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Chris Milton

Chris Milton

It Ain’t Whatcha Do, It’s The Way That You Do It…

The Injection trim.. and that’s what gets results!

This may seem a little trite for a business sustainability and CSR blog.  After all, thinking about your business’ effects beyond the simple commercial supply of product or services is the very definition of sustainability.  However, a particularly pertinent example surfaced last week.

Archimedes Pharma is (according to their website) an international specialty pharmaceutical company focused on the oncology, pain, neurology, and critical care sectors.  One of their products is sodium thiopental, whose Wikipedia entry states:

Sodium thiopental, better known as Sodium Pentothal (a trademark of Abbott Laboratories), thiopental, thiopentone sodium, or Trapanal (also a trademark), is a rapid-onset short-acting barbiturate general anaesthetic. … Thiopental is a core medicine in the World Health Organization’s “Essential Drugs List”, which is a list of minimum medical needs for a basic healthcare system. [Read more…] about It Ain’t Whatcha Do, It’s The Way That You Do It…

Mandatory sustainability measures: a digest

PounceLike spring follows autumn or cats pounce on mice (even under the snow!), now seems to be the season for people to discuss mandatory supra-national reporting standards.  Without going into too much detail, here is a selection of last week’s activity for you to peruse at your leisure.

EU may legislate on corporate, social and environmental data

This story was reported by Responsible Investor (RI).  In effect, the EU is keeping the door open for future ESG legislation, but the period within which any decision will be made is rapidly narrowing.

In May 2010 the European Parliament passed the resolution “Delivering a single market to consumers and citizens”.  This highlighted “the importance of establishing a green single market for emerging low-carbon and environmental technologies, services and products” and insisted that “the use of conformity assessments to gauge social environmental and economic impact at both EU and national level” should be ensured.

The European Commission, the EU’s executive, broadly agrees with this opinion and describes the need for a Single Market Act as urgent.  Consequently, it now aims to have a Single Market Act passed and implemented by the end of 2012 with a draft scheduled for publication in early 2011.

Of further note in the RI article the report the commission is considering a review the status of “foundations, corporative societies and mutual associations”.  If the EU were to start to legislate to put these forms or corporation on even an equal footing as traditional businesses it would change the ESG dynamic overnight.

Full disclosure of SRI data “would boost the market”

This story comes from CityWire, an independent publication a quarter owned by Reuters, and reports on the views of the European Sustainable Investment Forum (Eurosif).

Matt Stevens, Eurosif’s executive chairman, is quoted as saying “A purely voluntary disclosure scheme does not guarantee significant, relevant and comparable data from all issuers.”.

However he is at least partially contradicted by Steve Waygood, former Chair of UKSIF, who says “I am not convinced that the potentially ossified regulatory hand on all issues is the right one .. (however) .. there is definitely a need for much better guidance on what should be disclosed”.

In his role as Head of Sustainability at Aviva Investors, Waygood prefers the approach of asking stock markets to make ESG part of their listing criteria.  While not regulatory, this is still a form of mandatory ESG disclosure.

Are businesses ready to accept more carbon legislation?

Yes, is the surprising answer from Carbon Guerilla’s chairman Les Hayman, as reported by Business Green.

Hayman believes many companies are tapping into carbon accounting as a way of lowering costs and cites an example of someone who chews through up to £40/day in carbon credits purchased from a mobile phone provider.

He says: “I think governments are only just starting to realise that this area is an incredible one for taxation, and one that allows them to look like really good global citizens.”

The idea of carbon allowances for individuals and corporations isn’t not a new one but unfortunately, and unwittingly, Hayman also points out the flaw in such schemes.

“Think of carbon as a debit or credit card, so you spend something you have or something you pay for in the future,” he says. ” (This)  makes people aware that it’s a limited commodity like currency.”

Except currency isn’t a limited commodity, as fans of quantitative easing will all too happily point out.

The accountants are coming

Sustainability reporting is often linked with financial reporting because, as George Monbiot recently said, “the way in which nature is being squeezed into a column of figures in an accountant’s ledger .. may be necessary. What else will induce the blinkered, frightened people who hold power today to take the issue seriously?”

With this in mind there are there’s one other story which is worth keeping an eye on.

