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


Where sustainability means survival

Where sustainability means survival
Financial Times, 14 October 2004 - Mike Scott finds the banking sector
embarking on a series of initiatives to show how seriously it takes the
impact of projects on the environment
When it comes to unsustainable businesses, the financial services sector
used to consider itself pretty low on the list. After all, the sector does
not produce pollutants or greenhouse gases and is known for its good
employment practices.
But it is having to take sustainability seriously now. Non-governmental
organisations have targeted banks as the ultimate source of
environmentally unfriendly projects, a plethora of sustainability indices
has sprung up and institutional investors are taking note of environmental
issues because they are hitting their bottom line.
After NGOs highlighted environmental and social problems with projects
financed by the World Bank and the International Finance Corporation, its
private sector arm, these organisations became more wary of investing in
projects such as dams and oil pipelines. But when the World Bank refused
to invest in the controversial Three Gorges Dam in China, for example,
private banks, unburdened by public scrutiny, stepped into the breach.
As a result, NGOs shifted their focus to the private sector, which has had
to respond to their concerns. One example of this is the Equator
Principles, established in 2003 by an international group of banks,
including ABN Amro, Barclays and Citigroup, to address the social and
environmental impacts of the projects they finance. A year on, 27 banks
have signed up, representing more than 80 per cent of global project
financing funds.
The Equator Principles include safeguards in areas ranging from
environmental assessment and natural habitats to indigenous peoples and
child labour. If borrowers fail to comply with loan conditions, they can
be declared in default.
Simon McRae, corporate campaigner at Friends of the Earth, says: "The good
thing is that the signatories are saying they are responsible for how
those projects are turning out. But there is still a long way to go."
Banktrack, an NGO that monitors banks' investments, says signatories are
still funding unsustainable projects, and that it is unclear to what
extent banks are actually complying with the principles.
Meanwhile, the United Nations Environment Programme's Finance Initiative
has developed a set of responsible investment guidelines for institutions.
The impetus came partly from "the governance meltdown" associated with
companies such as WorldCom and Enron and partly from a realisation among
fund managers of the need to invest for the long term, says Monique
Barbut, director of Technology, Industry and Economics at UNEP.
"Some of the scandals have sensitised funds to the fact that good
sustainability within investments also makes good long-term sense in terms
of protecting your assets." In association with the Global Reporting
Initiative, UNEP-FI wants to establish a de facto standard in the market.
There is a vast range of information on sustainable investment but no
A forthcoming report by environmental consultancy URS carried out a study
of 65 sources of information on sustainability, ranging from ratings
agencies to Socially Responsible Investment (SRI) indices, such as
FTSE4Good and the Dow Jones Sustainability Index, and research houses.
Belinda Howell, director of corporate sustainable solutions at URS, says:
"We analysed how the same companies performed across a range of ratings
and there was no comparability at all. There has to be a move to better
quality and better consistency of information; there are just too many
operators measuring different things."
To this end, the London Stock Exchange has set up the Corporate
Responsibility Exchange. The LSE says: "UK companies are overwhelmed by
the questionnaires being sent to them for corporate responsibility
The CRE allows companies to fill out a single questionnaire and gives
investors a single site where they can locate and analyse company data. It
allow companies to disclose information against the most influential codes
and rating systems, including the Global Reporting Initiative, the
FTSE4Good index and Business in the Community's Corporate Responsibility
These indices are very influential, according to URS's Dr Howell.
"Companies really do respond to how they perform on these indices and
whether they are in or out. That has a big impact on behaviour and
companies will work very hard to improve their performance." An earlier
URS report on FTSE 100 companies suggested that those performing well in
environmentally responsible indices had lower share price volatility,
leading to a lower cost of capital. As a result, Dr Howell says, "one
benchmark of a well-run company is how they perform in environmental
Increasingly, SRI is seen as a good business move. The Co-operative Bank
says about 30 per cent of customers join as a result of its ethical
policy. Now its sister company, Co-operative Insurance Society, is to
canvas customers over what issues it should pursue with the companies it
invests in. Mervyn Pedelty, chief executive of Co-operative Financial
Services, says: "We are increasingly paying out claims for flooding and
storm damage brought about by global warming. Should we be investing the
same customers' money in companies that pollute the atmosphere, which in
turn leads to climate change, without seeking to improve the environmental
performance of such companies?"
While insurance companies were among the first to realise they needed to
take into account the effects of climate change, other key sectors that
will be affected include the energy, transport, heavy manufacturing and
construction industries, and oil and agricultural markets. In 2003 Dollars
70bn of damage was caused by weather-related disasters, according to the
Carbon Disclosure Project (CDP).
Representing institutional investors with assets in excess of Dollars
10,000bn, the CDP asks FT500 companies what they are doing to mitigate the
effects of greenhouse gas emissions.
It says it "demonstrates that the mainstream investment community is
seriously engaging with the strategic and financial implications of
climate change" and that taking climate risks into account is becoming
part of smart financial management.
Copyright 2004 The Financial Times Limited
Financial Times (London, England)

SRI analysts set out corporate disclosure guidelines

SRI analysts set out corporate disclosure guidelines
Environmental Finance, 8 October 2004 - Social research analysts at 17
investment firms have set out their recommendations on how companies
should respond to increasing demands for social and environmental
In a six-page statement, released on Wednesday, they called on companies
to increase annual reporting on their social and environmental policies
and recommended that companies adopt the Global Reporting Initiative (GRI)
sustainability reporting guidelines as a way to standardise the
information supplied.
"Companies have been asking us for guidance on how to meet the
skyrocketing demands for information," said Steve Lippmann, senior social
research analyst for Trillium Asset Management. "With this statement, we
recommend ways that companies can increase the credibility, comparability
and utility of their reporting."
The GRI developed its guidelines to measure economic and environmental
performance as well as labour practices, human rights and product
responsibility. Already companies such as Citigroup, Ford, General Motors,
Hewlett-Packard, Intel and Starbucks use the GRI standards.
"Our stakeholders look to us to disclose key environmental and social data
so they can compare and judge our performance. It makes clear sense for
Intel to meet that need," said Dave Stangis, director of corporate
responsibility for Intel. "GRI has provided a flexible framework to
achieve those goals since 1999."
The investment firms issuing the statement, representing more than $147
billion, include: Christian Brothers Investment Services, Domini Social
Investments, Dreyfus, Pax World Funds and Walden Asset Management, among
"The analyst community has spoken: there is a need for fuller disclosure
of business risks and opportunities facing companies today," said Ernst
Ligteringen, GRI's chief executive. "This will only work for all the
players involved ? investors, companies, and other stakeholders ? if based
on a generally accepted framework that establishes common expectations for
publicly reported information."

