Global Compact International Yearbook 2009

Global Compact 

International Yearbook 

2009

Published by macondo Media Group with kind support from: 

Adecco Group 

Ampeg 

Amazon Carribean Guayana 

Autostrade per L´Italia 

Arcandor 

Carrefour 

Coca-Cola Hellenic 

Danfoss 

Dong Energy 

E.ON 

Ernst & Young 

Gandaki Bee Concern 

Grundfos 

Holcim 

Martha Tilaar Group 

Medine 

Nexen 

Novo Nordisk 

Otto Group 

REN 

Groupe SEB 

Siemens 

PT Smart TBK 

TMS Group 

Toms 

TÜV Rheinland 

2 

Global Compact International Yearbook 2009

Agenda 

Foreword 

“ 

The United Nations Global Compact is both a policy platform and a practical 

framework for companies that are committed to sustainability and responsible 

business practices. It provides a forum for exchanging current and emerging 

best practices and for debating the role that business can and must play in addressing 

global challenges. This inaugural edition of the Global Compact International Yearbook 

shows how companies around the world are making an impact and fostering positive 

change. 

Ban Ki-moon, UN Secretary General 

No consideration of sustainability or responsible business can avoid the defining issue 

of this generation. It is fitting, therefore, that the Yearbook – which was developed and 

produced entirely by Global Compact participants – devotes so much of its content to 

climate change. In December 2009, governments will convene at the United Nations 

Climate Change Conference in Copenhagen to negotiate a new comprehensive climate 

change agreement. Business will have a major role to play – through innovation, 

investment, technology transfer and advocacy. 

One underlying message of this Yearbook is that a global, low-carbon economy is not 

only technologically possible, it makes good business sense. I hope the perspectives from 

science, public policy and business presented in this publication can convince more 

companies of the urgency of action and the practical benefits such action will have for 

both the natural and business environments. We need the voice and energy of business 

to help us combat climate change. 

Since its launch in July 2000, the Global Compact has grown to become the world’s 

largest corporate sustainability initiative. Its more than 6,000 business participants 

in nearly 140 countries strive to implement universal principles in the areas of human 

rights, labour, environment and anti-corruption. They have undertaken hundreds of 

projects in health, education and infrastructure around the world, and have generated 

important momentum for building a more equitable and sustainable future for all. This 

Yearbook documents these efforts. I commend it to a wide global audience 

” 

and encourage all readers and stakeholders to do their part in supporting 

the Global Compact. 

Global Compact International Yearbook 2009 3

The Politics of 

Climate Change 

Bitte Leadtext einlaufen lassen! 

4 


Agenda 



By Sir Anthony Giddens 

It is an important year, and everybody knows it because it is 

the year of Copenhagen. It’s a key for climate change policy. I 

do hope the Copenhagen negotiations will be successful, but 

there are reasons I have to be worried. 

What are the reasons that I have worries? Well, first of all, when 

you have two hundred nations to agree on something, they 

can often only agree on a very low level. That’s exactly what 

happened with Kyoto: They agreed on really quite inadequate 

targets. This may not happen this time. 

Second, obviously there are no methods and no means of enforcement 

in the international community for countries that do 

not live up to their obligations. There are no strong mechanisms 

of enforcement in the international community. For serious 

issues, we have no international regulations at all. 

Thirdly, even if significant agreements are reached in Copenhagen, 

they have to be enforced. It’s not enough just to say 

what we are going to do: The crucial issue facing all of us in 

climate change is how we are going to do the things that we 

say we want to do. 

In truth, what is going to happen in respect of climate change 

in the world’s future will depend on the industrial countries. 

The industrial countries under any Copenhagen bargain have 

to take the lead in radically reducing their emissions, not just 

in the longer term, but in the short term, too. 

There is a gap much larger than that between what seems to 

be a potentially cataclysmic future – which in fact is a danger 

for the future of world society – and the lack of response from 

the majority of the public, not only in the industrial countries, 

but to a slight degree in most of the world. What accounts 

for the size of this gap? I have a theory, which to me sort of 

faces the political problems of climate change. That theory 

I called “Giddens’s Paradox”. “Giddens’s Paradox” says that 

climate change is an issue we never had to deal with politically 

before, not just because of its global scope but because 

it’s politics of an abstract future, mediated by scientific items. 

We never had to confront the issue politically, nor has any 

other civilization entreated so fundamentally upon nature as 

our civilization, for better or worse, has done. 

Now climate change is a substantial future threat, but it is 

not visible in the course of daily life, so you have to get at 

it through some optic representation in the melting of the 

Arctic icebergs or whatever. For me, that’s the reason why the 

majority of the public ignores such an issue. Climate change 

simply does not impinge on most people’s everyday concerns. 

Moreover, survey material shows that climate change in the 

public is simply one among many other potential cataclysms. 

We are all experiencing the possible swine flu, and there are 

always announcements of other possible pandemics. Catastrophe, 

global catastrophe, is never far away, and it’s hard for 

the members of the ordinary public to disentangle that. 

The paradox lies in the fact that, if we wait until climate 

change does become visible in people’s lives, especially in 

people’s lives in the industrial countries, it will be by definition 

too late. If we wait, we are lost because there is normally 

no way of getting the emissions out of the air once they are 

there. The longer we wait, the more emissions will be in the 

air and the more impossible it is to cope with the problem 

except by adapting to it. That’s the reason I think why so many 

members of the ordinary public are climate-change sceptics. 

It’s a very convenient position to adopt if you want to put it 

out of your consciousness. 

In the majority of the industrial countries, over 40% of the 

population are climate change sceptics. On the other side, only 

one percent of scientists are climate change sceptics. So you 

can see what a difficult political issue it is. It’s partly for this 

reason that I came to the conclusion that we don’t really have 

a politics of climate change. We don’t really have a developed 

account of how we are going to handle such an unusual, 

unique issue in the context of the democratic institutions of 

industrial countries, where it must be handled. 

I’ll just shortly drop four points: First of all, we have to disentangle 

Green politics and the idea of being Green. Environmental 

politics is quite distinct from the climate change issue and 

the problems that climate change poses for us. The two have 

become wrapped together partly because of the influence of 

the Green movement in bringing climate change to the attention 

of the population. But controlling emissions has not 

very much to do with a large amount of what is constituted 

by Green values and Green interests and Green concerns. Climate 

change is a serious threat, which of course is on top of 

other threats to the world’s resources, but we must entangle 

this threat in a direct way, and we have to find an adequate 

conceptual thinking. 

Secondly, we need to reduce the transformation on politics. 

We must develop a politics of the long-term, because we 

don’t have yet a politics of the long-term. In industrialized 

democratic countries, we have no instruments to deal with 

long-term issues, partly because of the impact of the era of 

deregulation, which is hopefully over. But when we are dealing 

with climate change, we have to work on a thirty-year cycle. 

6 


Agenda 


I like President Obama’s interventions – whatever happens 

when progress is made through Congress – is that he does 

have a sense for rational politics. There are only a handful of 

other politicians in Europe who have to some extent achieved 

this. Meanwhile, the European Union has taken above all a 

regulatory approach. 

Fourthly, if you follow the consequences of Giddens’s paradox, 

it shows that we are probably not getting too far just by 

scaring people; partly because there are many things we are 

frightened of, partly because what we are asking them to be 

frightened of is an abstract future. Therefore, we have to look 

for a revolution in our approach to climate change issue: 

• which looks much more to positives, 

• which has an inspirational quality, 

• which sets out a kind of society we would like to achieve, 

not that kind of society we want to avoid, 

• which sets out a positive view of the future, 

• which recognizes that there are costs to be born in a changing 

of consumption patterns that has to be made, but in the 

same time also focuses on benefits, also focuses on maturities; 

also focuses upon a positive noble vision of the society we’d 

like to create. 

This means reintroducing these issues into politics after decades, 

like the return to the idea of planning. You can’t count 

on a future unless you have a perspective for that future that 

implies a long term view of what we want to achieve. The 

return to planning is not a return to top down. With the 

public opinion towards climate change, state intervention is 

vital, but only in conjunction with grass-roots initiatives. You 

need the state and the government to encourage all sorts of 

bottom up initiatives from civil society groups and others. But 

you can’t deal with climate change in a short-term phase of 

democratic politics without having a longer time perspective, 

and that is not going to be easy to create. 

Third, and important to creating a long-term perspective, 

is to pull climate change away from the left-right division. 

It’s a very unfortunate fact that in many of the developed 

countries climate change has become politically polarized 

between left and right. In order to confront climate change, 

you must get something of a consensus among at least a 

substantial proportion of a democratic polity or you are not 

going to generate support for your policies. In my view, the 

left has a special responsibility and has to give up claiming 

climate change as its issue. We should no longer say such 

things as “Green is the new Red”, because that immediately 

polarizes political opinion on the right. One of the reasons 

Apparently, my argument is that we need at this point something 

very different from what the Third Way meant; we need 

a good dose of utopia back in our politics. We need to think, 

what will be the lock on implications of moving towards a 

low carbon economy. Many people think there will be an 

economy just like the existing economy, the industrial one, 

where everything else stays the same, except we are producing 

lower emissions. That is not remotely conceivable. We 

have to think through a whole morass of implications on an 

economic level. 

And we have to think what kind of society should prevail in 

this world and how we’d like to achieve it. It’s a simple matter 

of that. When Francis Fukuyama spoke of the end of history 

he must have been wrong, because Fukuyama said we won’t 

invent new forms of society. Indeed: We have to invent a different 

form of society, because our way of life is unsustainable, 

strictly in climate change patterns. 

Source: Transcription of Lord Giddens 

presentation of his new book „The Politics of 

Climate Change“ in Essen/Germany in June 

2009. Set by Lisa Dahlheimer. 

Author: Lord Anthony Giddens is former 

Director of the London School of Economics 

and Political Science (LSE). 


Road to 

Copenhagen: 

Viewpoints 

8 


Agenda 


Paul Dickinson, 

1 

CEO at the 

Carbon Disclosure Project 

The private sector will be the source 

of almost all of the funds required for 

the transition to a low-carbon economy, 

and the creation of new and radically 

different infrastructure and energy systems. 

The challenge for governments is 

to realign financial signals so that lowcarbon 

solutions are the obvious choice 

for investment decisions. 

There are various means that governments can use to drive 

investment patterns, ranging from regulation and choice editing 

through to subsidies and fiscal incentives. Governments 

can also intervene directly in the market through large-scale 

public procurement. These actions can be conducted at the 

national level or under international agreements. However, 

none of them can be carried out effectively without consistent, 

comparable data on the carbon intensity of companies, 

products, and activities. 

Reduction Commitment). These requirements are not yet linked 

or consistent, which will create a heavy reporting burden for 

companies and also means that comparability may continue to 

be an issue for investors. We need to move to the next phase: 

towards global consistency. 

A strong precedent has been set by the development of international 

financial reporting standards. Full international 

adoption of these has taken many decades, but the world 

is now well-placed to accelerate creation of their climatechange 

reporting equivalent. Important work is being done 

to enable this to happen, for example by the International 

Accounting Standards Board, the International Auditing 

and Assurance Standards Board, and the Climate Disclosure 

Standards Board. 

These efforts are relevant to many aspects of the Global Deal 

framework now under discussion by governments, for example 

to MRV (measurable, reportable, verifiable), international 

capacity-building, and sectoral action. They also act as a bridge 

between the world of government negotiations and the world 

of the companies and investors, who will put the necessary 

changes into action. It is crucial that these two worlds can 

find ways to communicate on each others terms in order to 

better work together to fight climate change. 

Governments must prioritize and promote the development 

of the key factors that allow this to happen – reporting, 

accounting, and assurance. The Carbon Disclosure Product 

(CDP) is working towards greater data comparability between 

companies and creating a global reporting standard 

for carbon through our work with the Climate Disclosure 

Standards Board. We are frequently told by companies and 

investors that one single standard will be very important 

in driving effective action on climate change. That message 

was repeated in recent CDP research, which was conducted 

with the AEA and detailed what global businesses need from 

governments. 

This is not simply a question of quantitative emissions reporting, 

although this is, of course, vitally important. Financial 

institutions looking to invest, for example, need to know 

more than emissions data – they require information about 

trends, risks, opportunities, strategies, performance, and 

corporate governance. They need to know about the future 

of an investment prospect, as well as its past and present. 

They need decision-relevant information using material and 

comparable data. 

We are halfway there. Corporate reporting regulations are 

proliferating all over the world, mostly requiring emissions 

data but sometimes requesting more qualitative information, 

too (as with, for example, the United Kingdom’s new Carbon 


James P. Leape, 

Director-General of WWF 

International 

2 

Climate change is the greatest environmental 

challenge the world has ever 

faced. It has the potential to also be the 

greatest developmental, social, health, 

and security challenge – if unchecked, 

global warming could potentially create 

hundreds of millions of climate refugees 

as coastal areas are flooded, crops 

fail – causing greater food scarcity – and water supplies dry 

up. It is a threat that will affect us all, irrespective of where 

we live. As Archbishop Tutu said, climate change is “totally 

indiscriminate of race, culture and religion.” 

When the world’s leaders meet in Copenhagen at the end 

of this year to agree on a deal to replace the ageing and 

ineffective Kyoto Protocol, they must come up with a bold 

response that can put the world on a track to a low-carbon 

economy. 

Attainable goals 

The truth of the matter is that these changes are well within 

our reach. In January of 2009, McKinsey & Co. presented a 

rigorous assessment of the costs of abating climate change 

– a report that was sponsored by WWF and several other organizations. 

Mapping out the solutions for every sector of the 

economy in every region of the world, the McKinsey analysis 

makes several critical points. 

McKinsey’s analysis shows that it is possible, with proven 

technologies, to reduce global emissions to a level that is likely 

to keep global temperatures from rising more than 2°C. It also 

shows that the cost is manageable. Full implementation of 

all the measures assessed by McKinsey would cost less than 1 

percent of global GDP – challenging, to be sure, but far, far 

less than the cost of inaction, which Lord Nicholas Stern has 

estimated to be from 5 to 20 percent of global GDP. 

The McKinsey analysis also makes it very clear, however, that 

we can succeed in meeting the challenge of climate change 

only if we utilize the full potential of all the measures available 

to us. Success requires bold action in every sector of the 

economy – from power to transportation to forestry – and in 

every region of the world: across the industrialized countries, 

of course, but also the emerging economies and the major 

forest regions. The McKinsey study further demonstrates that 

success is only possible if we find a way to move very quickly 

– every year of delay makes the solution more difficult and 

more costly. And every year of delay locks in another 5 parts 

per million of CO2 in the atmosphere. 

Challenging times 

To be sure, these are challenging times – countries all over 

the world are struggling to deal with a global recession. But 

that recession cannot – and need not – delay action on 

climate change. The recovery will not succeed if we rebuild 

the fossil-fuel-dependent economy, which is vulnerable to 

the volatility and inevitable escalation of oil prices, and the 

growing impacts of climate change. To be sustained, the new 

economy must be low-carbon and built upon the energy solutions 

of the future, not the past. The trillions of dollars of 

stimulus now being pumped into the global economy thus 

provide a crucial opportunity to lay the foundation for that 

low-carbon future. A massive public investment in critical 

infrastructure – from “smart grids” that facilitate reliance on 

renewable energy technologies, to public transit and green 

buildings – can open up huge opportunities for innovation 

and for creating new markets. 

Building-blocks of a sustainable future 

Climate change is, of course, a truly global challenge – it 

threatens the future of every person and community on 

the planet, and it can be solved only if we find a way to act 

together. The UN negotiations that culminate in Copenhagen 

this December are thus of the highest importance. In 

those negotiations, the countries of the world must agree 

on a global deal that includes several basic elements. The 

global deal must establish measures that will ensure that 

total global emissions of greenhouse gases peak and begin 

to decline by 2020, and it must set the world on a course for 

reducing emissions to 80 percent below 1990 levels by 2050. 

Those are the targets necessary to prevent the planet from 

warming more than 2°C. 

Achieving those targets will require industrialized countries 

to greatly reduce their emissions to levels that are 25 to 40 

percent below 1990 levels by 2020. It will also require that 

emerging economies like China and India find ways to slow 

the increase in their emissions even as their economies grow, 

and that forest countries take action to curb deforestation. It 

is thus essential that the agreed framework provide for cooperation 

in developing and sharing technology, and establish 

robust financing mechanisms to support measures to reduce 

emissions from energy production and deforestation in the 

developing world. 

Finally, a global agreement will have to recognize that, even 

if we act boldly to bring climate change under control, we 

will still suffer significant impacts, and that the world must 

10 


Agenda 


Beyond 2012 – The 

World Food Programme's 

Perspective 3 

provide the resources that will allow developing countries 

to adapt. 

Climate change will not wait 

we see that 

responsibility 

and long-term 

strategies pay off 

in the end. 

A strong Copenhagen agreement can be the cornerstone of a new 

global economy – an economy that offers huge opportunities 

for new industries and new jobs; an economy that can, in fact, 

protect the climate on which we all depend. We know that we 

have the technologies and the financial means to move onto 

that path. What we need now is the political will. 

Climate is a key parameter in growing food. Changes in climate 

pose a threat to agriculture and can lead to drastic increases 

in food insecurity and hunger. Climate change will affect 

everyone, but it has a disproportionate effect on those living 

in poverty in developing countries in areas where deprivation 

and vulnerability to climate risks and natural disasters are 

severe. Studies warn of a coming “global food crunch” with 

long-term drivers of climate change, scarcity of land and 

water, lack of investment in agriculture and fuel production, 

and rising food consumption due to population growth all 

combining to cause political instability. 

As the world’s frontline organization in the fight against 

hunger, the UN World Food Programme (WFP) will be in even 

greater demand in helping communities that are affected by 

recurrent natural disasters adapt to climate change. Sophisticated 

and innovative tools – such as the WFP Vulnerability 

Analysis and Mapping, Early Warning Systems, Emergency 

Needs Assessments, and Weather-based Insurance – are 

essential adaptation instruments to anticipate the onset of 

natural disasters and allow for protective measures to be 

put in place. 

Presence in and knowledge of the affected areas is key to determining 

disaster prevention and taking appropriate measures. 

WFP’s extensive deep-field presence in places where deprivation 

and vulnerability to climate change and natural disasters 

are severe gives an advantage in operationally strengthening 

resilience. The operational base of WFP consists of: 74 country 

offices and 270 sub-offices, an overall presence in 91 countries 

worldwide, and 10,200 employees, of which 91 percent are 

engaged in field operations. 


WFP is prepared for climate-related shocks and emergencies. 

As a leader of the Global Logistics Cluster, WFP supports UN 

agencies in emergency preparedness and response mechanisms. 

WFP manages five UN Humanitarian Resource depots 

in Italy, Ghana, Panama, Malaysia, and Dubai for more than 

30 humanitarian organizations that use this network in the 

various locations for storage of emergency stocks. The depots 

are stocked with standardized relief materials and are geared 

to ship essential relief supplies wherever needed within 24 

to 48 hours. 

The vision of an economy based on low-carbon incentives and 

“Green Growth” will only succeed if global partnerships and 

common framework agreements manage to bring adaptation 

in the least developed countries to the forefront. WFP has itself 

started to reduce its carbon footprint in its offices around the 

globe and to mainstream climate adaption activities into all 

of its programing areas. WFP will be engaging governments, 

the private sector, and civil society to also implement innovative 

solutions to reduce the impact of climate change and its 

effects on food security and hunger. 

Björn Stigson, President 

of the World Business 

Council for Sustainable 

Development 

4 

When the world’s governments meet in 

Copenhagen in December, their representatives 

will be dealing with an unprecedented 

level of change in two interwoven 

areas: climate and the economy. This 

massive pressure for change is leading 

to what I believe is a new industrial 

revolution, one that has the potential to 

dramatically reshape the world we live in. That pressure will 

remain, no matter what global leaders decide in Copenhagen. 

Sustainable solutions to the complex problems we are facing 

will require government and business to cooperate on a level 

never seen before. 

The time for short-term solutions is behind us. The global recession 

must not be used as an excuse to forget about the future. 

It is clear that we must revive growth in the world economy 

and imperative that we do this in a low-carbon way. We need 

to find ways of working – and of thinking – that align the 

needs of development, the economy and the world’s climate 

and find solutions that work for all three. Globally responsible 

business is continuing to work to find climate solutions, 

address the water crisis, stem biodiversity loss and work with 

the poor to assist in providing sustainable livelihoods. 

But how we use and source energy in the future will be critical. 

The new industrial revolution will see a surge in green 

jobs; indeed, one estimate says 20 million could be created 

in renewable energy alone, far more than would be achieved 

with fossil-fuel-based energy. Clearly, there will be opportunities 

for some businesses in this revolution, just as there will 

be losses for others. 

Energy is essential for industry – to power infrastructure and 

to connect goods and services to markets. It is also essential 

for development. Energy shifts the quality of people’s lives 

enormously; it is the single largest requirement for economic 

growth and social development. Currently about 1.6 billion 

people have no access to electricity, and it will be difficult to 

improve their lives significantly without it. But more people 

with electricity must not mean more greenhouse gas emissions. 

Energy efficiency is widely accepted as the most cost-effective 

way to mitigate climate change. Fully 50 percent of the potential 

to cut greenhouse gas emissions in half by 2050 is expected to 

come from increased energy efficiency. The climate solution 

therefore requires us to quickly improve energy efficiency, to 

develop low-carbon energy sources and to find breakthrough 

technologies and put them to work. 

We now need long-term leadership, governments that put 

the future ahead of the present. Sustainability must be at the 

top of the list for world leaders. Governments clearly have a 

difficult task ahead of them, but business is ready and willing, 

also in this period of global economic crisis, to contribute to 

climate-change solutions. 

At the World Business Council for Sustainable Development, 

we have been working with business for 15 years to find sustainable 

ways to achieve economic growth. We will continue 

to do this, regardless of the outcome of the United Nations 

Climate Change Conference in Copenhagen. Our member 

companies will continue to invest in the innovation needed, 

to find and develop new products, services and technologies 

that the world will need as it faces the joint challenge of 

greenhouse gas reduction and economic growth. One example 

of this is our recent publication of a ground-breaking report 

12 


Agenda 


Transforming the Market: Energy Efficiency in Buildings. This 

report, the result of a $US15 million investment and four 

years of research, shows how energy use in buildings can be 

cut 50 percent by 2050. 

Business knows it will have to provide the lion’s share of 

the huge investment that will be needed. But to do that it 

needs: 

• The right policy framework. This must be transparent, predictable 

and long-term, allowing business to understand the 

risks as fully as possible before investing. 

• Developed countries need precise intermediate targets for 

2020-2030 to allow them to measure and adapt if the world 

is to reduce CO2 emissions 50 percent by 2050. Yes, huge 

investments are called for in energy, urban infrastructure, 

water, transport and food supplies, but we must make 

sure these investments remain aligned with a sustainable 

future. 

• Solutions must identify ways to share the burden fairly so that 

all parties can and will commit to them. We need to ensure 

that all industrial sectors, the financial world, developing 

and developed countries with their national concerns and 

many others have their needs taken into consideration so 

they are willing and able to cooperate. 

• Rapidly emerging economies should be considered separately 

and in a distinct fashion. 

• National policies must be suited to national circumstances. 

• Actions in developing countries will be effective only if 

programmes are put in place to build up infrastructure and 

develop skills and those programmes are accompanied by 

an allocation of resources. 

Many questions and issues remain, but we cannot allow these 

to block our path to a new climate regime. For example, we 

need to identify market mechanisms that will create a price 

for carbon that takes into account its true cost. We need to 

understand how to scale up energy efficiency globally. An 

energy-lean economy: What does it look like and what technologies 

and policies will help create it? We need jobs in clean 

energy, but how do we get investment flowing into it? 

The world after 2050 will be different, and the changes that get 

us there will be transformational. But there is no alternative 

to making those changes. We need to build a more sustainable 

society with lower energy and resource use. Whatever 

happens in Copenhagen, this need will remain. How we live, 

do business and earn our living – the lives we will have in 

the future – all depend on what we do now to handle this 

need. 

Lila Karbassi, 

UN Global Compact Issue 

Manager, Environment 

5 

United Nations Secretary-General Ban 

Ki-moon has called climate change “the 

defining challenge of our time” – for 

good reasons. Climate change is the most 

pressing and disruptive issue the world 

is facing today. It affects every aspect of 

society, from energy resources and water 

sustainability to public health, food 

security, and even human security. 

Despite – or perhaps even because of – the global financial 

crisis, there is no time to delay action on climate change. There 

is only a very short window of opportunity, which requires 

all social actors to become part of the solution to this global 

threat. Greenhouse gas emissions that contribute to global 

warming must be cut with no further delay. 

This year, crucial government negotiations will be held at 

the UN Climate Change Conference (COP15) in December in 

Copenhagen. The goal is to forge a new global framework on 

climate change, one that will be an effective successor to the 

Kyoto Protocol, which expires in 2012. Ultimately, much will 

depend on the positions of the United States and China, the 

globe’s biggest generators of greenhouse gases, who together 

account for nearly half of all emissions. 

As a key stakeholder in the global climate debate, the business 

community has a critical role to play and many businesses 

have been mobilizing for some time. What is needed now is 

a strong signal from business that will give governments the 

confidence needed to negotiate a strong deal with ambitious 

emission reduction targets at COP15. 

It is in this context that the Copenhagen Climate Council – 

in cooperation with the UN Global Compact and a group of 

partners – convened the World Business Summit on Climate 

Change from May 24–26, 2009, in Copenhagen. The Summit 

brought together over 650 business leaders, government officials, 

and NGO representatives from around the world to put 

forward a set of recommendations for the December negotiations. 

The Summit was opened by the Secretary-General, who 

challenged business leaders to “put themselves at the forefront 

of an unprecedented effort to retool the global economy into 

a cleaner, greener, and more sustainable economy.” 

The Summit was an effective forum for showing how the private 

sector can address the climate challenge through financ- 


ing, development, and deployment of low-carbon solutions. 

At the same time, there was consensus that business needs 

regulatory certainty to unleash its full potential – certainty 

that only governments can provide. 

The Summit resulted in “The Copenhagen Call”, a strong 

statement urging political leaders everywhere to agree on an 

ambitious and effective global climate treaty at COP15. The 

Call further outlines the elements that business leaders believe 

are necessary for a new treaty. 

As we move closer to COP15, many businesses have emerged as 

climate champions and leaders by putting effective mitigation 

and adaptation strategies into place, driving innovation, and 

putting pressure on their governments to act now. However, 

climate leaders represent only a small portion of the business 

world that has made climate change a top priority. Many businesses 

are still sitting on the fence and waiting for others to 

take the initiative. Unless more businesses begin to lobby vigorously 

for a climate agreement in the months ahead, chances 

are slim that governments will seal the deal in Copenhagen. 

And the consequences of failure would be devastating: for the 

planet, for society, and for business. 

The good news is that there are effective fora that have helped 

galvanize the voice of business. The Global Compact’s own 

Caring for Climate initiative – launched by the Secretary- 

General in July 2007 – is a voluntary and complementary 

action platform for Global Compact participants who seek to 

demonstrate climate leadership. Caring for Climate provides a 

framework for business leaders to advance practical solutions 

and help shape public policy as well as public attitudes. The 

more than 350 chief executives in 65 countries who support 

Caring for Climate are prepared to set goals, develop and expand 

strategies and practices, and to publicly disclose emissions as 

part of their existing disclosure commitment (COP) within the 

Global Compact framework. 

Carlos Minc Baumfeld, 

Brazilian Environment 

Minister 

6 

Brazil’s position on global warming is extremely 

clear: We want the country to take 

on a leading role amongst the nations that 

are now dealing with this phenomenon, 

which has been named one of the most 

worrying for future generations. 

Recently, in a ministerial consultation 

on climate change, which took place during the 25th session 

of the United Nations Environment Programme Governing 

Council/Global Ministerial Environment Forum held in February 

in Nairobi, Kenya, we argued that a commitment must 

be made between developed and developing countries so that 

bolder goals for reduction of greenhouse gas emissions can 

be established. 

Dubbed the “descending carbon spiral”, the Brazilian proposal 

is based on common but differentiated responsibilities for 

developed and developing countries in addressing climate 

change – based on funding and technology transfer to developing 

countries – so that an international agreement may 

More information on Caring for Climate: 

www.unglobalcompact.org/Issues/Environment/Climate_Change/ 

14 


Agenda 


be reached at the United Nations Framework Convention on 

Climate Change, to be held in December 2009 in Copenhagen, 

Denmark. New standards for the second commitment period 

of the Kyoto Protocol are expected to be established during 

this high-level meeting. 

According to the proposal, developed countries should commit 

to bolder goals for greenhouse gas emissions reduction 

and design mechanisms for an over €100 billion fund aimed 

at financing mitigation and adaptation activities in regions 

that will be most affected. 

Presently, the richest countries in the European Union have 

adopted a maximum 20% reduction goal by 2020, which could 

eventually be broadened to 30% if developing nations also commit 

to reductions. Nonetheless, we consider this a timid goal, 

since the UN’s Intergovernmental Panel on Climate Change 

(IPCC) itself recommended that rich countries should reduce 

their emissions by 40% by 2020 in order to avoid imminent 

environmental disaster. 

We strongly defend the “descending carbon spiral”, because 

it assumes an international common but differentiated commitment 

to fight global warming. Initiatives carried out 

by developed countries, together with resources from the 

above-mentioned climate fund and partnerships for technology 

transfer, must be followed by meaningful mitigation 

and emissions reduction outcomes in developing countries. 

Therefore, developed and developing countries would rely on 

one another to obtain desired results. 

The Brazilian initiative is also based on a proposal presented 

by us last year during the UN climate change meeting held in 

Poznan, Poland. Commended both by UN Secretary-General 

Ban Ki-moon and by the US ex-vice-president Al Gore, the 

National Plan on Climate Change establishes a Brazilian commitment 

to reduce illegal logging in the Amazon Rainforest 

by 70% by 2017. This is clearly an ambitious goal, since in 

Brazil forest burning and deforestation represent around 75% 

of national CO2 emissions. 

Furthermore, rich countries would have to commit to contributing 

to this climate fund around 10% of the total value of 

annual transactions related to clean development mechanism 

(CDM) projects and 10% of the profits from the production 

and trading of oil and coal. These resources would be applied 

to immediate greenhouse effect mitigation actions as well 

as to activities for adaptation by affected regions and forest 

preservation. Funds would be invested in programmes within 

countries which reduced deforestation and preserved forests 

or created new protected areas. 

The basic idea behind this climate fund account is to stimulate 

developing countries that still harbour forests to preserve them 

or expand their coverage. To this end, a value per hectare of 

forest would be proposed in due time. 

So, actions proposed in Nairobi could be funded by the establishment 

of this general international climate fund – which 

could initially be fed by various sources, such as the carbon 

market and taxes on oil trading. Together, these initiatives might 

free the world from the present deadlock which threatens it, 

turning the United Nations Framework Convention on Climate 

Change in Copenhagen into a pact for the decarbonization of 

global economies and, ultimately, for saving the planet. 

Getting in the Lead? 

The position of 

the European Union 7 

The pledge to reduce greenhouse gas emissions in the European 

Union (E.U.) by 20% from 1990 levels by 2020 has been half 

fulfilled at present: emissions of all E.U. countries are currently 

at around 12% under the 1990 average. E.U. environmental 

commissioner Stavros Dimas has admitted that a large part 

of the reduction can be attributed to warm weather, however. 

Transport emissions rose by a quarter and household savings 

were not much either. But Stavros Dimas seems optimistic and 

has stated his confidence that the E.U. will reach its climate 

goals or even exceed them. 

An important item of the E.U. climate and energy package is 

the increase in the proportion of renewable energy sources 

used in overall energy consumption to 20% by 2020. National 

energy targets should be introduced for this purpose; these 

can vary greatly between countries. For example, Sweden 

needs to reach a proportion of 49%, whereas Malta must only 

achieve 10%. At the same time, the proportion of biofuels in 

overall petrol and diesel consumption should increase to at 

least 10% by 2020. Along with the reduction of emissions, 

the E.U. aims to decrease dependence on petroleum, natural 

gas and coal imports by promoting renewable energy sources. 

Another important element of the package is the reduction of 

emissions by power stations and energy-intensive industries . 

The introduction of a transnational emissions trading system 

should take these emissions down 21% from 2005 levels. The 

promotion of carbon dioxide capture and storage technologies 

will also figure prominently. 


The package of climate and energy measures that has already 

been adopted by the E.U. is anticipated to take effect in 2011. 

The E.U. is prepared to increase its CO2 reductions target from 

20% below 2020 levels to 30%, as long as other industrialized 

nations commit to comparable decreases. Even though this 

may make the E.U. a pioneer, it is still far less than what is 

necessary, according to environmentalists. Antje von Broock, an 

expert from the Friends of the Earth Germany environmental 

network, urges the E.U. to give primary support to developing 

nations' work on climate change, stating that industrialized 

nations must provide 40 billion euros annually toward 

climate protection in developing nations. The E.U. must take 

on a third of that. 

Climate Change in 

Down Under – 

"The worst global recession since the Great Depression means 

we must adapt our climate change measures but not abandon 

them", said Prime Minister Kevin Rudd in May 2009. Emissions 

measures in Australia have been delayed as a consequence 

of this adaptation. The original government action plan for 

reducing pollutant emissions nationwide called for measures 

on emissions in 2010; the new target is 2011. Citizens' action 

groups in Australia, such as the Bayside Climate Change Action 

Group, have accused Australian Prime Minister Kevin Rudd 

of breaking his election promises. 

Another item concerns agriculture in Australia, where sustainable 

practices to reduce pollution should also be promoted. 

The government hopes that implementing these measures will 

not only protect the environment, but create new jobs as well. 

As the Minister for Climate Change and Water, Senator Penny 

Wong, put it, "the Australian Government Climate Change 

Strategy provides the long-term framework and confidence 

required to create the new jobs and business of a low pollution 

future". 

The Australian Position 8 USA: 

A study by the Oxfam charity says that a fair agreement on 

climate change would mean that Australia must reduce 

emissions by 34 per cent by 2020. Until now, however, the 

government has offered only a 25 per cent reduction. The 

government has allocated 15 billion dollars to implement 

its climate strategy, in which investments in renewable 

energy sources and the research and development of new 

technologies figure prominently. By 2020, 20 per cent of 

the electricity should be generated by renewable energy 

sources. It should be possible for private households as well 

as corporations to implement these technologies at reasonable 

cost and receive the corresponding guidance in using 

them. They will receive low-interest loans or discounts on 

investment in energy-efficient home insulation, solar panel 

installations, or rainwater cisterns and water recycling, just 

to name a few. 

From the laggard to the 

pioneer? 9 

“We’re back in the game,” said Secretary of State Hillary Clinton, 

and meant that the USA was “ready to lead and determined 

to make up for lost time” on international climate protection. 

With this approach, the administration of Barack Obama has 

clearly distanced itself from the position of the previous US 

administration and signaled a turnaround in the country’s 

climate policy. The Obama Administration clarified this backsliding 

with the release of a new report on climate change. 

16 


Agenda 


"It is clear that climate change is happening now," John P. 

Holdren, director of the White House Office of Science and 

Technology Policy, said. 

In the run-up to the Copenhagen Climate Summit in December, 

the USA is on the offensive: At the UN conference in Bonn, 

it presented its own recommendation for a new climate protection 

agreement. The USA is striving for a “comprehensive 

agreement”, says the head of the US delegation, Jonathan 

Pershing. The industrial countries should reduce their CO2 

emissions 80 percent by 2050. But specific recommendations 

for medium-term reduction goals were not presented. What’s 

new about the proposal is, the USA is no longer demanding 

that threshold countries, such as China, commit to specific 

CO2 reduction goals. The economically stronger developing 

countries should also make contributions, but these could 

look different case by case, says Pershing. The proposal is 

an update of the UN Climate Convention, which was agreed 

on in Rio de Janeiro in 1992. Environmental organizations 

expressed criticism of the US proposal. "The USA wants to 

abandon Kyoto completely," says Greenpeace. But that would 

cause important elements of climate protection to fall away, 

such as mandatory adherence to commitments. "That would 

be the end of an effective Copenhagen agreement." 

At the national level, too, the US government has presented a 

plan for a new start in environmental policy with its "American 

Clean Energy and Security Act of 2009", but this hasn’t 

been passed yet. The proposed law would reduce greenhouse 

gas emissions to 17 percent below the 2005 level by 2020. 

Originally, a goal of 20 percent was even being considered. 

In addition, the bill recommends for the first time a national 

emissions trading system, which would start in 2012. But massive 

resistance in the US Congress threatens to tie the hands of 

the US government internationally, warns Todd Stern, the US 

government’s Special Envoy for Climate Change. In contrast, 

Steven Chu, US Energy Secretary, emphasizes the USA’s work 

at various levels, such as efforts to achieve cooperation with 

China on climate protection. 

Beyond the proposed law, the US government for the first time 

has introduced tougher rules nationwide for fuel economy and 

exhaust emissions from motor vehicles. The goal is to save 

almost two billion barrels of oil and cut emissions 30 percent 

by 2016 through new, environmentally friendlier automobiles 

and small trucks. As a result, the CO2 emissions would be 

reduced by 900 million tons. Further, the US government is 

considering following the European model and paying car 

owners a premium for trading in their high-fuel-consumption 

used cars for new, more environmentally friendly models. 

President Obama labels his government’s current climate 

protection plans a "historic step." 

China: The right to 

development 10 

"Climate change is an environmental issue. But ultimately, it 

is a development issue." The negotiations for a new climate 

protection agreement must therefore follow the principle of 

"common but differentiated responsibilities", says Chinese 

President Hu Jintao. Regarding the post-Kyoto climate agreement, 

China is pushing for continuity: The Chinese government 

demands that the rich industrial countries commit to reduce 

global CO2 emissions and fulfill their obligations on technology 

transfer and financial support to developing countries. In 

addition, China calls for the rich industrial countries to reduce 

their emissions 40 percent by 2020. 

Further, in advance of the negotiations for a world climate 

agreement in December in Copenhagen, the Chinese government 

argued that some of the Chinese CO2 emissions from 

exported goods should be allocated to the industrial countries, 

that is, to the consumers of the goods. Chinese Premier Wen 

Jiabao added, it would be difficult for China to commit to 

CO2 emissions-reduction goals for the period between 2013 

and 2020, since the country was still in an early stage of development. 

But China will work to expand renewable energy 

production and increase energy efficiency. 

The Chinese government has worked out an action plan against 

climate change in which it will raise the share of regenerative 

energy to ten percent of total energy consumption. "China has 

a 1.3 billion population, and in terms of per capita greenhouse 

gas emission, we are certainly not the biggest one, yet we are 

still very active and positive about our cooperation with Europe 

in terms of saving energy, reducing pollution, developing a low 

carbon economy and developing those environmentally friendly 

technologies," says Wen Jiabao. China is already holding talks 

with the USA on more intensive cooperation in developing 

"green technologies". Experts believe these talks could result in 

a treaty ready for signature by autumn 2009. While the treaty 

will not include CO2-reduction goals for China, it will set clear 

and implementable energy efficiency goals. Priority should be 

given to further development of carbon dioxide capture and 

storage (CCS) as well as work on more efficient automotive 

fuels. Both countries want to bring mature energy-efficiency 

technologies to the market faster. Also under consideration 

is a free trade area between China and the USA, limited to 

"clean" technologies. In the past, the Chinese government consistently 

argued that accelerated transfer of climate protection 

technologies was a central prerequisite for the success of the 

international climate protection negotiations in Copenhagen, 

Denmark, at the end of 2009. 


Toward a Post-Kyoto 


Architecture: 

A Political Analysis 

18 


Agenda 


By Robert O. Keohane and Kal Raustiala 

Any international regime aimed at the mitigation of climate 

change must solve three problems. It must: (1) secure sufficient 

participation to be effective; (2) achieve agreement on rules 

that are meaningful, so that if they were followed, climate 

change would indeed be mitigated; and (3) ensure compliance 

with the rules. That is, it must solve problems of participation, 

effectiveness, and compliance. These problems require 

careful institutional design. The standard that should be applied 

to an institutional design such as that proposed in this 

chapter is whether, given a level of political commitment, it 

will increase the likelihood of a satisfactory solution to the 

tripartite requirements of an effective regime: participation, 

sufficiently strict rules, and a robust compliance system 1 . 

The attractions of a cap-and-trade architecture for 

participation 

The paper argues that only a cap-and-trade architecture is likely 

to make it politically possible to secure sufficient participation 

to get a climate-change mitigation regime up and running. 

Project-oriented mechanisms fail to send a comprehensive 

price signal to investors and governments; they incur very 

high transaction costs; and they require counter-factual determinations 

to assess additionality. Global carbon taxes would 

impose economic burdens on the industries of developing 

countries without offering the offsetting gains of being able 

to sell emissions permits under a cap that made allowance for 

their much lower historic and per capita emissions. It therefore 

seems unlikely that developing countries, including China 

and India, would agree to such an arrangement. 

Yet the task of negotiating a comprehensive cap-and-trade 

system will be daunting. Incentives for the most reluctant 

countries – or those that can bluff at being most reluctant – 

to hold out for a better deal would be very great. The option of 

beginning with a smaller “club” of major contributors to global 

warming plus any other states that chose to join or of linking 

various cap-and-trade systems should be maintained. 

1 

The paper summarized here is published in Joseph E. Aldy 

and Robert N. Stavins, ed., Post-Kyoto International Climate 

Policy: Implementing Architectures for Agreement (Cambridge 

University Press 2009). Our goal in that paper is to sketch 

such a design, particularly its compliance system, with careful 

attention to the realities of world politics. Please refer to that 

paper for all details and references; this is only a very brief 

summary. 

In short, we favor cap and trade as the basic approach, but 

do so cognizant of the many problems it faces. We are not 

confident that such a system will work. However, we think 

it has the best political prospects of any plausible climate 

system, and we believe that careful institutional design can 

help ensure feasibility. 

The political logic of a buyer liability system 

The fundamental problem of compliance in world politics 

is that it is virtually impossible to force powerful states to 

comply with international rules through a collective process. 

Rules that purport to ensure compliance lack credibility ex 

ante. Difficulties of enforcement yield two common outcomes 

with regard to international agreements. One is the negotiation 

of weak or vague international commitments that largely 

match existing behavior. This outcome is particularly common 

in the environmental realm, where agreements have often 

been struck that exhibit high compliance – because they are 

carefully tuned to the status quo – yet do little to influence 

actual change in behavior. An equally undesirable outcome is 

the negotiation of ambitious (but sometimes vague) rules that 

are frequently violated. When untethered to any meaningful 

monitoring and compliance system, ambitious international 

rules run the risk of substantial non-compliance. More specifically, 

there are at least three major political constraints 

on compliance provisions for a comprehensive cap-and-trade 

regime. Proposals that ignore these constraints will either not 

be implemented or will be ineffective if implemented. 

1| Post-hoc penalties on powerful sellers are infeasible. 

2| Any system that requires interstate negotiations to determine 

arrangements for compliance will be subject to political 

strategy and pressure. 

3| Any system that can be manipulated, or “gamed,” will be. 

The Kyoto Protocol contains unrealistic compliance provisions 

built around the idea of external enforcement. They open the 

door to renegotiations and exit threats and introduce a serious 

problem of moral hazard. 

We propose, instead, a system of “buyer liability,” based on an 

analogy with international bond markets. Firms and similar 

entities would be required to hold permits for the difference 

between their emissions and nationally set limits and would 

be authorized, at least to some amount, to purchase these 

permits from permit-holders in other countries. Buyers of 

emissions permits that do not represent the full amount of 

carbon reduction their face value implies – because their 

sellers did not keep their commitments – would need to 


purchase more permits or engage in further internal reductions. 

National governments would enforce this commitment 

against private actors within their jurisdictions. 

This system thus rests on the incentives of buyers, which 

will largely be in industrialized democracies, to comply with 

domestic emissions controls, and on the incentives of sellers, 

largely outside these states, to command and maintain the 

highest price in the market. It is therefore very important to 

note that the likely permit-short countries, in which enterprises 

will be net buyers of permits, on balance have stronger and 

less corrupt national legal institutions than the likely permitlong 

countries. Furthermore, the permit-short countries are 

overwhelmingly democratic. We therefore rely on internal 

structures and incentives, such as democracy and the rule of 

law, to ensure that permit-short countries comply with the 

system. Indeed, the political asymmetry – in rule of law and 

democracy – between buyer and seller countries is central to 

our advocacy of buyer liability. 

Especially now, 

we see that 


and long-term 


in the end. 

Our system is designed to generate endogenous incentives for 

compliance on the part of permit-long, or seller, countries. 

These governments will gain economically from maintaining 

a high value for the permits that their enterprises sell 

and will therefore seek to act in a way that maintains their 

reputation for compliance. This system, unlike many of the 

most prominent alternatives, provides “institutionalized 

transmission belts” for compliance to flow from the advanced 

industrial democracies, which have the strongest commitment 

to climate-change abatement, to the wide range of likely selling 

jurisdictions, which tend to have weak commitments to 

abatement. Details can be found in the paper. 

Buyers and incentives for prudence 

As in all cap-and-trade systems, under our proposal emissions 

permits would trade on public markets. Their value would 

depend on buyers’ ex ante estimates of validity. Shortly after 

the end of the year for which permits were issued, a comprehensive 

assessment would decide their value. In many 

respects, a buyer liability system is broadly akin to the existing 

international bond market. After being issued by states, 

bonds trade on international markets just as emissions permits 

would trade on such markets. Permits would trade at prices 

that reflect market participants’ confidence that they would 

be valid when they came due for redemption. They would 

likely trade at discounts if their validity was viewed as questionable. 

Buyers of emissions permits that were invalid, like 

buyers of bonds whose issuers default, will incur losses at the 

end of the process, and market prices will reflect prevailing 

expectations of eventual validity or invalidity. Like buyers of 

bonds, therefore, buyers of permits will have strong incentives 

to assess quality ex ante, price the permits accordingly, and 

hedge to some degree by purchasing excess permits. 

Accurate assessment and pricing are key to the smooth working 

of permit markets. If assessments ex ante are accurate, 

buyers can simply discount permits appropriately and buy 

more nominal permits than they require to meet emissions 

limits set by their governments. As in other markets, actors 

will hedge against risk. Insurance markets may also arise to 

cover the risk of permit invalidity. 

Sellers and incentives for validity 

If buyers bear the liability for invalid permits, what incentives 

do sellers have to ensure that the permits they sell are backed 

by real emissions reductions at the national level? Permits that 

lacked full validity would have a reduced value, with the loss 

borne by buyers that held the permits at that time. How would 

this give sellers incentives to follow the rules? 

20 


Agenda 


Under our proposal, governments of permit-long jurisdictions 

will seek to assure that the permits their domestic enterprises 

offer for sale are valid, because if they fail to do so, future 

permits from any enterprise within their jurisdiction will be 

devalued. Discounting all permits from a given jurisdiction 

at the same rate may appear unfair, since it penalizes those 

seller entities that scrupulously abate emissions but whose 

counterpart entities, in the same jurisdiction, fail to meet 

their obligations. But this unfairness is essentially a national 

problem, since it could only be the result of lax enforcement at 

the national level and can best be fixed via national action. 

Furthermore, emissions trading would be structured to continue 

for many years. Such an ongoing market creates an economic 

incentive for sellers to ensure quality. More specifically, if the 

rate at which states that are net sellers of permits discount 

future gains is sufficiently low and the magnitude of expected 

future permit sales is sufficiently high, states will seek reputations 

for selling valid permits. Sellers of fully valid permits 

would also have an incentive to cooperate with and even support 

credible monitoring systems, so that their permits would 

be regarded ex ante as valid and could command their full 

price. In short, buyer liability makes seller incentives largely 

economic rather than political. Seller incentives would not 

rest on concern about climate change; they would rest on an 

ongoing desire for profit. 

Reputation (for high value permits) is consequently at the 

center of this self-enforcement mechanism. It is therefore 

crucial to design the allocation system so that sellers of permits 

would face the prospect of a substantial stream of revenue 

many years into the future. If the “shadow of the future” is 

too short, incentives for compliance will tend to vanish. In the 

long run, of course, the caps will have to “bite” even on those 

countries that were net sellers of permits when they originally 

joined. Our expectation is that, over time, countries such as 

China would increasingly recognize their stake in mitigating 

climate change; that is, at the state level, incentives would 

become political as well as economic, even if private entities 

would continue to be primarily motivated by profit. Having 

been part of a cap-and-trade system, these governments would 

also have developed the institutions necessary for effective 

participation, and acceptance of meaningful caps would 

therefore create a less uncertain prospect for them. In other 

words, ideally, the period of being large net sellers of permits 

would be a transition phase, easing countries’ way into full 

membership. 

The problem of assessment 

To be effective, any cap and trade regime, whether involving 

buyer or seller liability, requires an accurate and prompt ex 

post assessment of permit quality. In view of our assumption 

that any system that can be gamed for strategic advantage 

will be gamed, any technically complex system of assessment 

should be examined closely from a political standpoint. As 

in liability systems, complex technical arrangements can be 

strategically manipulated in ways that are not transparent. If 

so, their very complexity may be self-defeating. 

The most serious problem of measurement is political: An 

international assessment process will be vulnerable to political 

pressure, and like judges on international courts, individuals 

responsible for conducting an assessment may feel strong pressures 

to support the positions of their national governments. 

As a result, strenuous efforts must be made to insulate the 

assessment process from political pressure. 

Conclusion 

Our proposed system for a post-Kyoto regime rests instead on 

a model of buyer liability coupled to annual ex post assessments 

and jurisdiction-equal discounting of invalid permits. 

This system is incentive-compatible for two reasons: buyers 

have incentives to monitor the system and price permits 

according to perceived validity, and sellers have incentives, 

if allocations are correct, to maintain their reputations for 

reliability. The system will not operate automatically: In particular, 

institutions will need to be created to assure that ex 

post assessment is reliable and, ex ante, that ratings agencies 

are also reliable. Indeed, one of the major conclusions of this 

paper is the urgent need for social scientists to think more 

carefully about assessment institutions that could be effective 

in a climate change regime with buyer liability. 

There are many potential problems with this system, which 

are discussed in the full paper. However, the cardinal virtue of 

a buyer liability system is that it would not require that an international 

organization ensure compliance with international 

commitments—a condition that, as we have seen, cannot be 

met. This system would instead be self-enforcing. 

Robert O. Keohane works 

as tutor at the Woodrow 

Wilson School of Public 

and International Affairs, 

Princeton University. 

Kal Raustiala works 

as tutor at the UCLA 

Law School & UCLA 

International Institute. 


50,000,00 

50 trillion dollars 

This is how much damage the financial and economic crisis has caused throughout the 

world so far. That is the estimate of the Asian Development Bank. 

The World 

Financial 

Crisis in 

Numbers 

10,000,000,000,000 


This is the total of the US government’s financial injection 

into the country’s crippled financial sector. 

In 2005, the average per capita income of a U.S. resident 

over 25 was 32,140 US dollars, according to the US 

Census Bureau. He or she would have to work around 300 

million years to earn this amount. This is the time from the 

Permian Age, when the first reptiles appeared, until today. 

4,000,000,000,000 


In its current report, the International Monetary Fund (IMF) 

places the losses to the world’s financial sector from bad 

securities at around four trillion dollars. 

This equals the private wealth of the richest 1025 people 

before the financial crisis, according to Forbes Magazine. 

428,000,000,000 

428 billion dollars 

Eastern European countries have to raise around 428 billion 

euros ($600 billion) to repay loans. That is 50 percent more 

than was first assumed, since the IMF’s “Global Financial 

Stability Report” had previously miscalculated it. 

Since 1970, the industrialized countries have promised 

to raise their development aid to 0.7 percent of gross 

domestic product. However, this percentage is unaffordable, 

say the G8 countries’ finance ministers in unison. But 

the costs would not even be half as high as the Eastern 

European deficit. 

22 


Agenda 

Financial Crisis 

0,000,000 

A human organism has exactly this number of cells. The body, by the way, replaces its 

cells every 14 days. The economic crisis will be with us longer. 

180,000,000,000 


The US insurance corporation AIG received federal aid 

several times in the last few months, which now totals 

around $180 billion. At the same time, AIG paid bonuses of 

165 million dollars. 

If you stacked 100 dollar bills on top of each other, they 

would build a tower around 180 kilometres high. That is 

around 20.5 times higher than Mount Everest, the world’s 

highest mountain. 

105,000,000,000 


This much is being contributed to the International Monetary 

Fund by the European Union alone, as was decided at the 

economic summit in London. 

