tag:blogger.com,1999:blog-282110702024-02-21T00:18:04.032+01:00Sustainability Reporting CentralWith the amount of interesting people that cross our paths, and envelope-pushing
news and research that cross our desks, GRI staff started a blog where we could pick up some of the basics of sustainability reporting, the best new issues, ideas, theories, cases, stories, and other tid bits to share with the GRI network. If its about sustainability reporting, you will find it here!Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.comBlogger90125tag:blogger.com,1999:blog-28211070.post-83274391879181405822008-03-03T13:27:00.004+01:002008-03-03T13:45:34.885+01:00Back to basics (11): Sustainability – the next Kondratiev supercycle?The last edition of “back to basics” did focus on the ongoing discussion about managerial trends and was proposing that sustainability needs to get into the DNA of management practice, starting from the Board room and supported from bottom-up, which will of course only happen if management theory accepts sustainability as a principle that keeps the organization alive (license to operate) and embeds the opportunity to prosper (license to grow). It remains to be seen what the consequences will be for Weber-type demand and control hierarchy, for the ongoing increase of workload for less staff in efficiency driven management programs, the ongoing ‘parallel worlds’ corporate governance, strategy development and sustainability management, Taylor-style way segmentation of work packages and one-way communication to customers. The champions of the last decade, including Google, Starbucks, Yahoo, ebay, but also Gore, Timberland and others throw a lot of this over board, use seamless stakeholder engagement and web 2.0 technology to enable internal and external networking communities and shape their business models. The internet development marks the most important milestone of the 5th Kondratiev supercycle, and at the same time shapes the path into the 6th Kondraftiev cycle; maybe this next supercycle will carry the name “sustainability cycle”?<br /><br />Here’s a quick Wikipedia explanation of the phenomenon of so-called Kondratiev cycles (<a href="http://en.wikipedia.org/wiki/Kondratiev_wave">http://en.wikipedia.org/wiki/Kondratiev_wave</a>): “The Russian economist Nikolai Kondratiev (1892-1938) was the first to bring these observations to international attention in his book "The Major Economic Cycles" (1925). (…) According to the innovation theory, these waves arise from the bunching of basic innovations that launch technological revolutions that in turn create leading industrial or commercial sectors. (…) Most cycle theorists agree on five waves so far since the industrial revolution, and the sixth one to come. These five cycles are:<br /><br />1. The Industrial Revolution—1771,<br />2. The Age of Steam and Railways—1829,<br />3. The Age of Steel, Electricity and Heavy Engineering—1875,<br />4. The Age of Oil, the Automobile and Mass Production—1908,<br />5. The Age of Information and Telecommunications—1971.”<br /><br />All new supercycles are normally aligned by recessions, a tendency currently eminent. It is clear that from a technology perspective this next supercycle will focus on technologies that aim to sustain human life on this planet; health care, biotechnology (biomimicry etc.), next generation renewable energy and also – although conflicting - gene technology are subcategories. Even visionary concepts for the next generation internet is taking biological processes as the basis for further adaptation.<br /><br />For all of us working in organizations and dealing with management issues one of the most important questions will be: will biology and its inherent logic of adaptation and communication also bring about a new mangement style? Will the next Kondratiev cycle include innovation in technology AND management? Will we see a continuous flow of newcomer organizations becoming big in short time just simply because the earlier cycle champions became to slow to adapt because of their structure and size?<br /><br />You may aks ‘what does all of that has to do with GRI and is G3 Guidelines?’ Well, first of all the existence of GRI itself is a logic answer of interested stakeholders – like many other GAN’s (Global Action Networks) - to the slow adaptability of world trade mechanisms, governments and companies with regard to the overall transparency needs of a fair and successful implementation of globalization. The idea is that world markets can simply function better (and will survive) if sustainability is accepted as the roadmap and the necessary transparency needed is available. This will increase the speed into the next Kondratiev supercycle.<br /><br />GRI’s G3 Guidelines purposefully ask in great depth what management’s reaction to these new challenges is. Is sustainability part of Board room discussions and is the organization aware about its impacts on sustainability issues? Vice versa, how do sustainability problem areas already affect strategy and business models? (see GRI G3 chapter on ‘Strategy and Analysis’). G3’s Disclosure on Management Approach then asks how the results of this analysis are translated into the management system implementation. Last but not least G3’s indicators ask about the performance achieved and the targets and objectives aligned to them. In that sense using G3 and implementing a proper reporting process are a useful means to increase the above described adaptability into an age of high speed change.Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com86tag:blogger.com,1999:blog-28211070.post-47598323919696067892008-02-02T09:44:00.000+01:002008-02-04T23:14:18.030+01:00Back to basics (10): Sustainability - a new gene for the management DNA<span lang="EN-GB" style="font-family:Arial;">If you compare the discussion in companies around sustainability with a decade ago one could agree that quite a lot has already happened. Tools that help to demystify the meaning of sustainability and decode its general principles into how-to guidance for operational management are available and regularly updated; adaptation to the deeper needs of specific industries, but also public authorities and NGOs are under development. The landscape for globally accepted and applicable tools (conduct principles, management system approaches and balanced scorecards, reporting guidelines, assurance standards, life cycle assessments, and the relevant IT tools supporting all this) becomes clearer. A new layer of internal transparency around problematic sustainability issues helps as an additional radar screen to reduce company risk and to foresee danger up on the horizon. And more often sustainability reports reveal that there is progress towards sustainable excellence and a closer understanding of the 3D reality surrounding these organizations; so far, so good. <o:p></o:p></span> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">But still two major obstacles prevent companies from moving faster: firstly, the difference between political talk and concrete political action in global and regional debates doesn’t give companies the feeling that they are able to act in reliable and fair market conditions; a “wait and see” attitude becomes logic. Well, we also know that some companies and their industry federations are often also causing or at least influencing these toxic environments in the political arena through their lobbying activities, very often to the disadvantage of the few proactive industry peers, some of them are quite disappointed that their industry companions are hiding behind their strong backs. <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Secondly, maybe a reaction to the first obstacle, sustainability as a paradigm to come to new value creation opportunities hasn’t been taken seriously enough in board rooms; let the middle management struggle with it. What we miss are crystal clear top management commitments and related actions (top down) that could create enough trust at staff level (bottom up) to enthusiastically embrace the paradigm of sustainability as a fountain of youth for that sort of innovative products and services that would rapidly help solving the most burning problems of this planet. Some good examples are rather the exception to the rule and do not yet create the inspiration avalanches that are needed (how nice for the first movers!); most industries continue to fine-tune the existing product and service range and prefer to milk existing cash cows until the cow collapses. Simply, sustainability is not yet part of the management DNA. So here we are, rubbing our eyes and wonder why everything that has to do with sustainability happens in slow motion while the world is changing in rapid motion and our opportunities to pull the plug where the planet needs it reduces from day to day.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">2008 could become the year where we might see some change. There is obviously an appetite to increase the speed for clearer commitment from top management to wake up the sleeping beauty “sustainability” and shift from risk reduction to opportunity and sustainable value creation. Here are two examples:<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">The first wake up call came from the World Economic Forum’s “Global Risks 2008” report that was published shortly before the January WEF in Davos (see <a href="http://www.weforum.org/">www.weforum.org</a>). This report categorizes economical, geopolitical, environmental, social and technological trends, issues of concern and risks. The report concludes with a call to action: “Leadership on global risk issues will be an increasingly precious commodity”. It remains to be seen if this call will be understood by enlightened industry leaders to embed sustainability into their business models. Of course, this call also went to politicians, but that’s only a side note.