Sustainablog

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

27.5.06

Ultra-Low-Power Cell Phones: Programmable analog circuits could drastically reduce the power needs and cost of electronics in portable devices


thanks to Norbert for this one

Bernie/Jean-Francois, interesting concept!  And here I thought analog processing went out with the vacuum tubes...


There is more information at
http://web.media.mit.edu/~vigoda/phd/ben.vigoda.phd.pdf (a 209 page thesis document).  Here is an extract:

This thesis proposes an alternate paradigm for designing computers using continuous-

time analog circuits. Digital computation sacrifices continuous degrees of freedom.

A principled approach to recovering them is to view analog circuits as propagat-

ing probabilities in a message passing algorithm. Within this framework, analog

continuous-time circuits can perform robust, programmable, high-speed, low-power,

cost-effective, statistical signal processing. This methodology will have broad appli-

cation to systems which can benefit from low-power, high-speed signal processing and

offers the possibility of adaptable/programmable high-speed circuitry at frequencies

where digital circuitry would be cost and power prohibitive.


Many problems must be solved before the new design methodology can be shown

to be useful in practice: Continuous-time signal processing is not well understood.

Analog computational circuits known as "soft-gates" have been previously proposed,

but a complementary set of analog memory circuits is still lacking. Analog circuits

are usually tunable, rarely reconfigurable, but never programmable.


The thesis develops an understanding of the convergence and synchronization of

statistical signal processing algorithms in continuous time, and explores the use of

linear and nonlinear circuits for analog memory. An exemplary embodiment called

the Noise Lock Loop (NLL) using these design primitives is demonstrated to perform

direct-sequence spread-spectrum acquisition and tracking functionality and promises

order-of-magnitude wins over digital implementations. A building block for the con-

struction of programmable analog gate arrays, the "soft-multiplexer" is also pro-

posed.

 
----- Forwarded by Norbert Hoeller/SINet on 17/05/2006 12:47 PM -----


Content:

Ultra-Low-Power Cell Phones by Kevin Bullis
Programmable analog circuits could drastically reduce the power needs and cost of electronics in portable devices.

http://www.technologyreview.com/read_article.aspx?id=16872

Tuesday, May 16, 2006

Ultra-Low-Power Cell Phones

Programmable analog circuits could drastically reduce the power needs and cost of electronics in portable devices.

By Kevin Bullis

A schematic of a new type of chip that replaces digital with analog computation, which could be the basis of ultra-low-power cell phones. (Courtesy of Benjamin Vigoda, Mitsubishi Electric Research Laboratories.)

A radical approach to making the electronics in cell phones could cut the power consumption of cell phones anywhere from 10 to 100 times, while also dramatically reducing the size and cost.

The mobile phone of tomorrow faces competing demands: the need for more and more sophisticated ways of using available bandwidth and the need to accommodate ever-more power-hungry procesasing. Benjamin Vigoda, research scientist at Mitsubishi Electric Research Laboratories in Cambridge, MA, and research associate at MIT, says the solution may come from an unexpected approach: replacing the combination of analog and digital circuitry used today with what he calls "analog logic."

Vigoda has already built a prototype chip using his approach, which is now being tested for accuracy, power consumption, and noise, among other things. He says a cell phone using the technology could be completed in five years.

Today's cell phones already use specialized analog components for sending and receiving high frequencies, for example, which are too fast for digital processing to handle. Meanwhile, digital components handle computational functions, such as error correction, with programmable, general purpose logic gates.

Vigoda's programmable analog devices can replace both the traditional analog and digital components. This saves power in two ways. First, converting between analog and digital is wasteful in both space and power. Going all-analog cuts out the analog-to-digital middleman, thereby reducing the power required. The analog circuits are also more efficient -- Vigoda says one can do the work of 1,000 digital logic gates.

At the same time, Vigoda is keeping the advantages of digital processors by using modular components that permit, for example, an automated design process. Also, because he uses standard CMOS transistors, his new circuits can be built using a standard semiconductor manufacturing process.

While the new components can replace power-hungry digital chips, they can also replace old analog components, such as oscillators, with analog components that can be programmed. The result would be radios which can produce more complex signals that can be changed "on the fly," Vigoda says, making it possible for many more callers to use the same bandwidth without the signals interfering with each other, as well as making it possible to optimize power savings for different environments. "For 80 years we've been relying on these special-purpose analog circuits that are designed and set in stone," says Vigoda. "What we can do now is make the radio programmable all the way to the antenna. You can imagine much better system-wide optimization given this flexibility at the physical layer."

If Vigoda's approach proves out, it could lead to future phones that use a fraction of the power of today's models, while enabling much greater use of available bandwidth. And this advantage would also apply to radios for wireless Internet access and ultra-low-power remote sensors. "Ten times savings in power means the longevity of the battery is now ten times greater," he says.

Jonathan Mills, professor of computer science at Indiana University, says that Vigoda is not the first to develop analog devices that can perform the computational work typically done with digital components, but that his work "has a strong place in current investigations into non-digital paradigms for computing," in part, because Vigoda is working on a project with clear commercial potential.

"Ben [Vigoda] is capitalizing on the excellent property of analog: that it cuts out some of these computational paths that use power and cost speed, so what he's doing has vast potential," Mills says.

The kindest cut: Cutting down trees could be the best way to preserve tropical forests


The kindest cut
May 25th 2006
From The Economist print edition



Cutting down trees could be the best way to preserve tropical forests

Get article background

DEPRESSING reports about how quickly the world's tropical forests are being felled are commonplace. But depressing reports about the state of the trees that are still standing are much rarer. In fact, a new study from the International Tropical Timber Organisation (ITTO), an offshoot of the United Nations, claims to be the first exhaustive survey of tropical-forest management ever undertaken. Its findings, although grim, do contain a kernel of hope.

The ITTO examined “permanent forest estate”, meaning land that the governments of its 33 members have formally set aside for forests, and is therefore subject to some form of regulation or protection. The category includes both national parks and timber concessions, in both public and private hands. It covers 814m hectares, and accounts for roughly two-thirds of the world's tropical forests.

The concept is important, explains Duncan Poore, one of the authors of the report, because it is not always possible, or desirable, to protect every last grove against encroaching farms or homes. Instead, governments should concentrate on maintaining the forests that are the most commercially and scientifically valuable. Yet the ITTO's researchers found that only 15% of the permanent forest estate has a management plan, and less than 5% of it is sustainably managed. That still amounts to an area the size of Germany, the report notes, and represents a dramatic improvement since 1988, when an earlier and less extensive survey found that only one country in the tropics—Trinidad and Tobago—had any well-run forests at all. But relative to the area of forest that has disappeared over the same period, the well-managed area is negligible.

The crux is bad government. Poor countries do not always have good forestry laws. Even when they do, they rarely have the capacity to enforce them. It is no coincidence that Malaysia, the country with the highest proportion of prudently managed forest in the study, is also one of the richest. Countries with the worst run forests, meanwhile, are war-torn places such as Congo and Cambodia.

