You can access some extract pages from the November 2013 Ethical Corporation magazine

1. ECM November_Layout 1 05/11/2013 17:33 Page 1
Sustainable business in Europe
Continent of contrasts
Climate change
IPCC's final warning (again)
Forest offsetting
REDD hot solution?
November 2013
www.ethicalcorp.com
The executive whistle
When to blow, and how to do it

2. ECM November_Layout 1 05/11/2013 17:34 Page 2
rt
C10 % po
e E 10 ur re
ot
Qu ave g yo
s sin
to howca
S
on
Get your report in the
hands of the stakeholders
it was written for!
Stand out from the crowd – promote your Corporate Responsibility
and Sustainability report with our new CR Report Showcase
This is your chance to get your report infront of all
your key stakeholders.
On a daily basis your partners, suppliers, clients,
colleagues, NGOs, academics, governance and press,
visit Ethical Corporation.
We will make sure you get the maximum
exposure that your report deserves.
§ List your report NOW!
Get in touch: +44 (0) 20 7375 7244 | aaron.jackson@ethicalcorp.com

3. ECM November_Layout 1 05/11/2013 17:34 Page 3
Ethical Corporation • November 2013
Contents
Contents
5
From the editor
EthicsWatch
6
Accenture CEO survey
Look for the value
7
Extractive sector transparency
EITI tightens up
8
Arctic activism
Russia gets heavy
9
Child labour
ILO seeks more data
10 Mallen Baker
Electric dreams
Briefing: Europe
p26 Is REDD the offsetting answer?
p37 How to be strong
24 Cheat sheet
Reports and research, distilled and analysed
32 BrandWatch
Power to the people, from Ikea
12 Un-common market
14 Corporate reputation recovery
18 EU red tape that works?
26 Emissions and deforestation
REDD alert
21 Spit and Polish
30 NGOwatch
Russia’s in the Antarctic too
Strategy and management
34 IPCC’s new report
Same old same old?
37 The GlobalEthicist
How to blow the whistle
39 Global Compact 100
A credible new ethical index
31 Peter Knight
We can’t share everything
43 China column
Paul French is back in Burma
Review
44 Report: Merck
45 Report: City of Warsaw
46 New books
47 Academic news
COVER IMAGE: ISTOCKPHOTO
48 People on the move
p11 Europe's great and the (not-so) good
p34 More bad news
50 Toby Webb
Risky business
3

4. ECM November_Layout 1 05/11/2013 17:34 Page 5
Ethical Corporation • November 2013
From the editor
Welcome to the November 2013 issue
he reputation of business in Europe has seemingly never been
lower, as the continent’s economy continues to only slowly
recover from the financial crisis and its after effects. This is particularly so in the continent’s southern states, where unemployment
remains very high. Certainly there is a public and media appetite to
weed out the corporate bad guys, as the scandals on company tax
policies, executive pay levels, and everything else have demonstrated.
Any observer of the European Union would be unsurprised to
learn that the European commission in Brussels has, as for many
things, released guidance and regulations regarding corporate
responsibility. Unlike some other commission activity, however,
reaction to these regulations has been largely positive. There is
much to be said for standardising the approach on these businesscritical matters for companies that have operations across the EU.
Some companies, of course, have seen the opportunity in regaining
trust through developing more sustainable business models, as our
briefing, from p11, demonstrates.
Elsewhere in this issue, from p34, we focus on what the recent
report from the Intergovernmental Panel on Climate Change really
means for business. It’s sadly very tempting to say ‘here we go
again’, and certainly a lot of what the IPCC says now is merely
confirming what the panel has always said. There is a pressing
need for companies to look beyond the next few years and to really
think about what increased global temperatures will mean for them
and their supply chains. Even if we manage to keep the world’s
climate within the 2C increase that scientists regard as the
maximum safe limit, companies will be operating in a far more
uncertain world.
In our strategy and management section, the latest from our
GlobalEthicist columnist focuses on the difficult situation a toplevel executive whistleblower can find him or herself in, and what
T
the options are to get out of the situation. Clearly an employee at
any level in a company can find themselves uncomfortable – on an
ethical, moral or personal basis – with the actions of others. Responsible organisations have strict codes
of conduct in such circumstances,
with clear guidance for employees
including communication channels
through which they can make their
concerns known. But when you are
near the top of a company, or even at
the top like the former Olympus chief
executive Michael Woodford, your
options become, inevitably, more
limited. See how you can extricate
yourself from p37.