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">The second wake up call has been published in a white paper that tackles the needed change in the overall management DNA to create the “sustainability revolution”. This white paper, called “A new mindset for corporate sustainability” (<a href="http://www.biggerthinking.com/en/sustainability/innovation.aspx">http://www.biggerthinking.com/en/sustainability/innovation.aspx</a>), was sponsored by BT and Cisco and summarizes the evident strategic opportunity for management and offers a 10-step program to turning the company into a sustainability-driven innovator. No wonder that BT and Cisco were the initiators of this approach that brought together academic thought leadership in a virtual discussion space (no travel was needed to bring them together; the ecological footprint of this project was close to zero). BT is a regular award winner for their proactive sustainability program that enables them to quickly adapt to market needs and simply “gets it”; Cisco is a major supplier to BT and a willing companion in this project.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">I was especially pleased to see “bring your stakeholders on board (actively encourage them to participate in your innovation and encourage them to develop sustainable opportunities themselves)” and “use people power (ensure that sustainability is a clearly stated value at every stage of your people management process)” as two of the 10 principles. These two steps are the really difficult ones because they are so much against the current plan and control management mainstream and this surprising belief that one can have a highly adaptable organization while the majority of staff are actually de-linked from the products, customers, relevant management information, most of the other colleagues and last but not least also from the owners of these organizations. How much real passion for the company vision can be expected from these people? <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">I personally believe that the really innovative companies that are able to successfully implement sustainability into their DNA will be those with less hierarchy and that are closer to all of their stakeholders and allow them influencing decision making. Furthermore those companies will be rewarded that allow all staff a time buffer to create mental space for “crazy ideas” how to connect company value with social value; this means a huge step back from the lean management hype (or do you think that staff that already have difficulties to manage a work/life balance and suffer from the "overflow error" symptoms will be in the mood to think creatively?). Charles Darwin already warned us: “It’s not the strongest of species that survives or the most intelligent; it’s the one that is most adaptable to change.” It will be those that integrate sustainability into their DNA. <o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com203tag:blogger.com,1999:blog-28211070.post-65679121891162798912008-01-14T20:41:00.000+01:002008-01-14T20:54:45.663+01:00Back to basics (9): The world is a "polder" - a parable for sustainability today<p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Welcome back in 2008! One of the things that I have been thinking about a lot in 2007 was the question “what is it that really and most effectively drives sustainable change”? After many years in the sustainability business my list has actually boiled down to four major drivers: legislation (let’s face it), competition, cost advantages and – maybe most important - education. There are definitely more, but these seem to be the most effective and high level ones (please let me know if you think differently). <span style=""> </span><o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Fair market conditions and a high level of transparency are prerequisites that these four drivers can actually flourish towards a more sustainable world; GRI plays a major role in increasing transparency about sustainability issue areas and provides a major instrument to allow structured discussion through the GRI Framework. While legal compliance, competition and cost advantage are quite well-known and managed in the corporate world, the overall and most important driver for me is actually education, meaning awareness about the interconnectivity of many sustainability problem areas and the ability of people and organizations to reflect on what their own impact is and how a certain history, religion, regional or company culture is influencing behaviour.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">During the Christmas break I took the opportunity to read Jared Diamonds book “Collapse: how societies choose to fail or succeed” (Penguin books). If I could recommend books to start education and raising awareness about sustainability, Diamond’s book would be amongst the top 3. He looks into the past and what emerges is a fundamental pattern of environmental catastrophe which still exists today, globally and at higher level. In the last chapter Jared Diamond analyzes today’s political and market interconnectivity and develops a fragile picture of the world and concludes that the risk we face is of a worldwide decline.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">As somebody living in the </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">Netherlands</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> I was especially touched by a picture painted by Diamond that explains “the world as a polder”: 1/5<sup>th</sup> of the Dutch landmass is reclaimed from the sea, is up to 22 ft. below sea level and a complicated drainage system is pumping water back out into a river or the North Sea. This is why the </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">Netherlands</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> had so many windmills in the past (replaced today to steam, diesel or electric pumps). He quotes one Dutch friend who said: “You have to be able to get along with your enemy, because he may be the person operating the neighbouring pump in your polder. And we’re all down in the polders together. It’s not the case that rich people live safely up on tops of the dikes while poor people live down in the polder bottoms below sea levels. If the dikes and pumps fail, we’ll all drown together”. <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Diamond concludes that most of the needed technology to not drown together already exists. But what is crucial is to also make the right choices towards long-term planning, and willingness to reconsider core values. He finishes his book by saying: “Thus, we have the opportunity to learn from the mistakes of distant peoples and past peoples. That’s an opportunity that no past society enjoyed to such a degree”.<br /></span></p><p class="MsoNormal" style=""> </p><p class="MsoNormal" style=""><span style="font-family: Arial;" lang="EN-GB">So, let’s learn from the past, understand the value of transparency and make a real difference! Educating sustainability and finding the right parables to make people understand what is at stake is probably the biggest challenge we need to solve. 99% of the people of this planet still don’t have a clue.<o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com28tag:blogger.com,1999:blog-28211070.post-81278605068452952822007-11-12T23:23:00.000+01:002007-11-12T23:26:38.536+01:00Back to basics (8): Schumpeter's disequilibrium today<p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Another often quoted economist and political scientist is Joseph Schumpeter (1883-1950). He was actually born in </span><st1:state><st1:place><span lang="EN-GB" style="font-family:Arial;">Moravia</span></st1:place></st1:state><span lang="EN-GB" style="font-family:Arial;">, became Austrian and then left for the </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">US</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> where he taught in Harvard, an interesting career. In his book “Capitalism, Socialism and Democracy” (1942) Schumpeter introduced the concept of "creative destruction" in which the old ways of doing things are endogenously destroyed and replaced by the new. He described that the real driving force of capitalism is “disequilibrium”, opportunities coming up by new (today: global) demands, inspiring innovation, a recipe to also avoid monopoly power. He also warned governments not to protect certain markets or organizations that were unable to succeed in transformation processes. One could argue that this is pure Darwinism for economy dummies.<span style=""> </span><o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Those who understand sustainability as the roadmap to successfully implement globalization should nowadays find Schumpeter quite inspiring because his baseline for a healthy capitalism is very much in line with what is really needed now: we are facing the fact that we need to overcome several divides between the global North and South (e.g. market divide, digital divide, education divide, etc.), dematerializing by at least factor 10 until 2050, while another 3 billion people will join us until then, the majority of them in the developing and emerging market countries. The ecological footprint (a methodology to measure the planet’s biocapacity that is already used up, invented by several institutions now captured in the “Global Footprint Network”) tells us that we have already overstretched the global capacity by 20%, growing to 100% until 2050, meaning we would need TWO planets if we allow business as usual. What else than “creative destruction” can be the way forward to successfully integrate countries into the global world markets?