Reflecting back over the past 12 months, a few things stood out as significant events in the CSR world. Here are Liz Gorman’s top five issues for executives from 2012 as published by CSRwire:
1. A Bite out of Apple
The year began with a major story published in the New
York Times on Apple: In China, Human Costs Are Built Into an
iPad. The story revealed the harsh conditions workers are subjected
to in Foxconn’s Chinese factories, a supplier to Apple. These workers labor away
for long hours, churning out iPads and iPhones at record speed in order to keep
up with growing consumer demand for these products. Working conditions are
undoubtedly better than in earlier years, but a lack of safety protections led
to an explosion in the Chengdu factory last January, killing two workers and
injuring others, as the crew on shift polished iPad covers.
York Times on Apple: In China, Human Costs Are Built Into an
iPad. The story revealed the harsh conditions workers are subjected
to in Foxconn’s Chinese factories, a supplier to Apple. These workers labor away
for long hours, churning out iPads and iPhones at record speed in order to keep
up with growing consumer demand for these products. Working conditions are
undoubtedly better than in earlier years, but a lack of safety protections led
to an explosion in the Chengdu factory last January, killing two workers and
injuring others, as the crew on shift polished iPad covers.
While Apple has a supplier code of conduct mandating
fair and safe working conditions, and a well-documented audit trail of
inspections, it also has had its share of problems getting suppliers to comply
with its code. The company has also reported these violations publicly.
But when the story broke, Apple tried to downplay the situation and provided
evidence that it had done everything it could to prevent these issues. And like
its peers, it had probably pressed hard on Foxconn to maintain good working
conditions while pushing harder to meet its unrelenting delivery demands.
There’s a relationship here, but that’s a topic for another time.
What the New York Times story did was serve as a
reminder to all corporations that rely on contract factories to produce their
goods: Your suppliers can be monitored but ultimately cannot be trusted to fully
comply with corporate standards once the auditors leave the scene. And that is
what we call a reputational risk – and in Apple’s case, a reputational
nightmare.
reminder to all corporations that rely on contract factories to produce their
goods: Your suppliers can be monitored but ultimately cannot be trusted to fully
comply with corporate standards once the auditors leave the scene. And that is
what we call a reputational risk – and in Apple’s case, a reputational
nightmare.
2. GRI Goes G4
Now in its 15th year of providing organizations
with a universal framework to guide their CSR or sustainability reporting
endeavors, the Global Reporting Initiative will introduce the next
version of its reporting guidelines in May 2013 – the G4. While there is much
anticipation about them, there is also some fear and displeasure.
with a universal framework to guide their CSR or sustainability reporting
endeavors, the Global Reporting Initiative will introduce the next
version of its reporting guidelines in May 2013 – the G4. While there is much
anticipation about them, there is also some fear and displeasure.
What’s the problem?
The GRI has proposed a number of changes to make the G4 more
user-friendly through better guidance documents, additional disclosures for
governance and supply chain, and placing a sharper focus on materiality. In
theory, that’s all good and needed.
user-friendly through better guidance documents, additional disclosures for
governance and supply chain, and placing a sharper focus on materiality. In
theory, that’s all good and needed.
What worries some reporters, however, is the focus on
materiality. The G4 will advise reporting organizations to conduct a thorough
assessment of its material issues, considering the broader sustainability
context and analyzing its impacts from one end of its value chain to the other.
Will this lead to lengthier reports because of many more required disclosures,
ranging from supply chain impacts to end-of-life disposal issues? Mindy Gomes Casseres sums up the implications of value chain assessments nicely on
GreenBiz.
materiality. The G4 will advise reporting organizations to conduct a thorough
assessment of its material issues, considering the broader sustainability
context and analyzing its impacts from one end of its value chain to the other.
Will this lead to lengthier reports because of many more required disclosures,
ranging from supply chain impacts to end-of-life disposal issues? Mindy Gomes Casseres sums up the implications of value chain assessments nicely on
GreenBiz.
The other change GRI is proposing is to no longer include the
Application Levels, which have
helped companies compare themselves to other reporters and follow a path of
improvement. This move would effectively eliminate the A-B-C self-grading system
that reporters have grown attached to.
Application Levels, which have
helped companies compare themselves to other reporters and follow a path of
improvement. This move would effectively eliminate the A-B-C self-grading system
that reporters have grown attached to.
The exact changes the new G4 guidelines may include are not
confirmed yet. Word is that the GRI is still mulling things over behind closed
doors. One thing is certain: A lot can happen between now and May. Stay tuned on
this.
confirmed yet. Word is that the GRI is still mulling things over behind closed
doors. One thing is certain: A lot can happen between now and May. Stay tuned on
this.
3. FTC Draws a Greener Line
After more than two years of shopping around and getting
input on its proposed update to the Green Guides, the FTC finally made them official on
October 1, 2012. At last, there was some clarity for marketers of green products
about what language is considered acceptable and what’s considered crossing the
line.
input on its proposed update to the Green Guides, the FTC finally made them official on
October 1, 2012. At last, there was some clarity for marketers of green products
about what language is considered acceptable and what’s considered crossing the
line.
While my colleague Jonathan Yohannan captured the essential
guidelines succinctly on Talkback, the first thing to know is that
broad claims like “green” and “eco-friendly” are no longer going to be cool to
use, unless backed up with substantiated facts about the environmental
attributes of the product in question. These attributes should be significant,
say the guidelines, otherwise don’t bother using these haloed terms.
guidelines succinctly on Talkback, the first thing to know is that
broad claims like “green” and “eco-friendly” are no longer going to be cool to
use, unless backed up with substantiated facts about the environmental
attributes of the product in question. These attributes should be significant,
say the guidelines, otherwise don’t bother using these haloed terms.
