermining our abilities to differ- much better used to contribute to a PETER KNIGHT www.contextamerica.com
  • 6. “Ethical Corporation magazine is one ofthe most valuable resources ofbusiness information on sustainability”The above is what just one of our subscribers has to say about our magazine. Become a subscriberto Ethical Corporation and receive our unbiased, highly respected monthly magazine plus getaccess to our searchable database of over 7,500 CR related articles.As a subscriber you will receive access to allthe above CR business intelligence plus enjoybenefits such as:4 Discounts on attendance to our conferences, reporting clinics and more4 50% discount all Ethical Corporation business intelligence reports and management briefings4 Access to our weekly e-newsletter that will keep you informed of all the key sustainability issues.Here’s what another of our subscribers have to say:"Ethical Corporation brings together theno-nonsense critical approach to sustainabilitywith business savvy information"– Ramon Arratia, Sustainability Director, EMEAInterfaceFLORSubscribe today! An Individual Subscription usually costs £495 but you can take advantage of a 10% discount. So you can get access to our wealth of CR resources plus benefit from discounts on our other products and services for just £445, simply quote the discount code ‘FM10’.` www.ethicalcorp.com/subscribe  +44 (0)20 7375 7575  Email: subs@ethicalcorp.com
  • 7. 24 CRwatch Ethical Corporation • September 2011 CRwatch By Jeni Bauser in New York How mobile phones can reunite refugees, Amnesty’s Arabian troubles and VW under scrutiny App helps refugees find possess, we wanted to create a hybrid Amnesty International blocked in Saudi Arabia loved ones between the passion of the NGO and Amnesty International’s global website was temporarily blocked in Saudi In partnership with the United the strategy, structure and discipline Arabia in reaction to the organisation’s vocal stance against a proposed Nations High Commissioner for of the private sector,” Mikkelsen says. Saudi anti-terrorism law, which would sanction authorities to prosecute Refugees and Refugees United (RU), Refugees can register for the RU peaceful dissent as a terrorist crime. Ericsson, the communications infra- platform in two ways. Those who Amnesty says the law “would entrench, exacerbate, and offer a cloak of have been resettled mainly access the ‘legality’ to long-standing oppressive measures taken by the Saudi Arabian database via the internet or mobile RAPIDEYE/ISTOCKPHOTO.COM government in the pretext of countering terrorism”. In particular, the law platform. People still in refugee would allow suspects of supposed “terrorist crimes” (a term also loosely camps, who use the service the most, defined) to be held for an indefinite period without charge or trial, and register with the help of RU and without access to a lawyer. It would also grant tremendous power to the partner staff. minister of the interior, without judicial oversight. According to Elaine Weidman, The Saudi government released a statement calling Amnesty’s concerns Ericsson’s vice-president of sustain- “baseless” and “completely without foundation”. ability and corporate responsibility, “We completely disagree,” says Amnesty’s Neil Durkin. “Meanwhile, the the partnership is a natural fit with Saudi Arabian authorities do not seem willing to enter into a proper discus- the company’s Technology for Good sion about the issues. Blocking sites is hardly the hallmark of an open initiative, which “harnesses the country that welcomes free debate.” power of informational and commu- There have also been reports that Amnesty’s UK site was blocked. The nication technology to address climate Arabic script of the anti-terror law has since been transferred to Amnesty’s Mobile populations can keep in touch change and socio-economic develop- blog protectthehuman.com. ment issues”. “As to the likelihood of it being passed – it’s extremely difficult to say,” structure group, is helping refugees Durkin says. “Other punitive laws have come into force in Saudi Arabia in register, locate and reconnect with VF acquires Timberland loved ones using a custom mobile Timberland has been snatched up by NUMBEOS/ISTOCKPHOTO.COM and internet platform. US clothing giant VF Corporation, The programme got a boost this owner of big name brands including summer with the addition of Android North Face, Vans, 7 For All Mankind app technology, allowing refugees to and Wrangler. use SMS and mobile browsing to The acquisition marks VF’s overar- locate missing relatives – in addition ching strategy to expand its to RU’s existing internet platform. outerwear brands, which VF chief Mobile functionality is particularly executive Eric Wiseman says “will valuable in Africa, where mobile continue the transformation of VF’s phone penetration is above 50%, as portfolio, propelling VF’s Outdoor & compared with PC-based internet at Action Sports businesses to 50% of just 10%. total revenue”. Ericsson helped develop RU’s “Timberland is proud of its rich web-based platform for mobile heritage, its track record of success phones and connect them with and its reputation as a responsible global mobile operators, such as and environmentally conscious Safaricom and MTN in Africa. global citizen, all of which will be Refugees United co-founder preserved and enhanced by becoming Christopher Mikkelsen says the part of the VF family of brands,” says Android app is predominantly geared Jeffrey Swartz, Timberland’s chief towards refugees with smart phones executive. (usually those who have already Timberland has remained tight- What cost security and stability? resettled) and NGO staff. lipped concerning the details of the The programme is also expanding deal, so only time will tell how this recent years, but also much of its legal code is either kept secret or is beyond the pilot in Uganda to Kenya will affect Timberland’s operations governed by pronouncements – fatwas – by the Council of Senior Ulema. and other “refugee-populous” host (and those of VF), and its leadership It’s true to say, indeed, that the entire justice system remains largely secre- and resettlement countries. position in sustainability. tive.” Amnesty says it will continue to monitor the situation closely. “Realising the immense treasure Timberland made headway as a trove of knowledge corporations green leader with its 2006 green
  • 8. Ethical Corporation • September 2011 CRwatch 25 Bloomberg donates to anti-coal campaign Greenpeace targets Volkswagen The Sierra Club’s Beyond Coal campaign just got a $50m boost from New Greenpeace spoofed Volkswagen’s highly successful “The Force” advert (a York City mayor Michael Bloomberg’s philanthropic arm, Bloomberg take on the Star Wars tale) with its “Away from Darkside” campaign to Philanthropies. challenge the company’s green commitments. The Beyond Coal campaign was launched in 2002 and predominantly Volkswagen Group is the world’s second largest car manufacturer. focused on preventing 153 new coal-fired plants from being developed According to Greenpeace’s Leila Deen, VW holds the most board seats on the under the Bush administration (only one actually broke ground). powerful European Automobile Manufacturers Association, which “has The campaign is now been leading the charge against strong fuel efficiency standards in Europe RADOSLAW DREWEK/DREAMSTIME.COM working to retire one-third and pushing hard to block key climate laws”. of America’s coal fleet by Greenpeace is also asking VW to include its impressive efficiency tech- 2020, and put clean energy nology on all vehicles as the norm, rather than an added cost. “[If] they projects in their stead. With desire to be the most eco-friendly, they have an obligation to set stan- Bloomberg’s sizable grant dards,” says Deen. over the next four years, the The campaign, launched in June, is now in 15 countries and has more non-profit group can now than 250,000 supporters. double its staff, expand the “Our shift to a low carbon future is full of opportunity, and corporate campaign from 15 to 45 advisers should be pushing companies to focus on thinking afresh about their states, and boost