The executive whistle
When to blow, and how to do it
Also this month we have all our
usual columnists and story analysis,
plus reviews of reports from Merck and the City of Warsaw,
which is the self-proclaimed first report to follow the new GR4
guidelines.
Ethical Corporation will be back in early December with our
usual review of the year and our preview for 2014. If there’s
anything you think we should include, please get in touch. n
Sustainable business in Europe
Continent of contrasts
Climate change
IPCC's final warning (again)
Forest offsetting
REDD hot solution?
November 2013
www.ethicalcorp.com
Ian Welsh
Editor
Contributors: Rob Bailes, Mallen Baker, Oliver Balch,
Andrea Bonime-Blanc, Aleksandra Dobkowski-Joy,
Jon Entine, Paul French, Stephen Gardner, Nadine Hawa,
Phoebe Hayes, Peter Knight, Judy Kuszewski, Claire Manuel,
Eric Marx, Jerri-Lynn Scofield, Toby Webb
Publisher: Toby Webb
toby.webb@ethicalcorp.com
Editor: Ian Welsh
ian.welsh@ethicalcorp.com
Contributing editor: Mallen Baker
Sub editors: Sarah Burton, Gareth Overton
Business Intelligence for Sustainability
People on the move
7-9 Fashion St, London E1 6PX UK
Subscriptions: +44 (0) 20 7375 7575
Editorial: +44 (0) 20 7375 7213
ISSN 1758-1575
52
Advertising and sales: Oliver Bamford
Design: Alex Chilton Design
moves@ethicalcorp.com
oliver.bamford@ethicalcorp.com | +44 (0) 20 7375 7518
info@alex-chilton.co.uk | +44 (0) 20 7042 6340
Subscriptions
subs@ethicalcorp.com | +44 (0) 20 7375 7575
Corporate subscription
packages from £495
Ethical Corporation is printed by Four Way Print Ltd on Green Coat plus paper, which
comprises 80% recycled and 20% Forest Stewardship Council certified source material.
5

5. ECM November_Layout 1 05/11/2013 17:34 Page 6
6 EthicsWatch
Ethical Corporation • November 2013
EthicsWatch
Get off my land
impact, says the report.
“What we heard from CEOs is that they are
struggling to make the case that links sustainability with business value. Although they
haven’t lost faith with markets, they believe
that governments are going to have to intervene to set the right market conditions to
ensure that the right kind of outcomes are
rewarded,” says Peter Lacy, Accenture’s
managing director of strategy and sustainability in Asia-Pacific, and lead author of the
CEO study.
Analysis: CEO survey
Bosses seek
sustainability value
By Rob Bailes
Company bosses feel constrained by market
expectations, but transformational leaders
are emerging
ustainability remains firmly on the business
leader ’s agenda, but chief executives are
increasingly finding themselves constrained by
market expectations and unable to quantify and
harness the business value of sustainability.
JUPITER IMAGES
S
Sustainability still isn’t everyone’s cup of tea
This was the prevailing view that emerged
from a new UN Global Compact-Accenture
study of more than 1,000 global CEOs from 27
industries and 103 countries. The third Global
Compact CEO Study claims to be the largest
piece of research into the views of chief executives on sustainability to date.
It finds that while CEOs remain convinced
that sustainability can be a driver of growth
and innovation, businesses are struggling to
deliver the business case at scale. An inability
to make the connection between sustainability
and business value is seen as a critical factor in
blocking further progress to embedding
sustainability.
And 83% of CEOs believe that an increase
in government intervention – by way of
providing an enabling environment for the
private sector – is integral to advancing
sustainability. Government intervention can
help move sustainability beyond incremental
advances to a collective and transformative
Transformational leaders
Of unique interest to this year’s study, Lacy
says, was the identification of an emerging
group of transformational leaders. These are
CEOs of companies that demonstrate both
sustainability leadership and traditional high
business performance, and they are framing
sustainability in very different ways from
other companies.
“They are companies that are able to
monetise sustainability through their top line,”
Lacy says. “They are able to drive a sustainability innovation agenda that is very clearly
and tangibly linked to value and that’s where
they are able to convince the customer and
consumer that this all makes sense.”
What attributes do transformational leaders
possess? The report identifies several
emerging themes that are enabling transformational leaders to achieve both value creation
and sustainability impact.
One strong theme is the ability to move
beyond reactive and incremental responses to
external pressures in favour of a deeper understanding of sustainability as a driver of
innovation, differentiation and growth. These
businesses are converting sustainability to
advantage and value creation.