Global Warming Bombshell: A prime piece of evidence linking human activity to climate change turns out to be an artifact of poor mathematics.

Global Warming Bombshell
A prime piece of evidence linking human activity to climate change turns
out to be an artifact of poor mathematics.

By Richard Muller
Technology for Presidents
October 15, 2004

Progress in science is sometimes made by great discoveries. But science
also advances when we learn that something we believed to be true isn?t.
When solving a jigsaw puzzle, the solution can sometimes be stymied by the
fact that a wrong piece has been wedged in a key place.

In the scientific and political debate over global warming, the latest
wrong piece may be the ?hockey stick,? the famous plot (shown below),
published by University of Massachusetts geoscientist Michael Mann and
colleagues. This plot purports to show that we are now experiencing the
warmest climate in a millennium, and that the earth, after remaining cool
for centuries during the medieval era, suddenly began to heat up about 100
years ago--just at the time that the burning of coal and oil led to an
increase in atmospheric levels of carbon dioxide.
I talked about this at length in my December 2003 column. Unfortunately,
discussion of this plot has been so polluted by political and activist
frenzy that it is hard to dig into it to reach the science. My earlier
column was largely a plea to let science proceed unmolested.
Unfortunately, the very importance of the issue has made careful science
difficult to pursue.

But now a shock: Canadian scientists Stephen McIntyre and Ross McKitrick
have uncovered a fundamental mathematical flaw in the computer program
that was used to produce the hockey stick. In his original publications of
the stick, Mann purported to use a standard method known as principal
component analysis, or PCA, to find the dominant features in a set of more
than 70 different climate records.
But it wasn?t so. McIntyre and McKitrick obtained part of the program that
Mann used, and they found serious problems. Not only does the program not
do conventional PCA, but it handles data normalization in a way that can
only be described as mistaken.
Now comes the real shocker. This improper normalization procedure tends to
emphasize any data that do have the hockey stick shape, and to suppress
all data that do not. To demonstrate this effect, McIntyre and McKitrick
created some meaningless test data that had, on average, no trends. This
method of generating random data is called ?Monte Carlo? analysis, after
the famous casino, and it is widely used in statistical analysis to test
procedures. When McIntyre and McKitrick fed these random data into the
Mann procedure, out popped a hockey stick shape!
That discovery hit me like a bombshell, and I suspect it is having the
same effect on many others. Suddenly the hockey stick, the poster-child of
the global warming community, turns out to be an artifact of poor
mathematics. How could it happen? What is going on? Let me digress into a
short technical discussion of how this incredible error took place.
In PCA and similar techniques, each of the (in this case, typically 70)
different data sets have their averages subtracted (so they have a mean of
zero), and then are multiplied by a number to make their average around
that mean to be equal to one; in technical jargon, we say that each data
set is normalized to zero mean and unit variance. In standard PCA, each
data set is normalized over its complete data period; for key climate data
sets that Mann used to create his hockey stick graph, this was the
interval 1400-1980. But the computer program Mann used did not do that.
Instead, it forced each data set to have zero mean for the time period
1902-1980, and to match the historical records for this interval. This is
the time when the historical temperature is well known, so this procedure
does guarantee the most accurate temperature scale. But it completely
screws up PCA. PCA is mostly concerned with the data sets that have high
variance, and the Mann normalization procedure tends to give very high
variance to any data set with a hockey stick shape. (Such data sets have
zero mean only over the 1902-1980 period, not over the longer 1400-1980
The net result: the ?principal component? will have a hockey stick shape
even if most of the data do not.

McIntyre and McKitrick sent their detailed analysis to Nature magazine for
publication, and it was extensively refereed. But their paper was finally
rejected. In frustration, McIntyre and McKitrick put the entire record of
their submission and the referee reports on a Web page for all to see. If
you look, you?ll see that McIntyre and McKitrick have found numerous other
problems with the Mann analysis. I emphasize the bug in their PCA program
simply because it is so blatant and so easy to understand. Apparently,
Mann and his colleagues never tested their program with the standard Monte
Carlo approach, or they would have discovered the error themselves. Other
and different criticisms of the hockey stick are emerging (see, for
example, the paper by Hans von Storch and colleagues in the September 30
issue of Science).
Some people may complain that McIntyre and McKitrick did not publish their
results in a refereed journal. That is true--but not for lack of trying.
Moreover, the paper was refereed--and even better, the referee reports are
there for us to read. McIntyre and McKitrick?s only failure was in not
convincing Nature that the paper was important enough to publish.
How does this bombshell affect what we think about global warming?
It certainly does not negate the threat of a long-term global temperature
increase. In fact, McIntyre and McKitrick are careful to point out that it
is hard to draw conclusions from these data, even with their corrections.
Did medieval global warming take place? Last month the consensus was that
it did not; now the correct answer is that nobody really knows. Uncovering
errors in the Mann analysis doesn?t settle the debate; it just reopens it.
We now know less about the history of climate, and its natural
fluctuations over century-scale time frames, than we thought we knew.
If you are concerned about global warming (as I am) and think that
human-created carbon dioxide may contribute (as I do), then you still
should agree that we are much better off having broken the hockey stick.
Misinformation can do real harm, because it distorts predictions. Suppose,
for example, that future measurements in the years 2005-2015 show a clear
and distinct global cooling trend. (It could happen.) If we mistakenly
took the hockey stick seriously--that is, if we believed that natural
fluctuations in climate are small--then we might conclude (mistakenly)
that the cooling could not be just a random fluctuation on top of a
long-term warming trend, since according to the hockey stick, such
fluctuations are negligible. And that might lead in turn to the mistaken
conclusion that global warming predictions are a lot of hooey. If, on the
other hand, we reject the hockey stick, and recognize that natural
fluctuations can be large, then we will not be misled by a few years of
random cooling.
A phony hockey stick is more dangerous than a broken one--if we know it is
broken. It is our responsibility as scientists to look at the data in an
unbiased way, and draw whatever conclusions follow. When we discover a
mistake, we admit it, learn from it, and perhaps discover once again the
value of caution.