member- business model, getting ahead in the race for low carbon technology, rather ship from 1.4 million to 2.4 than spending money on trying to hold back an inevitable tide,” Deen says. million. “Michael Bloomberg is V DEANPICTURES/DREAMSTIME.COM very focused on outcomes and metrics to assess a problem and how we can fix it,” says Bruce Nilles, founder of the Beyond Coal campaign. “Our work is a measurable way to reduce carbon pollution one Hands up for clean power, says Bloomberg plant at a time, and that mirrors the type of work he is doing in New York with the Plan NYC green initiative.” The Sierra Club works closely at the state level and with union leaders to ensure no one gets laid off as a result of the plant closures. For example, workers can be transferred to another part of the facility, be moved to another plant, or get trained in alternative energy technology. Nilles is also quick to point out that new wind and solar facilities generate more jobs than coal. Plus, the majority of states currently import millions of dollars worth of coal, but if they could keep money in-state and create new clean energy jobs, that’s a win-win. “When there is an absence of movement on key issues at a state, federal Is VW pushing as hard as it should? or international level, supporting efforts that are being driven at a local level – by communities, towns and cities – can have a cumulative, significant “Otherwise EU and US companies will find themselves left behind by the more and measurable impact globally,” says Bloomberg Philanthropies’ Michael ambitious companies of newly developing countries, such as China, who have Marinello. already seen and acted on the opportunities this transition affords.”packaging commitment to reduce its InterfaceFlor launches comes from post-consumer-recycled the greenhouse gas emissions of everyenvironmental footprint and put a another first raw materials such as reclaimed consumer product. And all this is“nutritional label” on its packaging InterfaceFlor, the modular flooring commercial fishing nets, textile and achieved while maintaining competi-to educate consumers about products’ division of US-based sustainability plastic waste, and materials from tive prices.life-cycles. Timberland is a founding leader Interface, has developed one InterfaceFlor’s products. The “Strategic, long-term collaborationmember of the Eco-Index, an of its most environmentally friendly remaining 70% of recycled material is key to the success of a sustainableindustry-wide rating that assesses a products to date. mainly comes from pre-consumer future,” says InterfaceFlor’s Deepaproduct’s environmental impact, and The new line, Biosfera I, is the external sources. The line uses as little Vyas. “Establishing a mutual relation-has had great success with its Earth- first carpet collection to use 100% yarn as possible to reduce emissions ship with suppliers on sustainabilitykeepers collection, which uses recycled yarn, and is independently and waste. initiatives can help to make your ownrecycled and organic materials that verified to boot. InterfaceFLOR also uses its Cool products and business more resilientare sustainably sourced. In the 2011 line, 30% of the yarn Carpet practice to calculate and offset and sustainable.” n
  • 9. 26 Columnist: Jon Entine Ethical Corporation • September 2011 CARLOFRANCO/ISTOCKPHOTO.COM Eco marketing What price green consumerism? Plenty of shoppers say they consider environmental impact, but in reality price rules supreme, says Jon Entine emember the innocent days of only if they are convinced that the R the 1980s ethical consumer movement? New Age entrepreneurs sacrifice – higher prices – signals some measurable value.” rode the green wave into the hearts We need proof that a green and malls of the world. The promise? product or service is “as effective and How much do we want green carrots? Buying pricey ice-cream would make of the same quality” as alternatives, the world a better place. says Kate James of Grail Research, a was declared the new black – Vanity That myth crashed. Consumers, consumer research company. Grail Fair published its annual “Go Green” it turned out, were not willing to reports that although 85% of US issue timed to Earth Day. Muck- buy idealism if it came at a consumers claim they buy green, raked.com estimated that the issue, premium. Two decades later, green fewer than 8% actually do. According printed on non-recycled paper, used marketing remains with us, more to marketing firm Ypartnership, 2,247 tonnes of trees and produced intense than ever. Is green yet more although eight in 10 vacation trav- 4,331,757 pounds of greenhouse than a fad? ellers consider themselves “eco- gases, 13,413,922 gallons of waste- The Lifestyles of Health and conscious,” only one in 10 books water and 1,744,060 pounds of solid Sustainability annual survey esti- travel based on green considerations. waste. Vanity Fair scrapped the mates that 13-19% of American Eco-consumerism remains a Consumers need green theme issue in 2009. adults are dedicated green buyers – marginal purchase or luxury indul- proof that a The green marketing trend is a $290bn market. The US-based gence except for a dedicated few. A green product certainly not all smoke and mirrors. Cone Communications estimates 2008 study funded by the UK The boom in environmental that 70% of American consumers Economic and Social Research is as effective marketing has meant more scrutiny consider the environmental impact Council found that 30% of and of the same of companies looking to differen- of their purchasing. The UK and consumers reported they were very tiate themselves. Green marketers Europe show similar numbers. concerned about environmental quality as the have been forced to raise their game According to marketing experts, issues but they struggled to translate alternatives in transparent and creative ways, however, these figures are wildly this into purchases. As a result, the focusing on eco-innovation and overstated, reflecting attitudes, not market share for “ethical foods”, one actual corporate responsibility buying patterns. of the most visible segments of the commitments to enhance their Prof Shruti Gupta of Penn State green market, has yet to crack 5%. brand identity. They need to University, a world expert in ethical document their green credentials. behaviour says: “While people love to Jaded greens Perhaps the most encouraging voice their idealism to survey compa- Baby boomers, who launched the twist is not the fragile green buying nies, the cold facts are they almost green movement, are now the trend but the turn by manufacturers always put their self-interest first.” leading sceptics. Many have towards a more sustainable style of Take Elizabeth Romanaux, a metaphorically traded in their business – thank you, Wal-Mart and consultant from New Jersey inter- Beetles for luxury hybrid BMWs, GE. “I believe the real growth in viewed by the American Association but deceive themselves they are still environmental consumerism will be of Retired People for a magazine buying green. in the business-to-business space, piece about green buying. She Crowd Science, which uses not in selling to consumers,” says considers herself environmentally internet surveys, says 25% of Gupta. “For them it’s not paying conscious. She recycles. She seniors say shopping green premium prices, it’s making invest- composts. But she won’t pay a “makes no difference”; most of the ments in sustainable production premium for an eco-friendly hotel rest are indifferent. To eco- that significantly lowers long-range room or cleaning products. “It isn’t cynics green consumerism is the costs. Greening the supply chain that I can’t afford them,” she told ultimate oxymoron, akin to “corpo- saves them money.” n AARP Magazine. “It just goes rate responsibility”. The genuine against my grain to pay more.” solution, of course, is to buy less. Jon Entine is director of ESG MediaMetrics and “Consumers will buy pricier Three years ago, as green fever COLUMNIST: senior fellow at the Center for Health and Risk green products,” Gupta says, “but was peaking in Hollywood – green JON ENTINE Communication at George Mason University.
