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


Ethics training - Doing the wrong things: ethical misconduct in the workplace is widespread despite a rise in formal ethics programmes

Ethics training - Doing the wrong things
Lisa Roner in Dallas
21 Nov 05

Training helps, if you do it right
Training helps, if you do it right

A new study shows ethical misconduct in the workplace is widespread despite a rise in formal ethics programmes
According to the 2005 National Business Ethics Survey released last month, more than half of US workers have observed at least one type of ethical misconduct in the workplace, a slight increase from 2003, despite greater awareness of formal ethics programmes. And employee reporting of such instances of misconduct fell by 10% from 2003.

The survey of 3,000 US workers, conducted by the non-profit group Ethics Resource Center, examines trends in workplace ethics, implementation and impacts of formal ethics programmes, ethics cultures within organisations and factors that pose risks of misconduct.

Nearly 70% of employees report their organisations have implemented formal ethics training programmes, up 14% from 2003. And 65% say there is a place in their organisation where they can seek ethics advice.

Patricia Harned, president of the Ethics Resource Center, says regulation resulting from the Enron collapse and other corporate scandals has prompted a renewed emphasis on corporate ethics. But despite significant investment of resources by companies in ethics and compliance programmes, little change is being seen as a direct impact of the programmes, she says.

The key, says Nell Minow, editor of the Corporate Library, is that we are better at identifying ethics violations after the fact than at preventing them. And the study, she says, shows just how ineffective “programmes” are.

Companies, Harned advises, need to take a closer look at the role workplace culture plays.

Change of culture

Sandra Waddock, professor of management and senior research fellow at the Center for Corporate Citizenship at Boston College, agrees. Just implementing an ethics programme and telling employees to “be better”, she says, is not going to change the culture of an organisation.

“You need to work systemically at many different levels, and in particular you need to change the rewards system to change the culture of an organisation,” she says.

Ethics has to be a part of every single transaction and communication, from the job interview to the performance evaluation and pay and bonuses, Minow stresses.

Although formal ethics programmes alone may help some employees make the right decisions, Waddock says, they only address the symptoms and not the real problem – that people are rewarded for short-sighted decisions that seem to improve short-term, bottom-line results.

“Companies are companies and the reason they are putting so much pressure on employees for short-term results is because they are under the same pressure from Wall Street,” she says.

It is easy, Waddock says, to get caught up in that culture and think “everybody is doing it, so it must be okay”. Ethics programmes, she says, can only go so far in countering that pressure when the rest of the system is working against it.

Therefore, ethics programmes, while important, must be merely a part of bigger strategy, she says.

Perhaps most importantly, Minow says, ethics can only truly be communicated by example.

It is clear it takes more than simply implementing an ethics programme to instil ethics in the workplace. Improving ethics in business requires living the spirit of those programmes in every aspect and transaction – beginning at the top, and often transcending the wishes of the stock market.

Losing friends by being big: Business knows that big is beautiful, but the media and consumers often disagree.

Losing friends by being big
Steve Hilton on communication
11 Nov 05

A too-successful supplier squeezer?
A too-successful supplier squeezer?

Business knows that big is beautiful, but the media and consumers often disagree. Steve Hilton examines the link between size and reputation
My old economics tutor had a favourite wisecrack: “The goal of every competitive corporation is to become a monopoly.” I’m sure there are many companies out there who would forcefully reject such dastardly motives being ascribed to them, but there’s more than a grain of truth in the remark. The pursuit of increased market share is indeed what drives many businesses and, let’s face it, how many of them would complain if their share approached the 100% mark?

But with success comes scrutiny; as companies grow, their reputations and business practices come increasingly under the spotlight – particularly in the area of corporate responsibility. The public picture is rarely flattering. So what I want to know is, is a link between growing size and criticism for responsibility failings inevitable? In other words, is it possible to be big and good? And, perhaps more importantly, does public opinion matter anyway?