Bad weather may cloud the picture

Bad weather may cloud the picture
Financial Times, 14 October 2004 - Fiona Harvey explains why extreme
weather conditions have put global warming on top of the political agenda
and how business can gain a competitive advantage by acting to reduce
Climate change will be one of the items at the top of the agenda when the
UK takes over the presidency of the European Union and G8 next year,
promises Tony Blair, the UK prime minister.
His enthusiasm for the subject reflects growing public concern that
"extreme weather events", such as storms, droughts and floods, could be
the result of human action changing the planet's weather systems.
Some scientists dispute the research on climate change and its conclusions
but a growing body of evidence suggests that human action - in particular,
the increasing amount of carbon in the atmosphere, mainly as the result of
the burning of fossil fuels - is leading to warmer temperatures and
greater unpredictability in some aspects of weather.
Tackling climate change must involve all businesses, as economic growth is
the driver of increasing carbon consumption. As developing countries grow
they require more and more energy. For these reasons, dramatic change
would be required in business practices to bring down global greenhouse
gas emissions to those of even a few years ago.
But as "a reduction in growth is not an acceptable path to a lower carbon
world, given the challenge that energy is needed to alleviate poverty,"
says Bjorn Stigson, president of the World Business Council for
Sustainable Development, new ways have to be found to enable developing
countries to grow without putting too much strain on the environment. He
says: "We need to break the current direct link between standards of
living, energy consumption and carbon emissions."
One way of doing this is for governments to impose costs on businesses
depending on the amount of greenhouse gases they emit, sometimes known as
a climate change levy, to encourage them to become more efficient.
Businesses that emit less greenhouse gas than their peers can be rewarded
with carbon "credits" that they can trade with others, to effectively
reduce their levy.
Yet some businesses are favoured over others in regulatory regimes, argues
Andrea Kaszewski of WWF, a green lobbying group. She says: "There are
perverse subsidies in some areas, like aviation. Aviation fuel is
effectively subsidised, but the aviation industry ought to be paying more
than normal people because they pollute such a lot."
Even without government involvement, many businesses are seeking to reduce
emissions as a way of cutting their operating costs.
Paul Fleming, professor of energy management at the Institute for Energy
and Sustainable Development at the UK's De Montfort University, says there
are numerous ways in which companies can take simple steps to reduce their
He lists energy efficient lighting, more efficient motors and drives in
manufacturing plants, better building insulation, and a reduction in
redundant pipework as easy ways in which companies can cut their energy
These measures can also bring other benefits.
He cites the case of a company that gained greater productivity from its
workforce when it installed energy efficient lighting, because the
improved illumination made working mucheasier. "If lots of businesses took
steps like these, it would have a real effect on climate change," says
Prof Fleming.
Before businesses take such steps, they can analyse their emissions in
order to figure out where their reduction efforts may be best placed, says
Jed Jones, consultant in KPMG's sustainability advisory services.
"This is a vital step, yet there are many companies that do not have
emissions data that can be verified. Often, these companies are the most
vociferous opponents of any measures to control greenhouse gas emissions."
Meanwhile, companies in regimes that do regulate emissions tightly may win
out over companies in countries that rely on voluntary reductions, argues
Robert Casamento, partner at Deloitte. "In five years' time, European
companies will have a new emissions reduction capability more advanced
than Exxon and other US companies, which are not investing at the same
rate as their European rivals," he says.
Companies that have taken a lead in reducing emissions, according to new
research from the non-profit Climate Group, include Deutsche Telekom,
which reduced its carbon dioxide emissions by 65 per cent between 1995 and
2002; 3M, which has achieved a 35 per cent reduction on emissions from
1995 levels; Swiss Re, which will cut operational greenhouse gas emissions
by 15 per cent by 2013; and the Canadian Forest Products Industry, which
is now reporting greenhouse gas emissions at 28 per cent below 1990
Some energy companies, which by the nature of their business are
responsible for large amounts of global emissions, have also taken a lead
in projects to reduce climate change.
Kurt Hoffman, director of the Shell Foundation, points to projects from
the Bus Rapid Transit system in Mexico City to the development of more
efficient, low-cost stoves as examples of where Shell, in partnership with
other organisations, is helping developing countries progress without
escalating their emissions dramatically.
Another option for companies seeking to cut emissions is to investigate
using timber frame to build their offices. Though architects often do not
think of wood as suitable for office construction, Gerry McCaughey, chief
executive of Century Homes, cites the case of a five-storey bank in Navan,
in Ireland, recently built with a timber frame.
Building houses with wooden frames instead of concrete can almost halve
the greenhouse gases used in their construction and operation in some
cases. Wood also acts as a store for carbon, as trees take up carbon
dioxide from the air as they grow.
If any of these measures are to have much effect on climate change, they
will need to be taken quickly.
Anne Lauvergeon, chairman of the executive board of Areva, the French
nuclear group, told a recent conference:
"(The energy cycle) is like a supertanker. It takes time to change
direction, so you must anticipate. Otherwise the consequences may spiral
out of control."
Copyright 2004 The Financial Times Limited
Financial Times (London, England)


The globetrotter ?s guide to stakeholder reporting: National governments are pursuing markedly different strategies to

The globetrotter?s guide to stakeholder reporting
Roger Cowe
16 Sep 04
National governments are pursuing markedly different strategies to
encourage reporting across the triple bottom line.

The Securities and Exchange Commission in the US has recently woken up to
the fact that companies are not very good at disclosing environmental

The cost of cleaning up polluted sites can dwarf some financial
liabilities, but the SEC has never quite got to grips with this aspect of
corporate balance sheets.

This is on no less an authority than the US Congress GAO (formerly the
General Accounting Office), which pointed out in a recent report that it
was impossible to assess a company?s environmental risks.

The GAO said: ?Environmental risks and liabilities are among the
conditions that, if undisclosed, could impair the public?s ability to make
sound investment decisions. The SEC does not have the information it needs
to analyse the frequency of problems involving environmental disclosure,
compared with other types of disclosure problems.?

The GAO report was released at a symposium on Capitol Hill organised
jointly with the Corporate Sunshine Working Group, an alliance of
non-governmental organisations, unions and investor groups pushing for
greater transparency.

The Group has a 20-point list of demands (see box 1) for improving the
effectiveness of existing requirements, but also adding new items that
companies should address. The proposals have been chosen for their
relevance to financial value and because they would improve corporate
governance and corporate responsibility.

The Sunshine Group?s approach demonstrates one prong of what can be
described as a three-pronged attack on social enterprise disclosures. The
first prong, exemplified at its best by the Toxic Release Inventory and
equal opportunities reporting requirements in the US, is standalone,
site-specific reporting direct to government agencies and quite separate
from other corporate reporting.

The third prong is an attempt to set out specific social and environmental
reporting requirements in company law. This has been a prominent trend in
several European countries over the past few years. In the middle is the
Sunshine Group?s slightly more pragmatic approach of using existing
securities legislation to require new disclosures.

In fact the SEC already has the power to require companies to disclose
anything that investors might reasonably need to make decisions,
specifically including:

· material effects of compliance with environmental laws
· any material pending legal proceedings

· any ?known trends, demands, commitments, events or uncertainties? that
are likely to have a material effect on a company's bottom line.