Three-quarters of the harmful greenhouse gases in the 

atmosphere come from industrialized nations. Developing 

countries bear the brunt of the damage, however. The 

Oxfam NGO estimates that some 100 billion U.S. dollars 

are needed to protect poor countries from the effects of 

climate change. 

24,000,000,000 


China supports the dollar with around 24 billion dollars 

monthly (as of May 2009). Up to now, the Chinese central 

bank has bought a total of around 770 billion dollars worth 

of US treasury securities, reports the Neue Züricher Zeitung. 

What could this amount do? Worldwide, 800 million people 

suffer from hunger. This number could be cut in half with 

24 billion dollars per year. 

1,000,000,000 


One billion seems to be the smallest unit of measure in the 

current worldwide rescue plans. Amounts below that seem 

hardly worth mentioning in the media. 

Experts estimate that at least one billion people worldwide 

have to live on an income of one dollar per day. The billion 

that hardly plays a role any more in the worldwide financial 

merry-go-round would give these people a good day. Not 

much, perhaps, but more than many a “rescue package” is 

worth. 


24 


Agenda 


Corporate 

Responsibility in 

Times of Crisis 

2008 will be remembered as the year of crises. The breakdown of financial 

institutions and markets and the subsequent worldwide economic 

downturn have put the spotlight on issues that the United Nations Global 

Compact has long advocated as essential responsibilities for modern 

business and today’s global markets: comprehensive risk management, 

long-term performance, and ethics. 

By Georg Kell 

No doubt, poor regulation and oversight were among the 

key factors contributing to this dramatic chain of events. But 

equally important, the financial crisis revealed an inadequate 

understanding of risk and a fateful focus on short-term returns. 

In fact, if we were to take just one clue from the meltdown, it 

is that the global marketplace is in need of a stronger ethical 

orientation and a more comprehensive understanding, assessment, 

and management of risks that gives consideration to 

material issues in the environmental, social, and governance 

(ESG) realms. 

Restoring confidence and trust in markets requires a shift to 

long-term sustainable value creation, and corporate responsibility 

must be an instrument towards this end. If the crisis 

is any indication, it is now time to build on the advances 

made over the past 10 years by companies and investors in 

the area of ESG performance and bring this discipline to the 

mainstream. 

By understanding and broadly applying key lessons from the 

financial crisis, there is a genuine opportunity to alter the course 

of current challenges that will otherwise have systemic and 

game-changing consequences, notably climate change. Crises 

linked to food, water, and energy also pose serious threats. The 

call for governments, financial institutions, corporations, and 

citizens to responsibly manage these risks is urgent. 

For business, a few key lessons have emerged 

Long-term considerations and comprehensive risk-management 

must be integrated into market expectations and corporate 

strategy: Obsession with short-term profits and oftentimes 

reckless disregard for long-term considerations played an 

important role in destabilizing markets everywhere. At the 

same time, insufficient attention has been paid to ESG issues, 

which have gained in relevance and, thus, materiality to business 

– particularly climate change, water, and poverty. 

True business leadership must focus on stakeholders, not only 

shareholders: Well-publicized accusations of greed, fraud, and 

abuse – ultimately disregard for ethics and the interests of 

society – are numerous in the wake of the financial crisis. A 


Viewpoint: Do we need a 

new economic system? 

By Dr. Elmer Lnzen 

In 1933, representatives from 66 countries met in London to 

find a common solution to that era's global economic crisis. The 

idea: to have London send a signal for a new global financial 

system. The conference was a flop. On BBC Radio, economist 

John Maynard Keynes called it a complete yawn, and went on 

to say that conferences of this type usually ended in empty 

platitudes and ambiguous phras es. 

Seventy-six years later, the world is once again peering into 

the abyss of a global economic crisis, and they're meeting 

in London again to discuss the cornerstones of a new global 

financial system. Even if history never repeats itself, there are 

certainly parallels: The global economic crisis of the 1930s led 

once already to liberalism being criticized and to the expectation 

that state intervention would lead the way out of the 

crisis. This Keynesianism shaped the European social market 

economy and only came to a standstill in the wave of inflation 

that followed in its wake. Today, too, most politicians have 

decided on the collapse of neoclassical/neoliberal economic 

policy by acclamation. John Maynard Keynes is experiencing 

a magnificent comeback. 

So what kind of economists do we want? Sensitive psychologists? 

Analytical scientists, or observant historians? There are 

two common types in the West: the economist-as-doctor and the 

economist-as-prophet. The doctor is the type who has problemsolving 

prescriptions or drafts “surgical cuts” to bring about a 

cure. The aim of the pragmatic doctor is not to illuminate the 

economy, but rather to treat the symptoms. The doctor comes 

when the national economy is suffering. Any Keynes or Jeffrey 

Sachs would certainly be a well-known example here. 

When it comes to forecasting, however, we have all those 

economists that we could almost call astrologers: They can 

predict the future numbers on gross national product, exports 

or unemployment with seemingly exact precision. They work 

as augurs of the national economy in economic research 

institutes or as chief economists for the major banks. Since 

the economy has to be rational and therefore predictable, the 

need for their services never flags. But just as it is for most 

astrologers, however, the world is always full of surprises, 

and the forecasts are usually wrong. Economists speak of the 

phenomenon of "fat tails". 

Could the crisis lead us to remember the economists as philosophers 

again? After all, many of the founding fathers of 

the market economy were of this type: Smith, Ricardo, Hayek 

and others. They questioned the fundamentals: which rules 

should be valid for the economy, and how much of the state 

do we need? What is the meaning of market and competition? 

And how are we to understand what is fair? Such a regulatory 

debate appears in an era when the world is falling apart, both 

in real terms and in principle. 

The current crisis is also a crisis of economic theory. Indeed, 

we are learning to say goodbye to many of our fondest habits, 

including the fact that fundamental company disclosures 

alone are not sufficient. No one is “too big to fail” anymore. 

What are the cornerstones of a new theory, then? The future 

global economy will be a less American one. Nowhere can the 

erosion of power be deduced more clearly than in the financial 

world. For years, the United States has pontificated on how 

business should work; potential objections from European 

politicians in favor of a more social and consensus-based 

economy were waved away as "nonsense" from old Europe. 

What mattered were bankers’ bonuses, quarterly shareholder 

value and limitless creativity when inventing newer and more 

bizarre capital market products. None of that has any value 

today -- literal or figurative. This opens up opportunities for 

other points of view: globalization can be rediscovered as a 

global contest of ideas. It will be exciting to discuss globalization 

with people from China, Kenya, India and Peru, without 

establishing a hegemonic explanation beforehand; just think 

of a Mohammad Yunus model of social entrepreneurship. 

These are new paths, important ones. The Global Compact 

and initiatives like the Principles for Responsible Investment 

(PRI) and Principles for Responsible 

Management Education (PRME) can 

be important platforms for discussion 

in this regard. 

Dr. Elmer Lenzen 

Chairman 

26 


Agenda 


number of financial and corporate leaders have been blamed 

for focussing on delivering rewards to a relative few at the 

expense of the taxpayers now paying for bailouts. Companies 

operating in the new global context must respond not only to 

investors, but also consider interests of employees, communities, 

and other key stakeholders. 

For markets to function, we need effective disclosure standards, 

regulation, and oversight: Lack of transparency and disclosure 

allowed too many organizations to hide poor practices that 

eventually led to financial collapses and liquidity crises, as well 

as lost homes, jobs, and pensions. Insufficient or ineffective 

regulation and oversight in the financial markets were part 

of the problem. Additionally, outdated regulatory frameworks 

no longer effectively addressed sophisticated capital flows 

and financial products in today’s global market. Reform will 

undoubtedly require increased international cooperation and 

coordination. 

and increased poverty have become more widespread. Shortterm 

stimulus and recovery plans within companies must be 

mindful of ESG impacts. 

More companies need to engage more deeply on ESG issues 

and comprehensively disclose their efforts: 

• ESG in the boardroom: Boards and other corporate governance 

entities have the ultimate responsibility for the long-term 

Economies are more interdependent than ever before: The 

rapid succession from the collapse of the US mortgage bubble 

to a global financial crisis and a subsequent global economic 

downturn is proof of the high degree to which markets are 

interconnected and interdependent. All economies – developing 

to advanced – have been affected to varying degrees. 

And on top of massive investment losses and loan failures, 

many countries face imminent threats of increased poverty 

and social ills. 

A bright future for corporate responsibility? 

By all accounts, the crisis requires a renewed call for corporate 

responsibility – through the observance of universal principles 

in the areas of Human Rights, labour, environment, and anticorruption. 

Today’s confluence of global threats provides the 

most compelling and rational case for: embracing an expanded 

view of risk and opportunity management to include ESG 

factors; for increasing focus on long-term value creation in 

companies and markets; and for emphasizing responsibility 

and ethics to drive confidence and trust. 

The following framework for action should guide companies 

in their efforts to reconcile their commitment to corporate 

responsibility with the circumstances of a fundamentally 

altered global economy. 

Implementation and disclosure of ESG issues 

The economic downturn poses a real challenge for many 

companies, yet should not be used as an excuse to ignore or 

cut back on issues that directly impact the value of business. 

Climate change, Human Rights challenges, and corruption 

will not vanish as a result of economic decline and may actually 

worsen because of it. Already, downsizing, labour unrest, 


stewardship of the organization. In this regard, they are 

responsible for assessing and overseeing risks posed to the 

enterprise – financial and extra-financial. Recent studies 

indicate that a minority of boards are adequately addressing 

traditional risks, and even fewer are equipped to do so 

in the environmental and social realms. Companies should 

integrate ESG issues into boardroom deliberations and policymaking. 

• Subsidiaries and supply chains: Without a deeper penetration 

throughout companies and value chains, corporate responsibility 

efforts will have limited impact. While CEO ownership 

of ESG issues has grown, the momentum has not sufficiently 

moved down the organization and out to subsidiaries and 

supply chains. It is time to move for an integrated approach 

to implement all Global Compact principles throughout and 

beyond headquarters, and then report on these efforts. 

• Comprehensive and accurate disclosure: Without more comprehensive 

and accurate disclosure, it will be difficult to establish 

a strong link between ESG performance and long-term 

value. The Global Compact’s Communications on Progress 

(COP) framework was introduced for this purpose and has 

resulted in the submission of nearly 5000 reports by participating 

companies. Likewise, all of the Global Compact’s 

specialized engagement platforms – such as the CEO Water 

Mandate and Caring for Climate – have introduced disclosure 

requirements. Companies of all sizes are called on to 

use established frameworks and indicators when reporting, 

such as the Global Reporting Initiative. While much work 

remains to be done, limited early efforts by companies to 

include ESG figures in annual financial reports have been 

undertaken and mark an important shift in thinking on the 

financial materiality of these issues. 

• Engaging the investment community: One of the most important 

trends in recent years has been the movement by mainstream 

investors to identify and integrate ESG issues into relevant 

policies and investment decision-making. This provides a 

powerful impetus for companies to implement and disclose 

performance results. It is not just the growth of the responsible 

investment community that is promising – for instance 

the UN Principles for Responsible Investment now comprise 

470 signatories with around USD 18 trillion of assets under 

management – but also the campaigns being undertaken to 

encourage business action. Companies should capitalize on 

this growing opportunity to more actively communicate their 

ESG policies and performance with investors – emphasizing 

materiality and the links to corporate value drivers. 

Climate change 

The risks from climate change are intimately linked with issues 

at the core of the corporate responsibility movement: Human 

Rights, labour, and good governance. It is the most serious 

threat to global development and social progress. A global 

agreement on climate that results in a sufficient price for carbon 

will help ensure the continuation of a global marketplace 

based on openness and competition. On the other hand, the 

trade tensions and discriminatory carbon tariffs that would 

result from a failure to find an agreement could destroy the 

underpinnings of the global economy, upon which so many 

companies and investors are reliant. The ability of stakeholders 

– namely government and business – to cooperate and 

collaborate to find climate solutions will be the litmus test for 

the sustainability of our current global market system. 

• Building a green economy: Only a small fraction of business 

leaders are taking the climate agenda seriously. Many are 

still sitting on the fence, while others are actively lobbying 

against climate action. It is now time to change course and 

help build a green economy. Business must answer the call 

to create a future based on a low-carbon economy – green 

jobs, renewable energy, and energy efficiency – and make 

28 


Agenda 


use of their supply chains to ensure that the cleanest technologies 

are developed and applied everywhere. 

• Caring for Climate: All companies should join Caring for Climate, 

the world’s largest business-led initiative on climate change, 

in which chief executives commit to undertake comprehensive 

climate policies and disclose carbon emissions. In addition to 

assisting companies in the development of effective climate 

policies, Caring for Climate also provides a channel for the 

business community to contribute inputs and perspectives 

to key governmental deliberations. 

• Water stewardship: A critical – and related – issue for business 

action is water sustainability. Through the CEO Water 

Mandate, the Global Compact provides an avenue for advancing 

corporate water stewardship. The initiative assists companies 

in the development, implementation, and disclosure 

of water sustainability policies and practices. Examples of 

efforts include drip irrigation, water harvesting, and new 

technologies for recycling water from manufacturing. 

• Business vision for COP 15: It is essential for business to be part of 

the movement for a comprehensive and meaningful agreement 

at COP 15, the United Nations Climate Change Conference, 

to be held in Copenhagen in December 2009. In this context, 

business is called upon to develop a shared vision and a set 

of recommendations towards a new, global framework on 

climate change. Governments must understand that December 

is the time to seal the deal on climate change. 

Collective action 

The greatest global challenges will only be solved by cooperation. 

Effective partnerships can make it possible to overcome 

dilemmas that are too difficult or complex for one organization 

or sector to address alone. More and stronger collaboration 

between governments, civil society, and the private sector is 

needed. 

• The voice of business: The collective voice of business can lead 

to significant changes in expectations. Business initiatives 

have made important contributions to norms and standards 

– sometimes joining together on issues, such as corruption 

and nutrition, or by sector, such as extraction and textiles. 

For example, it will only be through effective advocacy and 

business statesmanship that business can help move the 

climate change agenda in the right direction. An enormous 

need for advocacy also exists in relation to water, food sustainability, 

and supply-chain standards. 

• Public-private partnerships: Almost all United Nations entities now 

work with business and civil society to address the Millennium 

Development Goals, as well as issues such as food security and 

disaster relief. Increasingly, government development agencies 

engage the private sector in coalitions and community-based 

initiatives. This momentum must be harnessed and a renewed 

focus placed on collaboration, with a move from pilot projects 

to large-scale transformative initiatives. 

Global frameworks and national regulation 

Today, there is an opportunity for chief executives to exercise 

business statesmanship by supporting solutions to issues, 

including climate change, anti-corruption, and other key 

areas. However, too often, a disconnect remains between a 

company’s responsibility commitments and its (direct and 

indirect) lobbying. 

There are several important opportunities linked to national 

regulation. Related to climate, business should support and 

not obstruct higher performance standards in critical areas 

such as energy efficiency and investments in new technologies, 

which will lead to low-carbon economies. Domestic 

stimulus packages implemented in response to the economic 

downturn must be carried out with sufficient transparency 

and oversight. Calls for regulators to require listed companies 

to disclose ESG performance should be supported. And 

efforts by governments to encourage business to implement 

ESG issues promise to bring increased attention and scale to 

corporate responsibility. 

Of course, in the midst of increased calls for regulatory safeguards 

and oversight, governments must do their part and 

actively encourage companies to voluntarily adopt tenets of 

corporate responsibility. 

Governments should further emphasize that regulation and 

voluntary initiatives are complementary. In addition to effective 

regulation, voluntary efforts can deliver value in terms 

of innovation and solution-finding that goes beyond the bar 

set by rules. There are additional steps to be taken to promote 

responsible business, most notably rewards for good corporate 

practices and tax incentives. 

None of the measures and steps outlined here will deliver results 

overnight. And some require fundamental transformations of 

business strategies and operations. But if anything good is to 

emerge from this economic crisis, it is the real opportunity 

to define a new phase in globalization, in which markets 

contribute to a world where all people live in societies that 

are prosperous and peaceful. 

Georg Kell is Executive Director, United 

Nations Global Compact 


Ethics and 

Business: 

Ensuring 

Credibility 

By ??? 

Ethics and business are often thought to be in tension and conflict with 

each other. How do you see the importance of ethics for the functioning 

of the social market economy? 

Andreas Suchanek: Ethics, in the form of a shared basic 

understanding of “right” values, such as dignity, freedom, 

justice, etc., are the foundation of the social market economy. 

Competition and legal foundations, both of which are essential 

for a market economy, lose their ability to function 

when people lose trust, and maintaining trust is always (also) 

a matter of the responsibility – or more generally: practiced 

values – of those active in the market economy. Tensions 

between ethics and business will always arise, but the goal is 

to find suitable investments that make ethics and business, 

responsibility and profit fruitful for each other. 

With the current financial and economic crisis, trust in the market 

economy’s advantages for society has reached an all-time low. How 

can business and society come together again? 

Suchanek: On the one hand, this is a problem of unfamiliarity: 

Many people understand too little about the market 

economy and what companies and managers achieve to have 

appropriate expectations; in other words, sometimes they have 

expectations that can’t possibly be met. Here, education and 

communication are needed about what we can reasonably 

expect and what costs are associated with a market economy 

(for the market economy is still the best of all economic systems 

today, despite recent events). 

On the other hand, it’s also a question of the commitment 

of decision-makers and companies active in the economy to 

clearly recognise their responsibility and communicate this 

credibly. In this context, “credible” means ensuring that you 

don’t make promises that you later can’t keep, whether these 

are concrete promises to customers, suppliers or employees or 

general promises in the form of communicated values. 

In many companies, a rediscovery of values has taken place in recent 

years. How can such a value system help companies responsibly flesh 

out the inadequate global order? 

Suchanek: Here, too: Properly understood, values are 

the foundation for a company’s ability to add value. Nobody 

wants to work for an irresponsible, unreliable company that 

lacks integrity, nor does anyone want to buy its products. 

That also holds especially for global competition. And so it’s 

no coincidence that a rediscovery of values is taking place at 

this time. Of course, it’s critical that these values be put into 

practice, and that requires investments in management training 

and development and in the governance structures. The 

values must be made consistent with the often challenging 

conditions of the company’s daily work. 

Implementation of values also demands mechanisms of guidance and 

control. These include, among other things, incentive systems, CSR 

management and compliance. Is this an important key for orienting 

innovation processes and company development on superordinate, 

non-financial goals? 

Suchanek: I believe, yes! The previously mentioned task 

of integrating the values into day-to-day work has a lot to do 

with the mentioned compliance and incentive systems. What’s 

important is to see both of them in context; in particular, 

employees must be made to understand why and how, for 

example, compliance measures serve to implement values 

such as integrity. 

CSR measures in the narrow sense of corporate citizenship, 

that is, contributions, pro-bono activities, giving employees 

time off for social or ecological projects, etc., can also be an 

important component if professionally implemented. But 

such measures should not be equated with a company’s 

responsibility; they’re only part of it. Corporate responsibility 

involves first and foremost the core business – the way 

profits are earned. 

Prof. Andreas Suchanek is the Dow Research 

Professor of Sustainability and Global 

Ethics at the Leipzig Graduate School of 

Management (HHL). 

The interview took place in conjunction with 

the 2009 Baden-Württemberg Sustainability 

Congress. 

30 


Agenda 



Has the 

Triple 

Bottom Line 

Failed, Mr. 

Elkington? 

“No” would be my one-word answer to the editors’ question. 

Indeed, the very fact that the editorial team of the International 

Global Compact Yearbook decided to commission this 

essay – some 15 years after the genesis of the “triple bottom 

line” agenda – itself speaks volumes. Success and failure are 

relative, of course, reflecting initial expectations and ambitions. 

In coining terms like “environmental excellence” (1984), “green 

consumer” (1986), or “triple bottom line” (1994), I was simply 

trying to help us all expand our minds for new possibilities. 

The second of these terms set a high bar, with our book The 

Green Consumer Guide selling something like one million 

copies worldwide, but even though Cannibals with Forks – 

the book in which I introduced the triple bottom line concept 

to a wider world – sold 95 percent fewer copies, I consider it 

to have had an equal, or even greater, impact. 

But what metrics or benchmarks of success should we use 

here? For me, one key consideration is this: Whatever business 

language we now use, the idea that corporations and 

financial institutions need to track and manage value creation 

(or destruction) in multiple dimensions is no longer as 

alien as it once was. In that sense, at least, the triple bottom 

line concept has helped open-out business, financial, and 

governmental horizons. 

Just for a moment, recall what the business agenda was like 

in this sector back in 1994. The leading edge of thinking 

focussed on what was called eco-efficiency – a term coined 

by the World Business Council for Sustainable Development 

two years prior. The idea here was that business should simultaneously 

pursue a reduction in the material- and energy 

intensity of goods or services, alongside greater durability, 

improved recyclability, and maximum use of renewable 

resources. All perfectly splendid and – as the recent energy 

crunch underscored – there is a great deal still to be done 

on those fronts. 

But my motivation in coming up with the triple bottom line 

reflected a very personal frustration that eco-efficiency – at the 

time often presented as shorthand for business sustainability 

– missed a trick (some would say deliberately so) by focussing 

on the interplay between financial and environmental factors. 

In the process, it created (or aggravated) potential blind spots 

in business thinking, ignoring at least two key components 

of business and market performance: the broader economic 

and social dimensions of value creation. 

At a time when a surprising number of otherwise sane American 

business leaders chose to see sustainable development as akin 

to socialism – even communism – this was a gamble: Perhaps 

we risked confirming their fears and forcing a general retreat. 

But I had already had a very positive response to a paper I 

had produced for the California Management Review in 1994, 

which spotlighted the potential for what I called “win-win-win” 

strategies and solutions. The triple bottom line language was 

an attempt to communicate this wider sustainability challenge 

to business people; the rather more populist version I 

came up with in 1995 – “People, Planet, Profit” – helped the 

32 


Agenda 


to some degree. Over time, these have evolved into a level of 

sophistication that would have been inconceivable a decade 

earlier. In parallel, socially responsible investment firms – and 

even mainstream financial institutions – began to open out 

their thinking and metrics, though the pace of development 

here has often been frustratingly slow. You might even argue 

that this new line of business thinking helped pave the way 

for later initiatives like the UN Global Compact. 

Academics and researchers have piled in behind, studying the 

different approaches. Triple bottom line case studies have been 

written and books published that critically evaluate progress 

to date. Among the latter, a key contribution was The Triple 

Bottom Line: Does it All Add Up? – Assessing the Sustainability 

of Business and CSR, published by Earthscan (London, 

UK) in 2004. As the publishers explained, it reviewed what 

the concept had “already achieved by stimulating change and 

bringing business to appreciate the importance and benefits of 

corporate social responsibility (CSR) and good environmental 

performance.” The contributors then explored what still needed 

to be done through regulation and legislation. 

concept go viral, particularly when Shell used it as the title of 

its first-ever sustainability report in 1997. 

Before long, various new institutions were adopting triple 

bottom line frameworks in their work, among them the Dow 

Jones Sustainability Indexes (where, to disclose an interest, I 

have been on the Advisory Board since the outset) and the 

Global Reporting Initiative (where I helped shift the original 

concept of environmental reporting to a triple bottom line focus 

– and now serve as a member of the Board). The concept also 

spurred the establishment of many other organizations, among 

them Robert Rubenstein’s TBLI Group, which organizes major 

conferences on related themes for the financial world. 

Over time, in addition to Shell, we have seen a growing array 

of companies building triple bottom line thinking into their 

values and strategies – with Denmark’s Novo Nordisk integrating 

it into its very chartering. In turn, the concept spurred the 

evolution and spread of related terms, including “double bottom 

line” (financial and social), “quadruple bottom line” (with the 

fourth dimension being anything from ethics to governance), 

the 3-D agenda of “environment, society, and governance” (ESG), 

and Jed Emerson’s concept of “blended value”. Whether in this 

last formulation or the World Resources Institute’s concept of 

the “next bottom line”, the quest was on for ways of accounting 

for and managing multi-dimensional value creation. 

Before long, literally thousands of companies were producing 

annual reports that embraced the triple bottom line approach, 

Overall, I am not unhappy with progress on the triple bottom 

line agenda, which I see gaining a new lease on life at the moment, 

particularly in some of the BRIC countries. But before I 

rest my case, I should underscore the fact that Cannibals with 

Forks was one of a trilogy, followed in 2001 by The Chrysalis 

Economy and in 2008 by The Power of Unreasonable People. 

The second volume went on to say that corporate responsibility 

was a necessary – but not sufficient – condition of 

sustainable development, with a major economic transformation 

likely during the second decade of the new century. The 

third volume explores the work of some of the potentially 

disruptive innovators and entrepreneurs who are evolving 

the new mindsets, technologies, and business models that 

will underpin any sustainability transition. This work was 

taken further in our 2009 report, The Phoenix Economy: 50 

Pioneers in Social Innovation. So I see the triple bottom line 

as a work in progress – not a museum exhibit – and as a 

continuing challenge to the thinking of decision-takers and 

policymakers. Watch this space. 

John Elkington is Co-Founder of 

SustainAbility HYPERLINKandHYPERLINK 

as an author he coined the term “triple 

bottom line” in 1994HYPERLINK. 


Visiting the Global 

Compact Office 

When I went to New York in March 2009, it was during the peak of the 

banking crisis and the self-doubts of the investment sector. There was 

a prevailing certainty that one economic era had come to an end, but 

ambiguity as to how the new era would look. Some of these elements are 

being intensively discussed and developed at the Global Compact Office: 

It is about lasting nature, transparency, responsible merchants, and the 

respectful handling of our planet. 

34 


Agenda 

Global Compact Inside 


By Dr. Elmer Lenzen 

The ejection from paradise finally took place at Sotheby’s. 

“The Peaceable Kingdom”, a naive depiction of conditions in 

paradise by Edward Hicks, was recently auctioned off there 

for just under 10 million dollars. The once superrich patron 

Ralph Esmerian had previously removed the painting from 

a New York museum. At present, this is not a unique event: 

Artwork on loan and promised gifts have been brought to the 

auction house a lot lately. 

The crisis has a firm hold on New York: Stocks have fallen to 

unexpected lows, fancy restaurants wait in vain for customers, 

and boutiques are unabashedly announcing discounts of up 

to 50 percent, even on noble shopping miles like Fifth and 

Madison Avenues. The government, meanwhile, is simulating 

“stress tests” for its sick banks, and the weather is also acting 

crazy: Though already the beginning of March, it’s colder than 

it has been in decades. Even the airports had to shut down 

temporarily. Good thing, some announcers said, that nobody’s 

flying anyway because of the crisis. 

In the UN district on the Hudson River, activity seems to be 

going on unabated. Delegations and visitors from around 

the world are pushing their way into the world-famous glass 

building to take part in a conference, one or the other of 

which is going on here almost all the time. Across the street 

is the Millennium Hotel, a popular accommodation for guests 

and speakers. Right next to it, almost inconspicuous, is the 

entrance area to one of the United Nations’ administration 

buildings. There on the sixth floor is DC2-612: the Global 

Compact Office. 

Here, up to 25 people work in a space of barely 200 square 

metres on the vision of a just globalization. The floor is shared 

with the “UN Mine Action Service”, which has also provided 

the pictures in the shared hallway. The photos of mine victims 

in Afghanistan shake viewers up and remind them of the challenges 

the world faces. The working conditions in DC2-612 

are cramped. Besides the work stations, the open-space office 

serves as a storeroom and a place to plan global strategy. “Still,” 

Global Compact spokesman Matthias Stausberg says with a 

grin, “each room has its own window and so has daylight.” 

That’s not always the case for US offices. 

This is where the world’s largest and most important initiative 

for business responsibility has its headquarters. Unspectacular. 

Modest. That fits an initiative that, though sponsored by no 

less than the UN Secretary-General, does not draw attention 

to itself by making loud demands, but rather discreet recommendations. 

Founded 10 years ago, the UN Global Compact is 

a strategic policy initiative for businesses that are committed 

36 


Agenda 


to aligning their operations and strategies with ten universally 

accepted principles in the areas of human rights, labour, environment 

and anti-corruption. Today, the Initiative includes 

well over 6,000 companies and other stakeholders from 130 

countries around the globe. 

The Global Compact sees itself as a dialogue forum that has 

promotion of its own ten principles on the agenda as well as 

support of broader UN initiatives, such as the Millennium 

Development Goals (MDGs). Critics counter that the Global 

Compact is a conglomeration of do-gooders. Toothless and 

weak. NGOs like Greenpeace or Oxfam consider every form 

of corporate social responsibility (CSR), and so also the Global 

Compact, to be pure window-dressing. For them, free trade 

only works with hard rules, not recommendations. But Global 

Compact director Georg Kell waves this aside: “No government 

bureaucracy can ever spread technology and innovation on 

the same scale and at the same speed as the private sector.” 

Former UN Secretary-General Kofi Annan understood this. In 

1997, he assigned Kell the task of sounding out the potential 

for cooperation between the UN and business. The man from 

Above: UNGC spokesperson Matthias Stausberg 

Left: The GCO offers many space for ideas but the 

working space is limited. 

southern Germany had previously gained experience with 

business cooperations as a development expert in Africa and 

Latin America. Two years later, he had to write a “really good 

speech” for Annan, Kell remembers during the interview. The 

UN Secretary-General wanted to hold the speech at the World 

Economic Forum in Davos as a direction-setting signal for the 

change of millennium. Kell was so nervous, he admits today, 

that he hardly heard a word. But the reactions were all the 

more clear: The vague vision of a Global Compact was so well 

received around the world that, within a decade, it would grow 

into the world’s leading umbrella brand for CSR. There’s a 

reason for its success: With the UN, the CSR issue has a credible 

sponsor. Companies, politicians, labour unions, scholars 

and civil-society groups feel equally represented and accepted 

here. The UN is one of the few supranational organizations 

whose credibility is widely recognized. 

The Global Compact lives from this credibility and from 

members’ desire to work with each other, not against each 

other. Olajobi Makinwa today is issue manager for the subject 

of anti-corruption. Previously, the lawyer was director of 

Amnesty International in South Africa. In the interview, she 

remembers that, for her, business used to be the enemy. In 

contrast, respect and acceptance of the other side characterises 

the Global Compact. Tolerance as a unique selling proposition. 

But there were doubts not only from the NGO side; even in the 

UN itself, many shared this fear, adds Melissa Powell, Head of 

Strategy and Partnerships. At first there was even a caricature 

showing the UN Building with company standards and their 

logos replacing the national flags. Subtitle: “UN for sale”. Today, 

Powell receives weekly calls from the Building asking for help. 

“Many believe”, Powell says, “that the Compact is sitting on 

mountains of company cash that we can distribute as we see 

fit.” That, of course, is not true, she adds. 

But for all participants, more important than the financing 

question is the upholding of credibility: Over the years, Kell and 

his team have quietly toughened the conditions of participation. 

The main instrument is the annually required Communication 

on Progress (COP). The COP must substantially report on the 

company’s engagement. Those companies that don’t submit 

it are first warned, then placed on the inactive list, and finally 

removed from the rolls. Even voluntary initiatives can have 

tough rules. In any case, the policy has consequences: Well 

over 600 companies have been delisted over the last few years. 

Is the Global Compact losing members then? On the contrary. 

The Initiative is constantly gaining in popularity, especially 

in the Southern Hemisphere. That is important, since it’s 

especially critical there to uphold labour, environmental and 

social standards. The ten principles must be implemented 

there in order to become a truly global standard. 

The new UN Secretary-General Ban Ki-moon also stands behind 

the pact. This support is important, and the Secretary-General 


makes it clear that the Initiative can 

show us ways out of the crisis. Ban: 

“Ensure that your boards, subsidiaries 

and supply chain partners use the Compact 

as both a management guide and a 

moral compass.” Morality as a compass 

in these times? That sounds pious. But 

Kell becomes feisty: Especially now, we 

see that responsibility and long-term 

strategies pay off in the end. 

That the worldwide crisis has come to 

a head in the finance and trade centre 

New York is understandable. And at the same time, it’s symbolic: 

New York, like almost no other city, incorporates globalization 

with all its achievements and excesses. The city is a melting 

pot of cultures, nationalities, lifestyles. New York is the city 

where every good, every service and every type of information 

is available at any time. But it’s also the city where one hour 

of parking costs as much as a pair of jeans sewn together in 

Bangladesh or Turkey. And where a simple dinner is as expensive 

as one year of school fees in Namibia. Everything in this 

city has its price, but only few ask about the value, Kell adds 

pensively. In this point, too, New York has followed its own 

path. The wrong path, Kell emphasises untiringly. 

Regardless, nowhere did the price and profit spiral turn as 

consistently as on Wall Street and in the Financial District. At 

the same time, nowhere were so few questions asked about the 

value of the products as right here at AIG, Lehman Brothers, 

Bear Stearns, Citibank and the others. Every news broadcast 

and every discussion in the city’s innumerable delis now seems 

to revolve around the cause of the crisis: The answer has five 

letters – greed. Greed destroyed understanding. Greed made 

people careless about risk. Greed made people irresponsible. 

That has become clearer to everyone today than in the past. 

Even to those who, until recently, joked about the term “business 

ethics”. 

Further down on the southern tip of Manhattan lies the heart 

of globalization and greed. From the Fulton Street subway station, 

it takes just a few minutes to walk to Wall Street: Here 

you can see the stockbrokers, the masters of the universe, as 

Tom Wolfe aptly called them in his novel. Men whose actions 

were guided solely by bonuses and commissions. Now the 

brokers inconspicuously pull on their jackets when they go 

out on the street. Not just because of the cold, as can be seen 

from their furtive glances to the left and right. Nobody wants 

to be recognised as a stock market speculator nowadays. The 

masters of the universe have grown meek. Many a finance 

and business magnate has taken on the role of enlightened 

sinner. The most spectacular was the confession of Jack Welch: 

The long-time CEO of General Electric and icon of US industry 

declared this spring that striving for short-term profits and 

Especially now, 

we see that 


and long-term 


in the end. 

higher share prices is a “dumb idea”. “On 

the face of it, shareholder value is the 

dumbest idea in the world,” Welch told 

the Financial Times. “Shareholder value 

is a result, not a strategy … Your main 

constituencies are your employees, your 

customers and your products.” 

Still, at Global Compact no one is happy 

about the crisis. Too obvious are the social 

and ecological costs that now have to 

be paid throughout the world: In China 

alone, 25 million migrant workers have 

been hit by mass layoffs so far. In Africa, the crisis is destroying 

the already meagre buds of economic growth. Australia, 

for its part, has largely put its climate protection promises 

on ice: Introduction of emissions trading has been postponed 

with the curt justification that the economic situation doesn’t 

permit it. And so the next step of the crisis is now starting: 

When companies get into trouble, the state currently jumps in. 

But who will stand by the state when it gets into trouble, as is 

happening in Iceland and many eastern European countries? 

38 


Agenda 


Left: New York is the centre of the financial world and 

since the beginning home of the Global Compact. 

Below: Major Bloomberg has promised a "greener" city. 

strategic orientation has clearly been jettisoned, and longterm 

thinking has given way to the struggle for short-term 

survival. On the other hand, of course, there are companies 

that understand how to adapt to the situation. The core 

question for Stausberg is, what is the appropriate stimulus 

to cause a change from short-term to long-term thinking? A 

corresponding insight in management circles, as is currently 

being called for, is certainly essential. But also just as important 

is a state that creates incentive systems, consumers that 

reward such companies through conscious consumption 

decisions and investors that look for more than supposedly 

dream yields. 

Not long ago, British Prime Minister Gordon Brown warned 

of “deglobalization”, an implosion of world trade with fatal 

results for social systems and political orders. 

Freedom without boundaries must fail, German Interior Minister 

Schaeuble warns. But freedom itself must not be put up 

for grabs in consequence. Rather, crash barriers need to be 

erected. And to continue with the thought process, there must 

also be guiding stars. Both, crash barriers and guiding stars, 

mark a new economic order, to which the Global Compact 

can give answers. Kell: “The quarterly short-term thinking that 

prevailed for so long is slowly giving way to a more comprehensive, 

sustainable risk assessment.” 

Olajobi Makinwa also sees opportunities for new moral guidelines: 

“It made people start asking questions,” she says with 

hope. Fundamental strategies are being tested. She herself is 

responsible for the issue of corruption and notes that many 

companies are now asking her for advice, since ethics are 

becoming more widely understood as providing a direction 

for the future. 

Only the spokesman Matthias Stausberg is not as optimistic 

as some of his colleagues. He currently sees two contradictory 

tendencies: On the one hand, there are a growing number 

of companies that, in panic and fully without reflection, are 

axing all budgets that aren’t essential for daily business. All 

The Green New Deal, which is being talked about so much 

these days, is an idea many people have to get used to. Still: 

“It’s time for a change” seems to be the phrase of the hour, 

thanks to President Obama. New York is perhaps an indicator 

for this change as well. The city wants to become greener. On 

the one hand, it wants to animate more and more people to 

switch to buses and subways, and on the other, it wants to 

make buildings, such as the currently highest skyscraper in 

the city – the Empire State Building – into model projects 

for energy efficiency. “With the renovation of the Empire State, 

we want to emphasise that 80 percent of the greenhouse gas 

emissions in New York are caused by buildings,” New York 

Mayor Michael Bloomberg says. The Empire State Building 

project can save 38 percent of the energy used. To achieve 

this goal, 6,500 conventional windowpanes on the building’s 

surface will be replaced by thermopane glass. In addition, the 

building’s heating and air conditioning and electrical systems 

will be made state of the art. Experts estimate the savings at 

4.4 million dollars per year, which will save 105,000 tons of 

CO2 in 15 years. Even now, the 78-year-old building glows 

green in the evening to show its good will. 

But let’s not get caught up in too much euphoria. The outcome 

of the painting auction at Sotheby’s should be a warning. The 

successful bidder has since fallen into financial trouble and 

is trying to back out of the purchase. A lawsuit has been filed 

between him and Sotheby’s. One thing, at least: Until the 

dispute is settled, the picture will remain in the museum. 

Dr. Elmer Lenzen, 

Chairman of the macondo Media Group 


Ethics is Back 

Georg Kell about the Crisis, 

Climate Change and the 

Role of the Global Compact 

40 


Agenda 


Since the very beginning, Georg Kell has been Executive Director of the Global 

Compact. Due to his ongoing fervour the Global Compact today is fully integrated into 

the UN system. We spoke with Georg Kell about the economic crisis, the search for 

new confidence, and the renaissance of politics and ethics. His message is clear: 

We have to reward sustainable business models. And we have to take climate change 

much more seriously, or the future might be rough. 

Interview conducted by Dr. Elmer Lenzen 

Mr. Kell, when the Global Compact was founded, the world was at the 

edge of the 21st Century. Since then, we have seen 9/11, questionable 

wars on terror and a financial and economic crisis of historic dimensions. 

Is the Global Compact prepared for such times? 

Ten years ago, the Compact was launched primarily to 

provide legitimacy. That was before Seattle and other World 

Trade Organization events. Without a doubt, these issues are 

still important today. But it has now become very clear that we 

have entered a new era: the world is struggling to restore trust 

and confidence in order to return to growth and employment. 

We are seeing enormous government interventions and experiencing 

market shockwaves unlike any since the 1930s. 

At the same time, we have to brace ourselves for the next 

systemic disruption: climate change. We completely agree 

with UN Secretary-General Ban Ki-moon’s position on sustainability 

in the 21st century. In his speech at this year’s World 

Economic Forum, he made it very clear that we need to take 

on both challenges at the same time: we need to restore trust 

and confidence, and we need to lay the foundation for more 

sustainable growth, which means greener growth. 

Cynics say the present crisis shows that economics and ethics have nothing 

in common. How do you respond? 

Ethics is back, values are back, and the search for long-term 

sustainability is more apparent than ever before! It may sound 

ironic, but the crisis has reinforced the search for values and 

ethics. The quarterly short-term thinking that prevailed for so 

long is slowly giving way to a more comprehensive, sustainable 

risk assessment. There is a fundamental lesson teaching 

us to focus on long-term value creation. Secondly, we have 

to come up with a more comprehensive risk paradigm, one 

which is adequate for interdependent growth and takes into 

consideration environmental, social and governance – ESG 

– issues. So, in a certain way, the crisis is playing into our 

hands. The growing need for the Global Compact may also be 

underscored by the fact that more than 200 companies have 

recently joined the Initiative, while others are rediscovering 

the value of engagement. 

But you cannot deny that we have experienced many dubious practices 

in the markets... 

The public has to distinguish among economic actors. 

Those entrepreneurs make investments, create employment 

and provide goods and services are as innocent of what has 

happened as most people are. Even in the financial sector, 

many parts were solid. What we see, if anything, is that the 

financial crisis started in the least regulated sub-categories of 

the financial system, among the so called “innovative product 

generators” of private equity funds and investment banks. Some 

of them are out of business now, and we welcome this. They 

stood for a lack of ethics, obsession with short-term profits 

and reckless behaviour. But it would be totally wrong to say 

that the whole private sector behaved unethically. 

And what role does the Global Compact play? 

What we presently see is a deficit of hope and stimuli 

for ideas and innovation. Through responsible behaviour, 

through deeper engagement in the Compact, you can make a 

contribution to restoring trust and confidence. Entrepreneurs 

can show that business is not just about surviving and cutting 

costs; they can also lead the way to a sustainable future 

by stressing innovation. All the government interventions 

right now will stimulate markets. But this is only an “incentive 

moment”. The true source of value creation is, of course, 

entrepreneurship. I’m convinced that, at the end of the day, 

we will come back to these economic fundamentals. 

In Davos this January, PM Gordon Brown warned against “deglobalization”. 

In his words, this does not mean a romantic return to the “good 

ol’ times”, but an abrupt destruction of global interdependence with 


tremendous economic and social costs. Isn’t this in contradiction to the 

optimism of the Global Compact? 

I share Gordon Brown’s view. I’m very concerned, too. 

If you ask me what the biggest threats are, I would respond 

populism at the country level; discrimination against everything 

that doesn’t come from the domestic market; and 

protectionism that rolls back all that we have established over 

the past decades. The multilateral global system has assured 

at least a minimum of fairness, and I have the hope that the 

politicians, in their wisdom, will not forget that humanity has 

had to learn several times and at great cost what it means to 

neglect an interdependent world. It would undermine our collective 

ability to create wealth, employment and hope. And it 

would also bring to an end the rapid diffusion of know-how, 

technology and solutions we urgently need in the fight against 

poverty and climate change. 

Due to the crisis, we’re seeing a tremendous comeback of Keynesian policy. 

Will this affect the balance of power in the Global Compact? 

Not yet, but I suspect it will very soon. I agree that the 

amount of government intervention we have seen over the 

past months is on a scale never before seen in the history of 

modern markets. I think there is both a risk and an opportunity 

in that. The risk is obviously that government interventions 

distort market performance and undermine competitiveness 

and lead to inward-orientation. That is the risk Gordon Brown 

mentioned at the World Economic Forum. A positive aspect 

could be, on the other hand, that governments recognize the 

opportunities that lie in collective responsibility and working 

together. They could use their interventions to accelerate the 

change processes we were talking about. They can set the right 

signals to reward responsibility and green growth. 

In fact, politicians from Obama to Merkel say that we need a sustainable 

economy. Why is this so hard to achieve in everyday life? 

Because we are lazy. We all dislike change, because it 

means making an effort. That is part of human nature. Over 

decades, we have got used to how prices are established, how 

institutions regulate and all the rest. We carry the whole legacy 

of the past with us, and now we realize that we need to change, 

for instance by putting different prices on certain products. 

How do you do that? It will be a painful adjustment process. 

Can you give us an example? 

No doubt, climate change and putting a clear price on 

greenhouse gas emissions will lead to major disruptions. 

There will be losers, because many companies are betting on 

the wrong horse. They didn’t adapt in time to be on the front 

edge of the change agenda. And, of course, these companies 

don’t like this kind of change and will try to preserve the 

status quo as long as possible. On winning side will be the 

many other companies that have already started to invest in 

a future where greenhouse gas emissions have market prices 

sufficiently high to encourage green investment. 

Do you really think that innovation alone can stop global warming? 

The complexity of climate change is incredible, and the 

more you look at it, the more it scares you. Indeed, we are 

very late in the game. Maybe we are already too far behind. 

According to UN estimates, over 75 percent of all disaster 

events from 1988 to 2007 were climate-related and accounted 

for 45 percent of deaths and 80 percent of the economic losses 

caused by natural hazards. I don’t want to be a doomsday 

prophet, but we better get prepared for a rough future with 

major discontinuities. And it is not only an environmental 

issue Climate change affects all aspects of life: It is a social 

issue. It is a political issue. It is a security issue. It is becoming 

an overarching challenge that humanity has to cope with. So 

what can we do? In principle, the solution is simple: We just 

have to tax what is bad and reward what is good. The easiest 

solution would be a heavy tax on carbon emissions. That would 

stimulate innovation. Will this become a global movement, or 

not? Will politicians have the courage and the will to make 

that happen? That is the key question. 

42 


Agenda 


“ 

Entrepreneurs can 

show that business is not 

just about surviving 

and cutting costs; 

they can also lead the 

way to a sustainable future 

by stressing innovation. 

Georg Kell, UN Global Compact Executive Director 

” 

Do you think collective political action will be a realistic option for the 

Copenhagen Climate Summit? 

I think so. We’re still baffled by how a regional housing 

crisis in the US could turn into a worldwide financial crisis 

leading to the biggest decline in the history of export-oriented 

economies, such as Korea or China, and to the possible breakdown 

of Ukraine and some other eastern European countries. 

So, the message to governments is that we all live in a very 

closely connected world. Even more so when it comes to 

climate change. Therefore, the world needs to move to a 

proactive risk management, and there’s a stronger need for 

cooperation than ever before. I was pleased to read about the 

European debates on how to deal with the crisis in the eastern 

part of the European Union. This may bring more coherence 

to Brussels' policy. Another example is China, which is now 

more proactive on the climate agenda. They understand the 

urgency to act, especially domestically, because their water 

and land are polluted, and the prospects of natural disasters 

are dramatic. 

Why is a successful Copenhagen Climate Summit so important? 

We need a successful COP 15 for many reasons. Imagine 

if COP15 were a failure and individual regions and countries 

would pursue their own way of putting a price on carbon 

emissions! That would lead to a patchwork of disjointed approaches, 

which ultimately would put enormous pressure on 

the trading and investment systems. No doubt it would lead 

to protectionism and cause major disruptions of economic 

growth. 

...and what role can the business sector play? 

I’m personally convinced that investment and commerce 

offer the best opportunities to spread technology and knowhow. 

Supply chains are the most effective way to diffuse clean 

technology. No government bureaucracy can ever spread 

technology on the same scale and at the same speed as the 

private sector. 

Thank you very much! 


Annual Review: 

Highlights and Gaps 

More companies joined the United Nations Global Compact 

(UNGC) last year than ever before. The UN’s voluntary initiative 

of companies recorded 1,473 new entrants in 2008, 

which is a plus of 30 percent over the previous year. But 

in carrying out the Network’s ten principles, there are still 

“serious implementation gaps”. That is what Georg Kell, 

Executive Director of the Global Compact Office, writes in 

his foreword to the Network’s 2008 Annual Review, which 

appeared at the beginning of April. Even more companies 

need to focus more strongly on the ecological and social 

aspects of their activities and on good company management, 

says Kell. There is room for improvement, especially 

in the supply chain, according to the report. In a survey 

of UNGC members, only seven percent of the companies 

said they require their suppliers to be members of the 

Global Compact. Among companies that have subsidiaries, 

the number was 30 percent. It is time, says Kell, “to move 

from pilot programmes in select corporate departments to 

an integrated approach to implement all UN Global Compact 

principles throughout and beyond headquarters, into 

subsidiaries and the supply chain.” In addition, company 

reporting on progress in implementing the UNGC principles 

often remains below potential, Kell believes. The reports still 

focus too much on policy, says the UNGC Executive Director. 

In contrast, detailed information on concrete improvements 

is seen less frequently. In 2008, the Network Office had to 

remove 404 companies from the member list (“delisting”) 

for not submitting an annual progress report. Despite these 

shortcomings, Kell says the 2008 annual report shows “that 

the Global Compact contributes positively to the global 

spread of responsible business practices.” The number of 

members has risen to 6,000, and the Network is now active 

in nearly 140 countries. 

Annual Review 

Sum velenim veniam, sum 

dolore ming enim dolorerit 

lam augueros diamcommy 

nonsed et lorero 

odolore conse dolobor 

erillup tations equatuerat 

lute magnit dolese magna 

facidui 

Global 

Compact 

Inside: 

News 

White Paper on Managing Climate 

Change and Water 

The UN Global Compact and the Pacific Institute jointly 

released a white paper which explores the linkages between 

climate change and water – from both the scientific and 

corporate management perspectives. Entitled "Climate 

Change and the Global Water Crisis: What Businesses Need 

to Know and Do", the paper covers a number of critical areas, 

including: How climate change is expected to impact water 

scarcity, water quality, and water demand; the ways in which 

water and energy are interconnected, including trade-off 

scenarios; the business risks of water and climate change; 

how businesses can strategically manage water-climate 

risks; the linkages between climate and water and the UN 

Millennium Development Goals. “This paper underscores 

the importance of viewing the many ways in which different 

environmental challenges are in fact deeply connected, and 

the need to approach these issues in an integrated way,” said 

Georg Kell, Executive Director of the UN Global Compact. 

“Climate change needs to be understood in terms of how it 

44 


Agenda 


Next Step in Anti-Corruption 

Investors Give New Twist to Good 

COP/Bad COP 

The 38 members of the UN-backed Principles for Responsible 

Investment (PRI) have written to the CEOs of 130 major 

listed companies which are signed up in the United Nations 

Global Compact. Twenty-five of the companies have been 

praised by the investors for producing notably high-quality 

COPs – including Air France and Starbucks – while over 

100 companies were identified as laggards by the investors 

for failing to submit a COP this year. Those companies that 

failed to produce COPs include GAP Inc, Severn Trent plc 

and LVMH. Representing one of the collaborating investment 

institutions, Aviva Investors’ Head of Research and 

Engagement, Steve Waygood, said: “The UN Global Compact 

system provides investors with a universe of ‘good COPs’ 

and ‘bad COPs’. Companies that produce a ‘good COP’ send 

a powerful message to a valuable audience of institutional 

investors. Those who have failed to submit a report will 

trigger alarm bells among investors who want real details 

about a company’s business practices on ESG issues”. 

The United Nations Global Compact has determined the 

next steps in the fight against corruption. At its fourth 

workshop at the end of February in New York, the members 

of the Working Group on Anti-Corruption agreed, among 

other things, to provide guidance to sensitize companies to 

the risks of bribery. The first part of the guideline, which 

recently appeared in the publication series RESIST (Resisting 

Extortions and Solicitations in International Transactions), 

focuses on the company procurement process. In seven 

scenarios, the guideline runs through classic situations that 

purchasers face in everyday business and shows how they 

can deal with corrupt offers. A second RESIST publication 

is planned for the end of the year. It will probably cover 

possible scenarios in project implementation. In addition, 

the members of the working group (representatives of the 

Global Compact Office, civil society, business, local networks 

and international organizations) introduced initial 

elements for more transparent company reporting on the 

issue of corruption. Since companies and organizations have 

previously provided differing amounts of information on 

this issue – for competitive reasons, among others – the 

matrix should include two sets of instructions for reporting, 

one more demanding, one less. Other topics of the February 

session were: Corruption in the supply chain and possible 

cooperation with governmental or intergovernmental organizations. 

In 2009, the members wish to work on anchoring 

the principles of the Global Compact – such as the fight 

against corruption – into the courses and curricula of 

business schools. 

Anti-corruption is one of the ten GC principles: Companies 

and organizations that join the UN initiative promise to 

work against all kinds of corruption, including extortion 

and bribery. According to estimates of the World Economic 

Forum, corruption causes economic losses of 2.6 trillion 

US dollars per year. That is more than five percent of gross 

world product. 


Annual Review: 

Highlights and Gaps 

More companies joined the United Nations Global Compact 

(UNGC) last year than ever before. The UN’s voluntary initiative 

of companies recorded 1,473 new entrants in 2008, 

which is a plus of 30 percent over the previous year. But 

in carrying out the Network’s ten principles, there are still 

“serious implementation gaps”. That is what Georg Kell, 

Executive Director of the Global Compact Office, writes in 

his foreword to the Network’s 2008 Annual Review, which 

appeared at the beginning of April. Even more companies 

need to focus more strongly on the ecological and social 

aspects of their activities and on good company management, 

says Kell. There is room for improvement, especially 

in the supply chain, according to the report. In a survey 

of UNGC members, only seven percent of the companies 

said they require their suppliers to be members of the 

Global Compact. Among companies that have subsidiaries, 

the number was 30 percent. It is time, says Kell, “to move 

from pilot programmes in select corporate departments to 

an integrated approach to implement all UN Global Compact 

principles throughout and beyond headquarters, into 

subsidiaries and the supply chain.” In addition, company 

reporting on progress in implementing the UNGC principles 

often remains below potential, Kell believes. The reports still 

focus too much on policy, says the UNGC Executive Director. 