Another major point of differentiation, says
Lacy, is the commitment of these companies to
engage in partnerships and collaboration
throughout the value chain. They recognise
the value of external collaboration in helping
the business to achieve its sustainability goals.
Last, but not least, transformational leaders
are measuring the value of sustainability to the
company. These companies are quantifying
the impact of their initiatives and sustainable
business models to the company, as well as
tracking their impact on local communities.
RSOKOLOFF/ISTOCKPHOTO
What bosses think, the EITI pushes on, the Arctic 30 and child labour
Greenpeace is hoping to obstruct
hydraulic fracturing, or fracking, for
shale gas in the UK by encouraging
use of trespass laws. Greenpeace
campaigner Anna Jones says: “Under
English law, if you own land, your
rights extend to all the ground
Anti-fracking action intensifies
beneath it. If someone drills under
your home without permission, it is
trespass.” Fracking companies would
have to obtain explicit consent from
all landowners, Greenpeace says.
Evidence for the claim comes from a
legal case involving businessman
Mohammed al-Fayad, former owner
of Harrods, who in 2010 won
compensation for trespass from an oil
company that drilled without
permission under his Surrey estate.
The UK Department of Energy and
Climate Change says that oil and gas
developers can negotiate access rights
with landowners.
Food for thought
Hard on the heels of revelations from
retail giant Tesco about the amount of
supermarket food wasted in the UK,
the European commission in Brussels
is considering European Union food
waste reduction targets. The emphasis
would be on cutting waste from the
distribution and post-retail stages of
the food supply chain, the commission says, meaning most pressure to
achieve cuts could fall on supermarkets and consumers. The
commission’s proposals could be
published by the end of the year.
Meanwhile, an October report from
the non-profit Waste Resources
Action Programme (Wrap) found that
waste from the production of food in
the UK outweighed waste arising from
its distribution and consumption. In
2011, 4.3m tonnes of food was
wasted, but 3.9m tonnes of that is
“manufacturing waste”, Wrap says.

6. ECM November_Layout 1 05/11/2013 17:34 Page 7
Ethical Corporation • November 2013
Analysis: Extractive Industries Transparency Initiative
A number of companies that promote
themselves as green business leaders
have had their commitment to
sustainability brought into question
by signing a letter to President Obama
calling for the approval of the controversial Keystone XL pipeline. The
October letter, signed by 168 chief
executives, emphasises the need to
boost economic recovery and
enhance US competitiveness, and
says environmental concerns could
“be managed”. Signatories include
the leaders of GE, Siemens and
PricewaterhouseCoopers, which
compiles the Carbon Disclosure
Project’s indexes. Critics say the letter
demonstrates business hypocrisy
when it comes to reducing emissions
and combating global warming. The
Keystone XL pipeline would transport
emissions-intensive oil from Canada’s
tar sands to the Texas Gulf coast.
EITI digs in
By Jerri-Lynn Scofield
Ten years on from its launch, the EITI has
developed its standard and is expanding
its membership
BMW
BMW has been taken aback by
demand for its first electric car, the i3,
which will start to be delivered in
Europe in November. About 8,000
of the cars have been reserved by
customers, exceeding the firm’s
expectations. The i3 will sell for about
£30,000, and BMW is seeking to
Sparking a revolution
soothe “range anxiety,” or concerns
that electric vehicles will too quickly
run out of power, by offering
customers the option of a back-up
conventional vehicle that can be used
for longer journeys. BMW chief financial officer Friedrich Eichiner says: “If
demand holds, and that’s what it is
looking like, we will have to invest
more.” Electric cars look set to roll out
on an ever greater scale: Volkswagen
has outlined plans to offer as many
as 40 models of electric vehicles.
arlier this year, the Extractive Industries
Transparency Initiative took a major leap
forward with the adoption of a stricter new
standard at its biennial conference in Australia.
“[This] is an illustration that multistate
corporate governance need not be a feeble
lowest common denominator effort, but can
reflect real leadership in taking policy where it
hasn’t been before,” says Jonas Moberg, head US to join the party
In addition to the four EU countries that have
of the EITI’s secretariat in Oslo.
When EITI was launched 10 years ago, both announced intentions to join EITI, the US has
governments and companies resisted disclosing revealed similar plans, and is expected to
even basic information. “With the new EITI submit its EITI application early in 2014.
standard, the consensus as to what
should be disclosed has broadened
significantly,” says Moberg.
The new standard requires
going beyond merely looking at
fiscal data – such as corporate tax
and other payments – to look in
detail at the licensing application,
beneficial ownership, and specific
contractual provisions that apply to
resource extraction.
