Last weekend I attended the gala screening of “Fast Food Nation” at the 50th London Film Festival. The director, author, and a pair of the film’s stars were in attendance, and after customary salutations, Richard Linklater took the stage to intro the film. He explained that they wanted the movie to give a voice to characters and ideas that “perhaps we don’t want to think about and often don’t get shown,” but are a very real aspect of contemporary America.
Indeed from the opening credits, viewers take a turn and are confronted with a morality play more awkward to scale than any fence in the desert. Migrant workers, environmental degradation, the unraveling of social fabric, safe and sanitary working conditions, nutrition... all are scaled, attempting to highlight the interconnections and complexity involved with a simple hamburger.
In this fictionalized adaptation of Eric Schlosser’s same-titled, non-fiction expose published in 2001, star cameos provide brevity to the weighty topic matter (Avril Lavigne as stylish student activist?!?). At first this take seems odd, the book clearly leans to documentary fodder. But the author explained that though he was approached by a number of documentary filmmakers, in the end he feared losing creative control.
Bruce Willis, playing Harry--Mickey’s supply chain manager cum conduit to cheap meat--gives a particularly enticing 2-minute monologue on the state of corporate affairs, concluding that “we all have to eat a little shit now and then.”
And though the film at times gets bogged down by its multifaceted storytelling, on the whole it remains poignant: Can we fault hope and determination just because it springs from an illegal, undocumented migrant worker from Mexico? Can we fault industrial meatpacking plants if they are operating within regulated guidelines?
This is not an anti-fast food industry movie, it is open-ended look at the facts of the matter. Whether or not you choose to head out for a ‘Big One’ or a quarter-pounder of any stripe after the show ultimately remains your own decision.
James Nevison
Tuesday, October 31, 2006
Monday, October 30, 2006
Climate noise, carbon neutral company, and offsets
A couple of interesting climate-related media stories over the weekend and today.
Firstly, the company formerly known as Future Forests, now the Carbon Neutral Company, took a beating from the BBC's 5 live report on Sunday.
http://www.bbc.co.uk/fivelive/programmes/fivelivereport.shtml
Then, the long awaited Stern report came out on the costs of climate change:
http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm
On the Carbon Neutral Company, the BBC went after them for selling rights to carbon in trees that existed anyway and would probably not be cut down anyhow. The BBC reporter talked of rights being sold for some seventeen pounds per tree when they had been bought for less than a pound. Secondly, they brought in George Monbiot and NGO critics like Greenpeace, to talk about carbon offsetting not really being a solution. While the Carbon Neutral Company chose not to take part and defend itself, the founder of a rival firm, Climate Care, Mike Mason, made an eloquent defence of his firm's work with Ford's Land Drover division.
Whether the CCC has been 'unfairly' (define that!) marking up the rights to trees (and letting customers think they 'own' the trees, when they don't), the BBC's evidence of mis-selling was sketchy to say the least. The wider debate about whether offsetting actually does anything was much more interesting.
Mike Mason of Climate Care http://www.climatecare.org (a hybrid, non-profit/for profit company) did well to explain how and why they work with Land Rover on emissions reduction.
In the face of NGO critiscism that carbon emissions have actually gone up at the company (factoring in factory emissions) he said that the intentions were right at the higher levels of the firm, and that management increasingly realises they are operating in an increasingly carbon-constrained environment (sic). This means Premier Automotive's (umbrella of luxury brands owned by Ford that contains LR) committment to some one billion pounds in carbon cutting technology should be recognisd, he said.
Having worked in the auto industry in the past, I am not surprised to hear it will take some time for Land Rover to adapt, after all, their cars are naturally gas guzzling and re-tooling factories and putting into production new designs takes years. Look at how long it has taken Toyota to gain critical marketing mass on the Prius (it has cost them a fortune so far).
Not that Ford, and others, couldn't do a lot more of course, but they need to do it without going bust in the meantime.
What was interesting about the discussion on offsetting in the radio programme was the debate about offsetting carbon in developing countries. The G8 offset money spent by the UK government (some 50K) after last year's G8 summit in South Africa, seems to have been largely spent on red tape, the programme alleged.
If this is true, and it appears that it is, it does raise important, not-yet discussed questions about how to get the balance right between making sure things happen properly on the offset side, and spending money where it can actually have an impact.
Whereas NGOs used to be accused of (and still are) spending too much money on administration, so carbon offsetters look likely to be accused of handing out too much money on monitoring (big 4 accountants were mentioned) and assurance in the future.
On the Stern report, it does seem the government, indeed all parties, have now woken up to the need for beyond-Kyoto action, and all speak of green taxes as a solution.
Sounds sensible, especially if adding on tax in one place means taking it away in another, but the electorate will await real policies, and politicians may have to recognise that it will take a while yet before votes are decided on a green basis.
This will mean real leadership being shown in the meantime. Who has the guts in a 5 year election cycle to make and defend initially-unpopular electorate-leading actions?
Toby Webb, Editor
Firstly, the company formerly known as Future Forests, now the Carbon Neutral Company, took a beating from the BBC's 5 live report on Sunday.
http://www.bbc.co.uk/fivelive/programmes/fivelivereport.shtml
Then, the long awaited Stern report came out on the costs of climate change:
http://www.hm-treasury.gov.uk/independent_reviews/stern_review_economics_climate_change/sternreview_index.cfm
On the Carbon Neutral Company, the BBC went after them for selling rights to carbon in trees that existed anyway and would probably not be cut down anyhow. The BBC reporter talked of rights being sold for some seventeen pounds per tree when they had been bought for less than a pound. Secondly, they brought in George Monbiot and NGO critics like Greenpeace, to talk about carbon offsetting not really being a solution. While the Carbon Neutral Company chose not to take part and defend itself, the founder of a rival firm, Climate Care, Mike Mason, made an eloquent defence of his firm's work with Ford's Land Drover division.
Whether the CCC has been 'unfairly' (define that!) marking up the rights to trees (and letting customers think they 'own' the trees, when they don't), the BBC's evidence of mis-selling was sketchy to say the least. The wider debate about whether offsetting actually does anything was much more interesting.