  • 10. Country briefing:Turkey29 Modernisation and corporate challenges33 Risks and opportunities35 Change at the topOverviewThe philanthropy problemBy Amy BrownIf Turkey’s corporate responsibility movement is to drive real organisational change, companiesneed to see that sustainability is more than philanthropy urkey, one of the fastest-growing emerging The reasons for this lie in a centuries-old tradition.T economies, is in the midst of major transforma-tion. Since the 1980s, market deregulation has Since Ottoman times, institutionalised philanthropy, in the form of the “waqf ” (a form of charitableboosted foreign investment. The Turkish economy foundation from Islamic tradition) was the mainexperienced boom-and-bust cycles throughout the basis for the provision of public services such as1990s, culminating in an economic crisis in 2001. education, social security and healthcare.Since then, structural reforms have brought political Waqfs generally belonged to wealthy familiesand economic stability. Now Turkey is the world’s who used these foundations to share their wealth in The idea that16th largest economy and is expected to grow at a the form of public goods. Waqfs are still active inrate of about 5% until at least 2015. Turkey today and most family-owned conglomerates sustainability is With a population of 71 million, Turkey is a huge in Turkey have an associated waqf. In fact, Turkish a way to earnpotential market. While its economy is much smaller society has come to expect companies to play anthan the Bric countries (Brazil, Russia, India and active role in society, especially in education, health, competitiveChina), Turkey’s unique geopolitical position gives it culture, sports and the arts. advantage is stilla particular importance on the world stage. Turkey’s sights are focused on achieving Traditional values novel in Turkeymembership of the European Union. While the Sustainability and corporate responsibility haveaccession process is likely to create adjustment costs become mired in this tradition, where philanthropicand regulatory risks for business, it is expected to raise donations and community involvement are seen asenvironmental, ethical, and social standards in areas much the same thing. The idea that sustainability issuch as participative democracy, anti-corruption, a way to earn competitive advantage through newhuman rights, and the importance of civil society. opportunities, new markets, and new business The EU is Turkey’s biggest trading partner, so models, or to minimise risks, is still novel in Turkey.there is a lot riding on getting it right. As it integrates “Most companies still consider CR as an add-on,its economy with developed countries, Turkish not core to the business,” says Melsa Ararat, acompanies are competing on a much larger playing professor in strategic management, corporatefield. The notion that a strong sustainability profile governance and business and ethics at Sabanciis a competitive advantage is only just taking root in University and the director of the CorporateTurkey, where corporate responsibility is often Governance Forum of Turkey. “Doing good shouldregarded as synonymous with philanthropy. start with avoiding harm and understanding your
  • 11. 28 Country briefing: Turkey Ethical Corporation • September 2011 full impacts and Turkish companies are not there yet. likely to change,” says Serdar Dinler, president of the The importance CR is still about marketing and PR.” CSR Association of Turkey, an NGO. That view is shared by Atila Uras, manager of the Change must therefore come from within. And of sustainability UN Joint Programme to Enhance the Capacity of while there is still a long way to go, Dinler is globally is moving Turkey to Adapt to Climate Change. cautiously optimistic. CR up company “Planting some trees was enough for the private “A growing number of companies recognise the sector until the first part of this decade,” Uras says. competitive and reputational advantages of CR and agendas “Then the concept of CR became more familiar and some are implementing better practices,” Dinler says. they began to understand that CR requires But only a few are making it a strategic part of their partnership, not just providing funds or charity work.” business, and none are taking it to the next level by This briefing has been written by One Stone, with special contribution from He describes Turkish companies as generally integrating CR throughout their supply chain. “In Istanbul-based correspondent Jennifer following global trends – not leading them – saying that Turkey, most leading companies are at the Hattam. One Stone is a global team theirs is “not a strategic approach, but mostly reactive”. implementation level.” offering sustainability consultancy and communications expertise. One Stone’s But there are some signs that things are changing. partners and associates are based in The proximity to Europe, exposure to energy Consumer demand Stockholm, Edinburgh, Sydney, Portland, risks exacerbated by growth, Turkey’s reliance on Turkish society and its millions of consumers also Oregon and Washington DC. One Stone external finance, and the increasing importance of need to drive sustainability, says Engin Guvenc, has more than two decades’ experience working with multinational companies to sustainability globally are moving corporate executive director of the Business Council for guide sustainability leadership strategies responsibility up company agendas. Sustainable Development Turkey. and provide focused sustainability Among the developments since 2010: the launch of “It is not only companies who should be making communication. the Istanbul Stock Exchange’s Sustainability Index; the society aware of sustainability, consumers are also being April Streeter is a writer specialising in first Turkish signatories to the United Nations’ Principle affected. If there isn’t a demand for products produced sustainability since 1998. Formerly based of Responsible Investment programme and Carbon in a more socially and environmentally responsible in Sweden, where she covered Scandi- Disclosure Project (to date, 20 companies have joined); way, there will be less action from industry,” she says. navia for Windpower Monthly, she now lives in Portland, Oregon and is a blogger an increase in the number of Global Reporting Initiative It comes down to changing corporate culture, she for Tree Hugger and The Huffington Post. reports published; and a growing number of Turkish adds. “We have a culture handed down over the companies signing up to the UN Global Compact. generations, so it is difficult to change the mindset.” Amy Brown, based in Washington DC, has written the award-winning sustainability The pressure exerted from external institutions As Turkish markets become more competitive, and integrated annual reports for Novo and market forces will probably continue to be bigger civil rights are better respected, the legal and judicial Nordisk, Electrolux and Ericsson. She’s drivers for better sustainability practice in Turkey system improves, and the intensified political and also written extensively for the Interna- tional Herald Tribune on sustainability than either government policy or civil society. economic interaction with Europe affects social issues and was editorial consultant for “There is no pressure from Turkish society or values. Against this backdrop, Turkish business has the World Business Council for Sustain- government for the private sector to improve its no choice but to take on a long-term perspective – able Development’s 10th anniversary corporate responsibility practices, and that is not and that bodes well for sustainability in Turkey. n publication Walking the Talk. Turkey factsheet Corporate responsibility statistics: Ethical Corporation survey results Socio-economic statistics Focus of CSR/sustainability Guidelines and initiatives most used Population: ................78.8 million (2011 estimate) GDP: ..............................$960bn (PPP 2010 estimate) 1. Reporting Global Reporting Initiative GDP per capita: ..........$12,300 (PPP 2010 estimate) 2. Employee engagement Global Compact Human Development Index: ..0.679 (83rd / 169) 3. Resource efficiency Current leadership Turkey sustainability leaders most mentioned President: ............................................ Abdullah Gul Guideline and standards statistics Coca-Cola Icecek, Koç Holding Type: .......... Republican parliamentary democracy GRI reports in 2010 ..........................................................10 Import partners Foreign sustainability leaders most mentioned Global Compact participants ........................................13 Russia ..............................................................13.8% Novo Nordisk, Vodafone UNPRI signatories ..............................................................7 Germany ..........................................................10.0% China....................................................................9.0% References: • Socio-economic statistics obtained from recent publications from the CIA Factbook and the Human Export partners Development Index. Germany ............................................................9.6% • Corporate responsibility data obtained from an August 2011 Ethical Corporation survey. The small sample France ..................................................................6.1% of this survey means that the results should be regarded as an indication of trends in Turkey and not as UK ........................................................................5.8% scientific research. • Guideline and standards statistics obtained during August 2011 from official website of each initiative.