Although “any country with a
significant resource extraction
sector could benefit from implementing the EITI standard”,
Moberg says, initially, the EITI was
aimed at developing countries with EITI brings benefits beyond simply transparency
a large dependency on resource
extraction.
The EITI’s focus on transparency and
“Now, there’s been a shift to middle and disclosure has also stimulated tightened
higher income countries also implementing accounting disclosure requirements in both
the EITI standard,” says Moberg, with the UK the EU and the US for companies involved in
and France announcing intentions to join the resource extraction, requiring them to report
EITI at the meeting in Australia, and Italy and payments to government officials in third
Germany following at the G8 Summit in June. countries. (The US requirements are
Forty-one countries are presently imple- temporarily in limbo, following an adverse
court decision in July.)
menting the EITI standard.
Although the new US rules don’t make
EITI itself has no authority to enforce its
standard by taking domestic or international such payments themselves any more per se
legal action against countries that fail to meet illegal than they already are under existing US
their EITI commitments. But it can determine law, inaccurate disclosure of such payments
its membership – an authority it has used to could trigger US securities law liability, and
enforce compliance.
possibly prompt private lawsuits by investors.
“EITI delisted Equatorial Guinea in 2009, And the increased transparency will also alert
São Tomé and Príncipe in 2009, and Gabon in the media and civil society groups in countries
2013. Currently, the EITI has suspended the where such payments are made.
E
Electric avenue
Central African Republic, DR Congo, Madagascar and Sierra Leone, and each of these
countries could face delisting, if remedial
measures are not taken,” says Anders
Kråkenes, EITI communications manager. São
Tomé and Príncipe responded to EITI censure
and the island nation has been readmitted to
the organisation.
“What is always hard to get people’s heads
around is that EITI started as a quasi multilateral response to NGO campaigning,” says
Moberg. “The early hope was that it would
result in a voluntary corporate social responsibility code. But it’s gone much further. The
EITI instead evolved into a standard implemented by governments.”
HUNTSTOCK
Practise what you
preach?
7
EthicsWatch

7. ECM November_Layout 1 05/11/2013 17:34 Page 8
8 EthicsWatch
Ethical Corporation • November 2013
Cottoning on
By Eric Marx
Russia’s heavy-handed treatment of
activists protesting against Arctic drilling
looks to have set the tone for this new
battleground
hen it comes to taking on the fossil fuel
industry, what does direct action look like?
If you’re Greenpeace, the obvious answer is
to try to interrupt major oil operations in the
Arctic – where an estimated quarter of the
world’s oil and gas reserves are thought to
reside. The global conservation organisation has
consistently called for a sanctuary around the
north pole and a ban on oil
drilling in the Arctic, but only in
the past two years did it launch a
more confrontational approach
involving the illegal boarding of
offshore oil rigs.
The risky strategy has helped
attract attention to dangerous
Arctic energy exploration. In late
September Greenpeace drew the
full fury of the Russian state on
30 activists, after two of their
party scaled Gazprom’s new oil
platform Prirazlomnaya.
While the Greenpeace vessel The new normal for activists?
Arctic Sunrise sat in international
waters, Russian coastguard officers forcibly significant decline in output from its convenboarded and seized control of the ship, tional reserves and so must turn to oil
arresting the entire crew, initially on a charge prospecting in the icy waters north of the
of piracy. While the original charges have been Arctic Circle.
scaled back, all 30 remained in custody seemFor this reason, “Greenpeace sees
ingly facing lengthy jail terms in late October [Gazprom’s oil platform Prirazlomnaya] as the
thin edge of the wedge”, says Anthea Pitt,
as Ethical Corporation went to press.
executive editor of Petroleum Economist
magazine. “If it comes off, then it’s almost open
‘Blatant intimidation’
“The Russian authorities are trying to scare season for the entire Arctic.”
Gazprom’s giant $4bn Prirazlomnaya
people who stand up to the oil industry in the
Arctic, but this blatant intimidation will not platform could supply oil directly to the global
succeed,” Greenpeace International executive market by early 2014 and, in the process, help
director Kumi Naidoo said following the arrests. solidify Russia’s position as a global energy
Naidoo subsequently offered himself as leader.
“Ignoring this case will only embolden
security for the so-called Arctic 30 – 28 Greenpeace activists and two freelance journalists – Russian authorities further,” warns Cooper.