More surprising, perhaps, is the difference the report found between forests where logging is allowed, and those that have been earmarked for conservation. Some 7% of “production” forests, it turns out, are in good shape, compared with just 2.4% of “protection” forests. As Dr Poore points out, it is easy to undertake to preserve a forest, but difficult to do so in practice. Timber concessionaires at least have an incentive (and probably the wherewithal) to look after their property, while ill-paid and ill-equipped forestry officials often have neither. Exploiting forests may prove the best way to preserve them.

26.5.06

Urban context for our CSR efforts: The future of cities (from UNEP and s+b)


Great links on the future of cities, provided by Laurie Courage

Takes a while to read these e2e but worth it....

http://www.strategy-business.com/media/file/sb42_06109.pdf

http://www.ourplanet.com/imgversn/161/images/Our_Planet_16.1_english.pdf

- Laurie

Organisational responsibility - Making a start at the NHS


Organisational responsibility - Making a start at the NHS
EC Newsdesk
25 May 06



The National Health Service, one of the largest employers in the UK – is attempting to become a better corporate citizen with the help of a new web-based tool
By Ceri Edwards

In line with recent calls for more “organisational responsibility” as well as better corporate citizenship, it appears that the UK’s National Health Service may now recognise its status as a major global organisation and the implications a broader outlook could have for healthcare.

The NHS’s Good Corporate Citizenship Self Assessment Model, a software tool, was developed earlier this year by the Sustainable Development Commission and funded by the Department of Health.

The system allows those in the health service, from individual general practitioners to big hospitals, to examine how they contribute to their local economies, communities and the environment.

This is made possible by a self-assessment test, where members of the health service measure their sustainability against that of similar organisations. In addition, further case studies, workshops and communications materials on organisational citizenship are now available online.

Article continues below this advertisement:
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Sue Konzelmann, corporate governance expert and reader in management at Birkbeck College, University of London, says: “It is a very positive thing for any organisation, particularly one as large and influential as the NHS, to embrace principles of corporate social, economic and environmental responsibility.”

Core impact areas


The new website focuses on six core areas: improving thinking about sustainable transport, procurement, facilities management, employment and skills, community engagement and the environmental impact of new buildings.

So far, the system has been well received. Within the first month after the launch, “three thousand people visited the site and the average length of stay was 15 minutes”, says Susannah Senior, team leader for the public sector of the UK’s Sustainable Development Commission.

However, Adrian Henriques, professor of accountability at Middlesex University, says the NHS is taking “a good first step” on the road to sustainability but still has a long way to travel.

The first difficulty, Henriques says, is that the model is self-assessment-based. As a major employer, the performance benchmark ought to be set at the highest possible standard, he argues, pointing out that this may be unattainable if the NHS is solely relying on self-reflection.

Net should be wider


And there seem to be omissions in the areas targeted for improvement, “the most obvious being patient care”, says Henriques.

Henriques says that by implementing the Good Corporate Citizenship Self-Assessment Model, the NHS is “looking mainly at direct and especially environmental impacts, but rather less at indirect impacts. Yet how patients are treated and how their health-related behaviour is influenced by the NHS are also important issues for sustainability”.

One of the direct impacts upon which the model concentrates is employment and skills. In recent years, the NHS has had difficulties recruiting and retaining staff. This is partly a reaction to the increased pressures on staff – which are in turn worsened by the recruitment problems, creating a vicious circle.

Employment practices outlined in the web-based model, such as providing a “healthy working environment … where staff are encouraged to develop their skills and where childcare is provided and flexible working arrangements are available”, are intended to address such problems, says the Sustainable Development Commission’s “Healthy Futures 4” report.

However, Sue Konzelmann of Birkbeck says: “The timing of the initiative is unfortunate, as the media headlines are currently highlighting the massive cuts in NHS staff in major hospitals across the UK.” The promise of good employment practices associated with the new model “seems hollow in the face of massive redundancies and staff reductions in NHS trusts across the country.”

However, the online model appears a step in the right direction, where motivation and defining good corporate citizenship is concerned. If the NHS can improve the community and environment around it, healthier lifestyles – and an internal focus on wider impacts and targets – will, hopefully, follow.

Ceri Edwards is a freelance journalist.
ceri_anne_edwards@hotmail.com

Useful links:

www.sd-commission.org.uk

Write to the Editor at editor@ethicalcorp.com.

Toyota Looks to Hybrids, Detroit Pushes Ethanol


Toyota Looks to Hybrids, Detroit Pushes Ethanol

WASHINGTON - Japan's Toyota Motor Corp. told Congress on Wednesday it could produce more than 1 million hybrids per year globally within the next decade as it looks to capitalize on energy and environmental concerns and the popularity of gas-electric vehicles.

The fastest growing automaker in the United States, which makes the top-selling Prius hybrid, relies on a different strategy than its US-based rivals to address calls in Washington to make vehicles more efficient and reduce energy dependence.

"Hybrids are a core technology for Toyota," William Reinert, Toyota's advanced technology manager, told the House of Representatives Energy and Commerce subcommittee hearing.

Detroit-based giants General Motors, Ford Motor Co. and Chrysler Group also intend to produce more hybrids, but their plans for that technology, at least for now, are less ambitious than Toyota.

Over the past week on Capitol Hill, executives of GM, Ford and Chrysler have pushed a vision supported by the White House that features alternative fuels, like ethanol blends and hydrogen fuel cells. Mass market availability of both is considered years, if not decades away.

But the Big Three also see alternative fuels as a potential long-term market option to help reverse sagging finances. The US-based companies have steadily lost market share to Toyota and other foreign rivals, which have prospered with smaller, more fuel-efficient vehicles.

The energy saving strategy of US-based automakers requires massive capital investments, broad-based political support that is not yet apparent, and unprecedented cooperation between the auto, energy and agricultural industries.

In meetings with House and Senate leaders last week, GM, Ford and Chrysler sought incentives to broaden consumer access to ethanol-based fuels and promoted hydrogen fuel cells.

Hybrids comprise only 1 percent of US new car sales but consumer interest is growing. Some analysts question whether fuel savings cover the extra cost to consumers.

There are about 500,000 hybrids on the road today in the United States from all manufacturers.

A poll by Consumer Reports on Wednesday showed that 37 percent of those surveyed said they may replace their vehicles with more fuel-efficient models. Half of that group said they may buy a hybrid.

"Clearly the American market is the key to expanding our hybrid technology," Reinert said.

Reinert said there is no option that is a "single silver bullet" and Toyota recognizes the potential of alternative sources, but it views them all in concert with the hybrid design.

"Some have characterized hybrid technology as an interim approach, a bridge to fuel cells. In our view, this underestimates the value of the hybrid system," Reinert said.

The US market represents half of the 600,000 hybrids sold by Toyota since 1997. It has five hybrid models in the United States with the Lexus LS 600h scheduled to go on the market in 2007.

Last year's energy bill offered a tax credit for hybrid purchases. (Additional reporting by Jui Chakravorty in Detroit)

Story by John Crawley


Disclosure and transparency - Is Asian corporate governance improving?


Disclosure and transparency - Is Asian corporate governance improving?
Tobias Webb, Editor
23 May 06



Yes but not fast enough, says the head of the Asian Corporate Governance Association
Across the Asian region “despite convergence, there remain huge differences in corporate governance quality,” said Jamie Allen, secretary general of the Asian Corporate Governance Association, (ACGA) at Ethical Corporation’s recent conference in Hong Kong.

Allen was speaking on behalf of the association, which focuses on research, advocacy and education in 11 Asian markets to encourage good regional corporate governance.

Its members include institutional investors that manage about $5 trillion in assets globally and some of Asia’s largest companies. Heavyweights among the members include Calpers, Fidelity investments, BP, Li & Fung, Neptune Orient Lines, SAP Asia and Swire Pacific.


“Who are Sarbanes and Oxley? ...I would like to see Asian rules written by those with Asian names” Chandran Nair



Allen told the conference there have been changes since 1998-99 in regional Asian corporate governance, with new best practice codes based largely on the Anglo-American system coming into force across many stock exchanges. Securities laws, listing rules and company law have been amended for the better in many cases, he said, and enforcement agencies in Asia have begun, as in the West, to work on settlements with companies rather than simply “sending bosses to jail”.

Audit committees on the rise

Among the other areas improving across Asia’s listed companies are quarterly reporting and the creation of audit committees. Generally, Allen said, disclosure practices were improving across the region and converging on global standards.

But there were also significant differences in disclosure and governance quality from market to market, Allen told the conference. The ACGA believes that while much of the corporate governance reform process has been positive, a criticism that can be levelled at regulators is that they often take a “top-down” approach, meaning they graft global standards onto local markets in sometimes inappropriate and ineffective ways, rather than starting the reform process by analysing local governance problems and seeking solutions.

This lack of organic growth of standards – that is, choosing standards to solve specific local problems – and the problem of buy-in by regional companies means that the outcome of corporate governance reforms is often unsatisfactory and superficial. Even within the top 30-50 listed companies in each market, only about half show good practices on corporate governance to date, according to ACGA. Somewhat unsurprisingly, Allen noted: “Large-cap stocks that need capital do better on improving practices.” He cited as a reason increased pressures from institutional investors and organisations such as the Asian Development Bank.

Good news and bad


“The good news is it’s improving,” he told the conference, but added that the “bad news is that is hasn’t come as far as it might in the last five years”.

Despite more rules coming in across Asia, he said national “implementation and enforcement of rules is a lot less impressive than the rules themselves”.

Regional audit committees are mandatory but, Allen asked, “are they implemented properly?” His answer: “Often not.”

Discussing some of the challenges research organisations face in the region from company and national vested interests, Allen provided the example of CLSA, a stock broker and investment banker that began undertaking governance research to rate Asian firms independently. As a result of its published results on the corporate governance of Korean firms several years ago, it lost some investment banking business with Korean companies that were upset with their rankings.

Regulator capacity needed


On the issue of serious corporate crime, Allen told the conference that the ACGA’s view is that Asian regulatory performance “is not impressive”. The authorities are reasonable at tackling smaller problems such as the mis-selling of financial products, but, he said, big deals and insider trading issues are not well dealt with. Here again, he said, “regulators are better at writing rules than enforcing them”.

Cyclical economic and stock market factors can have a major impact on the degree to which Asian corporate governance reforms are pursued, according to the ACGA. During economic downturns, regulators and investors usually pay considerable attention to corporate governance standards. But when markets are booming, excitement overwhelms such concerns and investor appetite for risk rises. As Allen wryly noted, “in a strong wind even turkeys can fly”.

In Korea, the reform process was catalysed by the Asian financial crisis of 1997 and pressure from the International Monetary Fund. Later, as the economy began to improve, pressure for reform fell and resistance from Korea’s powerful chaebol conglomerates increased. For many years, Korean shares have traded at a discount in part because of poor corporate governance (although this discount has been reduced in the recent bull market).

Regulators, don’t dive in


Another cyclical problem occurs during periods of macro-economic or stock market fragility. This is when regulators can sometimes scare off investors by trying to enforce governance standards too vigorously, thus making a bad economic situation worse. Allen again cited Korea in early 2003.

“Indictment of ten senior SK Group executives for accounting fraud in SK Global made investors nervous and helped to drive down the Kospi Index further – just as the Iraq War was already causing a collapse in global stock markets. This forced the Fair Trade Commission to delay an investigation into allegedly illegal intra-group transactions at six major chaebols.”

Allen demonstrated how codes in Asia have progressed since 1998. Japan, India, Korea, Thailand, Malaysia, Singapore, Indonesia, Taiwan, the Philippines and Hong Kong have all implemented revised codes since that time, some more than once. In its 2005 rating, the ACGA puts Singapore top, followed by Hong Kong, then India, Malaysia and Taiwan. Following are Korea, Thailand and the Philippines, while China and Indonesia are at the bottom of the table of performers.

Return of the tigers


As of 27 January this year, Allen noted, Taiwan, Hong Kong, Singapore, Indonesia, Japan, South Korea and India are all showing a more than 10% rise in their stock markets compared with the previous year. On a three-year basis they all show growth of more than 30%. In India’s and Indonesia’s case it is more than 200%.

Allen says the danger for investors is that if they ignore corporate governance issues during boom periods they may lose out badly when a downturn or correction comes –since a large portion of their portfolios are likely to be companies with less than stellar governance. “It is precisely these companies whose stock prices falter first,”
Allen said, adding: “The shares of well-governed companies tend to perform better during recessions than the market as a whole.”

Allen outlined challenges the ACGA sees as important in the coming years. First, certain Western rules, such as on independent directors, when applied in Asia, do not have the desired effect. The definition has become blurred and many are not independent, but simply put on the board to tick the governance boxes.

Another challenge is the role of investment banks and their relationships with large companies during, for example, their initial public offerings. The ACGA has “few investment banks as members” Allen pointed out. These firms generally act only as mediators between markets and companies, he said. “We are trying to encourage investment banks to do more to encourage good corporate governance. Often they just help companies get listed and play by the rules, but they do not genuinely try to act as good governance catalysts.”

Global convergence, but different paths?


On the international scene, Allen said there appears to be different paths taken by the UK and the US on the future of the Anglo-American model of corporate governance. “Corporate governance in continental Europe and the US is often broader,” he told the conference, saying that the UK may be moving towards more of a stakeholder model with more interest being shown in the wider responsibilities of business as well as investor issues and corporate integrity.

Chandran Nair, as the conference and panel chair, noted that many in Asia object to overseas pressures on corporate governance reform. “Who are Sarbanes and Oxley?” he said. “I would like to see Asian rules written by those with Asian names,” he said, adding that often Korean firms complain of being bullied by those in favour of the Anglo-American corporate governance system based on shareholder capital. “The debate needs to acknowledge political realities,” he said.

