Is road safety a relevant CSR issue?

Photo: José Cuervo Elorza @Flickr

The Commission on Road Safety, a Non-Standing Committee of the Spanish Congress of Deputies, has approved unanimously a motion urging the Government to include road safety as part of  Corporate Social Responsibility, in an effort to involve companies in the prevention of work-related traffic accidents. The initiative calls for the Executive to make appropriate amendments in the Law on Prevention of Occupational Risks to include the assessment and the prevention of traffic accidents that occur as a result of work activity or commuting. According to the Committee’s recommendations, companies would have to report on their progresses on the prevention of work-related accidents and carry out studies and evaluations to identify – and fight – their causes. The Committee also calls for the registration of work-related traffic accidents, a better coordination between the private and public entities involved, and security improvements in work-related travel. Finally, it asks for the creation of a “quality label”, awarded by the competent institutions and agencies, which would support the company’s commitment in preventing accidents among their employees. As an incentive for the employer,  the Committee recommends the creation of an annual prize that would reward best practices in the field of occupational health and the quality of the inclusion of road safety plans in the Corporate Social Responsibility strategy of the companies.

This news has been received with mixed feelings in Spain, both by companies and the CSR community alike. One of the reasons, as stated by Professor Antonio Argandoña in his blog , is that this type of initiatives is a distraction from the “really important” CSR topics and that an “award” won’t change anything. According to other comments, it is the role of the Government to deal with road safety. I don’t agree at all with those points of view. I do believe that road safety is a valid material issue for businesses, a clear area of concern for their internal and external stakeholders and has potentially a huge impact, economic, social and environmental on the companies themselves and the society in general. In Spain, businesses lose thousands of working hours each year due to medical leaves of absence related to road accidents, that also cost thousands of lives. Industry research shows that typically workplace injury costs are met 40% by the employee, 30% by the employer and 30% by the community as a whole. The human cost is high, the financial cost as well. Corporate reputation is also affected by employees driving behaviour. Did it ever happen to you to observe a dangerous driver in a company car, or truck, bearing the logo of their employer? What was your reaction? The impact on environment is high too, not only due to bad driving behaviours, generating huge amounts of CO2, but also because of accidents involving dangerous goods or substances. 

In a recent post, CSR expert and author Elaine Cohen, writes that she believes that, in the next generation of GRI indicators, “G4”, “other issues that are not specifically covered in G3, should be considered, such as the issue of road safety and how companies manage employees who spend a lot of time on the road for work purposes, a significant source of fatalities and other accidents which endanger not only employees but the general public“. I couldn’t agree more. Many companies already include road safety in their CSR plans and strategy. Some of them because they are directly or indirectly, related to the transportation industry, or vehicle manufacturers such as Ashok Leyland. Others, because they realize that there’s an opportunity for them to improve their workers well-being while impacting positively other areas such as the environment and public safety. It is much better for an organisation to be promoting a good news safety story such as winning an award, than it is to have to react to and suppress the outcomes of a major incident. Those companies also realize that their initiatives directly impact their bottom line and that they can gain a competitive advantage by being ahead of more reactive organisations.

World Health Organisation data suggests that approximately 1.2 of the 5 million global injury deaths each year are road crashes. It’s clear that road safety is a major social issue. I believe that it is also a business issue. What do you think?

Little Things: Big Impact

I had a great week. As the sun is back in Barcelona today, and the week-end is so close, there are plenty of explanations behind my good mood. One of those explanations is definitely my lunch with Guy Bigwood, MCI Sustainability Director on Tuesday. Although my favourite soccer team has had a tough time on Wednesday, I had a fantastic evening with my friends on Thursday. Then, this morning, I read two very interesting articles that I’d like to share with you:

Can Green Building Save the Planet?

“That’s the question experts sought to answer at The Economist’s Intelligent Infrastructure conference held at Pace University, where principals of major architecture firms gathered to define green building and how it relates to their own urban designs.”

In the article, some of the architects share their vision of how we can build a more sustainable planet through green architecture. Among many great contributions, I particularly liked Llewelyn Davies Yeang chairman Ken Yeang’s idea that true green building is “a seamless integration of four eco-infrastructures”:

“Gray” — engineering infrastructure. Energy, smart grid, IT, recycling, waste, transport.