Mike Mason of Climate Care http://www.climatecare.org (a hybrid, non-profit/for profit company) did well to explain how and why they work with Land Rover on emissions reduction.
In the face of NGO critiscism that carbon emissions have actually gone up at the company (factoring in factory emissions) he said that the intentions were right at the higher levels of the firm, and that management increasingly realises they are operating in an increasingly carbon-constrained environment (sic). This means Premier Automotive's (umbrella of luxury brands owned by Ford that contains LR) committment to some one billion pounds in carbon cutting technology should be recognisd, he said.
Having worked in the auto industry in the past, I am not surprised to hear it will take some time for Land Rover to adapt, after all, their cars are naturally gas guzzling and re-tooling factories and putting into production new designs takes years. Look at how long it has taken Toyota to gain critical marketing mass on the Prius (it has cost them a fortune so far).
Not that Ford, and others, couldn't do a lot more of course, but they need to do it without going bust in the meantime.
What was interesting about the discussion on offsetting in the radio programme was the debate about offsetting carbon in developing countries. The G8 offset money spent by the UK government (some 50K) after last year's G8 summit in South Africa, seems to have been largely spent on red tape, the programme alleged.
If this is true, and it appears that it is, it does raise important, not-yet discussed questions about how to get the balance right between making sure things happen properly on the offset side, and spending money where it can actually have an impact.
Whereas NGOs used to be accused of (and still are) spending too much money on administration, so carbon offsetters look likely to be accused of handing out too much money on monitoring (big 4 accountants were mentioned) and assurance in the future.
On the Stern report, it does seem the government, indeed all parties, have now woken up to the need for beyond-Kyoto action, and all speak of green taxes as a solution.
Sounds sensible, especially if adding on tax in one place means taking it away in another, but the electorate will await real policies, and politicians may have to recognise that it will take a while yet before votes are decided on a green basis.
This will mean real leadership being shown in the meantime. Who has the guts in a 5 year election cycle to make and defend initially-unpopular electorate-leading actions?
Toby Webb, Editor
Thursday, October 26, 2006
Ethical MBA's...?
Yesterday's FT carried an interesting piece, a new report by Net Impact, the student sustainability body for MBA's.
The survey undertaken by Net Impact shows that out of 2100 MBA students in 87 programmes in the US and Canada, 81 per cent said that profit and social responsibility can co-exist.
Is the ghost of the still-living Milton Friedman fading away? Well perhaps. Some 90 per cent of the students said business leaders should factor in social and environmental issues into decision making, but only 60 per cent of the 90 thought such an approach could be profitable.
While some 78 per cent believed CSR classes should be core to their courses, and 80 per cent wanted to find "socially responsible" employment "at some point" in their careers, an amazing 59 per cent said they would seek such work when finishing their MBA's.
That last stat is astonishing, but will they change their minds when the bank manager comes a' knocking? And what makes us believe that the broader student body is any different from the average consumer, talking the talk in surveys, but finding it too hard to make ethical choices in the real world (or too expensive)?
The survey results seem based on Net Impact members, so perhaps the big 59 per cent stat is unrepresentative of the majority of MBA's. That would seem likely.
The FT concludes by pointing out that a separate survey found that 56 per cent of MBA students admit to cheating at some point on their courses. A worrying statistic for the future of business ethics. Is it the MBA system that's at fault for pushing too hard? That would be an easy conclusion.
Most probably its also about the natural human tendency to get ahead by taking shortcuts where they present themselves. I doubt we'll ever breed out that particular genetic desire...
http://www.ft.com/cms/s/ee45a804-63c5-11db-bc82-0000779e2340.html
Toby, Editor
The survey undertaken by Net Impact shows that out of 2100 MBA students in 87 programmes in the US and Canada, 81 per cent said that profit and social responsibility can co-exist.
Is the ghost of the still-living Milton Friedman fading away? Well perhaps. Some 90 per cent of the students said business leaders should factor in social and environmental issues into decision making, but only 60 per cent of the 90 thought such an approach could be profitable.
While some 78 per cent believed CSR classes should be core to their courses, and 80 per cent wanted to find "socially responsible" employment "at some point" in their careers, an amazing 59 per cent said they would seek such work when finishing their MBA's.
That last stat is astonishing, but will they change their minds when the bank manager comes a' knocking? And what makes us believe that the broader student body is any different from the average consumer, talking the talk in surveys, but finding it too hard to make ethical choices in the real world (or too expensive)?
The survey results seem based on Net Impact members, so perhaps the big 59 per cent stat is unrepresentative of the majority of MBA's. That would seem likely.
The FT concludes by pointing out that a separate survey found that 56 per cent of MBA students admit to cheating at some point on their courses. A worrying statistic for the future of business ethics. Is it the MBA system that's at fault for pushing too hard? That would be an easy conclusion.
Most probably its also about the natural human tendency to get ahead by taking shortcuts where they present themselves. I doubt we'll ever breed out that particular genetic desire...
http://www.ft.com/cms/s/ee45a804-63c5-11db-bc82-0000779e2340.html
Toby, Editor
Wednesday, October 25, 2006
An OFR by any other name? Well, kind of
In the finest tradition of government riven by splits between camps, the UK Companies bill, the biggest change in company law in a decard, has once again been changed at the last minute.
Corporate responsibility-minded readers will recall that not too long ago, the much heralded Operating and Financial Review requirement was scrapped by Gordon Brown at the last minute as overly onerous.
The OFR production requirement on companies was to ask them to disclose relevant social and environmental risk to their business to investors, subject to the judgement of directors.
In light of an EU requirement for a company to begin producing a Business Review for investors, this was apparently justified, notwithstanding that almost everyone agreed the OFR, in principle, was a good idea. For many it was seen as a way of encouraging the the laggards among Britain's 1300 or so listed companies. Search http://www.ethicalcorp.com for all the background on the OFR.
Now, Margaret Hodge, the sixth or so CSR minister in the same number of years (none of them actually do much, if anything) announced last week that Labour had slipped another requirement into the companies bill, which has not been previously mentioned or consulted upon.
The measure is designed to ask businesses to publish information about their supply chains. However, the business lobby is complaining that the wording is so vague it could force directors to reveal commercially and legally sensitive information.