The US SEC is considering the adoption of the International Financial Reporting Standards (IFRS) as a replacement for the Generally Accepted Accounting Principles (GAAP) and will continue to report upon measures required throughout 2011.

In the meantime, IFRS is already the norm in the EU & South Africa and will be integrated into accountancy rules in India, Russia, Japan and Canada from 2011.

Although an agreement on accountancy rules between erstwhile competitors such as the US, Russia, the EU and India will be unprecedented, such worldwide agreement will make the integration of sustainability concerns into financial calculations much easier.

Picture Credit: Pounce! by photofarmer under Creative Commons Attribution License.

Book Review: Eradicating Ecocide

Polly Higgins headshot

There was absolutely no doubt in Polly Higgins’ mind as she mounted the makeshift dais at the book launch of “Eradicating Ecocide”.  There is only one way to deal with business executives whose companies are wilfully destructive of the environment: prison.

“We need the punishment to be incarceration,” she stated, referring to business leaders who commit Ecocide.  But what exactly is Ecocide and how do you commit it?

The book, “Eradicating Ecocide” gives you all the answers you need, and it does so in a measured and well argued way.  This is because its author, Polly Higgins (pictured), is a lawyer with a deep understanding and firm grasp of international environmental law.

So, the book isn’t another wild diatribe against business … rather it is an examination of international law and how environmental protection has somehow been left by the wayside.

In the process it points out various loopholes commercial interests may have got used to, and asks business leaders to examine them and ask some deeper questions about the meaning of responsible business.

Definition of Ecocide

Interference in an area’s political, territorial and sovereign self determination are all defined within the United Nations charters as crimes against peace.  These definitions include the concept of genocide, the deliberate extermination of a people in order to further political or commercial gain.  However, to deliberately sabotage the land those people rely upon is a far less clear cut issue, although the results can be just as devastating.

This, put simply, is Ecocide.

You need only to think of the ongoing debate surrounding the slow, lingering death oil pollution is causing in the Niger Delta to get the point.  Why should it be “Not OK” to massacre a culture because it stands in the way of commercial gain (like the imperialists of old) but “OK” to poison the environment upon which that culture relies?

The Sharp End of Ecocide

There is one argument that it is not up to companies per se to clean up the environmental devastation their operations cause, providing they provide sufficient funds and support to enable the civil authorities to affect the clean up on behalf of their citizens.  This is what lies at the heart of the Chevron/Ecuador dispute.

However “Eradicating Ecocide” goes one step beyond, seeking to bust what can be painted as a mitigation-orientated culture.  Instead of cleaning up the mess, why not just make creating the mess illegal in the first place?

That, coupled with the imprisonment of culpable executives, would change attitudes towards commercial pollution more radically than sustainability standards or voluntary measures, the book argues.

This is the way “small scale” environmental law is going, with more and more companies being fined more and more heavily for breaching waste and water regulations.  Why, the argument may come soon, should specific industries be targeted but general ones not?

The clock to ensure the Earth remains healthy enough to support humankind is already ticking.  This book asks everyone to re-examine the legal framework within which we are attempting to accomplish this, and provides business leaders with a golden opportunity of making it happen.

Eradicating Ecocide is available from Amazon and leading bookstores.

EU and UK on Governance Collision Course

EPP Summit March 2010The EU has rejected the idea of voluntary codes for corporate governance for Europe’s businesses and has shown support instead for compulsory measures.

In a speech on Monday, the European Commission’s Internal Markets Commissioner Michel Barnier said “I am clear we will not be able to rely only on voluntary codes”. (Speech in full (PDF))

The EU is due to deliver a discussion paper on Corporate Governance in 2011 and it is now certain that this will include an element of compulsion in sustainability reporting.

This will cause consternation among some of Europe’s member states.  The UK in particular supports wholly voluntary measures and is likely to fight against any top-down imposition of standards from Brussels.

In particular the UK’s corporate governance and reporting regulator, the Financial Reporting Council, has said it will “defend to the death” the voluntary “comply or explain” principle which underpins many of the UK’s corporate reporting requirements.

Proposals which are up for discussion include limiting the number of directorships a person can hold, making a Chief Risk Officer mandatory and moving director remuneration away from the “hit-and-run culture that has caused so much damage”.

However Commissioner Barnier’s comments are aimed at a bigger target than just the EU.  He concluded:  “None of these actions can be wholly effective if taken in Europe alone.  We live in a global world.  And in a global world, policies which have a global impact must be designed – and applied – at a global level.   That is why action at the G20 is so important.  And why Seoul next month [November] matters – because it’s the right level for the issues we face.”

The Seoul Summit agenda includes the G20 Business Summit, a roundtable of 100 CEOs meeting with government representatives who will address Trade and Investment, Green Growth and CSR and is described as “a process, rather than a one-time event”.

The summit will also focus upon how to implement changes in the global financial system to make it more robust and accountable.

As Commissioner Barnier made his comments within the context of improving financial systems and increasing corporate responsibility, it seems likely that the EU will raise the subject during the roundtables or the main summit itself.

So the scene seems set.  Sooner or later the EU will push for compulsory governance standards and will push for them to be recognised worldwide.  You have now been warned!

Picture Credit: EPP Summit March 2010 by europeanpeoplesparty under Creative Commons Attribution No Derivatives License.

Sustainable Stock Exchanges Break Cover

Aviva InvestorsThe other day I was watching The Simpsons … I blame it on the kids, but thankfully they don’t always understand the bits I chuckle at.

Anyhow, the episode in question was “My Fair Laddy”, a wonderful rip of My Fair Lady complete with parodies which you feel ought to be violating copyright somewhere along the line.

For example, the elocution lesson: “The Snot .. From My Nose .. Shouldn’t Fall .. Upon My Clothes”.  I know it’s a long way from Spain, but lets not get into a debate on elongated vowels here!

Now, a few weeks ago I read something (I forget what) about Aviva Investors agitating strongly for increased responsibility within companies.  I think I reread it several times, just to make sure I’d understood correctly, looked genuinely surprised and made a mental note to look out for Aviva in the future.

Lo and behold, up they pop again, pressing for stockmarkets to include ESG criteria in their listing rules.  Did you just reread that sentence? I know I reread the article several times, remembered to close my mouth and thought “well this I gotta see!”

[Read more…] about Sustainable Stock Exchanges Break Cover

CSR : Growth Is Not The Answer

round and round we goIt’s the hoary old chestnut : what exactly does CSR mean to you?

Is it the environment, biodiversity and pollution?

Or maybe human rights and justice, ensuring we don’t abuse our fellow humans for personal gain?

Or is it just a resources based question, centred on ensuring you don’t consume more than can be produced?

This last is the angle most sustainability experts take, pointing out that this is not just a raw materials perspective but one which also embraces the likes of atmospheric health and human well being.

However most businesses think only of raw material use, power consumption and waste production.  Measured in these simplistic terms all that CSR and sustainability will achieve is doing business in a more efficient manner.  This is better than being grossly wasteful and irresponsible, but it is not sustainable.

This is because the fundamental flaw in the current business model has not been addressed : growth.

Businesses need to operate at a profit, there is no argument there.  However, there is no imperative for either business or the economy to be in a state of continual growth.  Many SMEs operate quite happily through having a set of regular clients whom they service and there is no presumption that it’s different for large companies.

Yesterday I tweeted an article entitled Limiting Growth To Save The World.  Please note the word is “limiting”, not “eliminating”.  One of my twitter correspondents responded pointing out that the last time downsizing was proposed they were attacked by the establishment for proposing terrorism.

A very US turn of phrase, but the same counter argument was made across Europe: that our culture is based upon a growth economy and to try and stymie that growth is to somehow undermine the culture.

The absurdity of perpetually growing businesses and economies was neatly summed up by Dax Lovegrove, head of industry and business for WWF, in the recent Financial Times article Response falls short of ecological challenges.

“The dilemma faced by the private sector is that if business growth continues, even with some efficiencies, the net result is higher impacts. And that can’t go on forever,” he said.  “There’s an inevitable ecological crunch looming, where companies are going to have to think quite differently.”

This is where a real sustainable business model needs to come to the fore.  One which isn’t based on growth but on sustainability: a radical rethink for businessman and politicians alike.

Picture Credit: Business cycles – round and round we go by Raquel Baranow under Creative Commons Attribution License.