Thursday, May 31, 2007

Sustainability reports database: next steps with Corporate Register

I just returned from a day in London where a colleague and I visited the small but lively office of corporateregister ( - this is the group that brings you the free database of PDF reports, ReportAlert services, and now EventAlert services. Last October (in conjunction with the release of the G3 Sustainability Reporting Guidelines) GRI formed a partnership with corporateregister to merge our reports databases - and corporateregister would become the host of the GRI reports registry.

It's just over eight months since we shifted from hosting our own database to working with corporateregister to host it and it was a good time for a check in. In general we were really impressed with their ability to track reports - they monitor 7000 companies, of which only 3500 issue reports currently, so they can pick up new reports as soon as they come out. At least two sets of eyes at corporateregister look the report over before it is posted, and dozens of data points are gathered on each one. We feel pretty confident that the data they present are accurate and current.

A few technological challenges remain - such as how to ensure reports written in non-Latin scripts (ie. Russian, Chinese) can be featured or counted in the database. For technical and quality reasons corporateregister can't host these in their database, so we are going to actively look for solutions with partners likely in Asia to ensure we have a complete database. Great news is that corporateregister will work on adding some new sort and statistics features on the GRI register this summer. Our database visitors have been asking for these for some months, so we are excited that they will come online soon.

Let me know what resources you would like to see on the GRI register:

Tuesday, May 29, 2007

Civil society: Alive and kicking behind bars

Organized civil society groups play an important role in the ongoing macro-discussion with business, government and labor about expectations, roles, and responsibilities vis-a-vis sustainable development. They often help expose previously unknown issues, bring voices to the voiceless, and represent the interests of 'common good' in discussions around how to change our world towards a more sustainable future - and who needs to play what role in order to get us there.

In the 1980's it was common to see civil society organizations grabbing newspaper headlines with brave and splashy interventions - people were spotted scaling industrial chimneys and chaining themselves to trees - in order to bring awareness and action on important issues. But we don't see these sorts of actions in the headines so much any longer. Is it because the media and the general public have tired of these 'antics' - or is because these groups have changed strategies and are working behind the scenes or in cooperation with business and government?

Unfortunately, I think its the former. Here are two points of evidence to support this position:

Quite by accident I met a real crew member of Greenpeace's famed Rainbow Warrior just last week. It sailed into Amsterdam so the crew could have a few days off before their next mission. Although she swore me to secrecy about their upcoming campaign, I can tell you that they are still as active as ever.

First thing this morning a piece of news arrived in my inbox. Last week was one of the most important gatherings of civil society organizations worldwide - the CIVICUS General Assembly. CIVICUS Secretary-General (and GRI Board member) Kumi Naidoo was leading a campaign to bring a voice to the voiceless - in this case civil society campaigners worldwide who have been imprisioned for speaking out. I can say that I was not even aware that there were so many activists silenced by jail terms in this day and age. See Kumi's column entry (below) for more details about how he got a taste for what his peer's must be experiencing.

Call for civil society watchdogs
By Kumi Naidoo, CIVICUS Secretary-General
I was put behind bars yesterday my friends, and I can tell you that even for those few minutes while photographers snapped, it didn't feel very pleasant. I sat in my 'cell' with youth delegates, Socialist International President and former foreign minister of Greece, George Papandreou. In our hands, placards depicting the images of our friends, imprisoned civil society activists from around the world. As I mentioned yesterday in my column, this was part of a wider campaign to remind the Assembly and the wider world of the plight faced by our colleagues and calling for their immediate release. I was released minutes later to my great relief. Warm regards, Kumi Naidoo.

Thursday, May 24, 2007

Everyday Americans waking up to corporate responsibility?

One of the major critiques of the corporate responsibility movement is that the average person on the street just doesn't really care about companies commitment - or lack thereof - to their social and environmental impacts and risks.

However, we (colleagues and I) have been speculating that the mainstreaming of the climate agenda in Western Europe and the USA will (or has?) usher in the broader sustainability agenda - including the role of the corporation - and help bring this to the attention of the everyday person.

The following little survey caught my eye recently which seems to back up this speculation.

Survey: Americans disapprove of companies performance on CSR

A majority of Americans from all sides of the political spectrum have said that they would look towards legislators to correct poor CSR performance by US businesses, according to a recent survey. 96 percent of Democrats, 80 percent of Independents, and 65 percent of Republicans say that it is either very or extremely important for Congress to ensure that companies are addressing social issues.

