The 2007 guide to Corporate Social Responsibility

December 06, 2007

What does it take to be a pioneer in Corporate Social Responsibility?

Download PDF: Corporate Social Responsibility pioneers

As Al Gore said: “There are many who still do not believe that global warming is a problem at all. And it’s no wonder, because they are the targets of a massive and well-organized campaign of disinformation lavishly funded by polluters who are determined to prevent any action to reduce the greenhouse gas emissions that cause global warming out of a fear that their profits might be affected if they had to stop dumping so much pollution into the atmosphere.”

However, many companies do acknowledge the problem and have participated in a number of global initiatives designed to mitigate it.

For example, the United Nations (UN) has created The Global Compact. This is a network-based initiative, consisting of the Global Compact Office and six UN agencies. The Global Compact consists of all relevant social contributors. These are the companies whose effect on the local environment they seek to influence, governments, labour, civil society organizations and the UN – which plays the role of convener and facilitator.

There are 10 principles to which companies are encouraged to adhere, spanning human rights, labour standards, the environment and anticorruption.

Human Rights:

Businesses should support and respect the protection of internationally proclaimed human rights;

Businesses should make sure that they are not complicit in human rights abuses.

Labour Standards:
Businesses should uphold:

The freedom of association;

The effective recognition of the right to collective bargaining;

The elimination of all forms of forced and compulsory labour;

The effective abolition of child labour;

The elimination of discrimination in respect to employment and occupation.

Environment:
Businesses should:

Support a precautionary approach to environmental challenges;

l Undertake initiatives to promote greater environmental responsibility;

Encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption:

Businesses should work against corruption in all its forms, including extortion and bribery.

The Global Compact was launched in 2000 and has grown to over 3,800 participants including over 2,900 businesses in 100 countries worldwide.

In addition, in 2005 the Kyoto Protocol came into effect. The Protocol was an international agreement aimed at reducing the world’s greenhouse gas emissions, in particular carbon dioxide; the target set for industrialized countries was to cut their combined emissions by 5% (1990 levels), between 2008 and 2012.

The Kyoto Protocol became a legally binding treaty on February 16 2005 among much speculation on the difference such a protocol would make. Although there is scientific consensus that greenhouse gas emissions are causing global warming, the suggested 5% reduction in emissions has been seen as just the tip of the iceberg, with reductions of 60% across the board needed to truly avoid the consequences of global warming, according to many experts.

Changing how businesses have operated for many years was always going to be a slow process, especially with no financial incentives for change. As a result, the Kyoto Protocol introduced emission trading allowing countries to buy and sell the carbon credits agreed within their allowances of greenhouse gas emissions. Countries can also gain carbon credits by offsetting their emissions such as through tree-planting.

With guidelines provided by the UN Global Compact and global initiatives such as the Kyoto Protocol, companies have developed many unique projects that expand their Corporate Social Responsibility (CSR). Euromoney looked at companies across Europe to find those who have developed unique and interesting initiatives that are having a positive affect on the environment, local communities and stakeholders.

As climate change and the role of the corporation become a larger political and social concern, the pressure on companies to take responsibility for their impact on the environment, local communities and employees has increased. Corporate governance operating according to sustainability principles can and does bring competitive advantages, often serving as a tool for brand differentiation and the establishment of a unique selling proposition. At the same time, it may even trigger positive side effects in terms of more efficient and cost-effective production procedures or facilitate the opening of unexplored markets. As part of a company’s risk management strategy, CSR offsets the jeopardy of scandalous events and defends a reputation for integrity and best practice which in turn helps build customer loyalty.

Corporate Social Responsibility is a broad concept and can include a number of projects and developments. Euromoney has highlighted 10 companies that have shown initiative in their approach to CSR.

Profiles include: