Sustainablog

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

27.8.05

RFID Rush: over 50% of the 510 North Americancompaniesùare evaluating, pilot testing, implementing or currently using RFID technology.



RFID Rush

Published: August 26, 2005
(After September 03, 2005, this article will only be available to
eStat Database subscribers.)

A recent study by
Frost & Sullivan and the Computing Technology Industry Association found that over 50% of the 510 North American companies it surveyed are evaluating, pilot testing, implementing or currently using RFID technology.

There are a variety of factors driving implementation, and some industries are further along than others. Leading the pack is the automotive industry, followed closely by the consumer goods and transportation and logistics sectors.

One major factor in the drive towards RFID is the advantage it offers over older tracking technology in supply chain management. Companies that have implemented RFID cite reduced inventories and reduced out-of-stocks as two of the most prominent rewards of RFID tracking, according to a recent A.T. Kearney study.

But many businesses are hesitant to make the switch, and as a result, pressure has come from the outside. David Sommer, vice president of electronic commerce for the Computing Technology Industry Association, explains: "Much of the RFID adoption in North America is being driven by mandates and directives from key organizations, including the U.S. Department of Defense, the Food and Drug Administration and Wal-Mart." Fully 46% of the consumer goods manufacturers surveyed have implemented a RFID solution because of mandates from Wal-Mart, along with 34% of food and beverage makers and 24% of textile and apparel manufacturers. The result among many of the pressured companies has been "slap-and-ship" implementation, where RFID tags are simply attached to shipping containers rather than more fully integrated into the overall process. Over one-half of businesses in the consumer goods, food and beverage, and textiles and apparel market use "slap-and-ship."

On the other hand, industries like banking and finance, information technology, and transportation and logistics are integrating RFID more fully with their business methods.

The slap-and-switch solution helps companies meet standards for RFID faster, but many would rather take longer to maintain the most cost efficient path. Only 35% of US companies surveyed by A.T. Kearney feel that bringing in a RFID system in less than two years is ideal, while 65% prefer two to four years for such a process (and this is just the time taken to reach a pilot test).

Interested in learning more about RFID? The eStat Database contains over 100 records on the subject.

Why Corporate Governance Doesn't Work Like it Should



Why Corporate Governance Doesn't Work Like it Should
8/2/2005 --

The late-1990s stock-market bubble and subsequent wave of corporate scandals show corporate governance does not work as advertised.

ANN ARBOR, Mich.—Corporate governance has become a hot button with the Securities and Exchange Commission, Congress, the federal courts and the news media.

Yet, current views regarding the original purpose, current function and collective impact of corporate-governance structures, processes and institutions fail to fully explain corporate behavior.

One thing is clear, however, says Jerry Davis, a business professor at the University of Michigan: Corporate governance works a whole lot better in theory than it does in practice.

"The stock-market bubble and related corporate scandals of the late 1990s and early 2000 provide evidence that corporate governance does not work as advertised, even in the United States," said Davis, professor of management and organizations at the Stephen M. Ross School of Business.

Corporate governance concerns the institutions that enable investments of financial, human and social capital in organizations, from boards of directors to legal frameworks and financial markets to broader cultural understandings about the place of the corporation in society. More broadly, corporate governance describes the institutional matrix that channels financial flows.

In his article "New Directions in Corporate Governance" in the August 2005 issue of the Annual Review of Sociology, Davis contends that because public corporations are among the most dominant actors transnationally, examining corporate governance is critical for understanding global structures of power.

"In a world of vast, unprecedented cross-border financial flows, governance is an essential component of the contemporary global economy," he said.

Sociologists have been critical of the "contractarian" approach to the corporation, which is based on the notion that corporations should be run to create shareholder value. This approach rapidly established itself as the dominant framework in the 1980s and had a substantial influence on public policy and managerial discourse.