Over three quarters of the respondents to the survey, which was carried out by Fleishman-Hillard and the National Consumers League, said US companies had poor records on CSR, with a big focus on sectors such as energy, food, chemicals and pharmaceuticals as needing more oversight by authorities.

"The generally lukewarm perception of U.S. corporations on socialresponsibility, along with the prevailing belief that Congress may need to get involved, could lead to increased oversight of the private sector on Capitol Hill" said former U.S. Sen. Jim Talent.

Monday, May 21, 2007

Hungary: gearing up for privitaization

Since visiting Slovakia last week, my curiousity about Central and Eastern Europe has been peaked. It's 17 years now since the 'iron curtain' fell and some countries have been fairing better than others in their journeys to establish democracies and stable economies.

One that is slightly ahead of the pack is Hungary. I was speaking to some Hungarians that traveled over to Slovakia for the G3 Breakfast event we held last Friday and they had an interesting story to tell about how sustainability was playing a role in business suceess there. They warned me that we can expect 5-10 new sustainability reports this year out of Hungary. I asked why.

They answered that many Hungarian companies are gearing up for privitization after decades of public ownership and governmental control. Some of the country's most important utilities, service providers, and national brands are opening up for private investors - from within Hungary and from abroad. Many are producing a sustainability report as a part of the package they are preparing to attract the most competitive offers. Showing that they adhere to high standards of environment, health, safety, product responsibility, labour practices, anti-corruption, and governance seems to help improve the value of the company.

That's a concrete business case if I've ever heard one.

Friday, May 18, 2007

Slovakia: Just getting started

After two days here in Bratislava as the guest of Pontis Foundation and the Business Leaders Forum I can say that I think we have successfully infected the local business community with the sustainability bug!

The economy is booming - nearly 10% growth per year - yet all business people I met felt that even this rate was too slow and the country had much to do to catch up. With such rapid growth of Slovak companies, the introduction of multi-nationals (I met representatives from Orange, Daimler, HP, Tesco, etc) and urbanization on the rise, everyone is trying to ensure that all this growth doesnt happen at a cost to the future economic vitality of the country.
Yesterday's full day conference attracted over 120 participants who were engaged in sessions on everything from the business case for sustainability, the GRI, the Global Compact, community investment, cause related marketing, employee and gender issues, and philanthropy. This morning we gathered about 40 people where I walked them through a more in-depth look at the GRI Guidelines. Guests from Czech Coal and Denso Hungary who have used the Guidelines for a few years now were able to present their company's business case for reporting, along with the challenges and benefits that reporting has brought them.
The prognosis? I think we will start to see some country level reports here in Slovakia - many country units already contribute to the parent company report so putting something out for the national audience won't be a difficult first step. Important will be to engage and build capacity for smaller enterprises to start with reporting. This will happen as Slovakia is held to the same standards for environmental and social performance as its other counterparts in the European Community, and pressure will be on for greater disclosure.
All in all a great trip and a facinating first look at one of Europe's newest members and how sustainability is taking shape here.

Tuesday, May 15, 2007

Emerging markets: suppliers differentiating themselves

I appreciate Stephen's reponse to yesterday's post (check it out -its a good one!) and here is his key point which I didn't articulate as clearly "I would find it counter-productive to promote relaxed standards for emerging markets, meanwhile promoting the idea of embracing progressive CSR principles as a way of creating both social and economic value."

This conversation is reminding me of my trip to Sri Lanka in December 2005. I joined my colleague Naoko from the secretariat to attend a working group meeting of the Apparel and Footwear Sector Supplement hosted by a supplier to many major brands called MAS Holdings in Columbo. Besides being a personally emotional trip due to the one year anniversary of the deadly tsunami, it was also a professionally inspiring trip.

It seems the business community had decided that it simply could not compete with its massive neighbours India and China on labor prices, so it had no choice but to compete on quality instead. As a result the government ratified nearly 30 international conventions on environment, labor, and human rights, and is on an agressive time frame for implementation. Interesting to note that Sri Lanka has ratified many conventions that leading economies such as Australia and the USA have not even ratified - where the customer base for most Sri Lankan produced products are located!

Leading Sri Lankan businesses are already shifting their practices to reflect these new higher standards, and they are positioning themselves as uniquely competitive in the marketplace as they are able to deliver quality goods at a good price but within the context of the environmental, labor, and human rights conditions that European and North American discerning consumers expect.