The bill, which is likely to become law inside a month, will require quoted companies to include in their annual business review "information about persons with whom the company has contractual or other arrangements which are essential to the business of the company". Companies believe this to be too vague, or at least their lobby groups do.
The CBI and the IOD are threatening to go over Hodge's head (as much apparently does) to the big Kahuna in waiting, Brown himself, to get all this overturned.
So what's going on here? The answer is not, and may not become, immediately clear. Is the government back tracking on a backtrack? Or is this the DTI feuding with the Treasury yet again, as it did over the OFR. Perhaps Brown will be too busy to notice, but bearing in mind the voice of the City in government, that seems unlikely.
The FT today quotes DTI officials as saying that the amendment gave directors discretion to disclose relevant information only, adding: "It's up to their judgement what they put in the business review."
So is this late change a good way to encourage companies to report on supply chain risk, or at least think about it? Or an overly onerous requirement on business? Post your own comments . Personally I prefer other methods than regulatory to encourage reporting and disclosure, but legislation should eventually be resorted to once all other avenues have been exhausted. Many of these remain unexplored though, which is why this move smacks somewhat of heavy-handedness.
This space, it would appear, warrants watching.
Toby Webb, Editor
Corporate responsibility-minded readers will recall that not too long ago, the much heralded Operating and Financial Review requirement was scrapped by Gordon Brown at the last minute as overly onerous.
The OFR production requirement on companies was to ask them to disclose relevant social and environmental risk to their business to investors, subject to the judgement of directors.
In light of an EU requirement for a company to begin producing a Business Review for investors, this was apparently justified, notwithstanding that almost everyone agreed the OFR, in principle, was a good idea. For many it was seen as a way of encouraging the the laggards among Britain's 1300 or so listed companies. Search http://www.ethicalcorp.com for all the background on the OFR.
Now, Margaret Hodge, the sixth or so CSR minister in the same number of years (none of them actually do much, if anything) announced last week that Labour had slipped another requirement into the companies bill, which has not been previously mentioned or consulted upon.
The measure is designed to ask businesses to publish information about their supply chains. However, the business lobby is complaining that the wording is so vague it could force directors to reveal commercially and legally sensitive information.
The bill, which is likely to become law inside a month, will require quoted companies to include in their annual business review "information about persons with whom the company has contractual or other arrangements which are essential to the business of the company". Companies believe this to be too vague, or at least their lobby groups do.
The CBI and the IOD are threatening to go over Hodge's head (as much apparently does) to the big Kahuna in waiting, Brown himself, to get all this overturned.
So what's going on here? The answer is not, and may not become, immediately clear. Is the government back tracking on a backtrack? Or is this the DTI feuding with the Treasury yet again, as it did over the OFR. Perhaps Brown will be too busy to notice, but bearing in mind the voice of the City in government, that seems unlikely.
The FT today quotes DTI officials as saying that the amendment gave directors discretion to disclose relevant information only, adding: "It's up to their judgement what they put in the business review."
So is this late change a good way to encourage companies to report on supply chain risk, or at least think about it? Or an overly onerous requirement on business? Post your own comments . Personally I prefer other methods than regulatory to encourage reporting and disclosure, but legislation should eventually be resorted to once all other avenues have been exhausted. Many of these remain unexplored though, which is why this move smacks somewhat of heavy-handedness.
This space, it would appear, warrants watching.
Toby Webb, Editor
Tuesday, October 24, 2006
China's red and smelly river
Despite the massive toxic spill that made the world’s press last year in Heilongjiang province that saw the city of Harbin reduced to bottled water and several downstream Russian Far East threatened something similar has happened again.
After the Harbin spill there was much hand wronging in the offices of the environmental protection agency in Beijing and some sackings after local officials tried to cover up and delay news on the spill. ‘Never again’ was the cry.
Well now we discover that a half-mile section of China’s Yellow River turned "red and smelly" after an unknown discharge was poured into it from a sewage pipe, according to the state media said.
This time the incident was in Lanzhou, a city of 2 million people in western Gansu province. Again the city was forced to shut down its water system.
We await some blame and see who will fall on their sword this time round.
Paul French, China Editor
For background articles, see: http://www.ethicalcorp.com/content.asp?ContentID=3994
and: http://www.ethicalcorp.com/content.asp?ContentID=4207
After the Harbin spill there was much hand wronging in the offices of the environmental protection agency in Beijing and some sackings after local officials tried to cover up and delay news on the spill. ‘Never again’ was the cry.
Well now we discover that a half-mile section of China’s Yellow River turned "red and smelly" after an unknown discharge was poured into it from a sewage pipe, according to the state media said.
This time the incident was in Lanzhou, a city of 2 million people in western Gansu province. Again the city was forced to shut down its water system.
We await some blame and see who will fall on their sword this time round.
Paul French, China Editor
For background articles, see: http://www.ethicalcorp.com/content.asp?ContentID=3994
and: http://www.ethicalcorp.com/content.asp?ContentID=4207
Monday, October 23, 2006
Trouble at mill
Oliver Balch Latin America Editor here.
January to Argentines is what August is to most mainland Europeans. Restaurants close their shutters, shops bolt their doors and everyone heads off to the beach for a month. The place to be seen for trendy Argentines (“VIP”, “Top”, ”fashionistas” as the jet set is variously known here) is Punta del Este. The sun-bathing salons of Buenos Aires are already beginning to fill up as people prepare their base tans for the annual pilgrimage to the über-cool Uruguayan beach resort.
There’s a problem, though. The Uruguayan government has given permission to two European pulp companies to build some gigantic mills on the border with Argentina. The move has sparked a furious dispute that has been running now for well over a year (ever on the pulse, Ethical Corporation reported on this first in May 2005). On the Argentine side, local residents near the mills say they are an eye-sore and a potential source of toxic contamination. For their part, the Uruguayans argue that the mills represent much needed investment. Where the diplomats failed, the protestors have moved in. Last year, Argentines took to blocking the main road networks into Uruguay. Tourist numbers in Punta del Este dropped as much as 50% in the high season. Uruguay’s tourist industry fear the same tactics will be used this summer as the dispute continues unabated.