“What specific governments and the interwriting in a letter mailed to the Russian president, Vladimir Putin, of his willingness to national community, in general, need to focus
“share” their fate. Human rights organisations on is not whether they support what Greenin Russia see the Greenpeace arrests as one peace did at the Prirazlomnaya oil rig, but the
more sign of a Russian Federation bent on fact that the Greenpeace activists were
unarmed protesters whose actions do not
stifling any kind of democratic dissent.
“Since Putin came back to power things warrant such grotesque criminal charges.”
W
Concern about forced labour in the
cotton fields of Uzbekistan is
prompting an increasing number of
brands to refuse to buy cotton from
the country, according to campaign
ISTOCK
Testing the waters
have gone from bad to worse,” says Sergei
Nikitin, Amnesty International’s Moscow
office director. “Here we have peaceful, nonviolent actions from a well-known
organisation which identified itself.”
The arrest of the Arctic 30 through the use
of disproportionate sanctions is essentially an
international version of the Pussy Riot case,
says Tanya Cooper, Russia researcher at
Human Rights Watch.
“This is a message to show Greenpeace how
high the stakes are for their environmental
activism,” says Cooper.
Energy analysts say the Greenpeace action
may have struck a nerve with the Russian state
at a time when it is particularly vulnerable:
heavily dependent on oil and gas revenues to
finance government operations, it faces a
An opaque supply chain
IGOR PODGORNY/GREENPEACE
Analysis: Arctic 30
group the Responsible Sourcing
Network (RSN). In the run-up to this
year’s cotton harvest, Ikea, Marks
Spencer and Canadian sportswear
label Lululemon athletica joined 133
other signatories in a pledge against
forced labour. As we have reported in
Ethical Corporation, each year in
Uzbekistan, under a “quasi-feudal”
system, state employees, students and
even young schoolchildren must help
out with the harvest or face punishment. Uzbekistan has this year, for
the first time, allowed International
Labour Organization inspectors to
observe the harvest, though it is
“difficult for citizens to speak openly
with ILO monitors”, RSN says. Most
Uzbek cotton goes to Bangladesh and
China, making it hard to assess the
effect of the brands’ boycott.
100 pledges
A worker-safety accord committed to
improving conditions in the factories
of Bangladesh reached a 100-brand
milestone in October. The three
signatories that took the Bangladesh
Accord on Fire and Building Safety
past its century are Woolworths
Australia, Germany’s Gebra, which
makes safety warning products, and
international trader Wünsche Group.
The accord was established by international unions IndustriALL and UNI
in the wake of the April 2013 Rana
Plaza factory collapse, which killed
more than 1,000 textile workers. By
signing the accord, brands pledge to
make funds available for factory
safety upgrades, and that workers
will continue to be paid while renovations are taking place.

8. ECM November_Layout 1 05/11/2013 17:34 Page 9
Ethical Corporation • November 2013
EthicsWatch
9
On track
Analysis: child labour
Too many children
still at work
By Judy Kuszewski
A new report claims good progress on
child labour, but warns against complacency
new report from the International Labour
Organization’s International Programme
on the Elimination of Child Labour (IPEC)
shows a steep decline in child workers worldwide during the period 2008-2012. The report
is the latest in IPEC’s periodic surveys that aim
to measure trends in child labour, towards the
ILO target to eliminate the worst forms of child
labour by 2016.
The report identifies 168 million children
engaged in child labour worldwide, down
from 215 million in 2008, and 245 million in
2000. More than half are involved in hazardous
work, considered one of the worst forms of
child labour. While Asia and the Pacific regions
report the highest absolute numbers of child
labourers, the highest rate of child labour per
capita remains in sub-Saharan Africa.
A
Well reputed
YONGYUAN/ISTOCK
Companies with better reputations
for corporate responsibility are much
more likely to be recommended by
their customers than laggards,
according to the 2013 CSR RepTrack
100 study, carried out by US-based
consultancy the Reputation Institute. The RepTrack survey, covering
55,000 consumers globally, found
that 73% would recommend companies perceived to be “delivering on
corporate social responsibility”, but
Social value engine
only 17% would recommend companies seen to be “poorly delivering”.
The companies with the world’s best
reputations, according to the study,
are Microsoft, Disney, BMW and
Google. “Companies must recognise
that creating social value is a prerequisite to creating business value. That
makes monitoring and quantifying
the returns on CR essential,” the
Reputation Institute says.
not be met as evidence of this danger.