Governments, businesses, and workers seem to be united behind the strategy for Sri Lanka as a whole to develop a reputation for quality based on their environmental and social commitments - thereby making it worth that extra few cents for fabrics sourced there and helping to improve working and living conditions for an entire nation in the process. My understanding is that Sri Lanka is already being rewarded under trade agreements from 'Western' nations as a result.

From GRI's perspective, the public disclosure aspect is a vital ingredient in this picture - companies must prove they are performing to higher social and environmental standards through the use of a credible public disclosure standard.

Monday, May 14, 2007

Emerging markets: Held to the same standards?

One of the big topics in the GRI network is whether or not the Sustainability Reporting Guidelines as they stand today are applicable - and should be expected for use - by companies and other organizations in emerging markets.

Some say that the bar should be lowered and the standards made 'easier' for companies as a way to entice them to just get started, especially in regimes where the laws for environmental and social conditions are not as stringent as they are in OECD countries and therefore companies have a longer way to go to get up to par with competitors elsewhere.

But in a recent conversation with Mervyn E King, the new chair of GRI's board, an expert in corporate governance, and a native of South Africa, I heard a different story.

King says attracting investment – including foreign investment – in the private sector is a key to energizing economies in some of the poorest nations worldwide. This will only happen if there is both real and perceived adherence to best practice in business management and corporate governance since investors must feel confident.

A study in 2000 published by McKinsey & Co in their Investor Opinion Survey illustrates the point. The survey found that 84% of the more than 200 institutional investors questioned are willing to pay a premium for shares in a well governed company, over one considered poorly governed but with a comparable financial record. The actual premium varied from country to country, for example, a well governed company in the UK would see investors willing to pay 18% more for shares than a poorly governed company. But importantly, the premium went even higher in emerging markets. For example, investors would be willing to pay 27% more for a well governed company in Indonesia or Venezuela versus what they would pay for a poorly governed company with similar financial performance in those same countries.

From his perspective one of the drivers behind the use of international standards, including the GRI Guidelines, is to raise the standards of business management and governance quality worldwide, thereby strengthening the economy and society as a whole. One way a company can prove it is well governed and worthy of investment is to be transparent about its risks and opportunities related to sustainability.

Wednesday, May 09, 2007

Supply chain: the next reporting frontier

Many multinationals are struggling with sustainability issues in their supply chains. How can they be sure that the environmental and social standards that they adhere to are also being met in emerging markets where the local laws or common business practice do not have such protections built in?

Transparency about such issues in the supply chain is turning out to be a big trend lately. GRI is now working with 4 major European multinationals who have each identified 3-4 key suppliers in their chains located in emerging markets - and together we are all going through the reporing process based on the GRI Guidelines. The suppliers are learning how to identify the issues they need to report on for their own local stakeholder needs, but also to remain competitive in the international marketplace.

This photo was taken last week in China by my colleague Leontien from the GRI secretariat. She was there visiting supplier factories that are participating in this project. She said that before she left on her trip she was worried that the suppliers were feeling pressure from the top - but upon her return she had a different perspective. It seems the suppliers are finding their own voices and are seeing the value in communicating in a proactive way about their sustainability issues.

Find out more on this exciting project by clicking the title above.

Monday, May 07, 2007

Web 2.0: Endless possibilities for the GRI network

A friend of mine gave me a book over the weekend called "Wikinomics: How mass collaboration changes everything" by D. Tapscott and A. Williams. It has dropped into my lap at the perfect moment as I am in the midst of drafting up GRI's five year strategic plan and the book has inspired all sorts of great ideas.

GRI is in essence a mass collaboration. Thousands of people contribute their knowledge, experience, and opinions into one big pot which gets simmered and stirred, and eventually the GRI Sustainability Reporting Framework pops out. We have been doing this for 10 years and have managed to grow the network to include an estimated 30,000 people. And we have done this all the old fashioned way of hopping on airplanes and organizing telephone based conference calls.

Tapscott and Williams outline dozens of examples of successful and thriving online communities - some with a business focus and some with a social good focus. Imagine what we could do if we had access to new tools where people could collaborate on topics directly and not have to go through the Amsterdam secretariat? We could engage so many more people on more topics in more meaningful ways. This also bodes well for cost and carbon savings with less travel and phone time.

Interestingly, Don Tapscott also wrote "The Naked Corporation" all about the importance of transparency in the modern era - with very strong value propositions for sustainability reporting and GRI based reporting. Wow, the world is more closely linked than we all thought!