  • 12. Ethical Corporation • September 2011 Country briefing: Turkey 29 PH2212/ISTOCKPHOTO.COMCompanies and sustainabilityCorporate hurdlesBy Amy BrownTurkey has big ambitions, but in its efforts to modernise, a range of sustainability challengesmust be confronted opulation growth, urbanisation, rising incomes “Water scarcity is a big, big issue,” says Atila Uras,P and energy consumption are straining Turkey’snatural resources. Turkey is also highly vulnerable manager of the UN Joint Programme to Enhance the Capacity of Turkey to Adapt to Climate Change. Turkey faces pressure fromto climate change, with a carbon-intense economy “Turkey is among the most highly vulnerable the EU to providethat has an increasing energy shortage and depend- countries in world, and the major impact of climateence on imports. change will mostly be in terms of water. By 2070 it is concrete emissions In contrast with many emerging markets, Turkey predicted Turkey will experience 30% less rainfall, in reductionsis a net commodity importer. About $35bn of oil and [what is] an important regional basin for agriculturenatural gas each year has to be imported (equivalent and food security.”to almost 5% of GDP). The country has an unsus- Few companies embrace the environmentaltainable carbon-based transport system. And with agenda of the country, turning instead to their longits large coal reserves, use of coal is expected to legacy of contributing to social needs such as educa-multiply over the next decade. tion. Unemployment at 14% is the most pressing On the bright side, Turkey is one of the pilot economic and social issue, mostly affecting Turkey’scountries in the Clean Technology Fund, which youthful population (44% are under the age of 24).finances low-emissions technologies for greenhouse “Many young people are graduating withoutgas reductions within countries’ investment plans. skills, which is a very dangerous thing, a timeThrough CTF, Turkey hopes to jump-start the private bomb,” says Serdar Dinler, president of the CSRmarket for energy efficiency and renewable energy. Association of Turkey, an NGO. “This is a very Turkey has substantial renewable energy important challenge for Turkish society.”resources, including hydroelectric, wind, geo- Atilla Yerlikaya, corporate affairs director atthermal and solar power. The long-awaited Coca-Cola Icecek, agrees. “Capacity building for theRenewable Energy Law, enacted January 2011, young, dynamic population of Turkey is extremelyincludes an incentive scheme to promote renewable important. Formal and vocational education isenergy use and production. critical for the future of the country.” The EU accession process has improved Turkey’sLooming water scarcity infrastructure for protection of human rights butWith a climate strategy criticised as vague, Turkey these institutions lack resources, independence andfaces pressure from the EU to provide concrete impact, according to Prof Melsa Ararat of Sabanciemissions reductions. Lack of certainty over University.Turkey’s position with respect to international Trade union rights are another weakness. Theagreements has led to a weak approach and low number of workers covered by collective agree-awareness of the issue by most corporations in ments in Turkey is as low as 3% of registeredTurkey. workers. While Turkey has a labour unions law, it
  • 13. 30 Country briefing: Turkey Ethical Corporation • September 2011 DEBORAH BENBROOK/DREAMSTIME.COM Koç Holding: social history By Amy Brown “I live and prosper with my country,” declared Vehbi Koç, founder of Koç Holding, the largest industrial conglomerate in Turkey. That philosophy has guided the actions of this powerful family-owned company for the past 40 years. A tradition of social responsibility began with the Vehbi Koç Foundation, supporting education and the arts. But in recent years that view has shifted to a more encompassing definition of corporate responsibility that is less about being a wealthy benefactor and more about recognising a business case for sustainability. Where Koç Holding leads, others follow. It comprises 117 companies, representing 10% of Turkey’s total exports, and generates a combined turnover equiva- lent to 7% of Turkey’s national income. It is the only Turkish company in the Fortune 500 list. With that kind of leverage comes a sense of responsibility, says Oya Ünlü Kizil, head of corporate communications and external affairs. “Our sustain- ability depends on the sustainability of the society at large,” she says. With Turkey’s large number of unemployed and unskilled young, Koç Holding started a vocational education programme with the ministry of education and local NGOs to encourage young people to enrol in Responsible textiles have a competitive advantage vocational education and to contribute to the training of a qualified workforce. This initiative goes beyond does not apply to certain sectors of the Procter & Gamble and Coca-Cola setting philanthropy, explains Kizil, in that it positively affects economy where informality is high. Health standards that domestic companies must business outcomes by increasing the pool of skilled and safety at work is therefore a serious follow to stay competitive. human resources. Consumer-product companies, such as On the environmental side, the company endorsed a appliance manufacturer Arcelik, which climate change strategy in 2010 with an eye to trans- Consumer product have growing numbers of local consumers forming potential risks into opportunities. “A low-carbon manufacturers are investing who view environmental performance as a economy,” Kizil says, “has significant potential to create differentiating factor, are taking the agenda important new business and job opportunities.” in environmental efficiency more seriously and investing in environ- An energy efficiency coordination group has shown mentally efficient products. results: a 100% group-wide improvement in energy concern, given the size of the informal And the banking sector is often regarded efficiency in two years, saving about 330,000 tonnes market and low level of unionisation. as a leader in corporate responsibility, of CO2 emissions in 2010. Companies within The Turkish textile industry has seized according to Ararat, not least because Koç stand out as leaders, such as Arcelik, which has on corporate responsibility as a competitive international loan institutions set environ- developed world-leading energy-efficient home advantage against the threat of Chinese mental, social and corporate governance appliances, and automakers Tofas and Otokar that textiles and engaged voluntarily in projects standards for loan recipients. produce hybrid and electric vehicles. with European civil society organisations Koç produces an annual CR report and was one of such as the Clean Clothes Campaign to A family affair the first signatories to the UN Global Compact. In 2010 improve social standards. Turkey’s corporate landscape is defined by the group developed a