In contrast, detailed information on concrete improvements 

is seen less frequently. In 2008, the Network Office had to 

remove 404 companies from the member list (“delisting”) 

for not submitting an annual progress report. Despite these 

shortcomings, Kell says the 2008 annual report shows “that 

the Global Compact contributes positively to the global 

spread of responsible business practices.” The number of 

members has risen to 6,000, and the Network is now active 

in nearly 140 countries. 

Annual Review 

Sum velenim veniam, sum 

dolore ming enim dolorerit 

lam augueros diamcommy 

nonsed et lorero 

odolore conse dolobor 

erillup tations equatuerat 

lute magnit dolese magna 

facidui 

News 

White Paper on Managing Climate 

Change and Water 

The UN Global Compact and the Pacific Institute jointly 

released a white paper which explores the linkages between 

climate change and water – from both the scientific and 

corporate management perspectives. Entitled "Climate 

Change and the Global Water Crisis: What Businesses Need 

to Know and Do", the paper covers a number of critical areas, 

including: How climate change is expected to impact water 

scarcity, water quality, and water demand; the ways in which 

water and energy are interconnected, including trade-off 

scenarios; the business risks of water and climate change; 

how businesses can strategically manage water-climate 

risks; the linkages between climate and water and the UN 

Millennium Development Goals. “This paper underscores 

the importance of viewing the many ways in which different 

environmental challenges are in fact deeply connected, and 

the need to approach these issues in an integrated way,” said 

Georg Kell, Executive Director of the UN Global Compact. 

“Climate change needs to be understood in terms of how it 

46 


Agenda 


Next Step in Anti-Corruption 

Investors Give New Twist to Good 

COP/Bad COP 

The 38 members of the UN-backed Principles for Responsible 

Investment (PRI) have written to the CEOs of 130 major 

listed companies which are signed up in the United Nations 

Global Compact. Twenty-five of the companies have been 

praised by the investors for producing notably high-quality 

COPs – including Air France and Starbucks – while over 

100 companies were identified as laggards by the investors 

for failing to submit a COP this year. Those companies that 

failed to produce COPs include GAP Inc, Severn Trent plc 

and LVMH. Representing one of the collaborating investment 

institutions, Aviva Investors’ Head of Research and 

Engagement, Steve Waygood, said: “The UN Global Compact 

system provides investors with a universe of ‘good COPs’ 

and ‘bad COPs’. Companies that produce a ‘good COP’ send 

a powerful message to a valuable audience of institutional 

investors. Those who have failed to submit a report will 

trigger alarm bells among investors who want real details 

about a company’s business practices on ESG issues”. 

The United Nations Global Compact has determined the 

next steps in the fight against corruption. At its fourth 

workshop at the end of February in New York, the members 

of the Working Group on Anti-Corruption agreed, among 

other things, to provide guidance to sensitize companies to 

the risks of bribery. The first part of the guideline, which 

recently appeared in the publication series RESIST (Resisting 

Extortions and Solicitations in International Transactions), 

focuses on the company procurement process. In seven 

scenarios, the guideline runs through classic situations that 

purchasers face in everyday business and shows how they 

can deal with corrupt offers. A second RESIST publication 

is planned for the end of the year. It will probably cover 

possible scenarios in project implementation. In addition, 

the members of the working group (representatives of the 

Global Compact Office, civil society, business, local networks 

and international organizations) introduced initial 

elements for more transparent company reporting on the 

issue of corruption. Since companies and organizations have 

previously provided differing amounts of information on 

this issue – for competitive reasons, among others – the 

matrix should include two sets of instructions for reporting, 

one more demanding, one less. Other topics of the February 

session were: Corruption in the supply chain and possible 

cooperation with governmental or intergovernmental organizations. 

In 2009, the members wish to work on anchoring 

the principles of the Global Compact – such as the fight 

against corruption – into the courses and curricula of 

business schools. 

Anti-corruption is one of the ten GC principles: Companies 

and organizations that join the UN initiative promise to 

work against all kinds of corruption, including extortion 

and bribery. According to estimates of the World Economic 

Forum, corruption causes economic losses of 2.6 trillion 

US dollars per year. That is more than five percent of gross 

world product. 


The Global 

Compact 

in the 

Emirates 

48 


Agenda 


In just 20 years, the countries of the Gulf Cooperation Council (GCC) have transformed 

themselves from deeply traditional nations that depended largely on oil revenues to 

booming metropolises with rapidly growing and diversified economies. The transformation – 

especially in the United Arab Emirates (UAE) has been staggering; once home to a small 

and tight knit society, the UAE today boasts over 202 different nationalities, making it one of 

the most diverse nations in the world. The rapid development of the region is 

accompanied by a greater call for a more responsible and sustainable way of doing 

business, in order to solidify the progress that is being made. 

By Habiba Al Marashi 

The UN Global Compact is gaining momentum 

all over the world and the Gulf 

Region is no exception to this trend. One 

of the world’s fastest-growing regions 

in terms of economy as well as demographically, 

the Gulf Region presents 

the UN Global Compact with a unique 

opportunity to make a firm and lasting 

impact on the way that business is conducted 

in this part of the world. As the 

UN Global Compact Local Network focal 

point for the GCC states, the Emirates 

Environmental Group has been actively 

engaging local and regional businesses, 

government, and semi-government organizations 

since 2007. 

The state of CSR in the 

GCC States 

The Gulf Cooperation Council is made 

up by Saudi Arabia, the United Arab 

Emirates, Qatar, Oman, Bahrain, and 

Kuwait. This oil-rich region has seen 

tremendous growth in the last 20 years, 

with the focus – especially in countries 

like the UAE – shifting from being almost 

exclusively reliant on oil-export 

revenues to becoming far more diversified 

economies. 

“We have to face facts; advanced 

industrialized countries 

must accept the majority of 

responsibility for cleaning up the 

environment. Some developed 

countries do not want to take 

responsibility under the pretext 

that it would undermine the 

progress of their country and 

affect the welfare of their society. 

This is both unfair and selfish.” 

Sheikh Mohammed bin Rashid al Maktoum, Vice 

President and Prime Minister of 

the UAE and Ruler of Dubai 

As a result of this diversification, the 

region has witnessed an enormous influx 

of foreign capital, companies, and 

labour. This has had a significant effect 

on the social and environmental makeup 

of the countries in the GCC and has 

posed serious questions with regard to a 

wide variety of issues, ranging from the 

national identity of the local populations 

to the growing environmental footprint 

of the GCC. 

Certain aspects of Corporate Social Responsibility 

(CSR) have a long history in 

this region (philanthropy is one of the 

five pillars of Islam), but until recently, 

CSR as a comprehensive, long-term business 

model was largely unknown in 

the GCC. Although national governments 

have been quick to recognize 

the environmental implications of the 

massive growth of their economies, and 

have taken innovative steps to reverse 

this trend (Masdar City, the world’s first 

Carbon Neutral city in the Emirate of 

Abu Dhabi is one particularly notable 

example), there are other areas where 

legislation is lagging behind the fastpaced 

developments on the ground. 

Emirates Environmental Group (EEG) has 

been playing a central role in convincing 

businesses and the general public 

that it is imperative that both local and 

international companies step up and – 

voluntarily – take up the responsibility 

of doing more than is minimally required 

of them. 

Increasingly, companies in the GCC are 

realizing that there is more to Corporate 

Social Responsibility than just PR value, 

and they are starting to incorporate CSR 

principles into the core values of their 

businesses. As is to be expected of dynamic 

and varied economies, the CSR 

initiatives being undertaken by GCC 

businesses vary greatly in scale, qual- 


ity, and sustainability. Nevertheless, the 

enthusiasm with which the UN Global 

Compact has been received by companies, 

government, and semi-government 

organizations in the GCC proves that 

there is great potential to achieve truly 

sustainable growth. 

The UN Global Compact Local 

Network in the GCC states 

Two years of diligent preparation, raising 

awareness of the UNGC in the GCC 

states, and developing a local framework 

culminated in the official launch of the 

UNGC Local Network for the GCC states 

on April 7, 2008. The festive occasion 

brought high-level representatives from 

government, semi-government and the 

private sector together for the official 

ceremony. The event even received the 

patronage of the Crown Prince and chairman 

of the Executive Council of Dubai, 

HRH Prince Hamdan bin Mohammed 

bin Rashid al Maktoum, underlining 

the support that the UNGC enjoys in the 

highest levels of government. 

The UNGC executive director, Mr. Georg 

Kell, provided the keynote speech, while 

other speakers included Mrs. Habiba 

al Marashi, and Steering Committee 

members Mr. Mohammed Al Sarhan and 

Mr. Rami Ghandour. In addition to the 

17 companies that had already signed 

up before the official launch, another 

organization joined the UNGC Local 

Network at this event. The high-level 

guests and impressive media turnout 

gave the launch excellent media coverage 

and subsequently helped further raise 

the profile of the UNGC Local Network 

with the general public. 

The UNGC Local Network structure 

The Emirates Environmental Group acts 

as the focal point for the UNGC Local 

Network. The EEG’s chairperson, Mrs. 

Habiba Al Marashi, sits on the UN Global 

Compact board. The diversity of the GCC 

is perfectly exemplified in the UNGC 

Local Network for the GCC Secretariat 

office, where people from 12 different 

countries work together to advance the 

principles of the UNGC in the GCC. 

Although the secretariat of the Local 

Network is based in Dubai, UAE, the 

Network aims to actively involve participants 

from all GCC states. Reflecting this 

aim, the steering committee for the Local 

Network consists of participants from 

the UAE, Qatar, and Saudi Arabia. The 

goal is to further expand this Steering 

Committee, so that its members truly 

reflect all countries of the GCC. Ideally, 

The Global Compact Network in Gulf 

Region was launched in April 2008. 

His Highness Sheikh Hamdan bin 

Mohammed bin Rashid Al Maktoum, 

Crown Prince of Dubai and Chairman 

of Dubai Executive Council, was the 

patron of the event. 

50 


Agenda 


each country will be represented by both 

a member of a government entity and a 

representative from the corporate world. 

The current members of the Steering 

Committee aim to convene at least three 

times a year, with the location of the 

meeting rotating between them. 

The UNGC Local Network’s activities 

The UNGC Local Network has been off to 

a flying start. Introducing the UNGC in 

the region that was largely unfamiliar 

with the Initiative and its principles, 

we initially set out to raise awareness 

among our existing members and the 

general public. Support has been steadily 

growing and we consequently rolled out 

a number of lectures, workshops, and 

documentation to further familiarize 

organizations in the region with the 

UNGC. 

We also provide our participants with 

access to CSR experts and resource speakers 

to further strengthen their own CSR 

practices. The Local Network has represented 

the UNGC at three international 

forums; the First Alliance of Civilizations 

Annual Forum (Madrid, January 15–16, 

2008), the Second Forum of Ministers for 

Social Development (Amman, November 

12–14, 2008), and the Business for the 

Environment Global Summit (Singapore 

April 22–23, 2008). 

In addition to officially representing 

the UNGC at high-level events, we have 

committed ourselves to lobby for greater 

UNGC participation whenever the (speaking) 

opportunity arises. Perfect examples 

of such opportunities were the International 

Business Forum (Doha, November 

28, 2008) and the CSR networking event 

hosted by the Dubai Chamber of Commerce, 

where the EEG chairperson, in 

the capacity as guest speaker, encouraged 

businesses to join the UNGC. 

In addition to public speaking engagements, 

the Local Network Steering Committee 

convened twice in the past year. 

The Local Network was also represented 

at the UNGC board meeting, with Mrs. 

Al Marashi present in New York (April 

30–May 1, 2008). 

UNGC Local Network participants 

The UNGC Local Network for the GCC 

states was launched under the patronage 

of Sheikh Hamdan bin Mohammed 

bin Rashid Al Maktoum, Dubai’s Crown 

Prince and the chairman of the Executive 

Council. His involvement with the UNGC 

Local Network and with its launch has 

been extremely beneficial to the Network 

in terms of credibility and publicity. In 

this region, having the government’s 

seal of approval is crucial to engaging 

key players in society, and the Crown 

Prince’s patronage has proven to be very 

helpful in this process. 

The UNGC Local Network currently has 

34 active participants spread out over 

five GCC states, while the applications 

for two more memberships are currently 

being processed. The participants are 

heterogeneous, with MNC’s, SME’s, and 

local companies all participating. Reflecting 

the GCC’s economy, the majority 

of participants are Construction and 

Engineering companies, with the Professional 

and Scientific and Oil&Gas 

enterprises coming in second and third 

place, respectively. 

As a relatively young Local Network, the 

UNGC Local Network for the GCC set out 

with a dual policy: to actively recruit new 

participants to the UNGC and to engage 

those businesses that had already signed 

up globally to become active participants 

locally. In this it has largely been successful. 

Businesses across the region are 

becoming more aware of the benefits of 

participating in a Local Network, and the 

Local Network focal point, in turn, has 

been stepping up its efforts to actively 

engage its Local Network participants. 

This too has paid off. UNGC global initiatives 

such as the CEO Water Mandate, the 

Caring for Climate statement, the CEO 

statement on the UN Convention against 

Corruption, and the CEO statement on 

Business and Human Rights were all 

endorsed by businesses from the GCC. In 

addition to these initiatives, one of the 

GCC Local Network participants became 

the first business from the Middle East 

to donate to the UN Central Emergency 

Response Fund (CERF) by answering the 

Secretary General’s call to donate to the 

Gaza Relief Fund. 

Among the participants of the UNGC 

Local Network for the GCC, there are 

varying motivations for joining the Network. 

In a participant survey held in 

2008, respondents cited the desire to 

build knowledge and capacity for CSR 

as their top reason for joining the UNGC. 

Improving stakeholder relationships and 

building trust came in as a close second. 

The fact that companies cite these objectives 

as being more important than just 

networking opportunities and PR value 

is a clear sign that the long-term value of 

responsible business is sinking in with 

companies in the region. 

The UNGC and CSR in the current 

financial climate 


The Emirates 

Environmental 

Group (EEG) 

The Emirates Environmental Group (EEG) has been active 

since 1991. Based in Dubai, UAE, the EEG was founded with 

an aim to create a more sustainable and equitable society in 

the UAE and the wider GCC region. As the name suggests, the 

EEG initially focussed mainly on environmental issues in the 

rapidly expanding UAE. In a country where civil society was 

virtually non-existent, the EEG quickly became the torchbearer 

for a wide variety of environmental initiatives. 

In partnership with its corporate members, several long-running 

and highly successful campaigns have been rolled out, including 

the Can Collection Drive (under the slogan YES WE CAN!, 

the EEG encourages schools, businesses, and individuals to 

collect and donate their empty aluminium cans at several can 

collection points). The glass, battery, toner, and paper collection 

campaigns have proven very successful and continue to 

attract more participants with each cycle. Furthermore, the 

EEG regularly teams up with businesses to organize Waste 

Management Outreach projects, which promote recycling 

with a wide variety of groups. 

Perhaps one of the most challenging, yet rewarding initiatives 

has been the “Clean up the UAE 2008” campaign, which featured 

more than 23,000 volunteers cleaning up 140.5 tonnes 

of litter all over the UAE. This massive campaign, which was 

coordinated by the EEG, featured mainly students as volunteers 

and offered them a revealing glimpse into what happens to 

our surroundings when we do not take care of it. 

In addition to educational campaigns, the EEG has a long-standing 

tradition of honouring the people and organizations that 

prove to be champions of change. Each year, the EEG honours 

those who have made exceptional contributions to environmental 

protection during a very high-profile gala dinner. 

The EEG has always maintained that protecting the environment 

cannot happen in isolation. Environmental responsibility 

is an integral part of a wider set of social and economic 

issues that the UAE and the rest of the GCC are faced with. 

Capitalizing on the solid relationship with government, semigovernment, 

and businesses in the GCC, the EEG CSR Network 

was launched on March 15, 2004. 

Taking the relationship between the EEG and its partners 

to another level, the EEG CSR Network offers participants a 

tool for facilitating open and transparent business policies 

and practices based on ethical values that have a sustained, 

positive impact on business, the environment, and society as 

a whole. The EEG CSR Network has proven to be an excellent 

platform for networking, sharing best practices, and learning 

among the corporate leaders in the GCC. Here, too, a host of 

activities have taken place, ranging from community lectures, 

workshops, training sessions, and the highlight of the year: 

The Arabia CSR Awards. Launched by the EEG CSR Network, 

the awards honour small, medium, and large businesses 

across the GCC and the wider Arab world that have made an 

exceptional contribution towards sustainable development 

through their CSR programs. 

Environmental sustainability, 

then and now 

After years of fast-paced growth of both the economy and the 

ecological footprint of the UAE, the government has wholeheartedly 

embraced environmental protection. 

Masdar City was mentioned earlier as a notable example 

in Abu Dhabi. Dubai’s Green Initiative ensures that all new 

buildings adhere to strict guidelines when it comes to sustainable 

materials and building methods. These groundbreaking 

initiatives build on the strength of the UAE as a relatively new 

country that has the opportunity, will, and capacity to lead 

when it comes to environmental sustainability. 

With leadership that has put its weight behind the quest for 

a more sustainable society, the challenge of fully engaging all 

sectors of society remains. The UAE and, to a lesser degree, the 

wider GCC states have become transient societies. The large 

foreign labour force that has descended on the region generally 

only call it home for a limited number of years, making 

them less attached to their environment and less inclined 

to care for it properly. The EEG has been combating this 

“But this isn’t my home anyway” attitude since its inception, 

and will continue to do so. Fortunately, we are witnessing a 

gradual shift in the level of awareness and commitment to 

work towards a more sustainable society. 

52 


Agenda 


The greatest challenge that we currently 

face is convincing businesses in the GCC 

region that the current financial crisis 

should not be an excuse to downsize 

their CSR efforts. An unfortunate side 

effect of the fact that CSR is relatively 

new in this region is that its position as 

an integral business component has not 

yet been completely solidified in many 

and managing human capital are now 

more pressing than ever, and communicating 

this to government, semi- government, 

and private organizations across 

the region is our top priority in these 

trying times. 

Conclusion 

The GCC has successfully transformed 

itself into a global financial hub, with 

the UAE standing out as a shining example 

of a modern, open, and progressive 

Arab nation. Several progressive leaders 

of the countries in the Gulf have been 

lavished with praise and admiration for 

their visionary approaches to the development 

of their countries. The people 

of the GCC are rightfully proud of the 

immense leaps that they have taken in 

such an incredibly short time. It is, however, 

too soon to sit back and rest on our 

laurels. With the privileges of development 

also come the responsibilities. As 

His Highness Sheikh Mohammed said: 

“It would be both unfair and selfish to sit 

back and let others deal with our shared 

responsibility towards the environment 

and the society that we all live in.” 

Winning companies honoured as 

pioneering champions of the first-ever 

Arabia CSR Awards in 2008. 

businesses. In the wave of company 

downsizing that has also affected the 

GCC, departments dealing with CSR issues 

have been among the hardest hit. 

The UNGC Local Network for the GCC 

is acutely aware of these developments 

and is actively reaching out to existing 

and potential participants to try and 

reverse this trend. 

The Network’s first workshop of 2009 

was focussed on doing “Sustainable Business 

in the Current Economic Climate”. 

Featuring prominent guest speakers from 

the public and the private sectors, the 

workshop underlined the importance 

of sound CSR practices in this economic 

climate. According to the Director of 

Sustainability for Deloitte, “Corporate 

responsibility and Sustainability are an 

imperative, because those companies 

that fail to address CSR will find themselves 

on the path to corporate extinction.” 

His strong message was echoed by 

the CSR manager of the Dubai Chamber 

of Commerce and Industry, who told the 

audience that “Environmental challenges 

like global warming will not go away. 

They will intensify, causing an array 

of social challenges too.” Both speakers 

proceeded to present the audience 

with an outline of practical steps that 

can be taken to ensure responsible and 

sustainable business practices in the 

current climate. 

As the UNGC Local Network for the GCC 

focal point, we consider it to be our 

responsibility to continue to spread the 

message of the importance of CSR, especially 

in this current climate. Issues such 

as transparency, responsible investment, 

At the EEG, we work towards yet another 

transformation of the GCC – from 

capital-driven development to a fully 

inclusive and sustainable society that 

honours its rich heritage while leading 

the way towards an equitable and 

responsible future for all who call this 

region home. 

Habiba Al Marashi is Chair of the Emirates 


Human Rights 

Environment 

Cap Gemini 

Carrefour 

Danfoss 


Grundfos 

Novo Nordisk 

Sanofi-Aventis 

Groupe SEB 

Toms 

Labour Standards 

Adecco Group 

Amazon Carribean 

Arcandor 

Ernst & Young 

Otto Group 

TMS Group 


Ampeg 

Autostrade 

Bayer 

BASF 

Coc-Cola Hellenic 

Deutsche Post DHL 

Dong Energy 

E.ON 

Holcim 


REN 

PT Smart TBK 

Anti-Corruption 

Siemens 

Partnership 

Financial Markets 

Medine 

Nexen 

Deutsche Bank 

54 


Agenda 

Best Practice 

Best Practice 

Solely responsible for the editorial contributions under the heading "Best Practice" 

are the companies and their authors themselves. 

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Adecco Group 

Ampeg 

Amazon Carribean Guayana 

Autostrade per L'Italia 

Arcandor 

Bayer 

BASF 

Cap Gemini 

Carrefour 


Danfoss 

Deutsche Bank 


Dong Energy 

E.ON 

Ernst & Young 


Grundfos 

Holcim 


Medine 

Nexen 

Novo Nordisk 

Otto Group 

REN 


Groupe SEB 

Siemens 

PT Smart TBK 

TMS Group 

Toms 



Adecco Group 

Carrying the Torch 

for GC Principles 

The availability, nature and conditions of work are central to the wellbeing of individuals, 

families, economies and societies the world-over. ‘Work’ is the core business of Adecco 

Group, the world’s leading provider of HR solutions, with over 31,000 people dedicated 

to enabling more than 500,000 colleagues to work every day with clients in over 60 

countries. 

By Stephan Howeg and Lilian Furrer 

It is a vital role between the individual 

and the employer which needs to be 

governed by a principled approach as 

Adecco Group recognized signing the 

UN Global Compact in 2003 as the first 

in its industry. 

The principle number 6 ‘The elimination 

of discrimination in respect of employment 

and occupation’ is where Adecco’s 

conduct makes the most obvious impact. 

As you may expect, all colleagues working 

for Adecco directly are trained in 

non-discriminatory practices. This is just 

the starting point of a range of pro-active 

initiatives that the company runs to create 

chances for individual development 

and the integration of disadvantaged 

groups into work and society. 

Amongst Adecco’s efforts is the International 

Olympic Committee (IOC) Athlete 

Career Programme (ACP). Launched in 

2005, the Programme is offered by the 

IOC and the National Olympic Committees 

in co-operation with Adecco who 

has been supporting athletes since 1999. 

Adecco uses its expertise to assist Olympic 

athletes make the transition from sport 

to the labour market, as well as advising 

companies on the benefits to hire athletes 

in conventional roles. Through the 

IOC Athlete Career Programme Adecco 

offers Career Training and Development 

support in the form of education, life 

skills and employment support. 

Before assuming that Olympic participants 

don’t need help in a career beyond 

competition, think again. For every star 

with major sponsorships hundreds of 

competitive athletes face a future they 

might not be prepared for. And in a 

number of cases, stars on the field of 

play benefit from the exposure of opportunities 

and education of respect and 

fair play in the workforce. 

Keeth Smart, USA fencing medalist in 

Bejing 2008, recognized he needed assistance 

to combine his work life and 

competitive sports. 

When joining the Programme in 2006 

he worked at a telecom company as 

financial research analyst where he was 

having difficulty balancing his work commitments, 

training schedule and commuting. 

So he looked to the IOC Athlete 

Career Programme for answers. 

With the Programme, he built his confidence 

and re-positioned himself effectively 

to combine his work life and 

competitive sports. "With my increased 

ability to describe my position and translatable 

skills, rather than joining a new 

Our principle 

We demonstrate respect for the 

rights and dignity of all people. 

We believe that work is a key 

factor for social integration and 

contributes to the well-being of 

society at large. Consequently we 

not only uphold the elimination 

of discrimination and specifically 

sensitize and train our staff on 

risks of potentially discriminatory 

labour practices, but also make 

use of our role as employer 

for the social integration of 

disadvantaged groups. 

2 


Best Practice 


Keeth Smart, Olympic Medalist 2008, 

not only had a clear focus in sport. 

Now he is studying for an MBA, being 

guided and coached by the IOC Athlete 

Career Programme to achieve his 

future career plans. 

Our “Disability and Skills” programme 

is up and running in France, Italy, Spain, 

Norway, Belgium, the Netherlands, Japan, 

the US and Argentina. In France, 

Adecco and an organization called Agefiph 

help15,000 people with disabilities 

find a suitable job each year. 

Regarding the mature workforce, Adecco 

USA has been an honoree since 2002 

of the American Association of Retired 

Persons (AARP) list of Best Employees for 

workers over 50, reflecting the success of 

initiatives such as Adecco’s Renaissance 

programme offering benefits for older 

people wanting to work. 

company, my employer worked with 

me, kept me on the team and enabled 

me to have a balanced scheduled that 

included working, training and competition." 

Now having retired from sport, 

Keeth is studying for an MBA with the 

ACP Programme manager still assisting 

with guidance and practical help on his 

future career plans. 

Over 3,000 athletes from more than 30 

countries in ages ranging from under 20 

to over 40 across five continents have taken 

part in the Programme. Whilst Keeth 

is an excellent example, perhaps the 

Programme’s benefit can be most keenly 

felt in the developing world, acting as a 

shining light for positive change and the 

relevant Global Compact principles. 

An example of this is the three-day 

programme that took place in Dakar, 

Senegal, run in conjunction with the 

IOC and the IOC Olympic Solidarity organization. 

The event is helping athletes 

from the African region prepare for the 

transition to the labour market amongst 

them Ibrahim Maiga, who represented 

Mali in the 400 metre hurdles. Ibrahim 

commented: “The coaching has an immediate 

effect and changes a person right 

away. It is training for the whole of life, 

something we live everyday, everywhere 

and with everybody.” 

Even though the IOC Athlete Career 

Programme aims to meet individual 

athlete’s needs for a fair chance in labour 

market, each participant becomes an 

ambassador ‘carrying the torch’ for the 

Global Compact principle of eliminating 

discrimination in respect of employment 

and occupation. 

The IOC Athlete Career Programme is just 

one of Adecco’s pro-active programmes 

focused upon striving for fair access to 

the labour market and equal opportunities 

for all. Other activities are focused 

towards the ageing population and mature 

workforce, the disabled, unemployed 

youth and the long-term unemployed. 

In Germany, Adecco supports a publicprivate 

initiative called Quadriga that 

since 2007 has had a 70% success rate 

in integrating young unemployed people 

into the labour market. Similarly 

in Argentina, Adecco is one of several 

companies supporting an International 

Labour Organization project aiming to 

coach, train and find employment for 

1,000 young men and women. France 

is home to Adecco’s largest project to 

support the re-integration of long-term 

unemployed. The ‘Interim et insertion’ 

programme currently coaches 4,000 

people each year to enhance their job 

searching skills. 

Supporting the integration of disadvantaged 

groups is one aspect of Adecco’s 

three-part Corporate Responsibility (CR) 

strategy. The additional focal points of 

skill development and safety at work 

for colleagues strengthen Adecco’s commitment 

to Global Compact principle 1 

‘Businesses should support and respect 

protection of internationally proclaimed 

human rights; and principle 2 ‘Make sure 

that they are not complicit in human 

rights abuses’. The importance Adecco 

places on CR as part of its sustainable 

business model is reflected by the creation 

of a dedicated CR organisation in 

2008 led by Group Communications 

and overseen by the Group CEO and the 

Corporate Governance Committee of the 

Adecco Group’s Board of Directors. 


Ampeg 

Keep persevering 

and act local 

Bad news from the world of climate research arrives on our 

doorsteps nearly every day, and not one day goes by without 

our using a back door to redress our personal balance of 

thought on the world in which our children will live one 

day: Perhaps it is just a temporary glitch in the climate – 

something natural, that will right itself in the end. Even 

Hans Joachim Schellnhuber from the Potsdam Institute for 

Climate Impact Research consoles himself with the hope that 

the scientific community may have made a collective error 

on this issue. He expressed his thoughts on the percentage 

probability of his hopes becoming true in the following 

statement on 26th March 2009. "Well, the chance that the 

whole scientific world has actually made a mistake here 

probably lies below one percent." 

By Peter Graf 

It was certainly naive to assume that the 

Kyoto Protocol would sort everything 

out, and it was definitely wrong to continue 

chanting the mantra of "everything 

will be alright in the end" for 10 years. 

Worldwide, CO 2 

emissions are increasing 

much more than feared in the most 

pessimistic of forecasts. Similarly naive 

is our ignorance of the long-term consequences 

of actions that have pushed us 

into the largest economic and financial 

crisis ever. The subsidises being pumped 

into the system to stave off this crisis are 

far higher than would have been needed 

to introduce comprehensive, short-term 

and effective climate-protection measures. 

Both situations clearly demonstrate 

that, in the short-term, it is wrong to 

rely on global regulation, which is still 

far-too-weak and that local action is 

needed. 

Taking our own company as an example, 

this white paper is designed to reveal the 

potential for savings that exists when 

an all-round investigation of energy 

consumption is performed outside of 

normal business operations. 

Immediate measures 

A tour around our company with a simple 

measuring device delivered the most 

surprising example of energy-savings 

potential: printers that consume just 1 

watt less in energy-saving mode than in 

normal mode! In energy-saving mode, 

only the display switches off on these 

network printers, and instead of consuming 

34 watts of electricity, they consume 

4 


Best Practice 

Environment 

Development in electricity consumption at AMPEG 

100% 

90% 

80% 

70% 

60% 

01.2007 04.2007 07.2007 10.2007 01.2008 04.2008 07.2008 10.2008 

33, and they do that 24 hours a day, 365 

days a year. This represents an enormous 

waste of energy, especially since our offices 

close at 6:00 p.m. and open up again 

at 8:00 a.m. This means that our printers 

consume electricity more than 14 hours 

a day for absolutely no reason. A simple, 

but effective measure to control this is 

to connect the printers in the printer 

room to a multiple socket outlet strip, 

and then connect this to the main socket 

outlet through a time switch. This can 

save up to 144 kWh a year, depending 

on the printer you use. 

We also identified 5-litre mini-boilers 

under the washbasins in our offices as 

another unnecessary energy guzzler: 

Four of them consume almost 1,500 

kWh a year. This is the same amount suggested 

by the Internet consumer portal 

Verivox as the yearly requirement for an 

average single-person household. A survey 

amongst our staff showed that they 

would be happy to go without hot water 

in the toilets to help the environment. 

Our immediate solution was to switch 

off the boilers. Since then, no one has 

complained about not having hot water 

to wash their hands with. 

We also found an easy-to-implement 

solution for our workplace PCs: Central 

entries in the Group Policy for the Active 

Directory now ensure that hard disks and 

screens on workplace computers shut 

down during breaks after ten and fifteen 

minutes, respectively. The computers go 

into sleep mode after 20 minutes, and 

as a consequence they only consume 

3.5 watts instead of 88. If employees 

are at a meeting, there is no need for 

their computers to be in standard mode. 

Although they may need 30 seconds to 

reboot them out of sleep mode, there are 

lots of things they can do to use the time 

effectively without their computers. 

Energy guzzlers 

AMPEG maintains a complex productive 

network to achieve the best-possible quality 

in the productive evaluation of software 

applications and the development 

of proprietary software. At the beginning 

of 2007, we decided to virtualise as much 

of our hardware as possible in order to 

reduce the electricity consumed by running 

a server on a 24/365 basis. Average 

power consumption amounted to 178 

watts an hour for hardware equipped 

with a single processor. This provided an 

energy-savings potential of around 1,560 

kWh per server per annum, which, again, 

is as much as a single-person household 

consumes a year. 

Employing virtualisation software, we 

managed to convert our physical computers 

into "virtual machines". We only 

needed three or four hours to perform 

a conversion. We also invested in cutting-edge 

blade systems equipped with 

energy-saving low-voltage processors to 

get as many virtual machines as possible 

to run on a single hardware host. 

The energy balance 

The chart demonstrates how massively 

downsizing our server hardware made 

it possible for us to significantly reduce 

electricity consumption from the 2nd 

Quarter of 2008. 

Our comprehensive package of measures 

allowed us to reduce electricity 

consumption throughout the company 

by 30 percent in two years and hence 

reduce our carbon footprint by several 

tonnes. 

AMPEG has reinvested a large part of 

what it has saved in electricity costs back 

into the environment, and although the 

higher unit price eats up part of the 

savings, we still wanted to set a good 

example and now get the electricity for 

our whole company from a supplier 

providing energy from 100% regenerative 

sources. 

Proactive measures 

The British historian Eric Hobsbawm 

recently argued that both socialism and 

capitalism are exhausted. A phase of 

reorientation like this represents exactly 

the right time for companies to act more 

justly in terms of social responsibility 

and positively showcase their climate 

protection costs as having social value. 

In return, shareholders should honour 

this investment in the future, even if 

they receive lower dividends in the shortterm. 

Our employees, who reap large 

benefits from the profits our company 

makes, have already been doing this for 

a long time. 

If we, the companies from the rich and 

developed European nations, set a good 

example, it will be easier for countries 

like the USA, Australia, Canada and 

others to implement climate protection 

goals. AMPEG's latest project is called, 

“30% less paper”. And we certainly aim 

to achieve this in 2009. 


Amazon Caribbean Guyana 

Indigenously Produced 

Organic Fruit 

By Gerd Pfitzenmaier 

“Without the cooperation with the indigenous people,” Xavier Richard knows, “our company 

would never have been able to thrive as it has.” Since its establishment in 1987, Amazon 

Caribbean Ltd. (Amcar) has relied on the efforts of thousands of indigenous people from the 

Arawack, Warrau and Carib tribes in Guyana. In the jungle of the Barima-Waini Basin, they 

collect the raw materials for Amcar’s products: hearts of palm and pineapple. “Our mission,” 

the company states accordingly, “is to generate, in partnership with the people in Guyana, 

economic value added from naturally growing products.” 

In his factory hidden in the jungle, the 

French adventurer Pierre Saint-Arroman 

has taught indigenous workers how to 

harvest certified organic hearts of palm 

and pineapples, pack them in cans and 

ship them to customers in Europe’s organic 

stores and U.S. malls. With these 

goods, Amcar and the indigenous people 

create “benefits for everyone involved”, 

Richard notes in summarizing the basic 

business idea. Economic success is, of 

course, important to him and Pierre 

Saint-Arroman – but at the same time, 

they want to help the inhabitants of the 

Orionoco Delta. “In the first 15 years of 

our work, Guyana went through economic 

crises,” Xavier Richard remembers. 

“Today, the people earn a secure income 

from Amcar.” 

The success story began as an adventure 

story: When Pierre Saint-Arroman 

travelled to the South American country 

in 1983, he actually wanted to dig 

for uranium. Guyana lives from the 

exploitation of its bauxite, diamond and 

gold mines, and with the experience 

he had gathered in the African bush, 

Saint-Arroman wanted to sell the ore 

in Europe as raw material for energy 

production. But the deal fell apart. Saint- 

Arroman stayed because he sensed the 

fresh political wind blowing in Guyana 

back then. The country was looking for 

foreign investors. He met Xavier Richard, 

and the two of them “copied the knowhow 

for processing hearts of palm from 

the neighbours in Venezuela and, with 

Dennis Wilson, Dennis Ramascindo and 

George Uthandi, built our own factory 

in Drum Hill,” Richard reminisces. The 

new entrepreneurs obtained the material 

for the mill from the rain forest on the 

Barima River. They also relied on the 

knowledge of their hired indigenous 

helpers: a first win-win business, from 

which the families living there have also 

profited from the very beginning. 

The company trained 500 indigenous 

people as organic farmers in an effort 

supported by the United Nations Development 

Programme (UNDP) and this 

South American country’s government. 

“Not only did Amcar secure its supply of 

organic raw materials,” the report states, 

“at the same time it secured the indigenous 

people a sustainable income.” Even today, 

the only connection to the cities on 

the ocean coast remains the boat trip 

through the jungle along the river and 

delta, which often takes up to two days. 

On the barges, Amcar employees transport 

food, clothing and fuel to the factory 

and carry their products to the harbour 

at Georgetown on the north coast. 

“Even in the first year, our employees’ 

families harvested 13 twenty-foot containers 

of hearts of palm,” says Xavier 

Richard, looking back at the company’s 

start, “which we could ship as exports to 

Europe.” With this, the company showed 

how much potential there is in Guyana’s 

little-used agriculture. The secret lies in 

the broad, pristine tracts of land, which 

are mostly overgrown by jungle. They 

are fully untouched by agrochemicals 

6 


Best Practice 


For Amcar, the basis of this business 

remains the hearts of palm. Their harvesting, 

the company emphasizes, is 

absolutely harmless for the natural environment 

in the jungle of Guyana, for 

the Euterpe oleracea are not cultivated 

in plantations, but grow wild in the 

forest. “People intervene only when 

harvesting,” Amcar says, describing this 

nature-friendly activity. To make sure 

that it stays this way, the company trains 

Guyana’s indigenous farmers to take 

lasting care of the jungle land. “This 

keeps the Amerindians from using nonecological 

production methods,” judged 

the United Nations Development Programme 

(UNDP) and the UWI Institute 

of Business in their 2005 volume The 

Millennium Goals and the Private Sector, 

The Caribbean Experience. 

and so could be used for organic farming 

within a short time, avoiding long 

transition times. 

Until Amcar was established, nobody had 

thought of selling the fruit or vegetables 

harvested in Guyana as organic food. 

But Richard and Saint-Arroman added 

another argument: They vaunt their 

cooperation with the indigenous people 

to the affluent consumers in far-away 

Europe and Arabia by offering hearts of 

palm and pineapple not just as “organic”, 

but also as “indigenous” fruit. And so 

they gain a second bonus from their collaboration 

with the indigenous peoples 

of South America. “Amcar proves,” they 

announce on their Internet site, “how 

we can benefit from the added value in 

the market.” And their products, ecologically 

produced by indigenous people, 

enjoy disproportional success with the 

customers.“ Annual growth in 2000 was 

almost nine percent and quickly jumped 

to 20 percent in 2005,” Amcar notes 

with satisfaction: “Investment in the 

professional processing of these nontraditional 

agricultural products can 

thus become an engine of growth.” And 

so in the company founders’ vision, the 

indigenous people would gain a key role 

in the global market: Their land and 

knowledge provide future generations 

with natural food and medicine. 

Consistent with this, CEO Pierre Saint- 

Arroman signed the Global Compact 

membership declaration for Amcar back 

in 2000. And consistent in its pursuit of 

these commitments, Amcar organises the 

food supply of the indigenous communities 

at affordable prices. The company 

also supplies transportation for the remote 

region: Their boats are usually the 

only connection to the world outside the 

jungle, and certainly the fastest. 

Together with the Red Cross in Guyana, 

the company offers health courses for 

employees’ families as well as for other 

members of the indigenous village communities. 

These are meant to fight malaria 

and inform people how to better 

protect themselves against infection with 

AIDS. The company’s commitment also 

includes education for the employees’ 

children and further development of 

workers’ technical skills. 

In all this work, the two entrepreneurs 

always keep the people with whom they 

work in view. And their commitment has 

not gone without recognition: In 2004 the 

Amcar founders were commended in “The 

World Business Awards in support of the 

Millennium Development Goals”. 


Autostrade Per l'Italia 

Upgrading 

Infrastructural Capacity 

and Reducing Atmospheric 

Pollution 

By Simonetta Giordani, Benedetta Masignani and Andrea Ragni 

Given the interest in the issue of air quality – an issue 

that necessarily implies a scientific approach – Autostrade 

per l’Italia embarked on an in-depth examination of the 

problem in all of its aspects in 2007. This was done with 

an awareness that the motorway network is not a source 

of pollution, but rather an infrastructure that facilitates 

the transit of vehicles, whose emissions vary depending on 

their basic technical features, their speed, and traffic flow 

in general. A correct approach to the issue of air pollution 

therefore leads to the conclusion that since motorways 

free the ordinary road system of traffic, they can serve to 

reduce pollution. 

Autostrade per l'Italia – 100 percent 

owned by Atlantia S.p.A., which is responsible 

for investments and strategies 

in the transport and communications 

infrastructure and networks sector – is 

the leading European concessionaire 

for toll motorway management and for 

related transport services. 

In Italy, about four million motorists – 

around 8 percent of the Italian population 

– use the Group's motorways daily. 

Those motorways cover 3413.5 km and 

contribute to the social and economic 

standing of Italy within Europe, ensuring 

an effective transport system and 

indispensable services in and between 

urban areas. 

In 2007 and 2008 Autostrade per l’Italia, 

in partnership with Euromobility Service 

S.r.l., the National Association of Mobility 

Managers, Rome, conducted an experiment 

aimed at determining the real advantage 

– in terms of the abatement of 

atmospheric pollution – obtained from 

the construction of an additional traffic 

lane in sections characterised by persistently 

congested traffic. The decrees that 

were issued between 2006 and 2007 on 

environmental impact evaluation (EIS) 

procedures for measures to upgrade the 

motorway concessionaire network are 

proof of the enormous importance that 

the Italian Ministry of the Environment 

attaches to the problems of atmospheric 

pollution. Every EIS decree offers the 

same recommendations: on the one hand, 

to implement environmental monitoring 

plans – by the proponents of civil engineering 

works – in order to acquire the 

data necessary to quantify and manage 

atmospheric pollution phenomena; on 

the other hand, to urge the regions to 

make their plans for rehabilitating the 

quality of the air – pursuant to European 

directives 96/62/CE and 99/30/CE – 

fully operational, thereby avoiding action 

against Italy for breach of EC regulations 

by the European Community. 

These provisions, which are contained 

in the EIS decrees on measures to upgrade 

motorway sections referring to 

various Italian regions (Lombardy, Emilia 

Romagna, Tuscany, Marche, Lazio), convinced 

Autostrade per l’Italia to conduct 

the experiment in Tuscany and 

Lombardy. 

The method used in this study marks 

a change to traditional methods based 

on the COPERT/CORINAIR methodology, 

since it does not use driving cycles 

8 


Best Practice 

Environment 

Design/Non-Design Comparison 

Percentage variation (%) 

0 

-5 

-10 

-15 

-20 

CO 

VOC NOx PM10 

vehicles. As concerns NOx and PM10 

emissions, the same reasoning applies 

with respect to heavy vehicles. Therefore, 

it can be concluded that the building of 

a third lane for the section in question 

will produce a reduction in polluting 

emissions by vehicle traffic. 

-25 

-30 

and average speeds, but instead is based 

on traffic microsimulation models and 

instantaneous emission factors (taken 

from the MODEMINRETS and DVB- 

University of Graz databases) that are 

applied to monitored driving cycles on 

the motorway sections. As a result, this 

method can represent local situations 

more effectively and supply more reliable 

estimates about the differences – in 

terms of emissions produced – between 

smooth-flowing traffic and congested 

traffic conditions. 

In 2007 the method proposed was applied 

to the Barberino del Mugello–Incisa 

Valdarno section of the A1 Milan–Naples 

motorway, and, in particular, to the subsection 

Barberino del Mugello–North 

Florence section, in order to analyse the 

effect of the enlargement of the road 

infrastructure on traffic emissions. 

The present motorway layout (two lanes 

per carriageway) was compared with 

the new design layout (three lanes per 

carriageway). The fluidity of the traffic 

produced by the enlargement design 

increased the average travelling speed 

and thus was responsible for "flatter" 

driving cycles. More specifically, flatter 

cycles mean less stop-and-go, during 

which emissions are highest. 

It was therefore demonstrated that in 

each of the five time intervals in which 

the day was divided, emissions of the 

main pollutants (CO, NOx, COV, and primary 

PM10) were significantly lower with 

the enlargement design. This conclusion 

is valid not only with reference to 2007 

but also 2010 – taking into account 

expected traffic increases. 

The figure above illustrates the overall 

emission benefits for all categories of 

vehicles. A comparison between the columns 

for the years 2007 and 2010 shows 

that in 2010 there is a very prominent 

reduction in CO and VOCs with respect 

to other pollutants. This is explained by 

the fact that CO and VOC emissions are 

principally produced by light vehicles 

and thus their overall trend is strongly 

affected by the respective trends of light 

Network Average Speed 

km/h 

100 

80 

60 

40 

20 

0 

4 Traffic Lanes 3 Traffic Lanes 

2007 2010 

In 2008 Autostrade per l’Italia also conducted 

the experiment in Lombardy 

regarding the A4 Turin–Trieste motorway, 

which is considered one of the focal 

points of the Italian road network due 

to its connecting the Iberian Peninsula 

and the Balkans, thereby making it one 

of the most trafficked motorways in Italy. 

The methodology proposed was applied 

only to the Milan–Bergamo section (34 

km) of the A4 motorway and presented 

a direct comparison between the current 

network with enhancements (four traffic 

lanes) and the previous carriageway 

layout (three traffic lanes). 

The conclusions of previous studies was 

confirmed, that is, that traffic fluidity 

that results from road enlargement 

increases the average speed and produces 

“flatter” driving cycles as well as 

significantly lower emissions of major 

air pollutants (CO = -35%, NOx = -13%, 

VOC = -14%, PM10 = -22%), as shown in 

the following figure. 

6 - 7 am 3 - 4 pm 5 - 6 pm 

9 - 10 pm 


Arcandor 

Action in the Supply Chain 

Since the nineties, retailers have been paying more and more attention to social 

responsibility in the supply chain. As there was extensive agreement on establishing 

common criteria of their individual procurement guidelines, it was only logical for 

them to pursue a cooperative effort. Originally under the umbrella of the Foreign 

Trade Association of the German Retail Trade (AVE), these efforts developed at the 

European level into the Business Social Compliance Initiative (BSCI). 

By Dr. Alexandra Hildebrandt 

10 


Best Practice 


The goal of the BSCI is to coordinate the 

varied efforts of its member companies 

to improve workers living and working 

conditions in the factories, bundle their 

experience and act faster and more efficiently 

together. In addition, a uniform 

stance towards suppliers, various stakeholders 

and governmental authorities 

gives the Corporate Social Responsibility 

(CSR) efforts more a higher emphasis 

and more power. So far (as of February 

2009), the BSCI already has more than 

250 members from 11 European countries 

and enjoys a high credibility and 

recognition in politics and business, both 

nationally and internationally. 

We are among the first BSCI members 

and have worked since the start of the 

Initiative on developing instruments to 

improve and check social standards in 

our supply chain. While the focus at first 

was on goods requiring a large amount 

of direct manual labour (clothing, home 

textiles, toys or shoes/leather goods), the 

focus of the Initiative changed to cover 

factories that are more technology-intensive 

such as hardware manufacturers. 

The BSCI process model helps suppliers 

improve the situation in their production 

sites through several successive 

steps. Starting with awareness raising, in 

which suppliers, through training, are 

exposed to the issue of social responsibility 

and standards. The next step the 

process requires a self-assessment. If 

this assessment is done honestly and 

thoroughly, and after good preparation, 

no unpleasant surprises are expected 

from the subsequent audit. 

Currently, twelve certified auditing companies 

are authorized to perform BSCI 

audits: These companies conduct their 

audits independently and according to 

BSCI standards. This ensures objectivity 

and comparability of final results worldwide. 

An audit is being conducted over 

the period of several days and finishes 

with a report, including a corrective 

action plan (CAP). 

Experience shows that carrying out the 

CAP in the set timeframe frequently 

causes difficulties. In order to address this 

problem we are working together with 

the supplier and carry out qualification 

measures in the form of special workshops, 

individual discussions or training 

for the suppliers and also help develop 

ideas and possible solutions on site. 

A re-audit after implementation of the 

CAP usually has two outcomes: 1) It 

confirms that the agreed measures have 

been carried out and the factory complies 

with all required social standards, or 2) 

it shows the need for further improvement. 

Once the audit is successfully 

completed it will be three years before a 

follow-on cycle audit is being conducted 

to ensure that the level achieved has 

been maintained. 

Regarding the financing of a BSCI audit, 

our company has decided that suppliers 

must pay the costs. Other BSCI members, 

which largely work with exclusive suppliers 

and/or whose portfolio of suppliers 

is much smaller and largely stable, bear 

the audit costs themselves. 

How do things look in practice? 

The CSR team directly cooperates with 

employees of the Asian purchasing agent 

Li & Fung. They are in direct in contact 

with the suppliers on organizational 

issues during the BSCI process and are 

also involved in the progress checks in 

our production sites. In addition, new 

suppliers without “Group experience” 

are looked at in a pre-check, the so called 

factory evaluation and are evaluated on 

their suitability and need for development. 

Due to the large number of Group suppliers, 

we started with the top revenue 

providers and are currently working 

with suppliers in the broad middle of 

the revenue range. Starting in 2010, we 

will also integrate suppliers with lower 

revenues into the BSCI audit process. 

The suppliers we are working with to 

improve social compliance have about 

two months to meet their audit obligation. 

A supplier can also always choose 

to undergo an audit independent of the 

CSR team’s program. 

In some cases it also happens that several 

attempts are needed before our factories 

are truly “socially compliant”. But it does 

not fit our understanding of responsibility 

and sustainability to drop a supplier 

simply because conditions in its factories 

do not fully meet our requirements. 

Exceptions are the “No-Gos”, which all 

our suppliers are aware of, such as child 

labour or forced labour. 

However, every “problem supplier” is 

looked at on an individual basis. In 2007 

for example, it came to our attention that 

a Chinese factory employed a worker 

that was only 15 years old (the legal 

minimum age is 16 in China). Since the 

family urgently needed her income and 

only a few months remained until her 

16th birthday, it was agreed to finance 

the girl’s school attendance and let her 

work reduced hours (as allowed under 

national laws) at full pay. The supplier 

was warned and received targeted individual 

training. 

But such pragmatic solutions cannot 

always be found for all participants. 

There are also suppliers who have no 

interest in improving conditions in their 

production sites. If these suppliers fail to 

show evidence of changes they made or 

proof of being compliant despite all our 

efforts, an escalation process is initiated. 

This extends from actions and interventions 

by the CSR team to the involvement 

of the responsible parties at Li & 

Fung and ultimately the buyers of the 

individual Arcandor Group companies 

doing business with these suppliers. If 

these measures do not bear fruit, then, 

in the interest of the Group and as a 

last resort, our words are followed by 

actions and the business relationship 

is ended. 


Bayer 

The Bayer 

Climate Program 

12 


Best Practice 

Environment 

We at Bayer consider climate change to be the most pressing challenge facing the world 

today. After all, climate change endangers the natural basis of all our commercial 

and social actions. The consequences for company policy are clear – in this time of global 

financial and economic crisis in particular, it is crucial that companies set a course that 

will steer them towards sustainability. This also involves making a clear commitment 

to climate protection. As part of our comprehensive climate program, Bayer is working 

to develop solutions across a range of areas that will enable the company to make a 

contribution to tackling the challenges posed by climate change. 

By Dr. Wolfgang Große Entrup 

As a founding member of the UN Global 

Compact, we support the objectives and 

principles of this initiative wholeheartedly 

and are also committed to pursuing 

our own initiatives to spread and 

implement these goals and principles 

worldwide. One central area of activity 

is environmental protection. This issue 

has long been given high priority at 

Bayer. As a company with international 

production operations, we believe the 

judicious use of natural resources is a 

major part of its corporate social responsibility. 

This is particularly true when it 

comes to climate protection and tackling 

climate change. 

As an emitter of greenhouse gases, the 

company is aware that it is part of the 

problem. For that reason, the Group 

took steps early on to implement improvements 

in its production processes, 

introduce new technologies, and opt 

for efficient combined heat and power 

generation in the field of energy supply. 