<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">We already see first successful examples of creative destruction in countries like </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">India</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;">, </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">Mexico</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> and </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">Brazil</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;">, wonderfully captured by C.K. Prahalad in “The future at the bottom of the pyramid”; completely different business models that absorb the needs and adapting to the infrastructural shortages of differently developed markets. Some global companies are amongst these examples, but most of the innovative ones are rooted in developing or emerging market countries. The title of this book already indicates the failure of any “top down” approach, just exporting Northern business models to the global South in an attempt to just simply copy what has worked in the global North. <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Interestingly, the year 2000 Lisbon EU strategy for innovation explicitly mentioned Schumpeter’s creative destruction as a way forward to foster innovation, enabling social and environmental renewal. It broadly aimed to make </span><st1:place><span lang="EN-GB" style="font-family:Arial;">Europe</span></st1:place><span lang="EN-GB" style="font-family:Arial;"> the most competitive and the most dynamic knowledge-based economy in the world by 2010. Not too much has been achieved since then, so one should not wonder that companies from developing and emerging markets that have successfully tested their business models in their local markets now start to also take over their Northern competitors that are stuck in a protective political climate, trapped in existing infrastructure and sunk capital investments. To sum it up, Schumpeter’s ideas today seem to better work in the bottom-of-the-pyramid context where opportunities are just simply taken when they arise, no foot on the brake. If Schumpeter would still be alive he might have again packed his bags, heading towards </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">India</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> or </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">Brazil</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;">!?! <o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-58939500557871836472007-11-01T11:39:00.000+01:002007-11-03T14:33:48.907+01:00Back to basics (7): Recalibrating the "invisible hand of the market"<p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">The critics of the concept of sustainable development and CSR always argue with Milton Friedman’s famous quote that “the business of business is business” and also refer to Adam Smith’s theory of the “invisible hand of the market”. They see especially CSR as an attempt to more regulation through the backdoor and a way to restrict the market power and the players within their specific markets; overall CSR is bad for modern capitalism. Even worse, these two famous quotes seem to permit amoral behaviour if there are no laws against certain ways to pursue self-interest.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">But wait a minute! When Adam Smith published “An inquiry into the nature and cause of the wealth of nations” in 1776, partnerships were the dominant form of enterprise in which ownership and management meant the same thing. Adam Smith was against the idea of corporations, or "joint stock companies." Why that?<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Sad but true, most lobbyists of the "invisible hand of the market"credo are not aware that Adam Smith did also publish “The theory of moral sentiments” in 1759, where he explains that the self-interest of the market players (buy and sell side) needs to be pursued by people of conscience and with a clear moral capacity; he argues that sympathy is required to achieve socially beneficial results. The self-interest he speaks of is not a narrow selfishness that allows whatever market transaction, but something that involves sympathy. He regards pure selfishness as inappropriate, if not immoral, and that the self-interested actor has sympathy for others. He continues that the self-interest of any actor includes the interest of the rest of society, since the socially-defined notions of appropriate and inappropriate actions necessarily affect the interests of the individual as a member of society. This context is useful to understand why Adam Smith was against the idea of corporations or joint stock companies, where he already envisaged the problems of a disconnect between ownership and management. <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">I would argue that Adam Smith’s idea of the self-interested market player that has developed a moral capacity and can make informed market decisions in the aim to achieve socially beneficial results will find a lot of merit in integrating sustainability thinking and CSR as a tool to implement that thinking into his/her understanding of necessary fair market conditions: a better understanding of the needed changes in legislative frameworks (and its enforcement) to support sustainability as a means for fair markets, a changed mindset about the basic role of a company (counterpoint to Milton Friedman), the need for broader education on sustainability issues in all economic curricula (to disable amoral behaviour and enable Adam Smith's concept of "sympathy"), and a broadly developed set of indicators of economic, environmental and societal impacts of the transactions of the organization and of the individual (to increase the available information to make good market decisions). Needless to say, GRI plays a crucial role to achieve continuous improvement of some of these mentioned points through its multistakeholder global platform for dialog, its guidelines and sector supplements. GRI’s learning services add to solving some of the educational challenges.<br /></span></p><p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Adam Smith, a sustainability activist more than two centuries ago - a very different take on his legacy? At least he was somebody sustainability advocates of today can lend more credit from than the narrow-minded lobbyists of modern capitalism who haven't got the whole story about Adam Smith.<o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com0tag:blogger.com,1999:blog-28211070.post-39472912705266718322007-10-26T03:29:00.000+02:002007-10-26T04:48:07.468+02:00Day 4: Transparency takes center stageThe keynote speaker today was Sir Michael Rake - former KPMG boss and four weeks into his chairship of the British telecomms giant BT.<br /><br />Several months ago, in his position as aruguably the most influencial accountant in the world, Sir Mike started to stir up the business, accounting, and investment community by saying <a href="http://www.ft.com/rake">its time for a new sort of business reporting </a>- and the past should not be used as a road map for the future. He called for a redesign in reporting standards, and the incorporation of metrics that show a more three dimensional view of a company - including economic, environmental, and social risks. <br /><br />Sir Mike gave a thought provoking speech today at the conference - addressing a wide ranging number of topics such as how to rebuild trust in the corporate sector to how companies can use their products and services to gain buainess advantage while tackling some of the worst global development and environmental issues.<br /><br />But I was glad to hear during the question answer period his reference to the GRI and the role that disclosure can play in building trust, and also to justify atttention and expenditure on social and environmental risks.Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-28211070.post-31391707260397766122007-10-25T02:31:00.000+02:002007-10-26T03:28:50.729+02:00Day 3: Greenpeace and Coca Cola are now friendsThe buzz on the opening day of the annual BSR Conferece here in San Francisco was a story Gerd Leipold, Executive Director of Greenpeace, was telling about its former arch enemy Coca COla. After well over a decade of Greenpeace pressure, Coke has agreed to install Greenfreeze refrigeration units at the Beijing Olympics and other venues worldwide (about 100,000 units total I think) that will save several thousand tons of hydroflourocarbons (HFC) over their lifetime. HFC's are a nasty contributor to climate change. (You might recall chloroflourocarbons CFC's were banned in the 1980's in most industrialized nations for their contribution to Ozone Layer depletion - at that point most refrigeration units shifted to utilizing HFCs instead).<br /><br />Some people thought this was very good news. It showed that long term committment to issues by NGOs do result in sigificant change, and that civil society can work together with businesses to take on the difficult challenges of our times. It gave hope to people who had previously lost hope or interest in these sorts of collaborations.<br /><br />But others were disappointed in Greenpeace. After 10 years of work how could they claim that Coca Cola's 100,000 frig units was a success story? Why did it take so long? Why not a complete phase out of HFCs? Why did they settle? What happened to the Greenpeace of old?<br /><br />For me every small victory is a victory and it all adds up. It shows that we have changed a lot as a global community as well - for the better perhaps. Collaborative instead of confrontational. Celebrating the postive rather than the negative. Building the foundations for future collaborations and wins.Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-28211070.post-73805224455413469442007-10-24T02:15:00.000+02:002007-10-26T02:31:38.459+02:00Day 2: Tech sector gets materialThe Global e-Sustainability Initiative (<a href="http://www.gesi.org">GeSI</a>) is an industry association of 20+ members - mainly European telecomms but some other global players in the ICT sector are also among the membership. They are working together to address the common sustainability issues their sector faces. One of their projects is on the topic of accountability. To improve their accountability for impacts caused by their products and services, GeSI decided it was time to first agree - on a general level - on what issues were most "material" for the industry. They hired <a href="http://www.bsr.org">BSR</a> to conduct some research on the subject and today I was invited to attend a stakeholder dialogue to review and discuss the results of this research.