The immediate prompt for asking this question is the media pasting being dished out to that golden boy of British retailing, Tesco. For year after year in its seemingly inexorable rise, it could do no wrong. Media coverage was almost universally adulatory – praising Tesco’s strong financial performance, its job creation record, its retailing innovations, its community projects …

But look what’s been happening to Tesco’s media profile lately. Slammed for squeezing its suppliers, accused of turning into a Big Brother behemoth with a creepy new database of UK consumer habits, attacked for misleading labelling on its own-brand products, despised for putting small, local shops out of business – why even its flagship community programme, Computers for Schools, has come under fire for delivering less than it makes out. Tesco’s latest results announcement prompted a bout of collective hand-wringing in the British media as the cry went up: “Is Tesco too big and too successful?”

It is easy to dismiss this sort of stuff as the natural “build ’em up, knock ’em down” tendency of the British media. But it is not just in Britain that we see this phenomenon. Look at US companies, like, most obviously, Wal-Mart, but also Microsoft and even hippy-dippy Starbucks.

The first question for any responsible management to ask is: does this media criticism make any difference? So what if people don’t like us? All that matters is that they keep buying our products and shopping in our stores. It is a version of the chant favoured by the hooligans – sorry, fans – at Millwall football club in south-east London: “Everyone hates us, we don’t care.” But how wise is this attitude?

There’s a simple rule in life: if people like you, it’s easier to do what you want to do.

In the business context, expansion into new markets, the establishment of joint ventures and partnerships, dealings with regulatory authorities and local and national governments – all these things are easier if people like you. And if they hate you, a lot of senior management time can be wasted trying to persuade people you’re not a monster.

So if it is worth trying to be big and good, what is the best way to do it? One company worth keeping an eye on in this context is Google. Just like Microsoft and Starbucks, Google has moved with amazing speed from cheeky outsider to global giant. Its approach to corporate responsibility is captured in a simple phrase: “Don’t be evil.”

Somehow, I think that not being evil is a necessary but not sufficient condition for being seen as “good”. As well as avoiding harm, big corporations need to be seen to be promoting good – over and above the basic utility they provide society, and their role in job and wealth creation.

As ever in this game, it is the difference between risk and opportunity. More to the point, it is about thinking these things through in good time. The business world is littered with success stories that came too late to the realisation that being big and good is something that takes a lot of work.

Model behaviour

As you know, I can’t resist an “I told you so”. A few months ago, I argued that brands would have to start taking responsibility for the personal moral conduct of the celebrities they sponsor, and who they use to endorse their products.

Burberry? H&M? Kate Moss? I rest my case.

McDonald's and Wal-Mart - Hard facts please: vague promises to change, even if well intentioned, need to be translated into specific objectives.

McDonald's and Wal-Mart - Hard facts please
Roger Cowe (2)
20 Nov 05

When it comes to demonstrating real corporate responsibility progress, it is the numbers that count, argues Roger Cowe
Closing the Business for Social Responsibility (BSR) conference at the beginning of November, the McDonald's CEO Jim Skinner talked about challenging the assumptions people make about companies like his.

He warned against social responsibility becoming political and bureaucratic, and about: "reports, conversation and presentation".

In classic consumer industry fashion, his claims were accompanied by three videos - about the value of a career start at McDonald's, the importance of exercise, and an attack on the movie Super Size Me.

He is not alone in asserting his company's innocence in the face of sustained assaults on its reputation. Nestle has famously joined the fairtrade enemy (as reported by Mallen Baker in his Ethical Corporation column). And Wal-Mart appears to have experienced the kind of startling Damascene conversion on broad corporate responsibility that GE has gone through on environmental technology.

Wal-Mart CEO Lee Scott recently told employees: "We are going to have the courage to lead and do what is right." He was referring to the environment, but also product sourcing, healthcare and wages - all areas where the supermarket giant has been repeatedly attacked.

As well as calling for an increase in the US minimum wage, he introduced the startlingly green concept of EDLC - Every Day Low Carbon. This is the carbon equivalent of the Every Day Low Price approach which has driven the store group's growth, relegating retailers' traditional tactic of occasional special offers. It will help achieve Scott's ambition "to sell products that sustain our resources and environment".