Between 1990 and 2008, Bayer was 

able to reduce its worldwide greenhouse 

gas emissions by 38 percent. In 2008, 

the company was the only member of 

the chemical-pharmaceutical industry 

headquartered in Europe to be included 

in the Climate Disclosure Leadership 

Index four times in a row. The Climate 

Disclosure Leadership Index is the first 

global climate protection index. 

The Bayer 

Climate Program 

• Clear commitment to climate 

protection 

• Lighthouse projects in the fields 

of buildings, agriculture and 

production 

• Further measures: company 

vehicles, business travel and IT 

• Bayer Climate Award and 

scholarships 

• Expenditure on climate-related 

F&E and projects: EUR 1 billion 

(2008-2010) 

However, Bayer is also part of the solution. 

Many of the company’s products 

contribute towards cutting energy consumption 

and therefore CO2 emissions. 

For example, materials from Bayer are 

used to provide effective insulation for 

houses and refrigerators, and to manufacture 

lighter-weight vehicles with lower 

levels of consumption. The materials 

themselves also display very good energy 

credentials – raw materials from 

Bayer that are used to manufacture polyurethane 

for insulation, for example, save 

more than 70 times the energy needed 

to produce them in the first place. 

The Bayer Climate Program 

Bayer is keen on playing an even more 

prominent role in addressing the climate 

issue and pursuing climate protection 

goals. To that end, the company launched 

the Bayer Climate Program at the end of 

2007. Scheduled to continue for several 

years, the program clusters the many and 

varied skills of the subgroups and service 

companies with the aim of boosting 

climate protection. Between 2008 and 

2010, Bayer will invest EUR 1 billion in 

climate-relevant research and development 

and various projects. 

The first lighthouse projects implemented 

under the auspices of the Bayer Climate 

Program are the EcoCommercial Build- 


Bayer 

ing – a global concept for zero-emissions 

buildings in the office and industrial 

sector – the Bayer Climate Check for 

analyzing and reducing greenhouse 

gas emissions in industrial production, 

and the development of stress-tolerant 

plants in the agricultural sector. This 

comprehensive program also includes a 

low-emission fleet of vehicles, increased 

use of cutting-edge video-conferencing 

technology to reduce the need for business 

trips, and energy-saving measures 

in the Group’s data centres. 

Bayer set itself emission targets to be implemented 

in the various sub groups. According 

to today’s estimates, the Group’s 

greenhouse gas emissions will remain at 

the level of 2007 up to 2020 despite an 

expected growth in production after the 

economic crisis will have been overcome. 

There are two more special initiatives we 

launched under our climate program. 

We founded the Bayer Climate Award 

to recognize the work of outstanding 

climate researchers. And we honor school 

students who have demonstrated a particular 

commitment to climate protection 

with scholarships. 

The EcoCommercial Building 

Energy consumption in buildings is responsible 

for around 20 percent of global 

greenhouse emissions. Bayer Material- 

Science is focussing on buildings in the 

office, industrial, and social amenities 

sector, a field that has remained somewhat 

neglected up till now. Working 

in cooperation with partners, the Bayer 

subgroup has developed the EcoCommercial 

Building, a new concept for zeroemissions 

buildings. Insulation materials 

are crucial to this project. Alongside the 

fact that the EcoCommercial Building 

generates its own renewable energies, 

these materials ensure that buildings of 

this type save energy and thus can fulfil 

their own energy needs independently 

– and achieve a CO2-neutral status as 

an annual average. 

What is special about this concept is 

that it can be adapted to the world’s 

different climate zones. In warm regions, 

buildings must be insulated against the 

heat, while in cool regions they must be 

protected against the cold. Bayer itself 

is constructing the first EcoCommercial 

Buildings in two different climate 

zones. The Group’s new administrative 

premises currently under construction 

near New Delhi will consume 70 percent 

less electrical energy than buildings 

constructed using methods common in 

this subtropical region of India. Meanwhile, 

in the more moderate climate 

of Germany, Bayer is building an emissionsneutral 

company kindergarten at 

its Monheim site. 

The Bayer Climate Check 

Bayer Technology Services developed the 

Bayer Climate Check with the aim of increasing 

energy efficiency and reducing 

greenhouse gas emissions in industrial 

production. This enables the company 

to run checks on production sites worldwide 

to determine their impact on the 

climate and identify areas where there 

is potential to cut emissions. The new 

feature of this tool is that it also includes 

the pre-production processes – raw 

materials, energy, and logistics – in 

the analysis. 

Bayer in figures 

Key businesses in health care, 

crop science and high-tech 

materials: 

• 108,600 employees* 

• Sales of EUR 32.9 billion* 

• 316 companies* 

• R&D budget 2009: 

EUR 2.9 billion 

* As at the end of 2008 

We use the Climate Check to examine 

over 100 production sites worldwide 

by the end of 2009, thereby recording 

information on around 85 percent of our 

greenhouse gas emissions. Steps will then 

be taken to make full and intelligent use 

of the potential savings identified. Initial 

results reveal that the Bayer Climate 

Check can help the Group to cut its current 

greenhouse gas emissions by around 

10 percent. In addition, the management 

also takes the Climate Check into account 

when making decisions on new investments. 

This new style of climate check is 

TÜV-certified and is also made available 

to other interested companies. 

Stress-resistant plants 

Climate change is threatening to further 

exacerbate issues such as heat and 

drought that are already reducing the 

agricultural yield of crops by up to 

80 percent. The world’s population is 

further growing, but the land available 

for cultivation is limited. Furthermore, 

the demand for biofuels is rising. The 

ultimate aim is to safeguard and even 

increase crop yields. As a result acricultural 

productivity has to be boosted 

significantly. Researchers from Bayer 

CropScience are seeking to make plants 

more resistant to stress factors such 

as drought, heat, cold, and soil salinity 

by unlocking the potential offered 

by biotechnology, for example. Bayer 

CropScience is also already supplying 

innovative crop protection agents that 

help to safeguard or increase crop yields, 

even under stressful conditions. 

Saving energy in further areas – 

company vehicles, business trips, 

and IT 

Bayer aims to cut greenhouse gas emissions 

from its company vehicles by 20 

percent by 2012. In the first year of the 

climate program, the accelerated introduction 

of company cars with lowconsumption 

engine technology and alternative 

drive systems (e.g., hybrid) in 20 countries 

resulted in a 5 percent reduction in associated 

greenhouse gas emissions. 

14 


Best Practice 

Environment 

The chemical park in Leverkusen 

Today’s cutting-edge video-conferencing 

technology offers an appealing alternative 

form of communication that dispenses 

with many of the disadvantages 

of teleconferencing. This technology 

means it is possible to generate life-size 

representations of video conference 

participants, creating a realistic meeting 

scenario and allowing non-verbal 

communication. In cases where there 

is no need for someone to be present 

in person, these telepresence rooms 

prevent staff from having to travel 

long distances to attend meetings. We 

have set up the first such so-called telepresence 

rooms equipped with the 

latest video technology at the Group 

headquarters in Leverkusen (Germany) 

and at the Pittsburgh site in the United 

States. Other key Bayer sites are set to 

follow suit. 

In every large company, IT also offers 

the potential for making sizeable energy 

savings. Using a range of measures, we 

have set ourselves the task of reducing 

the energy consumption of our three 

data centres located at the Group headquarters 

in Leverkusen and at the sites 

in Pittsburgh and Singapore also by 20 

percent by 2012. This project includes 

energy-saving concepts for server installation 

and computer usage and, in addition, 

reductions in paper consumption. 

To make optimum use of the current 

of air needed to cool computer chips, 

for example, computers will be set up 

in such a way that cold and warm air is 

kept apart as much as possible. 

Promoting scientific and social 

debate on climate change 

Bayer is employing two initiatives to promote 

scientific and social debate on the 

challenges posed by climate change, and 

to recognize specific personal achievements 

made in this area. The Bayer Climate 

Award is the first international 

prize for outstanding contributions to 

fundamental climate science research. 

The Bayer Science & Education Foundation 

presented the award for the first time 

in 2009 in Berlin to Professor emeritus 

Eberhard Jochem from the Fraunhofer 

Institute for Systems and Innovation 

Research in Karlsruhe (Germany). Professor 

Jochem, who was involved in the 

Intergovernmental Panel on Climate 

Change (IPCC) and other projects aimed 

at developing an international climate 

policy, was honoured for his pioneering 

technological and economic contributions 

to research into energy efficiency. 

He has demonstrated not only that it is 

possible to achieve an 80 percent increase 

in energy efficiency in the industrialized 

nations before the end of this century, 

but also that it is an economically viable 

proposition. The Climate Award has a 

prize fund of EUR 50,000 and is awarded 

every two years. 

Sustainability Camps organized by independent 

organizations open up opportunities 

to gain first-hand information 

about climate protection and to 

share views and opinions with other 

likeminded people. Each year, the Bayer 

Science & Education Foundation awards 

scholarships to school students so they 

can attend these events. In doing so, we 

recognize and reward the dedication 

shown by the people who themselves 

are the reason why it is crucial we are 

proactive in tackling climate change 

today – the generation of tomorrow. 


BASF 

1+3: Building a 

responsible value chain 

In China, there are over 32,000 chemical enterprises and many more if we consider the entire 

supply chain. Over 90% of the related companies are small and medium-sized enterprises 

(SMEs), which contribute strongly to the overall economic activities of the country but often 

find it hard to mobilise enough resources to effectively practise sustainable development. 

Thus, BASF in 2006 initiated a program called “1+3”, which mobilises and supports its 

partners and suppliers in China to improve their corporate social responsibility (CSR). 

16 


Best Practice 

Environment 

By JinXiu-Lucy Li 

BASF believes the effort of sustainability 

should involve the entire value chain. 

For example, the analysis of emissions 

and energy consumption should not be 

limited to only one single producer of a 

chemical, but should take into account 

the entire lifecycle of a product, from 

raw materials sourcing to disposal. If 

all suppliers and customers adopt green 

practices by maximising the "good inputs" 

and minimising the "bad outputs", then 

the whole supply chain would help in 

mitigating risks and speeding up innovations. 

The “1+3” CSR project is now gradually 

building up a responsible value chain 

by spreading and sharing the principles 

and practices of sustainability. To date, 

60 local and international companies in 

China are participating in the project, 

thus enhancing performance in, for example, 

environmental protection, health 

and safety (EHS) management. 

What does “1+3” stand for? 

The “1+3” CSR project was initiated by 

BASF in October 2006 as an innovative 

approach in supply chain management. 

It was launched as a program under 

the China Business Council for Sustainable 

Development (CBCSD). CBCSD is a 

coalition of leading Chinese and foreign 

enterprises registered and operating 

in China, established through the 

Ministry of Civil Affairs. It helps the 

World Business Council for Sustainable 

Development (WBCSD) shape the sustainable 

development agenda at the 

local level and also provides a platform 

for exchange and cooperation among 

businesses, government and social communities 

in China. 

A CBCSD member company like BASF 

forms teams with three types of business 

partners: customers, suppliers and logistics 

service providers – mostly SMEs – 

with the aim of promoting sustainability 

and giving guidance for best practices 

or customised solutions. Each of the 

three selected partner companies then 

introduces the same concept to a further 

three business partners in its own value 

chain: A snowball effect is created. 

BASF had six “1+3” partners participate 

in its first round, which concluded in July 

BASF has been a committed 

partner to Greater China since 

1885. It is one of the biggest 

foreign investors in the Chinese 

chemical industry. The company 

has approximately 6,300 

employees and operated 19 BASF 

wholly owned subsidiaries and 

10 BASF joint ventures in 2008. 

BASF’s sales in Greater China are 

about €4.2 billion. 

For further information, please visit 

www.greater-china.basf.com. 

2008. These were customers – Huafeng 

Group, Guangzhou Liby Enterprise Group 

Co., Ltd., Beijing Plaschem Trading Co. 

Ltd. and Zhejiang Kaipute Spandex Co., 

Ltd. – as well as a supplier – Zhejiang 

Qiming Pharmaceutical Co., Ltd. – and 

a logistics service provider – Sinochem 

International Corp. Currently, BASF is 

running the second round of the “1+3” 

CSR project. 

Dr. Jürgen Hambrecht, BASF chairman 

of the board, sees sustainability as a key 

factor to ensure long-term economic 

success. This is crucial, as the concept 

needs commitment at the highest level. In 

China, BASF is the chair of the Association 

of International Chemical Manufacturers 

(AICM), which aims to promote safe and 

clean practices in the manufacturing, 

distribution and use of chemicals. In 

December 2006, BASF, along with other 

member companies, such as Bayer, Dow 

Chemical, Exxon Mobil, Merck Chemical, 

Degussa Cyprus, Romania Gate Haas, DSM 

and the Shanghai-based China Europe 

International Business School (CEIBS), 

invited the leaders of 25 Chinese chemical 

enterprises to participate in training on 

EHS topics. This meeting instilled in them 

a strong awareness of the importance of 

sustainability as well as an understanding 

of how it could be implemented throughout 

their businesses. 

"Ambassador + expert": jointly 

ensuring sustainability 

If you strive to address a complex topic 

like sustainability, you need to get a feeling 

for your partner’s specific needs. That 

is why the BASF team started its work on 

the “1+3” project by sending questionnaires 

out to the partners, which helped 

them identify their areas for improvement. 

An expert team was then set up 

for each partner according to the chosen 

area of cooperation. These teams consist 

of a representative of the relevant BASF 

business unit – the “ambassador” – and 

one BASF “expert” in the specific EHS 

topic. This could be pollution prevention 

or occupational health and safety, 

for example. The teams then develop 

a tailored plan on how to improve the 

partners' sustainability management 

capacity and how to integrate the concept 

into their corporate strategies. 

For example, one common problem in 

China that “1+3” participants can address 


BASF 

is a lack of knowledge on how to obtain a 

Material Safety Data Sheet (MSDS), which 

is obligatory in China and describes the 

chemical and physical properties of a 

material and provides advice on safe 

handling and use of the material. 

Hands-on approach: 

BASF developed tailor-made programs 

according to “1+3” partners’ specific 

requests, ranging from seminars and 

training to site visits and implementation. 

Through these, partners started to 

see the bigger picture of how and where 

to improve their EHS areas in a systematic 

way. BASF also provided training for 

a Road Safety Quality Assessment System 

(RSQAS), which is a preventive program 

to strengthen the safety and reliability of 

chemical transportation in China. 

In so-called “Eyes for Safety” visits, the 

six BASF expert teams first went to inspect 

each partner’s production site in 

order to get a picture of the partner’s 

EHS status and make it aware of the 

areas which might have been overlooked. 

Then, the BASF experts and the partner’s 

EHS managers together identified priority 

cooperation areas. “The BASF visit 

provided good insight for our middle 

management on environmental protection 

and safety management,” said Mr 

Zhang Qiming, the Board Chairman of 

Zhejiang Qiming Pharmaceutical Co. Ltd. 

after an “Eyes for safety” visit. 

their improvement progress, which are 

then quickly addressed by BASF experts. 

This proved to be a very helpful tool for 

our partners to view their implementation 

as a long-term process and to ensure 

continuous improvement. 

During a “1+3” sustainability self-assessment 

seminar in July 2008 in Shanghai, 

senior executives from six “1+3” partners 

and the BASF project team attended a 

roundtable discussion. BASF experts 

presented detailed analysis on their six 

Responsible Care (RC) systems and best 

practices. This trust-filled sharing not 

only of good experiences but also of 

challenges and related problem-solving 

techniques with regard to practical implementation 

of sustainability aspects 

is another fruitful result of the whole 

project. All participating companies are 

committed to continue to implement 

their social responsibility objectives by 

putting more sustainability ideas into 

practice. 

The fruits of the “1+3” 

sustainability project 

Improving value chain competitiveness and 

creating new customer relations: 

By disseminating the “1+3” ideas and values 

to more partners, BASF continually 

broadens the platform for dialogue with 

them and puts an innovative customer 

relationship into practice. Mutual trust is 

established between the two parties, effectively 

laying the foundation for a longterm 

strategic partnership. This not only 

strengthens BASF's inter-departmental 

cooperation, but also reduces risk in its 

value chain. 

In the implementation phase, the project 

groups also provide training to address 

common issues faced by all companies. 

Every project group also reviewed one of 

their partner’s reform strategies. 

Sustainable solutions need 

staying power 

Sustainability solutions are usually implemented 

over a long-term period. This 

is why “1+3” aims to accompany our 

partners beyond the first year. In order 

to help our partners to ensure sustained 

improvement in their sustainability practices, 

BASF offers self-assessments in the 

form of a questionnaire asking about 

“Difficult times especially show that companies which conduct their business 

sustainably and responsibly are more successful in the long-term. That is 

why sustainability is a firm part of BASF’s strategy: Long-term success is 

not possible unless the environment and society are treated carefully. We 

are therefore committed to implementing the principles of the U.N. Global 

Compact.” 

Dr. Jürgen Hambrecht, BASF chairman of the board 

18 


Best Practice 

environment 

Raising awareness of sustainability amongst 

participating enterprises and satisfying their 

developmental needs: 

As China’s economy is increasingly integrated 

into the global economy, actively 

practising sustainability and integrating 

it into business practices has been essential 

to maintain core competitiveness. 

In this respect, BASF’s six partners all 

believe that the “1+3” project was just 

what they needed. They have benefited 

from the free access to advanced sustainability 

management techniques from a 

large multinational corporation such as 

BASF. The six enterprises have integrated 

the “1+3” concept into their corporate 

strategies by improving their employees’ 

workplace safety and their companies’ 

surroundings as well as strengthening 

dialogue with various stakeholders. They 

have also held seminars themselves on 

process safety management systems or 

sustainability practices. One partner has 

even submitted a proposal to the National 

People’s Congress aiming to promote the 

“1+3” concept. At the same time, the six 

partners have kept focused on emissions 

reduction in the production process and 

promotion of the sustainability concept 

in their own supply chains. 

the 1+3 program 

MeMBer CoMPanY 

suPPlIer 

all participating companies are 

committed to continue implementing 

their social responsibility objectives by 

putting more sustainability ideas 

into practice at the conclusion event to 

"1+3" project in July 2008. 

China Business Council for 

sustainable development 


CustoMer 


ContraCtor 

Role-model effect: 

In January 2008, the United Nations 

Global Compact named the BASF “1+3” 

CSR project a case study that was then 

shared among members and enterprises 

worldwide. In China, Zhai Qi, executive 

secretary-general of the China Business 

Council for Sustainable Development 

(CBCSD), believes that “1+3” has already 

become a model for the dissemination of 

sustainability principles throughout the 

Chinese economy because it has proved 

particularly successful among small and 

medium-sized companies. 

The snowball effect 

goes on… 

After the successful implementation of 

the “1+3” CSR Project, BASF launched the 

"Golden Bee" concept with China WTO 

Tribune to further promote sustainability 

in China. The analogy of honeybees was 

chosen because the bees naturally create 

a win-win situation. BASF, together with 

China WTO Tribune and China Ocean 

Shipping (Group) Company, announced 

the "2007 Golden Bee CSR China Honor 

Roll" in April 2008. Sixty of the 205 participating 

enterprises were honoured as 

pioneers and role models, based on their 

corporate governance, overall business 

performance and CSR practices. 

BASF firmly believes that shouldering 

sustainability challenges leads to stronger 

competitiveness. Since China’s ambitious 

sustainable development goals cannot 

be achieved by large companies alone, 

BASF hopes that more local enterprises 

will gradually join in to share their sustainability 

practices with a large number 

of small and medium-sized companies 

along their supply chain – just like a 

bee disseminating pollen. Following 

this model, the partners benefiting from 

their involvement in the project would 

commit to continuing the “1+3” model 

– which means the number of partners 

will soon triple, and so on. If this process 

continues to replicate itself, a new 

paradigm can be created. The practice 

of the “1+3” model could influence all 

businesses and eventually the entire 

society. 


CapGemini-Naandi Collaborative Partnership 

Creating an Impact 

on Education for Girls 

in India 

With girls representing two-third of the world’s uneducated children and women 

representing two-thirds of the world’s illiterate adults, it has been acknowledged that 

successful education for girls and women is a necessary mechanism for breaking the cycle 

of poverty, myths, and social norms, for ensuring the well-being and health of children, 

and for the long-term success of developing countries. 

By Carolyn E. Nimmy and Cecilia Schrijver 

20 


Best Practice 

human rights 

Capgemini Group & naandi foundation 

Whilst education in India is free, the 

materials to support that education are 

not. These materials includes uniforms, 

clothes, notebooks, and personal hygiene 

products – expenditures that underprivileged 

families are often unwilling or 

unable to make for their daughters. 

Project Nanhi Kali is a participatory project 

where individuals, groups, and companies 

are encouraged to sponsor the education 

of girls. The Nanhi Kali project is jointly 

managed by the Naandi Foundation and 

the K.C. Mahindra Education Trust. The 

Capgemini Group is currently the second 

largest corporate sponsor of the Nanhi 

Kali project, we support the education 

of over 10,000 girls in India. 

The birth of a successful 

employee-led initiative 

What started as a friendship between 

Capgemini India and Capgemini Norway 

while looking for ways to support the 

Rightshore® (Offshoring) strategy and 

to promote understanding and cooperation 

has now grown into a truly global 

Capgemini Group program and a strong 

Naandi-Capgemini relationship. 

uK 

• Program deployed 

• Supports 2,250 girls 

• naandi ASE 

north aMerICa 

• Coming soon 

BelGIuM 

• Coming soon 

PortuGal 

• Christmas Card initiative 

norWaY 

• naandi norway launched 



• Art Camp and Auction 

CaPGeMInI unIversItY 

event 

• naandi Awareness 

event, June 2008 

• Supporting 80 girls 

netherlands 

• Executive Dinner 

• Event supporting 300 

girls 

• Power of 10 initiative 

will be deployed 

CaPGeMInI GrouP 

• Successful E-Card 

Initiative and IWd 

Celebration Initiative, 

2007 / 2008 

• Supporting 146 girls 

fInland 

• naandi integrated in 

leadership development 

• Program to be launched 

soon 

GerManY 

• Art Camp Event & 

auction 


sWeden 



slovaKIa 

• SiSp Rightshore 

• Supports 18 girls 

IndIa 


• Supports > 1,000 girls 

australIa 

• Program deployed 1 st 

december 2008 

• Supports 80 girls 

“Many companies have a long history of supporting social projects often driven 

by a philanthropic dimension enabling an ability to ‘give back’ to society. 

this approach has changed with companies now aligning their Corporate 

responsibility and sustainability approach to their corporate strategy.” 

Carolyn nimmy, vP, Cr & sustainability lead, Capgemini Group 

Today, Capgemini Group and over 10 

countries in the Group are supporting 

the Nanhi Kali project. Several different 

initiatives and schemes have been 

implemented. For example, Capgemini 

India, Norway, Sweden, United Kingdom, 

Australia, Slovakia, as well as Sogeti India 

have adopted the project as a formal community 

initiative. Within those offices, a 

payroll contribution system has been set 

up in which employees have the ability to 

voluntarily contribute to the Nanhi Kali 

project and either individually or collectively 

sponsor the education of a Nanhi 

Kali. Capgemini Norway in particular has 

taken a big step through its collaboration 

with the Naandi Foundation and has 

jointly established its first foundation 

outside of India – Naandi Norway. Many 

of these initiatives are being matched by 

Capgemini, ensuring a combination of 

employee passion and company commitment 

to the Nanhi Kali project. 

Capgemini Finland works together with 

Naandi in their leadership development 

programs and other countries in the 

Group such as Germany, the Netherlands 

and Portugal have launched successful 

initiatives. 

“What’s really worked is the fact that 

there are a lot of Naandi evangelists in 

the Capgemini world! Each country office 

now has an ambassador for Naandi and 

there’s nothing more credible than one 

of your employees – who has been there, 

seen it, and done it – coming back and 

talking about it,” explains Manoj Kumar, 

CEO of the Naandi Foundation. 

Capgemini a people company 

Throughout our 40-year history, Capgemini 

has built its business upon strong ethical 

values that underpin our approach 

to all aspects of our business. Joining 

the UN Global Compact in 2004 was 

a natural extension of these values in 

ensuring we remain a responsible business. 

As a global company and with our 

current growth in developing countries, 

we are aware of the different challenges 

that need to be faced, such as Human 

Rights standards, opportunities for education 

and employment, and the need 

for respect and understanding of different 

cultures. 

Signing up to the ten principles of the 

Global Compact adds to how we can 

contribute and leverage our skills, our 

people, and our know-how to make a 

difference. Our partnership with the 

Naandi Foundation is based on our belief 

that major community programs with a 

strong alignment to a business strategy 

have a far greater impact. Joining the 

forces of our employees with organizations 

such as the Naandi Foundation to 


CapGemini-Naandi Collaborative Partnership 

help others strengthens our team spirit, 

improves communication, and gives us 

a better understanding of the communities 

around us. 

Capgemini has a strong desire to support 

diversity – gender diversity in particular. 

We believe that diversity and the 

elimination of discrimination are key to 

our long-term business health. Working 

with the Naandi Foundation and supporting 

education for girls in India has 

made gender-specific issues more visible 

to all employees and gives our people 

the opportunity to be actively involved. 

This too supports our commitment to 

the first and the sixth principles of the 

UN Global Compact, which concern the 

protection of internationally proclaimed 

Human Rights and the elimination of 

discrimination with respect to employment 

and occupation. 

Our partnership with the Naandi Foundation 

offers Indian girls dignity, education, 

equality, and empowerment – the same 

attributes that our people seek for themselves 

and the company they work with. 

Through our community programs, we 

have the ability to bring the UN Global 

Compact principles, our values, and our 

own business principles alive. 

Capgemini’s community focus 

Aligning our corporate responsibility and 

sustainability approach with our corporate 

strategy provides benefits through 

enhanced reputation, greater consumer 

and employer brand-awareness, as well 

as attracting and increasing employee 

engagement, which have a longer-lasting 

and more effective impact on the community. 

At the heart of our business strategy, 

we focus on creating a diverse, engaged, 

and skilled workforce; developing strong 

client relationships; developing our Rightshore® 

approach; and supporting the 

development of India as a long-term and 

viable business location. 

Our initiatives are aligned to three core 

themes: Education – our conviction 

is that education is the key to helping 

countries and communities develop; 

Diversity – a source of richness and 

competitive advantage; Growth – our 

growth in the developing world brings 

specific duties and is especially relevant 

for our current strategy in India. 

Our partnership with the Naandi Foundation 

is strongly aligned with our business 

purpose and community strategy. 

Not only does it make business-sense 

and ensures employee engagement and 

motivation, we are above all supporting 

the education of many girls in India and 

have a positive community impact. 

Enabling cultural understanding 

and awareness 

Our corporate strategy and Rightshore® 

approach has enabled us to work with 

countries such as India. Our partnership 

has enabled us to change the way we 

think and embrace multiculturalism 

as we become a truly open and diverse 

company that is focussed on changing 

the lives of the girls we support. 

As a global multicultural company, we 

celebrate many different religious festivities. 

For the last two years, we have run 

a holiday season e-card initiative lasting 

from Diwali to the Chinese New Year 

(taking in Christmas, Eid, Hanukkah, 

and Thanksgiving). In the initiative, our 

people are invited to send e-cards to family, 

friends, colleagues, and clients. For 

every 1000 e-cards sent, the Capgemini 

Group funded the education of a girl in 

India. Last year 75,000 e-cards were sent 

and this year 113,000 e-cards. The e-card 

artwork used was made by the girls in 

India through various Art Camps run 

by Capgemini Germany and Norway, in 

which our people spend a day working 

with the children on art pieces. 

Capgemini also actively promotes International 

Women’s Day around the 

Group and we ran an online campaign in 

support of the Naandi Foundation. Our 

people were invited to express support 

for the Nanhi Kali initiative through a 

simple online click – for every 250 clicks, 

“Government statistics in India 

reveal that only three out of 

10 girls who enter elementary 

school complete 10 years of basic 

education. Research has shown 

that the reason for this dropout 

may be as minor as the girl child 

not being able to afford a uniform 

to go to school and could include 

more complex factors like girls 

taking on the responsibility of 

household chores at a very 

young age as a result of gender 

stereotyping” 

Nanhi Kali Project, 2009 

the Group supported the education of 

a girl in India, translating into 33 more 

girls who received support. 

Our simple but effective e-card and click 

campaigns have allowed us to demonstrate 

that, although we may have a consistent 

delivery model across the Group, 

22 


Best Practice 

Human Rights 

we actively make room for everyone and 

create awareness around our differences. 

The marked uptake of participation in 

the e-card and click campaigns shows the 

success and enthusiasm of our employees 

in supporting the Naandi Foundation. 

Because the take-up of the Naandi 

Foundation around the Group has been 

fostered at a grassroots level – without 

mandating initiatives or pushing 

particular diversity platforms onto our 

people – we are changing the way we 

think about diversity. Very soon most of 

our home-grown executive talent will 

have been impacted and touched by the 

program – already, many people have 

visited the girls we are supporting. 

Enabling the development of 

leadership skills 

Community projects can be used to develop 

leadership skills and multicultural 

awareness, both of which are necessities 

in today’s global business world. Such 

programs often require little investment 

when compared to the returns generated, 

but they have the valuable ability 

to accelerate skill-building, cultural 

awareness, pride, and commitments 

whilst maintaining engagement in tough 

times. 

We have integrated the Naandi Foundation 

into our people development at our 

Capgemini University to help illustrate 

to our people the link between the community, 

the importance of diversity, and 

enabling multicultural understanding. 

We are instilling diversity into our DNA 

through people’s appreciation of our 

work with the Naandi Foundation. 

Capgemini Finland successfully launched 

the “Leading Together” program in 2008, 

which is based on a collaboration between 

Capgemini Finland and India. The 

training program intends to impart the 

efficiency of Rightshore® collaboration by 

using the Naandi Foundation as a learning 

vehicle. The teams were charged with 

the assignment of creating an innovative, 

out-of-the-box strategy to help raise the 

visibility of the Naandi Foundation, both 

inside and outside Capgemini. 

Community program as a 

key differentiator over tough 

competition 

Community programs can also be a great 

means to collaborate with clients. For 

example, joint sponsorship or matching 

programs can involve both client and 

supplier by building increased collaboration 

but also by generating pride and 

a sense of shared achievement amongst 

the client/supplier teams working together. 

Our Norwegian team started working 

with the Naandi Foundation in relation 

to the growth in business being delivered 

out of India. Business growth came when 

we extended the Naandi Foundation to 

client partnerships, whereby each Indian 

employee participating in a client account 

results in a girl being supported 

by both the client and our Norwegian 

affiliate. One of our clients in Norway 

chose Capgemini for its capability and 

also indicated that Capgemini Norway’s 

corporate social responsibility (CSR) practice 

had been an important component 

in selecting a supplier. It was Capgemini’s 

support of the Naandi Foundation 

in India that become a key differentiator 

in winning the deal. Capgemini 

made a commitment whereby for every 

person working on the client account, 

Capgemini would sponsor a schoolgirl; 

the client subsequently agreed to match 

Capgemini’s commitment. This is a great 

example of CSR in action and the difference 

it can make to clients, employees, 

and the community. 

Client engagement is the ultimate accolade 

for this type of program, and to 

have clients willingly agree to join in 

our program and sponsor girls in India 

is a strong endorsement. “In the case of 

Capgemini Norway, Capgemini registered 

as a charity, known as Naandi Norway, 

the first Naandi outside of India. As a 

result, Capgemini Norway now has a 

very interesting profile in Norwegian 

society. Norway’s parliament knows 

about the relationship with Naandi, as 

does Norway’s media. And potential 

Norwegian employees know about it 

as well as current and potential clients. 

So while following passion the initiative 

has also been converted into a business 

opportunity to raise the profile of the 

company in Norway and win business. 

To my mind it’s a fantastic way of how 

you can start with just a link to a charity 

and take it to a new level,” says Manoj 

Kumar, CEO of the Naandi Foundation. 

Enhancing employee engagement 

During these uncertain times, the need 

to motivate and keep employees engaged 

has never been more vital. Research 

has shown that high employee engagement 

has a direct impact on the bottom 

line. For many years, employee survey 

results have been analyzed to identify 

key drivers or opportunities to increase 

people engagement. Our Capgemini 

Global Group Employee Survey 2008 

shows that our community work is a 

key driver in employee engagement and 

retention of talented people. Employees 

often enjoy participating in community 

programs, making them proud of what 

their company is doing. In the more 

socially aware environment of today, 

we can mark the shift from feel-good 

programs to those that are aligned to 

the corporate strategy and are designed 

to ensure motivation. 

Our relationship with the Naandi Foundation 

in India and our support for the 

Nanhi Kali project has helped us contribute 

to a better livelihood for the 

more unprivileged groups in society. The 

partnership has not only enabled over 

10,000 girls in India to have the right 

to education, it has also brought along 

several business benefits, including support 

for our Rightshore® strategy, building 

client intimacy, ensuring employee 

engagement, and helping our people 

understand the importance of human 

rights, the combat against discrimination 

and the value brought along by cultural 

differences. 


Carrefour 

For you, for us – 

Carrefour Commits Itself 

Since 2001, Carrefour Colombia has adhered to the United Nations Office on Drugs and 

Crime (UNODC) program for the voluntary, gradual eradication of illicit plantations. In 

another project, in Bangladesh, the focus is on the workers of controlled products suppliers. 

Training helps them learn more about their labour and Human Rights. 

By Helene Jessua 

The first best practice is about encouraging 

farmers to give up illicit cultivation: 

The idea is to assist those who have given 

up coca cultivation so that they can earn 

adequate incomes legally. This program 

consists of convincing Colombian farmers 

who cultivate illicit coca to change 

to products that are mainly consumed 

in their country, such as beans, cacao, 

palm hearts, coffee, honey, coconuts. 

To achieve this, and to ensure adequate 

income to farmers, it is important that 

a company can ensure the marketing 

of these substitution products. Thus, 

within the framework of the UN program, 

Carrefour has implemented practices already 

in place in other countries, such as 

guaranteeing a minimum price to enable 

farmers to live decently and committing 

to this in the long term. 

The products are selected under the UN- 

ODC Alternative Development Products 

program and by the Colombian government’s 

Presidential Agency for Social 

Action. In some cases, the United States 

Agency for International Development 

(USAID) is also involved in the project. 

After checking farmers’ compliance with 

the “zero illicit” policy, the products are 

presented by the UNODC to Carrefour 

Commercial and Social Responsibility 

teams. Carrefour also offers technical 

support on quality, logistics, and packaging 

provided by its commercial team. To 

promote the products, Carrefour communicates 

in-store and places signs on 

the shelves next to the products, which 

state: “For you, for us, Carrefour commits 

itself. In buying this product, you also 

support the UN and national government 

program for substitution of illicit 

cultivation.” 

Two examples of projects 

supported by Carrefour in the 

program: 

Agroamazonia was created in mid-2001 

by six associations of farmers that signed 

an agreement for the substitution of 

illicit cultivation, in line with the National 

Alternative Development Plan, 

which today is called Plan Colombia. 

The palm heart of Putumayo produced 

by Agroamazonia was the first product 

listed by Carrefour within the framework 

of the program in 2001. Agroamazonia 

includes 332 families and 660 hectares of 

palm. The project has thus enabled the 

eradication of more than 600 hectares 

of coca cultivation. 

Carrefour also works with Ecolsierra, a 

network that brings together more than 

700 families located in Sierra Nevada de 

Santa Marta (north of Colombia), who 

work to strengthen their productivity 

whilst implementing sustainable 

ecological agriculture methods. These 

families produce organic honey and 

coffee. Through application of these 

clean production methods, conservation, 

recuperation, and protection of natural 

resources can be achieved. 

24 


Best Practice 

Human Rights 

Situation of the program today 

Today, within the program, Carrefour 

offers 45 products in its Colombian stores 

and works with 12 suppliers representing 

more than 3000 families from the 

most disadvantaged area in the country, 

which is also most affected by illicit cultivation. 

In November 2004, Carrefour 

Colombia received a special prize by 

the UNODC for its global contribution 

within the program for the voluntary, 

gradual eradication of illicit plantations. 

This UN civil society program rewards 

organizations and individuals who have 

contributed to the eradication of drugs 

and crime, corruption, and terrorism in 

the civil society. This was the first time 

the award was given to a company. 

Best Practice 2: Training of workers 

in Bangladesh 

The Carrefour Group has been committed 

to the respect of Human Rights 

throughout its supply chain for more 

than 10 years. To this aim, the Group 

has been working with the International 

Federation for Human Rights (FIDH) since 

1998 and drew up a Social Charter in 

2000 signed by all its controlled products 

suppliers, who are audited on their 

compliance with it. Because training and 

awareness-raising of workers are key for 

improvement of working conditions in 

the factories, Carrefour and FIDH decided 

to launch a training project in Bangladesh 

with a local NGO, Karmojibi Nari (KN). 

The aim is to give the workers better 

knowledge about fundamental rights 

at work. The program was initiated as a 

pilot project in 2004 and then launched 

in 2006 as a three-year project with the 

objective of targeting all Carrefour's suppliers 

in Bangladesh. 

This three-year “fundamental rights at 

work” training program is named “To 

Ensure Decent Workplace for Better 

Livelihood and Increase Productivity.” 

Trainings sessions target three 

different groups, in the following 

order: 

1| Top-level management: Through a 

two-hour discussion at the Carrefour 

office in Dhaka, Carrefour and KN 

explain the content of the program 

and discuss with factory owners the 

importance of training workers about 

their rights and responsibilities, as 

well as the link between social compliance 

and increased productivity. 

2| Mid-level management training: This 

is a one-day on-site training with a 

main focus on gender discrimination. 

This training is to help the participants 

become more aware of what it 

means to be well-behaved, motivated, 

and heedful towards workers, how to 

find problem resolutions, and how 

to achieve productivity maximization. 

This training is key, as conflicts 

between workers and their direct 

supervisors are common, with the 

majority of supervisors being mainly 

men and about 75 percent of the 

workers being women. 

3| Workers: The aim of this training 

is to inform workers of their rights, 

and to build their capacities in collective 

bargaining, organizational 

skills, and conflict resolution. This 

training consists of a one-day on-site 

training session. Each training group 

is composed of workers both selected 

by the management and randomly 

by KN. Those workers receive five 

copies of the leaflets, which contain 

information about: the right to an appointment 

letter (contract); the service 

book; ID cards; wages; working hours; 

occupational health and safety; leaves 

for sickness, maternity, holiday, and 

festivals; duties and responsibilities. 

The leaflets are then distributed to 

other workers and they are assigned 

the task of disseminating what they 

have learned. 

Concrete results 

The management has increasingly realized 

the importance of having women 

as supervisors. KN noticed that workers 

show a genuine interest in knowing 

about their legal rights. After the training, 

workers become aware of the rights 

they have under the law and become 

more conscious of issues such as sexual 

harassment and complaint procedures. It 

was found that in some factories, workers 

asked for their rights and concrete 

changes happened in some workplaces 

following their demands (maternity leave 

with wages, overtime rates, canteen facilities, 

etc.). Without this program, no 

local NGO would ever have been allowed 

to access the factories and educate the 

workers within the workplace. The challenge 

now is to find ways to reach out 

to all workers. 



Lowering CO2 emissions 

in Company-wide 

effort to protect the 

environment 

Coca-Cola Hellenic, the 

largest independent bottler 

of Coca-Cola products in 

Europe, is constructing 15 

Combined Heat and Power 

(CHP) units in 12 countries 

as part of a companywide 

plan to significantly 

reduce CO 2 

emissions in its 

operations. 

Coca-Cola Hellenic estimates that the 

amount of energy used in its operations, 

involving production facilities, cooling 

equipment and transportation, is currently 

approximately 890,000 tonnes 

across 28 countries. The figure has been 

cut by 28% over the past 5 years, and it 

is expected that initiatives now being 

undertaken will result in a further reduction 

of 20% by the end of 2010. The CHP 

plants are the cornerstone of Coca-Cola 

Hellenic’s energy reduction strategy, 

which is being instituted throughout all 

operations, involves all employees, and 

engages suppliers, customers, governments 

and local community organisations. 

Construction is being undertaken in 

cooperation with the US-based firm 

Contour Global, a leading developer 

of energy-efficient systems which use 

natural gas and capture and reuse heat 

from power generation. The units provide 

all power needs, including heat, 

cooling and electricity, and also capture 

CO 2 

, for industrial use. Excess electricity 

will be delivered to the national grid. It 

is anticipated that when the units are 

completed in 2010, they will achieve 

an annual reduction in CO 2 

emissions 

of more than 20% across all production 

facilities. 

“The decision to construct the 15 CHP 

plants was announced in early 2008 as 

part of the Company’s overall commitment 

to Corporate Social Responsibility 

(CSR), to the sustainable development 

of its operations, and to the communities 

it serves,” said Doros Constantinou, 

Managing Director of Coca-Cola 

26 


Best Practice 

Environment 

Hellenic. “Construction of the plants is 

now progressing as the necessary permits 

are granted, and the first of the plants 

is scheduled to be opened in June in 

Romania, followed by Northern Ireland 

in September. 

The plants are being built in 11 countries: 

Greece, Italy, Northern Ireland, Romania, 

the Czech Republic, Poland, Austria, 

Slovakia, Nigeria, Ukraine, and Serbia. 

The pilot plant has been running successfully 

since 2006 in Hungary. 

At ceremonies to announce the construction 

plan, Mr. Günter Verheugen, EU Vice 

President and European Commissioner 

for Enterprise and Industry, extended his 

strong support in his role as cofounder 

of the European Alliance for CSR. Mr. 

Verheugen said, “Coca-Cola Hellenic is an 

active member of the CSR Alliance. This 

initiative shows that the Alliance is not 

about words but about changing reality. 

It demonstrates that environmental and 

economic goals can be pursued in unison. 

It also demonstrates how innovation is 

not just a driver of economic competitiveness, 

but can also underpin business’s 

contribution to wider societal goals, such 

as the fight against climate change.” 

Mr. Doros Constantinou said that 

Coca-Cola Hellenic made the decision to 

build the CHP plants following impressive 

results achieved with a pilot CHP 

plant at the company’s bottling facility 

in Hungary. The first of its kind for the 

European beverage industry, the plant 

was introduced at the Dunaharaszti bottling 

facility in 2006, and in its first year 

of operation, achieved a reduction in CO 2 

emissions of 43%, equivalent to more 

than 18,000 tons of CO 2 

. At the same time, 

on the environment of its operations 

generally. Other energy-saving initiatives 

in bottling plants, for example, include 

new cleaning regimes that use cold water 

instead of hot, along with the installation 

of energy efficiency technologies 

and energy saving devices. 

The Group is also applying efficiencies 

in offices and other facilities, such as 

warehouses and storage areas, introducing 

lower-energy computers and 

energy-saving power and lighting systems. 

Employees are informed about 

the importance of environmental protection 

and encouraged to engage in 

energy-saving practices – at work and 

at home. 

Care is taken in transportation. Vehicle 

engines are being downsized, alternative 

fuels are being used, hybrid technology 

is being explored, and drivers are being 

trained in ecologically friendly methods. 

Efficient route planning and avoidance 

of unnecessary travel or deliveries by air 

are further scaling back energy usage. 

energy costs were reduced by €400,000. 

It is anticipated that each of the new 

plants will realise similar reductions 

and savings, with each plant gaining at 

least 40% energy efficiency. 

Conserving Energy 

As the 15 new CHP units come on-line, 

they are expected to make a major contribution 

to the efforts being made by 

Coca-Cola Hellenic to reduce the impact 

Action is also being taken in making 

cooling equipment, a primary source 

of indirect emissions, more climatefriendly. 

Working together with suppliers, 

Coca-Cola Hellenic is introducing new, 

low-energy cooling units. Refrigerant gases 

such as hydrofluorocarbons (HFCs) are 

being eliminated, while alternative, low 

impact gases, like hydrocarbon (HC) and 

CO 2 

technology, are being introduced. 

In addition, sales representatives are 

trained to work with customers, monitoring 

the condition of their coolers, 

informing them about efficient energy 

use, and helping them to reduce their 

own carbon footprints. In carrying out 

energy-saving activities, the Group seeks 

to cooperate with governments and the 

communities it serves. Among the relationships 

engaged in is the UN Global 

Compact Caring for Climate, the largest 

global business coalition on climate, and 

participation in events such as the World 

Business Summit on Climate Change. 


Danfoss 

Improving the Working 

Environment 

In August 2006, Danfoss acquired the factory of Chinese company 

Qinbao, a manufacturer of brazed plate heat exchangers that is located in 

Hangzhou, approximately 150 km southwest of Shanghai. 

By Gerhard Teschl 

Within only five years, Qinbao had been 

able to build a strong position within 

the Chinese market and was therefore, 

from a strategic standpoint, of interest 

to Danfoss. As a part of the internal 

standardized merger and acquisition 

process, Danfoss carried out a working 

environment and safety audit to identify 

and analyze gaps between the Group’s 

mandatory corporate safety standards 

and those of the newly acquired company. 

Although the company lived up well to 

national standards, the audit revealed 

significant deviations from Danfoss’ 

corporate standards. These deviations 

can be summarized in the following 

categories: 

• Insufficient personal protection equipment 

• Missing, inadequate, or defective safety 

protection for the semi-automated 

equipment 

• Insufficient workshop safety 

• Insufficient training and visualization 

of safety and environmental issues 

Since safety and environmental issues are 

a top priority for Danfoss management, 

an action plan was developed to address 

and eliminate the nonconformities 

within a tight, targeted time frame. 

Activity 1: Establish personal safety 

protection for workshop employees 

and visitors 

At the time of the Qinbao takeover, the 

personal protection equipment was insufficient 

and none of the employees 

were obliged to wear protective equipment 

in order to protect their personal 

health. 

Depending on the work station and area, 

Danfoss enforced a rule that employees 

must wear ear plugs, safety shoes, eye 

protection, working clothes, gloves, or 

masks. This has not been easy as it is 

not always comfortable for workers to 

wear these items, especially gloves and 

masks in environments where the climate 

is hot. 

Activity 2: Upgrade or retirement 

of semi-automated production 

equipment 

Previously, Qinbao experienced several 

work-related accidents and injuries. 

Especially the cutting, punching, and 

pressing process regularly led to serious 

injuries. Although no official statistics 

were kept, former management and 

employees admitted that these accidents 

were frequent and that there were few 

consequences for the company. 

Within the first two months after the 

acquisition, Danfoss implemented safety 

sensors, protection fences, and safety 

push buttons for all cutting, pressing, 

and punching machines. In phase two (after 

12 months), a majority of the presses 

were exchanged with modern presses. 

Currently, the focus is on increasing the 

degree of automation for the punching 

equipment, which will help in eliminating 

entirely the potential for those types 

of injuries. 

Activity 3: The workshop safety 

When Danfoss took over Qinbao, the 

workshop was small and dark and the 

equipment and working stations were 

squeezed in between one another. Heavy 

heat exchangers were manually lifted 

and transported by the employees. 

In early 2007 the lighting and product 

handling were improved, and the workshop 

was divided into different zones 

for transportation and safety reasons. In 

28 


Best Practice 

Human Rights 

indicator for the individual performance 

systems of all blue-collar employees. In 

general, three stages of awareness have 

been observed at the company: 

1| Reluctance to wear safety protection 

and to follow safety rules 

2| Compliance and awareness-raising 

through audits, (small) penalties, and 

rewards 

3| Understanding and appreciation of 

safety and personal protection and 

safe/comfortable working environment 

through frequent training and 

permanent visualization of safety 

improvements 

These three stages are well-described by 

Xu Zhihua, who has worked at Qinbao on 

the bolt-welding station since 2004. 

Qinbao: The production and challenges in terms of the working environment 

The brazed plate heat exchangers that Qinbao manufactures are made of 

stainless steel and copper. The typical production process consists of cutting, 

pressing, washing, assembling, brazing, welding, testing, and packing. The 

finished product weighs up to 150 kg and the plates and product corners are 

sharp. Some areas of the workshop have high noise levels; in other areas, 

heavy products are being lifted. This means that there are several working 

issues to be addressed in the working environment. 

2008 the company was moved to a new 

facility, where the workshop environment 

and safety standards lived up to 

Danfoss’ corporate standards. The 6S system 

(Sort, Stabilize, Shine, Standardize, 

Sustain, and Safety) was implemented 

throughout the workshop. At the new 

facility, it is not just about raising the 

safety level but also about addressing 

the personal comfort levels of the employees. 

Activity 4: Training,visualization, 

and awareness-raising of safety 

Along with improving personal safety 

of the employees and upgrading the 

machines and the workshop facilities, 

it has been very important to train and 

visualize safety issues in order to create 

long-term awareness. 

Now both veteran and new employees 

are systematically trained to handle 

equipment and meet the safety standards. 

Each machine and working station 

is marked with signs describing which 

safety devices the employees must wear 

as well as how installed safety equipment 

on machines must be used. Safety charts 

in the workshop record the status and 

improvements in the working environment 

and safety levels. 

Daily 6S audits help to reinforce and raise 

awareness about safety issues. In 2007, 

compliance with safety standards also 

became an important key performance 

“These safety devices do give us a great 

protection against serious injuries, and 

now I know that Danfoss not only provides 

us with a working place to make 

money. The company cares about unusual 

details – for China – such a wearing 

safety devices. But we can work here 

happily and healthily. So I am full of 

energy while working in the plant.” 

Two years after the acquisition, Danfoss’ 

safety and environmental standards have 

been fully and successfully implemented 

at the former Qinbao factory. In 2009, 

Danfoss Qinbao aims to have its environmental 

management system certified 

according to ISO 14000. 

The example of the Qinbao takeover has 

proven that, even in a challenging environment, 

well-described and standardized 

safety and environmental standards 

can be implemented successfully within 

a reasonable time frame and without 

compromising these issues. 

The success is measurable: In 2008, the 

company had one minor and one serious 

accident, which is a decline of 60 percent 

in comparison to 2007 statistics, and a 

major improvement over previous years. 

Over the last six months, Danfoss Qinbao 

has been entirely accident-free. 


Deutsche Bank 

The microfinance 

revolution has only 

just begun 

Microcredits have proven to be powerful instruments in the fight against poverty. 

However, they will reach their full impact only if they manage to limit their reliance 

on the charitable sector. 

By Hanns Michael Hölz 

“The genocide brought the destruction 

of my parents’ retail shop“, Nsengiyma 

Gilbert from Rwanda explains. “It ended 

in ruins and in the brutal killing of my 

father. After the war, I dropped out of 

school, crisscrossed Kigali in search for a 

job to no avail. Then the idea of selling 

milk to a nearby kindergarten school 

near my home came to me. However, 

the earnings from this business were 

not enough to buy me a refrigerator and 

enable me to rent a bigger place to start a 

restaurant,” Gilbert says. “I tried to get a 

loan from other banking institutions, but 

the conditions were a little too harsh and 

couldn’t provide an immediate solution 

to my desperate situation. That’s when a 

friend of mine told me about RML quick 

loans,” he explains. 

RML is the abbreviation of Rwanda Microfinance 

Limited, a company founded 

in 2004 in order to provide loans to 

low-income salary earners and microentrepreneurs. 

RML provided Gilbert 

with a business loan of about $500, and 

things improved. He bought a refrigerator 

for his dairy products and moved 

to a bigger place that he turned into a 

restaurant. The income generated from 

his restaurant business helped him build 

a decent home for his mother. “This 

business has served as a lifeline for me 

and my family‘s financial and social 

livelihood. Now my aged mother will 

no more spend sleepless nights when it 

rains,” he affirms. With additional support 

from RML, Gilbert plans to expand 

his business. 

Supporting early-stage microfinance 

institutions (MFI) 

RML is part of Micro Africa, an East African 

microfinance group based in Nairobi, 

Kenya. In mid-2006, RML had not 

yet reached operational self-sufficiency 

and had a total loan portfolio of half a 

million dollars. But then the Deutsche 

Bank Start-up Fund provided a letter of 

credit in the amount of $100,000, which 

secured a Rwandan franc loan from a 

local lender. Since receiving the loan, 

RML has become profitable and now 

serves over 1,400 clients with a portfolio 

of over $1.4 million. 

The Deutsche Bank Start-up Fund, which 

is supported by the Deutsche Bank Americas 

Foundation and CORDAID, a Dutch 

NGO, seeks to identify start-up microfinance 

institutions (MFI) in underserved 

markets with strong management. Capitalized 

through grants and soft funding, 

it provides flexible financing to support 

portfolio growth and works to build 

governance and financing capacity. Like 

all the other microfinance instruments 

developed and used by Deutsche Bank, 

the Start-up Fund does not lend to the 

final borrowers, but gives financial and 

logistics support to microfinancing institutions. 

By transferring capital and 

know-how, it strengthens regional economic 

structures and networks in order 

to stabilise developing countries. 