The International Finance Corporation (IFC) came out in favour of Botnia’s mill last week after months of impact studies and further impact studies. Ence, the Spanish firm responsible for the second of the two mills, pre-empted the announcement by saying it was looking into new locations for its proposed mill. This eases the IFC’s job as much of the criticism from environmentalists had been focused on the cumulative impact of the two mills – i.e. both in their own right might tick all the boxes, but combined they represent a $1.8 billion project that presents all sorts of water and energy use issues. Ence has yet to announce where it plans to move to. Botnia is continuing full-steam ahead. The IFC’s decision also makes it easier for BBVA and Caylon, the private banks helping arrange financing for the projects. Both are members of the Equator Principles. “If it’s good enough for the IFC, it’s good enough for us” is their basic defense.
A law suit filed by Argentina is still pending in the International Court in the Hague, but it seems that the government here in Buenos Aires is now trying to back-peddle. President Kirchner has wrung out as much political mileage as he could from the issue (earlier in the year he travelled to Gualeguaychú, the epicenter of the opposition here, and pronounced that the environment was a “policy of state”). Very cleverly, the President made the head of the main NGO opposing the mills his new Environment Secretary. She is now calling on the protestors not to continue with the blockades. A canny policy of divide and conquer.
One good thing coming out of the whole affair is the commitment by the Argentine government to prioritise environmental issues in the future. Cleaning up the Riachuelo, the capital’s stinking river, is now top of the agenda. It is not the first time the government has tried. Under Carlos Menem, the Environment Secretary famously pledged to decontaminate the river in “1000 days”. She ended up going to prison for embezzling state funds. The river still reeks.
January to Argentines is what August is to most mainland Europeans. Restaurants close their shutters, shops bolt their doors and everyone heads off to the beach for a month. The place to be seen for trendy Argentines (“VIP”, “Top”, ”fashionistas” as the jet set is variously known here) is Punta del Este. The sun-bathing salons of Buenos Aires are already beginning to fill up as people prepare their base tans for the annual pilgrimage to the über-cool Uruguayan beach resort.
There’s a problem, though. The Uruguayan government has given permission to two European pulp companies to build some gigantic mills on the border with Argentina. The move has sparked a furious dispute that has been running now for well over a year (ever on the pulse, Ethical Corporation reported on this first in May 2005). On the Argentine side, local residents near the mills say they are an eye-sore and a potential source of toxic contamination. For their part, the Uruguayans argue that the mills represent much needed investment. Where the diplomats failed, the protestors have moved in. Last year, Argentines took to blocking the main road networks into Uruguay. Tourist numbers in Punta del Este dropped as much as 50% in the high season. Uruguay’s tourist industry fear the same tactics will be used this summer as the dispute continues unabated.
The International Finance Corporation (IFC) came out in favour of Botnia’s mill last week after months of impact studies and further impact studies. Ence, the Spanish firm responsible for the second of the two mills, pre-empted the announcement by saying it was looking into new locations for its proposed mill. This eases the IFC’s job as much of the criticism from environmentalists had been focused on the cumulative impact of the two mills – i.e. both in their own right might tick all the boxes, but combined they represent a $1.8 billion project that presents all sorts of water and energy use issues. Ence has yet to announce where it plans to move to. Botnia is continuing full-steam ahead. The IFC’s decision also makes it easier for BBVA and Caylon, the private banks helping arrange financing for the projects. Both are members of the Equator Principles. “If it’s good enough for the IFC, it’s good enough for us” is their basic defense.
A law suit filed by Argentina is still pending in the International Court in the Hague, but it seems that the government here in Buenos Aires is now trying to back-peddle. President Kirchner has wrung out as much political mileage as he could from the issue (earlier in the year he travelled to Gualeguaychú, the epicenter of the opposition here, and pronounced that the environment was a “policy of state”). Very cleverly, the President made the head of the main NGO opposing the mills his new Environment Secretary. She is now calling on the protestors not to continue with the blockades. A canny policy of divide and conquer.
One good thing coming out of the whole affair is the commitment by the Argentine government to prioritise environmental issues in the future. Cleaning up the Riachuelo, the capital’s stinking river, is now top of the agenda. It is not the first time the government has tried. Under Carlos Menem, the Environment Secretary famously pledged to decontaminate the river in “1000 days”. She ended up going to prison for embezzling state funds. The river still reeks.
Change through maturity
Lisa Roner, Ethical Corp's North America editor, checking in.
Just wanted to share some background thoughts and information on a story we've just wrapped up on Gerber's (a Novartis company) adoption of the FTSE4Good breast milk substitute marketing guidelines. Gerber is the first company to implement the guidelines and the first to make the index. It's a REALLY big step when you consider that the WHO code has been in place for more than a quarter of a century with little positive forward movement - until now - by companies to adhere to it. The FTSE guidelines are based on the WHO code, but go a step further by asking companies to show evidence of robust management systems and processes as well as verification.
A couple of notable things struck me as I worked on this piece. First, I am truly impressed by the level of commitment and maturity on both sides of this negotiation. The folks at FTSE and Gerber have been working toward this end for the better part of three years. For most of us, that's an awfully long time to remain committed to anything without taking our eye off the ball.
Gerber was quick to admit that the give and take process with FTSE was an "education" for them. They say freely that they began without a clue as to what FTSE's beef was with their marketing practices. And FTSE is quick to credit Gerber with being one of only a scant two or three who responded to their initial request for engagement with interest and a desire to learn more about how to comply.
It's refreshing to realize that Gerber made step-wise improvements throughout the 3 year engagement without fully knowing whether they would eventually make it onto the index. A real sign, in my opinion, that they are more interested in doing the "right" thing than in the eventual payoffs.
And last, and perhaps most significant, I would point out that neither FTSE nor Gerber has issued press releases trumpeting this achievement. To me at least, that is the most telling sign that both parties were in this for all the right reasons.
Positive, mature engagement with longterm, mutual, clear commitments to a meaningful end result with little to no public fanfare and back-patting in the end - now that's a story.
