Corporate Social Responsibility: Does It Matter? Presentation to the 8th Annual Conference  International Corporate Govern...
A Crisis in Leadership
US Markets: A Breakdown in Trust
President George W. Bush <ul><li>“ With 80 million Americans participating as shareholders of companies, we must ensure  h...
What is CERES? <ul><li>Most powerful U.S.  coalition  of environmental, labor, and investors (85 organizations) </li></ul>...
<ul><li>AFL-CIO </li></ul><ul><li>Interfaith Center on Corporate Responsibility  (church pension funds) </li></ul><ul><li>...
<ul><li>American Airlines </li></ul><ul><li>Bank of America </li></ul><ul><li>Baxter International </li></ul><ul><li>Bethl...
<ul><li>Over five years (1997-2002), with hundreds of global partners, built a generally accepted framework for corporate ...
GRI Charter Group <ul><li>AccountAbility </li></ul><ul><li>Amnesty International </li></ul><ul><li>Association of Chartere...
Companies using GRI- a Sampling  American Home Products  AT&T  Baxter  Biffa Waste Services Ltd.  Body Shop International ...
Strong Government  Support for Standardized Reporting   <ul><li>European Union CSR guidelines </li></ul><ul><li>Japanese E...
CERES 2002  Sustainable Governance Project <ul><li>Underlying premise : CEOs and boards can no longer oversee large global...
<ul><li>All US sectors and portfolios exposed to varying degrees of climate risk </li></ul><ul><ul><li>Agriculture, energy...
<ul><li>California : agriculture, especially fruits, nuts, wine.  Cost of lettuce quadrupled this spring due to strange we...
Colorado : 984 fires have destroyed 375,000 acres Barry Gutierrez © News
CERES Report:  Value at Risk: Climate Change  and the Future of Governance   <ul><li>Recommendations for Institutional Inv...
<ul><li>May 29, 2002:  20% (= $55 billion) of shareholders voted  against  management of Exxon-Mobil on a climate related ...
21st Century will see Convergence of Sustainability and Governance Agendas <ul><li>CERES is committed to: </li></ul><ul><u...
<ul><li>www.ceres.org </li></ul><ul><ul><li>Free report downloads available </li></ul></ul><ul><li>www.globalreporting.org...
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Corporate Social Responsibility: Does It Matter?

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Corporate Social Responsibility: Does It Matter?

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  • Thank you very much. I would like to commend the program committee for prescience in choosing the topic of Corporations As Citizens: the Role of Governance. Could not be more timely or appropriate. The CERES coalition is built on the proposition that increasingly, in a global economy, economic prosperity, social responsibility, and ecological sanity cannot be separated for executives, boards, or investors. Whereas before, one might have thought of responsibility or citizenship as side issues, now they, with the advent of the Internet, every company lives under a spotlight. The ability to manage a company depends on having the trust of investors and other stakeholders and such trust cannot be manufactured suddenly. It is built on a commitment to core principles, to rigorous behavior, and to transparency. Or, to put it another way, best practice in governance and management is steadily converging with best practice toward sustainability. Of course, in the United States, we have a crisis of responsibility, trust, and transparency that signals the shift from an old pattern to a new one.
  • Corporate Social Responsibility: Does It Matter?