So the issue here is largely about how important environmental (and
social) issues are to investors. But the US experience also emphasises the
convergence of corporate responsibility and corporate governance, which is
evident above all in the Sarbanes-Oxley Act ? the 2002 legislation
reacting to the spate of corporate scandals, which is the biggest thing to
hit US boardrooms for decades.

Sox, as it tends to be known, is mostly about boardroom practices ? audit
committees, board ethics, internal controls ? but it has altered the
climate of disclosure, making it more difficult for companies (and their
chief executives who now have to sign off the accounts) to ignore or
underplay liabilities and risks. It has also made boards, and especially
audit committees, more aware and concerned about reputational issues.

Those awkward Europeans

Things are very different in Europe. While the European Union is bringing
in the 8th Company Law Directive, which will introduce similar
requirements to Sarbanes-Oxley, there is a much more direct approach to
disclosure of environmental items (in particular) in many European, and
especially Scandinavian, countries.

The UK is now at the forefront, with the requirement for companies to
publish a wide-ranging Operating and Financial Review (OFR ? equivalent to
the Management Discussion and Analysis in the US) from next year. The
final consultation only ended at the beginning of August, and the detail
will depend on the requirements to be set out by the Accounting Standards

But broadly, the OFR will require directors to give shareholders relevant
information on the company?s objectives, strategy, performance and future
prospects. They should include material on policies relating to employees,
customers and suppliers, as well as social and environmental impacts,
where that is necessary for shareholders? proper understanding of the

The freedom given to directors to decide what to include disappoints
critics who would prefer greater prescription. The Core (corporate
responsibility) coalition of NGOs has campaigned hard for compulsion,
including twice getting a Bill debated in the House of Commons.

Its pressure, and the substantial (but insufficient) support from MPs, may
have strengthened the government?s resolve in resisting complaints from
the business world that the OFR requirements were too onerous.

But that is a long way from the mandatory reporting on social and
environmental issues that Core has demanded. Its parliamentary Bill called
for companies to report against a comprehensive set of social,
environmental and economic performance indicators.

The 120-strong coalition issued a stinging attack on the OFR plans the
minute the consultation ended, saying: ?The proposals pay little attention
to the social and environmental responsibilities of business, focusing
only on shareholder interests. Core says this overlooks the importance of
environmental and social responsibility as part of a company?s overall

While the debate has centred on reporting, the point is to get companies
to do things differently. And the central question is how effective each
approach would be in getting companies to understand and address social
and environmental issues.

On the one hand, too much prescription might result in mechanistic,
?boiler-plate? reporting and business as usual. On the other hand, lack of
prescription could see companies failing to take these issues seriously.

The fact is, though, that there has never been much appetite in the UK to
introduce mandatory social and environmental reporting through company
law. Other countries in Europe and Scandinavia are moving to this kind of
position, although most started with more specific requirements, along the
lines of the approach pioneered in the US with the Toxic Release
Inventory. No European country has gone as far as that, but first steps
have usually focused on the most polluting industry sectors and specific
emissions from individual sites.

The Dutch situation

The Netherlands took the lead as long ago as 1993, when the Environmental
Management Act introduced the possibility of statutory reporting
requirements ? which were finally brought in four years later. Larger
companies in industrial sectors with high environmental impacts (eg
chemicals, food, oil, power generation, airports) are required to report
both to government and to the general public, for each of their sites.

Last year the country joined the trend to including company-wide
information in annual reports to shareholders, although this is currently
only a matter of ?best practice? rather than a legal requirement. The
directors? report is now expected to include a review of environmental,
social and ethical matters, similar to the new UK requirement for the OFR.
As in the UK, stakeholder relations are seen as an important issue to be

And the Danes too

Denmark has followed a similar trajectory, though with more enthusiasm.
The Green Accounts Act was passed in 1995 under the umbrella of
environmental protection legislation. More than 1,000 Danish companies in
nine industry sectors (including steel, oil and gas, chemicals, power
generation) were required to publish ?green accounts? for each site. The
main disclosure requirement is about consumption of energy, water and
materials, plus polluting emissions. The law was updated in 2001 to add
waste disclosure, compliance with regulations, environmental policy
statements and supplier policies.

Companies must also include statements from local authorities on their
regulatory experience with the company. The government also joined the
trend to require such information to be aggregated in the main financial
annual report, though in common with the UK approach, management has
discretion on what to include and how to report.

The subsequent defeat of the social democrats and the accession of a
centre-right government led to suggestions that this toughening of the law
would be rolled back. But Allan Jorgensen of The Copenhagen Centre says
this does not seem to be on the agenda. ?Rolling the environmental
requirements into the social sphere is some way off?, he says, ?but it?s
unlikely the existing requirements will be changed. High environmental
standards are owed to regulation.?

In fact, far from rolling back the existing law, the government is
contemplating joining the socially responsible investment bandwagon and
bringing in regulation which would require the whole financial sector to
be more open about incorporating social requirements into investment

Several other countries in the region, including neighbours Norway and
Sweden have followed a similar path. Norway has progressively toughened
reporting requirements since the early 1990s, so that companies must now
provide a fairly specific set of disclosures on labour and environmental

France does it their way

More recently, France has attracted headlines for its Nouvelles Regulation
Economiques requiring all listed companies to include social and
environmental issues in their statutory annual reports from 2002.

Several specific aspects are laid down to be included in a review of
social and environmental impacts as part of the directors? report,
covering employment, resource use, emissions, expenditure and management
action on environmental protection measures.

The initial experience has been unexciting. Writing in a special issue of
AccountAbility Quarterly, Francois Fatoux, executive director of the
research company Orse, says few companies reported adequate data and few
reports were independently verified.

This kind of regulation has not been restricted to Europe. Australia has
stopped short of mandating broad disclosure but the 2001 Corporations Act
requires companies to report breaches of environmental laws and licences
in their annual reports, as well as introducing a UK-style requirement for
financial providers to disclose the extent to which environmental, social
or ethical issues are considered in investment decisions.

But South Africa leads

South Africa has led the way in many respects with the King Committee
codes, based in corporate governance, as well as with the separate Black
Empowerment laws, which obviously have a very specific relevance to that

The first report by Mervyn King?s committee, in 1994, broke new ground in
the corporate governance area, going beyond the focus on boardroom
structures and processes, which was typical of similar inquiries,
including the Cadbury Committee in the UK. King II, published in 2002,
went even further, specifically addressing integrated sustainability
reporting. This occupied one of the six sections of the report, covering
stakeholder relations; health, safety and environment, ?human capital?,
and social issues including black empowerment (see box 2 and 3).