“Blue” — water infrastructure: “We need to close the loop as much as possible.”

“Red” — human infrastructure. “We have to change as people. Our lifestyle has to change.”

“Green” — green infrastructure. “We cannot see this because it’s invisible.” Nature’s utilities, habitats, biodiversity, ecological corridors.

I like this approach. It also reminds me how important it is to choose, not only the colours, but more importantly, the words carefully. Specially when talking about sustainability.

This aspect  is particularly clear in the other article that I wanted to share:

How to get your Board engaged in sustainability?

Written by Sally Uren, a “Deputy person @forum4thefuture. On a mission to create a sustainable future” as mentioned on her Twitter account, this brilliant article gives very smart pieces of advice to sustainability practitioners. Among them, Sally mentions the importance of “Using the right language.” She writes:

“Tailor your language to make the case as compelling as possible – use the language of business. So it’s ecosystem asset, not rainforest; it’s supply chain security, not running low on resources, for example.”

I couldn’t agree more. Using the language of business and, even more importantly, adapting your vocabulary and style to the personality of your interlocutor is fundamental, specially when presenting sustainability to political and rational decision-makers, as described by Sally in her post. Those two types of personality styles are more likely to be found in a Board room than the emotional one. The ideal situation would be to have a good balance of those three styles in a Board room, individually or as a team. That’s why diversity is so important as discussed in a previous post.

Well, in case you have to present some day a sustainability project in a Board room full of “emotional decision-makers” I can recommend the following video sent by my friend Gaelle, a brilliant manager at SAP. She has the right balance between emotional, rational and political decision-making styles, and she’s passionate about sustainability.

Enjoy and have a wonderful (green or multicoloured) week-end!

CSR conversations: Guy Bigwood, Sustainability Director

On my quest to the definition of Corporate Social Responsibility and Sustainability, I had lunch yesterday in Barcelona with Guy Bigwood, a Global CSR Professional dedicated to increasing the sustainability of the Meetings and Events Industry, Corporate Sustainability Director with MCI and current President of GMIC, the Green Meeting Industry Council. Guy was busy writing MCI’s 2010 CSR report and preparing GMIC next week conference where he will deliver a series of keynotes, so I really appreciate the time he spent with me discussing their 2009 Corporate Social Responsibility report, sustainability in the meeting industry and CSR in general.

MCI’s journey to sustainability started few years ago, with the company becoming in 2007 the first in its industry to join the United Nations Global Compact. MCI is a globally integrated association, communication and events management company with offices in 20 countries and about 900 employees worldwide. Its 2009 Corporate Social Report  describe the initiatives led by Guy Bigwood and his team through 5 majors area: leadership in the industry, employee development and well-being, environmental impact reduction, customer focused initiatives and impact on local communities. What is clear in the report is the involvement of the company’s leadership in the sustainability strategy, something particularly interesting as this topic was quite new to the top management team, but also the leading position of MCI in its industry.Finally,  the initiatives related to the  environment are definitely a major aspect of MCI sustainability strategy. Something I found really great in the report was that it also mentions the key learning points and improvement areas. Guy confirmed for example that there’s a need for key metrics in future reports. Although the 2010 report, due to be released in April, will still be published as a separate report, integrated reporting remaining the ultimate goal, it will contain more KPIs and measurements of the impact of the company’s sustainability initiatives. The specific GRI guidelines for the event industry, which draft was published yesterday, will help.  HR is  also an area where specific indicators, such as employee satisfaction, talent retention, or employee turnover, could be useful too. Guy confirmed that the HR department is definitely supporting the group’s CSR initiatives, something essential as discussed in a previous blog post, with proven results in many of their regions. The MCI Dublin Office, for example, won in 2009 the Irish Independent Great Places to work award. My guess is that the great job done there has something to do with the local employees perception of their work environment. Measuring this through specific indicators, as well as sharing best practices, could help working on employee engagement in the other regions. Guy and I also share the idea that middle-management is a key element of a successful sustainability strategy as discussed in a previous post.