A powerful instrument in the fight 

against poverty 

Microfinance, the extension of very small 

loans to those who lack collateral or a 

credit history, is proving to be a revolutionary 

model in enabling people to rise 

from poverty. It is based on the recogni- 

30 


Best Practice 



Deutsche Bank 

According to db research, women 

make up the vast majority of 

borrowers, especially in Asia. It reflects 

the fact that women are more reliable 

debtors because, due to stronger social 

and family ties, they often follow a 

more conservative investment strategy 

which in turn results in lower default 

rates for MFIs. 

tion that the working poor can act in 

an entrepreneurial manner and are, in 

principle, creditworthy. As a study by 

Deutsche Bank think tank db research 

illustrates, for these micro-borrowers, 

microcredit is often the only alternative 

to paying excessive interest rates 

charged by unofficial moneylenders or 

pawnshops in developing countries. For 

instance, in the Philippines loan sharks 

often charge an annualised interest rate 

of up to 1000% for a monthly loan. In 

contrast, interest rates charged by MFIs 

are in the range of 15% to 70% p.a. Seen 

from the perspective of a developed 

country, this may still seem high, but 

these rates result from the small size of 

loans and the high administrative costs 

as loan officers need to travel to remote 

places and intensively advise clients. It 

is estimated that administrative costs 

amount to up to two thirds of the interest 

paid by clients. In addition, there is 

a need for risk provisioning. 

According to db research, women make 

up the vast majority of borrowers, especially 

in Asia. This reflects the fact that 

women are more reliable debtors because, 

International Comparison: Impact of Deutsche Bank Microfinance Funds 

(Deutsche Bank Microcredit Development Fund, Global Commercial 

Microfinance Consortium & Start-Up Fund) 

Total Microcredits: USD 309,883,956 

400,000 

300,000 

200,000 

100,000 

90,000 

200 

0 

100,666 

Number of clients 

Average loan size USD 

527 

310,189 

460 

192,639 

due to stronger social and family ties, 

they often follow a more conservative 

investment strategy, which in turn results 

in lower default rates for MFIs. This 

lower credit risk is further supported by 

634 

93,060 

Africa & Middle East Asia Latin & South America Eastern Europe & Russia USA 

2,889 

260 

6,655 

6,000 

4,000 

2,000 

600 

500 

400 

a relatively low degree of labour mobility 

of female clients (due to strong family 

ties, women tend to work from home), 

which decreases the cost of monitoring 

debtors for an MFI. 

0 

32 


Best Practice 


In order to influence borrower behaviour, 

many MFIs apply the principle of group 

lending. This entails an MFI making a 

small loan to an individual who belongs 

to a group of 5 to 20 people. As soon as 

the individual borrower proves reliable, 

credit is extended to additional people 

within the group. This procedure creates 

an incentive for the group to monitor 

each other’s behaviour and ensure borrower 

discipline, as the group is jointly 

liable for the failure of any single member 

to repay her microloan. The average 

loan size starts from USD 100 and can 

reach several hundred dollars, depending 

on the debtor’s repayment history. 

Interest rates vary significantly according 

to the geographic regions, e.g. in India 

microloans are usually granted at 15% 

to 30%. 

However, not all MFIs apply the group 

lending principle; instead, some MFIs 

prefer to lend to individuals without any 

shared liability aspect. This reflects, inter 

alia, the argument that group lending 

has some shortcomings, e.g. that it only 

fully works in rural settings where social 

control is higher. In addition, opponents 

of group lending argue individual lending 

is superior, as it judges people on 

their own merits rather than on the 

group’s. In some countries, individual 

lending exhibits higher average loan 

amounts and often primarily serves the 

self-employed rather than the very poor 

seeking to start a business. As db research 

sums up, both approaches have their 

advantages and respond to different 

circumstances; hence, it can be expected 

that individual and group lending techniques 

will continue to coexist over the 

long term. 

Deutsche Bank – 

a microfinance pioneer 

Among commercial banks, Deutsche 

Bank is a pioneer in the field of microfinance. 

As early as 1997, the company 

established the Deutsche Bank Microcredit 

Development Fund (DBMDF) in 

order to help established microfinance 

institutions reach scale and long-term 

sustainability by encouraging relationships 

with local financial institutions. 

The DBMDF is a registered 501 (c) 3 

non-profit. It provides catalytic funds 

as collateral for leverage loans, typically 

2:1, and is supported by social investors, 

private clients of Deutsche Bank, and the 

Deutsche Bank Americas Foundation. 

The Global Commercial Microfinance 

Consortium, established at the end of 

2005, is an $80.6 million fund that serves 

as a platform to combine high risk catalytic 

development agency resources with 

the scale and execution efficiency of the 

private sector. Deutsche Bank created the 

Consortium in recognition of the pivotal 

roles that the private sector can play in 

the development arena in partnership 

with development agencies. In so doing, 

the Consortium harnesses resources 

available through the growing corporate 

social responsibility sector as an investment 

rather than as an expense. 

db Microfinance-Invest No. 1 – 

the next step in microfinancing 

However, the microfinancing instrument 

will reach its full impact only if it manages 

to limit its reliance on the charitable 

sector and turn into a regular business 

highly attractive to the private sector. 

Against this backdrop, three branches 

of Deutsche Bank – Private Wealth 

Management (PWM), Corporate Social 

Responsibility (CSR) und Asset Finance 

& Leasing (AFL) – have developed a 

product which addresses economic and 

philanthropic customer interest at the 

same time: db Microfinance-Invest No.1, 

the first securitization of subordinated 

microcredits with an external rating 

worldwide. The securitization transaction, 

which has a total volume of EUR 

60 million, was completed in 2007 and 

is the first German investment product 

which gives retail and institutional investors 

access to the ever-growing asset 

class ”microfinance“. The securities were 

purchased not only by Deutsche Bank 

but also by KfW-Entwicklungsbank (the 

largest institutional investors) as well as 

retail clients, foundations and church 

institutions. Deutsche Bank and its partners 

agreed upon a fee structure that 

is attractive for investors; for example, 

99.6% of the total investment volume 

is used to support microcredits. 

Senior notes in db Microfinance-Invest 

No.1 were assigned a BBB rating by Fitch 

Ratings. The portfolio comprises 21 microfinance 

institutions and banks in 15 

countries in Africa, Latin America, the 

Caucuses, Central Asia and Southeast 

Asia. The diversification of the MFI-Portfolio 

was compiled by Deutsche Bank’s 

New York Center of Competence and the 

Community Development Finance Group 

in Africa, Asia, Latin America, eastern 

Europe and central Asia. The fund’s 

goals include the provision of reasonably 

priced debt that garners full or partial 

equity credit without increasing clients’ 

weighted average cost of capital. This 

enables MFI clients to present a fairer 

picture of their financial strength to 

investors. The subordination layer should 

also enable clients to attract senior debt 

through strengthened equity ratios. Many 

microfinance institutions are also in the 

process of transforming themselves from 

unregulated into regulated financial 

entities, and db Microfinance-Invest’s 

subordinated debt provides quasi-equity 

that helps MFIs to meet their regulatory 

requirements in the transformation 

process. 

Throughout the world, Deutsche Bank 

seeks opportunities to play a positive 

role in addressing local needs by making 

available financial resources, the talents 

of its personnel and the leadership of 

its management. All of these efforts are 

geared toward forming lasting partnerships 

with community-based organizations 

to achieve durable and lasting 

benefits for local citizens. A combined 

Deutsche Bank Americas Foundation 

and Community Development Group 

carry out the firm’s corporate citizenship 

commitments in the Americas. The microcredit 

initiatives are an integral part 

of Deutsche Bank’s CSR activities and a 

recognized best-practice project in the 

framework of the Global Compact. 



The Green Imperative 

Deutsche Post DHL became a signatory to the UN Global Compact in June 2006. At 

that time, we sought to align our sustainability commitment and approach with key 

external international standards. In our effort to be a responsible corporate citizen, 

our overall sustainability approach focuses on environment and in particular climate 

protection, education and disaster management. 

Implementing new trailer designs to 

save fuel and reduce carbon impact 

34 


Best Practice 

Environment 

By Steffen Frankenberg 

Implementing environmental responsibility 

continues to be a challenge and 

opportunity for us as we seek ways to 

adapt our business processes and culture 

to addressing the environmental challenges 

we face today. 

Our environmental strategy has three 

pillars: 

• Tackling climate change 

• Improving our overall environmental 

performance 

• Minimizing our use of natural 

resources 

Tackling climate change 

As the world’s leading mail and logistics 

company, we transport billions of shipments 

each year to over 220 countries 

and territories, operating one of the 

world’s largest transportation fleets; we 

recognize that our largest environmental 

impact is CO 2 

emissions. We are making 

a concerted effort to effectively address 

this impact. 

In 2008, we launched our GoGreen 

Program and became the first logistics 

company to commit to clear climate 

protection targets. Our goal is to improve 

our carbon efficiency by 30% by 2020 

in our own operations and those of our 

subcontractors, compared to our 2007 

baseline. We have entered into discussions 

with our subcontractors on ways 

to measure and reduce their footprint; 

and have taken the first steps towards 

achieving our 2012 milestone of a 10% 

CO 2 

efficiency improvement in our own 

operations. 

To deliver on our carbon efficiency commitment 

we are focusing on five areas: 

As a responsible 

corporate citizen 

Deutsche Post 

DHL's overall 

sustainability 

approach focuses 

on environment 

and in particular 

climate 

protection, 

education 

and disaster 

management. 

1. Ensuring transparency: 

We need to be transparent about our 

carbon footprint to help us track our 

progress and identify opportunities to 

minimize it. The ability to calculate our 

own carbon footprint is a key prerequisite 

of our GoGreen Program. We also 

need the data to responsibly offset our 

GoGreen products and services, and in 

time, to calculate our customers’ individual 

footprints. In time, we will use this 

data to help our country teams manage 

emissions locally. 

2. Increasing CO 2 

efficiency: 

Minimizing our carbon footprint through 

targeted initiatives and by introducing 

innovative technologies for our own operations 

and our subcontractors we can 

effectively improve our CO 2 

efficiency. 

For example, in the UK, we introduced 

200 teardrop trailers which consume 

12% less fuel than conventional trailers. 

Globally we operate about 800 alternatively 

fuelled vehicles. We are constantly 

renewing our air and road fleet. We are 

also optimizing our network and transport 

planning e.g. with an electronic 

freight exchange system (EFX), and the 

utilization of our subcontractor fleet 

saving two million truck miles, equivalent 

to 3,000 tons of CO 2 

. We have also 

bundled our innovation activities into 

the DHL Innovation Center, in cooperation 

with IBM, SAP, MIT to develop 

innovative logistics solutions including 

‘green’ solutions. By doing so, we can 

actively promote the development of 

innovations such as electric and hybrid 

vehicles, aerodynamic solutions or new 

generation fuels to improve fuel and 

CO 2 

efficiency. 

3. Mobilizing our employees: 

Raising awareness of climate and environmental 

protection issues, and enabling 

our employees to minimize their impacts 

is critical to the successful implementation 

of our climate protection program. 

Our Save Fuel program provides driver 

training to approximately 50,000 drivers 

in Germany to help them reduce their 

fuel consumption by as much as 6% by 

the end of 2009. An internal employee 

‘environmental idea’ campaign generated 

more than 11,000 ideas from employees 

to improve our CO 2 

efficiency. 

Our getGREEN Associate Incentive Program 

in the US aims to educate and 

reward employees for making environmentally-sound 

choices in their everyday 



Employee involvement in addressing 

climate change is a key aspect of our 

global GoGreen Program. 

lives through monetary incentives to 

purchase non-conventionally fuelled vehicles 

such as hybrids or energy-efficient 

household appliances. In addition, for 

every five employees who take part in 

the program, we donate US$500 to The 

Nature Conservancy’s ‘Plant a Billion 

Trees’ campaign. 

We are also making changes to our 

company policies to ensure that, over 

the long term, our consideration for 

the environment is integrated into the 

business decision-making process. In 

Germany, we have revised our company 

car policy removing the worst polluting 

cars from those available for selection, 

increasing the period of usage and maximum 

mileage, and included a provision 

to encourage and incentivize individuals 

to make more environmentally-friendly 

choices. By the end of 2009, we will 

have implemented an e-Learning module 

to raise awareness of the climate 

change challenge. The goal is to help 

our employees better understand the 

importance of their role in addressing 

this challenge. 

4. Generating value at the market: 

Our GoGreen product portfolio offers 

customers services to assess, reduce and 

offset their emissions. For example, we 

designed a new refrigerated distribution 

hub for a key customer in the food 

manufacturing industry in the USA to 

maximize sustainability and energy efficiency 

by building it 30m underground. 

The facility uses 65% less energy than 

comparable above ground facilities; saves 

approximately 681,000 liters of fuel and 

reduces CO 2 

emissions by approximately 

1.8 million kgs annually. In 2008, we 

expanded our GoGreen carbon neutral 

service making it available in over 25 

countries in Europe and Asia. We also 

offer carbon consultancy services to create 

and execute greenhouse gas reduction 

strategies for DHL customers. 

5. Preparing for regulatory changes: 

We are engaging with the legislative 

process to help shape regulation that 

brings long-term environmentally-aware 

changes to our sector. It is clear that 

sooner, rather than later, there will be 

a price on CO 2 

emissions. It is important 

that in general, resources and CO 2 

emissions 

are priced adequately leading to 

efficient allocation of resources rather 

than to increased costs. By engaging 

with the regulatory process we want 

to be able to provide input to policies 

that could influence how our industry 

impacts the environment. 

Improving our overall 

environmental performance 

Although climate change is our largest 

environmental impact, we are also 

addressing our other environmental 

impacts. We have implemented an Environmental 

Management System to 

ensure that we were addressing our other 

environmental impacts. To date, approximately 

46 % of our global workforce 

now works under ISO 14001-certified 

Environmental Management Systems. Examples 

of business units with improved 

ISO 14001 coverage, include our MAIL 

business in Germany that earned ISO 

14001 certification for all of its operations. 

The certificate covers over 159,000 

employees and is valid for 49 operational 

districts, which include 82 mail and 

33 parcel centers. DHL Express Europe 

widened its certification coverage from 

44 % of sites in 2006, to 80 % in 2008 – 

covering 43,000 employees in 717 sites. 

In Asia-Pacific, DHL Global Forwarding 

achieved certification of its entire operations, 

covering over 10,000 employees 

at 199 facilities in 14 countries. We 

will continue to expand the coverage of 

our environmental management system 

throughout our organization. 

Minimizing our use of natural 

resources 

We spent over €9 billion in 2008 on 

products and services, of which almost 

€2 billion was spent on energy (fuel and 

36 


Best Practice 

Environment 

electricity). This considerable purchasing 

spend provides us with an opportunity 

to influence the sustainability of our 

own supply chain. In 2008, we revised 

our supplier code of conduct to include 

environmental considerations. This Code 

is part of all new contracts with suppliers. 

Early in the procurement process 

we request that our suppliers commit 

to the Code before proceeding. Our request 

for information form sets out the 

environmental expectations we have 

of our suppliers, and forms the basis 

for discussing alternatives. To support 

its implementation, we have developed 

guidance notes for our procurement 

teams and trained more than 500 of 

The DHL Innovation Center pioneers 

innovative logistics solutions to 

deliver economic and environmental 

efficiencies. 

Acting decisively 

on climate 

change is now 

a key initiative 

in our group's 

global and 

longterm agenda. 

our buyers on the content of our Code 

in 2008. 

We are also continuing sustainable sourcing 

initiatives which we initiated last 

year such as vehicle fleet procurement, 

“greener” IT, and paper sourcing. Our Procurement 

organization, for example, has 

significantly increased the percentage of 

recycled and sustainably-sourced paper 

it purchases, in line with the guidance in 

our Corporate Paper Policy, to over 80 % 

in 2008. We will now take further steps 

to implement the use of recycled paper 

across our organization worldwide. 

Conclusion 

2009 marks an important milestone on 

climate change with the UN Climate 

Conference in Copenhagen (COP 15)– 

aimed at setting action on climate change 

as a global priority. For Deutsche Post 

DHL, 2009 marks the year in which our 

Group’s climate protection program, 

GoGreen becomes firmly cemented in 

our company’s 2015 strategy and a key 

performance indicator for our company’s 

overall performance. Acting decisively 

on climate change is now a key initiative 

in our Group’s global and long-term 

agenda. 

The Danish Ministry of Foreign Affairs 

recently appointed DHL as the official logistics 

partner providing carbon neutral 

logistics services at UN Climate Conference 

in Copenhagen. We are proud to 

be an active part of this event and this 

achievement demonstrates to us that 

our GoGreen Program is steering our 

company in the right direction. At the 

same time, we recognize that we may 

not have all the answers and that we 

are counting on our business partners 

to embark on this journey with us. Yet, 

we realize waiting to act is not an option 

and that as a leader in our industry we 

have the power and obligation to set 

the pace. We are doing our best to lead 

by example. 

To find out more on Deutsche Post DHL’s 

climate protection program, GoGreen, visit: 

www.dp-dhl-gogreen.com 

To find out more about our sustainability 

commitment and programs, visit: 

www.dp-dhl.com/sustainability 


DonG Energy 

A Nationwide charging 

network for electric 

vehicles in Denmark 

Our modern lifestyles offer a wealth of exciting possibilities, but also go hand in hand with 

high energy consumption. Because of the carbon footprint that our energy consumption 

leaves behind, there is no longer any reason to doubt that our lifestyles affect the climate. 

Each and every one of us, including DONG Energy, is responsible for minimizing our 

energy consumption and maximizing our consideration for the environment. As an energy 

company, we have a special responsibility for producing energy in as environmentally 

friendly a manner as possible. 

By Anders Lyngtorp, M. Sc. Techn. Soc. 

We aim to triple our renewables capacity 

by 2020. That is a major challenge in 

itself. Despite these measures, our power 

plants will remain an essential part of 

our energy supply for the foreseeable 

future in order to provide reliable supplies 

of energy. Therefore, we need to 

identify efficient methods for reducing 

CO 2 

emissions from our power plants, 

which are among the most efficient in 

the world. We have removed almost every 

pollutant from the flue gases. Now we 

are focussing on the CO 2 

challenge. Our 

long-term objective is clear – providing 

reliable energy without CO 2 

emissions. 

Therefore, we are engaged in developing 

a range of projects that support this 

objective. Examples of these projects are: 

wind power generation; production of 

second-generation bioethanol; co-firing 

with biomass when generating combined 

heat and electricity; capturing and storing 

CO 2 

; employing geothermal energy 

as a supplement to district heating; and 

generating energy via solar energy, hydro 

power, or wave and tidal energy. 

We are constantly trying to improve 

our competitiveness and expand our 

presence in the northern European energy 

market – particularly through 

growth outside Denmark. The growth 

will be underpinned by a whole series 

of identified, well-defined investment 

options that have been chosen because 

they support our long-term objectives, 

utilize skills and existing market positions, 

and enable synergies across the 

entire Group. 

Recently, we entered into an agreement 

with Siemens to supply up to 500 wind 

turbines – with a total capacity of up 

to 1800 megawatts – for our planned 

offshore wind farms in northern Europe. 

This agreement is the largest single offshore 

wind turbine supply agreement 

ever, and it strengthens our leading position 

within offshore wind energy. Finally, 

it is an important tool for implementing 

our strategy of significantly expanding 

DONG Energy's position within the sustainable 

energy sector. 

Nationwide charging network 

In 2008, DONG Energy formed a cooperation 

with Better Place in Denmark. By 

doing so, DONG Energy became partner 

in a program for rolling out a nationwide 

charging network for electric vehicles in 

Denmark. The project provides optimum 

exploitation of renewable energy, which 

until now has been impossible to store, 

and also saves CO 2 

. 

As a geographically small country, Denmark 

has relatively low transportation 

needs. There is a high car-registration 

tax on conventional cars, but apart from 

VAT, there are no taxes on electric vehicles, 

making Denmark an ideal loca- 

38 


Best Practice 

Environment 

with 5.4 million inhabitants and some 

2 million passenger cars, the entire passenger 

car fleet could thereby be run on 

electricity produced by less than 750 

windmills. 

But as the wind is not blowing constantly, 

we have also estimated that even if all the 

electrical charging of cars was sourced 

from coal-fired power plants, net CO 2 

emissions would still decline by half. The 

reason is partly that electric motors are 

far more efficient than even the most 

modern combustion engines, and partly 

that the energy efficiency of our power 

plants is high. 

tion for launching an electric vehicles 

program. 

The goal of Better Place is to reduce CO 2 

emissions from the transport sector by 

implementing a charging infrastructure 

for electric vehicles. DONG Energy is 

shareholder in a Better Place operator 

in Denmark and will be supplying the 

energy to drive the electric vehicles. In 

close cooperation with DONG Energy, 

Better Place Denmark will be responsible 

for building an electric-car-charging network 

as well as a control centre that will 

communicate wirelessly with the cars in 

order to optimize the charging behaviour 

in relation to hourly fluctuations 

of market prices for electricity. Thereby 

it can be ensured that if a car is plugged 

into the carport socket outlet at 5 p.m., 

it will not start charging until late at 

night when general energy consumption 

is at its minimum – or alternatively, at 

times of the day or night when there is 

a surplus of energy. 

The infrastructure will include thousands 

of charge spots per region: in private 

homes, workplaces, and public locations 

throughout a deployment area. The 

charge spots are supplemented by a network 

of battery-switch stations that allow 

drivers to exchange a depleted battery 

for one with a full charge, in less time 

than it takes to fill a tank with petrol. 

That said, as the vast majority of driving 

trips are shorter than the 150-km range 

possible with a fully charged EV-battery, 

most customers will use charge spots as 

their primary source of energy. 

Charging electric cars with power 

We estimate that one medium-sized 

windmill with a 2 megawatt capacity 

on an annual basis can supply the energy 

needed for 3000 cars. In a country 

About DONG Energy 

However, the more wind power we have 

in our production mix at any given time, 

the higher the reduction in CO 2 

emissions 

will be. An additional benefit will come 

from the fact that most charging will 

take place at night when wind power 

is in excess supply. This means that it 

will be possible to use wind energy for 

transportation purposes that otherwise 

would have to be exported to neighbouring 

countries, typically at relatively low 

prices. 

Ultimately, the transition to an electricvehicle-based 

transportation system powered 

by renewable energy will lead to a 

reduction of CO 2 

emissions to the benefit 

of our climate. 

DONG Energy is an integrated energy company that operates across the 

entire energy value-chain, with a presence in a number of important markets 

in northern Europe – Germany, the United Kingdom, Norway, the Netherlands, 

Sweden, Poland, and Denmark. The company’s core business activities 

are: natural gas and oil exploration and production; production of thermal 

and renewable energy; natural gas and power sales; and distribution in the 

wholesale market and to end customers. More than 5000 employees are 

doing their best to fulfil the ambition of securing stable energy supplies for the 

company’s different markets. 


E.ON 

R&D driving the 

sustainable future 

of energy 

The world of energy is currently facing its potentially greatest challenge since the invention 

of electricity. This is being fuelled by three fundamental development trends. Firstly, demand 

for energy is continuing to increase. The IEA estimates that there will be about a 50 percent 

increase in demand for primary energy worldwide by 2030. This will require massive 

investments in energy generation. Secondly, climate change and the real threats it involves 

demand unrelenting action in support of global climate protection. Thirdly, the fact that 

fossil resources are not unlimited means that energy has to be treated even more responsibly. 

By Erik Brandsma 

Dealing with these seemingly irreconcilable 

conflicts – i.e. breaking the correlation 

between growth and energy 

consumption – requires a fundamental 

transformation of the energy sector and 

a new understanding of how we generate, 

distribute and use energy. New innovative 

technologies are key to making this 

happen. These range from tapping more 

into the potential renewables have to offer, 

successfully realizing carbon capture 

and storage, developing more effective 

energy storage systems and flexible distribution 

right up to devising intelligent 

solutions for increasing energy efficiency 

in residential homes. 

When it comes to R&D in forwardlooking 

energy technologies, E.ON is 

committed to attaining a leading position 

in its industry. On the one hand, 

E.ON wants to act as a catalyst between 

basic research and the energy sector’s 

day-to-day business and so accelerate 

the transformation of new ideas into 

marketable products and processes. In addition 

to that, we are forging ahead with 

the development of key technologies 

ourselves. As a successful international 

group, E.ON has unrivalled first-hand insight 

into the demands and requirements 

from the field. Accordingly our R&D 

strategy focuses on optimization of our 

facilities and processes with innovative 

solutions, development and commercial 

implementation of strategically relevant 

key technologies ("innovate.on") and 

promoting of research at universities 

and institutes around the world. 

Our activities to promote research focus 

on challenges for which fundamental 

solutions have to be found or which are 

at the very beginning of their research 

cycle. E.ON therefore supports the “E.ON 

Energy Research Center” (ERC), a public 

private partnership with RWTH Aachen 

University, which, among other areas, is 

researching into storage and efficient 

integration of renewable energies into 

the existing power supply. Today renewables 

cannot supply baseload power, as 

the wind does not always blow without 

interruption and the sun does not shine 

around the clock. We therefore have to 

develop innovative storage technologies 

to be able to store energy from renewable 

sources to make it available without 

interruption. The independent ERC is 

also conducting research into intelligent 

network systems, which enable the flexible 

use of renewables across borders and 

allow power generated decentrally to be 

fed into networks on demand. The findings 

remain the property of researchers 

and are published to be accessible in the 

public domain. 

Beyond that, regarding the pressing challenges 

of today’s energy sector, another 

objective is to make clean-coal technologies 

available on an industrial scale. If 

40 


Best Practice 

Environment 

out at sea, and maritime energy technologies, 

such as tidal and wave power 

plants as well as the generation of bio 

natural gas on an industrial scale. And 

given the future application of nuclear 

power, we also have to develop the next 

generation of nuclear power plants. They 

will then have to provide the greatest 

possible level of inherent safety and 

even higher protection against external 

influences. 

We have pooled these and other issues 

within our technology initiative “innovate.on” 

and, thanks to our international 

footprint in 30 markets, we are able to 

distribute tasks effectively and learn 

from each other. One example is that, as 

a group in Germany, we can benefit from 

the experience in wind energy which 

has been gathered in the UK and Spain, 

while our customers in Italy and the US 

stand to gain from German expertise in 

coal technology. 

innovate.on 

efficient ecological energy 

Future Fossil Fuel 

Power Plants 

High 

Efficient 

Coal 

Power Plant 

Carbon 

Capture 

Storage 

Nuclear 

Generation 

III+ 

this is to be achieved, we have to increase 

the thermal efficiency of coal-fired 

power plants considerably. However, the 

greatest challenge when it comes to low 

carbon is undoubtedly the low carbon 

power plant based on CCS technology. In 

capturing CO 2 

, we are currently pursuing 

three technologies but are concentrating 

on the “post combustion process”, as it 

Renewable Energy 

Wind 

Offshore 

Upgraded 

Biogas 

Marine 

End Use 

Efficiency 

Gas Heat 

Pump 

is easier to retrofit into existing power 

plants and can also be made available 

to other countries. In Europe we are 

working on establishing a fleet of pilot 

plants and intend to make CCS technology 

commercially viable by 2020. 

Further technological challenges include 

building offshore wind farms, even far 

As part of our commitment to push these 

fields of research and development, E.ON 

has once again considerably increased 

its investments in new technologies to 

support universities, research, development 

and demonstration plants, which 

amounted to € 106 million in 2008, after 

€ 83 million in 2007 and € 57 million in 

2006. The successes we have been able to 

claim reaffirm our conviction to continue 

with our broadly based R&D activities 

to find solutions for sustainable energy 

generation, distribution and use. 

R&D is also a field of action which affects 

different parties involved in the energy 

sector – government, universities, research 

institutions, industrial companies 

as well as the energy industry – and 

requires a joint effort to master the considerable 

challenges ahead. This applies 

for Germany and Europe, but also worldwide 

when it comes to the application 

of new technologies for global climate 

protection, where concerted actions by 

governments, companies and financial 

institutions are needed. 


Ernst & Young 

Diversity and 

Inclusiveness at 

Ernst & Young 

By Sabine Moron and Karin Sahr 

We recognize difference as a way of 

harnessing the individual and combined 

talents of our people. That is why D&I 

has been declared one of our ten global 

priorities. We live in an increasingly 

global economy, where multicultural 

(and often virtual) teams are the norm 

rather than the exception. We need to 

take into account the new mix of cultures 

and individual characteristics that shape 

our workforce and the different work 

styles that build our talent pool. At the 

same time, our clients and markets have 

become more diverse themselves, and 

we must mirror this diversity in more 

than just claims and quotas. As business 

challenges become more complex, 

solving them requires us to call on the 

widest spectrum of views and opinions. 

Our global D&I strategy aims to create 

structures in which these positive 

effects of a diverse workforce can be 

leveraged. 

The 6th principle of the UN Global Compact addresses 

the elimination of discrimination in respect of 

employment and occupation. At Ernst & Young, we not 

only believe in that goal from a moral perspective: We 

are convinced that Diversity and Inclusiveness (D&I) are 

actually a business must. That is why we do more than 

just look for ways to prevent or eliminate discrimination; 

we actively promote diversity as a value crucial to our 

company. 

However, it is important to recognize that 

the ability to cooperate across cultures 

does not come overnight. We are all 

biased – it is a part of human nature. 

While the abstract concept of diversity 

as a value might seem plausible to a 

lot of people, the actual confrontation 

with different points of view, different 

personal values, different ways of 

dealing with projects and problems on 

a day-to-day basis can easily create confusion 

and frustration. If not managed 

properly, the risk is high that the possible 

positive effects will never be uncovered. 

Instead, whoever represents the majority 

or the highest hierarchy level in the 

42 


Best Practice 


team could make decisions according 

to their belief-system, which can lead 

to discrimination against those who do 

not share it. This is why it is not enough 

to just have a diverse workforce – it 

is important to create awareness and 

develop the necessary skills to avoid 

frustration and discrimination and to 

leverage diversity’s benefits. 

We recognize that there is no fast-track 

or short-cut for D&I. That is why there 

are various initiatives on the office, 

country, area and global levels to address 

these issues in a comprehensive 

and sustainable way. In Germany, the 

roots of our D&I strategy go back to the 

long-existing program GROW – Growth 

and Retention Of Women. The program 

focuses on leveraging female leadership 

by providing networking and mentoring 

opportunities, events and quarterly 

measurements of gender equity, which 

are used as an important indicator in the 

German sustainability strategy. GROW 

has laid a solid foundation for our D&I 

initiative, and the heart of the program 

remains a priority within D&I. However, 

the definition of relevant diversity factors 

within our organization has widened. 

The challenge we are facing today lies 

in adjusting activities to that new scope 

as well as coordinating and streamlining 

our global activities. 

One important step was the creation 

of the new position of D&I Partner for 

Germany, Switzerland, and Austria (GSA). 

Ana-Cristina Grohnert’s task is to integrate 

the various programs across GSA 

and define innovative actions connected 

to our global D&I vision and priorities. 

For GSA, we have decided to set the first 

focus for the next 18-24 months on the 

aspects of gender management and crosscultural 

communication. We believe this 

will help drive broader benefits across 

all other Diversity groups. We are defining 

Diversity on a much broader basis 

than just the official 6 aspects which 

anti-discrimination laws address (gender, 

age, ethnic background, religion, sexual 

orientation and disabilities). For us, Diversity 

also includes cultural aspects, different 

experience levels and backgrounds, 

diverse concepts of courage, honesty or 

quality. D&I is a highly complex topic. If 

The Ernst & Young 

definition of Diversity 

and Inclusiveness 

Diversity is the demographic 

mix in a given environment, 

including differences in gender, 

ethnicity, national cultures, subcultures 

within countries, sexual 

orientation, disability, generation, 

experience levels, social 

backgrounds, etc. The mix varies 

among our areas and sub-areas. 

Inclusiveness is how we 

make the mix work. It is about 

creating an environment where 

all people feel valued, are part of 

the community and are able to 

perform at their best and achieve 

their potential. 

we want to transfer it successfully into 

our organization, we will have to do this 

in strategically sensible steps. 

The base for all activities is the creation 

of awareness and understanding, 

in and across our organization, that D&I 

management is not only morally right: 

Institutionalization of D&I in our value 

system, in our understanding of leadership, 

commitment and behavior, in our 

business and decision-making processes 

and in our market strategies is essential 

to adequately address the needs of our 

people and our clients. 

Building on that base, various agents 

and levels have to be empowered to actually 

work with the concepts, tools and 

methods of effective D&I. In 2009 alone, 

there will be 15 interactive Diversity 

workshops for about 40% of our partners 

across GSA, based on the belief that a successful 

D&I strategy requires a top-down 

approach. Our leaders have to ensure 

that D&I considerations are included 

in our processes, including rotation, client 

assignments, mobility experiences, 

performance evaluation, promotion, etc. 

At the same time, all employees need 

to be addressed. Currently this is done 

via various communication channels, 

with a focus on raising awareness of the 

need to reflect upon one’s own values 

and frame of reference on a day-to-day 

basis. As a next step, D&I skills need to 

be systematically included in the training 

program. An inclusive mindset has to 

become a prerequisite skill for promotions 

and leadership roles. We will build 

this by defining this specific competence, 

the related training, awareness modules 

and self assessment tools. 

We have defined a number of methods 

to measure success, including: 

• analysis of the diversity represented in 

our current partnership and leadership 

roles and the corresponding pipeline, 

• integration of D&I aspects into employee 

surveys and feedback processes, 

• review of turnover, career development 

experiences and promotion within our 

various groups. 

The final goal of these initiatives is not 

only the elimination of discrimination but 

also the comprehensive and sustainable 

management of diversity as an asset that 

creates value for our company, our clients 

and markets and society at large. 



Hope Through Honey 

“Fight poverty, maintain ecological equilibrium and so shape sustainable development.” 

These three clear goals are the essence of this truly mammoth project, Bhusan Shrestha 

says. The large Nepalese beekeeper Gandaki Bee Concern (GBC) wants to make money 

and at the same time bring progress to the small Asian country in the Himalayas. The 

company, founded in 1990 in the capital Kathmandu, wants to do no less than help 

more and more Nepalese “gain a source of income and at the same time conserve the 

quality of nature for the future.” 


To do this, CEO Dev Bahadur Gurung 

employs thousands of yellow-and-brownstriped 

helpers. They buzz over mountain 

meadows, hum in the orange groves of 

the lowlands and circle in thick swarms 

on astonishingly steep cliffs around 

semicircular or circular golden-yellow 

honeycombs. “In all nooks and crannies 

of the country,” GBC announces, 

“we’re promoting honey collection.” For 

Bhusan Shrestha and his boss, this craft, 

which has been exercised for centuries 

on the roof of the world, is the key to the 

economic rise of many small and micro 

enterprises in this region furrowed by 

deep gorges below the Earth’s highest 

summits. Through proper care of their 

bee colonies, the farmers of Nepal shall 

continue to boost the country’s constantly 

growing honey production and 

so earn enough money to support their 

families. Demand for the sweet substance 

is immense and guarantees them 

income with which they can finance 

a better life for themselves. A desired 

side-effect: Since the insects also need 

a clean environment, the farmers also 

pay attention to their most important 

capital: They protect the landscape and 

flora in this mountain country. 

He started his company with a few apis 

cerana hives. Today, most of the honey 

comes from around 1500 apis mellifera 

bee colonies, which produce up to 50 

kilograms per hive per year. Around 

300 tonnes of sweet nectar is the total 

yield of GBC per year, and the business 

has good prospects: One estimate assumes 

there are around 125,000 bee 

colonies in Nepal. “Eight of the world’s 

nine honeybee species are native to the 

country,” notes GBC as it describes the 

fundamentals of this business. At the 

same time, it recognises the challenge: 

“In Nepal, modern beekeeping is still in 

its infancy.” 

The company is working on this. It not 

only collects and processes honey for its 

own sale. GBC now earns money through 

a wide-ranging network of customers, 

including some financially stronger ones 

outside the country. But above all, GBC 

wants to pass on its know-how to the 

country’s farmers and so put beekeeping 

on a broader production footing. To do 

this, it has implemented a seven-step 

procedure, which first identifies suitable 

regions and then potential beekeepers, 

trains them and later provides continuing 

education. GBC helps the farmers 

prepare business plans and write marketing 

concepts. Employees see themselves 

as trainers and helpers, whose goal is to 

build an entire movement of beekeepers 

and honey producers in Nepal. 

And so GBC also relies on teamwork. 

Farmers do not need to act in the market 

alone. Rather, the company forms 

small cooperatives and shares with them 

the essential costs to buy equipment. 

“The cooperatives are the basis to ensure 

that development works,” GBC believes, 

and so it offers training courses for the 

new beekeepers or organises fairs in 

which they can exchange information 

and learn from each other. The focus 

always remains on “practical methods 

and pragmatic approaches”. 

These are especially essential in marketing. 

In Nepal, which has only a few 

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Best Practice 

Human Rights 

paved roads and vehicles, the beekeepers 

often stack the tin cans containing their 

honey onto regular buses to begin the 

sometimes difficult and long trip to the 

market, often in Kathmandu. Here, too, 

the members of a cooperative can help 

each other by dividing up the tasks. This 

saves time and minimises costs. 

“And so we’re increasing honey production 

from year to year,” GBC says about 

its positive results so far. Currently, the 

total amount of honey harvested and 

processed is over 1,500 tonnes per year. 

“The volume could potentially exceed 

10,000 tonnes per year,” the company’s 

specialists calculate. This potential, Dev 

Bahadur Gurung and Bushan Shrestha 

believe, can also be met especially with 

disadvantaged people. The two experts 

argue that beekeeping is not only a craft 

with relatively low capital needs: Honey 

can also be harvested in Nepal throughout 

the year and in almost all locations, 

they underline their business model. 

Thanks to its topography, the tiny country 

is home to many climate zones and 

thus a wide variety of the flora that serves 

as the best basis for producing the most 

varied flavour varieties of honey. 

Dev Bahadur Gurung and Bushan 

Shrestha also know that honey harvesting 

does not require beekeepers to own their 

own land. After all, bee colonies ignore 

property boundaries. “And so especially 

poorer farmers can also take advantage of 

this business,” GBC believes. Even people 

who never learned to read and write can 

raise bees, GBC notes as one of the plus 

points of the assistance project. 

And support for women has been up at 

the top of its agenda even before the company 

became a member of the United 

Nations’ Global Compact in 2000 and 

committed itself to its own CSR policy. 

“Beekeeping is easy work and doesn’t get 

in the way of housekeeping duties,” GBC 

employees say, which is a major advantage 

in giving women their own sources 

of income. The company sees this as an 

important step in reaching its goals of 

reducing poverty and promoting more 

equality in Nepal. “Our membership 

in the Global Compact,” says Bushan 

Shrestha, explaining the GBC’s decision 

to join the UN initiative, “also strengthens 

society’s trust in our actions.” 

GBC then uses this immediately for the 

good of all participants: The company 

simultaneously represents to the Nepalese 

government the interests of the 

small cooperatives’ many beekeepers. It 

takes care of the formalities for certifying 

the honey production as organic and 

maintains contacts with national and 

international authorities or NGOs that 

organise projects with the beekeepers’ 

association of Gandaki Bee Concern or 

that want to sell their products. 

GBC is the nerve centre of the “selffinancing 

network”, as Bushan Shrestha 

proudly calls it. There employees do 

market research, devise new processing 

methods and keep all beekeepers in 

Nepal informed of progress. “Our honey 

market is still being established,” the 

GBC experts say optimistically, “but if we 

continue to improve technologically and 

in management, we’ll soon be competitive 

in the world market.” 


Grundfos 

When water becomes 

sustainable business 

By pairing existing technologies with an innovative business 

model, Grundfos LIFELINK responsibly changes the way of 

operating and managing rural water supply systems. 

By Carsten Kvistgaard 

GRUNDFOS LIFELINK 

An oxcart is bumping along a red, dusty 

road in central Kenya with an empty water 

drum bouncing against the frame. A 

woman and two small boys are walking 

next to it. They have been walking for 

almost an hour when they finally stop 

at a small stone house next to the road. 

Women, children, and a few men swarm 

around the house, many carrying yellow 

plastic cans. 

In the middle of the house stands a 

rectangular black box, almost like an 

obelisk. The woman enters the house, 

picks a small plastic piece from inside 

her dress pocket and places it in a slot in 

the black box. The digital display above 

shows: “credit 0 KSh”. Then she fishes 

out her mobile phone. 

The LIFELINK concept 

The world’s leading pump manufacturer, 

Grundfos, heralds a new era in rural 

water supply. With its newly established 

subsidiary, Grundfos LIFELINK, it targets 

rural communities in Africa, Asia, and 

Latin America with a sustainable supply 

of safe drinking water at affordable 

prices. 

LIFELINK is a business, not a charity. It 

builds upon a combination of pump, 

mobile phone, and mobile banking technologies, 

and it is above all an innovative 

business model that allows consumers 

to pay back into the original system 

investment, simply by paying via their 

mobile for the water they use. 

A LIFELINK System is a single-point water 

supply with a submersible borehole 

pump that is powered by energy from 

solar panels. Water is pumped to an 

elevated storage tank, whereupon it is 

led by gravity to a tap unit in a small 

house. The tap unit also serves as a payment 

facility. 

New habits, new opportunities 

The woman’s fingers dance across her 

mobile phone. First she checks her mobile 

bank account: There is still money, 

even after buying a goat yesterday. She 

types in a few more figures and hits 

“send”. After a few seconds she receives 

an SMS: “100 KSh transferred to Grundfos 

for account AA0093”. She inserts the 

plastic key again to check her balance: 

She now has 100 shillings for tapping 

water. Enough for almost two weeks. 

So she places the water key in another 

slot and water starts flowing though 

a hose to the 200-litre water drum on 

her oxcart. 

A few weeks ago, she had to work hard 

at the hand pump for almost an hour to 

fill her drum. Now she can just relax and 

talk to people. One of them is a small, 

slight man carrying three jerrycans on 

his bicycle. His smile covers the whole 

of his face when he explains that he is 

doing good business: After paying two 

shillings per jerrycan at the water tap, 

he can drive less than half an hour away 

on his bicycle and sell it for 10 times as 

much to people who do not have the 

time or strength to travel a long distance 

to get safe drinking water. By expanding 

this business he will be in a position to 

feed his family. 

Children come from the nearby school to 

fetch water. With three taps on the unit, 

everybody can now fill their canisters 

without waiting, like they did before 

the LIFELINK system – sometimes an 

hour or more. School lessons are not 

affected anymore. 

A pump attendant looks after the system 

and ensures that everybody understands 

how to operate the tap system. He used 

to have a hard time counting people and 

cans and collecting money, but now he 

just needs to assist a few people. He is 

happy: “People now get what they pay 

for – no more, no less. And I don’t have 

46 


Best Practice 

Human Rights 

water revenue, it goes back into the 

community’s own account. 

Facts about LIFELINK and Grundfos 

• LIFELINK is the Grundfos Group’s first step into the socalled BOP market: 

The four billlion people in the world who live for less than two USD per day 

(Base of Pyramid). 

• LIFELINK is business with a responsible approach, closely connected to 

Grundfos’ CSR policy. We call it inclusive business because it creates value 

for both Grundfos and the local communities. 

• A LIFELINK system operates on solar energy and has a capacity of 8-16 m3 

per day. 

• By paying a water tariff similar to officially recommended tariffs, a 

community can pay back a LIFELINK system over 5-7 years. 

• Banking via mobile phones is becoming widespread in the developing world 

because traditional banks are little present in rural areas. 

• Grundfos has a solid record on providing access to water through our well 

tested solar or wind powered pump solutions. Tens of thousands of these 

are working steadily all over the world, from developing countries to remote 

parts of USA and Australia. 

• With such solutions, Grundfos contributes to fulfilment of several MDG’s 

(Millenium Development Goals) in developing countries. 

to explain it to them but can just help 

them instead. It’s great fun.” 

Financial and social sustainability 

The money used to pay for the water 

via mobile phone banking goes into an 

account at the telecompany, where it is 

transferred to the financing bank with 

whom LIFELINK has partnered. After 

deducting the community’s monthly 

loan repayment, the bank transfers an 

amount to pay for a service contract 

between the community and LIFELINK 

to cover service, maintenance, and spare 

parts. If anything is left over from the 

After their repayment of the system investment, 

the community will own the 

system and can invest the water income 

in new development projects. This closedpayment 

system prevents the need for 

cash to be exchanged between people 

and makes the concept transparent so 

that everybody with special interests and 

access – like financing institutions or 

donors – can follow each community’s 

financial and technical performance 

via the Internet. A special surveillance 

facility even makes it possible to see 

how much water is being tapped and 

displays alarms so that LIFELINK’s local 

service organization can take immediate 

action, should any problems arise. Thus, 

the system’s sustainability not only deals 

with environmental aspects by using 

solar energy, but also with social and 

financial aspects. 

The village chief explains: “I had an idea 

that this new water system would attract 

more people to our place. But I am surprised 

that we have been able to almost 

triple our water sales. I have a vision of 

LIFELINK systems in many more communities 

in our constituency because I see 

them as a motor of development. People 

get more time for productive work, cultivating 

and selling crops is much easier, 

and peoples’ health standard improves 

because they don’t need to take water 

from polluted sources.” 

The oxcart woman has filled her drum 

in 12 minutes and is heading home. 

Three other carts have already lined up. 

Women, children, and men come and go 

with jerrycans on their backs, on bicycles, 

donkeys, or wheelbarrows. 

The creaking of the hand pump has 

ceased, replaced by cheerful voices and 

laughter. And while the sun sets behind 

the acacias and pump performance slowly 

fades, the pump attendant can make 

his account: 11 cubic metres. He can lock 

the doors. It has been a good day. 


Holcim 

Collaborating to 

conserve ecosystems and 

biodiversity 

Conserving ecosystems and stopping biodiversity loss is one of the major issues of our time, 

in particular in situations where industrial activities and population growth put increasing 

pressure on natural habitats. Believing that this issue can only be addressed by working 

together, leading building materials company Holcim and IUCN, the International Union for 

Conservation of Nature, have joined forces to effectively manage biodiversity conservation 

and to create biodiversity-based sustainable livelihoods. 

By Stefanie Koch and Rashila Tong 

The production of cement and aggregates 

depends on long-term access to 

raw materials that are acquired through 

quarrying. Being in a resource-intensive 

business has led Holcim to the conviction 

that biodiversity conservation plays an 

important role in its long-term resource 

and reserve strategy. The company plans 

raw materials extraction and management 

according to a defined process with 

impacts assessed at each stage of quarry 

operation. Rehabilitation guidelines and 

plans are implemented by almost all cement 

and aggregate quarries, resulting 

in many conservation and restoration 

projects. 

This and the fact that Sustainable Development 

is a key element of the vision 

and mission of Holcim and integral 

part of business strategy has led the 

company to engage with a respected 

organization to get advice on assessing 

and mitigating its biodiversity footprint. 

IUCN is the world’s oldest and largest 

global environmental organization, with 

more than 1,000 government and NGO 

members and almost 11,000 volunteer 

experts in some 160 countries. IUCN 

works on biodiversity, climate change, 

energy, human livelihoods and greening 

the world economy by supporting scientific 

research, managing field projects, 

and bringing governments, NGOs and 

companies together to develop policy, 

laws and best practice. Given its expertise 

and network, IUCN makes a strong 

partner for Holcim to understand and 

address biodiversity conservation issues 

worldwide adequately. 

Developing company and 

industry relevant 

recommendations 

Given the many synergies between the 

two organizations, IUCN and Holcim 

have entered into a four years relationship 

(2007-2010) that aims at developing 

“robust ecosystem conservation standards 

for the Holcim Group, and contributing 

to sector-wide improvements in the cement 

and related sectors.” In this context, 

IUCN provides biodiversity expertise and 

enables Holcim to work more closely 

with relevant stakeholders internationally 

and locally through its network. In 

placing biodiversity conservation at the 

core of its collaboration, the strategic 

alliance between Holcim and IUCN is 

breaking new ground in the industry. 

A five-member Independent Expert Panel 

of biodiversity and conservation experts 

plays a key role in achieving the ambitious 

targets. The Panel is entrusted to 

develop key elements of a biodiversity 

policy and strategy. In order to advise 

Holcim, the panel has visited several different 

sites in Spain, Indonesia, Belgium, 

Hungary, and the US. These visits ensure 

that before making recommendations, 

the Panel understands the functioning 

of cement and aggregates operations, 

the diversity of sites and the different 

48 


Best Practice 

Environment 

Stakeholder dialogue in Nagarote, 

Nicaragua 

constraints encountered in different locations. 

These visits and the elaboration 

of a baseline of practices in biodiversity 

conservation management of Holcim 

were relevant to understand industryand 

company related biodiversity conservation 

issues. A quarry inventory now 

contains more than 300 Holcim quarries 

and includes examples of conservation 

practices all over the world. 

Creating sustainable livelihoods 

through biodiversity-based 

microenterprises 

Developing biodiversity-based microenterprises 

has the potential to lift individuals 

and communities out of poverty 

while conserving biodiversity. The main 

characteristic of these enterprises is that 

they depend on biodiversity for their core 

business or contribute to biodiversity 

conservation through their activity while 

at the same time providing sources of 

incomes for entire families. The development 

and pilot-testing of an approach 

in selected countries is another focus of 

the Holcim – IUCN collaboration. The 

main actors of microenterprise development 

projects and owners of respective 

businesses are local stakeholders 

themselves. The process of assessing the 

local environment, identifying business 

opportunities and entrepreneurs, equipping 

them with the skills necessary to 

lead a business as well as supporting 

the integration of the businesses into 

the local value chain is facilitated and 

supported by Holcim and IUCN. 

The concept, that will be made available 

to the public, incorporates a variety of 

approaches and key tools for the different 

phases of microenterprise development. 

In Nagarote, Nicaragua, a pilot project 

was initiated in 2008. A working group 

made up of Holcim and IUCN representatives 

and local community stakeholders 

conducted a participatory assessment of 

the socio-economic situation as well as 

available economic and natural resources. 

The team surveyed existing microenterprises 

and identified opportunities 

for biodiversity-related businesses such 

as ecotourism, reforestation and waste 

management. The start-up of businesses 

is foreseen for late 2009. 

Local collaboration in Sri Lanka 

To complement and strengthen the work 

being carried out, local agreements between 

Holcim country operations and 

IUCN are being actively promoted to 

address and resolve site specific issues 

and to support country level implementation 

of Holcim policies and recommendations. 

Such a local agreement has been signed 

between Holcim and IUCN in Sri Lanka. 

One of the projects under the agreement 

includes providing waste management 

solutions for Puttalam, a city near the 

location of the Holcim plant. Recently, 

the construction of a waste sorting facility 

has been completed that will separate 

solid waste into compostable and 

non-compostable fractions. The facility 

can process 7 tons per day, providing a 

waste solution to the community as well 

as compost to the residents. The noncompostable 

fraction is co-processed by 

the plant. Training has been provided 

to the staff and will now be turned over 

to the Puttalam Urban Council for operation. 

This example demonstrates 

how the two organizations functioned 

as a catalyst to improve the local area, 

providing benefit to all. 

The biodiversity efforts of Holcim, in 

particular in collaboration with IUCN, 

are deemed to be respectable as expressed 

in the words of the chair of the Panel 

after the visit to Indonesia: “What we 

saw, heard and experienced was not 

what we had expected – it was on par 

with, maybe even above, what we had 

seen elsewhere”. 

The panel visited the Four Holes 

Swamp adjacent to the Holly Hill, 

US site. 



Kampoeng Djamoe Organik 

Martha Tilaar 

Martha Tilaar Group is one of Indonesia’s foremost purveyors of innovative, high-quality 

beauty products and services. With its wide-ranging stable of sub-brands under the 

Martha Tilaar umbrella brand, the group offers an impressive array of beauty and 

well-being choices for women of all ages and income groups. While many of its products 

and treatments feature the ancient wisdom of traditional Indonesian herbal 

ingredients (jamu) and other natural plant extracts, Martha Tilaar also produces a wide 

variety of up-to-the-minute color cosmetics and skincare, body care 

and hair care products for the modern woman. 

By Nuning S. Barwa and Heru D. Wardana 

From its humble beginnings as a beauty 

salon in the early 1970s, the company 

has grown into an integrated, world-class, 

total beauty provider which exports its 

products all over the world. The company’s 

key brands have won numerous 

prizes and consistently achieved 

the country’s highest ratings for brand 

awareness, reflecting Martha Tilaar’s 

strong focus on beauty products specifically 

designed for the Eastern woman. 