Contractarians contend that financial markets are informationally efficient and, thus, that prevailing stock prices serve as economic guides. Corporate-governance institutions are explained by their function in orienting decision-makers toward signals in financial markets. The contractarian approach also holds that corporate structures, state corporate law and securities markets have evolved to serve the function of enhancing shareholder value.

"Sociological work, particularly within organizational theory, has questioned the empirical and theoretical underpinnings of this functionalist view and provided alternative interpretations based on networks, power and culture," Davis said.

Some studies, for example, have examined the impact of "interlocking" boards of directors, where individual directors serve on two or more boards at once. Other researchers have documented the influence of both behavioral and structural factors (e.g., the nature of relationships between CEOs and members of their board) and broader cultural factors (e.g., how changes in the prevailing rhetoric around corporate governance were filtered through discrete corporate practices).

In essence, sociologists say the divergence between the American theory of corporate governance and what happens on the ground is due largely to the "human economy," i.e., the people embedded in institutions, their social relationships with each other and their ability to manipulate the system to their own advantage.

"We can only hope that in five years there will be a fully developed sociology of corporate governance to provide a theoretical counter-weight to the deficiencies of the contractarian approach," Davis said.


For more information, contact:
Bernie DeGroat
Phone:(734) 936-1015 or 647-1847

Email:bernied@umich.edu

25.8.05

CSR Reporting faces its next challenge: Article by Mallen Baker


* Japan: Sony named as most responsible Japanese company

 According to a new survey released by the business newspaper Nihon
 Keizai Shimbun, Sony is the company that is most active in promoting
 corporate social responsibility in Japan.

 The survey evaluated companies using a questionnaire sent to major
 corporations. Sony topped the measure, followed by Matsushita Electric
 Industrial Co, Komatsu, NEC Corp and Toyota.

 The review focused on stakeholder dialogue, and had criteria covering
 management strategy and corporate structure, compliance, social
 contribution, commitment to employees and commitment to consumers and
 suppliers.


* CSR Reporting faces its next challenge

 Article by Mallen Baker

 There is some discussion that a number of the people in the leading
 companies - the pioneers, the CSR enthusiasts, the committed - are
 getting pretty fed up of being on the hamster wheel of churning out
 annual CSR reports. They spend most of their time collecting data, and
 not coming up with new ways to improve business practice. Revolt is in
 the air.

 Not that there is due to be an out and out assault on the principle of
 performance measurement and disclosure. But the current form of CSR
 reporting is simply not proving its value. It needs to evolve and fast
 to show that it can meet real needs.

 As it stands, vast amounts of money and time go into reports and it is
 known only too well by the people carrying out this investment that
 the stakeholders at whom the reports are aimed largely don't read
 them. Sooner or later, businesses begin to question a process where
 the standard rules of communication are routinely ignored, and the
 business value is slight. It is easy to say that no-one will be
 spending half a million dollars on reports that no-one reads in ten or
 twenty years time. It is harder to work out what will happen in the
 next three years.

 On the one hand, there is a growing interest amongst report writers to
 reach those elusive audiences. So the recent Centrica report, for
 instance, as well as being produced in conventional form, is having a
 separate edition produced for employees. It is based on the same
 information, but in much more of a 'magazine' format to make it more
 attractive to that audience. Different reporting channels for
 different key stakeholders is a very real possibility. Some of these
 may look nothing like reports at all - and it will be interesting to
 see how fast the CSR industry, which has certain expectations of its
 reports, will recognised and reward such approaches.

 On the other hand, there are moves to try to standardise the
 information that reports carry to make them easier to interpret. The
 Global Reporting Initiative, for instance, is now heavily into its
 '3rd Generation' development for its guidelines, aiming to produce
 something that shows real value.

 I have been one of the people critical of the GRI framework in the
 past. As it currently stands, it has been a struggle to explain why a
 report produced against the existing framework provides information
 that could communicate to the board why their company is committed to
 sustainability or social responsibility. A performance framework must
 be just that - the current draft with its one third of questions
 focusing on the existence of policies - falls well short in terms of
 quality of impact measurement.