sustainability performance Turkey’s corporate sectors are rapidly the group of powerful families that own evaluation and reporting system. All of this has to internationalising. The automotive and half a dozen leading conglomerates, among matter to the bottom line if sustainability is to become textile industries that depend on trade with them Eczacibasi, Kocabiyik, Sabanci, Koç, truly entrenched as a way of doing business, Kizil says. Europe face requirements for capping their Yazicilar and Ozilhan. These conglomerates “The sustainability of CR activities largely depends carbon, or reporting their emissions to their stand out in opinion surveys about social on their returns for the companies. It’s a two-way customers. responsibility conducted by Capital street. The companies’ ability to analyse social and Multinational companies have a benefi- magazine and the market research firm environmental risks and mitigate them through CR cial effect on the growth of corporate GSK-Turkey. activities is the key for their sustainability as well as responsibility and sustainability in Turkey, Given their influence in Turkish society, leadership in the 21st century.” with companies such as Unilever, Carrefour, these companies seem to have embraced
  • 14. Ethical Corporation • September 2011 Country briefing: Turkey 31 Petkim: pure petrochemicals? By April Streeter Petkim Petrochemical Holdings is Turkey’s largest petrochemicals producer and its giant plant dominates the spit of coast it occupies on the gulf of Izmit, 125km from Istanbul. The company make nearly 2m tonnes of chemical products each year, ranging from PVC to ethylene. Petkim is well aware it is in one of the most energy-intensive indus- tries, and due in part to expansion plans, the company made the move in 2010 to measure and report its greenhouse gas emissions through the Carbon Disclosure Project. Project manager Gediz Kaja of the Gaia Carbon Team (Petkim worked with the UK’s Ecometrica as well) says Petkim’s awakening to corporate responsibility and carbon management are part of a trend among companies grappling with the reality of the need for a low-carbon economy. It is also considered necessary as Petkim pushes ahead with an ambitious five-year export expansion plan. Perhaps to some degree the move is also a result of previous pressure from NGO Greenpeace over Petkim’s waste and pollution. Not regulated domestically, Petkim is acting voluntarily. Petkim makes a big impact “Petkim’s status in international markets plays an important role in its decision to strengthen its CSR,” Kaya says. “Nevertheless, there is some internal motivation – it is already reducing its carbon intensity. starting with the CEO, there is strong faith in the company that it should play an impor- The company has identified 43 energy-efficiency projects it could undertake, and has tant role, to contribute to environmental and social sustainability in its region and 23 of these projects already in progress. Petkim has also received permits for a 25MW nationwide. It sees itself as a role model and strongly believes that as an institution it on-site wind power plant. These measures are estimated to save 90,000 tonnes of CO2 can do it.” equivalent a year. Though Petkim hasn’t publicly disclosed the results of its CO2 measurements (compa- In addition, Petkim is getting ready to release its first full sustainability report in 2011. rable competitors Chevron and ExxonMobil emitted 63m and 131m tonnes of CO2 “Petkim has become a superior example of sustainability and corporate social respon- respectively in 2009), and is not currently setting quantitative targets for GHG emissions, sibility practice,” Kaja says, “in an environment where such actions are not mandatory.”their leadership role in raising sustainability decade” award by World Finance Magazine number of youth and vocationalon the corporate agenda. (an award partly based on a company’s programmes and, for example, has an The huge SME sector (SMEs make up sustainability track record), Turkcell is the employment creation programme focused90% of all companies in Turkey) is playing only Turkish company to be listed on the on call centres.catch-up. SMEs receive a significantly lower New York Stock Exchange. “With 34 million customers, we rely onshare of the credit supply in Turkey, so they Turkcell has become well known for its our call centres and at the same time thisare more likely to opt for informality and tax activities to support education in Turkey. creates employment opportunities. We areevasion. As a result, it is not uncommon to Turkcell’s main educational project, creating community value by investing infind a SME extolling an educational or social “Modern Girls of Modern Turkey”, which the local community,” says Zeynep Ozbil,programme and claiming to have adopted started in 2000, grants scholarships to young head of corporate citizenship at Turkcell.corporate responsibility, while engaging in While he sees Turkcell’s initiatives withintax avoidance. education as commendable, Serdar Dinler “You cannot call what these SMEs are Turkey needs greater of the CSR Association says the company isdoing CR as such,” Ararat says. “The activi- investment in vocation training still missing the big picture. “CSR is aboutties aim to have a reputational benefit to the changing organisational culture, not just acompany. But at the same time, these and human resources project,” he says.companies wouldn’t mind not paying Among the companies moving awaytaxes or being involved in the informal women in less developed parts of the from the philanthropy model to moreeconomy. They do not see corporate respon- country. These “Kardelenler” (snowdrops) strategic sustainability is Coca-Cola Iceceksibility as a measure of overall good projects, conducted in partnership with a (see case study). Risk management andcorporate citizenship.” local NGO, are now collectively one of the reputation are key drivers, along with Among the companies that stand out biggest social responsibility projects in the global expansion.consistently in Turkish opinion surveys and world. So far, 27,500 students have been “Research and development related toregional and international rankings on granted scholarships, 11,000 have gradu- eco-innovation could be better encouragedcorporate responsibility is Turkcell, Turkey’s ated from high school, 3,500 passed by the government by announcing specificbiggest communications and technology university entrance exams and 1,250 gradu- projects, giving more support to SMEs andcompany. Recognised as one of the top five ated from university. joint projects. Such programmes alreadycompanies in Europe for its financial disclo- Recognising that Turkey needs greater exist in Europe,” says Oya Ünlü Kizil, headsure procedures in 2011 by the IR Global investment in vocational training and of corporate communications and externalRankings, and recipient of “company of the human resources, Turkcell also supports a affairs at Koç Holding.