The committee went further than any other official or semi-official group
elsewhere in specifically embracing the notion of stakeholder
responsibility, saying: ?Boards must apply the test of fairness,
accountability, responsibility and transparency to all acts or omissions
and be accountable to the company but also responsive and responsible
towards the company?s identified stakeholders.?

Governments elsewhere may have thought such thoughts but kept them to
themselves, maintaining the line that directors are responsible only to
shareholders ? thereby fuelling confusion about the purpose of broader
reporting and requiring it to be set in the context of ?the business
case?. You might think that the business world would be up in arms at such
language, which would virtually be revolutionary in many countries. But
not in South Africa.

After all, the King Committee was set up by the Institute of Directors,
and its recommendations have been adopted by the Johannesburg Stock

Tony Dixon, executive director of the IoD, is full of praise. ?The
perception is that King has had a very positive impact,? he says. ?If
people are not adopting it, stakeholders want to know why. Sustainability
issues are very relevant here and we are getting some pretty good
sustainability reporting, moving away from the tick-box approach towards
substance over form.?

This assessment may be over-enthusiastic, according to a review of 2002
reports by the accounting firm KPMG. It found that 85 of the top 100
quoted South African companies had reported on sustainability issues, but
many were superficial.

KPMG concluded: ?Business is quickly realising that it is being held more
accountable for its non-financial performance. Integrated sustainability
reporting has become a mainstream practice for most JSE-listed companies.
This survey has shown that while many companies have begun to incorporate
the King II recommendations there remains significant room for further
disclosure in accordance with the Code.?

The firm also pointed out that we need action, not just words, and this
raises one of the critical questions about reporting, whether voluntary of
mandatory: does it make any difference?

Accountability, the UK-based think-tank, has also focused attention on
this issue through its Impacts of Reporting programme. In the special
edition of its Quarterly publication last year John Burke (the listings
director at the Johannesburg Stock Exchange and a member of the King
Committee) accepted that the requirements are onerous, but insisted that
they were also beneficial: ?Ultimately, these developments should result
in fewer corporate failures, improved shareholder returns and more
responsible corporate citizenship.?

Contrary to that assessment, Accountability has been pretty gloomy about
the quality of reporting so far, and especially about its apparent lack of
impact on decision-making. As the evidence from around the world shows,
there is plenty of enthusiasm for requiring companies to publish
non-financial information. The challenge now is to make it useful ? and

Box 1: Example of disclosures suggested by Corporate Sunshine Working

- Countries where company has facilities or operations, and their nature
(e.g. sales, manufacturing, assembly)

- List of major suppliers for core business operations

- Disclosure of compliance with Foreign Corrupt Practices Act

- Disclose security arrangements with state police and military forces or
with third party military or paramilitary forces

- Corporate contributions to political organisations; spending on lobbying

- Number of outstanding claims and number and aggregate value of
settlements related to product liability, injury, and wrongful deaths.

- Number and value of product recalls.

- Number and aggregate value of complaints filed at and violations found
by the Equal Employment Opportunity Commission and/or Office of Federal
Contract Compliance Programs.

- Identify trends in customer or stakeholder complaints, accidents, or any
recently published peer-reviewed scientific literature that may suggest
the company?s products, services or activities could cause serious harm to
human health or the environment.

- List and discuss significant environmental problems caused by normal use
of the company?s product by the ultimate customers.

Box 2: King II reporting recommendations

An integrated approach to stakeholder reporting that includes:

? acceptance and adoption of business principles that can be verified

? implementation of practices with adequate evidence to support disclosure

? performance against adopted business principles.
Consideration for disclosure of sustainability items should include:

? relevance to business, scope of disclosure, period of disclosure,
expectations of performance, and the impact directly attributable to the
company?s action or inaction

? principles of reliability, clarity, relevance, comparability,
timeliness, and verifiability, with a reference to the Global Reporting
Initiative guidelines

? development of guidelines for materiality

Specific sustainability disclosures should include:

? occupational health and safety matters, including AIDS
? environmental matters

? social investment prioritisation, including black economic empowerment

? human capital development, including employment equity.

Box 3: Objectives of South Africa?s Black Empowerment Act

To facilitate broad-based black economic empowerment by:

· promoting economic transformation to enable meaningful participation of
black people in the economy

· achieving a substantial change in the racial composition of ownership
and management structures and in the skilled occupations of existing and
new enterprises

· increasing the extent to which communities, workers, cooperatives and
other collective enterprises own and manage businesses, and increasing
their access to economic activities, infrastructure and skills training

· increasing the extent to which black women own and manage businesses,
and increasing their access to economic activities, infrastructure and
skills training

· promoting investment programmes that lead to broad-based and meaningful
participation in the economy by black people in order to achieve
sustainable development and general prosperity

· empowering rural and local communities by enabling access to economic
activities, land, infrastructure, ownership and skills

· promoting access to finance for black economic empowerment.

EU urges companies to adopt UK model of corporate governance

EU urges companies to adopt UK model of corporate governance
Alex Blyth
8 Oct 04
The European Commission has recommended that all listed companies in the
European Union should adopt the UK?s model of corporate governance. The
recommendation was announced despite strong resistance from German
Frits Bolkestein, the outgoing Dutch internal market commissioner, urged
the 25 governments of the EU to ensure a strong role for independent
directors. He also argued that companies should make annual forward
statements on directors? remuneration and that the topic should be voted
on at all annual shareholder meetings.

The recommendations are non-binding, but are nonetheless seen as a direct
attack on German business conduct. Only about a third of the top 30
companies in the Dax index comply with a code on transparency regarding
directors? pay and perks.

The UK and the Netherlands are said to follow most closely the recommended
model. Germany, Austria and the Nordic countries tend to be weaker on
corporate governance. French companies are often criticised for the
practice of having a board member who acts as both chairman and chief
executive. Greater accountability is the key issue in Belgium, Spain and