<br /><br />I read the 40 page paper before hand and was generally impressed at its depth and breadth, but there was certainly room for some stakeholder dialogue on how to expand, focus, and improve it! <br /><br />Firstly, their definition of materiality was important to note. They decided to rank issues according to its importance to the companies and the importantance to "influencial stakeholder groups". The old addage "if a tree falls in the forest and nobody hears it" came to mind. What if the sector was having a huge sustainability impact in a certain area but there just didnt happen to be an influencial stakeholder group that was fighting for it? Does this mean the companies are off the hook? <br /><br />Secondly, lets look at their issues identification. They clustered their issues into ten categories:<br />1. Climate change<br />2. Waste and materials use<br />3. Access to ICT<br />4. Freedom of expression<br />5. Privacy and security<br />6. Employee relationships<br />7. Customer relationships<br />8. Supply chain<br />9. Product use issues<br />10. Economic development<br /><br />Stakeholders in the room suggested that it may be more helpful for the industry to re-organize these issues differently so they could be better understood: impacts on environment, impacts on suppliers, impacts on employees, impacts on customers, etc. Others thought that some key issues were left out or were not prominent enough - such as labor issues, human rights, and water. <br /><br />One of the most interesting ideas I have heard in a long while came out at this meeting. We always do life cycle assessments for our products and services which focus on the environmental impacts. What about a social or societal LCA?<br /><br />BSR and GeSI will take our feedback and conduct two further dialogues in Europe and Asia. An updated list of material issues will surface and will help companies in the sector focus on the right things, and work collaboratively to tackle some of the most challenging issues.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-28211070.post-31107323298532814942007-10-23T01:56:00.000+02:002007-10-26T02:15:07.615+02:00Day 1: Responsible Procurement UN-styleThe UN Global Compact is trying to stir up some interest for building sustainability into procurement practices. I attended a workshop today in San Francisco with about 50 others. We spent the day pondering the various challenges and huge potential that weaving sustainability into supply chains has for putting sustainability at the heart of business operations globally.<br /><br />The day was opened with remarks by Aron Cramer, president of BSR, who pointed out that if sustainability requirements were woven into procurement contracts this could have a very powerful effect worldwide on environmental and social spheres. He also noted that due to the interconnectivity of supply chains today it was important that businesses do not compete in the realm of sustainability - but instead collaborate to raise the bar. The market would suffer if companies with similar supply chains started demanding all sorts of different standards, disclosures, and requirements. It would be a win-win-win for companies, suppliers and society if there was more collaboration in this area.<br /><br />My favourite panel of the day was a threesome that included a major multinational that provides cafeteria services for tens of thousands of office employees in five locations in the US, the catering company that services these cafeterias, and a representative of a group of small organic farmers in the California region that the catering company sources from. They all had the opportunity to talk about what sustainable procurement meant to them, the opportunities it offered, and some of the stumbling blocks they faced. It was the first time I had seen a real "supply chain" sitting together and talking openly about the challenges they face as they transform their businesses towards more sustainable practices.<br /><br />I think the other companies in the room were inspired by the degree to which they could work with their caterer to integrate sustainability into their service. The caterer was able to show how they were able to add value up and down the supply chain by brining new options and solutions for sustainability for both the client and the source farmers. And finally the farmer perspective made us all realize that small scale and local agriculture is superior to mass agriculture in terms of health and taste, and we need to find ways to improve their market access.<br /><br />If you are interested in supply chain issues, visit my colleague <a href="http://supplychaintransparency.wordpress.com/">Joris's blog </a>on the topic.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-28211070.post-7115346764715679232007-10-21T01:48:00.000+02:002007-10-26T01:55:54.668+02:00A week of sustainability in San FranciscoI will be in San Francisco, California, all week mainly to attend and participate in the annual "BSR Conference" run by the American industry association called Business for Social Responsibility. <br /><br />I will blog at the end of each day to reflect back on things that I saw, heard, and learned!Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-68926507450292681802007-10-18T21:21:00.000+02:002007-10-21T10:08:01.755+02:00Back to basics (6): Ever heard of "craggers"?<p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">I just returned from </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">Germany</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> speaking at a CSR roundtable that E&Y has started to offer quarterly in their offices, this time Düsseldorf. The Anti-Law of Jante (see Back to basics (5)) immediately came to my mind when the organizers told me that this was now the second meeting where the normal 20% no-show rate of registered participants didn’t work, the place was packed with 120 people and extra chairs were necessary. It was a nice mix of male and female participants, coming from several sorts of organizations, many of the participants still pretty young. Are we finally all waking up? <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">On my train ride back to Amsterdam I found this article in the International Herald Tribune* that caught my attention because it introduced a new abbreviation: “CRAG”, meaning “Carbon Rationing Action Group”, groups of volunteers (you might say on grass-roots level) that “aim to hold each other to account by imposing fines on members of the group who fail to keep their individual emissions under a certain quota”. This CRAG phenomenon has started in the UK, but I learnt that there are not only around 20 CRAGs with more than 160 individual members in the UK, but already many more that started in the U.S., in France and many places elsewhere. The members of the group define the rules, so fines are not common everywhere. A </span><st1:city><st1:place><span lang="EN-GB" style="font-family:Arial;">London</span></st1:place></st1:city><span lang="EN-GB" style="font-family:Arial;"> 60 staff consultancy has also decided to voluntarily attempting to keep their personal annual emissions under the British average of 6.000 kilograms CO2. Some CRAG’s allow their members to roll over their credits accumulated during a low-carbon year to allow for occasional high-carbon indulgences like flights.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Two things are worth mentioning here. First, what would all of this be without transparency, both in terms of now being able to define allowed emissions for each individual (based on the available data), and secondly to be able to be held accountable based on the individual real consumption of CO2. These people test out <span style=""> </span>new ways of living together, helping each other through learning, and last but not least can share experience with those who like the idea that every individual should have an emissions account in the future. Well, why not, if this system allows for some flexibility (where do you live, what are available options and barriers to access new technology, available income, cultural differentiation, etc.)? <o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">Secondly, this is the prototype of testing the possibility of the Anti-Law of Jante where the individual can show that a different world is possible without going back to Stone Age and that “the public perception that you’ve got to be rich to be green” is not true. Clearly, the major problem remains to “persuade the wider public that individual efforts, resulting in only microcosmic cuts, were worthwhile, particularly at a time when emissions are skyrocketing in other parts of the world like </span><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">China</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;">”. I am convinced that we all need to start somewhere, why not starting a CRAG?<o:p></o:p></span></p> <p class="MsoNormal" style=""><span style=";font-family:Arial;font-size:8;" lang="EN-GB" >* Neighbors agree: Thou shalt not emit, IHT, </span><st1:date year="2007" day="17" month="10"><span style=";font-family:Arial;font-size:8;" lang="EN-GB" >October 17, 2007</span></st1:date><span style=";font-family:Arial;font-size:8;" lang="EN-GB" >, Page 1 and 10 <o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com2tag:blogger.com,1999:blog-28211070.post-55586911994504304922007-10-12T23:41:00.000+02:002007-10-12T23:51:12.167+02:00Back to basics (5): The Law of Jante<p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">In one of his last books* Paulo Coelho explains to the reader the meaning of the “Law of Jante”, first introduced by the Scandinavian writer Aksel Sandemose in his 1933 novel <i style="">A Fugitive Crossing His Tracks</i>. In short the Law of Jante means something along the lines of “You are worthless; no one is interested in what you think, therefore you had better opt for mediocrity and anonymity. Do this and you will never face any major problems in life.” Coelho continues by saying “that it is thanks to the Law of Jante that the world has been manipulated in all kinds of ways by people who often end up achieving their own evil ends; we see the great gap between rich and poor, see social injustice, violence and people who are forced to give up their dreams.”