Gerard Oonk of the Stop Child Labour
Campaign coalition warns: “It’s not clear what
specific plans individual countries have to
speed up progress, and whether ILO is able to
MYOUSSEF/ISTOCKPHOTO
Zurich-headquartered Credit Suisse
has launched what it says is the
world’s first stock market tracking
index to follow the performance of
companies with lesbian, gay, bisexual
and transgender (LGBT) friendly
policies. The index follows US companies that score high on the Human
Rights Campaign’s Corporate Equality
Index, which benchmarks corporate
policies and practices on LGBT
employees. Companies tracked by the
index include Apple, Johnson
Johnson, Pfizer and Wells Fargo.
Timothy O’Hara, Credit Suisse global
head of equities, says: “Wall Street,
and Credit Suisse in particular, has
a strong track record of providing
leadership and support for LGBTrelated issues.”
Devil in the detail
While the improvements in numbers are
heartening, the picture is considerably more
complex in the detail. The report is transparent
on the fact that gaps remain in the data,
citing “eastern Europe, central Asia, the
Pacific, developed countries and several Asian
countries” as having missing or incomplete
data.
However, IPEC’s senior statistician Yacouba
Diallo says the picture is getting better. “Our
current data coverage is an improvement on
our previous estimate. We cover 53% of the
population of children aged 5-17, compared to
[previously] around 44%. This is based on 75
national data sets.”
Are the data gaps not cause for concern,
then? Diallo explains: “There are gaps in
certain regions, but that doesn’t mean we have
no data – just not enough to provide an
estimate for these regions. For this kind of
exercise, we aren’t able to provide statistics
because of our sample size in these regions.”
NGOs and the ILO alike express concern
over the potential for complacency that could
undermine the progress recently made, and
cite the fact that the 2016 target for the elimination of the worst forms of child labour will
A burden not to be borne
monitor it. The Dutch government, for
example, are working on a global risk analysis
of where the risk is in which industries. They
will then use this to focus on where the risk is
greatest, cooperate with NGOs and unions,
and use their own influence in specific sectors
where the risk is highest.”
The ILO’s Benjamin Smith explains that,
while the focus of the report is on policy
makers, there are clear actions private sector
employers can take to continue and accelerate
the trends in reduction in child labour.
“Companies can have a clear policy of no tolerance of child labour in their operations and
supply chain, then do their due diligence on
children’s rights. Most child labour, by vast
margins, occurs in the informal economy.
Therefore, we need to work towards formalising those parts of supply chains to get at the
root causes of child labour.”
And with 168 million instances of child
labour, there is still a lot to do.

9. ECM November_Layout 1 05/11/2013 17:34 Page 10
10 Columnist: Mallen Baker
ISTOCK
Ethical Corporation • November 2013
Energy supply
Lack of leadership will lose
the argument
As the public debate over high energy prices intensifies, we need
strong leadership to build consensus for climate change action,
says Mallen Baker
hatever else it is, Facebook is a
forum for the expression of
opinions by whatever cross-section
you’ve managed to gather as
friends through your life. For some
reason, I’ve managed quite a large
cross-section. But I’m not sure it
would end well if they all found
themselves in the same room as
each other.
There is one thing, though, that
many of them seem firmly agreed
upon right now. It’s that the energy
companies – especially in the UK –
are ripping us all off in the name of
blatant greed. And the truth is that
environmental charges have been
widely accepted by many as the
secondary villain of the piece.
The inherent contradiction in
attitudes has always been there, of
course. On the one hand we
recognise that in order to waste
less energy, it needs to cost more.
And, whether we like it or not, the
state of global energy supply can
be expected to deliver more
expensive energy in any case as we
come towards the end of the fossil
fuel era.
But at the same time, we have a
widespread attitude of entitlement
by the public to cheap energy, just
as we do cheap food.
These were always in contradiction, but now we’re seeing that as
the pressure increases – and we
should expect to see pressures
continue to increase – it will lead to
the withdrawal of public support
for green measures that are
perceived to be to blame.
We have almost zero perception
that there are big structural challenges in how energy is provided
worldwide. We have no sense of
outside events, some of which are
outside our control and have major
consequences on our choices.
W
Rather, if energy prices go up it’s
because someone is to blame. Politicians are to blame for not building
more power stations a few years
ago. Energy company chiefs are to
blame for being greedy. And environmentalists are to blame for
persuading the government to levy
green charges to put everyone’s
bills up.
Unfortunately, the news media
loves nothing better than to point
the finger of blame at someone –
and politicians and CEOs are top of
the list because the majority of
citizens will gratefully line up to
demonise them.
But the more substantial point is
that this climate of public consensus
completely changes the parameters
of what may be possible. In order to
take the radical steps to combat
climate change we need a consensus
for action. We need the consent of
citizens – and companies need the
consent of customers – or else it just
won’t work.