Establishment of ‘Kampoeng 

Djamoe Organik Martha Tilaar’ 

Garden 

As a natural cosmetic producer from the 

beginning, we have always integrated 

socially and environmentally responsible 

practices into our business activities and 

blended Indonesian medicinal plants, 

Eastern beauty, our rich culture and 

environment together in our mission. 

The three pillars of our corporate social 

responsibility focus on environmental 

and cultural stewardship, caring communities, 

and empowering women’s 

wellness. 

In 1998, the company established the 

10-hectare garden located in Cikarang 

industrial estate, West Java, which was 

conceived and developed by Dr. Martha 

Tilaar as a result of her total dedication 

to preserving Indonesian biodiversity, 

especially in medicinal, aromatic and cosmetic 

(MAC) plants. The main objective 

is to serve as a center for environmental 

and cultural education and a holistic garden 

that enhances our physical, spiritual 

and moral balance. 

Since the garden’s land is very marginal 

and dry, it took extra effort and dedicated 

commitment by our team for more than 

5 years in applying good organic agriculture 

principles to transform it so it could 

be planted with grass, trees, and MAC 

plants. Finally, after 8 years of hard work, 

the sustainable launch of Kampoeng 

Djamoe Organik (KaDO) was celebrated 

by Indonesian Environment Minister Ir. 

Rachmat Witoelar in June 2006. 

As an Indonesian company producing 

herbal and natural cosmetic products, 

we obtain our herbal materials from the 

local community and farmers in Indonesian 

provinces. Through partnerships 

with local farmers to provide high-quality 

plant materials, we can secure their supply 

to meet our needs all year round. For 

the time being, we always check farmers’ 

activities in cultivating the medicinal 

plants to produce simplisia (dried plant 

materials). It is important to supervise 

them at every step of plant cultivation 

and post-harvest treatment to achieve a 

high standard quality of plant materials. 

To efficiently and effectively transfer 

knowledge of good agricultural practices 

as well as good post-harvest practices 

50 


Best Practice 

Environment 

to farmers and the local community, 

we have also established in ‘Kampoeng 

Djamoe Organik’ complete training facilities 

for organic farming and post harvest 

treatment of MAC plants. 

Green mission of ‘Kampoeng 

Djamoe Organik Martha Tilaar’ 

Training in organic farming has been 

conducted since 2001, when we started 

giving free training in organic farming 

and simple production management 

to 20 cooperative farmers throughout 

Indonesia. In 2003, we also published 

a book on the organic farming system 

for Indonesian “empon-empon” (in the 

Zingiberaceae family, like ginger, Javanese 

turmeric, galangal). Our goal is to 

ensure that the organic plant cultivation 

system is being effectively implemented 

to support the supply chain process and 

conserve original Indonesian seeds and 

plant diversity. We then began to work 

with the Indonesian Agriculture Minister 

and Indonesian NGOs to conduct training 

on the organic farming system and 

good post-harvest practices for medicinal 

plants and promote them in Indonesia 

through printed and electronic media. 

Now we already have more than 200 cooperative 

farmers from Aceh to Papua. 

We have been collecting plant species 

from their habitats one-by-one since the 

year 2000, so we now have about 600 species 

of Indonesian MAC plants. Moreover, 

‘Kampoeng Djamoe Organik’ was planned 

as a green area in downtown Cikarang 

and to serve as a carbon trap and oxygen 

factory for the community. All program 

activities here are designed to achieve 

spiritual, physical and moral balance. 

These include training in organic farming 

and post-harvest treatment, agent 

development for green actions, rising 

awareness of global warming, herb-use 

training for healthy living, outdoor activities, 

promotion of the community’s 

green products, fun-learning for children 

and life-enhancing programs for senior 

citizens. 

We use this holistic garden based on 

organic precepts as a center for environmental 

education to enhance the balance 

of mind, beauty and behavior. Through 

‘Kampoeng Djamoe Organik’, we are trying 

to improve the quality and beauty of 

the environment through the collection 

of MAC plants and by spreading a new 

concept of agriculture through educational 

activities and natural relaxation. 

We are also endeavoring to conserve 

Indonesia’s biodiversity by applying winwin 

solutions for all stakeholders and 

the environment itself. 

In the long term, ‘Kampoeng Djamoe 

Organik Martha Tilaar’ has provided a 

beautiful and pleasant environment in 

the heart of Cikarang city with high added 

value in supporting the agrobusiness 

of MAC plants and ultimately stimulating 

the birth of “Environmental Heroes” 

in urban and industrial areas. There 

are so many benefits offered to visitors, 

such as fresh air in a green garden in 

the center of the city, relaxation, and 

education as well as broader knowledge 

about MAC plants and their uses. Next, 

the garden will also host an Eastern 

Spa, herbal laboratory, and School for 

Nature that will make this area a ‘Health 

Care & Education Center’, providing a 

traditional touch with modern nuances 

while serving as a hospitality host for 

global consumers. 


Medine 

Master Plan for 

Mauritius 

Established on the island of Mauritius in 1911, Medine originally grew and processed 

sugar cane. But since then, the importance of tourism and other service areas has steadily 

grown. The ‘Fondation Medine Horizons’ (FMH), which the company established for this 

purpose, promotes optimism and entrepreneurial self-help, states the GC report “Africa 

leads”. 


52 


Best Practice 

Partnership 

“Development,” says Dany Giraud, “can 

only be sustainable, in our opinion, if all 

the people of a region participate and enjoy 

the advantages of change.” The CEO 

of Medine, a conglomerate of companies 

in the holiday paradise Mauritius, has 

also been the driving force of the FMH 

since 2006. The Group established the 

foundation, funded by 10 million Mauritian 

rupees (€0.24 million) annually, in 

accordance with its master plan. 

The plan paints a picture of the future for 

the people living on the 10,625 hectares 

of land belonging to Medine. The vision 

promises them lives based on education, 

good jobs and social services. After all, 

the area in which the FMH works covers 

a good 5.5 percent of the entire island, 

which is located around 900 kilometres 

east of Madagascar in the Indian Ocean. 

About 15,000 islanders live in the area 

around the cities of Richelieu, Tamarin 

and Bambous. 

The company’s managers reacted early 

to changes in the world market and 

diversified their product portfolio. And 

so the company also plants vegetables 

and farms chickens among other projects. 

Employing over 1700 people, Medine 

also operates luxurious holiday resorts, 

nature parks and golf courses for wellto-do 

tourists. Medine’s CSR activities 

played a major role here. And so, consistent 

with this, FMH was founded in 

September 2006. The main goals of the 

master plan are to improve education 

and employment and promote entrepreneurship. 

Six employees transferred in 2006 from 

Medine to the newly established FMH. 

There, Sophie Desvaux de Marigny has 

steered teachers, social workers or organisers 

of the farmers’ market as well as 

financed microcredit to small businesspeople. 

“All our projects have the same 

goal,” says Sophie Desvaux: “We are 

integrating the poor into the economy 

of our region.” Since December 2007, the 

foundation has also been working with 

small companies. It provides them with 

small loans of between 950 and 31,250 

US dollars (750 – 25,000 euros). These 

jump-start loans give the recipient companies 

a leg up and stabilise the island’s 

economy. In the current and coming year, 

FHM is putting a special focus on the 

fight against drugs. Mauritius has the 

world’s second-largest heroin market 

in relation to its population, so this is a 

worthwhile project for the foundation. 

One of the fortunate beneficiaries of 

the foundation’s work is the tinsmith 

Seeven Seevathean. One of the last of 

his trade, the craftsman cuts, hammers 

and solders tanks, pails and cans under 

the corrugated metal roof of a wood 

hut in the provincial town of Bambous. 

Seevathean sells his wares at a stand 

beside the Royal Road, and his customers 

stream to him from far away. To expand 

the small company and boost production 

with new machines, he needed capital. 

Seevathean is a good businessman, and 

FMH credit expert Benoit Adolphe did not 

hesitate long before fulfilling his wish in 

December 2008. Adolphe granted him a 

125,000 rupee loan (€2000), repayable in 

small instalments over three years. The 

tinsmith was happy and immediately 

hired an additional worker. 

“Seevathean is a prime example of our 

work,” comments foundation employee 

Benoit Adolphe. “We help him to help 

others.” The tinsmith stands symbolically 

for at least 200 untrained unemployed 

people whom the foundation helped gain 

basic knowledge and technical skills in 

its specially constructed Medine Training 

Centre (MTC) between autumn 2006 and 

2008. Jean Marc Boissezon taught them 

reading and writing, and in the Centre 

they received basic training in home economics, 

child care or gardening. Today 

they work as domestic servants, hotel 

employees or landscapers. These professions 

are in demand in the region, and 

a job guarantees income. “That changes 

the social structure of society,” concludes 

Priscille Ramcharran, who works as a 

social worker at FMH. Alcohol and drug 

addiction, dropping out of school, unemployment 

and teenage pregnancy have 

long been a sad part of everyday life in 

the holiday dream island in the Indian 

Ocean. “Exactly that is what our master 

plan intends to change,” says Sophie 

Desvaux de Marigny. 

Not only has FMH supported 97 local 

NGO actions with around 15 million 

rupees (€365,000); most of all, it has 

trained the unemployed. “That provides 

families with an income,” says Sophie 

Desvaux proudly of this work. In a 150- 

hour course, FMH trains people to work 

in hotels. Some holiday resorts on the 

west coast of Mauritius cooperate intensively 

with the foundation and provide 

the trainees practical experience “on the 

job”. The operations of Medine also profit 

from the foundation’s work. They recruit 

their employees from the reservoir of 

the previously untrained. 

In 2007, Medine signed the Principles 

of the Global Compact. “Since then,” 

concludes the GC report “Africa leads” 

of 2008, “Medine and the foundation 

have spread optimism and entrepreneurial 

self-help.” With this they have 

also reached people who were previously 

left behind. Medine gives land to 

citizens’ action groups, builds nurseries 

and homes for the handicapped. “The 

foundation sets an example in all its 

activities,” Medine CEO Dany Giraud concludes. 

“We show how people, through 

their commitment, build and strengthen 

neighbourhood structures in which everyone 

suddenly helps to improve living 

conditions and gain access to social assistance 

and good jobs.” 


Nexen 

Yemen Water and 

Sanitation Project 

Is it possible to create a sustainable water and sanitation infrastructure project? 

Yes, but corporations and international organizations, such as the United Nations 

and its agencies, are still learning to work together. And it is paramount to 

effectively engage the community if such projects are to be successful. 

By Jeff Flood 

Nexen Inc. is a Canadian-based, global energy 

company growing value responsibly. 

We are strategically positioned in some 

of the world's most exciting regions: the 

North Sea, deep-water Gulf of Mexico, 

Middle East, offshore West Africa and 

the Canadian Athabasca oil sands. 

Yemen has been a significant international 

region for us since we first began 

production at Masila in 1993. We operate 

the country’s largest oil project and have 

developed strong relationships with the 

government and local communities. 

Yemen is one of the most water-scarce 

countries on earth. Small communities 

in Yemen have very limited resources 

for water and sanitation. When Nexen 

considered options for community investment 

that would make a sustainable 

difference to local residents, water was 

a natural area of focus. 

The community of Ressib is the settlement 

closest to our Central Processing 

Facility. From the outset, Ressib has been 

one of our key areas for community investment, 

with Nexen providing support 

for electricity, drinking water, health and 

education as priorities. 

54 


Best Practice 

Partnership 

As an active member of the UN Global 

Compact, we began looking for ways to 

partner with the UN and its agencies to 

address development-related issues, such 

as the Millennium Development Goals. 

After a period of consultation, we undertook 

to create a sustainable community 

development project in concert with the 

United Nations Development Programme 

(UNDP), with additional support from the 

Canadian International Development 

Agency (CIDA). This was one of the first 

partnership projects announced under 

the Global Compact and the first to be 

launched in the Middle East. 

Our mutual objective was to establish 

a clean water and sanitation program 

in the community of Ressib to enhance 

local quality of life by reducing incidences 

of water-borne diseases. To help 

us achieve those objectives, we launched 

a project to: 

• provide a long-term source of quality 

water for drinking and domestic use 

(local water wells showed moderately 

excessive levels of fluoride); 

• develop a locally appropriate sanitation 

and wastewater management system; 

and 

• build community capacity to sustain 

the water and sanitation systems. 

The project was approved in October 

2004 with the UNDP as the implementing 

body. We had hoped to complete 

the effort within three years. In truth, 

we have not achieved the goals we set 

for ourselves within the hoped-for time 

frame. The project is continuing and is 

now targeted for completion by yearend 

2010. 

There are several reasons for the project 

failing to meet our initial expectations: 

• The organizational cultures of the 

UNDP and Nexen were substantially 

different. The culture of an oil and gas 

company is less concerned with internal 

processes than a UN agency must 

be. For example, the steps required to 

approve materials procurement were 

significantly more detailed – and time 

consuming – than Nexen expected. 

• Thanks to multiple community investment 

efforts by Nexen over the years, 

the community (Ressib) has come to 

expect a “full service” project, with 

Nexen funding, installing and in some 

cases maintaining essential community 

infrastructure. The community has not 

fully embraced the concept of owning 

and managing the water and sanitation 

project themselves. 

• The security situation in Yemen has 

deteriorated since the project’s outset. 

This has limited the ability of UNDP 

staff to travel to, and spend time in, 

the community. 

Originally, the project was estimated at a 

cost of US$2 million, with US$1 million 

coming from Nexen and US$500,000 

coming from the UNDP and CIDA (each). 

With the lag in the project schedule, we 

now expect actual costs will exceed our 

original budget by about 25%. 

In early 2009, Nexen met with the UNDP, 

the Government of Yemen and community 

leaders. Together, we celebrated 

the fact that clean drinking water has 

now been provided to some 700 households, 

serving a population of about 

5000 people. 

By mutual agreement, Nexen agreed to 

complete the sanitation system (to be 

built by a local contractor) and to also 

support the local community in developing 

the capacity to own and manage the 

completed system. 

We are confident the project will ultimately 

achieve its goal of enhanced quality 

of life for the community of Ressib 

through successful completion of the 

water and sanitation project. But given 

the substantial delays in the project, it is 

important for us to capture the lessons 

learned, not only for ourselves but for 

other private/public partnerships such 

as ours. 

So what have we learned? 

We’ve learned not to underestimate the 

cultural differences between corporations 

and international organizations 

such as the UN and its agencies. While 

we both share the goal of sustainable 

development, our approaches to achieving 

that goal can differ substantially. It is 

important to recognize and deploy the 

skills and competencies of the project 

partners in the most effective manner 

right from the outset of the project, and 

to allow for adjustments as project conditions 

change. 

We’ve learned that sustainable infrastructure 

programs require long-term 

commitment from the community and 

the resources, will and education to see 

them through. The community must 

establish a clear champion and commit 

to an education program. 

Perhaps most importantly, we’ve learned 

an important difference between oil 

and gas infrastructure and community 

infrastructure. As a global oil and gas 

company, we have proven to be adept at 

drilling wells, at building roads, pipelines 

and processing facilities – all despite 

significant challenges in terrain, climate 

and culture. But when it comes to 

partnering with international agencies 

and developing community capacity to 

manage their own infrastructure, we’ve 

come to appreciate the complexities 

involved. 

On our part, we’ve learned valuable lessons 

we hope other private-sector players 

can study. We also hope that, from our 

experience, the UN, its agencies and the 

UN Global Compact can learn how to 

partner more effectively with companies 

such as ours. 


Novo Nordisk 

Changing 

Diabetes® 

By Craig Ludwig 

Protecting and promoting the right to 

health is first and foremost a responsibility 

of states. But business can make a big 

difference. Novo Nordisk is committed 

to pursuing its business goals as a profitable 

enterprise. However, as a global 

pharmaceutical company and a leader 

in diabetes care, we believe that we have 

a responsibility to try and influence the 

negative trends of this global health issue 

to prevent unnecessary human suffering. 

That is why we launched Changing 

Diabetes® in 2005, which is dedicated to 

bringing meaningful change to the lives 

of people living with diabetes. This promise 

underpins the company’s strategy in 

diabetes care and three ambitions drive 

its efforts: giving priority to people with 

diabetes, improving treatment outcomes, 

and breaking the curve of the global 

diabetes pandemic. 

There are 3.8 million deaths attributed to diabetes each 

year, accounting for roughly 6 percent of total causes of 

mortality globally. Yet the disease still goes largely ignored. 

Of the estimated 246 million people worldwide who are 

affected by diabetes today, 50 percent do not even know 

they have it. Diabetes is a global issue and presents a 

significant challenge to both the individual and society. 

In low- and middle-income economies, governments 

lack the resources to provide the health care that their 

populations need, and in high-income economies, ageing 

populations – combined with increased treatment costs – 

are putting public health budgets under pressure. 

To improve the lives of people affected 

by diabetes, change needs to happen at 

every level – in science and research, 

in humanitarian and outreach efforts, 

in education, and in government and 

public policy worldwide. This ambition 

poses huge challenges that require collaborative 

actions. 

Giving priority to people 

with diabetes 

The importance of raising awareness of 

diabetes led Novo Nordisk to become a 

strong partner in the Unite for Diabetes 

campaign, which led to the adoption of 

the 2006 UN Resolution on diabetes. The 

resolution calls upon all nations to tackle 

the growing diabetes pandemic. 

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Best Practice 

Human Rights 

In March 2007, Novo Nordisk gathered a 

wide range of stakeholders at a forum in 

New York to discuss how to put the resolution 

into action. The keynote speaker 

at the forum was former US President 

Bill Clinton, who stated: “We will never 

be forgiven, and I mean never, if we 

allow our children to live shorter lives 

than our own.” 

To date, 16 such national forums have 

been arranged in countries across the 

world, including Australia, Belgium, 

Denmark, Italy, and France. The forums 

aim to put diabetes on the health policy 

agenda and offer an opportunity to drive 

change on the ground through discussions 

about national diabetes strategies, 

improved diabetes prevention, and early 

detection of diabetes. At these forums, 

participants debate how to develop sustainable 

health policies and design health 

systems that generate value-based outcomes 

for people with diabetes. 

Improving treatment 

The effects of this devastating disease 

are complex and far-reaching. However, 

all too often, its impacts go unnoticed. 

Raising awareness of diabetes is, in itself, 

a challenge, but words are not enough. 

At the New York forum, Lars Rebien 

Sørensen, Novo Nordisk’s CEO and president, 

pledged to develop a means of 

tracking change and pinpointing areas 

in need of improvement. The Changing 

Diabetes® Barometer – a tool to 

keep score of the fight against diabetes 

– was launched in November 2007. The 

Barometer provides a means of setting 

a baseline and measuring the progress 

of care around the world through a set 

of quality indicators defined by international 

guidelines. It also measures quality 

of life as experienced by patients, and 

records the related health-care expenditures. 

By creating more transparency, 

the Barometer aims to give health-care 

policymakers and health-care providers 

the best possible basis for making 

informed decisions about improving 

health outcomes while bringing down 

total costs. 

Breaking the curve 

While diabetes is not yet a curable disease, 

it can be treated and, in many cases, 

it can be prevented. Novo Nordisk’s global 

awareness-raising campaign drives 

awareness of the personal and societal 

implications of diabetes. Included in 

this effort is the Changing Diabetes® Bus, 

which in September 2006 embarked on 

a world tour to raise public awareness 

about what can be done to prevent the 

onset of type 2 diabetes. To date, the bus 

has visited countries across five continents 

and has had more than 175,000 

visitors. 

Through the National Changing Diabetes® 

programs, Novo Nordisk promotes better 

education of health-care professionals 

and wider availability of screening for 

diabetes symptoms. This initiative works 

to bring together innovators in diabetes 

education and treatment to facilitate 

and advance the prevention, care, and 

management of diabetes. Approximately 

380,000 health-care professionals have 

been trained or educated through Novo 

Nordisk’s National Changing Diabetes® 

programs. 

At Novo Nordisk, we recognize that there 

is a link between poverty and ill health. 

Our comprehensive programs in the field 

of diabetes care also target disadvantaged 

communities and the most vulnerable 

populations with the least access to care. 

Our approach to improved access aligns 

with the UN Global Compact principles 

in respect of human rights and the UN 

Millennium Development Goals, with 

a long-term strategy to provide sustainable 

diabetes care for everyone who 

needs it. 

In December 2008, Novo Nordisk announced 

an ambitious access program 

to change the future of children living 

with type 1 diabetes in the world’s 

least-developed countries. The Changing 

Diabetes® in Children program hopes to 

reach 10,000 children by 2015. 

With the prediction that, by 2025, 380 

million people will be in need of diabetes 

care for the rest of their lives, diabetes 

presents a significant challenge to socioeconomic 

development and the future 

cost to health-care systems. Every 10 seconds, 

two people develop diabetes, and 

one person dies from diabetes-related 

complications. In one generation, the 

prevalence of diabetes has increased 

six-fold worldwide. It does not need to 

be this way. 

Change is essential if we are to break 

the curve of the pandemic of diabetes. 

As a business and as a corporate citizen 

in a world heavily burdened by disease, 

we want to change diabetes. We want 

to change the impact diabetes has on 

lives, change the amount of pain and 

suffering diabetes causes, and change 

the burden of diabetes on economies 

around the world. 


Otto Group 

Our Commitment Against 

Child Labour in India 

Around the globe, some 300 million children aged between five and fourteen work. 

In India, 59 million children do not have the chance to go to school. Instead, most 

of them have to herd goats, crush rocks, collect rubbish, sew sequins onto textile 

articles, clean the houses of rich families, or do other menial jobs to survive. 

By Andreas Streubig 

What has caused this shocking number 

of child workers in India? Child labour 

is mostly the result of the severe poverty 

of families, where every cent counts 

– no matter who earns it. But by working, 

these children forfeit their chance 

to break out of the poverty trap later. 

Moreover, there simply are not enough 

schools, teachers, and books for them, 

especially in structurally poorer regions. 

Many children in school do not receive 

enough support at home – particularly 

if they are the first in the family to go 

to school at all. 

Trading companies in the West that 

import goods from India and want to 

avoid unethical social behaviour in their 

production processes are also having to 

confront the issue of child labour. One of 

these is the Otto Group, a globally active 

trade and services group based in Hamburg, 

Germany. The Group developed 

its Code of Conduct back in 1996, based 

on International Labour Organization 

conventions. In cooperation with the 

Europe-based Business Social Compliance 

Initiative (BSCI), the Otto Group is 

working to guarantee the implementation 

of its Code of Conduct, with the aid 

of supplier audits and training within 

a carefully designed social management 

system. Preventing child labour is a key 

focus of this effort; nevertheless, it is 

impossible to be completely sure that 

children are not still being exploited as 

cheap labour, as this malaise is still too 

deeply rooted in the Indian market. 

This is why in March 2008 the Otto Group 

launched a development policy project 

in partnership with the human rights 

organization terre des hommes to combat 

child labour in India. It is initially set to 

run for three years and will be managed 

by terre des hommes, financially supported 

by the Otto Group, and implemented 

locally with project partners in the respective 

Indian regions. “Our project is 

aimed at tackling the problem of child 

labour on the deeper-lying, structural 

level,” explains Sibylle Duncker, Social 

Compliance Team Lead at the Group’s 

Hamburg head office. “We want to give 

children and adolescents access to a 

school education and so provide them 

with the basis for a professional future 

and genuine prospects in life.” 

This innovative project has two regional 

focal points in India: the capital, New 

Delhi, and the poverty-stricken northern 

state of Bihar, where most child workers 

in the urban industrial centres of New 

Delhi, Mumbai, and Calcutta come from. 

Working closely with state schools and 

local authorities, the project is designed 

to tackle the problem of child labour 

on a structural level in both project 

regions, but with a different emphasis 

in each. In rural Bihar prevention is the 

main priority – to stop children moving 

away and into the labour market 

at all. In New Delhi the goal is to show 

children and adolescents who are already 

in the labour market that they have 

clear alternatives – and to re-motivate 

them to go to school or even to take a 

skills-training course. 

“To combat child labour we’ve developed 

a whole range of interlinked measures,” 

explains Barbara Küppers, who is responsible 

for Child Labour / Social Standards 

at terre des hommes. “In Bihar the first 

step was to launch schooling campaigns, 

to get as many kids as we could into 

school.” In the West Champaran district, 

staff from the Jesuit aid organisation Rural 

Education and Development (READ), 

who are also involved in the project’s 

work, went from door to door to gradually 

gain families’ trust through a per- 

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Best Practice 


in parallel in three state schools so that 

teachers can receive further training. 

Besides, in contrast to Bihar, child workers 

in the slums are also offered direct 

opportunities to leave work and thus 

to break out of the poverty trap. These 

opportunities include giving them new 

skills and offering them alternatives to 

working in factories or restaurants. Kids’ 

Clubs for child workers aged between 

ten and fourteen give them a place to 

meet and to talk about problems at work 

or in their families. Young women are 

trained as seamstresses to give them 

a genuine professional alternative to 

unskilled factory work. 

sonal approach. Many of these families 

are “outcasts”, which is a serious social 

stigma in India. “Outcasts need to take 

great care not to overstep their limits – 

that’s why they often don’t send their 

children to school at all,” says Küppers. 

Children who broke off their schooling 

can catch up in evening classes so they 

can re-enter the state school system. The 

project also provides additional support 

for schoolchildren who are the first 

“school-learners” in their families; as they 

often receive no support at home, they 

have a higher risk of breaking off their 

schooling prematurely. Moreover, 180 

adolescents – half of them girls – also 

receive vocational training. The project 

gives state schools a helping hand with 

teacher training and school management 

programs; at the same time it works to 

mobilize parents and local communities 

for the children’s benefit – for instance 

through setting up school committees, 

but also through giving mothers’ selfhelp 

groups access to micro-credit and 

thus helping them to set up their own 

small businesses to secure their basic 

income. 

In New Delhi, staff from the project partner 

Ankur invite children aged between six 

and ten from three specific slums to play 

and learn together in specially designed 

learning centres. Again, this is aimed at 

giving them another chance of getting 

into the state school system. School management 

systems are being introduced 

So what progress has the project made 

after one year? Is the mix of education, 

training opportunities, and micro-finance 

for families helping to fight child 

labour? In the Bihar project region of 

West Champaran in June 2008, at the 

start of the Indian school year, 1279 

five- to twelve-year-olds were in school 

for the first time, reflecting a total of 80 

percent of local children who had not 

been previously schooled. The villagers 

participated in meetings and discussions, 

local authorities reacted very positively, 

and 140 local community volunteers took 

part in a training program for establishing 

self-help groups. In New Delhi, too, 

all project learning centres such as the 

Kids’ Clubs and the three centres for 

young women have opened – and are 

already operating at capacity. 

Despite these initial successes, there is 

still a long way to go. “An enormous 

and never-ending challenge,” is how 

Maren Boehm, who represents the Otto 

Group’s Corporate Responsibility Area 

in Asia, describes the project. “Grinding 

poverty, pitiful levels of education, 

and social stigmatisation”, are the main 

obstacles to be overcome, she explains. 

“Each and every day it’s a small victory 

for us when we see the kids in school, 

or in interim school, and not sent out 

to the fields to herd goats. We’re not 

working miracles here – but we are 

helping people!” 


REN 

Eagle Conservation 

Project 

By Isabel Abreu and Francisco Parada 

In keeping with its policy of 

supporting a precautionary 

approach to environmental 

challenges and promoting 

greater environmental 

responsibility, REN decided 

to co-sponsor the CEAI 

Bonelli’s eagle (Hieraaetus 

fasciatus) conservation 

project aimed at preserving 

this species and its habitats 

in Portugal. 

Concerned with the potential impact 

of power lines on the Bonelli’s eagle 

population in Portugal and the strong 

decrease of the species’ numbers in Europe, 

including Portugal, REN entered 

an agreement with CEAI (Centro de 

Estudos da Avifauna Ibérica) until the 

year 2010, entailing financial support 

of 240,000.00 EUR. 

Suffering from the strong impact of human 

activities, with the result that it 

is classified as an endangered species, 

the Bonelli’s eagle population in Portugal 

has nonetheless been registering 

a steady growth in the southern part of 

the country – in contrast to its slow 

decline in the northeast. In the south, it 

almost exclusively uses trees for nesting 

in forest and semi-arid habitats, which is 

a characteristic unique in Europe. 

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Best Practice 

Environment 

Within this context, REN decided in 

2007 to co-fund the project that CEAI 

is currently implementing within the 

LIFE/Nature Program to help conserve 

Bonelli’s eagle by combating the threats 

to the tree-nesting population of southern 

Portugal. 

Goals of the project 

Power lines, along with hunting and 

forestry activities, habitat degradation 

and food shortage due to climate change, 

pests, forest fires and inadequate forestry 

practices, and also the lack of public 

awareness are the major threats to the 

stability of the Bonelli’s eagle population. 

With this in mind, the project aims directly 

at the preservation of this species 

and its habitats by: 

• reducing mortality in adult and young 

birds and increasing pairs’ productivity, 

with a positive impact on the species’ 

dynamics; 

• improving habitat management by 

creating better environmental conditions 

for both this species and other 

priority species as well; 

• monitoring the Bonelli’s eagle population 

covered by this project; 

• involving various social actors who play 

an active role in the management of the 

territory and in conservation activities, 

encouraging them to actively promote 

conservation of biodiversity in general 

and of this species in particular; 

• increasing public awareness about the 

species’ ecological significance and the 

threats it faces. 

In line with this, REN seeks to gather as 

much information as possible on the dynamics 

of this species and its distribution 

in the territory, so as to incorporate it 

during planning and permit procedures 

for new power lines and to define impact 

minimization and compensation 

measures. 

Conservation measures 

To accomplish these goals, some practical 

measures have been undertaken, 

including monitoring and census-taking 

of the Bonelli’s eagle population as well 

as capturing and marking the population 

with PTT transmitters. 

In the Portuguese Red Data 

Book for Vertebrates, Bonelli’s 

eagle has been classified as 

endangered, and it is included in 

ANNEX I of the EC Birds directive 

(79/409/CEE). 

50% of the Bonelli’s eagle 

population has been lost in 

Mediterranean France and Spain. 

100 breeding pairs is the 

number of the Bonelli’s eagle 

population estimated in Portugal, 

representing over 10% of this 

species in Europe. 

For more information: 

http://lifebonelli.ceai.pt/en/index.html 

Seen as one of the most important measures 

for conservation of this species, 

habitat management contracts have been 

signed with landowners. It is expected 

that, by the end of the project, 18 pairs 

will benefit from it in the Special Protection 

Zones (ZPE) of Monchique and 

Caldeirão – both part of Rede Natura 

2000. Adding to this, technical support 

has been provided to landowners on how 

to make their forestry activities compatible 

with conservation of nature. 

Public awareness 

To improve public awareness, the project 

has been promoting public sessions in 

several cities in the region, which are 

addressed at hunters, farmers, foresters, 

local administration officials and 

the community, as well as seminars 

and workshops on the impact of power 

lines and wind farms on birdlife. To 

reach students, several environmental 

education sessions have been held in a 

wide range of elementary schools. By 

the end of the 2008-2009 school year, 

this initiative, which includes a field 

trip, pedagogic games and a theatre 

play, is expected to have reached 32 

schools and 820 students. Still within 

the scope of environmental education 

initiatives, the project has launched 

the “Bonelli Parede 2009”, open to all 

schools targeted by this project. Under 

the theme “Bonelli’s eagle – a species 

with a future”, this challenge seeks to 

highlight the importance of preserving 

this species and the environment. 

This “partnership” with CEAI is one of 

many initiatives that REN carries out 

to gain precise baseline environmental 

information to support its permit procedures 

for new lines and substations and 

engage relevant stakeholders in REN’s 

decision-making process. 



Improving the Future 

of Epileptic Patients 

Epilepsy is not a cause of significant mental impediments. Nevertheless, it is often falsely 

perceived as a mental disorder in developing countries. Although epilepsy is not fatal, 

patients who do not receive treatment will experience serious difficulties over their lifetime. 

In addition to the disease being a handicap in daily life and work, over time, people with 

epilepsy face social marginalization or even exclusion. In turn, the social group itself is 

deprived of their economic and social contributions. To address this disease in developing 

countries, all of these factors need to be taken into account. Sanofi-aventis, as a leader in the 

global pharmaceutical industry, is thus providing developing countries not only facilitated 

access to its quality medicines, but also a large number of health services that respond to 

their specific needs. 

By Mireille Cayreyre 

To achieve these goals, sanofi-aventis 

creates partnerships with healthcare 

structures that have a long history of 

in-the-field presence. This proximity 

allows for better patient management 

and follow-up and improved treatment 

compliance. It furthermore provides 

an opportunity to train the entire community, 

so that epilepsy patients are 

correctly oriented and freed from the 

stigma associated with this disease. 

Two medications for the treatment 

of epilepsy worldwide 

The sanofi-aventis Group was the creative 

force behind phenobarbital and valproic 

acid, two of the world’s most frequently 

used epilepsy medications over the past 

40 years. These two drugs are included 

in the WHO Model Lists of Essential 

Medicines. Valproic acid, discovered in 

1967, has completely changed epilepsy 

treatment methods and, in so doing, the 

lives of millions of people with epilepsy 

worldwide. 

The commitment of sanofi-aventis, in 

collaboration with its numerous partners 

(NGOs, universities, governments, etc.), 

to carry out epilepsy management actions 

in developing countries is a natural 

consequence of its history as an authority 

on anticonvulsant development and 

production, as well as its involvement 

in the field of neurology more generally, 

as exemplified by its numerous 

educational programs and clinical trials, 

among other things. 

• Eighty-five percent of epileptics, 42 

million, live in developing countries 

where disease prevalence is more pronounced. 

• In these countries, the yearly incidence 

is from 49 to 190 new cases per 100,000 

inhabitants. This is twice that of developed 

countries. 

• Approximately 5% of the world’s population 

will experience a seizure at least 

once in their lives. 

Eliminating the stigma of epilepsy 

"Epilepsy is always badly perceived in traditional 

cultures. In numerous regions of 

Africa, people with epilepsy are thought 

to be contagious and others avoid touching 

them, especially during a seizure." 

(Reference: Michel Dumas, Académie 

de Médecine, March 2008) 

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Best Practice 

Human Rights 



In some cultures, epileptic seizures are 

attributed to possession by evil spirits. 

The patients are thus put under the care 

of tribal healers or exorcists instead of 

physicians. Lacking proper diagnosis and 

treatment, they live on the margins of 

the community. With a correct diagnosis, 

the vast majority of people with epilepsy 

can be successfully treated with currently 

available medications. 

However, the majority (80%) of epileptic 

patients in developing countries do not 

receive treatment, and are often not even 

diagnosed, due to a lack of access to 

medical structures and medications that 

could help them. This results in serious 

physical, psychological, social and economic 

consequences for the patients and 

their families. (Reference: WHO, “Atlas 

- Epilepsy Care in the World 2005”) 

Putting training where it is 

needed in Africa 

Working in close collaboration with its 

various partners, including NGOs and 

universities, sanofi-aventis is bringing 

together its expertise and particular 

strengths in joint training programs 

in Africa. These programs are designed 

to train networks of physicians for the 

management of chronic diseases, such 

as epilepsy. 

Patient management in Africa is often 

difficult due to the isolation of populations, 

the rarity of healthcare structures 

and the lack of sufficient well-trained 

healthcare personnel. This is even more 

so the case for epilepsy and neurology in 

general. These specialties are almost completely 

absent from medical university 

programs and draw little attention from 

politicians, who are much more focused 

on the infectious tropical diseases that 

are decimating populations. The objective 

is thus to make sure that general 

practitioners (GPs) are both present in 

rural areas and trained for chronic, neurological 

diseases. 

These programs 

are designed to 

train networks 

of physicians for 

the management 

of chronic 

diseases, such as 

epilepsy. 

The effectiveness of these efforts is built 

upon the effective use of existing networks 

of trained GPs and their initiation 

in the management of epilepsy. Similarly, 

in Eastern Africa, state-supported healthcare 

structures have initiated training 

programs to improve the knowledge of 

physicians, nurses and even students in 

epilepsy detection and management. 

All these structures have in common 

very “elaborate” training programs and 

close proximity to the various populations 

and families. This allows them to 

work toward removing the stigma of epilepsy 

and to implement health programs 

adapted to the long-term care of this 

chronic disorder. It is thus logical that 

these organizations and sanofi-aventis 

join hands. 

Sanofi-aventis' partnerships with 

SantéSud in Mali and Madagascar 

and KAWE in Kenya 

SantéSud is an NGO promoting sustainable 

healthcare development in some 

of the world's poorest countries. Sanofi-aventis 

partnered with SantéSud 

to develop programs for rural GPs in 

Mali and Madagascar (AMC, “Association 

of Country Doctors”). According to the 

strategy defined by sanofi-aventis within 

the context of Access to Medicines, these 

programs provide: 

• basic epilepsy training for particularly 

motivated GPs (RARE – “Epilepsy Research 

Action Network”, and REM – 

“Madagascar Epilepsy Network”); 

• access to valproic acid and phenobarbital, 

sold to physicians using a differential 

pricing policy and supplied 

through a distribution system made 

reliable by the active participation of 

all actors, including the distributing 

wholesaler; 

• information and educational documents 

on epilepsy and its treatment. 

These medically thorough documents 

are available to participants in paper 

or electronic versions. In addition to 

basic training, they provide, in particular, 

an opportunity for follow-up 

and exchange of experience among 

trained physicians. 

In Kenya, the KAWE program is designed 

on the same principle and profits from a 

multi-partnership that includes sanofiaventis. 

The training for healthcare 

specialists is provided in hospitals and 

specialized clinics, where patients come 

for consultation. 

These two sanofi-aventis affiliated programs 

have in common: 

• sufficiently numerous and particularly 

motivated healthcare personnel, pro- 

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Best Practice 

Human Rights 

viding patients and their families with 

myth-dispelling facts on the disease 

and improved long-term care; 

• an IEC (Information Education Communication) 

given at program start-up 

and accompanied by follow-up sessions 

(e.g. five three-day training sessions 

over one-and-a-half years for the RARE 

network); 

• access to quality medicines furnished 

by sanofi-aventis at a preferential price 

via a local wholesaler, who has also 

agreed to lower his profit margin. 

• These two programs have resulted in 

the training of more than 35 GPs in 

Mali and the treatment of more than 

1700 epileptic patients, with positive 

results in more than two-thirds of the 

cases. 

• The Madagascar program was launched 

at the end of 2007 with 10 GPs. 

• In Kenya, training has been provided 

to more than 250 physicians, nurses 

and students and resulted in more than 

10,000 patients treated. 

Expanding these actions to 

Cameroon, Cambodia and Laos 

After four years of shared experience, 

SantéSud, sanofi-aventis and the KAWE 

have demonstrated that it is possible for 

rural GPs to provide epilepsy management. 

Families now agree to stop "hiding" 

their children and seek the assistance of 

qualified healthcare personnel, while 

calling less and less on tribal healers. 

These programs have inspired other 

structures, including national-level entities 

and international organizations. 

Indeed, pilot programs are being started 

in Cameroon, with the support of sanofiaventis. 

These include an epidemiological 

study in an isolated region of the country, 

training for the healthcare personnel 

assigned to this region and access to 

medications at preferential prices. The 

International League against Epilepsy 

(ILAE), in its joint program with WHO 

“Out of the Shadows”, also understands 

the importance of multi-partnerships for 

the implementation of campaigns against 

epilepsy. In addition to its participation 

in these various actions, sanofi-aventis 

is developing comparable activities in 

Asia, in Cambodia and soon Laos. 

It is clear that the entire community 

benefits when efforts are made to improve 

the lives of its ill members. In Mali, 

Madagascar, Kenya and Cambodia, we 

are working for a new, better, healthier 

and more productive future; a future 

that benefits our Group as well. Through 

the use of our medicines and know-how 

for patient treatment and the training 

programs that result from our on-site 

partnerships, sanofi-aventis, through 

its sustained engagement against this 

chronic disease, is actively strengthening 

the battle against epilepsy in developing 

countries. 


Groupe SEB 

Self-assessment 

regarding respect for 

Human Rights 

By Marianne Tisserand and Christian Coutin 

As world economies become globalized, the new challenge is to ensure that multinational 

corporations can be held accountable not only for the impact of their activities on human 

beings but also for their respect of Human Rights. To date, there is no supranational legal 

institution with the appropriate means to enforce human rights in a mandatory way. 

Companies that agree to assume responsibility do so voluntarily. But for an international 

firm, ensuring that Human Rights are respected can be quite difficult. The standards 

developed to protect people’s rights were originally drafted for states, so additional practical 

steps are required to apply those standards to companies and to develop concrete ways to 

implement and track them within a corporate environment. 

In 2003 when Groupe SEB signed the 

United Nations Global Compact, Groupe 

SEB committed to carrying out the Ten 

Principles of the Global Compact, including 

principles 1 and 2 concerning 

Human Rights. It was necessary to find 

a tool to transform this general concept 

into a concrete reality and to assess the 

way Human Rights are taken into account 

locally in each subsidiary. This tool 

should use “standardized” language that 

is approved by international institutions 

and that can be understood by everybody. 

Moreover, it should be easy to use to help 

the staff adhere to this tool and to the 

principles that are associated. 

What is HRCA? 

The Human Rights Compliance Assessment 

(HRCA) is a self-assessment tool 

66 


Best Practice 

Human Rights 

developed by the Danish Institute for 

Human Rights and promoted by the 

United Nations Global Compact. It is a 

self-diagnostic tool designed to help companies 

detect potential Human Rights 

violations in all aspects of their operations 

(employment practices, community 

impact, supply-chain management). This 

web-based tool comprises a database composed 

of indicators developed from the 

Universal Declaration of Human Rights, 

the 1966 Dual Covenants, and around 

80 other major treaties and conventions. 

The tool was the subject of extensive 

consultation – which involved over 

35 international human rights experts, 

50 human rights organizations, and 70 

international companies – to ensure it 

represented a broad consensus on the 

level of responsibility that companies 

should assume for Human Rights. Additionally, 

the researchers implemented 

tests of the tool in a number of different 

international companies to ensure the 

tool was practical, reliable, and met the 

needs of businesses. 

Consisting of a questionnaire of 350 

main questions (subdivided into 1000 

corresponding indicators), the tool at first 

appeared too large to be implemented 

rapidly. It would have required too much 

time or the involvement of too many 

people to complete, so it would not have 

been adapted in several cases. Indeed, 

there might have been a gap between 

the complexity of the tool and the size 

of certain of our subsidiaries, some of 

which only employed a few people. 

Therefore, in order to ensure maximum 

impact in a shorter amount of time and 

to provide people with the use of an 

operational tool, Groupe SEB decided 

to implement the shorter version, the 

HRCA “Quick Check” – composed of 

only 28 main questions (240 corresponding 

indicators), that is, approximately 10 

percent of the entire HRCA database. It 

appeared easier to implement and more 

pedagogic for users. The Quick Check 

identifies the most essential Human 

Rights issues a company must consider 

in relation to its activities. The indicators 

determine whether the company has 

policies or guidelines in place to address 

the Human Rights issues, and whether 

appropriate procedures/practices are in 

place to effectuate the policies. 

The indicators whether or not a company 

complies with the issue raised in 

the main question. It is necessary to 

answer each corresponding indicator 

before answering the main question. 

For each indicator, there are five predetermined 

choices: yes, no, F/A (further 

attention required), N/A (not applicable), 

or unknown. 

Once the answers are given for the 28 

main questions, final results are classified 

by topic and by category of answer 

(answers requiring further attention, 

answers conform with Human Rights, 

etc.). Thereby it is easier to clearly identify 

areas of progress and implement a 

plan of action for improvement. 

Implementation of 

the HRCA 

Groupe SEB was one of the very first 

French companies to implement the 

HRCA Quick Check. In 2007, Groupe 

SEB tested the tool at six international 

pilot sites, and in 2008 it extended it to 

100 percent of its industrial sites and 

logistics platforms (excluding its recently 

integrated company Supor at this stage). 

The HRCA Quick Check was completed 

by different people at each site (depending 

on the subject matter). In general, 

the Human Resource manager and the 

site manager are the personnel ideally 

suited to respond to this questionnaire. 

In 2009/2010, it will be deployed to commercial 

and service entities in Groupe 

SEB. 

Results and implementation of 

concrete measures 

This tool reinforces people’s awareness 

of the topic of Human Rights. The results 

of the HRCA questionnaire help 

in identifying areas that are at risk of 

being in non-compliance with Human 

Rights. For those who receive answers 

stating “requiring further attention” 

or “non-conform non compliance with 

Human Rights”, an action plan will be 

implemented to improve the situation 

and to ensure that all policies and practices 

respect Human Rights according 

to the HRCA Quick Check (particularly 

in countries where respect for Human 

Rights is still a very sensitive question, 

or still lacking legislation). 

In addition, the Quick Check results 

for each site are forwarded (on request) 

to the internal audit department. This 

department integrates several aspects 

of the HRCA (following a risk-mapping) 

as well as other aspects of the Global 

Compact in its mission,. The objective is 

to ensure that the answers given by the 

particular site are in line with the actual 

situation, and there is the possibility that 

the answers might be challenged. 

Suppliers: clear rules 

for compliance 

Groupe SEB also wants its suppliers to 

comply with local labour laws, especially 

in countries where respect for Human 

Rights is a very sensitive issue. Since 

2002, it has gradually been circulating 

social declarations based on Social Accountability 

8000 – one of the international 

standards in this area – and 

asking its suppliers to fill it in. This is a 

key requirement for Groupe SEB which 

conducts targeted social audits (internal 

and external) to monitor actual practices 

in the field. For any serious breaches of 

regulation, Groupe SEB suspends new 

orders with the supplier and demands 

implementation of a corrective action 

plan before any resumption in cooperation. 

Sustainable development criteria (social 

and environmental) form an integral part 

of the purchasing guidelines and general 

purchasing conditions. In addition, since 

2008, all panel suppliers and potential 

panel suppliers are subjected to specific 

assessments that take into account social 

and environmental aspects. 


Siemens 

From compliance 

to integrity 

In December 2008, Siemens reached a settlement with the investigative 

authorities in Germany and the U.S., thus bringing to an end the legal 

proceedings connected with bribery allegations in those two countries and 

concluding one of the most difficult chapters in the company’s history. Over the 

last two years, Siemens has implemented one of the world’s most comprehensive 

compliance programs and created a company culture focused on transparency 

and ethical business practices. 

By Dr. Andreas Pohlmann 

In 2008, the world-renowned Dow Jones 

Sustainability Index gave the company 

top marks in the categories risk management, 

compliance and corporate governance. 

This ranking – which took place 

only a year after Siemens had placed 

last in all three areas – demonstrates 

the enormous progress the company has 

made. Siemens’ robust company-wide 

compliance program and the massive 

expansion of its internal compliance organization, 

which now employs roughly 

600 people, are just two of the measures 

the company has implemented. In 2008, 

Siemens also conducted its first employee 

survey devoted exclusively to the compliance 

issue. And here again, the results 

were generally positive. 

Siemens sent the 2008 Employee Perception 

Survey to 90,000 employees. In 

order to identify the measures needed 

to further change its company culture, 

Siemens wanted to know how firmly 

its compliance program had taken hold, 

whether the program’s messages had 

been accepted and how well managers 

were communicating compliance-related 

topics. 

The survey confirmed that compliance is 

an important issue for the overwhelming 

majority of Siemens employees. It also 

confirmed that company employees had 

understood the compliance program 

and recognized its appropriateness, that 

compliance-related messages had been 

accepted and that management had set 

the right tone in communications. It was 

also clear from the survey that employees 

had acknowledged their responsibilities 

and were aware that violations of the 

rules would have consequences. 

However, the survey also indicated that 

further measures would be necessary in 

some areas in order to familiarize the 

workforce with compliance requirements. 

The tone from the top is clear and, in 

the words of Siemens CEO Peter Löscher, 

“only clean business is Siemens business 

– everywhere and at all times.” 

Consequences of the survey 

As a result of the survey, Siemens’ individual 

Sectors (Energy, Industry and 

Healthcare) and its Regional Companies 

around the world have defined and, in 

some cases, already launched additional 

measures for improving compliance 

awareness. The measures range from 

specific communications plans and campaigns 

at the level of individual business 

units to projects such as intranet videos, 

quizzes and compliance workshops to 

employee events with members of the 

compliance organization, compliancerelated 

discussions in employee newsletters, 

the establishment of processes and 

platforms for identifying and presenting 

model behavior in difficult situations 

and support by compliance experts for 

the sales organization. 

These measures are intended to substantially 

expand and deepen employee 

knowledge of ethically and legally irreproachable 

behavior. Their rigorous 

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Best Practice 

Anti-Corruption 

Like an inner compass: ethically and 

legally irreproachable behavior at 

Siemens should be determined not 

only by knowledge of the facts but 

above all by the right attitude. 

application will also help the workforce 

internalize the requirements of such 

behavior. Furthermore, the measures 

will create a general attitude that, like 

an inner compass, will automatically 

indicate the right thing to do in problematic 

situations. 

Managerial responsibility 

The Siemens Compliance Program 

The Siemens Compliance Program is based on three pillars: 

Prevent. Our revised Business Conduct Guidelines require employees to 

behave in accordance with the law and internal company regulations. All 

internal anti-corruption regulations are set out in the Siemens Anti-Public- 

Corruption Compliance Manual. An “Ask us” helpdesk provides an around-theclock 

point of contact for all compliance-related questions. In addition, more 

than 200,000 employees have taken part in compliance training. 

Detect. Unethical business practices can be reported to our independent 

ombudsman by both employees and third parties. A “Tell us” helpdesk also 

enables employees and external stakeholders to submit complaints about 

irregularities in 160 languages via the Internet or by telephone. In 2008, a total 

of 539 reports were made using these two channels. 

Respond. All the sanctions permitted by labor law are available to the 

company for imposing internal disciplinary measures for compliance 

violations. In 2008, Siemens instigated disciplinary measures for 909 

infringements of different kinds. For 26 percent of the employees involved the 

employment status was terminated. 

A stronger understanding of the role 

of local compliance experts as reliable 

advisers is intended to support this 

transformation. It is also vital, however, 

that managers rigorously implement 

the compliance program. That’s why 

the compliance awareness measured 

by the Employee Perception Survey is 

a factor in calculating senior management’s 

compliance-related incentives. 

After all, compliance influenced managers’ 

bonuses in fiscal 2008 by some 

17 percent. 

The Employee Perception Survey is, accordingly, 

yet another effective part of 

Siemens’ compliance management program 

– complementing the existing 

compliance program, the company’s 

internal compliance organization and 

the recently appointed Compliance 

Monitor, whose main function is to examine 

and evaluate the effectiveness 

of Siemens’ compliance program and 

advise the company on the program’s 

further development. All in all, Siemens 

has made substantial progress toward 

establishing a culture of responsibility 

and integrity. 


PT Smart TBK 

Cleaner Production 

Program in SMART 

As one of the largest 

integrated palm plantation 

companies in Indonesia, 

PT Sinar Mas Agro Resources 

and Technology Tbk 

(“SMART”) harnesses best 

management practices in 

administering its operations 

to produce sustainable palm 

oil in accordance with the 

Roundtable on Sustainable 

Palm Oil (“RSPO”) Principles 

and Criteria (“P&C”). 

Sustainability is our commitment and 

has become a fundamental guiding principle 

in managing the palm oil plantations, 

resulting in a series of initiatives. 

These serve as a manifestation of the 

Company’s long-term commitment, as an 

engaged corporate citizen and participant 

in the United Nations Global Compact 

(“GC”), to implement GC’s principles, 

especially in the area of environment. 

One of the sustainability practices is 

the Cleaner Production Program that 

covers both oil palm estates and mills 

(fruit processing facilities). 

The Cleaner Production Program encompasses 

a zero waste policy advocating 

the 3R (Reuse, Recovery and Recycling) 

principle. In this program, SMART encourages 

reusing as well as recycling all 

residues arising from oil palm cultivation 

for organic fertilizer and as a source of 

energy. These initiatives not only provide 

a positive impact on environmental sustainability, 

they may also increase cost 

competitiveness in the industry. 

Optimal Utilization of 

Organic Fertilizers 

SMART uses best practices to reduce 

the risk to the environment from application 

of mineral fertilizers. SMART 

has developed a comprehensive methodology 

to monitor and minimize the 

environmental impact from their usage. 

