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Thursday, December 24, 2009

Top Themes in 2009

I have been too critical of top ten rankings to list my top ten corporate responsibility issues for 2009 with any sort of credibility. But I can still identify themes that were important to me this year and end with a light hearted piece like they do on the news !

Greenwashing and Whitewashing – Earlier in the year, I wrote a number of posts on green and whitewashing as did guest bloggers , Kathrin Winkler from EMC and Keith Miller of 3M. Between these posts and in my December posts on employee engagement and sustainable community investment, I think a consistent theme came through. That is, the importance of striking the right balance between continuing to do the popular things that demonstrate engagement , without allowing them to divert attention from the material actions that make a substantive difference.

Ranking Programs – My overriding perspective on CSR rankings is that they serve a very valuable purpose. CR practitioners use rankings to drive change inside their companies and long may they continue. Brian Boyd talked about rankings from J&J’s perspective in his guest post in October. However, I maintain what I hope is a healthy skepticism of the supposed accuracy implied by quantification. You cannot define the best company accurately any more than you can define the best car or best country in the world. But you can improve the value of precise quantification by narrowing rankings to specific themes and sectors.

Product Impact – I tried to articulate in the Four Dimensions of Responsibility that the corporate responsibility field is far more than the ‘Direct Impact’ of the company’s carbon footprint or its community involvement contribution. In fact, in most cases that will be by far the smaller part of its impact. The impact of a business’s products and services and public policy positions is often far greater. In September’s guest post from Mark Buckley at Staples, in November’s from Francois Ajenstat at Microsoft and from Frank Mantero of GE in December we saw great examples of social and environmental sustainability initiatives way beyond ‘Direct Impact’.

Carbon Emissions and Climate Change – There was a lot of content on this topic in my blog this year. Emma Stewart wrote a guest post on Autodesk’s Corporate Finance Approach to Climate-stabilizing Targets (CFACT) . I wrote about how at BT Americas we completed our solar installation at El Segundo this year and production is as expected. We launched an employee solar residential program which has had great engagement although fewer installations than hoped. In April Kim Saylors-Laster posted on Walmart’s approach to solar. Carbon footprint and climate change is only one component of corporate responsibility, but we have had a less than clear outcome from COP15 and while compliance requirements remain far short of what is required to mitigate catastrophic climate change, the topic remains as central in the CR field at the end of 2009 as it was in the beginning.

Role of the CR Practitioner – I posted on varying themes in which I proposed that the business would benefit from the input of the CR team. This includes advertising, mis-use of the law to define what is good and bad , paying interns, the rights of the individual versus protection of the vulnerable ! I plan to continue on this topic in the new year as I consider that as CR practitioners we need to continue to spread our wings and broaden our influence within the business.

And my lighthearted piece at the end – Naked men in locker rooms do increase blog hit rate. But they also reduce your 'average time on page' when you don’t meet the customers’ expectations - SMART objectives can undermine sustainable behavior !

Happy Holidays

Tuesday, December 22, 2009

Sustainable Community Investment or Helping the Needy?

I have noticed some contrasts recently in the sort of giving employees want to do with the sort of giving companies want to do. As a company we want our community investment to be strategic and sustainable. For BT, with core competencies and impact in the ICT space, that means communications and digital inclusion. But employees, myself included, want to do things that involve a hands-on approach and that tackle an immediate need.

From a sustainable community investment perspective it is best to help a homeless person learn a skill so they can get a job, but working in a soup kitchen or donating to a food pantry is a hands-on approach that is more immediately fulfilling. Likewise donating money to help cure people with heart disease seems like a more charitable cause than donating your money towards a healthy living education program – although the latter might be better value. On a personal level most of us want to do things that meet the immediate requirements of a needy person.

In addition, personally, I want to do things that get me out of my normal office environment and working in different capacity. I am sure that why so many people like to work in soup kitchens.

Our emotional drivers as individuals incline us towards programs that help sustain the needy rather than truly sustainable programs that tackle the underlying issue.

Companies can and do address these differences by distinguishing between the drivers and appropriate funding to put behind employee engagement programs versus the drivers and appropriate funding to put behind corporate giving.