  • 15. 32 Country briefing: Turkey Ethical Corporation • September 2011 ERIC BRODER VAN DYKE/DREAMSTIME.COM Coca-Cola Icecek: bottled ethics By Amy Brown In a country and region expected to face serious water shortages in coming years, Coca-Cola Icecek (CCI), the Turkish-owned company that is the sixth largest bottler in the Coca-Cola empire, is proud of having the best water and energy usage rates in the global Coca-Cola system. “We are operating in an environment where natural resources are under tremendous pressure. Therefore efficient use of water, energy and packaging materials is critical for sustainability,” says Atilla Yerlikaya, director of corporate affairs at CCI. With a total of 20 plants, CCI employs about 9,000 people and has operations in 10 countries in the Middle East. Unlike many other Turkish companies just starting to get the big picture, CCI is well on the way to integrating sustainability. It’s a matter of common sense and long-term survival, Yerlikaya says. “Any CR approach or strategy that is not tied to the future of your business through a business case is destined to fail in the long term.” While aligned with the sustainability priorities of the Coca-Cola System, CCI has carved out its own priorities around water management, sustainable packaging, energy efficiency and climate change. CCI is hitting all the right notes in entrenching sustain- ability into the company’s fabric. Sustainability is embedded in CCI’s 2020 Vision and Strategic Framework. The board of directors’ corporate governance committee is responsible for the sustainability strategy and monitors performance. A sustainability committee led by the chief executive and comprising senior management identifies long-term sustainability targets and sets sustainability metrics. Finally, a sustainability working group includes all function heads and plays a critical role in linking sustainability management with field operations and upper-level management. The company has been a leader on the reporting front, too. CCI published its first CSR report in 2008, becoming the first company in Turkey to share non-financial perform- ance through a corporate social responsibility report according to the Global Reporting Initiative guidelines. It has continued to report according to GRI in 2010 and 2011 and is a signatory to the Global Compact. On the climate change front, CCI was among the first companies to sign the Copen- Cutting a mega brands impact is a towering task hagen Communiqué in 2009 and the Cancun Communiqué in 2010 and the CCI Turkey region president serves on the Climate Change Leaders Group, which supports the model that takes stakeholders’ expectations into account,” says Yerlikaya. “In the business community as Turkey transitions to a low-carbon economy. future, companies operating within this framework are going to be more successful “Earning a social licence to operate is only possible through building a business than others.” Taking a firmer line on climate change corporate affairs director of Coca-Cola change, companies are no longer able to would also be enhanced by stronger Icecek. hide their heads in the sand, Atila Uras says. government incentives, she adds. “Estab- The “360 degree view” of sustainability “Climate change is emerging in Turkey lishing a voluntary internal carbon market is being championed by NGOs such as as an issue for corporates, both to connected with international regulatory the Business Council for Sustainable Devel- address within the organisation and as a and voluntary markets may be another opment. marketing tool,” he says. Uras believes that means to encourage investments to BCSD’s executive director Engin Guvenc companies are beginning to see that the improve energy efficiency and carbon says that the organisation’s role is to make return on investments in energy efficiency reduction activities.” sure companies understand their risk areas or waste reduction is coming back very and help contribute to the company’s finan- quickly and that there is an enormous Confronting the challenges cial strength. “For example, without opportunity for greater visibility and Coca-Cola Icecek is among the Turkish knowing its carbon emissions impact, a communication around a more environ- companies confronting the issue of gender campaign to plant trees is clearly just for mental, low-carbon, responsible way of equality. Its female executive rate is 73%, marketing purposes. But if the company is operating their business. compared with only 16% globally. aware of their emissions impact and sees “As more evidence of the business “There is an increasing understanding of the risks associated, and this awareness case emerges, I expect to see growing the global CR agenda in Turkey, especially becomes part of the culture of the company investment by companies as they realise in the last two to three years. Right now, I to address these emissions – that is more there is an opportunity to do something believe Turkish companies are closing the corporate responsibility and sustainability.” good and receive economic benefit at the gap with MNCs,” says Atilla Yerlikaya, Particularly when it comes to climate same time.” n
  • 16. Ethical Corporation • September 2011 Country briefing: Turkey 33 FATIH POLAT/DREAMSTIME.COMCivil society 80% of companies see philanthropy as synonymous with corporate responsibility,Growing pains, some gains leaving NGOs with an enormous, even overwhelming educational task. Bulay’s organisation, Sum Türkiye, hasBy April Streeter encountered these challenges. Bulay, aTurkey’s NGOs and business associations are in the challenging process former Ford product development engineerof convincing businesses of the risks and opportunities of sustainability passionate about mobility, was sponsored by the World Resource Institute’s Embarq quest by engineer Sibel Bulay to bring universities is getting students to look for network to start her organisation.A sustainable transport to Turkey is anapt analogy for the current challenges of renewable projects on campuses and advocate for policy change to their adminis- She dived into the country’s snarly transport issues – in Istanbul, for example,many of the country’s responsibility- trations. most working men and women commutefocused NGOs and business associations. Tema has a high profile with the public for two hours or more in crawling trafficWhile opportunities abound, there are also and has made inroads inside companies. and smoggy air conditions.growing pains. The “81 Forests in 81 Cities” campaign Until recently, businesses’ charitable helped bring the plight of Turkey’s forests to Restrictive lawsand philanthropic activities were moulded the attention of regular Turkish citizens. In Sum Türkiye started by working on anby the historical “waqf ” structure. Proper partnership with Tema, Is Bankasi decided emissions inventory of road-based trafficcorporate responsibility requires a more internally to shift funds it would normally with BP Bulay soon realised, however, that .comprehensive view, however, and so use to send favoured customers New Year’s Sum Türkiye’s fundraising opportunitiesorganisations have the challenge of both gifts and instead allocate them and other were limited, due to Turkey’s restrictinggrowing stakeholder engagement in a NGO laws. Thus a significant portion of hersociety that has had limited activist Organisations have the working hours recently have been spentinvolvement, and increasing corporate setting up a foundation and changing theinvolvement in order to press forward with challenge of growing organisation name to Embarq Turkey.a sustainability agenda. stakeholder engagement in Now, Bulay’s new Embarq Turkey must Turkey’s fairly steady macroeconomic embrace a partnership model for success.growth beginning in 2002, and the subse- a society that has had limited There are two reasons for this. The influ-quent coming of age of a powerful group of activist involvement ence from European and US multinationals’Turkish entrepreneurs spurred the first sustainability approach is only just nowwave of sustainability-related NGOs and cash ($6.5m in total) to the planting of 2m spilling over to Turkish domestic corpora-business associations. Successful, civic- trees. Nearly a million are already in the tions, making them not primed for jointminded leaders such as Hayrettin Karaca ground, planted by Tema volunteers, projects just yet.and Nihat Gökyigit founded Tema (Turkish including elementary school children, at 81 In addition, as Guvenc Engin, executiveFoundation for Combating Soil Erosion) urban locations. director of the Turkish BCSD notes, aand retired bank chief Ibrahim Bertil started However, meatier responsibility-centric critical, in-your-face approach, favoured byTog (Community Volunteer Foundation). NGOs frequently run into the cultural resist- many existing Turkish NGOs (she mentions Tog, for example, has had success at ance of Turkish companies to see beyond Greenpeace) is not going to be fruitful forraising awareness among the Turkish public simple philanthropy to actual opportunities corporate responsibility and sustainabilityabout renewable energy, especially in the and risks of embracing a broader sustain- issues.youth population (aged 17-25). For example, ability agenda. As Serdar Dinler, president of “Few NGOs have the understanding ofthe Solar Generation project now at seven the CSR Association of Turkey, has put it, sustainability to pressure companies – many