MCI defines CSR as “a business strategy which strives for financial viability, in harmony with the planet and its people“.

 Guy and I discussed the current debate around the terminology and the efforts that CSR practitioners are undertaking to come up with a more consistent definition of those concepts. Regarding the debate, I share Alberto Andreu’s idea that the concept of CSR “is broken and that it’s urgent to fix it“. Alberto Andreu, who is Managing Director of Corporate Reputation and CSR at Telefónica and Professor of Organizational Behaviour at IE Business School, also considers that there’s a cultural bias that makes it difficult to get to a consistent definition of CSR on both sides of the Atlantic. I couldn’t agree more. In the US the legal perspective prevails and CSR initiatives are often reduced to the minimum compliance requirements, anything beyond that being “illegal or insincere”, or are only acceptable when they are synonym for philanthropy or charity, while Europe, which seems to be moving towards mandatory CSR reporting, has a broader perspective that involves the development of responsible business practices and a strong focus on the companies impact on their “ecosystem”.

 Alberto Andreu writes that “the line of progress, is in the definition made by the Dow Jones Sustainability Index (DJSI): “Corporate Sustainability – it states – is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments”.

This definition is close to another one that I mentioned in a previous post: SAP’s definition for sustainability: “holistically manage economic, environmental and social risks and opportunities“. As you can see, it seems quite complicated to avoid  “buzzwords” and this is exactly what anti-CSR advocates argue: CSR and sustainability are nothing but buzzwords. Note that their speech is usually not exempt of jargon.

Buzzword or not, what matters is execution. There’s a business case for sustainability, an urgent need for sustainable development, in a world with limited resources, and that requires more than words: strategic, powerful, comprehensive and measurable CSR initiatives.

CSR in one word: Opportunity

It seems quite challenging to describe what CSR is in 140 words or less. But it’s a great exercise. Leon Kaye, GreenGoPost.com‘s Founder, Features Editor & Lead Writer at Triple Pundit , Business Consultant and Balkans Advocate recently asked the CSR crowd on Twitter to give it a try :  #CSR and #Corpgov in Tweet-Speak: Express Yourself in 140 Characters (or Less!)

I decided not to use one of the many definitions written by others that I’ve read about the topic in last few years. Instead I tried to define it with my own words and came up with the following definition:

CSR= an opportunity for companies to ensure a sustainable growth while meeting the needs & concerns of their stakeholders

I wanted to avoid buzzwords but, in my opinion, the objective of Social Responsibility, including Corporate SR, is to contribute to sustainable development, so I couldn’t leave this word apart. Stakeholders? Well, employees, shareholders, customers, partners, providers, as Todays’ business world is far more interconnected than it was when Milton Friedman expressed its now infamous idea that the only responsibility a business has is towards its shareholders, nobody can deny that the value demanded by customers, employees, job seekers has created a profound market shift that companies can’t ignore. As SAP’s Chief Sustainability Officer, Peter Graf, put it recently, “sustainability is a trend as important as Internet or the globalization itself” and, “it’s here to say”, creating a world of “new winners and losers”.

That’s the reason why I’m using the word “opportunity“. Compliance is not a strategy, going beyond business is,  and it’s also a fantastic opportunity for companies to manage successfully the new market shifts around value creation: value demanded by stakeholders as previously said, value delivered by the company through its products and its supply chain and the value graded by financial markets, governments and NGOs. Companies that fail to see CSR as an opportunity simply won’t survive.

The business case for CSR: the financial impact of social commitments & initiatives.

This weekend, as reported by JustMeans, US President Obama’s sent a clear message to the Private Sector: CSR Is Your Obligation (and It’s Good for the Economy, Too), prompting Stephen M. Bainbridge,  a Law professor at UCLA, to produce yet another “piece of evidence” in the case against CSR. According to the Author, President Obama, who preaches the “false religion of Corporate Social Responsibility“, is “wrong” because the “obligation of business is to sustainably maximize long-term profits for shareholder”.  Like many CSR opponents his claim is that a company engaging in CSR actions can only have two motives: being illegal or being insincere.  