But the real trick is to find programs at the intersection of both employee drivers and strategic and sustainable community involvement. I am still working on it and would be interested to hear any you have come across in your sectors.

Friday, December 18, 2009

Employee Engagement: Some Last Thoughts

This is the last of a series of posts on employee engagement. Not deep and meaningful, rather I have captured a couple of thoughts that didn’t fit neatly elsewhere.

Global Sensitivity is one area that is on my radar all the time as I am the CR lead for a regional operation. Be sensitive to global differences. This could be the topic of a whole series of posts itself but I will save that for another time. The key question is centralized versus decentralized. I recommend tending towards centralized and line of business control for environmental projects, but for social and economic initiatives to tend towards global guidelines and plenty of local discretion on a geographic basis.

What about the skeptics? - I wrote a post on this some time ago and I stand by what I said in that post that we should not dismiss skeptics. In “Legal Doesn’t Equal Sustainable,” I commented on the conflict between sustainability and the advocacy based approach of our legal and political systems that require each side to demonize the other. I think that in the climate change space we have moved into that demonizing mode and as sustainability practitioners we should be setting a better example.

Much has been written on the topic recently. I will end with some other resources worth looking at:

Wednesday, December 16, 2009

Employee Engagement – Harness Momentum

This is one of a series of posts on employee engagement.

I see employee engagement as having two roles; as an end in itself and as a mechanism to achieve change.

As an end in itself, employee engagement serves to improve morale and enhance retention and recruitment. In that respect, the first role can be accomplished through leadership from the top and building momentum, both of which I’ve addressed in earlier posts from this series. But for the second role, as a vehicle to achieve change in support of the organizations overall CR objectives we need to harness that momentum.

Whereas building momentum calls for flexibility across business boundaries and what I termed ‘allowing the trivial’, harnessing momentum is the time to leverage this energy without losing it.

So, how do you harness momentum? I have used three interrelated approaches outlined below to help achieve this:

  • How the Individual Fits - Help the individual understand how their contribution fits into the whole. Look for ways to draw a quantified linkage between action as an individual and the objectives of the organization. In an ideal world our people will know what activities have to occur, and by when, to meet corporate responsibility targets, so they can put their actions in context.
  • Materiality – action on trivial impacts help build momentum. It is not necessary to stop those activities, but when harnessing the momentum it is the time to help people understand where the material business impacts are and how they can influence those impacts.
  • Functional Application – challenge the business units in the company to examine how they can impact the organization’s sustainability objectives within their core business activities and use the feedback from that to breakdown the objectives into functionally appropriate targets and objectives.

Earlier this week I attended an office party in our New York office catered wonderfully by one of our CSR partners, Project Renewal. I was humbled when two graduates of Project Renewal’s Culinary Arts Training Program told me what a great boost it was to their confidence to be invited in to speak to and work with us. But what great boost our own people get from organizing and participating in these programs. Joe Murphy, a colleague who volunteers with Project Renewal told me that every time he volunteers “I feel better than the person who gets the free meal.”

As corporate responsibility practitioners we must make sure that we harness this momentum to enable real change in underlying problems and not allow it to be a pressure release valve that enables us to allow the underlying problems to perpetuate.

Monday, December 14, 2009

Employee Engagement – Build Momentum

This is the third in a series of posts on employee engagement. I previously addressed the issue of engaging employees through the first step of demonstrating strong leadership from the top. Step two is to help build momentum throughout the organization.

I am often asked how I get employees to participate in supporting sustainability and CR programs. For the most part I find that people want to take action. In fact, if anything there is pent up demand. I just need to give them ‘permission’ and some framework for what they want to do.

BT has Carbon Clubs as a way to bring colleagues together to discuss climate change issues. Once a part of the BT carbon club, employees are able to share knowledge and ideas with colleagues and take action together. Similar to our program, Walmart has Personal Sustainability Projects. These programs were developed by employees as an outlet for them to embrace sustainability. The characteristics of these and other frameworks are very similar;

  • Empower - enable cross functional teams to form
  • Seed ideas - provide forums and gathering points through social networking and recognize with publicity and awards.