The energy blame game has
blown that consent out of the water.
Green policies have become
labelled in the public mind as an
expensive luxury. A nice-to-have
that not only could but should be
abandoned if times get tough.
Corporate buck-passing
In the absence of any clear analysis
as to why the environmental situation is one of the causes for times
getting tough – and likely to make
those times tougher still in the
future – it makes perfect sense.
The leadership of the energy
companies hasn’t helped much by
queuing up to point the finger at
eco-charges in a desperate attempt
to deflect criticism from themselves.
This approach fails to reframe
the discussion as being one about
Transparency can pile on the pressure for change
Green policies
have become
labelled in the
public mind as
an expensive
luxury
COLUMNIST:
MALLEN BAKER
necessary choices and consequences, and simply enters the
blame game discussion on its own
terms. And it’s doomed to failure. If
playing the blame game, the chief
executives of major utilities will
never win the hearts and minds of
the general population.
We need to see real leadership. As
demonstrated by great historical
leaders such as Gandhi and Mandela,
real leadership steps outside the
tribal logic of a specific position, and
uses its authority to make the necessary changes informed by the bigger
picture – taking its constituency to a
place it wouldn’t naturally have gone
on its own.
Energy company leaders should
start by improving the transparency
of their own processes to answer the
charges of profiteering – and face
down the investors that want to see
above-average returns from every
type of business everywhere. And
they need to use that momentum
then to pose a far-reaching challenge to our cosy consensus that
business as usual equals cheap
energy and if we don’t get it, then
someone in power must be to
blame.
I’m not holding my breath. But
in the absence of that kind of leadership, I fear we’ll be reaping the
consequences in the form of weak
political will and token environmental measures for the next
couple of decades. n
Mallen Baker is a contributing editor to Ethical
Corporation and managing director of Daisywheel Interactive.

10. ECM November_Layout 1 05/11/2013 17:34 Page 11
Briefing: Europe
12 Regional differences
14 Bottom-up sustainability
18 Brussels takes charge
21 Poland: growing confidence

11. ECM November_Layout 1 05/11/2013 17:34 Page 12
12 Briefing: Europe
FUSE
Ethical Corporation • November 2013
Introduction
Continent of contrasts
By Stephen Gardner
There is no such thing as a common European approach to sustainable business
or European companies, sustainability and
corporate responsibility can look very different
depending on where they are viewed from.
For German companies, for example, the
emphasis is on contributing to the maintenance of
the social market economy by conforming to
exacting environmental standards and seeking
agreement on working conditions with workers’
councils and unions. In Scandinavia, it is more
about equality, transparency and innovation – for
example, phasing out hazardous chemicals and fair
representation of women in boardrooms.
In France, sustainability often comes in the forms
of diktats from above, for example as strict nonfinancial disclosure requirements or a moratorium
on hydraulic fracturing, or fracking. Agenda-setting
by the French government arguably has the sideeffect of turning many French companies into
grudging box tickers.
In southern Europe, companies are often close to
their communities, but do little on the environment
or on social issues such as gender discrimination.
In the UK, the interests of shareholders predominate, and corporate responsibility is seen as
worthwhile as long as it contributes to long-term
sustainability and shareholder value.
In eastern Europe, meanwhile, there is a desire to
ride the wave of market forces in order to catch up
with the west, and a suspicion of anything “social”
that might sound like a communist-style imposed
obligation.
André Martinuzzi, head of the Institute for
Managing Sustainability at Vienna University of
Economics and Business, says that in the east,
F
corporate responsibility is often “seen as a form of
philanthropy, while in western European countries
it has a much stronger strategic meaning, for
example to create new markets as well as to increase
eco-efficiency”.
Nevertheless, ideas about corporate responsibility are spreading in the east, often imported by
western companies.
Diverse contexts
Varied attitudes towards corporate responsibility
and sustainability are to a great extent a consequence of the differing frameworks within which
companies operate in different parts of Europe.
Broadly speaking, countries in northern and
western Europe expect more of their companies
than their southern and eastern European counterparts do.
This can be seen in the application of environmental standards. In principle, companies in the
European Union are subject to harmonised environmental rules, wherever they are located, but in
practice implementation is done differently across
the union, resulting in many variations. Countries
such as Denmark and Sweden may go beyond EU
regulated minimums, whereas countries such as
Italy struggle to fully enforce the environmental
regulations that are handed down from Brussels.
Social welfare safety nets also vary significantly.