Allen agreed but said enforcing rules was “incredibly tough” and that Asian integrity alone did not create the “processes, standards and internal controls” that would ultimately resolve governance issues. The Anglo-American system was also spreading across the region, he said, because on the issue of corporate governance, “we are not seeing any Asian regulator coming up with anything original … they are borrowing wholesale from overseas”.

Useful links:

www.acga-asia.org
www.asria.org
www.adb.org

Stakeholder research - Asian perceptions count
Tobias Webb, Editor
18 May 06

Consumers are a growing force across Asia
Consumers are a growing force across Asia


Perceptions of Asian brands are positive on most areas of corporate responsibility. But that does not mean companies can afford to be complacent, says Edelman’s Asia-Pacific president
Undertaking stakeholder research is tricky at the best of times. Edelman, the world’s largest independent public relations firm, takes it upon itself to uncover worldwide stakeholder perceptions of business on an annual basis.

Edelman’s chief executive, Richard Edelman, is known to take great personal interest in the corporate responsibility agenda, even blogging about it.

In Asia, this stakeholder study is in its third year. Alan VanderMolen, the energetic president for Edelman in Asia-Pacific, presented the study’s findings to the recent Ethical Corporation Asia conference.

In 2005 the company undertook more than 900 20-minute interviews covering Hong Kong, India, Indonesia, Malaysia, South Korea, Singapore and Taiwan, alongside its first quantitative studies for China, Japan and Australia.

They covered seven stakeholder groups: non-governmental organisations, trade associations, institutional investors, the media, business executives, employees and upmarket consumers.


“Business is still in defensive mode, scared of being the first one out”



The aim is, as VanderMolen put it, to “understand the state of trust in institutions in the region”. Edelman’s latest findings indicate that governments have the highest level of trust, at 31%-55% in China.

This “blows my mind”, said VanderMolen. NGOs follow, on 28%, while business in China is trusted by 18%, with the state-controlled media lowest, at 17%.

Asian business unsure


When Edelman asked the stakeholder groups “which institution do you trust?” it found that business was the only group that did not rate itself highest.

“Business isn’t quite sure of what it is doing on trust and how to react to the trends,” VanderMolen concludes.

However, when it comes to product quality, perhaps unsurprisingly, multi-national brands are found by Edelman’s research to outperform Asian firms at a ratio of 2:1 in terms of stakeholder perceptions.

Large international brands are also held in much greater esteem when it comes to “standing behind products and services” when compared with Asian companies (48% to 25%).

And on providing good training and development for staff, the difference between foreign multi-national companies and Asian business in perceptions among the 782 individuals surveyed was marked – 56% of respondents believe that MNCs offer these opportunities against only 21% for Asian companies.

VanderMolen believes that much of the research Edelman has recently conducted shows “very encouraging statistics for MNCs”. Western business is seen as driving stakeholder dialogues, he said, and actually outperforming on some expectations.

Such companies are also perceived to be showing concern for local community welfare.

There are some regional exceptions, VanderMolen said, notably Tata, the conglomerate, which perhaps “don’t get the credit they deserve since they don’t put the money into promotion”.

In conclusion, he said, Edelman’s findings show that when it comes to corporate social responsibility outreach in many cases, “business is still in defensive mode, scared of being the first one out”.

While NGOs and governments are keen to promote corporate responsibility, companies in Asia remain scared of being seen as “naked on the beach” in the CSR world.

This quote, he said, originally came from the chief executive of April, the Indonesian timber company, which on the opening day of the Ethical Corporation conference, announced it had reinvigorated its initiative with WWF on land and forest conservation.

The company now seems determined to help stamp out illegal logging and improve its practices with the NGO as an adviser rather than an adversary.

Troublesome reticence?


This overall Asian reticence on corporate social responsibility may have troublesome consequences for companies, VanderMolen pointed out.

It may mean that “NGOs and government end up driving the agenda”. There is a risk for economic growth, VanderMolen said, “if CSR is not driven by all significant groups”.

There is still a “disturbing lack of consensus” on what corporate social responsibility and “citizenship” mean, and in VanderMolen’s view this is an area that business, NGOs and government need to tackle, while companies must remember that their approach must be tailored to suit each market and region.

And, he said, there are usually higher expectations on companies within poorer countries in the region.

VanderMolen concluded that Western MNCs “should feel encouraged that they are ahead of the curve” on Asian stakeholder expectations.

Useful links:

www.edelman.com

Debate: Water and the private sector: Pull the plug on privatisation -- or not?


Debate: Water and the private sector: Pull the plug on privatisation
EC Newsdesk
25 May 06

Protests forced Bechtel out of Bolivia
Protests forced Bechtel out of Bolivia


For the other side of this debate see 'Water and the private sector: The case for privatisation'


It is time for responsible companies to get out of the business of water privatisation, argues Murray Benham

Around the world, privatisation has resulted in unnecessarily high price rises and a failure to deliver water to the world’s poorest people.

In Argentina’s Tucuman province, state-run water services have been sold to French company Vivendi, and water rates have doubled.

In 1998, five of Chile’s 13 regional water companies were privatised, and in the four years following privatisation the private water companies’ water rates rose by 40% – twice the rate of increase of the public companies.

The recent UN World Water Development report finds: “Increased privatisation, which in many cases has implied rising water prices, is in many social settings a heavily politicised issue that is creating social and political discontent.”

The report says that, following privatisation in Ivory Coast, Guinea and Senegal: “The connection rates had increased, and there were tangible improvements for billing and collection of revenue.

"However, increased tariffs had made water supplies unaffordable for many of the poorest sections of society, which led to people getting disconnected from water supply. It was also unclear to what extent poor people had benefited from water network connection expansions.”

Senegal is typical of examples touted as privatisation successes where it is in fact the public sector that is funding new connections, not private investment.

Over the ten years of the private contract, Senegal has received $230 million in public and donor finance.

No profits in the pipeline


It is now clear that the private sector cannot make a profit without delivering a substandard service, fleecing consumers or being propped up by massive subsidies from the public sector and development banks.

According to a recent World Bank Working Paper, “there is no statistically significant difference between the efficiency performance of public and private operators in this sector”.

Under these circumstances, if a profit can’t be made responsibly then the business community should accept that there is no profit to be made and take its skills elsewhere.

This not to say there is no place for private companies in the provision of clean water. Well-functioning public systems may be assisted by private companies providing high quality goods and services.

Private companies may make the pumps and pipes, produce the treatment chemicals and run the billing systems.

And the failure of some state-run water industries cannot be conveniently ignored by those opposed to privatisation.

A strong element of the World Development Movement’s campaign is our advocacy of reform processes that keep water and sanitation services in public hands, boost access to water and sanitation for the poorest communities, and keep prices affordable.

The evidence from places where this has happened, including Porto Alegre, Penang, Dhaka and elsewhere, is very positive and we believe that it is these solutions that should be supported.