    1. 1. Corporate Social Responsibility: Does It Matter? Presentation to the 8th Annual Conference International Corporate Governance Network Milan, Italy Dr. Robert Kinloch Massie Executive Director CERES Board of Directors Global Reporting Initiative July 12, 2002 www.ceres.org
    2. 2. A Crisis in Leadership
    3. 3. US Markets: A Breakdown in Trust
    4. 4. President George W. Bush <ul><li>“ With 80 million Americans participating as shareholders of companies, we must ensure high standards , tough disclosure requirements and accurate information .” </li></ul><ul><li>April 24, 2002 </li></ul><ul><li>“ There is a need for a renewed corporate responsibility in America. Those entrusted with shareholders' money must -- must -- strive for the highest of high standards.” </li></ul><ul><li>June 26, 2002 </li></ul>
    5. 5. What is CERES? <ul><li>Most powerful U.S. coalition of environmental, labor, and investors (85 organizations) </li></ul><ul><li>A network of more than 70 corporations that have endorsed the CERES Principles </li></ul><ul><li>The oldest (1989) and most trusted environmental code of conduct in U.S. </li></ul><ul><li>The convenor, with UNEP, of the Global Reporting Initiative (GRI) </li></ul><ul><li>www.CERES.org </li></ul>CERES
    6. 6. <ul><li>AFL-CIO </li></ul><ul><li>Interfaith Center on Corporate Responsibility (church pension funds) </li></ul><ul><li>Citizens Funds </li></ul><ul><li>Conservation International </li></ul><ul><li>Domini Social Investments </li></ul><ul><li>Friends of the Earth </li></ul><ul><li>Friends, Ivory & Sime </li></ul><ul><li>New York City Employee Retirement System </li></ul><ul><li>Social Accountability International </li></ul><ul><li>Social Investment Forum </li></ul><ul><li>SustainAbility </li></ul><ul><li>Trillium Asset Management </li></ul><ul><li>Walden Asset Management </li></ul><ul><li>World Wildlife Fund U.S. </li></ul>Selected Coalition Members
    7. 7. <ul><li>American Airlines </li></ul><ul><li>Bank of America </li></ul><ul><li>Baxter International </li></ul><ul><li>Bethlehem Steel </li></ul><ul><li>Coca-Cola USA </li></ul><ul><li>Consolidated Edison </li></ul><ul><li>FleetBoston Financial </li></ul><ul><li>Ford Motor Company </li></ul><ul><li>General Motors </li></ul><ul><li>Interface </li></ul><ul><li>ITT Industries </li></ul><ul><li>Nike </li></ul><ul><li>Northeast Utilities </li></ul><ul><li>Saunders Hotel Group </li></ul><ul><li>Sunoco </li></ul><ul><li>US Trust Company </li></ul>Selected CERES Endorsers
    8. 8. <ul><li>Over five years (1997-2002), with hundreds of global partners, built a generally accepted framework for corporate sustainability reporting </li></ul><ul><li>GRI now independent, establishing headquarters in Amsterdam - 14 eminent board members </li></ul><ul><li>New version to be released around Johannesburg summit </li></ul><ul><li>Would invite ICGN members to support emerging standard by requesting GRI-based disclosure from portfolio companies </li></ul><ul><li>www.globalreporting.org </li></ul>CERES Launched GRI
    9. 9. GRI Charter Group <ul><li>AccountAbility </li></ul><ul><li>Amnesty International </li></ul><ul><li>Association of Chartered Certified Accountants </li></ul><ul><li>Baxter International </li></ul><ul><li>CERES </li></ul><ul><li>Consejo Empresario Argentino para el Desarollo Sostenible </li></ul><ul><li>Conservation International </li></ul><ul><li>Consumers International </li></ul><ul><li>Ford Motor Co. </li></ul><ul><li>Deloitte Touche </li></ul><ul><li>General Motors </li></ul><ul><li>Greenpeace International </li></ul><ul><li>Human Rights Watch </li></ul><ul><li>Instituto Ethos </li></ul><ul><li>KPMG </li></ul><ul><li>Nike </li></ul><ul><li>Oxfam International </li></ul><ul><li>Pricewaterhouse-Coopers </li></ul><ul><li>Royal Dutch/Shell </li></ul><ul><li>Social Accountability International </li></ul><ul><li>Transparency International </li></ul><ul><li>United Nations Environment Programme </li></ul><ul><li>UN High Commission on Human Rights </li></ul><ul><li>World Bank Group </li></ul><ul><li>World Conservation Union </li></ul><ul><li>World Resources Institute </li></ul><ul><li>WWF International </li></ul>
    10. 10. Companies using GRI- a Sampling American Home Products AT&T Baxter Biffa Waste Services Ltd. Body Shop International Bristol-Myers Squibb British Airways BT Carillion Electrolux ESAB Ford Motor Company Fuji Xerox General Motors Henkel ITT/Flygt Johnson & Johnson Kirin Brewing KLM Konica NEC Nissan Nokia Novo Nordisk Procter & Gamble Ricoh Royal Philips Electronics Saint-Gobain SAS SASOL Scandiflex Shell Severn Trent SITA South African Breweries Suncor Energy Sunoco Thames Water TXU Europe Vauxhall Motors Ltd VAW Aluminium Waste Recycling Group
