Articles

Getting CSR On the Corporate Agenda

published in CSR Wire, 2002
At the recent Business for Social Responsibility conference in Seattle, several speakers and attendees held the title of Vice President, Corporate Social Responsibility. While the title isn’t new, it is not yet prevalent in among multinational companies. Case studies of two major companies from the US and Canada illustrate that incorporating a corporate social responsibility position within a company is a process unique to each company and dependent on the dedication of the spokesperson for the issue within that company.Corporate Responsibility Officer Jeff Zalla says Chiquita’s move to write and publish its first social report was the result of a three-year process led by an internal steering committee that began with a review of the company’s core values in 1998.Steven Warshaw, who had just been promoted to President and COO, wanted to leverage a common set of values to align the management team across all of Chiquita’s business units. “We set out to prove to ourselves – and to our critics – that we were indeed achieving the highest possible social and environmental standards,” said Warshaw. Chiquita already had years of experience in getting its farms certified to the standards of the Rainforest Alliance’s Better Banana Project, and as it expanded its code of conduct in 2000, it adopted the SA8000 labor standard.Zalla’s own role evolved along with Chiquita’s program. He leads the Company’s steering committee and became full-time Corporate Responsibility Officer when Chiquita issued its new code. About a year later, he also became Chiquita’s VP, corporate communications, about the time Chiquita issued its first Corporate Responsibility Report. Within Chiquita, the two roles are intrinsically tied and dependent on one another. As VP corporate communications, he handles both internal and external communications. And a vital part of those communications to both internal and external stakeholders is the CSR side, where Zalla handles the measurement, verification, accountability, communication and reporting systems.an energy and chemicals company based in Calgary, Laura de Jonge holds the title of Integrity Coordinator, Safety, Environment & Social Responsibility.

De Jonge says she was offered her position in part due to her participation in an employee loaning program to the United Way. With a long history in community activism, de Jonge first worked for the company on contract in its legal department. In a strong move, she voiced her opinion to upper management, the company’s Vice President, General Counsel that her interpersonal skills could be used to better serve the company and pointed out that “the human side of business was something in which she wanted to become more involved.”

She was subsequently sent as a representative of the Company to the United Way’s loaning program. This program involved 40 loaned staff from Calgary companies who worked with 40 full-time United Way staff during its annual campaign. Together, they raised money to fund programs throughout the community. During her tenure there, de Jonge was able to work with a number of community service organizations, an experience, which serves her in her current position as Integrity Coordinator.

As Integrity Coordinator, de Jonge played an instrumental role in establishing and heading up a company-wide Integrity Team. The team is comprised of well-respected employees from each division, who are responsible for reviewing policy and making sure the Company and its employees could “walk the talk.” Last year, the team developed a workshop on integrity, which was delivered to approximately 2,000 employees worldwide. The Company’s approach also was the result of its involvement in the development of the International Code of Ethics for Canadian Business in 1997. Since then, Nexen also has committed to the UN Global Compact and other global initiatives. “Our CEO realizes the importance of having every employee know what we stand for and having an open channel to voice when values aren’t being met,” said de Jonge.

Two companies; two methods of incorporating CSR. One from the vision of the CEO coupled with concern about the media and brand reputation; the other, the strong voice of an employee, committed to stakeholder engagement and supported by senior management in putting CSR principles into practice.

Barbara Burton is an author/columnist and specialist on corporate social responsibility issues. She is the first US graduate ofAA-1000, a course on the process of social and ethical accounting, auditing and reporting, sponsored by the London-based Institute of Social and Ethical AccountAbility.

Wall Street Takes a Closer Look at Corporate Social Responsibility

published in The Daily Transcript, May 4, 2006

In case you haven’t noticed, Wall Street is now getting in on the act and taking a company’s corporate social responsibility initiatives seriously. What this says to me is that companies that continue to operate with a “shareholder-only value” mindset will be in for a rude awakening. It’s no surprise to me that more than 45 percent of the top Global Fortune 500 U.S. companies now report on corporate responsibility and that the S&P 500 also review a company’s CSR programs. According to Mike Wallace, of Wallace Partners LLC in San Francisco, the United States is predominately in a regulatory driven business atmosphere and slow to follow international trends” This is evident in the U.S. presence on indices By Barbara Burton such as the Dow Jones Sustainability Index and the FTSE4good, Wallace thinks companies need to “pay atten­tion to how traditional financial service institutions are rat­ing their corporate behavior and understand the direct link to their bottom line”