Just wanted to share some background thoughts and information on a story we've just wrapped up on Gerber's (a Novartis company) adoption of the FTSE4Good breast milk substitute marketing guidelines. Gerber is the first company to implement the guidelines and the first to make the index. It's a REALLY big step when you consider that the WHO code has been in place for more than a quarter of a century with little positive forward movement - until now - by companies to adhere to it. The FTSE guidelines are based on the WHO code, but go a step further by asking companies to show evidence of robust management systems and processes as well as verification.
A couple of notable things struck me as I worked on this piece. First, I am truly impressed by the level of commitment and maturity on both sides of this negotiation. The folks at FTSE and Gerber have been working toward this end for the better part of three years. For most of us, that's an awfully long time to remain committed to anything without taking our eye off the ball.
Gerber was quick to admit that the give and take process with FTSE was an "education" for them. They say freely that they began without a clue as to what FTSE's beef was with their marketing practices. And FTSE is quick to credit Gerber with being one of only a scant two or three who responded to their initial request for engagement with interest and a desire to learn more about how to comply.
It's refreshing to realize that Gerber made step-wise improvements throughout the 3 year engagement without fully knowing whether they would eventually make it onto the index. A real sign, in my opinion, that they are more interested in doing the "right" thing than in the eventual payoffs.
And last, and perhaps most significant, I would point out that neither FTSE nor Gerber has issued press releases trumpeting this achievement. To me at least, that is the most telling sign that both parties were in this for all the right reasons.
Positive, mature engagement with longterm, mutual, clear commitments to a meaningful end result with little to no public fanfare and back-patting in the end - now that's a story.
Saturday, October 21, 2006
Sexing up the magazine, via the blog?
Peter (EC political editor) and I had lunch yesterday with a good contact of ours who suggested we spice things up in the magazine and on the website a bit.
Rather than carrying dubious personal classifieds ('green swingers' etc) we thought instead we'd start an anonymous column focusing on a bit of gossip here and there, the juicy little anecdotes that are of interest to most.
Here's a few tasters: Which COO of a major multinational bank cuts off the ties of employees that offend him, and won't let anyone in his sight carry a bag WITHOUT a corporate logo on it? Answers in comment perhaps?
And which top retailer's cracking CR manager has a new head of comms who just doesn't get it at all. Will the CEO intervene before the talent leaves? Time will tell.
We're playing around with a name for the new section. CSRBitch was rejected immediately. Perhaps fellow editors and readers might suggest some?
Toby, Editor.
Rather than carrying dubious personal classifieds ('green swingers' etc) we thought instead we'd start an anonymous column focusing on a bit of gossip here and there, the juicy little anecdotes that are of interest to most.
Here's a few tasters: Which COO of a major multinational bank cuts off the ties of employees that offend him, and won't let anyone in his sight carry a bag WITHOUT a corporate logo on it? Answers in comment perhaps?
And which top retailer's cracking CR manager has a new head of comms who just doesn't get it at all. Will the CEO intervene before the talent leaves? Time will tell.
We're playing around with a name for the new section. CSRBitch was rejected immediately. Perhaps fellow editors and readers might suggest some?
Toby, Editor.
A Small Japanese Towns View on the North Korean Sanctions Debate
I just got back from a whirlwind trip to Tokyo where all the talk in the media of the North Korean nuclear crisis - perhaps unsurprisingly. In the next issue of Ethical Corporation we'll talk a little more about what the sanctions package proposed will actually mean for the DPRK, its people and foreign businesses already in the country and considering investments.
Still though the Japanese press was overwhelmingly pro-sanctions it seems those people living and working in the port towns that receive DPRK vessels are not so sure about the whole thing.
Maizuru in Kyoto Prefecture and, to a lesser extent, Sakaminato in Tottori Prefecture, locals are not so happy to lose business from and to the DPRK. Maizuru is the main port of call for those DPRK vessels now banned – around 250 ships a year representing approximately ¥4.5 billion in bilateral trade a year. Exports passing through Maizuru to the DPRK amounted to ¥1.73 billion in 2005, while imports from the North to Maizuru were¥2.8 billion (mostly cheap suits and seafood).
According to the generally dreary newspaper The Japan Times (slogan ‘All the News Without Fear or Favour’, though local wags suggest it should actually read ‘All the News Without Taste or Flavour’), the North Koreans mostly use Maizuru to ship second hand bicycles to the DPRK – which account for 40% of all exports. Some trade - imahine the impact of blockading those secondhand bikes on the DPRK's economy.
Paul French - China Editor, Ethical Corporation
And also in a shameless plug the author of the book North Korea - The Paranoid Peninsula, see Amazon.com.
Still though the Japanese press was overwhelmingly pro-sanctions it seems those people living and working in the port towns that receive DPRK vessels are not so sure about the whole thing.
Maizuru in Kyoto Prefecture and, to a lesser extent, Sakaminato in Tottori Prefecture, locals are not so happy to lose business from and to the DPRK. Maizuru is the main port of call for those DPRK vessels now banned – around 250 ships a year representing approximately ¥4.5 billion in bilateral trade a year. Exports passing through Maizuru to the DPRK amounted to ¥1.73 billion in 2005, while imports from the North to Maizuru were¥2.8 billion (mostly cheap suits and seafood).
According to the generally dreary newspaper The Japan Times (slogan ‘All the News Without Fear or Favour’, though local wags suggest it should actually read ‘All the News Without Taste or Flavour’), the North Koreans mostly use Maizuru to ship second hand bicycles to the DPRK – which account for 40% of all exports. Some trade - imahine the impact of blockading those secondhand bikes on the DPRK's economy.
Paul French - China Editor, Ethical Corporation
And also in a shameless plug the author of the book North Korea - The Paranoid Peninsula, see Amazon.com.
A Little Background on the Shenanigans in Shanghai
We've been covering the events in Shanghai for Ethical Corporation readers as an increasing number of senior officials have been implicated in the city's pension fund scandal - it's recently been announced that the man who runs the Shanghai F1 race track has been pulled in for questioning. The fall out continues - and one upshot is that companies with an exposure in Shanghai (notably property companies) may find this affecting their business operations, ability to raise finance or reputations if they are linked to disgraced politicians.