    11. 11. Strong Government Support for Standardized Reporting <ul><li>European Union CSR guidelines </li></ul><ul><li>Japanese Environment Agency </li></ul><ul><li>US EPA “Performance Track” </li></ul><ul><li>UK: Environmental Reporting Guidelines </li></ul><ul><li>France: Article 116 </li></ul><ul><li>Denmark: Sustainability Reporting Guidelines </li></ul>
    12. 12. CERES 2002 Sustainable Governance Project <ul><li>Underlying premise : CEOs and boards can no longer oversee large global businesses without: </li></ul><ul><ul><li>understanding key questions of sustainability , such as climate, energy, water, biodiversity, inequality </li></ul></ul><ul><ul><li>setting goals and measuring outcomes </li></ul></ul><ul><ul><li>disclosing the results through an international standard verified by third parties </li></ul></ul><ul><li>Failure to do so exposes firm to unnecessary risk </li></ul><ul><li>In 21st century, good governance includes </li></ul><ul><li>strategic approach to sustainability </li></ul>
    13. 13. <ul><li>All US sectors and portfolios exposed to varying degrees of climate risk </li></ul><ul><ul><li>Agriculture, energy, forestry, insurance, real estate, tourism, transportation, water and waste, etc. </li></ul></ul><ul><li>Future costs could be large </li></ul><ul><ul><li>Regulations (CA), financial losses, lawsuits </li></ul></ul><ul><ul><li>Much more research needed! </li></ul></ul><ul><li>Failure to assess long-term portfolio risk could be breach of fiduciary duty </li></ul>Example: “embedded climate risk”
    14. 14. <ul><li>California : agriculture, especially fruits, nuts, wine. Cost of lettuce quadrupled this spring due to strange weather conditions </li></ul><ul><li>Florida : potential loss of Everglades after $7.9 billion federal investment </li></ul><ul><li>Alaska : breaks in pipelines due to melting of permafrost </li></ul><ul><li>Across U.S .: drop in water table and aquifers, displacement of migratory birds, threat to coastal airports, expanded tropical disease areas, drought in New England, floods in Texas </li></ul><ul><li> TOTAL COST TO U.S. ECONOMY = ?????? </li></ul>U.S.: “embedded climate risk”
    15. 15. Colorado : 984 fires have destroyed 375,000 acres Barry Gutierrez © News
    16. 16. CERES Report: Value at Risk: Climate Change and the Future of Governance <ul><li>Recommendations for Institutional Investors </li></ul><ul><li>Seek out expertise </li></ul><ul><li>Examine embedded climate risk portfolio-wide </li></ul><ul><li>Take action to mitigate risk </li></ul><ul><ul><li>Incorporate climate change analysis into investment strategies </li></ul></ul><ul><ul><li>Require greater disclosure from firms </li></ul></ul><ul><ul><li>Encourage best practice from portfolio companies </li></ul></ul><ul><li>Pursue opportunities </li></ul><ul><ul><li>Clean, lower-carbon technologies </li></ul></ul>
    17. 17. <ul><li>May 29, 2002: 20% (= $55 billion) of shareholders voted against management of Exxon-Mobil on a climate related resolution </li></ul><ul><li>Why? </li></ul><ul><li>“ Neither the CEO, nor the board, nor management have a plan for appropriately managing the assets of the company given the challenge of climate change. [Investors] are going to treat it as a governance issue , not as an environmental issue .” </li></ul><ul><li>Mark Bateman </li></ul><ul><li>Investor Responsibility Research Center </li></ul><ul><li>(IRRC) </li></ul>Growing realization among U.S. investors that climate change is a governance issue
    18. 18. 21st Century will see Convergence of Sustainability and Governance Agendas <ul><li>CERES is committed to: </li></ul><ul><ul><li>Conducting collaborative research to assess long-term financial impacts </li></ul></ul><ul><ul><li>Sharing U.S. information, resources, and allies with other ICGN members </li></ul></ul><ul><ul><li>Supporting adoption of GRI, including greenhouse gas disclosure, by all US companies </li></ul></ul><ul><ul><li>Promoting ICGN decisions on good governance </li></ul></ul>
    19. 19. <ul><li>www.ceres.org </li></ul><ul><ul><li>Free report downloads available </li></ul></ul><ul><li>www.globalreporting.org </li></ul><ul><ul><li>Complete information on all activities </li></ul></ul><ul><li>Annual CERES Conference </li></ul><ul><ul><li>April 1-3, 2003 - New York Hilton </li></ul></ul><ul><li>Contact: Dr. Robert Kinloch Massie </li></ul><ul><li> (massie@ceres.org) </li></ul><ul><li> Dr. Ariane van Buren </li></ul><ul><li> (vanburen@ceres.org) </li></ul>For more information -

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