<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">What will happen a couple of generations from now when people will look back at the beginning of the new millennium? Will they realize that civil society, business and politics, although knowing all the facts that have been presented by the IPCC and clearly communicated by leaders like Al Gore, haven’t really done enough to prevent climate change, so that everything got worse and made life impossible in many areas of the planet, causing huge migration waves and decimation of humankind by until then unknown diseases that appeared because of an immense number of people living on very limited space in megacities of 50 million citizens and bigger? Will they simply say “well, blame it on the Law of Jante?”<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">I prefer Paulo Coelho’s proposal to create an “Anti-Law of Jante” to prevent things from getting worse: “You are worth much more than you think. Your work and your presence on this earth are important. Of course, such ideas could land you in a lot of trouble breaking the Law of Jante, but don’t be intimidated. Continue to live without fear, and you will triumph in the end.”<o:p></o:p></span></p> <p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;">With Al Gore and Rajendra Pachauri (for the IPCC) receiving this year’s Nobel Prize for Peace the Nobel Committee in </span><st1:city><st1:place><span lang="EN-GB" style="font-family:Arial;">Stockholm</span></st1:place></st1:city><span lang="EN-GB" style="font-family:Arial;"> has sent a clear wake-up call to the world today: let’s not allow this to happen. All necessary information is transparent; let’s fight the Law of Jante now! <span style=""><br /></span></span></p><p class="MsoNormal" style=""><span lang="EN-GB" style="font-family:Arial;"><span style="">We in GRI are proud of having had the chance to hear Al Gore at the first GRI Global Conference on Sustainability and Transparency in 2006 and are already looking forward to the second conference in May 2008 when Mr. Pachauri will be with us. </span><o:p></o:p></span></p> <p class="MsoNormal" style=""><span style=";font-family:Arial;font-size:8;" lang="EN-GB" >* Paulo Coelho: Like a flowing river, HarperCollins Publisher, 2006<o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com17tag:blogger.com,1999:blog-28211070.post-86556727301072993632007-10-11T13:11:00.000+02:002007-10-11T13:18:32.111+02:00We want to work for the good guysGraduates seek out socially responsible companies as employers, according to PWC research. <br /><br />In a study of 2739 graduates from China, USA and UK published by PWC earlier this week, 86.9% of all the graduates questioned said that they actively seek out employers whose corporate social responsibility behavior reflects their own. 90% of the graduates from the USA agreed to this statement compared to 87.2% in China and 71% in the UK. The graduates were questioned as part of a larger study about their expectations of work and careers. <br /><br />Employees and prospective employees are some of the most important audiences for sustainability reports. People want to work for companies that share the same values as they do. Although there have never been more people on earth as there are now, all reports say that finding and keeping great staff have never been harder. <br /><br />There is a category in the <a href="http://awards.globalreporting.org">GRI Readers Choice Awards </a>for best report from the perspective of employees. Get online and score your employers report today!<br /><br />Source: <a href="http://www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=2477&NewsAreaID=2 ">'Managing Tomorrow’s People: The Future of Work to 2020</a>’Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-32018791335117415012007-10-08T22:25:00.000+02:002007-10-08T22:32:28.166+02:00Back to basics (4): Who reads sustainability reports?<span style="font-family: Arial;" lang="EN-GB">Last week GRI launched the GRI Readers’ Choice Awards, giving readers a platform and a voice what they value most in sustainability reports and which reports they liked most because they addressed the material issues in a convincing way. We thought it was necessary to address the question “who is reading all these reports and is it really worth the effort?” This is of course exciting, and the first days after the website was launched the interest was already huge. But still, two things make me really wonder:<o:p></o:p></span> <p class="MsoNormal" style=""><span style="font-family: Arial;" lang="EN-GB">Firstly, I am always amazed how much capacity and money is available in nearly all companies that I have seen for their normal annual reporting process and print design, while sustainability reports still have to be produced with budgets that are “too much to die, but not enough to live”.<o:p></o:p></span></p> <p class="MsoNormal" style=""><span style="font-family: Arial;" lang="EN-GB">Of course, there are difficult, sometimes overwhelming legal requirements to fulfil when pulling together annual reports. And yes, strict assurance practices are necessary as well; all that has to be well prepared and does cost money. However, it is mainly a look into the rear mirror, addressed to one stakeholder group only and not really covering the long-term future needs (in that sense: sustainability) of the company. One could argue that all these efforts are necessary for the readers, but – let’s be honest – how many readers do annual reports really have apart from maybe 200 industry sector specialists, asset managers, ranking institutions, an probably some competitors and employees? How many printed short versions of annual reports have you personally thrown away into the bin without having taken one single look at them? <o:p></o:p></span></p> <p class="MsoNormal" style=""><span style="font-family: Arial;" lang="EN-GB">In contrast to this I have met so many companies where employees have learnt so much about their company (especially when they were large and/or multinationals) and have used sustainability reports as a reference document when visiting customers, shared them with friends and still have them at home, keeping every single version. I have seen students reading reports when figuring out which company could be a good employer, MBA students using the GRI matchmaker program to study sustainability reports in their MBA courses and discuss the question what a specific company should be responsible for and how they would react in case of a certain dilemma, digging deep into the problems and build understanding of the rationale behind a specific decision that had to be made. We see more and more of the usual suspects for annual reports consumption reading sustainability reports because they want to learn how to invest more sustainable and long-term, making investment decision with a real sense - while still making money. We see more and more suppliers reading sustainability reports because they expect to be asked next about their specific responsibility in the supply chain by their customers, and we see more and more communities and ministries really thinking about making sustainability information a requirement for their own procurement activities. So, is there anybody out there who likes to follow my bet that already more people really read sustainability reports than annual reports? <o:p></o:p></span></p> <p class="MsoNormal" style=""><span style="font-family: Arial;" lang="EN-GB">Clearly, I am not arguing that less money should be spent on annual reports if it’s absolutely necessary. But it’s definitely time to make sure that sustainability reporting processes get the budgets they deserve! If the budget for the preparation of a good sustainability reports remains low over time a clear story is told: it is not the lack of money, but the wrong prioritization of sustainability as a really important issue.<span style=""> </span><o:p></o:p></span></p> <p class="MsoNormal" style=""><span style="font-family: Arial;" lang="EN-GB">Secondly, isn’t the basic question asked not also a warning signal that stakeholder engagement is still not fully understood? While it is pretty clear that during the development of the sustainability report stakeholders need to be involved to define material issues, the question how to continue to involve stakeholders after the publication of the report still seems to be a weak spot. Or has the communication strategy suddenly ended with the launch of the report (maybe with an A5 card in the back as feedback form?) instead of making the launch of the report the starting point for even more stakeholder engagement (=input for the next report)? In summary the fact that we still ask ourselves the basic question about the readers of sustainability reports makes it clear that some inefficiency in the overall reporting and feedback process still exists. Answers are welcome; therefore please join the GRI Readers’ Choice Awards.