Economics and environment can be compatible

Economics and environment can be compatible
875 words
10 October 2004
Times Union
Copyright (c) 2004 Bell & Howell Information and Learning Company. All
rights reserved.
The recent spike in oil prices, The New York Times reported several days
ago, has meant great news in China: The government is tightening mileage
standards on new cars and pushing ahead with negotiations on major
projects with Toyota for more hybrid vehicles.
This is great news? For China, which dislikes over-reliance on insecure
foreign oil supplies and has too much smog, of course it is. For Toyota,
it's even better news: China is the largest market in world history.
China's policies may soon be imitated through the core of Asia, and a
whole generation of oil-dependent vehicles may be skipped.
What's in it for us? A lesson bigger than a Saudi oil field. Hybrids are a
sign of potentially major changes in the auto industry, mirrored by even
larger changes in general business strategy. A quiet revolution has taken
place that makes the Chinese choice -- and many of our future choices --
much more practical.
Let's call the revolution "social response product development."
Managers spent decades after World War II integrating quality control
processes into corporate strategy. The "quality" revolution at such firms
as General Electric, Honeywell and Lockheed Martin stressed profit through
pricing and technical quality.
Now a third element makes up the business creed -- a corporate trinity, in
effect -- governing automakers such as Toyota and Honda, but also HP,
Merck and BP, which compete on price, technical quality and social
Social response does not connote philanthropy or forcing business to
comply with regulations. Rather, it describes what many businesses are
already practicing: proactively pursuing profit through creation of
environmentally appealing products. Such companies are not looking for
awards for kindness, but for profit -- which is exactly why their
long-term social impact will be keenly felt.
Dennis Minano, former head of energy and environment at GM, says a company
"that can capture historic forces and align them with new products that
speak to society's desire to protect future generations stands on the
cutting edge of contemporary business strategy. This provides a new form
of competitive advantage."
In this country, Toyota's hybrid cars are growing in popularity daily --
although, as with all new economy cars, they have not quite lived up to
all the mileage claims made for them in cities. Nevertheless, they are
still substantial gas-savers on any kind of road. Originally small and
relatively unimpressive looking, hybrid- electrics are increasingly
available in many automotive models, from four-door sedans to SUVs, and
even light trucks and buses. We can expect more of them in the near
Seattle has transformed much of its fleet of public buses to hybrids.
Hybrids appeal to American consumers for two reasons: savings on gas and
saving the country. In a poll on energy policy taken this summer by the
Hudson Institute and Frank Luntz, almost 60 percent of respondents said
government ought to provide substantial tax breaks for anyone buying such
The phrase "energy independence" is old; the news is we can get there from
here. The key isn't government alone, but aligning policy with social
response product development capitalism. Presidential candidate John
Kerry, for example, has proposed tax breaks for hybrids and developing
ethanol and other grain-based fuels as replacements for foreign oil. He
also has called for funding to finance research and development of
alternative and renewable fuels, and to help American manufacturers
reconfigure plants to make more efficient vehicles.
Can this be done? Yes, because the social response product development
revolution and energy revolution are supported by a third revolution. For
the first time, the transparency of the modern corporation allows the
simultaneous tracking of corporate performance by stakeholders, the
investment community and consumers. The smarts behind eliminating
environmental risks can now be matched with the sacred drive to lessen
financial risks. Investors want safe returns, and wise environmental
policy is increasingly a route to get to them.
Taking advantage of these revolutions means that, at last -- and without
environmental romanticism -- we can "hedge our national portfolio."
Virginia (with California and Texas to follow soon) is helping by allowing
hybrids with single drivers in high occupancy vehicle lanes. More cities
can follow Seattle, which estimates it will soon make up in gas savings
its higher initial investment in hybrid buses.
The federal government can allow energy efficient appliances -- such as
new home and computing appliances -- to compete through proper labeling.
It can decrease subsidies of the oil business here and abroad. It can
invest more in biomass, dispersed and distributed energy systems,
co-generation and the like.
There are parallels in non-energy fields. Social response product
development gives HP a competitive advantage, and special appeal to some
customers, because of its decreased use of unsafe metallics and plastics
in manufacture, its lead and paper recycling and its "all in one" series
of equipment for smaller office environments. Interface, a carpet company,
practices social response product development when it uses environmentally
friendly chemicals to make textiles. Green Mountain Coffee Roasters
practices it by growing beans in ways helpful to Third World agricultural
communities. These developments mirror the importance of hybrid cars: At
long last, we can reconcile environmental and economic goals.
Document TMNN000020041011e0aa00052

Greenhouse Gas Jump Shows Kyoto Vital - UK

Greenhouse Gas Jump Shows Kyoto Vital - UK

Wed Oct 13, 5:18 AM ET

Science - Reuters

By Ed Stoddard
BANGKOK (Reuters) - A worrying rise in the levels of so-called greenhouse
gases linked to climate change highlights the importance of the Kyoto
protocol, British Environment Minister Elliot Morley said Wednesday.

Carbon dioxide levels, the main gas blamed for blanketing the planet and
pushing up temperatures since the Industrial Revolution, have risen by
more than two parts per million (ppm) in the past two years against a
recent rate of about 1.5 ppm.
Scientists said Monday the figures were confirmed at sites including Mauna
Loa, Hawaii, west Ireland and the Norwegian Arctic island of Svalbard,
about 800 miles from the North Pole. The rise was less in the southern
"If this trend continues, then it suggests that the impact of global
warming will be faster than what had previously been modeled with all the
problems that will go with it," Morley told Reuters.
"It absolutely underscores the importance of Kyoto and underscores the
need for international action by all countries," he said on the sidelines
of the Convention on International Trade in Endangered Species (CITES) in
U.N. scientists project that average temperatures will rise 1.4 to 5.8 C
(3 to 11 F) by 2100 because of human impact on the climate.
Temperatures have already risen by 0.8 C since the Industrial Revolution
in tandem with a 30 percent rise in CO2 levels.
The U.N.'s Kyoto protocol, likely to come into force in coming months with
Russian help after a U.S. pullout in 2001, obliges developed nations to
cut their carbon dioxide emissions by 5.2 percent below 1990 levels by
Russian President Vladimir Putin (news - web sites) backed the Kyoto
Protocol (news - web sites) unambiguously Tuesday in his first public
comments since his government sent it to the Kremlin- dominated parliament
for ratification.
Russian ratification is vital to the environmental pact, which needs the
backing of nations responsible for 55 percent of global greenhouse gas
"It's a huge boost to the Kyoto process," Morley said of Russia's support
after years of dithering.
"It means that we can now look for the next stage of Kyoto, because Kyoto
is the beginning and not the end of a process. We can move on."
Rising global temperatures have been linked to extreme weather patterns,
including droughts and flooding, and are seen by some as a potential spark
for regional conflicts.