  • 17. 34 Country briefing: Turkey Ethical Corporation • September 2011 AIR PORTRAIT/ISTOCKPHOTO.COM were established years ago and work proselytising corporate responsi- with a business-as-usual approach – bility. and to criticise companies is the “They organise meetings and main attraction. Greenpeace can do speakers – may publish papers – this, but other local NGOs can be but when it comes to supporting more successful by taking the more the government to improve legisla- constructive approach,” Engin says. tion that impacts the environment Bulay clearly knows this, and or other CSR issues, they do not favours a constructive approach for take any action,” Ararat says. In Embarq Turkey. fact, she suggests that they work to Yet as far as domestic corporations oppose more stringent environ- are concerned, education about mental or other CR-relevant corporate responsibility is still legislation that would impact lacking, Bulay says, and with Embarq companies’ competitiveness or the sole NGO specifically concen- profitability. trating on sustainable mobility, it is Observers seem unable to single beyond her organisation’s capacity. out any one NGO with clear success Embarq is unlikely to grab any in the responsibility/sustainability flashy headlines or prizes, as Is arena. The Turkish BCSD’s effort to Bankasi has with “81 Cities”. Instead, create a Sustainability Index for the Bulay says she must work to gain the Istanbul Stock Exchange seems a trust of stakeholders, now and in the current high note, however, espe- future. That way, she says, “when cially as 80 companies have companies are ready to invest their expressed interest. And the recent CSR dollars, we can align their objec- formation of a Turkish Business tives with CSR initiatives”. Cycling catching on Network Linked-in CSR group with Embarq Turkey has partnered 500 members is a positive develop- with the city of Sakarya’s Transport Direc- is one of the country’s most influential ment. torate, as well as the Dutch NGO Interface business organisations. Following Turkey’s Devin Bahceci, who has worked for the for Cycling Expertise (I-CE), to train a local application for EU membership in 1987, Turkish Green Party and in a variety of team to design safe bicycle corridors in this Tusiad has worked ceaselessly to align NGO roles, currently as secretary-general of mid-sized city. Over 90% of Sakarya’s Turkish business standards and practices the Earth Association, says the lack of a cyclists are male – unsafe conditions are with those of the EU. That would seem to guiding NGO is particularly dire in the field seen as a barrier to women riders – and at give corporate social responsibility at least a of climate change. least 10% of riders have been in collisions. place at the conference table. “For me the test of NGO success is the Bulay sees the greatest success in Tusiad president Ümit Boyner has made ability to affect people and government to Sakarya thus far as the Transport Direc- the right speeches about the low-carbon take necessary steps, both adaptation and torate’s realisation that cycling is actually a economy and Turkey’s needed to transition. mitigation, in order to prevent the destruc- mode of transport, worthy of initiatives. She tive threats of climate change,” he says. wants to see that kind of attitude shift Bahceci’s view is that there has not been an spread to other cities – Antalya will be next NGOs frequently run into the NGO in Turkey that has been able to do this. to develop a pilot cycling corridor – and to cultural resistance of Turkish Powerful environmental NGOs are “not domestic companies. political enough” to influence the govern- “It’s the idea that it’s not about cars per companies to see beyond ment, and they generally only provide se, it’s about climate change, mobility, simple philanthropy services such as “planting trees”. democracy,” she says. Bahceci says that from his observation, “Intensive work,” she has said, is under way private sector support of NGOs is still quite Who carries the torch? inside the organisation, for example, to low, and corporate responsibility initiatives Back to CSR’s educational deficit, and older, create a framework for Turkey’s response to inside more mainstream NGOs few and far established NGOs such as Tog and Tema are climate change. between. pursuing the slow process of raising aware- When it comes to action, however, others Yet Ararat says the pressure from Europe ness of environmental and social in the corporate responsibility community for Turkish companies to shift their vision sustainability issues among the Turkish are not so clear that Tusiad is committed. A from responsibility as an “add-on” to part of populace. Yet since smaller nimble players CR study group, established in 2007, started the core business strategy will continue. such as Embarq may not have the institu- out robustly but has seemed to peter out, And as the case study on Petkim’s process tional capacity, who will press the CR according to Serdar Dinler. also demonstrates (see p.31), while the agenda inside companies? That’s in line with what Melsa Ararat, education and impetus to start that process Probably not the business associations, it director of the Corporate Governance may not come from the NGO world at all, seems. In existence since 1971, the Turkish Forum of Turkey, calls the “lack of success” once the process has begun Turkish compa- Industry and Business Association (Tusiad) by Tusiad and other business associations at nies’ results can be swift and fruitful. n
  • 18. Ethical Corporation • September 2011 Country briefing: Turkey 35GovernmentMissing thebig pictureBy Jennifer HattamThere are plenty of well-meaningsustainability initiatives under way inTurkey, but a cultural movement forchange has yet to take hold aced with soaring energy costs amidF rapid urbanisation and industrialisation,the Turkish government late last year finally President Guls progressive laws could be better enforcedenacted a long-awaited law setting feed-intariffs for renewable energy generation. far as I can tell, no company in Turkey is comes to sustainability. For environmentalists, though, the law truly migrating towards sustainability in a “Turkey’s environmental agenda is 100%contained a major catch. It allowed way that meaningfully challenges the related to the EU accession process. Everyprotected nature areas to be used for business model,” says John Buffington of year we’re incorporating new EU regula-production facilities for renewable energy – Karbon Ekonomi, a firm that offers sustain- tions and directives and there’s a hugeincluding the massive hydroelectric dams ability consulting to Turkish firms. amount of compliance work being done atthey have been fighting for years. Many say the government, since 2007 the company level,” Okumus says, adding The inconsistency reflects what the under Abdullah Gul, gives companies little that international climate change negotia-deputy director of the Regional Environ- or no incentive to do so, despite various tions also play a