SMART has also put into its standard 

agronomy operations various environmentally 

friendly practices of applying 

non-chemical, nutrient-enriched waste 

products, such as empty fruit bunches 

and palm oil mill effluent (“POME”), back 

to its fields as organic fertilizers. These 

practices minimize the impact on the 

environment and provide savings in 

maintenance costs for the estates. By 

utilizing organic fertilizer, both empty 

fruit bunches and POME, SMART has 

reduced the usage of chemical fertilizers 

by more than 20 percent per annum. 

After the palm fruits are processed into 

crude palm oil, the mill generates empty 

fruit bunches as residue, with an average 

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Best Practice 

Environment 

weight of approximately 21 percent of 

the mass of fruit processed. The empty 

fruit bunches are applied directly to the 

oil palm estates at a specific dosage. As 

the nutritional content quickly declines, 

empty fruit bunches should be applied 

within six days in order to maximize 

the benefit. As organic mulch, empty 

fruit bunches provide natural nourishment 

to the oil palm trees and soil; provide 

a growth medium for beneficial 

RSPO Principles 

effluent to the estates, ponds should be 

established to store the digested effluent, 

which is channeled directly from the 

mills to the estates. 

SMART uses the shells and fiber of husks 

from the fresh fruit bunches, which are 

the solid waste from the mills. 

Reduce Dust from Boilers 

To promote cleaner air, SMART has 

initiated the usage of boilers that are 

equipped with "dust collectors" or "multicyclones", 

as some would call them. The 

main function of dust collectors is to remove 

the smallest-sized particulates from 

the boiler flue gas so the exhaust released 

to the atmosphere is clean. In addition, 

most of the mills are also equipped with 

automatic fuel and draft controls that 

can improve the burning or combustion 

efficiency of the palm fuel (shell and 

fiber) and ultimately avoid dust. 

1. Commitment to transparency 

2. Compliance with applicable laws and regulations 

3. Commitment to long-term economic and financial viability 

4. Use of appropriate best practices by growers and millers 

5. Environmental responsibility and conservation of natural resources and 

biodiversity 

6. Responsible consideration of employees and individuals and communities 

affected by growers and mills 

7. Responsible development of new plantings 

8. Commitment to continuous improvement in key areas of activity 

Bio-gas Generator Initiatives 

SMART is continually pursuing other 

initiatives to reduce or prevent negative 

environmental impact, such as methane 

gas release, waste water and production 

residue that can pollute and endanger 

the environment. Advanced options are 

being reviewed to further reduce the usage 

of diesel by replacing it with bio-gas. 

Currently, an alternative is being worked 

on to reduce the use of diesel by capturing 

methane gas from mill effluent. 

micro-organisms; stimulate the growth 

of new roots; promote soil conservation 

to prevent erosion and intensify the soil’s 

water-holding capacity. 

The POME from the mill, generally representing 

55 percent of the mass of fruit 

processed, can also be used as organic fertilizer, 

after being digested in the waste 

water treatment plant to decrease several 

parameters in accordance with the 

Decree of the Minister of Environment 

of the Republic of Indonesia Number 

29, Year 2003. Digested palm oil mill 

effluent contains natural nutrients and 

water for the oil palm trees and soil and 

provides a growth medium for beneficial 

micro-organisms. To apply the digested 

As an alternative to direct application 

of the digested effluent and empty fruit 

bunches to the estates, organic compost 

can also be generated by spraying 

the digested effluent onto the shredded 

empty fruit bunches. After the decomposition 

process, empty fruit bunches will 

lose half their weight and 80% of their 

volume, but the nutrient content will 

remain the same. This alternative allows 

efficient transportation and application 

of the composted empty fruit bunches to 

estates located far from the mills. 

Use of Shell and Fiber as 

Fuel in Boilers 

Minimizing usage of diesel means reducing 

the consumption of fossil fuels and 

emissions released into the air, as the 

exhaust from diesel generators contains 

hydrocarbons and nitrogen oxide (NOx), 

which increase pollution. Instead of using 

diesel to fuel the boilers in the mills, 

Conventionally, mill effluent is treated 

in open lagoons, where it undergoes an 

anaerobic process that releases methane 

gas to the atmosphere. The methane 

gas released could be captured by biodigesters 

and burnt in gas engines to 

generate electricity for the mill. In this 

way, emission of methane gas to the atmosphere 

is eliminated. At the same time, 

the usage of gas in generators to produce 

electricity, as a replacement for diesel 

generators, greatly reduces the exhaust 

gases from fossil fuel. SMART will constantly 

embrace technological innovation 

to work on more advanced alternatives 

that constructively contribute to lessening 

the impact on the environment and 

ultimately preserving nature. 

Contact: Ismu Zulfikar 


TMS Group 

Lead by Example 

The purpose of the venture between TMS and its key customers is to provide a working 

strategy to implement the Business Social Compliance Initiative (BSCI). The key is a 

partnership in respecting human dignity, managing risk, and maximizing the opportunities 

in the supply chain by taking a proactive and ethical approach. 

By Jeffrey Revels 

The TMS Group has established itself as 

one of the leading sourcing organizations 

for apparel and fashion accessories in 

Asia. With offices in the United States, 

Hong Kong, China, India, Bangladesh, 

and Indonesia, the thriving group delivers 

fashionable products and services at 

the highest quality level to customers 

worldwide. 

The TMS Group is a preferred supplier 

with a number of well-known and fashionable 

international apparel brands. 

The TMS Group global customer-base 

markets products in five continents and 

more than 40 countries, in virtually every 

corner of the globe. 

The TMS Group partnered with all key 

customers in implementing the BSCI 

with all of its suppliers. The pilot venture 

commenced in late 2006, and the formal 

launch was in November 2007. All participants 

are strongly committed to social 

responsibility as an integral element of 

long-term business success. BSCI is not a 

just a social, ethical, or business-driven 

set of values and ideals. It is also a moral 

responsibility inherent for any corporate 

citizen, and one that ultimately must 

respect human dignity. BSCI has a wideranging 

and comprehensive approach to 

the introduction, implementation, and 

sustained achievement of Corporate Social 

Responsibility (CSR). The TMS Group 

exercises its role thru a partnership and 

mentoring approach with its suppliers 

on a global basis. 

The key element within the collaboration 

between committed suppliers and 

the TMS Group is the internal global 

compliance philosophy that focuses 

on supplier education, coaching, and 

achieved compliance. This approach is 

enhanced by audits in standards and 

policies in the following areas: employee 

rights, compensation, workplace environment, 

economics, and eco/environment 

sustainability. Through this 

aspect of supplier education, the power 

of the commonly referred to “WIIFM" 

principle is unleashed with suppliers. 

The “WIIFM” (“What’s in it for me”) 

principle demonstrates to suppliers the 

measurable advantages of BSCI in the 

core areas of: 

• Optimizing working conditions 

• Increasing productivity 

• Higher product quality 

• Higher satisfaction for workers and 

consumers 

• Obtaining a “preferred supplier status” 

The combined success of this approach 

is reflected in the BSCI Self Assessment 

and Code Declarations for 100 percent 

of existing and new suppliers. The performance 

of the supply chain is one of 

the main CSR concerns that the TMS 

Group and key customers manage and 

measure across their businesses with all 

suppliers. The key is that, as partners, 

we must lead by example, and that we 

are ethical, transparent, and accountable 

in our daily work, and pass this 

philosophy on to our supply base as a 

requirement. 

The TMS group strategy 

Taking the “lead by example” approach, 

we utilize the combined framework of 

the Global Compact/BSCI to create partnerships 

aligned with clear and measurable 

global standards that are addressed 

in a proactive way with suppliers. This 

developed strategy to implementing BSCI 

is part of an overall three-tier Corporate 

Social Responsibility philosophy that 

addresses three core areas: 

(A) Protection: Human Rights, reputation, 

and liability risk management 

(B) Builders: Enhance corporate reputation, 

strengthen efficiency for quality/ 

cost/cycle time 

(C) Innovation: New supplier certifications, 

products, or expanding capacity 

and skills within existing suppliers 

and re-certification 

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Best Practice 


and to prompt corrective action (short/ 

long term) to address any shortfalls. 

Within nine months of formally implementing 

BSCI, the TMS Group achieved 

67 percent compliance of all suppliers 

with either BSCI and/or SA8000 standards; 

33 percent are progressing towards 

satisfactory compliance, with an anticipated 

90 percent target for full compliance 

by January 2009. 

The main drivers that support the TMS 

Group philosophy are the fundamental 

universal drivers such as the UN Universal 

Declaration of Human Rights, the 

International Labour Organization conventions, 

and parallel certifications such 

as SA8000. They focus on the importance 

of proactively managing and removing 

sources of Human Rights/dignity risk. 

This covers social, environmental, and 

ethical risk factors. They are a critical 

part of the program and integrated into 

the internal and informal audit processes 

and supplier education curricula. 

Taking action step by step and 

getting results 

(E) On-site, unannounced inspections 

(F) Supplier forums on compliance and 

country legislative changes 

(G) Re-certification and continuing education 

For “high-risk” areas that are identified 

as being in danger of not meeting or 

failing to maintain the TMS Group or 

BSCI standards, the approach is even 

more proactive. Further actions include 

bi-weekly on-site assessments or training 

to identify to what extent suppliers in 

these areas are meeting the standards 

Developing skills 

The TMS Group, in collaboration with 

key customers, continues to develop its 

internal Compliance Team, applying this 

year's requirements for advanced SA8000 

Auditor Certification for all compliance 

officers, along with continuing education 

curricula. Why is it CSR? The TMS 

Group supply-chain activities respect 

human dignity and combine educationbased 

strategies that proactively address 

risk to Human Rights and reputation. 

In some instances, the BSCI and TMS 

Group social requirements go beyond 

current legislative requirements. BSCI is 

uniquely tailored to meet the particular 

relationships with suppliers. Respecting 

human dignity, while continuing to deliver 

business results to all stakeholders, 

is achievable and sustainable. 

Since the formal launch of implementing 

BSCI in November 2007, the TMS Group 

compliance and key customer compliance 

programs have implemented the 

following framework for delivery and 

attainment of BSCI standards: 

(A) TMS Group initial screening, followup 

audits, and curriculum development 

for suppliers 

(B) TMS Corrective Action Plan training 

and support with factory management 

(C) BSCI self-assessments 

(D) BSCI initial audits, and follow-up 

audits 

Suppliers with BSCI/SA-8000 standards 

Total suppliers: 

78 (100%) 

Active suppliers with key customers: 

70 (90%) 

Pending key customer confirmation: 

8 (10%) 

September 30, 2008 TMS Fashion (H.K.) Ltd. 

19 (24%) 

BSCI Re-Audit 

21 (27%) 

Pending BSCI 

Initial Audit 

38 (49%) 

Pass BSCI or 

SA-8000 


Toms 

Aid for children 

from the cocoa 

supply chain in Ghana 

The recurrent focus on the issue of child labour in the cocoa bean supply chain caused 

Danish chocolate manufacturer, Toms, to partner with Danida and IBIS, a Danish aid NGO. 

This partnership has resulted in a Toms education project in Ghana, improving the quality of 

schooling for 15,000 children in cocoa producing areas. 

By Charlotte Thorø Berghof 

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Human Rights 

The project has already made a difference 

for thousands of children in Ghana and 

at the same time has been an important 

learning process for Toms. This project 

in Ghana was a first for Toms. It has 

given Toms hands-on experience from 

the supply chain and, at the same time, 

spread a sense of satisfaction amongst 

the company’s employees about this 

corporate responsibility initiative. 

Toms has always sourced most of its 

cocoa from Ghana. Although Toms 

is the largest confectionery manufacturer 

in Denmark, its cocoa purchase 

is equivalent to less than one percent 

of Ghana's total cocoa export. Though 

Toms is a somewhat small player in the 

international cocoa market, the company 

decided to make a commitment to the 

Ghanaian cocoa producers corresponding 

to the size of its purchases. The education 

project is one expression of this 

commitment. 

One of the biggest issues to consider 

when buying cocoa from Ghana is the 

issue of child labour. Due to its commitment 

to the Global Compact, Toms 

wishes to dissociate itself from all cases 

of child labour. However, the issue of 

child labour in the cocoa supply chain 

is complicated, as it is intertwined with 

poverty and cultural traditions. 

Cocoa in Ghana is produced by approximately 

850,000 small family farms. Many 

of these families are very poor and have 

their children assist them to generate 

more income. How best to be a cocoa 

farmer is traditionally passed on from 

generation to generation, and it is therefore 

very important to the parents to 

make sure that their children will be 

able to take over the farm one day. 

The problem is not that children help 

their parents farm cocoa. But when helping 

the parents prevents the child from 

attending school, or when it harms the 

child physiologically or mentally, it is 

considered to be child labour. 

The project that Toms has embarked 

upon addresses the goal of protecting 

children, and consists of several components. 

The project seeks not only to ensure 

that children attend school; it also seeks 

to ensure that they stay in school. The 

quality of education in rural schools is 

often so poor that it demotivates both 

children and parents, who are unsure 

what good will come out of attending 

school. The poor quality stems from 

both outdated teacher education and, 

more commonly, a basic lack of teachers. 

Very few teachers wish to work in 

remote areas, like the cocoa producing 

areas, and so teaching in village schools 

is often undertaken by young boys or 

girls with no formal training. Though 

the young untrained teacher’s efforts 

are an attempt to give the children some 

kind of education, the quality is often so 

poor that parents choose to keep their 

children at home. 

As a result of this vicious circle, the main 

component of the project addresses the 

teachers. The Ghanaian Government 

already has an education system set up 

in these areas but is faced with many 

challenges, among other things due to 

a lack of resources. The project therefore 

feeds into the existing governmental 

structure. 

In the districts encompassed by the 

project, about 400 trained teachers and 

350 untrained teachers have been supported, 

either by updating their teaching 

capabilities or providing actual teacher 

training. 

So far, the outcome of the training as well 

as the commitment from the teachers 

has been overwhelming. For example, 

the untrained teachers spend almost 

all their spare time and vacations at 

the training college, overjoyed in their 

eagerness to receive formal training. 

Most importantly, the feedback from 

the teachers themselves shows that the 

project benefits the children in more 

than only academic ways. One of the 

teachers reported no longer hitting the 

children, as his training has equipped 

him pedagogically to refrain from corporal 

punishment when situations arise 

in the classroom. The same teacher also 

explained how the children now confide 

in him, because he has realized that his 

responsibility is not only to teach but also 

help the children and prepare them for 

a future outside of school. 

As in many places in Africa, the schools 

have no or only very few educational 

materials. As part of the project and as 

a way of supporting the teachers, the 

project also supplies such materials to 

the schools. 

The project takes a holistic approach. 

Accordingly, it not only focuses on the 

teachers but also the parents. As a result, 

a local NGO has been engaged in the 

project to support existing or start up 

new Parent Teacher Associations (PTAs) 

as a means of involving the parents in 

their children’s education and as a way 

of addressing the issue of child labour. 

Furthermore, radio programmes have 

been produced and broadcasted locally. 

The programmes are primarily addressed 

at the parents and are yet another way 

of engaging parents on the issues and 

dilemmas also discussed in the PTAs. 

In addition to the actual project in Ghana, 

Toms has decided to share the experience 

from the project with Danish students. 

Every year, approximately 15,000 students 

visit Toms to gain an insight into 

the company and chocolate production. 

Toms wishes to use this opportunity to 

communicate with the visitors about 

the company and its supply chain. The 

students will therefore be introduced to 

the way of life and challenges of children 

in the cocoa producing areas. 

The education project has enjoyed success 

and strives to ensure that all children 

in the cocoa supply chain are treated 

properly. Similarly, Toms’ engagement 

in the cocoa supply chain is a sign of its 

commitment to responsible and proper 

management. 



FIT 5 - Factory Improvement 

Training in China 

Globalization is a market driver in all economies around the world. Rapidly growing 

and emerging markets offer high potential, but also high risks when measured against 

international standards and common business behavior. In order to improve the 

situation of suppliers in these new economies, it is necessary to inform, train and support 

factory owners as well as workers in implementing management systems and 

improving production. 

By Sherin Lin and Dagny Bühler 

Increasing production while at the same 

time being a socially responsible employer 

can be a challenge. Particularly wellknown 

are examples from the sportswear 

and textile industries. Being a supplier 

for brands that are sold all over the world 

often means adopting the standards of 

each brand owner. Enabling the suppliers 

to have a say in the process and deciding 

which standards are important to them 

are some of the goals of the FIT 5 Program 

(Factory Improvement Training based on 

5 integrated modules: Communication, 

Human Resource Management, Lean 

Manufacturing, Occupational Health and 

Safety and Social Accountability). The key 

to success is to transfer responsibility and 

ownership, making it a desired change 

that comes from within rather than one 

forced by customers or buyers. 

TÜV Rheinland Group in Shenzhen and 

CSR Asia, in collaboration with the German 

not-for-profit organization InWEnt 

gGmbH (Capacity Building International, 

Germany), have developed this multisupplier 

training program linking productivity, 

quality management, CSR and 

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Best Practice 


the essential basic rights with respect to 

selected ILO standards, Chinese labor law 

and workplace conditions. 

Implementation of the program is usually 

a process lasting six months, where 

experts accompany the factory’s management 

and staff in putting the agreed 

measures into action. The program can 

be conducted in a group with up to six 

factories simultaneously. The results of 

the progress evaluations in the selected 

companies were impressive – even after 

the short 6-month period. After the 

companies participated in the program, 

working hours were reduced by more 

than a third, productivity increased by 

up to 50%, and employee satisfaction 

was improved by 40%. 

Five integrated modules, consisting of 

Communication, Human Resource (HR) 

management, Lean Manufacturing, Occupational 

Health and Safety (OHS) and 

Social Accountability, are the core of 

the program. To begin with, all managers 

take part in a seminar to improve 

how they communicate with customers 

and employees. Communication is the 

foundation for successful completion of 

the program. The topics covered in the 

management seminar are team building, 

managing complaints and effective 

grievance procedures. This module takes 

into consideration Principle 3 of the UN 

Global Compact, supporting open structures 

to enable collective bargaining and 

the freedom of worker association. 

In the second module, a coherent HR 

management policy is developed together 

with the participants – recruitment 

and selection processes are defined, 

training and performance management 

developed. Here the emphasis is on the 

UN Global Compact Principles 4, 5 and 

6, making sure that the company’s HR 

department is aware of international 

labor standards and the internationally 

recognized rights of workers. 

Module three, Lean Manufacturing, 

drives all other aspects of FIT5; followed 

by the fourth module, Occupational 

To begin with, all managers take part 

in a seminar to improve how they 

communicate with customers and 

employees. 

Health and Safety (OHS), which, together 

with Social Accountability (module 5), 

puts the focus on employees as the main 

asset of a sustainable manufacturing 

process. TÜV Rheinland also makes sure 

that all managers are aware of human 

rights and possible human rights abuses 

that could take place in their factories. 

Suggestions are made on how to stop 

any breaches of international law and 

prevent abuses in the future. 

Implementation of the program also follows 

five successive steps. Before starting 

the program, consultants schedule an 

on-site factory visit, report their findings 

in a status assessment and, together 

with the management, decide on key 

performance indicators for the project 

as a basis for all subsequent actions. 

The assessment is followed by a training 

seminar for the company managers, 

in which progressive communication 

and modern management structures 

are discussed. After this step, another 

factory visit takes place, where initial 

improvements are monitored and advice 

is given for further implementation of 

the socially responsible manufacturing 

process. If all relevant criteria have been 

fulfilled after six months, progress reports 

are provided and a FIT 5 certificate is 

awarded, which confirms that participation 

has actively improved structures for 

implementing a standardized sustainable 

manufacturing process. 

What happens if a supplier is not successful? 

In a few cases, managers’ commitment 

was low, even though they had 

voluntarily signed up for the program 

earlier. In severe cases, when management 

continuously arrived late for the 

training, only assigned junior staff to 

participate in the program, and did not 

increase their commitment even after 

in-depth discussion, the companies had 

to drop out of the program. 

In summary, it can be said that, before 

starting the FIT 5 program, the 18 participating 

companies had needs for improvement 

in various areas: production was 

organized ineffectively, standard working 

hours had not been recorded, factories 

were cluttered with semi-finished 

products and waste. Additionally, an 

interdisciplinary lack of communication 

was apparent, employee turnover was 

enormous and local and national legal 

requirements where in many cases met 

only in part. 

All monitored factories made improvements 

on the points assessed over the 

six months of the FIT 5 program. Every 

achievement was unique, based on the 

factory’s situation, but all provided some 

relief regarding problems with excessive 

working hours, a crucial component of 

the CSR work that is integrated into the 

Lean Manufacturing module, or better 

human resource management via the 

HR module. Additionally, all factories 

were able to increase worker satisfaction 

and could thus significantly reduce 

employee turnover. 

Because the program has been a great 

success in South China, there are plans 

to expand it to other developing regions. 

FIT 5 has been approved as a significant 

Sino-German CSR Public-Private Partnership 

Program from 2009 to 2011 by the 

German Ministry for Economic Cooperation 

and Development (BMZ). 


News around the world 

Africa 

Providing Know how 

Accessibility and availability of products are as well as the 

training of good heath care professionals the key problems 

in rural areas in Africa. We talked about that with Mireille 

Cayreyre from Sanofi-Aventis. 

The health situation in Africa 

is still precarious. What are the 

main obstacles faced by African 

health-care systems? 

Everywhere in the world, 

the quality of health-care systems 

depends first on the level 

Mireille Cayreyre, 

of priority assigned to public 


health by political decision 

makers. Because of the precarious 

financial situation of many 

sub-Saharan African countries, 

African health systems are impacted by underfunding, lack of 

infrastructures, and lack of qualified human resources. Each 

African country has its own peculiarities and only countryspecific 

solutions can bring sustainable improvement. 

How can pharmaceutical companies like Sanofi-aventis contribute 

to further improvements in the region’s health systems. in the region? 

Pharmaceutical companies are only one of many stakeholders 

when it comes to improving public health globally. 

Sanofi-aventis is determined to make a difference. Donating 

medicines is necessary in exceptional circumstances but 

cannot be sustained over the long term. The best way for us 

to contribute to help break the vicious cycle of disease and 

poverty is by providing our know-how and expertise. Sanofiaventis’ 

“expertise” can be captured in four key tenets: a 

locally adjusted pricing policy; research and development; 

manufacturing expertise; and, last but not least, information, 

education, and communication. 

What additional support is needed from the international 

community? 

Over the past few years, the international community 

has made tremendous strides towards improving public 

health in developing countries. New financial mechanisms 

have been designed by public institutions and private foundations, 

which have led to major improvements, mainly in 

HIV/AIDS, tuberculosis, and malaria. Additional support from 

the international community is needed to improve the health 

infrastructure for all patients and, importantly, to address 

chronic diseases. Developing countries suffer from “tropical 

diseases” in addition to all the other diseases we know in 

industrialized countries. 

Is there a specific lesson from your epilepsy project that could be 

transferred to other medical contexts? 

We have seen that success comes from a handful of highly 

motivated individuals who are able to motivate others and who 

can assemble partners from multiple walks of life, including 

stakeholders from the community and, sometimes, potential 

challengers, such as traditional healers. The most important 

lesson that Sanofi-aventis has drawn from the epilepsy project 

concerns the building of programs to ensure sustainable access 

to high-quality drugs for diseases that require long-term, and 

often lifelong, treatment. 

22 



Africa 

Economy 

Crisis Cuts Africa’s 

Growth in Half 

The African economies are directly affected 

by the global economic and financial 

crisis. Average economic growth on the 

continent will decrease from five percent 

to less than half of that. This assessment 

was made in the report “African Economy 

Outlook (AEO)” issued jointly by the 

OECD, African Development Bank AfDB 

and the UN Economic Commission for 

Africa. Identified as causes for the economic 

downturn are the “collapse of raw 

material prices” and declining demand 

from the industrialized countries. The 

immediate consequence is an expected 

negative balance of payments in 2009. 

According to the AEO’s calculations, the 

deficit could reach 5.5 percent of gross 

domestic product. The downturn is also 

being worsened by drastically falling 

foreign investment and a drop in money 

sent to Africa by migrants overseas. The 

authors conclude that, as a result, most 

African countries will not achieve their 

Millennium Goals (MDGs). “However, we 

should not despair,” said Louis Kasekende 

of the African Development Bank. For 

most African countries, “the decade 

of reform has introduced efficiency in 

macroeconomic management and made 

African economies more competitive.” 

But the study urgently warns against 

protectionist efforts: Africa, in particular, 

should not undermine its efforts for 

integration into the world economy. 

Green revolution must 

empower farmers 

Pointing to Africa as the epicentre of 

the global food crisis, the United Nations 

Deputy Secretary-General, Asha- 

Rose Migiro, called for an African Green 

Revolution, urging the international 

community to double food yields across 

the continent through sustainable agriculture. 

“In contrast to the original Green 

Revolution of the 1960s and 1970s, which 

largely bypassed Africa, this must be a 

sustainable green revolution,” Migiro 

said in remarks to the opening of the 

17th session of the Commission on Sustainable 

Development. She emphasized 

the development of agricultural practices 

that respect diverse cropping systems 

and ecological conditions to preserve 

biodiversity. She also stressed the need 

to guarantee African farmers equitable 

access to markets for their products. “An 

African Green Revolution must empower 

farmers, particularly smallholders, both 

women and men,” Ms. Migiro said. She 

called for global agricultural markets to 

favour agricultural development in poor 

countries, saying “trade distortions that 

discourage agricultural investment in 

developing countries need to be phased 

out.” Sustainable agricultural development 

also requires careful management 

of resources to balance food security 

with energy needs, she added. “Food 

security must not suffer as a result of 

the growing demand for bio-fuels or as 

a result of long-term food export supply 

contracts,” Ms. Migiro said. 

Mega-Drought Threatens 

West Africa 

Severe and centuries-long periods of 

drought have been common in the history 

of West Africa. And such a drought 

is imminent again, according to scientists 

from the University of Texas and the University 

of Arizona. To make things worse, 

global climate change will make these 

droughts even hotter, reports Science 

Magazine. “It’s disconcerting - it suggests 

we’re vulnerable to a longer-lasting 

drought than we’ve seen in our lifetime,” 

says Tim Shanahan of the University of 

Texas about the results of his study. It 

is time to get to work on solutions for 

these regions, the researcher suggests. 

The last severe drought in the Sahel Zone 

in the 1970s and 1980s claimed the lives 

of at least 100,000 people – and some 

estimates even suggest up to one million 

deaths. But earlier dry periods lasted 

much longer. Clues to the impending 

drought in West Africa were found by 

the researchers in the sediment of Lake 

Bosumtwi in Ghana. Because no soil 

animals live there, layers lie upon layers 

at the lake bottom, says Shanahan. Dry 

and rainy periods can be precisely differentiated 

from each other by the ratio 

of two oxygen isotopes in the sediment. 

But none of the affected regions can 

survive one of these century-scale patterns 

of drought, the researcher believes. 

The only solution would be to desalinate 

seawater. That would be financially possible 

for the USA, but certainly not for 

the African countries, which lack the 

infrastructure to transport water over 

such large distances. 


Society 

The Elders 

Ten years ago, singer Peter Gabriel began 

a conversation with entrepreneur 

Richard Branson about the Elders as 

a new gathering of world leaders. The 

concept is based on traditional village 

elders, trusted by their people to resolve 

conflicts within their communities. In 

2001 Gabriel and Branson took their 

idea to former South African president 

Nelson Mandela, who was immediately 

enthusiastic. Together with Archbishop 

Desmond Tutu and Human Rights Advocate 

Graça Machel, they made the 

initiative become reality. “In today’s 

world, many of the problems we face 

are global in nature. These include climate 

change, pandemics such as AIDS, 

malaria, and TB … and, of course, that 

entirely human-created affliction: violent 

conflict,” Nelson Mandela said at the 

launch of the initiative. “I am confident 

that the Elders can become a real role 

model – leading, guiding, and supporting 

all sorts of initiatives, both their own 

and those of many others. The Elders 

can speak freely and boldly, working 

both publicly and behind the scenes on 

whatever actions need to be taken.“ Since 

then the Elders have engaged themselves 

in missions in Sudan and Zimbabwe, 

among other places. 

Mobile Telephones 

Revolutionizing Africa 

In the past few years, Africa has experienced 

a true mobile telephone boom. 

Mirjam de Bruijn writes in an extraordinary 

well done study Mobile Phones: The 

New Talking Drums of Everyday Africa: 

“ ‘We cannot imagine life now without 

a mobile phone’ is a frequent comment 

when Africans are asked about mobile 

phones. They have become part and 

parcel of the communication landscape 

in many urban and rural areas of Africa, 

and the growth of mobile telephony is 

amazing: from 1 in 50 people being users 

in 2000 to 1 in 3 in 2008. Such growth 

is impressive, but it does not even begin 

to tell us about the many ways in which 

mobile phones are being appropriated 

by Africans and how they are transforming 

or are being transformed by society 

in Africa. This volume ventures into 

such appropriation and mutual shaping.” 

SMS communication, in particular, has 

proved its worth as a many-sided and 

helpful tool to organize both work and 

private life. Hospitals are using them to 

organize medical personnel as needed or 

to inform the public about outbreaks of 

epidemics. Even job information, financial 

and administrative matters as well 

as instructional content for students 

are also being communicated through 

mobile phones, sometimes with the help 

of special applications. 

Scoring for Development 

The eyes of the world will be on South Africa 

in the Football World Cup 2010. This 

is an important opportunity to advertise 

Southern Africa. But the responsible 

people are also pushing sustainability 

aspects during the tournament. Willi 

Lemke, United Nations Special Adviser 

on Sport for Development and Peace, 

emphasizes that the 2010 World Cup 

has the highest priority for the United 

Nations in sport and development. The 

Football World Cup must strengthen 

the sense of community among the people 

of South Africa and also involve 

the poor, and South Africa must be a 

good host. That means, South Africans 

must celebrate the World Cup even if 

their national team is eliminated. That 

these developments will bear fruit well 

beyond the Football World Cup is also 

emphasized by Ian Neilson, member of 

the Mayoral Committee in Cape Town: 

“The 2010 World Cup is just a vehicle for 

bringing forward and strengthening the 

capability of local authority staffs, in 

order to handle such a big-scale event 

and to be better prepared for future 

challenges beyond 2010.” 

Conflict 

Investors Cause 

Agrarian Conflicts 

The political situation in Madagascar has 

escalated since the South Korean company 

Daewoo Logistics announced it would 

lease large areas of agricultural land 

there. The South Koreans want to lease 

1.3 million hectares of land to grow feed 

maize and palm oil. That equals about 

half the cultivable land of this African 

island country. The lease has a term of 

99 years, and will create around 70,000 

24 



Africa 

jobs in return. But the harvests will not 

benefit Madagascar’s population; rather, 

South Korea plans to use Madagascar 

to cover about half its long-run maize 

imports. But for Madagascar, this means 

a massive reduction in the agricultural 

land available to feed its people, even 

though half the population today lives 

on less than US$1 per day and around 

600,000 people rely on UN food aid. The 

conflict has escalated since the beginning 

of the year, and more than 100 people 

have already died in demonstrations. 

The example of Madagascar is one of 

numerous projects especially by Arab and 

Conflict minerals 

Electronics companies must ensure they 

are not using minerals that finance 

the war in the Democratic Republic of 

Congo – the deadliest conflict in over 

50 years, says the Enough Project. Many 

of these minerals end up in cell phones 

and other electronic devices used daily 

by millions of consumers. Audits of the 

supply chain for these deadly minerals 

are part of a four-part strategy to curb 

illegal profiteering from the trade in 

conflict minerals, detailed in the paper 

by the Enough Project at the Center for 

some of the most reprehensible armed 

groups in the world.” The Democratic 

Republic of the Congo remains the most 

dangerous place in the world to be a 

woman or a girl, largely because of the 

international demand for electronic 

products that requires minerals found 

in eastern Congo. Eastern Congo is a 

complex crisis, fuelled by tensions over 

land, rights, identity, regional power 

struggles, and the fundamental weaknesses 

of Congo as a state – the trade 

in conflict minerals is one of the key 

drivers of the conflict. 

Climate change and 

security in Africa 

Asian states to secure their agricultural 

needs through other countries, says the 

organisation GRAIN, which has launched 

a campaign against this. “That gives the 

impression of a neo-colonialist action,” 

criticises Abby Abbassian of the Food 

and Agriculture Organization FAO. The 

situation is aggravated by climate change, 

which is destroying more and more usable 

agricultural areas. Experts estimate 

that the available arable land per person 

worldwide will fall from the current 0.25 

hectares to 0.18 hectares by 2050. 

American Progress and the Grassroots 

Reconciliation Group. “Bringing transparency 

to the consumer electronics 

supply chain is an essential first step if 

we want to transform Congo’s mineral 

resources from a curse into an engine 

of growth for millions of people who 

remain trapped by both violence and 

poverty,” said John Norris, Enough’s 

executive director. “It is no accident that 

the majority of the violence in eastern 

Congo has been carried out in areas 

rich with minerals. Conflict minerals 

remain a key source of financing for 

By redrawing global maps of water availability, 

food security, disease prevalence, 

and coastal boundaries, climate change 

could potentially increase forced migration, 

raise tensions, and trigger new conflicts. 

Although Africa is the continent 

least responsible for greenhouse gas 

emissions, it is almost unanimously seen 

as the continent most at risk for climateinduced 

conflict – a function of the continent’s 

reliance on climate-dependent 

sectors (such as rain-fed agriculture) 

and its history of resource-, ethnic-, and 

political conflict. At the turn of the 21st 

century, more people were being killed 

in wars in this region than in the rest of 

the world combined. With tremendous 

natural resources and remarkable social 

and ecological diversity, the continent 

reflects a close dependency of people 

on its natural resources. It is this dependency 

and its fragile governance 

capacities that may present Africa with 

potentially severe problems in adapting 

to the challenges of climate change. In 

a report prepared for the Nordic-African 

Foreign Ministers Meeting in Copenhagen 

in March 2009, the International 

Institute for Sustainable Development 

examines the implications of climate 

change on African security and lays out 

strategies for peace and development in 

a changing climate. 



Asia 

26 



Asia 

China 

New Energy for China 

China intends to play a pioneering role 

in promoting regenerative energy. The 

Chinese government has decided that 

around ten percent of its domestic energy 

consumption should be met by renewable 

energy by 2010. The goal for 2020 

is 15 percent. Besides the expansion 

of water energy, the agenda especially 

targets investments in wind and solar energy. 

While China is already the world’s 

second-largest producer of renewable 

energy, after Germany, its reliance on 

fossil fuel still remains high. To reduce 

this dependency and save the costs of 

importing fossil fuels in the future, the 

Chinese government is stepping up its 

investments in renewable energy. In the 

water power sector, the dam project on 

the Yangtze Kiang, which began with the 

“Three Gorges Dam”, will be further expanded. 

In addition, wind power will be 

supported more in the coming ten years. 

By 2020, the People’s Republic plans 

to produce 100 gigawatts of electricity 

from wind. This equals about one-fifth 

of China’s current energy consumption. 

Steve Sawyer from the Global Wind 

Energy Council (GWEC) confirms that 

China “very clearly” wants to become the 

world’s number one wind-power country. 

The country is currently in fourth place, 

behind the USA, Germany and Spain. In 

addition, the Chinese government has announced 

its decision to increase support 

to the solar industry. As part of its “solar 

roofs program”, photovoltaic systems will 

be erected on roofs of schools, hospitals 

and government buildings. As in the USA, 

solar energy will be subsidized in the 

future with a tax credit on investment 

costs. Through these subsidies, the costs 

for solar power generation will lie below 

the present-day costs for conventional 

electricity. These actions herald the development 

of a huge solar and wind 

energy market in China. 

Migrant worker are hit worst 

The number of jobless migrant workers 

has considerably increased in China. 

About 25 million of the 130 million 

migrant workers have returned jobless 

from cities to the countryside as of the 

Chinese New Year in late January 2009, 

Beijing authorities stated. This is more 

than the Chinese government expected. 

“Migrant workers are suffering most in 

the unfolding financial crisis,” said Wei 

Chaoan, vice minister of agriculture. 

Coming mostly from inland provinces 

and living for years at a time in coastal 

cities, China’s migrant workers are sending 

most of their earnings home to their 

families. Many Chinese villages are living 

only from the money the migrant workers 

are sending back. That is one reason 

why China’s leaders have repeatedly 

expressed concern that the number of 

newly unemployed migrant labourers 

threatens to create “social instability” 

as redundant workers return from the 

cities to their villages. As the economy 

has deteriorated, sporadic protests have 

broken out already throughout southern 

China. To avoid more protests, Beijing 

is spending USD 584 billion on a stimulus 

package to speed up construction 

of infrastructure projects, build public 

housing projects, and raise subsidies for 

farmers. Meanwhile, provincial governments 

have come out with their own policies, 

which include free job retraining, 

tax breaks, and subsidies for redundant 

migrant workers returning home. International 

experts expect that the wave 

of government-invested infrastructure 

projects could help to absorb job losses. 

The questions are: How many and how 

quickly? 

China Lures Managers with 

Top Salaries 

Despite the worldwide economic crisis, 

demand for finance experts remains high 

in China. And so the People’s Republic 

of China is luring them with top salaries: 

According to the French news agency AFP, 

China is taking advantage of the current 

situation to recruit former investment 

bankers and finance experts from the 

West for its domestic fund companies, 

banks and state funds. The salaries of 

the courted experts are currently twice as 

high in China as in Western Europe. Ingo 

Kreisinger of the Baader Wertpapierhandelsbank 

views this move by China as 

“absolutely understandable”, since the 

stock markets in the West have lost much 

of their influence due to the economic 


crisis. In China, meanwhile, even the 

city government of Shanghai is said to 

be looking for over 80 finance experts 

in the hope of accelerating the process 

of catching up with Western financial 

centres. This hope seems justified: While 

before the financial crisis the Shanghai 

city government assumed it would reach 

Wall Street level by 2020, the city could 

establish itself much earlier as an international 

financial centre by bringing in 

outside experts. 

organizations note that the emissions 

of around 90 grams of CO2 per kilometre 

are encouragingly low. At this level, 

the Nano even lies below the EU’s goal 

for the European auto industry. The 

world’s cheapest car had 200,000 buyers 

in India in the first two weeks of sales 

alone. But since the factory buildings 

are not completed yet, Tata Motors will 

only be able to deliver 100,000 vehicles 

by the end of next year. Which buyers 

will be among the first 100,000 will be 

decided by lot. 

safety of workers in the industry, or the 

environment.” Even if there are critical 

voices, the UN's International Maritime 

Organization (IMO) convention is the 

first-ever such agreement on shipbreaking, 

which often exposes workers to 

asbestos, mercury, and other hazardous 

substances. The treaty requires shipowners, 

who are mostly from the west, 

to provide an inventory of hazardous 

materials aboard a ship before it is sent 

for recycling – work that is often done 

by children younger than 15 years old, as 

the recently published survey shows. 

India & South Asia 

The World’s Cheapest Car 

Nano – the cheapest car in the world 

– has been on the market since April 

2009. With this four-seater, the Indian 

automobile corporation Tata Motors 

wants to fulfil “the dream of driving for 

millions of people”. At a translated price 

of around US$2,000, the small car costs 

half of what the next least expensive car 

in India costs. The target market is primarily 

the up-and-coming middle class, 

who currently can afford motorcycles, 

but no cars. Tata Motors chairman Ratan 

Tata explained he wanted to create 

“a safe, affordable, all weather form of 

transport” for Indian families. But the 

world’s cheapest car could become a 

bestseller in other threshold and developing 

countries as well. With 33 HP and a 

maximum speed of 103 km/h, the Nano 

is said to consume around five litres of 

petrol per 100 kilometres (47 mpg). Critics 

warn of the increasing traffic burden 

in India and the negative impacts on 

climate change. After China, India is 

the fastest-growing automobile market. 

Experts predict that automobile sales in 

India will rise from currently around 

1.2 million to 3 to 4 million per year by 

2018. In view of these numbers, Rajendra 

Pachauri, head of the UN climate council 

IPCC, remarked that the Indian small 

car gives him “nightmares”. But some 

representatives of climate protection 

Child labour in booming 

shipbreaking industry 

“One-fourth of the labour in the ship 

recycling industry of Bangladesh is done 

by children,” reported a survey published 

by the international NGO Platform on 

Shipbreaking. Nearly 90 percent of the 

world’s ship recycling happens in India, 

Pakistan, and Bangladesh, and as the 

economy worsens, shipbreaking in South 

Asia has become a booming industry. The 

current financial crisis has dramatically 

re-shaped the landscape of the shipping 

industry: Fewer goods are transported 

and therefore more unused ships are 

withdrawn. This has led to a simultaneous 

resurgence in ship-recycling activities. 

Shipbreakers expect this year’s total 

to reach 250 ships, compared to 136 

ships in all of 2007 and 2008, making 

it among the best years ever, the news 

agency Reuters reported. Now millions 

of dollars are being earned. Nevertheless, 

shipbreaking is “a highly hazardous 

activity. It attracts extremely poor 

farmers, migrant workers, and children, 

as working in the yards provides them 

with higher income than agricultural 

work,” explained Ingvild Jenssen, director 

of NGO Platform on Shipbreaking. 

“Accidents occur on a daily basis, leaving 

many workers severely injured and 

some dead.” Therefore, dozens of nations 

recently signed a treaty to ensure that 

“ships, when recycled, do not pose any 

unnecessary risk to human health, the 

Ecological Region of 

the Himalayas 

Nowhere in the world is global warming 

causing glaciers to melt faster than 

in the Himalayas, the environmental 

protection organization WWF says. The 

consequences are ominous: In the short 

run, there is a threat of floods, but in 

the long run, the water supply for large 

parts of Asia is threatened. “High Noon”, 

a recently started research project of the 

European Union in cooperation with 

India, will now scientifically investigate 

the effects of continuing glacier melting 

on the water supply. The problems are 

pressing: The melting water of the Himalayan 

glacier feeds seven of Asia’s largest 

rivers (including the Ganges, Mekong 

and Yangtze Kiang). Millions of people 

live on and from these rivers. If the glacier 

waters run dry, the foundation of 

their lives would be greatly endangered. 

“Stop Climate Change – Let the Himalayas 

Live!”: In a joint action with the 

WWF, Apa Sherpa, world record holder 

in climbing Mount Everest, formulates 

expectations for the next UN world climate 

conference in Copenhagen. Besides 

climate warming triggered at the global 

level, it is especially the exploitation of 

natural resources at the regional level 

that represents a major threat to the 

ecosystem of the Himalayas and their 

residents. The overuse of forests as well 

as hunting of endangered wild animals 

28 



Asia 

oceans and promote sustainable fishing. 

Mangroves, wetlands and coral reefs had 

to be better protected. Convinced that 

the initiatives, from those of the Manado 

Declaration to local projects for maintenance 

of coral reefs and mangrove forests, 

can only be successful if the problems 

are also attacked globally, the over 5000 

participants demanded consideration of 

sea and coastal protection in the coming 

UN negotiations on a new world climate 

treaty to take place in Copenhagen. 

has not only reduced the region’s unique 

biological diversity but also threatens its 

food security. Millions of people in the 

region live below the poverty level. And 

so they depend on supplies of wood and 

wild animals. With the goal of countering 

the destruction of this ecosystem and 

the related threats at the regional level, 

the WWF has worked for more than 40 

years on over 60 projects to protect resources 

and species in the Himalayas. An 

important component of its involvement 

is the reforestation of deforested areas. 

As a result, not only are the habitats of 

wild animals restored and mountainsides 

protected from erosion, but jobs are created 

in the region. 

Southeast Asia & Japan 

Indonesia: Protection for 

the “Coral Triangle” 

The world’s most species-rich sea region, 

the so-called “Coral Triangle”, will be 

comprehensively protected. This has 

been agreed by the six heads of state 

and government of the adjoining Southeast 

Asian countries. At the end of the 

first World Ocean Conference (WOC) 

in Manado, Indonesia, they issued the 

“Manado Declaration”, a ten-year action 

plan which includes declaration of a fifth 

of the area’s threatened coastal waters as 

a protective zone. Fishing will no longer 

be permitted there. “The Coral Triangle 

is a globally recognized treasure,” says 

Indonesian President Susilo Bambara 

Yudhoyono. “It is the global center of 

marine life abundance and marine life 

diversity. If its natural systems were to 

be damaged beyond repair, it would be 

a tragedy for the whole planet.” The 

Triangle lies between the Philippines, 

Malaysia, Indonesia, Papua New Guinea, 

East Timor and the Salomon Islands. It 

houses a third of all coral reefs worldwide 

and is home to more than three-quarters 

of all corals – and to thousands of fish 

species. It is threatened by pollution, 

destructive fishing methods including 

explosives and poison, overfishing and 

climate change. On the coasts of this sea 

region live 120 million people, many 

of them dependent on fishing. The final 

declaration of the WOC 2009 stated 

that the participating countries wished 

to reduce the pollution of coasts and 

Human Rights violations 

in Myanmar 

“Human rights abuses in Burma are 

widespread, systematic, and part of the 

state policy” that “strongly suggests 

Burma’s military regime may be committing 

crimes against humanity and 

war crimes prosecutable under international 

law,” said a report published by 

Harvard Law School. The report came 

as Burma – which the military regime 

renamed Myanmar – faced widespread 

condemnation for putting opposition 

leader Aung San Suu Kyi on trial for 

breaking the terms of her house arrest. 

Now she faces a further three to five 

years imprisonment if found guilty of 

these latest charges. After Suu Kyi’s National 

League for Democracy party won 

Burma’s last election in 1990, she has 

spent more than 13 of the last 19 years 

in political detention, being just one of 

over 2100 political prisoners. Besides 

harsh punishment against oppositionists, 

forced displacement of over 3000 villages 

in eastern Myanmar, widespread and 

systematic sexual violence, torture, and 

summary execution of innocent civilians, 

there are other Human Rights violations, 

as a report by Harvard Law School has 

exposed. The devastating tropical cyclone 

Nargis has only recently drawn 

the world’s attention to the Burmese 

Human Rights situation, as the military 

junta failed to provide adequate food, 

water, and shelter to the survivors, and 

even then continued violating the rights 


of the victims as well as the local relief 

workers. Nargis left 1.5 million people 

“severely affected” and the final death 

toll has reached at least 146,000, the UN 

estimated. Only one year earlier, about 

20,000 monks peacefully demonstrated 

for democracy before the authoritarian 

government brutally countered their protests. 

The number of victims killed during 

and after the protest ranges between the 

official government toll of 13 to several 

hundred, even thousands, as estimated 

by different NGOs. UN Secretary-General 

Ban Ki-moon showed himself to be 

“gravely concerned” about the Human 

Rights situation in Myanmar. 

Japan Rewards Emigrants 

The Japanese government is resorting 

to unusual means to fight the dramatic 

increase in unemployment. To keep 

native residents from feeling even 

more strongly the consequences of the 

global economic crisis on the labour 

market, the government now wants to 

persuade thousands of new immigrants 

to leave by offering a one-time payment 

of 300,000 yen (2,300 euros). For each 

family member who leaves with them, 

the government is again adding 200,000 

yen on top. As the government also 

announced, the programme is directed 

especially at the around 400,000 South 

Americans of Japanese ancestry in the 

country. With this approach, Tokyo is 

backing away from its economic and 

immigration policy. It was only in the 

1990s that the government opened the 

labour market to South American descendants 

of Japanese emigrants. Back 

then, the government wanted to ensure 

the availability of cheap labour during 

the boom phase. Most of the South 

Americans currently living in Japan – 

experts estimate around 300,000 people 

– come from Brazil. The South American 

country is home to the largest group of 

ethnic Japanese outside Japan, around 

1.5 million people. The economic misery 

is mainly due to the collapse of foreign 

demand. This has forced the country’s 

industrial companies to reduce their 

production massively. 

Australia & Antarctica 

Climate change threatens 

Australia’s security 

The greatest fear Australians have for 

their country’s security is of climate 

change. That was revealed in a survey 

conducted in 2008 to develop a defence 

policy white book. The accompanying 

report states: “People expect that climate 

change will diminish food and 

water supplies, displace populations and 

trigger more frequent and more severe 

weather events.” Floods and forest fires 

are confirming these fears. Just this May, 

more than 10,000 Australians had to 

abandon their homes after prolonged 

rainfall and storms. In February, forest 

fires killed over 100 people and made 

400 homeless in the state of Victoria. 

Australians expect their defence forces 

to provide continuous humanitarian 

and disaster relief as well as stabilise 

the country. The “Defence White Paper” 

confirms the view that climate change 

and the growing population in many 

parts of the world will lead to a shortage 

of resources. But the report also states, 

“Large-scale strategic consequences of 

climate change are not likely to be felt 

before 2030.” The White Book, published 

in May 2009, captures the results of 

an intensive evaluation of Australia’s 

defence strategy, its capabilities, processes 

and resources. The most important 

result is the development of a defence 

force that can ensure the security of 

Australia and the surrounding regions. 

“The Australian Defence Force that we 

are creating will have access to leading 

technology, the best equipment as well 

as professional soldiers, sailors and airmen,” 

says Australian Defence Minister 

Joel Fitzgibbon. 

Maori receive compensation 

They shall keep their land and their 

natural resources – this condition was 

part of the Treaty of Waitangi concluded 

30 



Australia 

in 1840 between the British Crown and 

the Maori. But the Crown failed to keep 

its promise: European immigrants in 

the 19th century forcefully displaced 

the indigenous people of New Zealand 

from their land. That was around 150 

years ago. Negotiations over compensation 

between a Maori collective of seven 

tribes and the New Zealand government 

lasted, all in all, 20 years. In June 2008, 

the goal was reached: The government 

signed over 176,000 hectares of forest to 

the Maori group. Together with the income 

from forest management, the total 

value of the forest area is 500 million 

New Zealand dollars, equal to 243 million 

euros. Now the tribes, with around 

100,000 members, are the largest private 

forest owners in New Zealand: “We will 

become major investors in the forestry 

sector, and the land to be returned is 

culturally significant to us all,” said 

spokesperson Tamati Kruger. 

Micronesia: Uncertain future 

The rising sea level, worsening coast conditions, 

decreasing fresh water supplies 

and invasion of non-endemic species 

are making many of Oceania’s island 

states especially vulnerable. Almost half 

the population of Kiribati have already 

been resettled to larger islands. In 2007, 

the Fourth Assessment Report of the 


Change (IPCC) already left no doubt: The 

survival of the Pacific island state, a part 

of Oceania that stretches across a number 

of islands in Micronesia and Polynesia, 

is acutely threatened. With the goal of 

reducing risks, the presidents of Micronesia, 

Palau and the Marshall Islands as 

well as the governors of the US territories 

in Micronesia signed the “Micronesia 

Challenge” in 2006. In this agreement, 

they adopted the goal of conserving 30 

percent of near-shore coastal waters and 

20 percent of land resources by 2020. 

It will be implemented in practice by 

establishing nature preserves, such as 

coral reefs, forests and even entire islands. 

An example is Woja Island, which 

faces a shortage of drinking water due 

to poorly planned water management. 

Corresponding protective measures are 

based on agreements with local actors to 

protect their living space and build up an 

ecological network. The project will be 

carried out by the international nature 

protection organisation “The Nature 

Conservancy” and a regional organisation 

for protection of biodiversity called 

“Micronesia Conservation Trust Fund”. 

Green polar station 

The environmentally friendliest polar 

station ever built, Belgium’s “Princess 

Elisabeth”, is powered solely by wind and 

solar energy and produces no CO2 emissions. 

Nine wind turbines and 408 solar 

cells supply electricity to the building, 

which houses up to 20 people. Heating 

is provided by 24 square metres of thermal 

solar cells. Built in a passive house 

style, the station can forego a separate 

heating system by avoiding heat loss and 

optimising free heat gain. Additionally, 

drinking water is won from snow, and 

waste water is cleaned and reused. The 

station is recognised as a pioneer for its 

use of the most modern technologies 

under extreme conditions: “If we can 

build such a station in Antarctica, we 

can do that elsewhere in our society. We 

have the capacity, the technology, the 

knowledge to change our world,” said 

engineer Alain Hubert, the station’s 

developer. Named for the granddaughter 

of Belgium’s King Albert II, the Princess 

Elisabeth Station was opened in February 

2009. Its main purpose is to investigate 

climate change and the variety of life 

forms around the South Pole. The Belgian 

government and private investors, 

in cooperation with the International 

Polar Foundation, invested 21 million 

euros for the station’s construction. One 

million euros per year are provided by 

economics minister Sabine Laruelle for 

its operation. 

Antarctic tourism declines 

Journeys to the South Pole are in demand 

but relatively expensive. The global 

economic crisis caused the number of 

visitors to Antarctica to fall massively 

in the southern summer of 2008/2009. 