Interestingly, on the other side of the bench, I came across the results of a study led by Alan Fustec, professor at the School of Economic and Social Development (ESDES) in Lyon, France, measuring the financial impact of the French Railways Company SNCF’s CSR social commitments and initiatives, more specifically the initiatives targeting the local community and the general public in the community.

 “While these programs are often considered as a cost only, the study shows a net gain for the company and the community,” says Professor Fustec. “5 million euro for the company, and 6.4 million for the community,” adds Vincent Bouznad, from the Department for Sustainable Development at SNCF.

Five major initiatives, conducted in the past two years, have been studied: the use of social enterprises for maintenance works and services, the presence of social mediators in trains, school presentations to teach young people the consequences of their acts (pull the alarm unnecessarily, vandalism …), the fight against exclusion of homeless people and the responsible purchasing of goods and services.

“For each action, we  measured the cost (grants to associations, wages, working hours that are spent by employees of the company …), the gain for SNCF (cost-benefit analysis, reduced vandalism, impact on train delays …) and the gain for the community (lower unemployment or subsidies, impact of train delays on passengers, savings in terms of days in prison, greater security. ..), “said Alan Fustec.

A big surprise came from those results: they clearly demonstrated that the initiatives had a positive financial impact both on the company and the society. Besides strengthening SNCF’s public service mission and role in promoting social cohesion, the study, according to Vincent Bouznad also had a positive impact on the operations of the company itself: it contributed to raise managers’ awareness and encouraged them to identify new ways of doing business, therefore creating a “virtuous circle”.

Professor Bainbridge, just like many anti-CSR advocates, tend to forget that there are companies out there that are being sincere in their commitments towards the local communities in which they operate. If a company like SNCF, independently of its legal status and country can achieve positive financial outcomes through its social initiatives why wouldn’t it be the case for US companies? And who says that those actions don’t contribute to “sustainably maximize long-term profits for shareholders” as well?

The Future of Energy in Europe

Today, February 4th,  European Union leaders are holding their first ever energy summit. Although the policy agenda looks likely to be overshadowed by  pressing issues such as Egypt and the eurozone debt crisis, Europe must significantly enhance its climate action, without any delay, to stay on track toward meeting the goals mandated by law under the EU Climate and Energy Package of 2008.

In March 2007 the EU’s leaders endorsed an integrated approach to climate and energy policy that aimed to combat climate change and increase the EU’s energy security while strengthening its competitiveness. They committed Europe to transforming itself into a highly energy-efficient, low-carbon economy.

To kick-start this process, the EU Heads of State and Government set a series of demanding climate and energy targets to be met by 2020, known as the “20-20-20” targets:

• A reduction in EU greenhouse gas emissions of at least 20% below 1990 levels
• 20% of EU energy consumption to come from renewable resources
• A 20% reduction in primary energy use compared with projected levels, to be achieved by improving energy efficiency.

In January 2008 the European Commission proposed binding legislation to implement the 20-20-20 targets. This ‘climate and energy package’ was agreed by the European Parliament and Council in December 2008 and became law in June 2009.

The EU leaders also made a conditional commitment to scale up the EU’s GHG emissions reduction for 2020 from 20% to 30% if “other developed countries commit themselves to comparable emission reductions and economically more advanced developing countries contribute adequately to a global effort according to their responsibilities and respective capabilities”.

 

In May 2010, despite the actions of certain companies and strong internal opposition within the European Commission itself, arguing that the conditions had not yet been met, a detailed EU analysis showed that, due to the economic changes of the last two years, achieving a 30% target was now almost as inexpensive as achieving a 20% target was estimated to be in 2008“

The additional question is if Europe can meet its long-term climate target of 80 to 95% emissions reductions by 2050?  (from 1990 levels).

Ahead of this week’s meeting , during the presentation of  an independent study by Öko-Institut that sets out a detailed energy scenario for Europe up to 2050, the Greens/EFA energy spokesperson Claude Turmes urged the EU leaders to “set out a course to ensure the EU becomes an energy leader and not an energy loser”.