A couple of characteristics that I would add to the two above include:

  • Be flexible with boundaries - for example support activities that might impact carbon footprint outside of work if that is what folks want to focus on. I was briefed a year or so ago on a great example of a grass roots carbon club initiative at our Adastral Park research center. The team arranged to borrow a fleet of electric bikes from a vendor, put a charging station on the campus and loaned the bikes out to employees to try out two weeks at a time. Interested employees could then make their own arrangements to buy a bike instead of driving if that worked for them.

  • Allow the trivial - Three years ago and new in the role, I discouraged people who wanted to replace the paper in the photocopier and eliminate Styrofoam cups. We run massive data centers. Styrofoam cups and the paper in the office copier are simply not material and divert attention from what is. I have changed my views on that approach. Most BT employees never see the inside of a data center, but they do see the cups in the canteen and paper in the copier. Our people build their trust in their employer’s position from what they see, possibly more than from what they are told in corporate communications. So supporting the visible is important, even if it is trivial. And then, when those people have an opportunity in their jobs to influence something material they will take the right actions.

Adding these characteristics to your framework will help your organization to build momentum and engage employees in the process.

My next post will focus on the third step of employee engagement: harnessing the momentum.

Friday, December 11, 2009

Employee Engagement – Leading From the Top

This is the second in a series of posts on employee engagement describing what I consider to be three stages to full employee engagement; leading from the top, generating momentum and harnessing momentum.

The first step is to demonstrate leadership and commitment from the top. It is often stated as a foundational requirement for employee engagement, but can be hard to attain as illustrated by the many times I am asked the question , so how did you get your leadership team to support this?

I see an interesting tension between attaining true leadership for an issue while resisting the pressure for the company to change its CR priorities according to the CR priorities of the senior most leadership.

I have observed four characteristics that help distinguish true leadership for a sustainability theme.

Policy – a clearly articulated company position on the issue that includes definition of the extent of its effects on society and on the company, the cause, and the role the company has in mitigation and perhaps adaptation.

Targets – output related targets presented within the context of resolving the issue.

Names – named and visible members of the leadership team who back the policy and associated programs.

Engagement – Skin in the game through visible engagement by members of the leadership team. Examples from BT include Ben Verwayan’s active chairing of the Climate Change Task Force of the Confederation of British Industry as CEO of BT and Sir Michael Rake’s active role as chair of the UK Commission for Employment and Skills.

Historically, when corporate responsibility was philanthropy, the corporate CR theme was often set by the personal priorities of the most senior leaders of the company. An individual felt strongly about a particular theme and so philanthropic donations to that theme did well under their leadership. Today, enlightened companies have integrated corporate responsibility and sustainability into their business. One test of a good sustainability pillar is that it meets the changing needs of society and the changing role of the business in society, but resists change purely due to a change of leadership.

Wednesday, December 9, 2009

Employee Engagement

This is the first in a series of posts on the topic of employee engagement. It expands on my participation in a panel at BSR 09 a few weeks ago with Christopher Corpuel, Vice President, Sustainability at Hilton Hotels and Silvia Garrigo, Manager of Global Issues and Policy at Chevron. Silvia talked about engaging at the leadership level and Chris addressed integrating sustainability with the business. My focus was on engaging employees.

Deborah Fleischer at Triple Pundit - wrote a great overview of the session as did BSR. I have decided to try and capture my own thoughts while they are still relatively fresh in my mind.

But we should start with the question, why do any employee engagement at all? Employees are a key stakeholder group. They have the primary impact on the performance of the company in any particular corporate responsibility pillar and they have an impact through their actions outside of the workplace. The Green IT survey we did earlier this year identified that companies are able to lead the views or our employees towards a more positive approach to acting on climate change. So there is a rationale for companies to take action to engage employees on sustainability topics which they consider important – it makes a difference. The survey also identified that employees take more action at home than at work, so there is also room for improvement.

While I use carbon emissions and climate change primarily for examples, the steps apply equally to all pillars of corporate responsibility. And though I present them as a series of steps, in practice most examples I come across are implemented in parallel. Initiatives rarely start from a standing start and who wants to wait anyway! In three subsequent posts I will describe what I consider to be three stages to full employee engagement; leading from the top, generate momentum and harness momentum.