Anyway, the biggest head to roll so far is Chen Liangyu, formerly the Party Secretary for Shanghai - this is the most important post in the city in reality. So here are some previous shenanigans Mr Chen has been involved in for the background:
Yangshan – the Yangshan Deepwater Port is pre-eminent among Chen’s legacy to Shanghai and was controversial from the start. Ship captains didn’t like the location due to fast running waters, Ningbo was considered a better location but didn’t have the political clout to change the decision. The entire complex was widely known to be Chen Liangyu’s pet project. Despite the arguments, the port’s construction moved ahead. A major problem, little reported, was that in order to meet the tight deadlines for phase one of the port, work continued throughout the winter in appalling weather conditions – the result: a scary number of workers lost at sea, and in one instance, more fatalities when a ship sent to rescue men in trouble also lost several of its crew. Phase one was completed on time, and opened without some workers being able to attend due to their detention at the bottom of the sea. When the port did open, it was an instant success due to an order that all lines shipping to Europe relocate their operations there. One party of stunned European shippers we accompanied to the port noted that the port lacked a rail link – deemed fairly essential for efficiently offloading and on-shipping cargo. It seems that Shanghai could influence most things but not the lumbering Ministry of Railways.
Chongming – Comrade Chen led the charge to spoil the delightful car free nature reserve and migratory bird haven of Chongming Island, offshore from Shanghai. With Shanghai desperately short of green space and in urgent need of a surrounding ‘green lung’ to limit the polluting effects of untrammelled urbanisation and local industry, it was decided to destroy Chongming and turn it into part of the world’s largest shipyard complex bringing together the former Jiangnan yard and two others. Massive shipyards operating 24 hours a day are not considered attractive, either by holiday makers in need of recuperation, or migratory birds looking to rest their tired wings. Chen did not display many ornithological friendly tendencies. Of course, we are told that Shanghai residents are delighted by being home to the world’s largest shipyard – however, the hundreds of Chongming islanders now driving taxis around Shanghai invariably beg to differ at great length.
EXPO – Comrade Chen championed EXPO fever as his answer to Beijing’s Olympic bid. At the time, we asked a random sample of 50 Shanghainese if they were proud to be hosting EXPO 2010 – all 50 unanimously evinced pride. We asked the same 50 to describe the operation and point of an EXPO – all 50 admitted they didn’t really know what an EXPO was. Now 54,000 people are being relocated to make way for the EXPO tents. When the Shanghai media decided that news of Olympics 2008 preparations interested people more than EXPO developments, the local papers were ordered to restrict their reporting of 2008 news to the minimum stipulated by Beijing, and emphasis EXPO.
Compensation – Comrade Chen was involved in various arguments over the level and form of compensation and relocation payments made to Shanghai citizens as their homes were cleared for development in the city centre. Many were unhappy at low compensation rates and relocation to the margins of the municipality. Notable was the row over Jing’an district, were residents protested rushed relocation and poor compensation rates – they were arrested en-masse, prevented from travelling to Beijing to petition and their lawyer was arrested on charges of revealing state secrets and spreading Christianity. The same year, 14 other Shanghai lawyers had their licenses to practise removed for taking similar compensation cases.
Tongzhis – Perhaps the least offensive, but most bizarre, fiasco was Chen’s short lived campaign a couple of years ago to change Shanghai’s service industry etiquette. He criticised the widespread use of the terms xiaojie and xiansheng (Miss and Mr) as terms for addressing waitresses and waiters in restaurants, bars, etc. Too bourgeois, and rarely heard in Beijing. Keen to appear less bourgeois, yet not to imitate Beijing, Chen suggested using the term tongzhi (comrade) as a unisex mode of address for service workers. More than anything else, this revealed the disconnection between leaders and masses – in the intervening years since their elevation to the hallowed corridors of Shanghai City Hall, the term tongzhi had become widespread as a slang word for gay men. Someone eventually plucked up the courage to whisper in the Party Secretary’s ear, and the idea was quietly dropped.
Paul French, China Editor, Ethical Corporation
Anyway, the biggest head to roll so far is Chen Liangyu, formerly the Party Secretary for Shanghai - this is the most important post in the city in reality. So here are some previous shenanigans Mr Chen has been involved in for the background:
Yangshan – the Yangshan Deepwater Port is pre-eminent among Chen’s legacy to Shanghai and was controversial from the start. Ship captains didn’t like the location due to fast running waters, Ningbo was considered a better location but didn’t have the political clout to change the decision. The entire complex was widely known to be Chen Liangyu’s pet project. Despite the arguments, the port’s construction moved ahead. A major problem, little reported, was that in order to meet the tight deadlines for phase one of the port, work continued throughout the winter in appalling weather conditions – the result: a scary number of workers lost at sea, and in one instance, more fatalities when a ship sent to rescue men in trouble also lost several of its crew. Phase one was completed on time, and opened without some workers being able to attend due to their detention at the bottom of the sea. When the port did open, it was an instant success due to an order that all lines shipping to Europe relocate their operations there. One party of stunned European shippers we accompanied to the port noted that the port lacked a rail link – deemed fairly essential for efficiently offloading and on-shipping cargo. It seems that Shanghai could influence most things but not the lumbering Ministry of Railways.
Chongming – Comrade Chen led the charge to spoil the delightful car free nature reserve and migratory bird haven of Chongming Island, offshore from Shanghai. With Shanghai desperately short of green space and in urgent need of a surrounding ‘green lung’ to limit the polluting effects of untrammelled urbanisation and local industry, it was decided to destroy Chongming and turn it into part of the world’s largest shipyard complex bringing together the former Jiangnan yard and two others. Massive shipyards operating 24 hours a day are not considered attractive, either by holiday makers in need of recuperation, or migratory birds looking to rest their tired wings. Chen did not display many ornithological friendly tendencies. Of course, we are told that Shanghai residents are delighted by being home to the world’s largest shipyard – however, the hundreds of Chongming islanders now driving taxis around Shanghai invariably beg to differ at great length.