The recognition by both the UN and political leaders at the World Water Forum last month of the importance of governments in delivering water and sanitation to the poor should mark the beginning of the post-water-privatisation era.

Even the rhetoric being used by private water companies is changing as they wrestle with the reality of high profile privatisation failures, the existence of some highly successful public sector and co-operative models, and overwhelming evidence that privatisation cannot deliver the necessary investment and that it is no more efficient than the public sector.

In March the World Development Movement and Public Services International published research showing that 70% of African water privatisations had either ended early or were currently in some form of difficulty.

Bar a few ideological zealots from free market think tanks, no serious authority is calling for a massive expansion of water privatisation.

It is time for responsible companies to get out of the business of water privatisation and time for governments to stop supporting a failed solution to the world’s water crisis and get behind ones that work.


Murray Benham is head of campaigns for the World Development Movement

www.wdm.org.uk

Debate: Water and the private sector: The case for privatisation
EC Newsdesk
25 May 06

Too valuable to waste a drop
Too valuable to waste a drop


For the other side of this debate see 'Water and the private sector: Pull the plug on privatisation'


Fundamentalist NGOs’ opposition to private sector involvement in water is misguided and damaging, argues Mischa Balen

We all agree that we need to increase access to clean water in the developing world.

And as long as you can turn the tap on and get clean, running water, does it really matter whether this is funded through taxation or by paying a water company?

Too many anti-capitalist pressure groups say that it does, because they prefer ideological purity to water purity.

We need to be concerned with what works. Private companies have brought investment and business know-how to countries where governments have been unable to provide water.

Public systems never work as effectively as private systems. Just 28% of Sierra Leone inhabitants have access to water; the government cannot provide water to its citizens here so the private sector should be allowed to offer a helping hand.

In order to survive, companies need to make profits, so they have a clear incentive to connect as many users as possible. If they fail to connect some of the most poor or vulnerable, then they can be fined by a regulator.

In Buenos Aries, companies are required to meet connection targets, and following privatisation there was a 20% increase in water coverage. Lima, Peru, which opted out of privatisation, did not see any increase in coverage over the same period.

The message is clear: companies and citizens have a mutual interest in increasing coverage of water supplies.

The government can also buy water on behalf of its citizens to ensure that everyone benefits from the investment and technology that private companies bring.

Countries like Chile and Colombia do an excellent job, through multiple data sets, of identifying just who in society really is the poorest, not only to help with connection targets but to aid subsidisation schemes as well. Government subsidisation and social security schemes sit well alongside private provision of water.

Turning water supplies over to the private sector has greatly improved people’s health. Access
to sanitation in Buenos Aires, Argentina, was increased by one fifth in the city after privatisation, and on average 6% fewer children in the city are dying from water-related diseases. In the poorest regions of the city, child mortality fell by almost a quarter.

Keeping costs low


Private provision is cheaper than public provision: the profit motive means that companies continue to drive down costs. This does not come at the cost of quality, though; if their service goes downhill they are liable to be fined.

But it does mean that staff can be redeployed in more profitable activities, boosting economic output.

In countries where water has been privatised, very few staff are required: Panama employs just four people per 1,000 connections, each serving several people. Ninety-seven per cent of households have a connection. In Astana, Kazakstan, where water is a public service, the figure is 54 staff per 1,000 connections.

Andrew Nickson of Birmingham University is unequivocal on the reasons behind the startling success of water privatisation in Santa Cruz, Bolivia.

He says not only has the manager of the company been there since 1986 ¬– “in sharp contrast to the norm … where managers of state water companies are regularly removed” – but also that its co-operative structure “shields management from undue political interference, especially with regard to hiring, firing, and the awarding of contracts”.

This has helped produce an 80% coverage rate operating 24 hours a day.

What advocates and campaigners need to realise is that water costs money – to collect, clean and pipe to people’s homes. If a government performs this service, it typically does a less reliable, less efficient and less extensive job than the private sector.

We need to be concerned with what works, and what works is allowing efficient, effective and motivated companies to provide water. It is only fair that you can get a clean glass of water at any time of the day, and we should not let ideology get in the way of helping the poor.


Mischa Balen is the author of “Water for life: the case for private sector investment and management of developing country water systems” and a Fellow of the Globalisation Institute, an international development think tank.

mbalen@globalisationinstitute.org
www.globalisationinstitute.org

Write to the Editor at editor@ethicalcorp.com.

25.5.06

Climate alert spurs nuclear debate: Nukes in Australia


Thanks to Matt Davies for this one

Excuse the pun but nuclear debate is "heating up" somewhat in Australia - considering the Uranium resources and stable earth mass its sort of ideal for nuclear power and storage of the waste - personally I cant decide - I think were going to need Nuclear as a bridging power source but its the 100,000 year legacy that puts me off somewhat:

Climate alert spurs nuclear debate

By Stephanie Peatling and Wendy Frew
May 24, 2006

Related coverage

GLOBAL temperatures will rise by three times as much as many scientists had estimated, resulting in irrevocable changes for life on Earth, according to advice to the Howard Government - arming it with new ammunition to support a nuclear power industry for Australia.

Senior government ministers lined up yesterday to spruik the benefits of nuclear power as a solution to global warming, despite repeated denials from green groups and energy experts that it was a saviour.

The Australia Institute, a left-wing think tank, became the first group to speculate where nuclear power plants would be built, saying Port Stephens and Westernport Bay, in Victoria, were ideal.

Yesterday, the Federal Government released a report it commissioned from the Australian National University, showing global warming would push temperatures up by as much as 5.8 degrees by 2100. It was previously thought the rise would be at the lower end of a range between 1.4 and 5.8 degrees.

As a result of higher temperatures, the world can expect more extreme weather, which will have greater effects on human health, the destruction of plant and animal species, rising sea levels and increased episodes of coral bleaching, the report found.

The executive director of the Australia Institute, Clive Hamilton, said any site for a nuclear plant needed to be on the coast to provide cooling water, and must be close to power transmission lines, transport and major urban centres.

Dr Hamilton rejected suggestions he was being foolhardy in naming sites saying: "The Prime Minister said he wants a national debate and you can't have a debate about it in the abstract. You can't have a nuclear industry unless you have plants somewhere."

The Prime Minister will be under pressure to clarify the parameters of an inquiry into nuclear power, which he is expected to announce shortly after his return to Australia tomorrow.

The Government used question time yesterday to talk up nuclear energy as the answer to global warming caused by greenhouse gas emissions. The Foreign Affairs Minister, Alexander Downer, said "it could, at least, be argued that our uranium exports already effectively neutralise Australia's global emissions contribution".

"To put that into some perspective, it has been estimated that you would need a wind farm occupying 3200 square kilometres to produce the equivalent energy of a medium-sized power station."

Energy experts were stunned by Mr Downer's remarks.

"Words fail me," said a senior lecturer at the University of NSW's Institute of Environmental Studies, Mark Diesendorf. "Firstly, it assumes that nuclear power is a substitute for coal-fired power around the world when, in fact, it adds to coal-fired power."