Monday, December 7, 2009

Guest Post – GE

Coming Together on the "Rule of Law"

Back in February I wrote a post “Legal Doesn’t Equal Sustainable” highlighting the distinction between sustainability and legal requirements. This was from the perspective of my experience working in a developed economy. In this guest post, Frank Mantero from GE positions the importance of the rule of law to developing economies and to GE’s operations in developing countries.

Frank Mantero is the Director, Corporate Citizenship Programs, for GE Corporation. Frank coordinates the company's global citizenship efforts, develops and manages the company's Citizenship Report, monitors the company's engagement with the DJSI and leads communications for GE-sponsored disaster relief efforts.

Working for GE, I work for a multinational company with extensive and continuously growing operations in developing countries. One of the biggest challenges that we face today is the need for strong local institutions that help foster the rule of law, protect the rights of individuals and create predictable, transparent and equitable legal and regulatory environments;.

Here, the need for localized engagement has become more visible as we reflect on and manage the fallout of the recent global financial crisis-- the result of a complete “systems failure”. Slowly we are waking up to the impact of our actions and inaction, discovering the need to ‘reset’ our approach to business in every region and every industry. We have been challenged to re-think the way work together and re-set our responsibilities to each other and the communities around us.

As we pick ourselves up, dust ourselves down, and stand back to observe a new and unfamiliar world, I look around me to see others in the same situation-- weather beaten and tired. Despite the exhaustion, the survivors remain because they share the same the goals and values that defied a global economic meltdown- integrity, experience and a focus on transparency and accountability. For us to succeed in the future, we must continue to anchor ourselves using these goals and values, while at the same time innovating for change.

As Einstein once mused, “We can’t solve problems by using the same kind of thinking we used when we created them.” This philosophy is the foundation for the new, innovative approaches and collaborative actions that are changing the way we think about and shape our future. As a collective society, we face tremendous challenges such as climate change, energy security, water scarcity, migration, and health pandemics. To help tackle these modern day challenges, companies must build out their capacities around these issues, integrating innovation into the heart of their business. This innovation lies not only in the products and services companies provide, but also in their approach to engaging with the communities and governments where they operate.

While the growing strategic importance of what some call sustainable development and others call corporate responsibility, citizenship, or even responsible business does add some complexity to businesses operating in the global marketplace, it more importantly highlights the need for collaboration and agreement on the rules of the game. So, the ‘Rule of Law’ can no longer just be about securing a top down enforcement of the law, but also about building and/or strengthening the capacity of institutions and society to develop governance mechanisms that support sustainability values.

For me, this means securing the highest credible standards in one’s own practices considering local customs, cultural and political differences, that in turn, advance that of all businesses and governments towards sustainability. The importance of a consensus on truth and integrity is why in my work at GE I place great emphasis on “Rule of Law”. It plays a central role within our citizenship strategy, as it drives shared accountability and provides security in the midst of a downturn.

Without doubt, an effective Rule of Law ultimately strengthens nations (competitiveness) economically, politically and socially, creating environments that enable businesses like mine to engage and contribute to common development. It is time we come together, beyond issues of compliance, to uncover the roots and experience the promises of Rule of Law.

Thursday, December 3, 2009

Corporate Home Pages Promote the CR Message

I did an informal review this afternoon to try and gauge the extent to which companies are externally positioning sustainability and corporate responsibility as issues at a corporate level.

I just tackled just the first 40 or so of a list of 400 companies. Not very scientific I know, but enlightening nevertheless.

Every company had a link to their corporate responsibility site, but more importantly and to my surprise, exactly half the companies had sustainability issues highlighted front and center with large font text in prominent boxes. The language used was atypical of the corporate home page - environmental values stuff. And there was very little was about straight philanthropy, rather the focus was on core issues of company interaction with society and environment.

