Corporateresponsibility: 2011 reflections and 2012predictionsToby Webb, Founder/Chairman, EthicalCorporation,CEO/Co-Founder, StakeholderIntelligence Ltd17 November 2011. Canadian Business for SocialResponsibilityWebinar
Background • Founded Ethical Corporation 2001 • Directed/Chaired 80+ CR management conferences world-wide • Published 8000 articles & 12 reports • Interview 800+ executives per year: Reports, articles, conferences • 3000 Corp customers globally, expert analysts around globe • Lecturer, Corporate Responsibility, Birkbeck College (London) • Co-chaired independent working group on CSR for UK Government 2006-8 for David Cameron • Co-Founder of Stakeholder Intelligence: Bespoke company training, intelligence & research. 30 experts round the world: China, SA, Brazil, US etc
Sustainability 2011/12 issues Durban: Low expectations but a hope that Kyoto expiration may provide some impetus for a deal before 2015-20 Eurozone crisis: Current severe economic/political troubles an important context considering EU’s traditional role as global environmental standard-setter and proposed shift to a low carbon economy. May hinge on German election. UK Government step back: Policy confusion on business and carbon. E.G. FiTs, green tariffs, green deal, CRC, Renewable Heat Incentive, all faltered Business/Government steps forward: Davos 2011 provided CEOs with space to discuss SD and helps create interface between government and business
Sustainability: Macro issues: 2011 events and 2012 significance 7th billion person arriving on earth: UN shift from 9 to 10 billion max estimate Rio Earth Summit + 20: Unlikely major Govt action, but v significant for business announcements and commitments China’s Five Year Plan: Shift towards res. Efficiency: game changer? China’s middle class: People vs. Govt more than People vs. Biz AND What can 400mn ‘soccer mom’ types mean? Fukushima: Nail in the coffin of nuclear as a transition technology? Given German ‘political’ decision it’s a distinct possibility.
Sustainability: Macro issues: 2011 events and 2012 significance What the Frack?Gasland and association publicity around shale gas – good and bad – firmly on the CR agenda. Is it climate realpolitik or stopgap solution? Companies may need to take a position Occupy Wall Street: Not what it was, but what it represented…sense that the current system of liberal democracy and capitalism isn’t working, and the public sympathy for that 2012 question: Clearly change in context for business in society. Could it lead to a change in definition of the social contract, or a passing fad not even on the scale of anti- globalisation protests of late 1990s?
Sustainability: Macro issues: 2011 events and 2012 significance Occupy debate given new fillip to discussions about solutions: Notably the ‘Tobin tax’ idea which continues to gather political support but appears no closer to reality India’s corruption debate: Lone campaigner, Anna Hazare’s work and mobile licenses scandal = official corruption on mainstream political agenda. Govt& business now under much greater spotlight & pressure Closure of News of the World: Comeuppance for Murdoch. Ongoing, ever-growing journalism and corporate ethics scandal in UK, slowly spreading to North America (shareholder action)
Business and sustainability/corporate responsibility/ethics Coca-Cola Enterprises Sustainability Plan, Sainsbury’s 20/20 plan: September 2011: Impressive milestones. May help other large companies see beyond Unilever, Marks & Spencer as ‘out on their own’ High-tech brands and web businesses: Apple, Google, Facebook, Amazon under scrutiny on both operations AND consumer influence China’s reporting push: 600+ companies now reporting in China. What will Five Year Plan implementation mean for sustainability disclosure 2012 and beyond? Porter’s Shared Vale proposition: Despite obvious bandwagon-jumping and latenessm, re-badging a version of CR unrecognized in Europe as a proprietary concept
Business and sustainability Porter is a ‘name’ in business that counts. Despite lack of focus on minimizing negative impacts ‘Shared Value’ gives other celebrity academics confidence Reports indicate Shared Value apopular concept in US as many uncomfortable with word ‘responsibility’ for legal and cultural reasons Integrated reporting pilot: Despite commercial conflicts/rush by accountancy companies to cash in, major step forward in organizational change process – perhaps. May give CR movement some ‘much needed’ momentum Final Ruggie report: Serious, solutions-oriented step towards a framework for business and human rights. Companies will need to respond positively and in a lot more detail on the topic in 2012
Business and sustainability ISO 26,000& understanding: National body certification may create both markets and confusion Globally-relevant human rights-related rules: Frank-Dodd elements + California’s slave labour disclosure rules help continue to create momentum for business and human rights debate in 2012 Carbon Disclosure Project’s Carbon Action and Water Disclosure initiatives: Will they signal a real change in responsible investment? 2012 may tell us Barclay’s Bob Diamond admitting banks have serious reputation problem alongside financial, but lack solutions or path BP’s problems: Ongoing fallout from Macondo, and their admissions around business practices in Russia
Business case and sector improvements Bigger companies twice as likely to report as those with revenues under $1 billion 48% of Top 100 companies claim cost savings through CR initiatives 47% say increased revenues and/or their position in the current market through CR measures Best performing sectors for CR reporting: Forestry, pulp and paper (84%), mining (84% and automotive (78%) Greatest improvement since 08: Construction (65% in 2011 from 32% 08) and Pharmaceuticals (64% from 25% in 08)
Issues coming up the agenda Water and Carbon high on reporting agenda: CDP to report corporate survey results on water December 2011 Ethical Corporation research shows large companies pushing transparency and data requirements into Tier One suppliers: Energy, Carbon, Water top areas of interest Microsoft (‘11) and Wal-Mart (‘09) notable cases. SEDEX and the Fair Factories Clearinghouse seeing rise in data flowing in from both suppliers and brands 2011: World Resources Institute and World Business Council on Sustainable Development released biz standards to measure, report & manage carbon emissions in supply chains and throughout product life cycles through Greenhouse Gas Protocol
Issues coming up the agenda Integrated reporting on the rise. Some say its investor driven International Integrated Reporting Committee framework for integrated reporting: Aims to unite standards for financial reporting (IFRS and US GAAP) with SD frameworks 40 company pilot scheme for 12 months to apply draft principles: Coca-Cola Co, Microsoft Corp, Volvo, Deloitte & HSBC (IIRC Discussion Paper draft framework pub. 2011) Is there a danger that integrated reporting will water down sustainability reporting?...Sources: KPMG surveys, BNA Daily Environment Report, Ethical Corporation
Further reading and contact Tobywebb.blogspot.com www.slideshare.net/tobiaswebb www.ethicalcorp.com www.stakeholderintel.com (forthcoming) Toby.firstname.lastname@example.org Toby.email@example.com