According to the EU statistical office, Eurostat,
people in eastern and southern Europe tend to be
more “at risk of poverty and social exclusion” than
those in the west and north. In Austria, the “at risk”
rate is 16.9%, in the Netherlands 15.7%, and in
Countries in
northern and
western Europe
expect more of
their companies
than their southern
and eastern
counterparts

12. EC – Subscription Sample Pack No Discount_Layout 1 16/01/2013 11:59 Page 19
w of
no s al
e nd hic r
ib sa Et e
cr ou n crib
bs th as a bs
Su join ers n Su
d e io
an ur p rat
o
yo orp
C
Individual subscription
package benefits
•
No need to search, we’ll send all the latest CSR analysis straight to you
– via the monthly print magazine and weekly email updates
•
Increase your understanding of the ever-changing CSR issues – receive timely,
un-biased analysis of the key CSR issues from our expert team of writers
•
Drive and implement your CSR strategy – in-depth analysis, case studies and best
practice helping you discover the dos and don’ts for your company
•
All the insight you need is just a click away - benefit from access to the world's largest
CR resource (containing 8,000+ searchable articles)
•
Save money – receive exclusive subscriber-only discounts on all Ethical Corporation
conferences, research reports and the CSR reporting showcase.
§ Don’t miss out on business intelligence and resources that will help you and your
company drive forward your sustainable initiatives.
CALL
EMAIL
WEB
POST
the Ethical
Corporation team on
+44 (0)20 7375 7235
or US toll free:
+1 800 814 3459
the subscription
team on
subs@ethicalcorp.com
visit the website for
online subscriptions at
ethicalcorp.com/subscribe
the form to
Ethical Corporation
7-9 Fashion Street
London, E1 6PX
Subscription order form
All this for just £495 per year
Individual Subscription package
Enter your details
Zip/Post code: ............................................................................
First name: ..............................................................................
Country: ..................................................................................
Last name:................................................................................
Company: ................................................................................
Job title: ..................................................................................
Telephone: ..............................................................................
Email: ....................................................................................
Address: ..................................................................................
City: ........................................................................................
State/Province: ..........................................................................
Payment details
If you would like to pay by invoice please leave this section blank
Name (as it appears on card): ........................................................
Card number: ............................................................................
Type of card: ............................................................................
Expiry date:................................ Security code: ............................
Detach this completed order form and post/mail it back to us by using the
details above.

13. EC – Subscription Sample Pack No Discount_Layout 1 16/01/2013 11:59 Page 20
w e
no th
e ll t
ib r a igh
cr ve ns
bs sco R i
Su d di t CS
s
an late
Current subscribing
companies include:
• Abbott
• FTSE
• Novartis
• ABN Amro
• GlaxoSmithKline
• Old Mutual
• Accenture
• Harvard Business School
• PricewaterhouseCoopers
• Adidas Group
• Hill Knowlton
• Prudential
• Alliance Boots
• HSBC
• Royal Bank of Scotland
• BAE Systems
• IKEA
• SABMiller
• Barclays Bank
• InterfaceFlor
• Shell
• BNY Mellon
• International Post Corporation
• Singapore Management University
• Campbells Soup Company
• JCPenney
• The Body Shop
• Cable and Wireless Communications • John Lewis
• The Walt Disney Company
• Citi
• Kimberly Clark
• Toyota
• Coca-Cola Enterprises
• KPMG
• UNICEF
• Danone
• Kraft Foods
• Unilever
• Diageo
• Levi Strauss Company
• United Nations Library
• Dell
• Marks and Spencer
• Virgin Media
• E.ON
• McDonald’s
• Weber Shandwick
• Edelman
• Monsanto
• Walmart Stores
• First Solar
• Nestlé
• WWF
Here’s what a few of our current subscribers have to say...
“Ethical Corporation is a valuable and comprehensive resource on the global state of affairs
in corporate responsibility” – Dave Stangis, Vice President, Corporate Social Responsibility, Campbell Soup Company
“Ethical Corporation magazine is one of the most valuable resources of business information
on sustainability” – Joaquim Croca, Head of Corporate Responsibility Performance Reporting, Vodafone Group
“Ethical Corporation bring together the best in business to make a difference”
– Jeff Swartz, Former CEO, Timberland
“Ethical Corporation is an excellent tool for gathering stakeholder intelligence for Toyota’s
CSR Risk monitoring system” – Stefan Crets, General Manager, CSR, Toyota Motor Europe
“The essential source of critical analysis on corporate responsibility”
– Richard Ellis, Group Head of CSR, Alliance Boots