This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.


Canadian Tire, Petro-Canada and others booted out of FTSE4Good

EMEA News:
Time Warner, House of Fraser, Mothercare, Benetton and others booted out
of FTSE4Good
Alex Blyth
14 Sep 04
The results of the latest review of the FTSE4Good Index were released on
Monday, with 79 companies due to be added and 23 removed.
At its last review in March 2004, FTSE's committee lifted its exclusion on
companies which market infant formula and replaced it with measurable

At the time, an index spokesperson told Ethical Corporation that no
company was eligible for inclusion and this does not appear to have
changed since.

FTSE4Good said, though that it has been ?encouraged by the positive
response to date from a number of affected companies?.

45 companies from Japan have joined the index at this review.

This is the highest number of companies from a single country to enter the
index at this review.

12 companies from the UK are to be removed. Worldwide, 899 companies now
belong to the Index series.

The following companies are to be removed from the index because they no
longer meet the socially responsible investment criteria:

Canadian Tire
Great-West Lifeco
Telekom Italia Media
Meiji Dairies
Blacks Leisure Group
Brewin Dolphin Holdings
BSS Group
Close Brothers Group
Davis Service Group
House of Fraser
N.Brown Group
Oxford Instruments
The Peacock Group
Time Warner

A Mothercare spokesperson commented: ?We?re disappointed to be removed,
but remain committed to our social responsibilities. We will be reviewing
the requirements for re-admission.?

Changes to the index series take effect at the close of business on Friday
17 September.

SC Johnson: Easing our ecological footprint

SC Johnson: Easing our ecological footprint
Geneva, 15 September 2004 - Improving a company?s environmental track
record is a major challenge. Going about such a task often means taking a
step back and looking at the big picture in order to decide how to make a
significant and sustained improvement in a company?s impact on the global
SC Johnson took that step back and realized that the way to further
improve its environmental impact is by being selective in the materials
the company purchases to manufacture its products.
As one of the world's leading manufacturers of products for household
cleaning, home storage, air care, personal care, and insect control, SC
Johnson buys a lot of ingredients worldwide. The company seized the idea
of classifying and screening the ingredients used in every product the
company manufactures, and using that information to make measurable
improvements in the company's ecological footprint.
By shifting the company's product ingredients and packaging to the most
environmentally responsible materials possible, the company makes its
products cleaner, greener, and easier on the planet, improving the
company's environmental sustainability. At the same time, the company uses
its buying power to encourage its suppliers to produce more
environmentally sustainable ingredients.
SC Johnson realized that the company's efforts would ripple up and down
the products' lifecycle?from raw material purchases, to production,
packaging, and consumer use?and perhaps even beyond. The company?s mission
was not only to safeguard the health and safety of its consumers, the
people who work there, and the communities where they live, work and play.
They also hoped that by influencing the company's suppliers, competitors,
and even regulators, SC Johnson could help set standards of excellence in
environmental performance for the entire consumer products industry.
Such an effort, however, requires a comprehensive approach. Before any
strategy could be implemented, the company needed a meaningful yet
manageable technique for assessing an ingredient's ecological impact.
Company scientists struggled with the challenge:
What criteria should be used?
What sort of rating system would be meaningful yet usable and
How can comparisons be made across different types of ingredients for
different types of products? For instance, how could the environmental
footprint of shaving gel propellant be compared with an insect control
How could materials be assessed without undertaking an exhaustive and
costly battery of laboratory tests?
These were some of the questions with which SC Johnson staff had to
Staff scientists honed the system to a series of criteria that produce a
"score" for ingredients. Dubbed Greenlist?, the system classifies all the
ingredients that go into SC Johnson products according to their impact on
the environment and human health. The result is a process that gives SC
Johnson chemists around the globe instant access to data on the
environmental rating of their product ingredients in any proposed product
The system rates materials according to their environmental impacts. In
this way, materials can be measurably compared with one another for
environmental and human health characteristics.
Devising a system that provides useful data about a wide range of
materials?from product packaging, to fragrances, insecticides, and
propellants?was challenging. Therefore, its designers proposed the
development of screening criteria specifically tailored to each chemical
function. The Greenlist? rating system establishes four to seven unique
criteria for each raw material category. In each case, the criteria must
be meaningful, discriminating, and readily available.
Currently, Greenlist? rates surfactants, solvents, propellants,
insecticides, resins, and packaging. Company scientists have developed
draft criteria for fragrances, and have approved criteria for chelants
(water softening agents).
In order to develop quantifiable goals and measure the company's progress,
environmental managers had to gather baseline data on materials purchased
from manufacturers in dozens of countries. They started with five
categories accounting for 80 percent by volume of raw materials purchased.
SC Johnson and company suppliers worked to fill-in the data gaps, to
ensure the data's accuracy.
How the system works
For example, in the category of surfactants, a key ingredient in many
soaps and detergents that allows liquids to better penetrate clothing and
other surfaces, Greenlist? ratings include the following four criteria:
1. Aquatic toxicity (how dangerous the ingredient is in an aquatic
2. Biodegradability (how easily the ingredient breaks down
3. European Union environmental classification under the ?Dangerous
Substances Directive? which aims to identify and control individual
dangerous chemicals and raw materials;
4. Acute human toxicity (acuteness is determined by how fast any
effects occur in humans and what type they are).
The ingredient receives a score of 3, 2, 1, or 0, with 3 representing
"Best," 2 for "Better," 1 for "Acceptable," and 0 for "Restricted Use" in
each of the four categories (see Figure "sample Greenlist? scorecard").
Next, the scores are averaged.
The average score is then adjusted for "Other Significant Concerns," such
as possible endocrine (hormone) disruption, carcinogenicity (whether or
not something causes or induces cancer), reproductive toxicity, the EPA's
"PBT Profiler" classification (The EPA?s new PBT Profiler is a computer
model that will estimate the environmental persistence (P),
bioconcentration potential (B) and aquatic toxicity (T) of each raw
material used by SC Johnson or that SC Johnson is considering for future
use) and other environmental criteria.
Any addition of ?Other Significant Concerns? will reduce the material's
overall rating by one class, for example from 2 to 1. This additional
classification builds flexibility into the system, allowing staff to
downgrade a material's score to reflect additional concerns (the rating
cannot raise a material's score?only lower it).
A material having a rating of "0" is considered a "Restricted Use
Material." Such a rating means that its use in any SC Johnson product
requires direct approval from top management?an authorization that
Greenlist? managers are reluctant to approve because of the high internal
standards the company has set for reducing its material footprint.
These scores are then made available to SC Johnson chemists/formulators
online around the world, giving them the data they need to select the
best-rated ingredient to fulfill any particular function?such as a
particular type of surfactant.
When data is not immediately available for a material, raters give
ingredients a default rating of 1 until further data collection allowed an
improved score.
Top management has incorporated several mechanisms to ensure that staff
adopt Greenlist? throughout the company. Employee compensation is directly
influenced by how an employee or team performs on their objectives.
Perhaps equally important is that Greenlist? receives solid, committed
support from top management. Chairman Fisk Johnson, a chemist himself,
takes a personal interest in making sure the system succeeds.
In 2001, SC Johnson introduced Greenlist? and established a goal of 8
percent reduction in environment-impacting ingredients across all SC
Johnson brands by fiscal year 2002/03. SC Johnson exceeded its goal by
improving its environmental classification score by 12.5 percent.
The information in this case study was provided by the company and is not
intended to indicate effective or ineffective practices. There has been no
third-party verification of the information presented here. Please address
any queries on the content of this case study directly to the company.