EXPO – Comrade Chen championed EXPO fever as his answer to Beijing’s Olympic bid. At the time, we asked a random sample of 50 Shanghainese if they were proud to be hosting EXPO 2010 – all 50 unanimously evinced pride. We asked the same 50 to describe the operation and point of an EXPO – all 50 admitted they didn’t really know what an EXPO was. Now 54,000 people are being relocated to make way for the EXPO tents. When the Shanghai media decided that news of Olympics 2008 preparations interested people more than EXPO developments, the local papers were ordered to restrict their reporting of 2008 news to the minimum stipulated by Beijing, and emphasis EXPO.
Compensation – Comrade Chen was involved in various arguments over the level and form of compensation and relocation payments made to Shanghai citizens as their homes were cleared for development in the city centre. Many were unhappy at low compensation rates and relocation to the margins of the municipality. Notable was the row over Jing’an district, were residents protested rushed relocation and poor compensation rates – they were arrested en-masse, prevented from travelling to Beijing to petition and their lawyer was arrested on charges of revealing state secrets and spreading Christianity. The same year, 14 other Shanghai lawyers had their licenses to practise removed for taking similar compensation cases.
Tongzhis – Perhaps the least offensive, but most bizarre, fiasco was Chen’s short lived campaign a couple of years ago to change Shanghai’s service industry etiquette. He criticised the widespread use of the terms xiaojie and xiansheng (Miss and Mr) as terms for addressing waitresses and waiters in restaurants, bars, etc. Too bourgeois, and rarely heard in Beijing. Keen to appear less bourgeois, yet not to imitate Beijing, Chen suggested using the term tongzhi (comrade) as a unisex mode of address for service workers. More than anything else, this revealed the disconnection between leaders and masses – in the intervening years since their elevation to the hallowed corridors of Shanghai City Hall, the term tongzhi had become widespread as a slang word for gay men. Someone eventually plucked up the courage to whisper in the Party Secretary’s ear, and the idea was quietly dropped.
Paul French, China Editor, Ethical Corporation
Friday, October 20, 2006
Tricky recommendations
Hello bloggers, this is Poulomi Saha and I write for Ethical Corporation from Mumbai.
My post here is less a statement and more a question I'm thinking aloud and posing to readers and fellow Ethical Corp writers.
For the latest issue of the magazine, I did a story about Thai authorities under former prime minister Thaksin Shinawatra and the current military administration temporarily restricting supermarket growth due to complaints they were hurting small retailer businesses. Tesco was amongst those in the firing line.
While doing this story, I read of British prime minister hosting tea parties in London for his Indian counterpart Dr Manmohan Singh earlier this month. The occassion being mostly an Indo-UK investment summit, (India is the third largest foreign investor in the UK) there was talk of Blair doing everything in his power to convince Dr Singh into relaxing wholesale retail laws in India that currently deny foreign supermarkets access to the world's fastest growing consumer retail markets. Tesco, fighting against the likes of Wal-Mart and Carrefour, of course stands to benefit most from such persuasion tactics.
Now, how can a prime minister promote his national corporate interests when one of his own national regulators, the Competition Commission is conducting an inquiry into alleged 'bully behaviour' (squeezing of suppliers, putting small retailers out of business, use of anti-competitive methods etc) by the country's top 4 supermarkets - Tesco, Asda, Sainsbury's and Morrisons? It is understandable when politicians ignore similar investigations in far-away countries like Thailand as matters that dont concern them and their promotional agendas. But what when such an enquiry in currently ongoing on your own grounds?
Ideally, shouldn’t Mr Blair put a moratorim on such promotion, at least by his own government-related agencies and departments, until the Competition Commission comes out with its report on the inquiry by next year-end? Of course, as well, as stopping himself!
Okay, this may be a naive question for some but then do care to enlighten me if you can! Maybe our politics editor, Peter, may have some thoughts on the strange workings of governments and politicians?!
My post here is less a statement and more a question I'm thinking aloud and posing to readers and fellow Ethical Corp writers.
For the latest issue of the magazine, I did a story about Thai authorities under former prime minister Thaksin Shinawatra and the current military administration temporarily restricting supermarket growth due to complaints they were hurting small retailer businesses. Tesco was amongst those in the firing line.
While doing this story, I read of British prime minister hosting tea parties in London for his Indian counterpart Dr Manmohan Singh earlier this month. The occassion being mostly an Indo-UK investment summit, (India is the third largest foreign investor in the UK) there was talk of Blair doing everything in his power to convince Dr Singh into relaxing wholesale retail laws in India that currently deny foreign supermarkets access to the world's fastest growing consumer retail markets. Tesco, fighting against the likes of Wal-Mart and Carrefour, of course stands to benefit most from such persuasion tactics.
Now, how can a prime minister promote his national corporate interests when one of his own national regulators, the Competition Commission is conducting an inquiry into alleged 'bully behaviour' (squeezing of suppliers, putting small retailers out of business, use of anti-competitive methods etc) by the country's top 4 supermarkets - Tesco, Asda, Sainsbury's and Morrisons? It is understandable when politicians ignore similar investigations in far-away countries like Thailand as matters that dont concern them and their promotional agendas. But what when such an enquiry in currently ongoing on your own grounds?
Ideally, shouldn’t Mr Blair put a moratorim on such promotion, at least by his own government-related agencies and departments, until the Competition Commission comes out with its report on the inquiry by next year-end? Of course, as well, as stopping himself!
Okay, this may be a naive question for some but then do care to enlighten me if you can! Maybe our politics editor, Peter, may have some thoughts on the strange workings of governments and politicians?!
Russia laid bear...
Morning, Ethical Corp world. I'm Peter Davis, and I'm the magazine's political editor, which means that I try to put some of the CR issues that are of concern into the wider social and political context
Anyway, I was thumbing through The Economist earlier in the week, and came across an advert for a conference they are running abount investment in Russia - trumpeting the 'modern business environment' and the country's vast natural resources. All true of course.
However, what they neglected to mention were the rather obvious downsides of doing business in the Rodina. For a start, although central Moscow, and a few other locations like St Petersburg and Nizhny Novgorod might have a modern business infrastructure, the rest of the country certainly does not! Indeed, go just a couple of hundred miles outside Moscow, and it's as if you've gone back to the 12th century.