Carry on Kyoto: The Kyoto treaty on global warming is about to come into force

Carry on Kyoto
Oct 7th 2004
From The Economist print edition

The Kyoto treaty on global warming is about to come into force

Get article background
LIKE a swamp creature in a bad horror movie, the Kyoto treaty on climate
change has risen from the dead. A certain Texan cowboy thought he had
killed the Japanese monster. Alas, thanks to a last-minute betrayal by an
inscrutable Russian spymaster, the green beast is back.
That is only a slight exaggeration of how some people view the revival of
the Kyoto protocol. The controversial UN treaty, agreed in Japan in 1997,
commits rich countries to cuts in emissions of greenhouse gases by 2012.
But it was dealt a near-fatal blow when George Bush confirmed America's
rejection in 2001. The EU, Japan, Canada and over 100 others remained in,
but Russia wavered. If it did not ratify, the pact would fail.
Vladimir Putin played coy and angled for special favours. The Russians had
anyway been bribed with generous emissions targets, which they had
expected to sell as credits in the international emissions-trading market
envisaged by the treaty. With the departure of America, the biggest
emitter, Russia's windfall (mocked as ?hot air?) largely vanished. Only
clever manoeuvring by the EU, including support for Russian entry into the
World Trade Organisation, saved the treaty. Mr Putin's cabinet has just
formally approved the pact, and the parliament is expected to ratify it

Not everyone is rejoicing. Kyoto-bashers claim the deal is dangerously
deluded, citing environmental and economic grounds. That is unfair. Some
insist that the emissions targets will slow the warming trend only
slightly. That is true, but Kyoto was always seen as the first step in a
decades-long journey?akin to the early GATT trade rounds. Some sneer that
there are no legal sanctions for non-compliance. That is again true, but
misleading. For example, Kyoto rules have the full force of domestic EU
law, so future European offenders can indeed be hauled before the court of
justice in Luxembourg.
Others claim that Europeans will choose to buy Russian ?hot air? rather
than tackle the tougher job of making emissions cuts. But EU countries
have agreed to meet more than half of their emissions targets at home.
Moreover, it is not in Russia's interest to dump its carbon credits and
risk a price collapse. Since credits are ?bankable?, Russia will do better
to hold on and hope that America will enter the market in future, greatly
lifting their value. As for costs, the original targets were too
ambitious. Economic sense argues for a gentle start to emissions cuts,
moving flexibly towards deep cuts in the long term. That would be the
surest way to spur the development and adoption of low-carbon energy
technologies. These anyway need to be embraced by the Kyoto countries in
future if the broader process is to be a success.
The EU's initial rejection of emissions trading (done at the behest of
green lobbyists) made it impossible for America to stay in the treaty. But
European industrialists then realised that Kyoto might put them at a
disadvantage and so pushed for carbon trading. Ironically, the EU is about
to launch the world's first international carbon-trading system. America,
which pioneered such trading, is left out. Canada, Japan and maybe even
cheeky California will soon join Kyoto-land (see article).
The emergence of this innovative market is the best reason to stick with
Kyoto, but to make sure its flaws are fixed. Because climate change is so
complex, any sensible response must be market-based?as Kyoto has belatedly
become. It is a long-term problem, because carbon dioxide stays in the air
for a century. That is why the UN framework on which Kyoto rests (happily,
Mr Bush still accepts it) is rightly long-lived.
Negotiations start next year for the next Kyoto commitment period (which
begins in 2012). Informal efforts are underway to bring the 20 biggest
emitters on board. That will mean widening the treaty's scope to include
developing countries such as China and India. Tony Blair intends to use
Britain's position as head of both the EU and the G8 next year to woo
Even so, it will not be easy. Some European greens are foolishly insisting
on another rigid Kyoto round. Rather, negotiators must hold on to the best
aspects of Kyoto, such as trading, and leave behind a failed ?targets and
timetables? mindset. More creative proposals, ranging from emissions
targets pegged to GDP growth to fuel-efficiency commitments, are needed to
persuade America, and perhaps even China, to agree to meaningful
participation. A less aggressive treaty that actually works is surely
better than a failed one.

Welcome to Kyoto-land: By embracing Kyoto, the EU might just have given its businesses an edge in the race towards clean energy.

Welcome to Kyoto-land
Oct 7th 2004 | NEW YORK
From The Economist print edition

Why European companies may not lose out to their American rivals under the
Kyoto treaty on greenhouse-gas emissions
TWO hundred and fifty thousand tonnes of carbon dioxide is an exceedingly
tiny amount compared with how much is released by mankind's burning of
fossil fuels every day. But consider that those 250,000 tonnes were traded
on October 5th as forward contracts on Europe's fledgling market for
carbon-emissions credits, and suddenly the number seems more impressive.
After all, a few years ago the very notion of carbon trading seemed
fanciful. Indeed, that recent daily amount was more than twice the volume
traded in the whole month of August.
A big reason for the surge in trading was Russia's decision to ratify the
United Nations' Kyoto treaty on climate change. Now, a long-running
uncertainty is over. The treaty will soon come into force and remove the
cloud that has hung over the domestic rules on carbon emissions that
European Union countries have introduced. Industries in most rich
countries, notably in the EU, can no longer hope they will ever again be
allowed to vent carbon dioxide freely into the atmosphere, as they have
done in the past.

That will be good for the atmosphere, but what does it mean for industry?
After all, while the manufacturing sector in rich countries has become
less carbon-intensive since the oil shocks of the 1970s, it is still the
biggest contributor to carbon emission (see chart). Because George Bush
confirmed his country's rejection of the treaty in 2001, American
businesses are not subject to Kyoto rules. That has led Europe's
businessmen to ask with increasing urgency whether firms in Kyoto-land,
which also includes Japan and Canada, will suffer against rivals in
America and in the often overlooked, but energy-guzzling Australia, which
also has not ratified the Kyoto treaty (see next chart).
At first it seems obvious that firms facing a ?carbon price? must suffer a
heavy burden compared with rivals that do not. But look closer, and there
is reason to think that EU industry may not have such a heavy load to lift
after all.

Benedikt von Butler of Evolution Markets, a greenhouse-gas broker, points
to one reason not to worry: price. If a firm cannot stay under its
government-allocated quota for carbon emissions (and every sizeable EU
firm received such a quota earlier this year), then it must purchase
carbon allowances at the going price. Following the informal carbon market
already under way, pan-EU carbon trading starts next year. A few years
ago, observes Jorund Buen of Point Carbon, a European carbon consultancy,
most experts had expected businesses to be confronted with a price of
?20-25 ($25-31) per tonne. In practice, prices have been a lot lower than
that?and they are not expected to rise much above ?10-15 per tonne.
There are two reasons for this. The first is the potential overhang of
?hot air?. Russia was given an over-generous allowance of credits, to
persuade it to join the treaty. Some worried that it would, over time,
depress prices on the EU market. In fact, self-interest will discourage
this: the Russians do not want a price collapse. Indeed, argues Mr von
Butler, they are more likely, eventually, to join Ukraine and Bulgaria in
a cartel to try to prop up prices. The most likely outcome, reckons David
Victor of Stanford University, is that overhang of Russian credits will
allow EU governments to use the hot air as a ?safety valve? to ensure the
long-term price of EU carbon credits does not rise much above ?10. The
second reason is that, despite all the rhetoric, the EU is doing rather
less than it appears on climate, and America rather more.

