Toby Webb, Founder/Chairman, Ethical Corporation, CEO/Co-Founder, Stakeholder Intelligence Ltd

17 November 2011. Canadian Business for Social Responsibility Webinar

Corporate responsibility: 2011 reflections and 2012 predictions

Background

• Founded Ethical Corporation 2001• Directed/Chaired 80+ CR management conferences world-wide• Published 8000 articles & 12 reports• Interview 800+ executives per year: Reports, articles, conferences• 3000 Corp customers globally, expert analysts around globe• Lecturer, Corporate Responsibility, Birkbeck College (London)• Co-chaired independent working group on CSR for UK Government

2006-8 for David Cameron • Co-Founder of Stakeholder Intelligence: Bespoke company training,

intelligence & research. 30 experts round the world: China, SA, Brazil, US etc

Sustainability 2011/12 issues

Durban: Low expectations but a hope that Kyoto expiration may provide some impetus for a deal before 2015-20

Eurozone crisis: Current severe economic/political troubles an important context considering EU’s traditional role as global environmental standard-setter and proposed shift to a low carbon economy. May hinge on German election.

UK Government step back: Policy confusion on business and carbon. E.G. FiTs, green tariffs, green deal, CRC, Renewable Heat Incentive, all faltered

Business/Government steps forward: Davos 2011 provided CEOs with space to discuss SD and helps create interface between government and business

Sustainability: Macro issues: 2011 events and 2012 significance

7th billion person arriving on earth: UN shift from 9 to 10 billion max estimate

Rio Earth Summit + 20: Unlikely major Govt action, but v significant for business announcements and commitments

China’s Five Year Plan: Shift towards res. Efficiency: game changer?

China’s middle class: People vs. Govt more than People vs. Biz AND What can 400mn ‘soccer mom’ types mean?

Fukushima: Nail in the coffin of nuclear as a transition technology? Given German ‘political’ decision it’s a distinct possibility.

Sustainability: Macro issues: 2011 events and 2012 significance

What the Frack? Gasland and association publicity around shale gas – good and bad – firmly on the CR agenda. Is it climate realpolitik or stopgap solution? Companies may need to take a position

Occupy Wall Street: Not what it was, but what it represented…sense that the current system of liberal democracy and capitalism isn’t working, and the public sympathy for that

2012 question: Clearly change in context for business in society. Could it lead to a change in definition of the social contract, or a passing fad not even on the scale of anti-globalisation protests of late 1990s?

Sustainability: Macro issues: 2011 events and 2012 significance

 Occupy debate given new fillip to discussions about solutions: Notably the ‘Tobin tax’ idea which continues to gather political support but appears no closer to reality

India’s corruption debate: Lone campaigner, Anna Hazare’s work and mobile licenses scandal = official corruption on mainstream political agenda. Govt & business now under much greater spotlight & pressure

Closure of News of the World: Comeuppance for Murdoch. Ongoing, ever-growing journalism and corporate ethics scandal in UK, slowly spreading to North America (shareholder action)

Business and sustainability/corporate responsibility/ethics

Coca-Cola Enterprises Sustainability Plan, Sainsbury’s 20/20 plan: September 2011: Impressive milestones. May help other large companies see beyond Unilever, Marks & Spencer as ‘out on their own’

High-tech brands and web businesses: Apple, Google, Facebook, Amazon under scrutiny on both operations AND consumer influence

China’s reporting push: 600+ companies now reporting in China. What will Five Year Plan implementation mean for sustainability disclosure 2012 and beyond?

Porter’s Shared Vale proposition: Despite obvious bandwagon-jumping and latenessm, re-badging a version of CR unrecognized in Europe as a proprietary concept

Business and sustainability

Porter is a ‘name’ in business that counts. Despite lack of focus on minimizing negative impacts ‘Shared Value’ gives other celebrity academics confidence

Reports indicate Shared Value a popular concept in US as many uncomfortable with word ‘responsibility’ for legal and cultural reasons

Integrated reporting pilot: Despite commercial conflicts/rush by accountancy companies to cash in, major step forward in organizational change process – perhaps. May give CR movement some ‘much needed’ momentum

Final Ruggie report: Serious, solutions-oriented step towards a framework for business and human rights. Companies will need to respond positively and in a lot more detail on the topic in 2012

Business and sustainability

ISO 26,000 & understanding: National body certification may create both markets and confusion

Globally-relevant human rights-related rules: Frank-Dodd elements + California’s slave labour disclosure rules help continue to create momentum for business and human rights debate in 2012

Carbon Disclosure Project’s Carbon Action and Water Disclosure initiatives: Will they signal a real change in responsible investment? 2012 may tell us

Barclay’s Bob Diamond admitting banks have serious reputation problem alongside financial, but lack solutions or path

BP’s problems: Ongoing fallout from Macondo, and their admissions around business practices in Russia

Business case and sector improvements Bigger companies twice as likely to report as those with

revenues under $1 billion

48% of Top 100 companies claim cost savings through CR initiatives

47% say increased revenues and/or their position in the current market through CR measures

Best performing sectors for CR reporting: Forestry, pulp and paper (84%), mining (84% and automotive (78%)

Greatest improvement since '08: Construction (65% in 2011 from 32% '08) and Pharmaceuticals (64% from 25% in '08)

Issues coming up the agenda Water and Carbon high on reporting agenda: CDP to

report corporate survey results on water December 2011

Ethical Corporation research shows large companies pushing transparency and data requirements into Tier One suppliers: Energy, Carbon, Water top areas of interest

Microsoft (‘11) and Wal-Mart (‘09) notable cases. SEDEX and the Fair Factories Clearinghouse seeing rise in data flowing in from both suppliers and brands

2011: World Resources Institute and World Business Council on Sustainable Development released biz standards to measure, report & manage carbon emissions in supply chains and throughout product life cycles through Greenhouse Gas Protocol

Issues coming up the agenda

Integrated reporting on the rise. Some say it's investor driven

International Integrated Reporting Committee framework for integrated reporting: Aims to unite standards for financial reporting (IFRS and US GAAP) with SD frameworks

40 company pilot scheme for 12 months to apply draft principles: Coca-Cola Co, Microsoft Corp, Volvo, Deloitte & HSBC (IIRC Discussion Paper draft framework pub. 2011)

Is there a danger that integrated reporting will water down sustainability reporting?...

Sources: KPMG surveys, BNA Daily Environment Report, Ethical Corporation

Further reading and contact

Tobywebb.blogspot.com

www.slideshare.net/tobiaswebb

www.ethicalcorp.com

www.stakeholderintel.com (forthcoming)

Toby.webb@stakeholderintel.com

Toby.webb@ethicalcorp.com