Report links corporate governance and market value: companies with better corporate governance standards have a higher market value.

Asia Pacific News:
Report links corporate governance and market value
James Rose
17 Sep 04
A report produced by Professor Stephen Cheung of Hong Kong?s City
University has found that companies with better corporate governance
standards have a higher market value.

The survey was conducted on 168 Hong Kong-based companies drawn from four
major market indices, including those for so-called ?red chips? or
mainland Chinese companies listed in Hong Kong.

This group represents about 89 per cent of total market capitalisation and
about 80 per cent of total market turnover in Hong Kong.

Five areas were assessed: rights of shareholders; equitable treatment of
(minority) shareholders; the role of stakeholders in corporate governance;
disclosure and transparency; and the board's responsibilities.

According to the report?s author, ?We found a significant positive
relationship between the two variables? of corporate governance standards
and market value. ?That is to say? continued Professor Cheung, ?companies
with a higher score in corporate governance standards had higher market

Cheung says that the project?s aggregate results will be sent to all the
companies studied. But, he says, companies will not be told their scores,
only which quartile they fall into. ?We are creating peer pressure, to
make companies do better.?

The university will offer free advice to any company taking up its offer
for assistance.


Global Corporations Unite to Examine World-Class Performance in Corporate Citizenship

Global Corporations Unite to Examine World-Class Performance in Corporate
BOSTON, Sept. 16, 2004 - Nine of the world's top performing companies have
joined forces to form the Global Leadership Network. This international
network will focus on the crucial question of what constitutes world-class
performance in corporate citizenship.

Collectively, this important group of companies -- IBM, General Electric,
FedEx, Cargill, 3M, Diageo, Omron, Manpower, and General Motors --
represent more than $544 billion in annual revenues, employ some 1.4
million people and have multi-national operations that span the globe.

"These are best-in-class companies who have been practicing corporate
citizenship activities for years," said Steve Rochlin, director of
research and policy development for the Center for Corporate Citizenship
at Boston College. "Their willingness to share their experiences will have
a significant impact on other companies, especially those with fewer
resources or those who have been late to recognize the importance of
integrating corporate responsibility measures into their core business

"Crucially, these leading companies are identifying elements of their
corporate responsibility programs that not only improve but drive business
performance," said Simon Zadek, CEO of AccountAbility. "Capturing and
harnessing this valuable knowledge is one of the key objectives of this
unique business learning network."

"IBM founded this network of like-minded global companies because we know
that quality corporate citizenship and responsible social engagement is an
important part of the long term economic value of a company and that it
must be managed with the same seriousness of purpose as any other core
element of the business," said Stanley Litow, vice president of corporate
community relations at IBM. "By bringing together some of the most
well-known, well-respected global corporations to study these questions,
we believe we can, as a group, lead by example and have a profound impact
on the way all major corporations think about and manage corporate

Directed by the Center for Corporate Citizenship at Boston College and
AccountAbility, with support from the Ford Foundation and each
participating company, this three-year research project will focus on how
these companies balance the pressures for profitability against the
demands to be responsive to broader societal needs.

This will be achieved by exploring how they:
Align corporate citizenship into the core business strategy by defining
what activities are material to the company.

Respond to and learn from societal expectations in a manner that creates
value for the business and stakeholders.

Align corporate citizenship values with operational excellence to ensure
that ethics and the interests of good corporate governance are maintained.

Create opportunities for leadership that allow companies to influence the
best practices of others.
Preliminary findings from the research are expected in early 2005.