“I wholeheartedly agree with Wallace and wanted to find concrete examples. During the recent Business for Social Responsibility conference. I found exam­ples. Many were like the representative of an oil and gas company I spoke with, who said her company had embarked on a program to reduce emissions sever­al years ago- There was an initial cost, of course, but eventually the reduction in emissfons saved the company money, partly because its processes became more energy efficient than before. She described the initiative as “beyond com­pliance.” The end result: The company ended up with a strong, sustainable environmentally focused process, gained a positive reputation (as opposed to some of its competitors) and the initiative actually added to the bottom line. Why pay attention to CSR? Because it makes financial sense.

Today on Wall Street, asset owners, sell-side analysts and institutional and individual investors are looking at a company’s ESG and finding out that long-term business valuation is tied, more than ever, to a company’s positive envi­ronmental, social and its effective governance practices — its ESG — as well as its financial performance.

Sarah Forrest, a sell-side analyst with Goldman Sachs who leads its Global and Investment Research Division, said issues such as political risks and effects of major disasters may have put emphasis on ESG, but she points out that financial industry has reached a critical point. In a discussion at the BSR con­ference, Forrest said that if companies don’t integrate ESG into their financial analysis, they’ll have missed an opportunity to gain a competitive advantage.
With a strong commitment by top managers, her division began to measure ESG in

Wall Street and corporate social responsibility are no longer strange bedfel­lows. A solid CSR program is not only a valuable risk management tool for companies, but it can contribute to a solid reputation and valuation in the mar­ketplace. In fact, Dow Jones and Sustainability Asset Management launched a new North American and U.S. index, to examine major companies’ social, envi­ronmental and financial performance ( I hope CEOs will take a close look at these indicators and understand what I believe is behind corporate success. Like Wall Street, they’ll see the direct link between sustainability and profitability and will hopefully take the next step to implement a solid CSR program.

Burton is a specialist in the field of corporate social responsibility and received accreditation on conducting social audits from, the New Economics Foundation in London.

Source Code: 20060503tza

The Need for Courageous People

published in The Daily Transcript, July 16, 2003

Ethical Corporation Magazine sponsored a conference last month on corporate ethics in Washington, D.C. Addressing both coiporate accountability and corporate social responsibility initiatives, presenta­tions and discussions included examples of the corporate “non accountability” issues we’ve all read about during the last several years.

  • WorldCom’s multibillion-dollar acquisition that the board approved without question;
  • The Martha Stewart cover-up and the millions lost by shareholders; and
  • Xerox’s auditing scandal and associated shareholder losses.

Along with these examples of corporate fraud, there were plenty of suggestions on how to rebuild trust, become more transparent to stakeholders and improve the bottom line. In a sense, it felt as if speakers were say­ing to corporations, “Your time’s up. You can’t fudge numbers, put out fluffy PR reports or pretend the proxy resolutions are going away” (One speaker cited that proxy resolutions have increased by 20 percent in 2003 alone!)

Corporate social responsibility initiatives are no longer a passing fancy or used by large corporations to look good Today, the strong push for corporate accountabili­ty worldwide is exemplified in Britain’s recent proposed legislation (Company Law Review) requesting that com­panies disclose their policies and practices related to social and environmental programs (with the approval of the board of directors), as a part of their business report­ing requirements. And corporate social responsibility is getting more visibility in the investment fund arena, on Wall Street and among growing numbers of institution­al investors. They are taking a closer look at social and environmental indexes touted by such firms as FTSE America and funds such as Calvert, which carefully screens companies for their social/environmental per­formance. Speakers pointed out mat it is far more pro­ductive for corporations to be proactive and more trans­parent in decision-making and efforts to address social and environmental issues, instead of being left to defend bad decisions and then attempt to rebuild trust.

As the conference keynote speaker, Eric Pillmore, the SVP of corporate governance at Tyco International, admitted the theft of the company’s former senior lead­ers as an “ethical crisis at the top,” and outlined how the totally new board of directors would drive the compa­ny’s code of conduct.

Kennel’s group will focus on climate change, the loss of biodiversity and ris­ing sea levels. He sees today’s environ­mental problems as having reached a breaking point. In discussions with Kennel, he sites the numerous facts related to depletion of our natural resources. Beyond these problems, he sees science and business must come together to focus on sustainability in a win-win agenda that will tackle these tough problems. And his vision is that science can provide the “sustainable” solutions that businesses can integrate into their operations.