Here are some examples (excuse the lack of links but I am timing out);

Ahold - Acting in a responsible manner for the benefit of the planet
Air Liquide - Planet Hydrogen - Our planet abounds in energies. But by depleting its natural resources, we are asphyxiating it.
Akzo Nobel - Emergency on Planet Earth - A new magazine published
Allianz - The Good Entrepreneur - Green Ideas and economic success are not mutually exclusive.
Amadeus - Joined "Massive Good" - global health initiative
Arcelor Mittal - Taking responsibility for transforming tomorrow
Arla Foods - Closer to Nature - we are at one with nature and have a responsibility to look after it as best we can
AstellasPharma - Changing tomorrow - leading light for life

These are not the consumer product and marketing pages. These are the corporate home pages where shareholders go to look up the company report and accounts and a description of locations.

Call me a naïve optimist, but I think this is a good sign. I know there can be a big gap between words on a web site and core actions at board level, but there is also a big gap between having some CSR people in the company and making the issue front and centre in company communications. I think we have bridged that gap in many companies.

The corporate pages are for investors and these communications help set the foundations for companies to act positively in the sustainability space and bring their shareholders along with them. An optimistic ending to my day today.

Sustainability Rankings by Industry Sector – Any Better? Part 2

This is the second of two posts. The first, earlier this week, was on TBR’s ranking of the ICT sector.

M&E’s Sustainability Ranking looks at the oil and gas services sector and in contrast with TBR, takes a very broad perspective of sustainability “comparing twenty companies in the sector against 355 criteria of sustainability, corporate governance, social responsibility, transparency and ethics.”

So although it is sector specific, the M&E ranking has a great dependency on weighting factors between very disparate CSR themes which I see as a significant downside when looking at the specific scores.

First in the M&E report is Schlumberger followed by Baker Hughes and then Halliburton in third place. Although the broad scope of the M&E report prevents an accurate comparison to Newsweek’s green ranking, interestingly, the order in the top of the ranking is the same; Schlumberger #118, Baker Hughes #154 and then Halliburton at #169. (Considering they come from the oil and gas services sector I think all are pretty respectable positions in Newsweek’s rankings, ahead of many companies in much less challenging sectors).

I find the observations within M&Es study to be valuable. Amongst other things M&E identifies;

  • relative positioning of the participant companies from year to year, for example “The biggest movers in 2009 are Baker-Hughes, jumping from a score of 47.07% in 2008 to 72.7% in 2009”
  • correlations between sustainability performance and financial performance, “study shows a significant correlation of 0.34 between the total M&E results covering 355 points of sustainability performance with Return on Assets (ROA)”.
  • comparable participation of the included companies with the DJSI, UN Millennium Goals and Carbon Disclosure Project.

All in all although I remain skeptical about the specific scorings, the concise commentary and conclusions provided with this report are valuable and fairly unique amongst reports I have seen.

Wednesday, December 2, 2009

Sustainability Rankings by Industry Sector – Any Better ?

I have written previously about ranking programs and commented that I put more value behind rankings for a particular theme or a particular sector, where the comparison is more likely to be apples with apples and the vagaries of weighting factors are at least somewhat lessened.

Two sector rankings have been brought to my attention recently. I will cover one today (TBR) and one later this week (M&E) when I have collected my thoughts on it.

TBR’s Sustainability Index Benchmark Report looks at the ICT sector. TBR’s scope for sustainability is environmental issues. You can see that Dell, came first followed by BT, IBM, HP, Intel and Nokia.

A comparison with Newsweek’s rankings is possible, although only partial as Newsweek only covers US companies. In Newsweek’s ranking of 500 companies, HP comes first, Dell second, Intel fourth and IBM fifth. It is notable that these ICT sector companies are all clustered in the Newsweek ranking although the order is different.

I see weightings as having a significant impact on ranking even in TBR’s sector specific comparison. For example, how do you rank the relative importance of recycling equipment for BT, which is predominantly a networked services company, with Dell, which sells hardware products in boxes as its core business? (If this sounds like hard feeling’s that we are not #1, it isn’t meant to, I am more than happy that we are well recognized in the rankings).

I suspect that with only a couple of months between the surveys, the different positions between TBR and Newsweek are more likely to be reflecting weighting and methodology rather than performance, so I have to say I remain what I hope is a healthy skeptic on the exact order of rankings, but a supportive of the underlying objective and continued improvement to methodologies.

More to come later this week on M&E rankings in the oil and gas services sector.