Europe has all the regulations of Kyoto in place, but the straitjacket on
industry is pretty loose. When the national allocation plans for carbon
were issued earlier this year, the greens complained that they were
toothless and amounted to ?business as usual?. Industry had successfully
lobbied EU governments not to hobble its competitiveness. And in America,
where Mr Bush has unshackled corporations from Kyoto, many industries are
confronting a carbon challenge nonetheless and, in some cases, making
voluntary cuts.
One example is DuPont, which has slashed its emissions of greenhouse gases
(which include gases other than carbon dioxide) by a breathtaking 65%
compared with its 1990 levels. One reason has been to gain favourable
publicity. But multinationals like DuPont are convinced that carbon
constraints are coming anyway in America, and they want to make global
preparations. Since they have operations inside Kyoto-land, many are
pursuing low-carbon strategies at home, even in the absence of regulation.
There is also a grassroots rebellion taking place in America. Many states
have, in defiance of the Bush administration, introduced carbon
restrictions. States in New England have imposed curbs on carbon emissions
from power plants, and are developing a common trading system for
emissions with Canada's eastern provinces. California has the nation's
first law limiting greenhouse-gas emissions from cars. New York and others
may adopt similar rules.
So, Kyoto need not place a carbon millstone around the neck of Europe's
businesses. Indeed, even concerns about developing countries stealing a
competitive edge may be overblown. China, which has no obligations under
the treaty, is imposing de facto constraints on local industry through
seemingly unrelated policies such as tough new fuel-efficiency laws for
European economies might even gain some advantages. Anthony Hobley of
Baker & McKenzie, an American law firm, argues that Britain's early
embrace of the Kyoto protocol gives it a chance to dominate a sector that
benefits: the legal profession. ?English law is likely to be the major
legal system of this new international market. The fact the US has ruled
out ratifying Kyoto takes New York law out of the running for the time

Despite all the rhetoric, the EU is doing rather less than it appears on
climate, and America rather more

Another sort of edge lies in the pan-EU trading system. It formally covers
25 countries, but may set the global standard. Already, notes Mr Hobley,
Norway, Switzerland and Canada have had formal discussions about linking
to the system. Japan, a Kyoto signatory, may also announce a linking
scheme. Most intriguingly, rumours suggest that California might unveil a
carbon-trading system in December?and it too might be linked to the
European scheme.
The emerging carbon market already feels more like the dizzying early days
of Silicon Valley than the state capitalism of Europe's past. Jos Delbeke,
of the European Commission, certainly sounds more like a free marketeer
than a Eurocrat: ?We have created a new currency, the carbon allowance,
but only the market can set its price.? The commission has already
chastised eastern European governments for over-generous carbon
allowances, which it insists add up to unfair state aid.
The emerging carbon-emissions industry in the EU counts dozens of small
and medium-sized consulting firms, technology start-ups and the like. The
big accounting firms are scrambling to train ?carbon accountants?, and
venture capital is pouring into clean energy. London is quickly emerging
as the carbon-finance capital. It is home to Climate Change Capital, the
first merchant bank dedicated to carbon issues, and the Carbon Trust, an
innovative public-private partnership that aims to boost clean energy, in
part by funding promising technologies considered a little too risky for
private financiers.
If any industry should be hostile to Kyoto, then it should be energy. Yet
in 1997, Lord Browne, the boss of BP, the world's second-largest oil
company, broke ranks and called for action on global warming. Hoping to
encourage a market-friendly approach by the EU, he vowed that his company
would reduce its emissions to 10% below 1990 levels by 2010. He turned to
Environmental Defence, a market-minded green group that helped design
America's successful sulphur-dioxide trading system. Together, they
implemented a cap-and-trade carbon scheme for BP's various divisions
The result? The firm met its targets eight years ahead of schedule through
a combination of higher efficiency, new technology and better management
of energy. Most impressive, Lord Browne explains, is the price tag: ?We've
met it at no net economic cost?because the savings from reduced energy
inputs and increased efficiency have outweighed all the expenditure
involved.? The costs of tackling climate change, he concludes, ?are
clearly lower than many feared. This is a manageable problem.? By
embracing Kyoto, the EU might just have given its businesses an edge in
the race towards clean energy.

Analysts at Socially Responsible Investment Firms Urge Stronger Corporate Reporting

Analysts at Socially Responsible Investment Firms Urge Stronger Corporate
WASHINGTON, Oct. 7, 2004 - In the wake of years of corporate scandals, an
unprecedented coalition of analysts at 17 socially responsible investment
firms representing over $147 billion in assets is urging traded companies
around the world to meet a higher standard of reporting on corporate
governance, environmental, labor and other key issues.

In a joint statement, the analysts recommend that companies start
reporting annually on their key social and environmental policies,
practices and performance. For the first time, the coalition of socially
responsible investment analysts is sending a clear signal that companies
should base their reporting on the Global Reporting Initiative's (GRI)
Sustainability Reporting Guidelines.

Trillium Asset Management Senior Social Research Analyst Steve Lippman
said: "Companies have been asking us for guidance on how to meet the
skyrocketing demands for information. At the same time, a growing set of
investors is relying on data on companies' social and environmental
performance to make investment decisions. With this statement, we
recommend ways that companies can increase the credibility, comparability,
and utility of their reporting."

Intel Corporation Director of Corporate Responsibility Dave Stangis said:
"I have been engaging the social investment and research community for
several years. These groups own Intel shares or create indices that
incorporate Intel stock. They are a key stakeholder group and I value
their input. Our stakeholders look to us to disclose key environmental and
social data so they can compare and judge our performance. It makes clear
business sense for Intel to meet that need."

The signatories to the joint statement are: Boston Common Asset
Management, LLC, Calvert Group, Christian Brothers Investment Services,
Citizens Advisers Inc., Domini Social Investments LLC, Dreyfus Premier
Third Century Fund, Inc. / Dreyfus Socially Responsible Growth Fund, Inc.,
Ethical Funds, Green Century Funds, ISIS Asset Management, plc, Mennonite
Mutual Aid, Neuberger Berman Socially Responsive Investing, Real Assets,
Trillium Asset Management Corporation, Pax World Funds, The Pension Boards
-- UCC / United Church Foundation, Progressive Asset Management, Inc., and
Walden Asset Management, a division of Boston Trust & Investment

The joint analyst statement is a project of the Social Investment Forum's
International Working Group (IWG) and the Social Investment Research
Analysts Network (SIRAN).

For the full text of the analyst statement and a list of other
organizations supporting it, go to