significant role.mental Centre’s Turkey office calls a lack of “[EU accession] has been one of theoverall vision on environmental issues. “There is no motivation, drivers in the Turkish clean-tech industry,”“There are a lot of laws but they are not says a business leader in the renewable-enforced and do not serve a target,” says no incentive, no regulatory energy sector. “The EU has been pressuringREC’s Kerem Okumus. “There is no sustain- pressure” Turkey since its economy has been growingable long-term regulatory framework.” at high rates in the last decade, but without The situation parallels that of most Kerem Okumus, Regional much care for the environment.”Turkish companies, which largely adopt Environmental Centre The increasing globalisation of theindividual initiatives that might fall under Turkish economy has had a similar influ-the heading of “corporate social responsi- commendable laws, including ones ence, with multinationals operating in thebility” without making deeper changes to mandating building energy performance country often at the leading edge of corpo-their practices and processes. and other efficiency measures. rate responsibility efforts. “The real drivers “Many companies do not get what right now that I’ve found are a foreignsustainability is about,” says Aykan Gulten, Lacking pressure parent company that has a globala former Nike corporate responsibility “Environmental regulation in Turkey is programme and foreign investors asking formanager who now heads works in corpo- pretty sophisticated but there is not enough it,” Buffington says.rate affairs for Coca-Cola Icecek. “They do monitoring, enforcement, and criminal When looking for a corporate partner fornot assess their impact on the environment sanctions,” says Gulten. “There are no regu- her social entrepreneurship project,and society but try to be recognised as lations holding companies back from Copmadam founder Tara Hopkins likewiseresponsible through donations and PR improving environmental performance but found success with Unilever, a large multi-work.” there are not enough encouraging it either.” national. “We did go to several big Turkish Garanti Bank, the country’s second According to REC’s Okumus, one of the companies, asking them to sponsor alargest private bank, has, for example, been most important moves the government Turkish development programme, and theymuch praised for its longstanding sponsor- could make would be to establish an emis- were less than interested,” she says.ship of the environmental group WWF sions-reduction target that companies Others remain hopeful, however, thatTurkey. The same bank has, however, been a would have to figure out how to meet. awareness and action are on the rise, partic-target of fierce criticism domestically and in Turkey’s per-capita carbon emissions are ularly in the private sector.Europe for its support for the Ilisu Dam near the world average of 4.5 tonnes a year, “Turkey is going through the sameproject, a massive hydroelectric power but at the current rate of growth, he says, period the western world completed a fewplant in south-eastern Turkey that would this figure could hit 9 tonnes by 2020, years ago,” Gulten says. “At the end of thisinundate a 2,000-year-old city and displace leaving the country trailing. period, companies with real commitmentits current residents. European funders “Right now there is no motivation, no will be able to differentiate their positionhave already pulled out of the project. incentive, no regulatory pressure,” Okumus from greenwashers.” n “There are a growing number of firms says, adding that consumer demand andadopting incremental CSR measures, but as market pressure are also lacking when it Jennifer Hattam is a freelance journalist based in Istanbul.
  • 19. 36 Columnist: Paul French Ethical Corporation • September 2011 China column Desperate to be friends Paul French says that the Chinese government needs to act very differently if it wants to be popular in the west arlier in the summer, two things and obviously having had the E grabbed the attention of China watchers. The outspoken and inter- frighteners put on him. This did not endear Wen to the British nationally lauded Chinese artist Ai public. Weiwei was finally released (on Most of Fleet Street and the UK Wen is on a charm offensive bail) after 75 days of detention and arts community publicly showed Chinese premier Wen Jiabao visited support for Ai. Penguin published from a trip by western academics to London to push the Beijing line one of its “specials” on him; Beijing where the purpose was to on things. Anthony Gormley and other British “engage” with the Communist The release of Ai occurred the artists called for his release; and his party on its image issues overseas. week before Wen arrived in installations at London’s Somerset He tells me that one of the party London. This is not presumed to be House and Lisson Grove Gallery leaders’ major concerns is that they a coincidence. Meanwhile Wen’s were well attended. But little feel unloved. trip was less the usual trade mission comment came from the business They believe they have deliv- and more another step in China’s community. ered growth, better standards of search to find out why nobody living and a stronger China – so loves her. Speak out? Beijing feels why don’t people appreciate the In fact very few, if any, new So what? Why should business that the party more? Similarly, Beijing feels contracts were concluded during speak out for Ai? world doesn’t that the world doesn’t understand the trip. Instead we saw some Well, for one thing his work had or accept a stronger China. minor announcements mixed with recently been the Unilever Installa- understand some long-arranged deals finally tion at London’s Tate Modern. Ai’s or accept a No emotional contact authorised by Beijing (the Diageo Sunflower Seeds featuring 100m The leadership believes China has stake in a traditional Chinese spirits handmade ceramic seeds attracted stronger China been a bulwark against an even maker). much praise – and many visitors. deeper world recession and the There were also some examples Unilever presumably sponsors the world should be grateful. That the of what the Foreign Office calls installation to appear to be west focuses on human rights, Tibet (off the record) “reheated” agree- supporting creativity and free and Ai Weiwei genuinely perplexes ments that have long been in place expression. Yet I cannot find even a Beijing. As Brown puts it, “the party but get rolled out one more time small press release from Unilever in is frustrated that it has failed to during these visits to inflate the response to Ai’s detention. Total make an emotional contact with numbers (for example, the contract silence. the people”. for a clean coal plant in Inner Of course, Unilever does more Still, Beijing’s marketing and PR Mongolia that may, or may not, than €1bn of business a year in are not really improving – even ever happen). China, a country where the govern- as Wen was still in London the ment regularly takes reprisals cadres in Beijing were announcing Why the hush? against companies that don’t stay that Ai was an “economic criminal” Two things struck me about these on-message. But is it acceptable to while telling critical British events. us, as consumers, that Unilever journalists to go and learn more First, shouldn’t British business gets all the press coverage, kudos about the “real China” but denying have shouted a little louder, or at all, and soft power from sponsoring those journalists visas to enter about Ai Weiwei? Ai but then, within weeks of his the country. Second, why is Beijing so seem- installation ending and when he’s For now, Beijing and the party ingly desperate to be loved in the been banged up by Beijing, says should probably just get used to west? Wen went on a rather cack- nothing? being unloved. n handed charm offensive in the Kerry Brown, head of the Royal wake of Ai being pictured on the Institute of International Affairs Paul French has been based in China for more front of every UK newspaper, freed China programme at Chatham COLUMNIST: than 20 years and is a partner in the research but unable to speak to journalists House in London, has just returned PAUL FRENCH publisher Access Asia.