The updated FTC Green Guides also provides specific guidance
on the use of the terms “biodegradable” and “compostable,” terms often
misunderstood and, therefore, misused. Marketers will also find clarity on
acceptable and deceptive claims when marketing a product as being “free-of”
something bad, non-toxic or ozone-safe, among other risky claims.
on the use of the terms “biodegradable” and “compostable,” terms often
misunderstood and, therefore, misused. Marketers will also find clarity on
acceptable and deceptive claims when marketing a product as being “free-of”
something bad, non-toxic or ozone-safe, among other risky claims.
For more, you can scope the 36-page document on the FTC website, which outlines all
the changes to the Green Guides and offers specific examples to support the new
guidelines. I suggest all green marketers read this carefully.
the changes to the Green Guides and offers specific examples to support the new
guidelines. I suggest all green marketers read this carefully.
4. Hurricane Warnings
While the debate rages on about whether Hurricane Sandy was a
demonstration of climate change or not, the impacts of this storm are still
being felt and dealt with. And this is exactly what the New York City Council
feared when it voted to expand the scope of the
city’s Climate Change Adaption Task Force on August 22, 2012, two months before
Sandy even reared her head. This task force is charged with evaluating the
potential effects of climate change on the city’s infrastructure while
developing strategies to protect the city from these impacts.
demonstration of climate change or not, the impacts of this storm are still
being felt and dealt with. And this is exactly what the New York City Council
feared when it voted to expand the scope of the
city’s Climate Change Adaption Task Force on August 22, 2012, two months before
Sandy even reared her head. This task force is charged with evaluating the
potential effects of climate change on the city’s infrastructure while
developing strategies to protect the city from these impacts.
The implication here is clear: New York has accepted the
notion that climate change is happening and is now on the next step: figuring
out how to adapt to new realities – from hotter summers to more severe and
wetter storms.
notion that climate change is happening and is now on the next step: figuring
out how to adapt to new realities – from hotter summers to more severe and
wetter storms.
But New York City is not alone. From Santa Cruz, Calif. to
Philadelphia, cities across the United States are honing their climate change
adaption plans and getting prepared to deal with changes to their regions.
Philadelphia, cities across the United States are honing their climate change
adaption plans and getting prepared to deal with changes to their regions.
While cities are busy planning to adapt, it’s not clear what
major corporations are doing to evaluate the impacts climate change may have on
their business – both good and bad – and plan for the future. Taking measures to
plan are especially important to businesses with operations along the shoreline
or with distribution facilities in areas that could be subject to rising flood
waters and potentially cut-off from transporting goods.
major corporations are doing to evaluate the impacts climate change may have on
their business – both good and bad – and plan for the future. Taking measures to
plan are especially important to businesses with operations along the shoreline
or with distribution facilities in areas that could be subject to rising flood
waters and potentially cut-off from transporting goods.
Companies went crazy planning for Y2K. Maybe it’s time for
them now to begin forming their climate change adaption plans so they’re ready
to counter possible impacts to their business?
them now to begin forming their climate change adaption plans so they’re ready
to counter possible impacts to their business?
5. More Sustainable, More Profitable
There were a number of reports out in 2012 that demonstrated
the connection between robust sustainability practices and more impressive
bottom lines. Of particular note was the Massachusetts Institute of Technology’s
third annual Sustainability and Innovation Global Executive
Study, released in January 2012.
the connection between robust sustainability practices and more impressive
bottom lines. Of particular note was the Massachusetts Institute of Technology’s
third annual Sustainability and Innovation Global Executive
Study, released in January 2012.
The global study gathered insights from more than 3,000
business executives and found that 70 percent of companies have made
sustainability a permanent agenda item for management. Their reason:
Sustainability is a necessity in today’s competitive marketplace. Adding further
evidence is the funding sustainability initiatives have continued to receive
even in recent belt-tightening years.
business executives and found that 70 percent of companies have made
sustainability a permanent agenda item for management. Their reason:
Sustainability is a necessity in today’s competitive marketplace. Adding further
evidence is the funding sustainability initiatives have continued to receive
even in recent belt-tightening years.
While CSR or sustainability are still not the highest items
on the corporate agenda, nearly a third of respondents to this study said
sustainability activities are contributing to profitability.
on the corporate agenda, nearly a third of respondents to this study said
sustainability activities are contributing to profitability.
Although many CSR executives continue to struggle with making
the business case for their causes, this report may finally provide strong
evidence that sustainability practices are not a fab, but a business
imperative.
the business case for their causes, this report may finally provide strong
evidence that sustainability practices are not a fab, but a business
imperative.
Let’s hope this continues to be the case in 2013.
Source: CSRwire
Related Articles
2012 in Retrospect: CSR & Sustainability in the Press
2012 in Retrospect: Better Together, Corporate Responsibility Grows Up
2012 in Retrospect: An Economic Hit Man’s Tips for Creating a Glorious Future
2012 in Retrospect: New Economy, Banking and Guns
2012 in Retrospect: Are We ‘Chasing Our Own Tail’ On The Circular Economy?
2012 in Retrospect: Pitchfork Politics, New-Age Style
CSR Standards Reduce Risk
Top CSR Initiatives for 2012
Tim Mohin’s Top 10 CSR Trends for 2012
Sustainable Brands’ Five Trends for 2012
Top Business Sustainability Trends for 2012
Discover more from Change Oracle
Subscribe to get the latest posts sent to your email.