<o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com4tag:blogger.com,1999:blog-28211070.post-17109726639439488492007-10-06T00:39:00.000+02:002007-10-06T17:25:29.524+02:00Back to basics (3): The business case for sustainability<p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">"Business cannot succeed in failing societies", how often have we already nodded when this quotation has been used in articles, brochures or presentations. But if that is a given, why do we so often discuss the question "What's the business case for sustainability (and sustainability reporting)?" Here’s my take on it:<o:p><br /></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">Organizations often lack a vision what sustainability really means for them and what they want to achieve over the next 20 or 30 years for itself, for society and the environment. Or in short: what responsibility is taken over by whom and for whom? If I read sustainability reports I very often read about objectives and targets for the next reporting period, maybe for 2 years, but only a few organizations present a long-term vision and define mid- or short-term targets through “reverse engineering”, deciding through that lens what the necessary next milestones need to be. What gets lost is the overall context and rationale why and how the organization will contribute to solve global problems through its specific business model or how its business model design is already influenced by those problems today. The GRI G3 Guidelines purposefully ask reporters to make exactly that two-way assessment in the strategy and analysis part.<o:p><br /></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">A lack of a long-term vision will consequently lead to a lack of understanding what investment is really needed and when it is needed. All expenses for CSR today are therefore seen as costs and necessary capacities for the longer term will not have been properly budgeted. CSR managers are too often pushed into a corner where they are only tolerated because they help to secure a basic compliance to laws; they do lack the acceptance to be seen as important multipliers for business opportunities. In this environment an understanding for the long-term value of sustainability cannot really grow.<o:p><br /></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">Reading sustainability reports offers a simple litmus test if an organization is willing to go the extra mile to explore the real value of sustainability : how is sustainability/CSR organized within the organization? Is CSR simply managed by an add-on department (extra question: “Is at least someone from the top management responsible for that department?”)? Are there responsible managers in all corporate departments, business lines and regional operations (matrix organization)? Are there policies that are properly enforced by measurement and reporting processes? Finally, is sustainability/CSR integrated into corporate or business development and gets regular top management attention? Shouldn’t it belong there if the connection to the business strategy is so urgently needed? Clearly, the level of organizational integration reveals if sustainability is seen as a risk reduction necessity (survival strategy) or an opportunity for long-term business development (growth strategy).<o:p><br /></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">Apart from the question on how CSR is organized my personal check list while reading reports continues like this (starting with the lowest priority for the business model): how much do I read about philanthropy activities, then about efficiency programs (e.g. some years ago zero waste costing was really en vogue), then about integration into risk management; next would be integration into corporate governance, and finally into research & development and/or (corporate) business strategy? That simple check list is a nice and easy rooster to quickly detect where an organization stands with regard to CSR.<o:p><br /></o:p></span></p> <p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">From my perspective sustainability needs the attention of top level strategists and integration into business model development. This ensures a connection with long-term target setting and the translation into strategies and milestones. The question about the business case for sustainability should then become obsolete. It’s a simple truth that if you don’t know where you’re going, you might simply not get there.<o:p></o:p></span></p>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-28981550313583143672007-10-05T14:12:00.000+02:002007-10-05T14:40:25.530+02:00The value of sustainability informationThe big buzz around here this week is the launch of the <a href="http://awards.globalreporting.org">GRI Readers Choice Awards.</a> These are not just awards for the sake of awards - they represent a whole new era for sustainability reporting.<br /><br />Sustainability reporting will not become a mainstream practice unless a freeflowing market for such information develops. People who stand to benefit the most from sustainability information as disclosed by companies today either don't know this information exists, or it comes to them in a form that is not usable or optimal. Who are these current and potential beneficiaries of sustainability information? Journalists, employees or prospective employees, investors and analysts, board and management team members, NGOs, consumers, and broader civil society. <br /><br />Until now GRI has focused on the information issuers by creating Guidelines and supporting materials for them to use as the basis for reporting economic, environmental, and social information. But now GRI is trying to create, stimulate, educate, and add value to the information users side. The Readers Choice Awards are designed to engage these information users/report readers directly and give them an avenue through which they can express their opinion. <br /><br />Readers are invited to select the reports of interest to them, and then assign scores to each of these reports based on their assessment of the quality and usefulness of the report to them. <br /><br />Reports that gain the highest scores in nine different categories will be declared the winner in a <a href="http://www.globalreporting.org/NewsEventsPress/Conference2008/">high profile ceremony in May 2008 </a>- but really its the readers and the movement towards better accountability and transparency that will be the real winners.<br /><br />We predict that the results of the scoring will lead directly to changes in the current practice of sustainability reporting. By getting a better understanding of what readers/users want and need, report preparers will thing about reporting differently. <br /><br />Early signs look good - after only 48 hours online the <a href="http://awards.globalreporting.org">Readers Choice website </a>had nearly 2000 visitors from 70 countries and hundreds had registered and started to score reports. We certainly hope thousands and thousands will join these early participants. I will keep you posted as we progress in this big experiment!Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-28211070.post-44426663714186471242007-10-03T13:58:00.000+02:002007-10-05T14:11:30.554+02:00Public sector still needs convincingWe were lucky enough to have Phil Hughes visiting us this week in Amsterdam. He traveled over from Melbourne to meet with various members of the GRI staff to reflect back on our three years of partnership and look ahead to the future. GRI helped to co-found the Centre for Public Agency Sustainability Reporting, which Phil now directs, with ICLEI-ANZ, City of Melbourne, and State of Victoria's EPA. <br /><br />We were comparing notes on the rate of uptake of the GRI Guidelines among public sector organizations (such as municipalities, federal departments, other public agencies) and the rate of uptake among businesses. The practice has been slow to take hold in the public sector, and Phil surmises that it is (at least in part) due to the lack of recognition of the three dimensional role these agencies play, and the size and complexity of their impacts. <br /><br />But I reflected that it was not that long ago that companies were in the same place. We seemed to have crossed over from that lack of awarness (whether purposeful or not!) to an understanding that companies do have complex impacts (postive and no-so-positive) on societies, economies, and the environment - and we are moving into an era of action. Maybe public agencies are a few steps behind, but Phil and I decided we had reason enough to remain optimistic that they would move along this curve some point soon as well.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-59508443439455094002007-09-21T18:38:00.000+02:002007-09-26T16:03:14.055+02:00Back to basics (2): Globalization and sustainability<p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">For quite some time I do start my presentations with a slide that shows the famous graph of the world population growth in developed and developing countries. "Oh, that one again ;-(" the audience might think, but honestly, do we really understand the impact of what's in front of us?<?xml:namespace prefix = o /><o:p></o:p></span></p><p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">China - although still applying a one-child policy - will grow by another 150 million people by 2050 (another one of those "rebound effects": due to a higher life span a full generation of Chinese people will "mathematically not have died" between 1990 and 2050). </span><?xml:namespace prefix = st1 /><st1:country-region><st1:place><span lang="EN-GB" style="font-family:Arial;">India</span></st1:place></st1:country-region><span lang="EN-GB" style="font-family:Arial;"> will see another 500 million Indians until 2050, more than the population of whole </span><st1:place><span lang="EN-GB" style="font-family:Arial;">Europe</span></st1:place><span lang="EN-GB" style="font-family:Arial;"> today. 90% of all kids below 18 years now grow up in developing countries - NINETY PER CENT! The sheer size of these numbers should make us think what that means in terms of sustainable development. Also, what does that say about tomorrow's markets? Here’s my take on it:</span></p><p class="MsoNormal"><span lang="EN-GB" style="font-family:Arial;">What would happen if the countries that are integrated in world markets today fail to integrate developing countries into the world markets? For sure, waves of migration, war for resources, new epidemics and negative effects on climate change strategies would be some of the effects. Our Western (and emerging) societies will simply not be able to cope with the overwhelming brutality of these effects. So, as failure would be a disaster, there is simply no other way than to accept the challenges of globalization and its world market logic. But how does that link with sustainability?