However, many developing countries are like that. The real problem, from a CR perspective, is what compromises doing business in Russia requires on issues like corporate governance. The apparent attitude of the Kremlin at present appears unlikely to render the situation any easier. I've just written a piece for the next edition of Ethical Corporation about Shell's travails in Sakhalin. Shell has gone through all the right hoops in Russia, but still faces the very real prospect that their huge project will have its ground rules changed half way through.
The Russian authorities' pretext for stalling the project is environmental, and even Shell admits that the environment has been a big challenge for the project. However, the real reason for the Kremlin's move is that they want a bigger slice of hte Sakhalin action. From a CR point-of-view, how are companies like Shell, who are commited to good governance to respond to this sort of behaviour by host governments?
Anyway, I was thumbing through The Economist earlier in the week, and came across an advert for a conference they are running abount investment in Russia - trumpeting the 'modern business environment' and the country's vast natural resources. All true of course.
However, what they neglected to mention were the rather obvious downsides of doing business in the Rodina. For a start, although central Moscow, and a few other locations like St Petersburg and Nizhny Novgorod might have a modern business infrastructure, the rest of the country certainly does not! Indeed, go just a couple of hundred miles outside Moscow, and it's as if you've gone back to the 12th century.
However, many developing countries are like that. The real problem, from a CR perspective, is what compromises doing business in Russia requires on issues like corporate governance. The apparent attitude of the Kremlin at present appears unlikely to render the situation any easier. I've just written a piece for the next edition of Ethical Corporation about Shell's travails in Sakhalin. Shell has gone through all the right hoops in Russia, but still faces the very real prospect that their huge project will have its ground rules changed half way through.
The Russian authorities' pretext for stalling the project is environmental, and even Shell admits that the environment has been a big challenge for the project. However, the real reason for the Kremlin's move is that they want a bigger slice of hte Sakhalin action. From a CR point-of-view, how are companies like Shell, who are commited to good governance to respond to this sort of behaviour by host governments?
What we are writing about in Ethical Corporation's next issue
Toby here, the alleged overall editor.
At the moment at Ethical Corporation we are trying to figure out what to write about for our December issue. Its a tough one, since there is so much going on.
Couple of stories that might make it - the rise of the ethical superbrand and what happens when Indian firms take over Western firms. (Corus just accepted a bid for the company from Tata, a well known Indian conglomerate with an excellent ethics reputation)
Other stories we are discussing writing about include companies that are investing in North Korea, Hong Kong corporate governance, (lots of Chinese firms listing in HK right now) and how countries in Central and Eastern Europe compare with other developing nations on transparency and disclosure.
We've also just run a whole bunch of articles on the main site (and more to come in the November issue) about the recent Global Reporting Initiative conference in Amsterdam and the launch of the G3 guidelines.
More soon, feel free to post your views on GRI, or other matters!
At the moment at Ethical Corporation we are trying to figure out what to write about for our December issue. Its a tough one, since there is so much going on.
Couple of stories that might make it - the rise of the ethical superbrand and what happens when Indian firms take over Western firms. (Corus just accepted a bid for the company from Tata, a well known Indian conglomerate with an excellent ethics reputation)
Other stories we are discussing writing about include companies that are investing in North Korea, Hong Kong corporate governance, (lots of Chinese firms listing in HK right now) and how countries in Central and Eastern Europe compare with other developing nations on transparency and disclosure.
We've also just run a whole bunch of articles on the main site (and more to come in the November issue) about the recent Global Reporting Initiative conference in Amsterdam and the launch of the G3 guidelines.
More soon, feel free to post your views on GRI, or other matters!
Opening post
Welcome to the new joint Ethical Corporation Editor's blog.
This blog aims to be a forum for the views and comments of Ethical Corporation's editors and writers all over the world.
Every participating writer/editor has committed to write one post a week, and so between us we should be able to keep this blog pretty up to date.
Our editors and writers are based in London, Shanghai, Dallas, Buenos Aires, New York, Hong Kong, Mumbai and in various other parts of the globe.
So who are we? Well, our main site is Ethical Corporation, www.ethicalcorp.com
Each month our writers and editors produce the content of Ethical Corporation magazine, our print edition, and ethicalcorp.com, our website. Our writers and editors also product special reports, like these: www.ethicalcorp.com/cre (Education and ethics) and this, the latest one, on finance and ethics: www.ethicalcorp.com/fsr
Among the writers who we hope will contribute to the blog (hint guys!) are John Russell, Deputy Editor, Lisa Roner, North America Editor, Zara Maung, Roving Reporter, Paul French, China Editor, Oliver Balch, Latin America editor. Time will tell who the best posters will be!
Ethical Corporation also produces reseach reports, like these: www.ethicalcorp.com/eci/pastreports.asp
We also host around a dozen conferences a year on corporate responsibility, and will aim to report back from them on the blog over the course of the year. Our events are on wide variety of business issues, see for more details.
Right, that's it for the first post, check out the main site and more will be posted soon!
Toby Webb, Founding Editor
This blog aims to be a forum for the views and comments of Ethical Corporation's editors and writers all over the world.
Every participating writer/editor has committed to write one post a week, and so between us we should be able to keep this blog pretty up to date.
Our editors and writers are based in London, Shanghai, Dallas, Buenos Aires, New York, Hong Kong, Mumbai and in various other parts of the globe.
So who are we? Well, our main site is Ethical Corporation, www.ethicalcorp.com
Each month our writers and editors produce the content of Ethical Corporation magazine, our print edition, and ethicalcorp.com, our website. Our writers and editors also product special reports, like these: www.ethicalcorp.com/cre (Education and ethics) and this, the latest one, on finance and ethics: www.ethicalcorp.com/fsr
Among the writers who we hope will contribute to the blog (hint guys!) are John Russell, Deputy Editor, Lisa Roner, North America Editor, Zara Maung, Roving Reporter, Paul French, China Editor, Oliver Balch, Latin America editor. Time will tell who the best posters will be!
Ethical Corporation also produces reseach reports, like these: www.ethicalcorp.com/eci/pastreports.asp
We also host around a dozen conferences a year on corporate responsibility, and will aim to report back from them on the blog over the course of the year. Our events are on wide variety of business issues, see for more details.
Right, that's it for the first post, check out the main site and more will be posted soon!
Toby Webb, Founding Editor
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