This was because building nuclear plants and mining uranium would require the use of vast amounts of existing energy sources, such as coal.

"More importantly, if we are going to talk about uranium exports, it must be done in the context of Australia being the world's biggest coal exporter, which would offset any tiny benefit from uranium exports even if we accepted that argument. I don't think they are grounds Mr Downer will want to stay on."

Dr Diesendorf said nuclear power was no more efficient in producing energy than coal and both were less efficient than wind.

The chief researcher at the Institute for Sustainable Futures, Chris Riedy, said it was fair to calculate how many wind turbines would be needed to generate the same amount of energy from one nuclear power plant, but "wind would be no more than 20 per cent [of the energy mix]. We would need bioenergy, solar power, natural gas, thermal energy and energy efficiency."

The Opposition Leader, Kim Beazley, vowed Labor would oppose nuclear plants and asked of Mr Howard: 'Which suburbs will be home to the new nuclear reactors? What will he do to ensure local residents and schools are safe? Will there be nuclear reactors in each major city, or just Sydney? What would he do with the nuclear waste?"

Labor's reconciliation spokesman, Peter Garrett, said his criticisms of a nuclear power industry had not changed since he stood as a candidate for the Nuclear Disarmament Party 22 years ago.

"Nukes won't really satisfy the problems of meeting reductions in greenhouse emissions and yet the Prime Minister is prepared to fly the kite," Mr Garrett said.

The Premier, Morris Iemma, said state law prevented a nuclear plant being built in NSW, unless the Federal Government overrode it.

POWER AND THE PLANT
- To control costs a nuclear power plant would need to be near a large, reliable source of fresh water, a major power transmission line and transport.

- A nuclear plant of 1000 megawatts would cost an estimated $3 billion to build - 2½ times that of a coal-fired plant - and much more to operate han fossil fuel plants.

- Acclerated nuclear construction program, say, over 20 years, would emit so much greenhouse gas it would take 40 years to break even in terms of CO 2, according to work by the UNSW's Dr Mark Diesendorf.

- No country has yet solved the problem of how to dispose of radioactive waste, which lasts for tens of thousands of years.

24.5.06

Researchers Finger Top 100 Corporate Polluters


Researchers Finger Top 100 Corporate Polluters
Source:
GreenBiz.com

AMHERST, Mass., May 15, 2006 - Researchers at the Political Economy Research Institute (PERI) at the University of Massachusetts has released its annual Toxic 100, an updated list of the top corporate air polluters.

"The Toxic 100 informs consumers and shareholders which large corporations release the most toxic pollutants into our air," says James K. Boyce, director of PERI's environment program. "We measure not just how many pounds of pollutants are released, but which are the most toxic and how many people are at risk. People have a right to know about toxic hazards to which they are exposed. Legislators need to understand the effects of pollution on their constituents."

The Toxic 100 index is based on air releases of hundreds of chemicals from industrial facilities across the United States. The rankings take into account not only the quantity of releases, but the relative toxicity of chemicals, nearby populations, and factors such as prevailing winds and height of smokestacks.

The Toxic 100 index identifies the top air polluters among corporations that appear in the "Fortune 500," "Forbes 500," and "Standard & Poor's 500" lists of the country's largest firms. The Toxic 100's top five companies are E.I. DuPont de Nemours & Co., US Steel, ConocoPhillips, GE, and Eastman Kodak.

A new feature of the Web-based list is that readers can see the details behind each company, such as individual facilities owned by the corporation, specific chemicals they emit, their toxicities, and their contributions to the company's overall Toxic Score.

The data on chemical releases come from the U.S. Environmental Protection Agency's Toxics Release Inventory (TRI). The TRI is widely cited in press accounts that identify the top polluters in various localities. But reports based on these data alone have three limitations:

  • Raw TRI data are reported in total pounds of chemicals, without taking into account differences in toxicity. Pound-for-pound, some chemicals are up to ten million times more hazardous than others.
  • TRI data do not calculate the numbers of people affected by toxic releases--for example, the difference between facilities upwind from densely-populated urban areas and those located far from population centers.
  • TRI data are reported on a facility-by-facility basis, without combining plants owned by one corporation to get a picture of overall corporate performance.
The Toxic 100 index tackles all three problems. It includes toxicity weights and the number of people at risk using 2002 data-the most recent available from the EPA's Risk-Screening Environmental Indicators project. PERI researchers added up facility-by-facility data from the EPA to get corporate rankings.

"In making this information available, we are building on the achievements of the right-to-know movement," Boyce explains. "Our goal is to engender public participation in environmental decision-making, and to help residents translate the right to know into the right to clean air."

A complete list of the Toxic 100 is available
online.

Warming skeptics take aim at Gore's 'Inconvenient Truth'


Warming skeptics take aim at Gore's 'Inconvenient Truth'

Greenwire, 17 May 2006 - Al Gore's new campaign to convince a wavering public about the consequences of unmitigated global warming hits full stride this week as the former vice president barnstorms the country to promote his new documentary film, "An Inconvenient Truth," which opens to the public next week in New York and Los Angeles.

Yet before the movie gets its first cinematic review, Gore's critics are launching a muscled counterattack to try to discredit the film and the man behind it. The barbs are reminiscient of those fired at Gore during earlier political campaigns, when some Republicans sought to portray him as, in the words of former President George H.W. Bush, an environmental "looney."

Tomorrow, the right-leaning Competitive Enterprise Institute will begin airing two 60-second television ads focused on what it terms "global warming alarmism" fostered by Gore and his supporters. The ads, to air in Washington, D.C., and on a more limited basis in 13 other TV markets, will not mention the film by name, a spokeswoman for CEI said. But the messages are clearly intended to counter the movie's pre-release buzz, which has heightened in recent weeks.

In Atlanta on Monday, a pre-release screening of "An Inconvenient Truth," followed by a 25-minute question-and-answer session with Gore, drew a packed house of guests invited by the Southern Environmental Law Center. Among those attending were actor-activist Sean Penn, media mogul Ted Turner and former Sen. Sam Nunn (D), who now leads a nonprofit group dedicated to nuclear nonproliferation.

On screen and off, Gore cultivates his role as a retired politician and seasoned environmentalist, laying out scientific theories behind climate change and backing his assertions with historical data and dramatic visual evidence of global warming's consequences. For viewers, the message of "An Inconvenient Truth" is clear: heat waves, hurricanes, droughts, famines, disease and species extinction are all outcomes of a warming climate.

The movie's doomsday analogies run from the cute -- a cartoon of a frog sitting blithely in a pot of boiling water -- to the disturbing, including time-lapse images of melting glaciers, evaporating lakes and wrenching footage of the suffering wrought by Hurricane Katrina last year. In Gore's classroom, all are direct consequences of human-induced climate change.

"The debate is over on global warming," Gore told the roughly 350 people gathered at the Atlanta theater. "It's real. It's catastrophic. It's time we did something about it."