<br /><br />Isn't sustainability just simply a synonym for a situation where everybody on this planet has the opportunity to participate in (globalized) world markets without being restricted by any rule that favours one person or place over another? The terms fairness and balance come to mind as well. And isn't sustainable "development" not just the broad highway in front of us, aligned by stable crash barriers (meaning globally accepted and globally applicable rules of behaviour that ensure fairness and balance, based on transparency and openness)? The question that remains though: how much time do we still have to continue <i>walking barefooted</i> on that highway? That is the picture that I always have in mind when I read the latest about WTO's never ending tragic soap "Nightmare on </span><st1:street><st1:address><span lang="EN-GB" style="font-family:Arial;"><st1:street style="FONT-FAMILY: arial"><st1:address>Doha Street</st1:address></st1:street></span></st1:address></st1:street><span lang="EN-GB" style="font-family:Arial;">". In that sense - for me - sustainable development is the blueprint for a successful implementation of globalization.<o:p></o:p></span></p><span lang="EN-GB" style="font-family:'Times New Roman';font-size:12;"><span style="font-family:arial;font-size:100%;"></span></span>Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com2tag:blogger.com,1999:blog-28211070.post-49297651842300168942007-09-18T22:43:00.000+02:002007-09-21T12:02:06.675+02:00Anniversaries: ISO 14001 is 10Stumbling across ISO 14001 certification figures a few days ago jogged my memory to the days when it was first released - I must admit that discovering 14001 was released 10 years ago this past June was a bit of shocker - time flies! <br /><br />It was controversial back then. The standard had the backing of governments and many businesses were stongly incentivized to get on board with it. I remember when Ford and GM joined forces a year or two later and made it mandatory for any company providing products or services in their supply chain to become certified under ISO 14001. <br /><br />But pushback came from companies and environmentalists who said that the standard was causing weaker performance - not stronger. Some companies in Japan, the US, and western Europe had already adhered to high levels of environmental management, and the ISO standard - built with wide global uptake in mind - actually lowered the bar instead of raising it. Of course, there were the to-be-expected complaints of cost and burden as well. <br /><br />Some say that ISO 14000 has been a solution to many problems: unintentional trade barriers created by environmental standards; the inefficiency of command and control regulations; and the plethora of permits, inspections, regulations and standards faced by companies trading across international borders. <br /><br />I think the standard has done much for environmental management overall - not the least by creating a standardized set of vocabulary, expectations, actions, and (10 years on) a worldwide infrastructure of practitioners that can help companies cope with their environmental risks. <br /><br />But is it actually improving performance? Does anyone out there know of any studies or impact assessments of ISO 14000 certifications?Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-69418787868657877442007-09-17T22:46:00.000+02:002007-09-24T17:03:02.431+02:00Back to basics (1): The value of transparency<span lang="EN-GB">Sometimes overwhelmed by so many different views, details, different priorities and cultural takes on sustainable development, I find it useful to really go back to the "heart of the matter", summarizing what we really need to achieve for a better future.<br /><br /></span>I'll start with an exercise that most of us go through at a certain moment of their career in GRI, trying to explain to others in not more than 60 seconds why GRI and sustainability reporting are so important. Here's my take on it:<br /><br />"In today's globalized world <strong>transparency</strong> is absolutely fundamental to create <strong>trust</strong>, which is the basic ingredient to create <strong>partnerships</strong> (we already know that we will only be able to create sustainable change in partnerships!); only through partnerships <strong>continuous improvement</strong> will be possible, which finally is a necessary essential to create <strong>sustainable change</strong>. Accepting this logic simply means that without the right level and depth of transparency sustainable change will not be achieved.<br /><br />Since we know that trust in most organizations is at an all-time low all over the world (open any newspaper on any day and just count how many articles you will find on this or somehow related topics), we need to work towards higher levels of transparency to recreate the necessary trust.<br /><br />This is where using the GRI Framework can help. GRI facilitates the necessary dialog of all stakeholder groups from all over the world to define the aspects any organization should take into account while assessing how to close their own transparency gap. The problems we need to solve are global, so the format that structures the expected level of transparency to create sustainable change needs to be global as well. There is no other format than the GRI Framework that serves this purpose. So, why hesitate using it?"<br /><br />We all need to decide if we can agree to this simple logic. Otherwise the other simple logic of W. Edwards Deming applies: "It is not necessary to change. Survival is not mandatory!"Ralph Thurmhttp://www.blogger.com/profile/10385892065719519101noreply@blogger.com0tag:blogger.com,1999:blog-28211070.post-85117299746021466982007-09-16T22:18:00.000+02:002007-09-16T22:38:31.990+02:00ISO 14001 - on the menu in AsiaI was somewhat surprised to find out that <a href="http://www.iso.org/iso/home.htm">International Organization for Standardization (ISO)</a> does not officially track the number of certifications to its 14001 environmental management standard. All these years I have been jealous of ISO assuming that they can track certifications with ease due to the compliance oriented nature of their standard. We are have always struggled to track the users of the Sustainability Reporting Guidelines because they are a flexible framework - certifications are not required, nor are companies required to inform GRI (or anyone else) when they have issued a report based on the Guidelines.<br /><br />Anyway, I stumbled across some data from the <a href="http://www.umweltbundesamt.de/index-e.htm">German Environment Agency (UBA)</a> while surfing the web this evening that seems to be the closest thing we have to a tally of total certifications. They tracked just over 129,000 certifications worldwide by the start of 2007 - they claim this figure represents a rise of about 25% from the previous year. I took that as a good sign that ISO 14000 is still growing that strongly.<br /><br />Organizations in Asian countries account for over 45% of certifications globally - with Japan and China in the number 1 and 2 spots respectively (approximately 20,000 certifications each), and South Korea, India, Taiwan, and Thailand all in the top 20. <br /><br />The ususal suspects from western Europe can be found in the top 20 as well - Spain (11,000 certifications - good for #3 spot), Italy, Germany, UK, Sweden, France, and Switzerland. But possibly more interesting is the appearance of some new CEE nations rounding out the bottom of the table - Romania, Czech Republic, and Hungary make the top 20 for the first time with a combined certification total of nearly 5000.<br /><br />The USA is 5th on the list with 8000 certifications, and Canada is 11th with nearly 2600. No African companies made the top 20, but the survey shows that South Africa has over 400 certifications to-date.<br /><br />I wonder if reporting rates will or do follow ISO certification rates. Has anybody out there seen any correlation?Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-28211070.post-87133961454879549822007-09-13T16:12:00.000+02:002007-09-13T16:51:38.069+02:00Frankfurt Motor Show: Environment on ParadeThe International Motor Show or Internationale Automobil-Ausstellung (IAA) is the world's largest motor show and it opens today. IAA is held biennially in Frankfurt, Germany and is known in English as the Frankfurt Motor Show. It will attract at least 1 million visitors and will debut no fewer than 250 new passenger vehicle models. <br /><br />I am no car junkie, so don't follow this closely but I did watch a segment on the morning news today previewing the models that visitors will be treated to when they arrive at the show this year. Clean, green, hybrid, electic, and other environmentally friendly prototypes will dominate the show apparently. I saw images of tiny space-age looking electric cars, and fancy luxury brands like Audi with the word HYBRID painted over the distinctive sleek bodywork. <br /><br />Growing up not far from Detroit MI where the annual Auto Show dominates people's calendars, I remember it was all about being big and bad in those days! Large Hummer-type vehicles, trucks with industrial grade power being sold on the consumer market, and big heavy fuselages (I know that is an airplane term, but some of the cars were so large they looked larger than a small plane!). <br /><br />Nice to see that the most anticipated new models this year are the enviro-friendly ones. They will have their place in the spotlight over the course of the next two weeks in Frankfurt - but the real road test will come when they hit the market. How will consumers vote?Unknownnoreply@blogger.com12tag:blogger.com,1999:blog-28211070.post-14282710862043003952007-09-11T16:24:00.000+02:002007-09-12T12:21:07.478+02:00Where I was on September 11th & how GRI helpedIt was a terrible morning that most people won't ever forget. I recall arriving at work around 8.30am at the <a href="http://www.tellus.org">Tellus Institute </a>in Boston (where the GRI spent its formative years - <a href="http://www.ceres.org">Ceres</a> shared office space at the Tellus building back then!) and being aware immediately that something was wrong as I could feel tension, concern and confusion in the air. Some of us crowded around a TV screen in the meeting room and watched with horror as the events of that morning unfolded.