Greens/EFA co-president Rebecca Harms added:

 “Further delaying decisive action on energy efficiency and renewables will heighten the risk that Europe will lose out to emerging economies like China in the growing green tech sector. We also need to move swiftly to reduce our damaging dependence on energy imports, which leads to the transfer of € billions to oil, gas and nuclear exporting countries. Investing in energy efficiency, home grown renewable energy and energy infrastructure would not only ensure Europe remains a leader in this emerging market and act as a crucial source of employment creation, it would also save Europe €130 billion in 2020, €260 billion in 2030 and €455 billion in 2050. We simply cannot afford to take another path.”

   

According to Jason Anderson, spokesman for the World Wildlife Fund:

“It is essential for Europe to reduce our dependence on expensive, polluting, insecure energy sources.”

 

Clear priorities mus be set to ensure immediate action. Existing priorities should also be revisited. The Iter nuclear fusion reactor project for example, which European financing rescue plan has been rejected last December by the European Parliament. This project, viewed by its defender as the future of clean energy, has been strongly opposed by Greenpeace International and other ecologist organizations in Europe and particularly in France, were the reactor is being built. According to Greenpeace’s Jan Vande Putte,  “Governments should not waste our money on a dangerous toy which will never deliver any useful energy”. “Instead, they should invest in renewable energy which is abundantly available, not in 2080 but today.”



Sustainability Awards: Doctor Knight and Mister Eye?

Dr C. Knight during the day. Mr. P. Eye at night? The Finnish energy corporation Neste Oil has received simultaneously, two very different distinctions. One for its “Irresponsible Corporate Behavior”, as a winner of the Public Eye Award, a “contest” organized by Berne Declaration and Greenpeace, and dedicated to highlighting the “most evil corporation of the year” from six candidates chosen by the organizers. The other, as a privileged member of the 100 World’s Most Sustainable Companies list established by the Canadian magazine Corporate Knights that “worked with a research firm to winnow down its list of publicly traded companies from 3,000 to 300”, based on financial performance and other criteria.

According to the Public Eye Award organizers, “Within the next two years the Finnish energy corporation Neste Oil is on track to become the number one buyer of palm oil and the world’s largest producer of biofuels”. Even today, they add, “under the misleading label “Neste Green Diesel”, the company sells “biodiesel” made from palm oil throughout Europe. IOI, Neste’s main supplier, has doubled its palm oil concessions as Neste is expanding its productive capacity in Rotterdam and Singapore”. The organizers explain that this a really bad behaviour because, and they’re absolutely right about that, “vast expanses of precious rainforest are sacrificed to the growing European demand for palm oil”. More importantly this production “requires chemicals that poison workers, villages, soil, water, fauna, and flora. The transformation of rainforests into plantations also destroys the habitats of endangered species such as the orangutan.”

In a public statement Neste Oil says it is “disappointed in the outcome of the Public Eye Award announced today and believes that it does not reflect the true nature of the situation. The company adds that it only buys “palm oil produced according to sustainable principles with a verifiable origin that is available” and reminds that it has” received extensive positive international recognition” for its “responsible approach from independent expert bodies in a number of reviews and indexes”. The most recent example of this being the Forest Footprint Disclosure 2010 Report published recently, in which” Neste Oil was ranked as the best oil company in terms of its forest footprint reporting for the second time”.

As for the 100 World’s Most Sustainable Companies list, Corporate Knight “tapped intelligence from the world’s largest sustainability research alliance to isolate the top ten per cent of companies from a universe of 3000 global stocks, which were then transparently ranked based on 10 verified indicators” such as Leadership Diversity, Carbon, Water and Safety productivity. The magazine also mentions that some “controversy research was incorporated into its assessment of each company to provide risk mitigation against companies with severe controversies that could be deleterious to share valuation.”

I’m not sure if controversy could be avoided regarding such a very sensitive topic. On the one hand, the risk is that the general public loses interest in those rankings and awards, and unfortunately, in sustainability in general, because of a lack of credibility of public and private organisms that monitor its execution.  But on the other end, public debate, transparency and critical thinking can help advance the cause of sustainability, avoid greenwash and window-dressing and ensure that companies achieving positive results on some specific indicators stop addressing the concerns of other legitimate stakeholders.