He likened growing public awareness about global warming to other transformative U.S. social movements, including the voting rights and civil rights achievements of the 20th century. "It's not really a political issue, if properly understood," Gore said. "It's a moral issue. It should rise above partisan politics."

In an interview today, Sen. Hillary Rodham Clinton (D-N.Y.) expressed high hopes that Gore's film will play a role in educating the public about climate change. "I hope it galvanizes people at all levels of society," she said. Clinton said she has not yet seen the film, and she does not think it will lead to a successful vote for mandatory greenhouse gas caps under this Congress or the Bush administration.

Yet critics, like Myron Ebell of CEI, reduce Gore's extensive treatment of the subject -- both in the movie and in other venues -- to environmentalist propaganda. "I've watched him for a long time. I don't know that he holds any surprises," said Ebell, who expected to attend a screening of "An Inconvenient Truth" this week at the National Geographic Society's Washington headquarters.

'Starvation diet'

In an article published this week in the National Review, Steven Hayward of the American Enterprise Institute characterized the movie's release as the latest in a "multi-million dollar PR campaign" to try to harness public fear about global warming.

"Underlying this effort is a sense of panic over two things:" Hayward writes, "the collapse of the Kyoto Protocol and frequent polls showing that Americans aren't buying into global-warming alarmism."

Another climate skeptic organization, the National Center for Policy Analysis, issued a report this week taking issue with many of the movie's linkages between environmental calamities and global warming. "For instance, the unprecedented destruction caused by Hurricanes Katrina and Rita was blamed on climate change –- but experts say these recent storms were part of a natural cycle and the increased damage was due to increased coastal populations and development," the report states.

But if Gore's movie employs scary images to persuade Americans that climate change poses a real threat to the nation and the world, so too do his dectractors, who seek to apply the harshest possible policy outcomes to the film's message that greenhouse gas concentrations warrant immediate action.

"Mr. Gore has always promoted causes that would require taking decisions away from the people and putting them in the hands of an expert elite," said Ebell, who directs CEI's global warming policy program. "Mr. Gore's ideal would be to give each person a book of energy rationing coupons and every year put fewer coupons in the book. It is a program of mandatory energy starvation."

AEI's Hayward makes similar claims in the National Review. "Green warriors," he said, "advocate putting the U.S. and the world on an energy starvation diet, to the exclusion of a wider and more moderate range of precautions that might be taken against global warming."

Gore's critics are counting on the idea the "starvation" imagery will resonate just as strongly with the public, especially in Middle America and regions where oil, coal and natural gas are economic staples. Among the TV markets where CEI's ads will run are Anchorage, Alaska; Charleston, W.Va.; Dayton, Ohio; Harrisburg, Pa.; and Springfield, Ill. Viewers in Austin, Dallas, Phoenix and Albuquerque, N.M., will also see the ads to be aired the last two Sundays of May on NBC's "Meet the Press" and "Fox News Sunday with Chris Wallace."

In an interview, Hayward said the "starvation diet" analogy is based on the principle that to stabilize greenhouse gas concentrations within 10 years, the United States would have to reduce by 50 percent or more its total emissions, or more than 3,000 million tons. "In the near term, that's simply unrealistic," he said.

Movie proceeds to benefit climate group

Judi Greenwald, director of innovative solutions for the Pew Center on Global Climate Change, agreed such a goal is unrealistic. But she noted few real policy directives, including those advocated by Gore, assume such a large reduction in GHGs over so few years. "The way we think about this, and the way many states are thinking about it, is that this is a 50-year solution divided into 10-year increments," Greenwald said. "You start with what you can do right away, then each decade you build on what you've achieved."

In fact, she said, the federal government could greatly soften the blow of GHG regulation on industry by establishing a long-range carbon cap, along with a "price signal" for emissions that will encourage private investment and innovation in pollution-control technologies. Industry "can see the policy certainty, then they have the motivation to move forward" on emissions controls, she said.

For his part, Gore has never veered from his position that carbon dioxide and other greenhouse gases should be regulated. As vice president, he largely shaped a pro-regulation climate policy under the Clinton administration, including advocating for the United Nations' Kyoto Protocol.

But much of the advocacy agenda stemming from the movie and its companion Web site, climatecrisis.net, is aimed a modest provisions, such as forest conservation, adoption of energy-efficient appliances, expansion of the hybrid car market and purchases of "green power" from electric utilities. In speeches and presentations, Gore summarizes many of his points by directing people to visit the Web site.

Proceeds from "An Inconvenient Truth" also will help finance a new political interest group, the Alliance for Climate Protection, whose leaders include former EPA administrators Carol Browner and Lee Thomas. The group plans to use advertising and grassroots organizing to persuade the public to back mandatory limits on greenhouse gas emissions (Greenwire, May 10).

  • Click here to view the Competitive Enterprise Institute's ads.

Comprehensive health management: The Dow Chemical Company


Comprehensive health management: The Dow Chemical Company

The challenge

Employee health affects employee productivity. As a worker’s health declines, productivity and output decrease. Healthcare costs pose a serious threat to company competitiveness, despite US employers passing on cost increases to workers through higher cost sharing. However, this short-term fix does not address the primary drivers of soaring health costs – inadequate investment in health through primary prevention, health risk reduction and disease management.

Making it happen

Through The Dow Chemical Company's Health and Human Performance Management (H&HP) initiative, the company has come to understand the significance of employee health on bottom-line results and has identified priority actions that can be taken to keep both its employees and the company healthy.

Dow’s H&HP management effort evolved over a number of years based on the growing belief of its champions that sustainable development derives from the performance, creativity, productivity, recruitment and retention of qualified, motivated employees. While technology may be duplicated, worker knowledge and human knowledge networks are primary sources of competitive advantage.

Dow’s first step towards a comprehensive focus was a health promotion program aimed at improving employee health, reducing healthcare costs and providing a service that employees would perceive as having high value. Dow later started providing health advocacy case management services supported by work site-based occupational health nurses. The company’s healthcare program focuses on employee health both within the company and with its vendor partners.

As its health management strategy took shape, its champions used evidence that about 25% of Dow’s direct and indirect healthcare costs could be positively impacted by aggressive company action. By demonstrating the relevance of health to Dow’s other corporate priorities, these champions were able to demonstrate the importance of employee health to the company’s sustainable development strategy.

The company’s H&HP strategy coordinates all business costs associated with health problems. Intervention priorities were set based on their expected impact on both direct and indirect costs. Three independent studies of internal and external data convinced the group’s leaders that the strategy addresses an opportunity area of approximately US$ 30 million annually.

Presenteeism, a term used by employers and researchers to reflect the effect of physical and mental illness on actual work performed, is also a concern for Dow. The results of a company-wide presenteeism study helped the team better understand and communicate the magnitude and effects of presenteeism, benchmark against other employers and refine its intervention agenda and data collection initiative.