<br /><br />Most of us went home early in shock. Some of the planes took off from the Boston airport which set the city into a state of panic, and many of us knew people that would have reported for work around that time at the Twin Towers in nearby New York and were concerned for their safety. <br /><br />The next morning <a href="http://www.tellus.org/index.asp?action=106">Allen White </a>(co-founder and acting Chief Executive of the GRI at that time) called myself and my colleague Mark Brownlie (GRI's former Communications Director) into his office. We were supposed to fly out on September 15th for a meeting of the so-called Measurement Working Group (MWG) - a group of nearly 100 people from all over the world and all backgrounds (corporate, investment, NGO, labor, accountants, you name it) in London where we would facilitate their talks on the development of the 2002 version of the GRI Sustainability Reporting Guidelines. Allen told us that the meeting was not canceled, that he had decided he would go, but that we could back out if we were not feeling secure. We both decided to join Allen and fly out on the 15th - just a few nervous days after 9-11-2001. <br /><br />We eventually found ourselves in London along with nearly 100 MWG members from over 40 countries who had made the same decision as we did. Many, including Allen and I, had to incur major difficulties and travel itinerary changes to get there due to airport shut downs and new security measures. We were surprised that we had nearly 100% attendance, very few people chose not to come and very few refused to let long queues and fear stop them from traveling to this unique gathering.<br /><br />I will never forget the way Allen White opened up that meeting. He reflected on the difficulties and risks that all had taken in order to be there and play their part in the development of the 2002 Guidelines. He said that our little microcosm of 100 participants committed to working together to achieve something - despite different languages, cultures, religions, citizenships, beliefs, and professional affiliations (not to mention opinions on how to measure environmental and social issues!) - was even more important post-9-11 than it was pre-9-11. Why? Because as long as we, as a global society, refuse to break down barriers and at the very least respect one another - if not try to understand one another - our future would never be a secure and sustainable one. <br /><br />Maybe our group was just a drop in the bucket, but it was a start, and we were building something that would help standardize communications about important economic, environmental, and social issues globally which we felt could help break down barriers and misunderstandings even further.<br /><br />GRI working group consensus-seeking processes are always incredible experiences for the participants as people learn (sometimes for the first time) to reach out across boundaries to try and understand one another - but the meeting in mid-September 2001 in London was an exceptional example of that. It was one of those experiences that changed my life both personally and professionally. I think of it every time I come across the stamp in my passport that marks my arrival at London Heathrow on 16 September 2001. <br /><br />In memory of Carlton Bartels, climate change innovator.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-28211070.post-14302423061685462092007-09-05T10:18:00.000+02:002007-09-05T12:53:53.358+02:00Harvard Business Review asks how reporting helps manage climate riskTo round out a threesome of unprecedented media interest in GRI recently (see previous two posts this week) the Harvard Business Review was in touch to talk about what everyone is talking about - climate change.<br /><br />The editor wondered how reporting could play a role in helping companies strategically manage risks and opportunities associated with climate change. Here were some perspectives I shared.<br /><br />Lagging indicators: The starting point for navigating the risks of climate change is to first understand what impact the company’s operations, products and services are having on the environment. By knowing their own ‘carbon footprint’ with certainty, companies can start to take action to reduce their impacts. Benefits of measuring and reporting include realizing cost savings due to energy efficiency, to remain one step ahead of regulation, and to protect brand value by showing accountability and responsibility for environmental responsibilities.<br /><br />Real time indicators: The climate change issue is so prominent that companies cannot afford to seem like they are not actively looking at their own impacts and helping to shape a more positive future. Benefits of reporting on these indicators include earning and maintaining a license to operate in the public domain, demonstrating a leadership position on one of the most pertinent issues of our time, and earning customers and clients by differentiating the company in the marketplace as responsible on this issue. <br /><br />Leading indicators: Scientists tell us that climate change will alter our climatic patterns and our physical landscape. Reporting on forward looking indicators lets a company tell its story about how it is going to adapt and innovate to mitigate risk that climate change could cause – such as emerging risks to places where the company has operations, or risks to resources the company is dependant on (e.g., forests or agriculture), and risks associated with rising energy costs. Leading indicators also help the company show how it will capitalize on new market opportunities afforded by climate change – such as introducing new products and services that do not rely on fossil fuels, or engaging in carbon trading. <br /><br /><a href="http://www.globalreporting.org/GRIPortal/GRI/G3Online/frmStep6PerformanceIndicator.aspx?NRMODE=Published&NRNODEGUID=%7bA4B9607F-FFB5-4F41-8899-D6526684C94A%7d&NRORIGINALURL=%2fReportingFramework%2fG3Online%2fPerformanceIndicators%2f&NRCACHEHINT=NoModifyGuest">Search GRI indicators here</a>.<br /><br />Honesty note:<br />The Economist and Business Week contacted me this week, but I have to admit that the editor from Harvard Business Review contacted me about three months ago to talk about sustainability reporting and climate change. Since I am on a roll blogging big media interviews this week I couldn't resist adding it to the list. Look for the HBR interview in this October's issue.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-28211070.post-87201708555317065282007-09-04T09:52:00.001+02:002007-09-04T17:01:38.873+02:00Business Week asks why SMEs would reportIts been a big week for media interviews here at GRI. Today I heard from a journalist working on a story for Business Week on small and medium sized enterprises and sustainability. She was wondering why SMEs might start reporting. Here is the just of my response: <br /><br />There seem to be two very different drivers for reporting based on where the company operates/originates (that we have detected!)<br /><br />SMEs from USA, Canada, Australia, Western Europe: the driver for embracing sustainability and producing a report is usually a competitive differentiator when it comes to products and services – ie., these are companies that produce “green” or “sustainable” or “natural” products and services, and they use reporting to walk the talk on what they are doing. The value of reporting to these companies is brand enhancement and better communication channels with key stakeholders such as customers, communities, providers of capital, and employees. Of course this is a broad generalization - an exception I know of would be a group of Chilean fruit growers are trying to break into the UK and US organics marketplace, and they are finding that sustainability reporting is helping convince buyers that their product is genuinely “sustainable”. <br /><br />Emerging markets SMEs (Africa, Asia, South America, Central and Eastern Europe) seem, for the most part, to be driven by efforts to enter – and be competitive – in the global marketplace. Buyers are forcing a plethora of ‘codes of conduct’ and other related initiatives (formal and informal) at them and they must show that they do adhere to sound environmental and labor/human rights practices in order to compete. As we have seen with the recent product safety and quality scandals in China – buyers are held responsible for what happens in their supply chains in the court of public opinion. This does seem ironic in a sense, as buyers have been shifting their contracts over the past decade or so to emerging markets where goods/services can be produced at lower cost – in part because the local governments do not impose stringent regulations when it comes to environment and social performance by the corporate sector. The regulation is still coming down the pipe – but in a different form and from a different authority – the international buyers (whether these be B2B or consumers directly). Companies with their eyes on the future are staying ahead of social audits and the like by getting a better idea of their social and environmental impacts and starting to manage potential risks.Unknownnoreply@blogger.com1