While a total of 46,000 people went there 

the year before, current visitor numbers 

are estimated at only 36,000. The season 

will be slow, writes the International Association 

of Antarctica Tour Operators 

IAATO. For ecologists, this is good news. 

For years they have warned of a major 

disaster resulting from tourism in the 

ecologically sensitive South Pole region. 

The environment got off lightly when 

the cruise ship Explorer sank two years 

ago and again when the Ocean Nova ran 

aground at the beginning of this year 

near the Argentine San Martin Station. 

But accidents such as these pose grave 

risks for the Antarctic region, for example 

from oil spills: “The decomposition of 

oil takes much longer in the cold regions 

than in the tropics, for example. This 

could have disastrous consequences for 

many of the species living in the region,” 

says Greenpeace marine biologist Antje 

Helms. To protect the ecosystem, participants 

in an international conference on 

the 50th anniversary of the Antarctic 

Treaty resolved to restrict tourism in 

the polar region. In April 2009, they 

decided that only cruise ships with a 

maximum of 500 passengers on board 

would be allowed to land in future. In 

addition, the docking stations can only 

be stopped at successively, and only 100 

passengers will be allowed on land at the 

same time. There must also be at least 

one guide for every 20 vacationers. 



Europe 

Link CSR & SRI better! 

Stock markets and economies are collapsing worldwide. Politicians 

are fervently putting together rescue packages. And 

the public is carrying on heated discussions about morality, 

bonuses and the new modesty. We talked to the sustainability 

expert at Deutsche Bank, Hanns-Michael Hölz, about the 

financial crisis, its lessons and the consequences for sustainable 

investment. 

Doesn’t the financial crisis show that business and ethics don’t mix? 

Hanns-Michael Hölz: It’s true that the financial crisis has 

made clear that we don’t have enough transparency and control 

in many areas. Klaus Töpfer once said, we have to harmonize 

human, economic and environmental capital with each other. 

Since the financial crisis is an economically problematic situation, 

it logically also impacts on the issues of human and 

environmental capital. And so it’s essential that we continue 

to keep these two issues in focus. Otherwise, we’ll be caught 

in a double wave that rolls over us: First, the wave of the financial 

crisis, then, as a result, an environmental or human 

capital crisis. And so it’s really important, especially now, to 

talk about business and ethics as harmonizing factors! 

What lessons should we draw from this? 

Hanns-Michael Hölz: My assessment is, we can’t logically 

start to draw lessons until the middle of the year, since all 

the facts about the current crisis won’t be on the table before 

then. But it can’t be denied that we must draw lessons. I’m 

very optimistic that the “sustainability” paradigm will serve 

as a kind of crash barrier. Of course, the function of these 

crash barriers is, in fact, not fully defined at this time. But 

I know that a great many experts, including regulators, are 

working intensely on it. 

Why is sustainability so difficult to implement in daily 

life? 

Hanns-Michael Hölz: Some say, sustainability is the fight 

against climate change. But that alone isn’t enough to present 

the entire economic paradigm of sustainability. Sustainability 

itself also means the ability to carry out dialogue, to include 

society’s various interest groups. It’s simply not enough to 

say: I can replace sustainability by focusing on issues related 

to long-term or future orientation. Sustainability is rather a 

balancing of stakeholder interests. Stated in banking language, 

that means searching for a balance between those who give 

us money and those whom we, in turn, give loans. 

Where do you see the responsibilities of politics here? 

Hanns-Michael Hölz: We certainly can’t exclude the state 

completely. After all, the state has the functions of representing 

interests and creating order. Particularly in the area of 

sustainability, frameworks must be established that business 

can rely on. Concretely: For a company like Daimler, whether 

the price for a ton of CO2 is 25 euros or 10 euros in 2012 is 

critical. The so-called “McKinsey Curve”, which calculates 

when investments in this area become profitable or unprofitable, 

shifts accordingly. 

The issue of biodiversity and capital market products is still in its 

infancy. Are there already product ideas here? 

Hanns-Michael Hölz: The interesting question is, whether 

ecological approaches can be broken down to the product level, 

as has already been done with climate protection or the fight 

against poverty. I still don’t see any complex solutions here. 

Some things have been done in the area of wood or water 

investment, specifically through fund designs. But the work of 

our Deutsche Bank colleague Pavan Sukhdev has great value 

for adding objectivity to this discussion. 

We thank you very much for the discussion! 

Dr. Elmer Lenzen held the interview. 

18 



North America 

Markets 

Europe in scrapping fever 

To support the ailing automobile industry, 

ten EU countries have now introduced 

a “scrapping premium”, and five 

others are considering one, according to 

the manufacturers’ association ACEA. 

With the scrapping premium, buyers of 

new cars receive money from the government 

for scrapping their old cars. Italy 

currently offers the highest payment of 

up to 5,000 euros, followed by Germany 

with 2,500 euros. Most other countries 

pay a premium between 1,000 and 1,750 

euros. To qualify for the premium, purchased 

cars must meet climate protection 

requirements, which differ from country 

to country. In many cases, qualifying 

vehicles must not exceed specific CO2 

emission levels. But these limits are 

almost always above the 120 grams per 

km called for by the EU. Even with the 

scrapping premium, the automobile 

industry needs to carry out far-reaching 

reforms, according to market observers. 

Excess production capacity worldwide 

is currently above 30 percent. If China 

and India enter the market with cheap 

models in coming years, most European 

automobile companies will face a very 

difficult situation. 

Goodbye “A++” 

The days of “A++” are numbered. The 

European Commission wants to make 

the electricity consumption of refrigerators, 

washing machines and other white 

goods clearer with a new energy efficiency 

label. Brussels is thus reacting to 

the rising energy efficiency of household 

appliances, which the existing labelling 

system can no longer portray. Appliances 

with a “green A” are thrifty consumers 

of power, those with a “red G” electricity 

hogs. For refrigerators, there are also the 

energy efficiency classes “A+” and “A++”. 

According to the German consumer 

organisation Verbraucherzentrale, only 

10.5 percent of all refrigerators sold in 

1996 had the highest efficiency class 

“A”, but this had climbed to around 90 

percent in 2007. Starting in 2011, additional 

“A” classes, such as “A-20%”, 

“A-40%” or “A-60%”, will be added to the 

old “A” to “G” labelling system. If a new 

refrigerator is labelled with “A-20%”, it 

consumes 20 percent less energy than 

an “A” model without the supplement; 

if labelled “A-60%”, its consumption is 

60 percent below that of the plain “A” 

model. Industry experts consider this 

the right approach to labelling. As a 

result, in the future all customers will 

be able to judge for themselves how 

much better a new appliance is than 

the old one. “The class boundaries are 

unchangeable, and customers can easily 

compare them even after some years, 

just as they’ve long been able to do with 

the classification EURO 1-6 for passenger 

cars,” says Miele General Manager 

Eduard Sailer. 

Certification forsustainability 

research 

Leading European SRI rating agencies 

have been successfully certified under 

the new European quality standard for 

research on corporate sustainability and 

responsibility (CSR) and socially responsible 

investment (SRI). The standard was 

developed by the Association for Independent 

Corporate Sustainability & 

Responsibility Research - AI CSRR. The 

voluntary auditing system has the goal 

of ensuring high quality standards in 

the research and analysis of sustainability 

and corporate responsibility and 

of promoting their further development, 

but without specifying exact research 

results. Driving this were investors and 

companies that call for a fundamental 

orientation on the principles of integrity, 

transparency and responsibility. Up to 

now, seven CSR and SRI rating agencies 

from Belgium, Germany, France, the 

United Kingdom, Italy, Sweden and Spain 

have been certified according to the CSRR 

standard. The new quality standard was 

introduced after a three-year development 

process promoted by the European 

Commission. Under the direction of the 

AI CSRR, experts from the capital market, 

civil-society and sustainable investment 

areas participated in developing the 

standard. James Gifford, Executive Director 

of the UN Principles for Responsible 

Investment, emphasises the importance 

of the new quality standard: “The principles 

of integrity, probity, transparency 

and accountability have never been so 

important. The development of quality 

standards should help further increase 

confidence in environmental-socialgovernance 

research providers when 

openness and accountability are valued 


y an ever increasing number of responsible 

investors.” 

CSR Management 

Denmark requires CSR reporting 

Exchange-listed Danish corporations, 

state-owned companies and institutional 

investors are required to integrate a CSR 

report in their annual reports starting in 

2010. This must include, among other 

things, information on company policy 

guidelines in the area of CSR and socially 

responsible investments as well as their 

implementation in practice. In addition, 

the results of CSR initiatives have to be 

presented and the expectations of top 

management for the future development 

of CSR strategies formulated. Since implementation 

of CSR strategies is voluntary, 

companies are allowed to simply point 

out the lack of a CSR strategy. For Global 

Compact members and signatories to the 

Principles for Responsible Investment, a 

reference to their “Communication on 

Progress” reports meets the requirement. 

In the wake of the financial crisis, demand 

for more transparency in company 

activities is growing. And so introduction 

of a required CSR report for exchangelisted 

companies is currently under consideration 

at the EU level as well. 

Non-governmental organisations (NGOs) 

and private-sector companies have to 

work more closely together to achieve 

shared success in international development 

cooperation, the management consultancy 

Accenture says. In companies, 

the readiness for such cooperation is 

stronger than ever, the consultants write 

in their recently published report “Development 

Collaboration: None of Our Business?”. 

NGOs could play an important 

role in mobilising the resources of business 

to fight hunger, poverty or climate 

change, the report states. But for that to 

happen, they have to work together with 

companies more effectively than before. 

Exemplary cooperation already exists, 

but much potential remains unused, 

the consultants believe, due to different 

stages of development of the NGOs themselves. 

Newly founded organisations first 

have to establish themselves. Only in a 

third development wave, after establishment 

and consolidation, do cooperative 

arrangements with the private sector 

gain weight within NGOs. Accenture 

therefore recommends that managers in 

NGOs accelerate this internal organisation 

development. They should kindle 

“cultural change” within the organisation 

and at the same time create capacity for 

new cooperation programmes, such as 

by setting up additional positions for 

cooperation. In addition, NGOs have to 

be more open to business ideas from the 

private sector that attempt to meet challenges 

such as fighting poverty through 

market means. The readiness of companies 

to engage more in international 

development cooperation has grown 

enormously in recent years, according 

to Accenture. At the same time, their 

understanding of development cooperation 

has changed – away from mere 

charity toward approaches that seek 

to combine assistance with business 

opportunities, says Accenture. But committed 

companies could still learn a lot 

from the NGOs, even in development 

cooperation. The consultants’ recommendation 

to business: First, companies 

must move away from short-term, nextquarter 

thinking and learn to recognise 

the business opportunities that lie in 

development cooperation. They also need 

to recognise the NGOs as strategic “key 

stakeholders” and work together with 

them to find new markets so they can 

establish the market-based assistance 

business models as widely as possible. 

Accordingly, the consultants recommend 

that companies increase their efforts to 

engage with NGOs and support them 

in their own change efforts – through 

contributions, but also through transfer 

of know-how. 

Business and NGOs can learn 

a lot from each other 

Germany searching for national 

CSR strategy 

Led by the Federal Ministry of Labour 

and Social Affairs (BMAS), the German 

Federal Government is currently working 

on a national CSR strategy. The German 

Global Compact Network is also taking 

part in the consultations. Back last sum- 

20 



North America 

mer, the government proclaimed the 

importance of corporate social responsibility 

and, as part of a national sustainability 

strategy, announced ways to make 

the subject of “social responsibility of 

companies” in general, and companies’ 

efforts to fulfil these responsibilities in 

particular, more visible to the broader 

public. An action plan is currently being 

developed to sharpen the German CSR 

profile – and for good reason. Not only 

does CSR strengthen the national and 

international competitiveness of German 

companies, it is also "an important, and 

ever more important, contribution to 

the social and ecological dimensions of 

globalisation," says the Labour Ministry. 

The recently published study “Corporate 

Social Responsibility (CSR) between 

market and politics” serves as the basis 

for development of the national CSR 

strategy under the Labour Ministry’s 

leadership. In this study, the authors 

work through the current state of the 

sustainability debate in Germany. In 

their conclusion, they recommend an 

activating and complementary approach 

as well as a cooperative and learning 

development process for the national 

sustainability strategy. The final version 

of the national CSR strategy should be 

published this year. 

People 

Prince Charles calls for 

rainforest fund 

The British successor to the throne, Prince 

Charles, has called for greater protection 

of the rainforests in the Amazon Basin 

and other locations in the world. In a 

guest article for the magazine Reader’s 

Digest, the Prince of Wales notes that, despite 

many attempts to stop clear cutting, 

these important ecosystems continue to 

be razed to the ground. He also argues 

that only massive worldwide pressure 

will move those responsible to take the 

urgently needed decisions. And so Prince 

Charles is vigorously pushing an emergency 

plan – financed through bonds 

to be purchased by the industrialised 

countries’ governments. Charles recommends 

a three-step process: In a first step, 

we must determine what it costs the individual 

countries to protect the rainforest. 

Then we clarify how these costs could 

be reimbursed. In the third step, ways 

to raise this money are found. A central 

aspect must be to provide the rainforest 

countries with enough funds to invest in 

appropriate technologies, management 

and sustainable development, the Prince 

says. Only in this way can we halt the 

destruction. Prince Charles assumes that 

a contribution of eight to eleven billion 

euros is needed annually to help the 

rainforest countries. He calls for this 

money immediately, so it can be invested 

in sustainable agriculture before even 

more forest is lost. 

Jean Ziegler receives 

millennium prize 

The aid organisation CARE Germany- 

Luxembourg has awarded the Millennium 

Prize to Jean Ziegler, the former 

UN Special Rapporteur on the Right to 

Food. CARE has thus honoured the man 

who, like no other before him, succeeded 

in making people aware of injustice in 

the worldwide distribution of goods and 

calling the causes by name. “Jean Ziegler 

is the voice of the poor, their siren. He 

is the dread of the powerful, a friend of 

the media; he is an interesting man and 

a courageous man,” said Heiner Geissler, 

a retired German minister, describing 

him in the award speech. “Jean Ziegler 

gives the global social environmental 

policy a philosophical, ethical justification. 

He exposes the inhumanity of the 

current economic system and describes 

the alternatives, the planetary civil society,” 

Geissler continues. In his acceptance 

speech, Jean Ziegler said: “I thank CARE 

from the bottom of my heart. But today 

is not just about a ceremony or tribute. 

With this prize, CARE is putting a weapon 

in my hand. For if I receive this prestigious 

prize, then there must be truth to the 

right to food.” According to Ziegler, the 

right to food is the human right “that is 

violated most brutally and permanently.” 

Every five seconds, a child dies of hunger, 

but many countries, such as the USA, 

Canada or the United Kingdom, have not 

recognised the right. Ziegler continues: 

“The voice of the hungry can only be the 

civil society; it can only be CARE. With 

our democratic means, we must force 

through the structural change of this 

absurd and murderous world order.” 



Latin America 

A Global Concept for Zero-Emission Buildings 

Carbon reduction is a difficult job. Significant progress will 

only be possible with a coherent climate strategy. We spoke 

with Dr. Wolfgang Große Entrup, Head of Governmental and 

Product Affairs at Bayer AG about the ambitious plans. 

Experts say that there are huge 

carbon reduction capacities in 

the field of building. Bayer has 

some lighthouse projects in this 

area. Can you describe in a few 

sentences what we could achieve 

with Bayer technology? 

Dr. Wolfgang Große Entrup, Energy consumption in 

Bayer AG 

buildings accounts for nearly 

20 percent of global greenhouse 

gas emissions. We are focussing 

on a segment that has been 

rather neglected up to now: office and industrial buildings and 

welfare facilities. Together with partners, we have developed 

the “EcoCommercial Building” (ECB), a globally adaptable 

concept for zero-emission buildings. 

These measures are tremendously important for megacities like 

the ones in Latin America. A UN study recently stated that these 

cities will be affected by climate change exorbitantly. What should 

governments and city councils do in your opinion, and how could 

Bayer support them? 

Authorities and the private sector should partner and focus 

on areas where greenhouse gas emissions can be reduced 

immensely, even in the short term. One of these areas is the 

insulation of buildings. Bayer has a long record in this business 

and can contribute a lot of know-how and innovative 

products. Insulating materials based on raw materials from 

Bayer display an excellent climate balance: In buildings, they 

save more than 70 times as much energy as is needed for 

their production. 

Your climate program has been introduced globally. But are there 

specific regional differences and cultural adjustments? 

Our climate program has been adopted in the regions according 

to different climate challenges and different legislative 

opportunities. For example, our ECB in India has been adapted 

to the climate aspects and existent construction supply chain 

boundary conditions. The ECB Kindergarten in Monheim (Germany), 

in contrast, is also a climate-neutral building but with 

totally different energetic installations. Different aspects of 

energy efficiency opportunities have been monitored through 

our climate-check initiative. 

Bayer has already reduced its carbon footprint significantly. Which 

of your measures could serve as models for industry? 

The continuous improvement of energy efficiency is a key 

focus in managing our production processes. Our innovative 

“Bayer Climate Check” is helping us to assess the greenhouse 

gas emissions at our sites worldwide. It is special because it 

enables a company to analyze the carbon footprint not only 

of the production processes, but also of raw materials, energy 

supply, and logistics. This holistic approach is really cuttingedge 

and could serve as a model for industry. 

14 



North America 

Mexico 

Drug War at US-Mexican Border 

When Mexican President Felipe Calderon 

took office, he promised to combat the 

illegal drug trade at home and work 

with the United States to stem the flow 

of illegal drugs across the US-Mexican 

border. As Mexico increased its policing 

efforts, the cartels went on the offensive: 

In 2008 alone, more than 7,000 Mexicans 

were killed as a result of drug-related 

violence. The waves of violence is now 

spilling across the southern border of 

the United States, where there have 

been increased calls for the deployment 

of the National Guard along the 2000- 

mile border with Mexico. So far, the 

Obama administration has been reluctant 

to send in armed troops, but it has 

sent more federal agents to the border 

with enhanced equipment to check for 

drugs and guns moving into the United 

States, says law firm Beresky & Fish. 

The Mexican drug cartels have profited 

from the decrease in power of the Columbian 

cartels. Previously, marijuana 

was the main cash crop for the Mexican 

cartels. Now the cartels are dealing not 

only in marijuana, but also supplying 

American drug users with cocaine and 

methamphetamine. Experts say that 

they earn between USD 15 to 25 billion 

with drug consumption by US citizens. 

On the other side, it is estimated that 

95 percent of the Mexican drug cartels’ 

weapons come from the United States. 

There are more than 6600 licensed gun 

dealers on the US side of the border with 

Mexico. The weapons are purchased, 

legally or illegally, within the United 

States. The guns then make their way 

into the drug cartels’ hands, either in 

the United States or across the border 

into Mexico, where the cartels use the 

weapons against each other, the police, 

and innocent Mexican citizens. 

Tequila boom causing 

ecological crisis 

The rising world demand for tequila is 

causing an ecological and social crisis in 

the Mexican production regions. That 

is the conclusion of a study by New 

North Carolina State University, which 

discusses the problems of changes in 

production structures associated with 

the boom. Besides leaching of the soil, 

the changes are causing social problems. 

This shows that a geographical indication 

for a product is not enough to ensure its 

social or ecological sustainability, says 

the author of the study, Sarah Bowen. 

The geographical indication’s worldwide 

stipulations ensure that production and 

processing of the agave can only take 

place in the Mexican state of Jalisco and 

four other regions of the country. The 

brand has developed successfully: The 

tequila industry has boomed since 1994 

and quadrupled its production to around 

300 million liters per year by 2007. Bowen 

points out the social consequences 

of this growth. “Tequila production today 

is undermining the social foundation of 

the region that relies on the agave. It is 

marginalizing independent agave farmers 

and farm workers.” Geographical indication 

standards alone thus contribute 

little to sustaining traditional production 

of tequila. “That’s especially clear in the 

Amatitán-Tequila Valley, where tequila 

has been produced for 400 years. The 

social and ecological resources here are 

threatened,” the study’s author says. 

Riddle on the origin of 

maize solved 

The maize or corn plant, one of the 

world’s most important staples and animal 

feeds, developed from plantings 

in Mexico. This took place 8,700 years 

ago, 1,200 years earlier than previously 

assumed. Proof of this was discovered by 

researchers at the Smithsonian National 

Museum of Natural History. Through 

genetic examinations, they were able to 

confirm that maize was bred in Mexico’s 

tropical south from a grass type named 

“teosinte”, which grows wild in Mexico, 

Guatemala and Nicaragua. This answer 

to the long unsolved question about 

the origin of the cultivated plant was 

published in the scientific journal Proceedings 

of the National Academy of 

Sciences. This proof of its origin places 

maize in a new light: The plant is one 

of the grain types that originated in the 

tropics. Mexican maize also stands in line 

with wheat and barley from the Middle 

East, which likewise were cultivated 

9,000 years ago. Especially those tropi- 


cal regions that were dry during certain 

times of the year were centers of early human 

settlement and agriculture in Latin 

America, explains the research director 

and archaeobotanist Dolores R. Piperno. 

The stone tools in which the researchers 

found the first remains of maize reveal 

how it was processed. “They pulverized 

the maize kernels to make them edible 

and easier to digest,” says Piperno. From 

Mexico, maize spread 7,600 years ago to 

Panama and then, around 6,000 years 

ago, to South America, where it was 

first used mainly in Chicha maize beer. 

Christopher Columbus discovered the 

plant in the Caribbean and brought it 

to Europe, along with the name typically 

used by the indigenous peoples 

of Guyana, “mahiz”. The plant’s high 

adaptability fostered its rapid spread to 

Asia and Africa, while Central Europe 

only became acquainted with the yellow 

grain later, after a detour through 

the Near East. 

Brazil 

Social inequality in Brazil 

Three quarters of Brazil’s prosperity benefits 

just ten percent of the population, 

human rights groups pointed out at the 

latest meeting of the UN Committee on 

Economic, Social and Cultural Rights in 

Geneva. The main cause of this disparity 

is the economic policy of the Brazilian 

government, they claim. The government 

puts too much emphasis on agricultural 

exports and large infrastructure projects 

instead of considering the needs of the 

poor and indigenous population. Talking 

to the news agency epo, Daniel Rech of 

the Catholic aid organization MISEREOR 

criticizes “the restrictive monetary policy, 

inadequacies in legislation and poor 

implementation of existing laws, such 

as those on the overdue agrarian reform” 

for contributing to social inequality. 

Moreover, NGOs are being increasingly 

criminalized, which makes potential 

cooperation with the state more and 

more difficult. 

Deforestation more profitable 

than conservation 

As long as the Amazon rain forest’s ecological 

benefits are not assigned a higher 

economic value, its destruction cannot be 

stopped. This is the conclusion of the environmental 

organization WWF, invoking 

a study of the Copernicus Institute at 

the Dutch Utrecht University. The study 

calculated the financial value of the 

Brazilian rain forest for economic uses 

that contribute to the forest’s destruction 

and compared it to the economic 

value of ecological functions. Thus, a 

hectare of rain forest has an annual 

value for CO2 storage of up to 78 euros 

and for erosion avoidance of up to 185 

euros. But the yield of a hectare of rain 

forest when it is cut down to produce 

soybeans is much higher, up to 470 euros. 

If the forest is sacrificed to raise cattle, it 

generates up to 115 euros. Among the 

main consumers of the soybeans that 

are destroying the rain forest are the 

Central European countries, where soy 

is fed to cattle or pigs to replace meat 

and bone meal. 

Supermarkets are booming 

In Brazil, when you want to buy the 

goods to meet your daily needs, you can 

check out the offering at the local daily 

or weekly market – or you can go to the 

competition. International supermarket 

chains are opening more and more 

branches and are seeking access to new 

consumer groups. This is made possible 

by the rapid growth of many threshold 

and developing countries – according 

to the World Bank, their share of the 

world economy had already reached 41 

percent in 2006. Globalization undoubtedly 

offers considerable opportunities 

to poorer population segments. But it 

also leads to severe ecological and social 

problems, as the example of the 

spread of supermarket chains in India 

and Brazil shows. “On the one hand, 

this causes the loss of jobs. In addition, 

the local, often small-scale agricultural 

sector often faces enormous competition 

from large-scale production systems,” 

explains Katharina Schmitt, expert for 

corporate responsibility at Germany’s 

Öko-Institut. “Small cooperatives and 

producing families are hardly capable 

of meeting the required product standards 

and supply quantities of Western 

supermarkets.” The researcher concludes 

critically: “There is something automatic 

about how Western business models and 

marketing structures establish themselves 

in threshold and developing countries. 

But it is doubtful that these often 

large-scale-industrial models are really 

suitable for meeting the needs of the 

local people.” The production of numerous 

consumer goods is becoming more 

complex, and parts of the manufacturing 

process are increasingly being displaced 

to low-wage countries to save costs. But 

environmental and social standards there 

are usually rudimentary, and violations 

of international treaties and national 

labor laws occur frequently. 

16 



North America 

South America 

Risk factor megacity 

Cities are especially threatened by natural 

disasters. The metropolises of the Southern 

Hemisphere, in particular, will suffer 

considerably from the consequences of 

climate change. This was the conclusion 

of the UN report “2009 Global Assessment 

Report on Disaster Risk Reduction”. 

The facts reported there indicate that 

especially megacities, metropolitan areas 

with more than 10 million residents, will 

be gravely affected. The report identifies 

uncontrolled urban development, 

poverty and environmental destruction 

as the “primary risk drivers”. And so in 

Latin America, for example, those slums 

and favelas that have grown on the sides 

of mountains are especially risky places. 

In the case of heavy rainfall or seismic 

shocks, mud avalanches or landslides 

threaten to kill many people. “This is the 

first global report ever which really provides 

any specific assessment of the low 

intensity extensive risks in developing 

countries,” says Margareta Wahlström, 

the UN Assistant Secretary-General for 

Disaster Risk Reduction. “Rather than 

an expense, investing in poverty and disaster 

risk reduction and climate change 

adaptation should be seen as an investment 

in building a more secure, stable, 

sustainable and equitable future.” 

Sales goals for sustainable 

coffee exceeded 

The environmental protection organization 

Rainforest Alliance reports encouraging 

numbers for coffee sales. In 2008, 

farms and peasant cooperatives sold a 

total of around 125 million pounds of 

coffee grown in compliance with the 

standards of the Rainforest Alliance and 

its partners in the Sustainable Agriculture 

Network (SAN). In the last reported 

time period, sales volume reached 91.3 

million pounds, exceeding expectations 

again. In all its forecasts, the organization 

had set just 120 million pounds 

as its highest target for calendar year 

2008. Around 70 million pounds of coffee 

from sustainable production were sold 

in Europe, and more than 40 million 

pounds reached the US market. Asia is 

developing as a new market. Here, 15 

million pounds of “Rainforest Alliance 

Certified” coffee were sold. The most 

important producing country for coffee 

with the green frog seal certifying its sustainable 

production origin is Brazil, with 

a 33 percent share and a total volume of 

40,800 tons. The second-largest producing 

country is Colombia with 22,000 tons 

and a share of 18 percent. In third place 

is Peru. There, 16,600 tons or 16 percent 

of the sustainably produced “Rainforest 

Alliance Certified” coffee is grown. 

Other important producing countries 

are El Salvador (10,700 tons = 9 percent), 

Guatemala (9,600 tons = 8 percent) and 

Mexico (6,000 tons = 5 percent). 

Galapagos strongly threatened 

A socio-economic disaster is looming on 

the Galapagos Islands, ecologists at the 

Universidad Autónoma de Madríd warn. 

Tourism, which the island inhabitants 

depend on, is not only causing increased 

immigration and squandering of local 

natural resources, but also infiltration 

of new animal and plant species that are 

endangering the island’s equilibrium. 

Sustainable development of the archipelago 

needs comprehensive concepts 

and more social stability on the islands, 

concludes the analysis published in the 

journal Ecology and Society. Today’s 

population of 20,000 inhabitants is 

growing year by year, especially due 

to immigration from Ecuador, whose 

territory the Galapagos have been since 

1832. Half the residents work in tourism 

and serve the now over 130,000 visitors 

who come to the Galapagos each year. 

But the immigration needed for tourism 

brings numerous problems to the Galapagos, 

says study director José Gonzalez. 

“Despite improved quarantine systems, 

today there are almost 500 new animal 

species that were brought to the Galapagos, 

almost 200 more than ten years ago. 

They quickly occupy the surrounding 

land and also infiltrate protected areas. 

Moreover, agriculture and cattle breeding 

are threatening biodiversity and 

sustainability,” Gonzalez emphasizes. 

The number of new plant species already 

exceeds that of the originally endemic 

plants and especially threatens the sensitive 

ecosystems in the archipelago’s 

moister higher regions. 



MENA 








investment. 

Doesn’t the financial crisis show that business and ethics don’t mix? 

Hanns-Michael Hölz: It’s true that the financial crisis has 

made clear that we don’t have enough transparency and control 

in many areas. Klaus Töpfer once said, we have to harmonize 

human, economic and environmental capital with each other. 

Since the financial crisis is an economically problematic situation, 

it logically also impacts on the issues of human and 

environmental capital. And so it’s essential that we continue 

to keep these two issues in focus. Otherwise, we’ll be caught 

in a double wave that rolls over us: First, the wave of the financial 

crisis, then, as a result, an environmental or human 

capital crisis. And so it’s really important, especially now, to 

talk about business and ethics as harmonizing factors! 












life? 




























investment, specifically through fund designs. But the work of 

our Deutsche Bank colleague Pavan Sukhdev has great value 

for adding objectivity to this discussion. 

We thank you very much for the discussion! 

Dr. Elmer Lenzen held the interview. 

10 



North America 

Conflict 

Opportunity costs of the 

Near East conflicts 

The Near East conflicts have caused enormous 

direct and indirect losses and costs. 

The “Strategic Foresight Group”, on assignment 

of some Western governments, 

has now calculated the opportunity costs 

of the conflicts in the Near East: around 

12 trillion US dollars since 1991. Opportunity 

costs are the earnings forfeited 

because opportunities had to be foregone, 

as a result of war, for example. Accordingly, 

had the conflicts since 1991 not 

taken place, every family in Israel and 

in the Arab world would now enjoy an 

income that would be twice as high on 

a per capita basis as it is today. In Iraq, 

in particular, the gross domestic product 

would be around 300 billion US dollars 

instead of the just 60 billion US dollars 

that it is today. The costs to the climate 

are also devastating: The conflicts have 

caused more CO2 emissions than are 

produced by an industrialised country 

like the United Kingdom. The researchers 

examined a total of 97 different parameters 

for economic, social, psychological 

and environmental costs. 

Gaza: The environment is a 

war casualty 

The Israeli military offensive against 

the Gaza Strip has also caused grave 

environmental damage. As UNDP reports, 

the main problems are the inadequate 

water supply and contaminated rubble. 

The environmental situation in Gaza was 

already precarious even before the offensive, 

as the independent news agency IPS 

reports. During “Operation Cast Lead” at 

the end of 2008 and beginning of 2009, 

almost the entire infrastructure in the 

Gaza Strip was destroyed within three 

weeks. According to the UNDP, the attacks 

caused especially heavy damage 

to the power supply, sewers and sewage 

treatment plants. Around 80 percent 

of the drinking water fails to meet the 

standards of the World Health Organization. 

Moreover, about 70 million litres 

of untreated sewage flow daily into the 

Mediterranean Sea. But the experts on 

location are also worried about rubble in 

residential areas. A spokesperson from 

the UN environment programme UNEP 

told IPS that the wartime destruction has 

released asbestos, which causes cancer. 

The soil has also been contaminated by 

white phosphorus, which the Israeli 

military dropped during the bombardment. 

This chemical decomposes very 

slowly and can enter the food cycle even 

years later. 

UN Report on the Human Rights 

Situation in Iraq 

The United Nations Assistance Mission 

for Iraq (UNAMI) issued its fourteenth 

report on the human rights situation 

in the country, produced in cooperation 

with the Office of the United Nations 

High Commissioner for Human 

Rights. The Special Representative of 

the Secretary-General for Iraq (SRSG), 

Staffan de Mistura, while recognizing 

various efforts by the Ministry of Human 

Rights, urged the Government of 

Iraq to take advantage of the improved 

security, stating: “This is an opportunity 

for Iraq to advance all aspects of the 

rule of law and human rights by further 

introducing legal reforms, strengthening 

the judiciary, improving the conditions 

of detention and enabling access 

to justice.” However, the report says 

the situation in prisons and detention 

centres still remains an issue of concern 

and it recommends reviewing the legal 

framework in order to make the essential 

move away from a confession-based 

system to an evidence-based one. UNAMI 

stands ready to help in this process. The 

report shows that gender-based violence 

remains one of the key unaddressed 

problems throughout Iraq. Numerous 

murders of women under the guise of 

so-called honour killings are still being 

recorded as suicides, the report shows, 

while in the northern Kurdistan Region, 

the practice of Female Genital Mutilation 

(FGM) remains a tolerated practice. UN 

High Commissioner for Human Rights 

Navi Pillay, whose staff helped compile 

the report, said “the situation of Iraqi 


women is extremely difficult. Violent 

actions are taken against them on a daily 

basis and I urge the authorities to make 

it a priority to both improve legislation, 

and law enforcement in order to protect 

them properly.” 

Business 

Mastering the crisis with 

the Koran 

Islamic banks for the most part have 

gotten off lightly in the “global” financial 

system collapse. The reason for this is 

their business model, which follows the 

rules of the Koran and clearly differs from 

that of Western banks. Trading in debt 

securities is strictly prohibited, and these 

banks do not invest in futures contracts 

in the real economy - not in abstract 

financial instruments. Islamic banking 

could therefore provide a useful model 

for the much-discussed future “reordering 

of financial markets”. “Islamic banks 

have benefited in the crisis from their 

main argument: They haven’t participated 

in buying and selling securitised 

loans," says Zaid el-Mogaddedi, Managing 

Director of the Frankfurt Institute for 

Islamic Banking and Finance (IFIBAF) in 

an interview. The international shock 

waves in financial markets were triggered 

when the speculative bubble in 

subprime mortgages burst, but no Islamic 

banks were hurt by the fallout in 

the initial months of the crisis. Meanwhile, 

however, the recession has hurt 

some Islamic financial institutions due 

to linkages with the real economy. The 

Islamic banks’ business model could 

serve as a guide in the reordering of 

Western banks, “even though the issue 

has some political explosiveness,” el- 

Financial crisis reaches Dubai 

Growth in the Arabian Peninsula will 

slow by up to three percentage points 

as a result of the worldwide recession. 

The financial and trading centre of Dubai 

has been especially hard hit. The government 

there under Sheikh Mohammed 

is alarmed and has already appointed 

a task force to investigate the effects 

of the financial crisis. The economic 

slowdown is showing up especially in 

the real estate market, which is struggling 

with falling prices for houses and 

flats. Primarily responsible for the weak 

economy is the liquidity crisis of local 

banks. The central bank of Abu Dhabi 

estimates that foreign investors have 

already withdrawn between 40 and 50 

billion US dollars as a result of the crisis. 

Since the diverted capital has been 

redeployed into dollar assets and used 

to compensate for market losses in New 

York and London, the capital shortfall 

at most Gulf financial institutions has 

grown dramatically. In addition to low 

cash flow, the situation is made worse 

by low oil prices. Investors are growing 

increasingly concerned, although the 

government is now trying to reassure 

them, pointing out that important construction 

projects will be carried out as 

planned, while less crucial ones will be 

postponed or deleted. 

Halal food is booming 

or other speculation-driven markets. As 

a result, Die Welt reports, they did not 

invest in toxic US real estate securities. 

Banking transactions are monitored by 

a sharia committee and checked for conformity 

with traditional interpretations 

of the Koran. In addition to a prohibition 

against interest, Islamic banks are 

obligated to accept risk in investments 

Mogaddedi believes. Applying the overall 

concept to conventional banks would 

be difficult. But individual elements of 

Islamic banking would provide these 

banks and the financial system greater 

security and more transparency after 

such a reordering. 

“Halal” food is gaining more and more 

popularity worldwide. The World Halal 

Forum, headquartered in Malaysia, estimates 

that revenues from food products 

unobjectionable under Islamic law have 

grown by over 50 billion US dollars over 

the last four years and now have reached 

around 634 billion US dollars. Markets include 

not only majority-Muslim countries 

but, increasingly, European countries as 

well. Global trade in halal food products 

is estimated to be some 12% of the 

total trade in agri-food products. With 

expected increases in both population 

12 



North America 

and incomes of halal consumers, this 

percentage is certain to increase. Businesses 

have long recognised the trend 

and so have converted more and more 

factories to halal production processes. 

The food products corporation Nestlé 

alone has halal-certified 75 of its 456 factories 

worldwide. The Arabic term “halal” 

means “permissible, allowed” and is used 

to describe Islamic dietary regulations. 

This includes the correct slaughtering 

of animals and avoidance of alcohol or 

pork. The latter are considered “haram” 

(impermissible, forbidden). Many reports 

on the halal market focus on meat, but 

products sold under the halal label cover 

virtually every agri-food product plus 

non-food products such as sweets, fruit 

drinks and cosmetics. 

Environment 

Egypt promotes renewable 

energies 

Egypt is transforming itself into an attractive 

location for renewable energies. 

Taking advantage of the country’s 

outstanding geo-climatic conditions, 

the Egyptian government is promoting 

investments in this still relatively young 

market. The country has enormous land 

areas to grow plants for biodiesel production, 

sunny weather for the solar industry 

and high wind velocities for electricity 

production from wind power. The best 

investment opportunities in the near 

term are offered by the construction of 

wind farms, the most cost-efficient source 

of renewable energy, as well as biodiesel 

production. If the costs for producing 

solar energy fall dramatically in the 

next five to seven years, the Egyptian 

government will also aim to build a competitive 

market for this form of energy 

in the medium term. Egypt’s proximity 

to Europe’s energy markets and manufacturers 

of production facilities is an 

additional advantage. The government 

predicts that around 20% of total electricity 

will be generated from renewable 

energy sources by 2020. Wind energy 

alone will provide 12%. Egypt already 

leads the entire North African market for 

electricity generation from wind energy 

with 57% of the total production. 

Tunisia: Schoolchildren 

lead the way in environmental 

conservation 

In Tunisia, an increasing number of 

young people are taking an interest in 

energy conservation, waste disposal and 

climate protection. One reason is the 

campaign “Environmental Caravan – 

I’m Joining In!”. Over a period of three 

years, it will visit a new place and a 

new school every week, teaching young 

people about environmental protection 

in a playful way. The “enviromobile” is 

a cinema, classroom and exhibition hall 

all rolled into one. On the 20 computer 

workstations within the bus, students 

can work on environmental problems 

interactively. Trained group leaders illustrate 

the challenges facing Tunisia: 

Due to the wasteful use of water, energy 

and soil, the desert is spreading, water 

is becoming scarce and biodiversity is 

shrinking. Another major problem for 

the environment and human health is 

waste, which most Tunisians dispose 

of indiscriminately. The environment 

bus spreads knowledge, raises awareness 

and provides an initial impetus for 

change. When the caravan moves on, 

local non-governmental organisations 

support environmental projects in the 

schools. In one of the over 100 school 

projects now taking place, students and 

teachers have reduced water consumption 

by repairing defective pipes and 

dripping water taps and using rainwater 

to water green areas. Other schools are 

reducing energy consumption, separating 

waste for recycling or planting local, 

long-neglected varieties of figs to help 

sustain the region’s biodiversity. 

Abu Dhabi is betting on a 

hydrogen future 

Abu Dhabi is still making good money 

with its oil supplies. But for its energy 

future, the Gulf state plans to convert 

completely to clean technologies. The 

Gulf state describes its project as the 

most ambitious sustainability concept 

that has ever existed. The project will 

include the largest hydrogen power plant 

in the world. The 15-billion-dollar fund, 

which the government hopes will lead to 

international joint ventures, is being put 

together by the Masdar company. “The 

worldwide demand for energy is rising, 

and since the issue of global warming 

is entering our consciousness more and 

more, it is now time to look to the future,” 

declares Masdar CEO Sultan Al 

Jaber. “Our possibilities to meet this 

need and take on these tasks will secure 

Abu Dhabi’s leadership in global energy 

projects in the future as well.” The Masdar 

Sustainable City – another component 

of the Abu Dhabi government 

plan – is also receiving public support 

from the environmental organization 

WWF. In the 50,000-resident model city 

of sustainability, no greenhouse gases 

will be produced. There will be no cars 

here, and all energy will come from 

renewable sources, with electricity generated 

photovoltaically. Houses, too, will 

be constructed following special plans 

so that cool air will enter, but heat will 

remain outside. 



North America 








investment. 

Doesn’t the financial crisis show 

that business and ethics don’t 

mix? 

Hanns-Michael Hölz: It’s 

true that the financial crisis 

has made clear that we don’t 

have enough transparency and 

Hanns-Michael Hölz, 

control in many areas. Klaus 

Deutsche Bank 

Töpfer once said, we have to 

harmonize human, economic 

and environmental capital with 

each other. Since the financial 

crisis is an economically problematic situation, it logically also 

impacts on the issues of human and environmental capital. 

And so it’s essential that we continue to keep these two issues 

in focus. Otherwise, we’ll be caught in a double wave that 

rolls over us: First, the wave of the financial crisis, then, as a 

result, an environmental or human capital crisis. And so it’s 

really important, especially now, to talk about business and 

ethics as harmonizing factors! 












life? 




























6 



North America 

Finance 

Epicenter of the crisis 

Confined crisis 

Last year, 35 counties accounted for half of the nation's foreclosure actions, an indication that much of 

the foreclosure crisis was confined to a few areas. 

What became a global crisis started very 

locally: Last year, only 35 US counties 

accounted for nearly half of the nations’ 

foreclosure actions – a sign that the 

global financial crisis began with a collapse 

of home loans in only a few corners 

of the country. This is the result of a 

RealtyTrac investigation, initiated by 

USA Today. ”This crisis was triggered by 

foreclosures, and a lot of those were in a 

very small number of areas,” the paper 

quotes William Lucy, professor at the 

University of Virginia and an expert on 

the link between lenders and faltering 

home loans. In contrast, other parts of 

the country were barely affected at the 

beginning of the crisis. That changed 

when major banks, which had heavily 

invested in mortgages, got into trouble. 

The Wachovia Bank, for example, 

collapsed quickly when its Florida and 

California mortgage customers began defaulting 

at high rates. USA Today comes 

to the conclusion: ”The worst-hit places 

comprise about 1% of all U.S. counties. A 

few are in already distressed areas around 

Detroit and Cleveland. Most are clustered 

in places such as southern California, 

Las Vegas, Phoenix, south Florida and 

Washington, D.C., where home values 

shot up dramatically in the first half of 

the decade, then began to crumble.“ 

SRI potential for the U.S.A. 

The U.S.A. is one of the world’s largest 

issuers of bonds. In spite of this, sustainable 

institutional investors often 

hesitate to purchase U.S. government 

bonds: Human rights violations such as 

torture, the death penalty, high military 

expenditures and the rejection of international 

climate protection agreements 

make these securities unattractive for 

sustainability-oriented investors. That 

could change in the foreseeable future. 

The current U.S. president has promised 

numerous measures that, if implemented, 

would have a direct influence on the 

assessment of U.S. government bonds 

in the SRI country rating. “This would 

move the U.S.A. up a few places in the 

sustainability ranking,” says Oliver Rüdel, 

research director at the sustainability 

rating agency oekom research. His list 

of recommendations for a significantly 

better standing largely matches Obama’s 

announced package of actions: Closing 

of the Guantánamo prison camp, elimination 

of torture, withdrawal from Iraq, 

ratification of the Kyoto Protocol, expansion 

of renewable energy sources and 

investments in infrastructure. Currently, 

the U.S.A. is four places ahead of Russia 

(44), between Mexico (39) and Turkey 

(41). Despite all his optimism, Rüdel 

is skeptical that the United States will 

reach the sustainability level of Europe 

during Barack Obama’s term in office. 

Still: “Obama can move powerful levers 

today that will set the stage for sustainable 

development in the U.S.A.” 

Crisis halts New York 

skyline plans 

Construction on the world’s best-known 

skyline has stopped due to financial 

problems. A number of New York real 

estate projects face failure because of the 

financial and economic crisis. While 30 

major construction projects with a value 

of five billion dollars have already been 

stopped since the end of 2008, more 

and more plans have been put on ice 

or canceled completely, according to the 

builders’ association BTEA. Besides the 

delays in expanding the world’s leading 

skyscraper site with its over 5,750 

buildings, the economic consequences 

for real estate companies, builders and 

architects are disastrous. According to 

the U.S. media, the enormous New York 

construction boom of recent years has 

already come to an abrupt end. The 

sector’s crisis is even endangering the 

rebuilding of the World Trade Center at 

Ground Zero. As a result of the threatening 

wave of bankruptcies and the need 

for cost savings, new record unemploy- 


ment numbers and the resulting “catastrophic 

effects on consumption” are 

feared. The construction freeze and the 

industry’s difficult situation are mainly 

due to the evaporation of investment 

flows and the credit squeeze in project 

financing. Cost savings are essential in 

view of the current economic situation, 

and so some construction projects have 

had to be reevaluated. Some buildings 

already under construction have been 

shortened by several stories and, when 

completed, will be lower than originally 

planned. 

Climate 

Climate 

Permafrost soil time bomb 

Climate researchers are worried about the 

permafrost soils in Canada and Siberia: 

The enormous amounts of greenhouse 

gases stored there could be released 

by global warming. The consequences 

for the world climate are considered 

devastating. As a study by the climate 

researcher Chris Field of Stanford University 

shows, global warming progressed 

significantly faster from 2000 to 2007 

than was forecast by most experts. Looking 

at the thawing permafrost soils, Field, 

who is also a member of the respected 


Change (IPCC), speaks of a ticking time 

bomb. The soils in Canada and Siberia 

could release millions of tons of greenhouse 

gases, which previously remained 

captured in the permanent ice. According 

to IPCC estimates, around 1 trillion tons 

of carbon dioxide (CO2) are stored in the 

permafrost soils. In comparison: Since 

the start of industrialization, humanity 

has emitted an estimated 350 billion 

tons of CO2, which has changed the 

world climate. But the problem is not just 

CO2: The peat ecosystems also release 

large amounts of so-called laughing gas, 

which is 300 times more harmful than 

carbon dioxide. 

Alaska pushes green energy 

After Texas, Alaska is the state that 

produces the most oil. Alaskan oil is 

expensive, due to the geographic location 

of the wells and the resulting long 

transport paths. The ups and downs of 

the oil markets have caused a rethinking 

in Juneau: Gov. Sarah Palin has committed 

around 300 million dollars over the 

next five years to promote renewable 

energies. The target groups are independent 

energy producers and local power 

networks. The amount is considerable for 

a state with just 670,000 residents, the 

New York Times says. “Today’s current 

low oil prices should not lull Alaskans 

into a false sense of security, as if these 

low prices are going to last,” Palin told 

the paper. Even today, the state produces 

around 24 percent of its energy from 

renewable energy sources. The share 

should rise to around 50 percent by 2025. 

Besides hydroelectric power, Alaska is 

also targeting wind energy. 

California’s strict fuel 

regulations 

Arnold Schwarzenegger, Governor of 

California, is sharpening his tone on 

climate protection: To significantly reduce 

carbon dioxide (CO2) emissions, his 

state has enacted the country’s strictest 

regulations for gasoline and diesel fuel. 

The “Low Carbon Fuel Standard” will 

reduce the share of CO2 in the fuels 

by around 10 percent by 2020. As the 

Air Resources Board regulatory agency 

further reports, refineries are called on 

to promote alternative fuels with a lesser 

CO2 burden, such as biofuel. Governor 

Schwarzenegger praised this step to the 

press, claiming it would “attract the 

private investors we need to transform 

our energy supply.” Schwarzenegger 

already announced ambitious climate 

protection goals last autumn. And so 

California joined the “Western Climate 

Initiative” (WCI), an association of six 

states and four Canadian provinces with 

84 million residents. 

Spam – the climate killer 

Every day, around 120 billion e-mails 

are sent worldwide. Of these, at least 80 

percent are spam, according to estimates. 

But this junk mail is not just annoying; 

it is also very harmful to the environment. 

A study in the U.S.A. found that 

spam mail consumes around 33 billion 

kilowatt hours of energy per year. That 

equals the electricity consumption, and 

8 



North America 

so also the greenhouse gas emissions, of 

2.4 million households or 3.1 million 

automobiles. The study “Carbon Footprint 

of Spam” by the consulting firm 

ICF International calculated that, in the 

U.S.A. alone, 8.2 billion kilograms of CO2 

are created by junk mail. By the way: 

The production of spam mails itself uses 

hardly any energy. Rather, 80 percent of 

the energy consumption results from 

viewing and deleting spam, 16 percent 

from its filtering. 

Environment 

U.S.A. voted onto UN Human 

Rights Council 

The U.S.A. has been elected to the Human 

Rights Council by the UN General 

Assembly. Until recently, America had 

boycotted the Council due to anti-Israel 

statements. The new Obama Administration 

has now moved away from the 

previous rigid rejectionist stance and has 

Vullutatem iure con et nisl eu feum 

dolore delit vullaortie cor susto odigna 

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announced it would work constructively 

on the Council. Julie de Riviero of Human 

Rights Watch praises this move: 

“We hope that the Americans will bring 

to the Council a new dynamic and a 

new commitment to human rights – 

especially as a country that is coming 

to terms with its own human rights 

offenses.” Many human rights activists 

had accused the U.S.A. of avoiding the 

Council in large part due to its own human 

rights violations. The UN Human 

Rights Council has existed since 2006, 

when it replaced the UN Commission 

on Human Rights. The Council is made 

up of 47 elected member states, which 

report directly to the General Assembly. 

The seats are distributed proportionately 

by geography: Africa and Asia each have 

13 seats, Latin America and the Caribbean 

8, Western Europe 7 and Eastern Europe 

6. Besides the U.S.A., China, Russia, Cuba 

and Saudi Arabia were also elected to 

the Human Rights Council by the UN 

General Assembly. 

Canada & UN Security Council 

seat: Water is the way 

Maude Barlow, senior advisor on water 

to the President of the United Nations 

General Assembly and Council of Canadians 

chairperson, says the Harper 

government's goal of a seat on the UN 

Security Council should be denied until 

Canada formally recognizes water as a 

human right. Canada and the United 

States have been the strongest opponents 

of the right to water at the United 

Nations. There is speculation that US 

President Barack Obama will change 

the American position on the right to 

water, but there is no indication to date 

that Prime Minister Harper intends to 

change his government's position on 

the issue. By 2025, the United Nations 

estimates that 2.8 billion people in 48 

countries will be living in areas facing 

water stress or scarcity. "It would be wonderful 

to see Canada on the UN Security 

Council helping to address the critical 

global challenges of our day," concludes 

Barlow. "But if the Harper government 

fails to act on the global water crisis, then 

it simply does not deserve to take that 

seat." The Canadian government under 

Prime Minister Stephen Harper has made 

securing a seat on the 15-member UN 

Security Council for the 2011-12 term a 

top foreign policy priority. The election 

will take place in October 2010. Canada 

is vying for this seat against Portugal 

and Germany, countries which already 

endorse the right to water. 

Native Americans: 

jobs vs. tradition? 

With an unemployment rate of over 80 

percent, the situation on the Northern 

Cheyenne Indian Reservation is depressing. 

Massive coal deposits on the reservation 

could change this. A bitter dispute 

has now broken out over mining rights 

and ecological consequences. The newly 

elected tribe president Leroy Spang is a 

former mineworker and favors awarding 

coal and gas concessions to big energy 

corporations. Opposed are the traditionalists, 

who fear for the tribe’s identity. 

“This is the last war that our people are 

going to face,” says Philipp Whiteman 

to USA Today. Whiteman is founder of 

Yellow Bird, a non-profit group promoting 

respect for the land and environment. 

Many reservation residents, like 

him, fear that mining would destroy 

the tribe’s culture and beliefs, which 

are closely linked to the “Black Rocks” 

mountains. Added to this is the worry of 

being cheated by the mining companies. 

The federal government as trustee had 

already tried to sell the coal deposits in 

the sixties. Back then, the land was sold 

without the Native Americans’ consent. 

It was only in 1976 that the U.S. Supreme 

Court recognized the Cheyenne’s right 

to own the reservation land. Local environmental 

groups have now turned to 

President Obama and hope for support 

in expanding renewable energies as an 

alternative to coal mining.

Global Compact International Yearbook 2009

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