By doing this study Dow now understand the significance of presenteeism related to chronic health problems much better and has identified priority actions that can be taken to address them. A common central intranet page under the logo and name Good Health for the Whole Self for all health-related programs and services was established as a single source portal. This name reinforces the perspective of a multidimensional health focus that addresses the physical, mental, emotional, social and spiritual dimensions of health.

Results

As these programs have unfolded, employees and managers have learned to appreciate the deeper financial implications of healthcare expenditures. As a result of their health advocacy case management efforts, more than 1,000 US employees using the services have obtained appropriate and expedient medical care following illness or injury, whether it was work or non-work related. For the employee, it has meant faster and fuller recovery, with 100% of respondents in follow-up surveys stating that the service had been of benefit. Dow has benefited from this effort by saving an estimated 5,000 days away from work. The direct cost savings is based on average salary, while the indirect savings is based on other projected administrative and work output factors. In addition, Dow’s US employees highly value these services. Of those eligible for a health assessment in 2004, approximately 90% participated. A satisfaction survey of these participants showed that 95% of employees responded that the health assessment is a valuable service provided by Dow.

Lessons

As the company has progressed in their efforts, several lessons have been learned:


-Internal communications are key. The program’s success continues to depend on winning and maintaining the support of five audiences:

  • Dow’s corporate leaders and shareholders
  • Leaders of their business units
  • Employee Health and Safety leaders
  • Human Resources leaders
  • Employees
-Strategic planning:
  • Have a vision in mind
  • Be grounded to some principles
  • Be persistent
-Coordination:
  • All health/safety related functions working together
  • Take small steps
-Present the business case:
  • Shift from cost to investment mindset
- Focus on efforts that achieve outcomes:
  • Need for metrics
  • Continuous reevaluation
  • Recognize and harness the importance of culture to achieve success.
This case study was produced as part of The Business of Health - The Health of Business (1.2 MB), a publication by the WBCSD and IBLF. Ill-health and disease impair business performance by hampering individuals, communities and markets. The examples gathered in this publication serve to illustrate the business case for corporate action on health and demonstrate how companies can positively and imaginatively engage with these issues to create business advantages.

Further information

Chronic diseases - Identifying and responding to the health issues of a global workforce: Volkswagen


Chronic diseases - Identifying and responding to the health issues of a global workforce: Volkswagen

According to the World Health Organization (WHO) chronic diseases now account for 60% of all deaths worldwide. In Mexico, like many other countries, obesity and chronic diseases such as heart disease, stroke, cancer, chronic respiratory diseases and diabetes, largely linked to poor diet and a lack of physical activity, have become pressing public health concerns.

Making it happen

Operating on a global and a regional basis, and as part of an integrated health program, Volkswagen Group, one of the world’s largest automobile manufacturers, is challenged to promote and protect the health of its employees as specific health concerns such as obesity emerge. VW believes that a company can only successfully exist as a global player in international competition if it has a healthy workforce – in the widest sense of the word. For VW the protection and promotion of the health of its 350,000 employees is therefore not only a social obligation but also an economic necessity. The Group operates 47 production plants in eleven European countries and a further seven countries in the Americas, Asia and Africa.

VW sells its vehicles in more than 150 countries across the world. The challenge for VW has been to develop and maintain an effective system to manage the health of its global workforce and which includes measures and programs for specific problems and target groups.

The company believes that looking after the health of the workforce involves more than the prevention of accidents and diseases and aims to maintain and promote the physical and mental efficiency and the motivation of the workforce in the long-term.

As VW states: “Both the workforce and the company benefit from health protection and health promotion. They lead to greater health and well-being among individual employees and make a major contribution to improving quality and productivity and therefore to the success of the company.”

VW defines the following actions as part of its employee health strategy:

  • Health – to protect the workforce from work-related health risks;
  • Well-being – to promote their physical, psychological and social well-being;
  • Capacity to act – to develop the individual’s capacity to act;
  • Health standards/economic efficiency – to achieve a long-term increase in the health standards of employees and to improve economic efficiency.
The VW Group has seen the development of a health initiative for apprentices who are overweight through the encouragement of healthy eating and physical activity. The company now offers considerable support to employees who fall into this category. For example in Mexico, where obesity has emerged as a one of the main public health concerns, the company has developed a series of courses and seminars which it offers to employees. These include regular medical examinations to monitor body mass index (BMI) and courses to identify and modify lifestyles such as a Sports Club to increase the general fitness of staff.

Healthy eating is also encouraged in the staff canteen, which is the largest in Latin America, serving more than twelve thousands meals per day. The canteen has seven dining halls, with space for 2,394 people provided for by 260 canteen staff. The meals are designed in accordance with nutritional, energy and calorific requirements. VW México also has the only canteen in Latin America that regularly offers a vegetarian alternative on such a large scale. Approximately 800 people chose this option each day.

Results

Health reporting is a core aspect of the VW employee health strategy. While ensuring that the rights of employees and the privacy of the individual is protected the company systematically documents and evaluates data relating to stress, strain and health. The data is then used to contribute towards identifying main areas of risk and disease, defining fields of action and monitoring success.

Lessons

  • Develop a comprehensive understanding of health – Understand that health is more than freedom from illness but also encompasses well-being, and the development of an individual’s capacity to act – making healthy choices, easy choices.
  • Adopt a holistic approach – This means regarding health promotion and protection as a whole, continuous process during which the psychological, physical and social aspects of health should be taken into consideration as well as influences both during and outside working hours, potential health risks and resources for health promotion.
  • Take a proactive approach – Health protection and health promotion should be tackled proactively through prevention and awareness programs as well as being integrated in the planning process.
  • Cooperate and participate – Taking national rulings into consideration, establish an open and comprehensive dialogue, and close, constructive cooperation with all those involved in occupational safety and health both within and outside the company.
  • Target specific problems – Measures and programs to protect and promote the health of the workforce should be carried out for specific problems and target groups.
  • Innovate – Success must be regularly monitored, continuous improvements made and innovative further development achieved.
  • Measure costs and benefits – The cost and benefits of all measures and programs must be taken into consideration. For example designing work to meet health requirements takes priority over measures relating to individuals.
  • Ensure specialist knowledge – Occupational Health Services (OHS) must be competent in the fields of occupational medicine, social medicine, industrial hygiene, toxicology, ergonomics, psychology, physiology and social sciences.
  • Provide for adequate personnel and equipment – Ensure a sufficient number of staff with relevant qualifications in occupational medicine and provide them with necessary equipment.
  • Allow free access/information – Allow OHS employees free access to all workplaces and facilities in the company and all information relating to production processes, performance standards and substances used or planned for use, as far as is necessary for the proper fulfillment of their tasks.
This case study was produced as part of The Business of Health - The Health of Business (1.2 MB), a publication by the WBCSD and IBLF. Ill-health and disease impair business performance by hampering individuals, communities and markets. The examples gathered in this publication serve to illustrate the business case for corporate action on health and demonstrate how companies can positively and imaginatively engage with these issues to create business advantages.

Further information