 But its mere existence encourages legislators to lean on it. The South
 African Stock Exchange (JSE) requires companies to report against it.
 When campaign groups lobbied for compulsory reporting in the UK, the
 answer to the question "report against what?" was the GRI - more
 because it was there and a convenient answer than because it was the
 right answer.

 This will mostly be good, healthy stuff if there is a common framework
 that genuinely captures the core of what companies should be
 disclosing on social responsibility - telling a real story to the
 financial community, to employees and to customers. If, however, the
 framework is misconceived, then it will potentially do a lot of
 damage. I applaud, and have high hopes for, the revision of the GRI
 framework currently going on. This really is the last chance in some
 ways. If it can't be gotten right now, with the accumulated experience
 of reporting that has grown up in recent years, then it should
 probably be dropped as being an impossible task. Obviously, it would
 be better if it succeeds.

 Of course, part of the problem is that we have unrealistic
 expectations of what these reports can tell us. After all, the
 financial reports of the company give us something which is much more
 concrete. Figures are figures and, properly gathered and represented,
 they don't lie. And yet we are quite used to the fact that we expect a
 number of financial analyst experts who know the industry context,
 have an assessment of the quality and track record of the leadership,
 and bring these into an interpretation of what the figures are
 actually telling us. Why do we imagine that CSR reports, which deal
 with much more intangible matters, should be self-evident and not at
 all requiring interpretation or context setting? Who currently
 provides such interpretation? Nobody. It is a rare event when the
 content of a CSR report makes it into the news sections as an
 indication of how a company is doing.

 As a result, we get reports with lots of photos of smiling children
 which try simultaneously to present data and to tell stories. The
 company becomes its own interpreter - and that is why so much of the
 focus on reporting remains on the quality of the report, rather than
 on what the report is actually telling us.

 There needs to be a revolution in reporting. Reports needs to be clear
 about their target audiences, and to select information that is
 relevant to that audience. They need to be used to drive performance
 improvement, and therefore to streamline the actual process of
 gathering data.

 And we desperately need an informed, critical group of interpreters to
 give us the real story behind the reports. Only then will the money
 spent of them really begin to provide the value that it should.

24.8.05

Going On-Line to save the world's cities [Does this look like a WorldJam or what?]



This Week's Headline News
August 23, 2005

Other News

Going On-Line to save the world's cities

VANCOUVER, August 16, 2005 (GLOBE-Net)- Imagine tens of thousands of people around the world connecting in real time over the internet to discuss and debate key issues about urban sustainability. Imagine world-class thinkers leading and moderating the discussions. Imagine new global networks being fostered between people who wouldn’t have connected before. Imagine the results that could be achieved by this unprecedented global conversation and collaboration. This is Habitat JAM.

In preparation for the 3rd World Urban Forum in Vancouver, the Canadian government and UN-HABITAT will host Habitat JAM - an Internet event that will provide an opportunity for people from around to world to give their input on key issues that will be discussed at World Urban Forum 3 taking place in Vancouver in June 2006.

Habitat JAM will be held from December 1st – 3rd, 2005, with over 100,000 participants over the 72 hour event. Participants include national/local governments and international organizations, elected leaders and legislators, urban planners and architects, grassroots organizations and global NGOs, experts and academics, financiers and builders, and development specialists. Users will be able to post content, respond to ideas, and discuss important issues with others around the globe.

The content of the Habitat JAM will focus on urban sustainability issues for both developed and developing countries, related to the themes of the World Urban Forum. Subject matter experts and moderators such as government leaders, celebrities, royalty and key thinkers will add their expertise, resulting in a discussion format that will evolve throughout the three-day JAM.

Habitat JAM is recruiting moderators, facilitators, subject matter experts and champions for this unprecedented global dialogue.

Spread the word – be a catalyst for change! Check out: Opportunities for business with the 3rd World Urban Forum !

For more information, click here.. Also check out: Canadian Government Information on World Urban Forum