“Ethics in character matters to a variety of stakehold­ers — employees, customers, suppliers, investors,” said Pillmore, adding that codes of conduct must be part of the corporate fiber. “The real moment of truth occurs every day in hundreds of little decisions people make at all levels of the organization.” He added that initiatives such as Sarbanes-Oxley (with its financial controls and audit committee rules), a 1-800 telephone hotline reporting method and a full-time ombudsman who reports to the independent audit committee are excel­lent first measures to drive accountability.

The vice president and general counsel for corporate compliance at Fannie Mae, Deborah House, said her review of WorldCom reports revealed its corporate cul­ture required they “make the numbers above all else.” She cited an example of how one CFO thought that adopting a code of conduct was a waste of time. To House, it’s time to “put a higher value on integrity as a leadership quality, versus production numbers.”

Corporate social responsibility begins with corporate accountability (ethics and character). The conference opened with discussions about accountability, corporate governance and codes of conduct, then addressed CSR issues — how companies adopt global standards, com­municate with their stakeholders and report social/environmental (and financial) progress.

Tyco’s VP said his company was committed to “build­ing courageous people” that are not afraid to bring unethical issues to light. He ended his presentation with this quote from Edmunde Burke, “The only thing nec­essary for the triumph of evil is for good men to do noth­ing.” Corporate social accountability, corporate social responsibility — it’s really all about ethics, and ethics matters.

Burton is a specialist in the field of corporate social responsibility and received accreditation on conducting social audits from the New Economics Foundation in London.

Source Code: 20030715tza

Why You Should Care About Sustainability

published in The Daily Transcript, March 17, 2006

Maybe you should ask the 30,000 Ford Motor Co. workers and the 30,000 GM workers about sus­tainability. Are the two motor giants “sustaining” their work force? Are they creating the next generation vehicles with “sustainable” technology and reliance on renew­able energy sources?

Sustainability is really having a mindset that goes beyond the bottom line and well beyond delivering “shareholder value.” It means that a company sustains its work force, sustains the communities in which it operates and sustains the environment that it affects. And it means that its con­tributions will be manifest long after the CEO and the board of directors have passed on. In short, a company’s sustain­able practices are its legacy.

The concept of sustainability is relevant to all industries and is alive and well here in San Diego. And one institution believes it’s so important that it has established one of the fist sustainability programs of its kind: UCSD’s new Environment and Sustainability Initiative. At the helm of the organization is a man who left his acade­mic post as director of Scripps Institute of
Oceanography because he believed he could make a greater impact on the future of the environment, and particularly in southern California.

As the new director of UCSD’s Environmental and Sustainability Initiative, Charles Kennel believes as I do that the concept of sustainability is no longer a choice for today’s CEO — it holds the promise for the future of business.

Kennel’s group will focus on climate change, the loss of biodiversity and ris­ing sea levels. He sees today’s environ­mental problems as having reached a breaking point. In discussions with Kennel, he sites the numerous facts related to depletion of our natural resources. Beyond these problems, he sees science and business must come together to focus on sustainability in a win-win agenda that will tackle these tough problems. And his vision is that science can provide the “sustainable” solutions that businesses can integrate into their operations.

The companies that survive will be the focused, forward-thinking compa­nies that embrace sustainability initia­tives, and have put these strategies into their long-range business plans. They understand that investing in sustainable practices is critical and will translate into future cost savings. As Kennel puts it, “A few years of investing in designing more energy-efficient operations or reducing energy usage, the more prof­itable a company could be later on — when the cost of energy rises.”

Our colli­sion course with depletion of natural resources is here and I concur with Kennel that we must maintain our level of economic growth, examine our resource consumption and preserve the environment that sustains us.This point was echoed at the recent Business for Social Responsibility Conference held in Washington, D.C., where company leaders and analysts concurred that long-term sustainability assessment is making its way into the financial market operations. It was no surprise to hear CEOs discuss their sus­tainability progress in terms of their triple bottom line (social, financial and environmental) progress.

Why should you care about sustain­ability? You should if you want to stay in business in the future. The auto indus­try layoffs are just one example of what’s coming down the pike. Maybe we should all take a lesson from UCSD and its commitment to sustainability.

Burton is a specialist in the field of cor­porate social responsibility and received accreditation on conducting social audits from the New Economics Foundation in London.

Source Code: 200603l6tza