Cynical reception

It is a pretty safe bet than most activists, many investors, employees and customers will dismiss such promises as "greenwash" - empty public relations which will change little on the ground.

It will take more than a few well-crafted speeches to transform these companies into corporate responsibility heroes. (Skinner's BSR speech was greeted with rapturous applause, but people do tend to get a bit carried away at such events.)

Such speeches are by no means a waste of time. Indeed, they are absolutely necessary. They need to be repeated in different forums many times to get the message across.

But critics will ask three important questions.

Firstly, is the message that the company promises to change, or that it believes it was right all along and the critics are misguided? McDonald's, like NestlŽ and others such as ExxonMobil, seems to suggest the latter. Skinner talked about "challenging assumptions" and "changing the framework of the debate".

Secondly, what are you going to do that is different? The conversation cannot get to this question, of course, unless the company is promising to change. But vague promises to change, even if well intentioned, need to be translated into specific objectives.

Scott went further than many CEOs in making several clear commitments (though not all with timescales attached), including:

- zero waste;
- increasing distribution fleet efficiency by 25% over the next three years and doubling it within ten years;
- eliminating 30% of the energy used by stores;
- reducing greenhouse gas emissions from stores by 20% over the next seven years;
- reducing solid waste from US stores by 25% in the next three years; and
- replacing PVC packaging for private brands within the next two years.

The third question these companies have to answer is: where is the evidence? Scepticism remains justified until there is solid evidence of improved performance. For example, I could not find any figures about Wal-Mart's current greenhouse gas emissions on its website. The Carbon Disclosure Project says the supermarket giant has so far declined to participate in its efforts to shed light on greenhouse gas performance.

Get the message right

This is where good communications come in. Even if the company is achieving ambitious targets, people's perceptions of the company as it moves from zero to hero will only begin to change if it publishes a credible record of improvement.

Skinner's rousing speech is let down in this respect by his company's report (which was also available at the conference).

Take the issue of "McJobs" - the allegation he framed as "McDonald's offers low-paying, dead-end jobs". Since this is such a big issue, it seems curious that wage rates appear in the company's corporate responsibility report under "Other issues", and no figures are quoted. Equally, there appear to be no figures supporting Skinner's argument that starting at McDonald's is a great first step on the career ladder.

Similarly, the most prominent figures in the "Balanced Lifestyles" section seem to undermine his comments about helping to increase milk consumption, showing that replacing Sprite with milk in a chicken nugget meal significantly increases fat and cholesterol and provides more protein than a six-year-old needs in a day.

But this is only McDonald's second such report, and it takes time to move beyond principles and policies to focus on performance. Next year, perhaps, we will see the company providing figures to back up his BSR claims, in line with his very apt comment that "the more you open the doors of your business, the more you gain credibility and trust".

Roger Cowe is director of Context, a CSR consultancy.


Japanese Firm Promotes Green Procurement of Paper Product

Japanese Firm Promotes Green Procurement of Paper Product
Non-manufacturing industry

Askul Corp., a Tokyo-based total office support service provider, announced on June 17, 2005 that it has formulated a "Procurement Policy for Paper Products" as a basic procurement guide for Askul-brand paper products.

As declared in the policy, the company gives priority to the following raw materials:
1) "Recycled pulp"produced through the effective use of waste paper and
other waste wood
2) Pulp certified with forest certification for proper management
3) Pulp from a properly managed secondary forest or plantation forest.

The company has conducted traceability surveys on raw materials used in all seven series of Askul photocopy papers since 2004, and discussed the results with each paper manufacturer to promote "green procurement."

The company will continue to promote green procurement by shifting to the raw materials designated in the procurement plan and complete this shift by the end of fiscal 2005. By advertising its basic positions on paper product procurement and policy implementation, the company aims to encourage domestic and international paper suppliers to seek more environment-friendly raw materials.

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