Xerosphere

By Aron Cramer, President and CEO and Dunstan Allison Hope, Managing Director, ICT Practice, Advisory Services

The recent developments in Egypt have provided increasing hope for all of us who believe in democracy, human rights, and the rule of law. The events have also provided ample new material for the “cyber-optimists” versus “cyber-skeptics” debate.

In the former camp are those who believe that new communications technologies will open up closed societies and accelerate transitions to democracy.  In the latter camp are those who believe that the same technologies can become a new source of repression and shore up authoritarian regimes, or who simply “don’t believe the hype” of those who believe that new technologies are ushering in an age of unprecedented openness.

The current situation in Egypt clearly moves the needle towards the “cyber-optimist” end of the spectrum. The images of peaceful change, hopefully leading to more democracy in Egypt, have been truly inspiring. But events over the past year also illustrate that these positive outcomes are by no means inevitable: whether it was the use of surveillance technology in Iran, demands from the governments of UAE, Saudi Arabia, and India (among others) to access messages sent over Blackberrys, or Google’s retreat from the Chinese search market, events don’t always develop the way that “cyber-optimists” would like them to.

In fact, the recent events in Egypt did not move only in one direction either, as the forced closure of entire mobile phone networks, the near-wholesale suspension of internet access, and the sending of pro-government text messages, so clearly illustrate. Egypt is but the latest—and most vivid—reminder of how business is squarely in the center of events that determine how well human rights are protected, and how important it is for business to make a positive contribution to protecting human rights.

In fact, neither the cheerleaders nor the cynics have it completely right.  The digital age has great potential to advance human rights, but it won’t happen automatically: It is what we as a global society—individuals, governments, companies and civil society—make of the communications tools at our disposal that will make a difference. What’s required from the private sector is a conscious, deliberate, and diligent approach that brings human rights principles squarely into business policy and operations. That’s why BSR has been working with companies to establish and implement human rights policies for nearly two decades.

In our new report on human rights in the digital age, published this week, BSR explores the roles that communications and technology companies should play in protecting human rights. One of our key points is that this is not a role only for the most visible companies; it is for the entire information ecosystem. Attention in Egypt, for example, focused on Vodafone’s and France Telecom’s decisions to comply with government demands to shut down internet service.  In fact, the need for a conscious and deliberate effort to protect human rights extends across the whole industry, including telecommunications services, mobile devices, consumer electronics, security software, IT services, internet companies, and social media. 

These issues are hardly limited to the evolution in Egypt or—the example many people often cite—China. The fact is, in every country there is a complex relationship between human rights, information and communications technology, law enforcement agencies, and the need to protect national security. All around the world there are legitimate reasons why governments and companies may restrict the flow of information (such as removing images of child exploitation) or allow access to personal information (such as tackling violent crime or international terrorism). The challenge is to define these restrictions as narrowly as possible, so that only legitimate purposes are served. Companies have a role by not being just passive recipients of government regulation and action, but by engaging in a dialogue with civil society and the public sector to keep restrictions or information sharing as limited as is absolutely necessary. 

With business engaged in this way, it is much likelier that the “cyber-optimists” will prove to have been correct. It is also the case that peaceful change like that we’ve witnessed in Egypt will be likelier…and that it will be less necessary.  



 

By Ayesha Barenblat, Director, Advisory Services

I just returned from Singapore, where (thanks to the generous support of the Levi Strauss Foundation) we convened a leading group of worker rights training organizations from around the world to collaborate on ways to scale and deepen the impact of their daunting and difficult in-factory work. 

We had a few “a-ha” moments along the way that are worth sharing:

1. Collaboration is necessary: Worker rights training organizations are severely underfunded and there is an appetite to share training content, design, and delivery innovations as well as learn from each other’s challenges. This collaboration—where trainers who compete for training dollars from multinational brands set aside their differences to learn from one another—is a first of its kind.
2. Context is key, but endemic issues are the same: Despite the differences in cultural contexts and labor laws, training organizations from countries as diverse as Bangladesh, China, India, and Vietnam are dealing with similar challenges on core labor issues such as wages, working hours, harassment, and discrimination.
3. Use of multi-media is on the rise: Every trainer in the room acknowledged the limited impact slides and lecture-style formats have, particularly given workers’ low literacy levels and the difficulty of setting up in-factory training sessions. New training techniques include the use of SMS, animation, videos, comic books, and participatory approaches to disseminating information.
4. Measurement remains elusive: Across the board, attendees acknowledged that capturing the business and social impacts of in-factory worker rights trainings is difficult. Today’s metrics center around training outputs (e.g. number of worker trainings and topics covered) as opposed to measuring training outcomes (e.g. changes to workers' lives and in management’s attitude).

Our discussion on impact measurements left me with an important question for our members: Would you stop your worker rights training efforts if there was no business case?
 
We currently put a lot of emphasis on establishing the “business case” for in-factory interventions, which has resulted in additional pressure on under-resourced training organizations that are already struggling to rally reticent factory management and tired workers. Worker rights are non-negotiable—most are a part of any country’s labor laws and likely a part of factories’ personnel policies. In some cases, a better understanding of contracts and wages may not have direct bottom-line benefits to factories.
 
Sure, we’ve all seen some correlations among worker trainings and improved turnover, absenteeism, and productivity, but it’s typically hard to establish causation. What if instead of chasing the elusive business case, brands were just firmer about tying their business relationships and orders to upholding worker rights? 

Up next, BSR will be working with Levi Strauss Foundation to create a compendium of training content, tips, and tools based on the collective input of participating training organizations. Our hope is to test this more robust and holistic training curriculum in factories. If you are interested in collaborating, contact Ayesha Barenblat at abarenblat@bsr.org.

For more information on this initiative, read our report “Moving the Needle.”

By Dunstan Allison Hope, Managing Director, ICT Practice, Advisory Services
Like many people, I’ve been watching the scenes of democratic protests in Egypt unfold with a mixture of awe and fascination, fear and hope. I’ve also been reflecting on the implications of these events for the relationship between business and human rights.
Over the past few months, I’ve been writing a BSR report on protecting human rights in the age of global digital communications, and so the near-complete shutdown of modern communications in Egypt, and the role of private companies in that shutdown, has been a source of particular interest to me—especially the complex ethics of providing telecommunications services in countries with poor human rights records.
On the one hand, telecommunications services provide huge opportunities for increased freedom of expression and can play a significant role in opening up closed societies. On the other hand, telecoms companies everywhere come under significant pressure to collaborate with law enforcement activities, such as enabling real-time surveillance or assisting in the pursuit of criminals.
Most of the time that’s not a big problem: There are plenty of legitimate reasons why law enforcement agencies and companies may restrict the free flow of information (such as removing images of child exploitation) or allow access to personal information (such as tackling violent crime).
But there are times when it can become a big problem. Just ask Vodafone, who issued the following statement late last week: “All mobile operators in Egypt have been instructed to suspend services in selected areas. Under Egyptian legislation, the authorities have the right to issue such an order and we are obliged to comply with it.” Over the weekend, Vodafone was able to restore its services, and explained its previous actions by stating that “there were no legal or practical options open to Vodafone or any of the mobile operators in Egypt, but to comply with the demands of the authorities.”
So what are the ethics of Vodafone’s circumstances in Egypt?
A key finding in the BSR report will be the different ethical circumstances faced by internet companies—say a Twitter or a Facebook—and telecommunications companies—in this case Vodafone—when it comes to providing services in countries with poor human rights records. Internet companies can often target services at a country (in the local language, for example) while locating key assets such as servers, user data, and personal information in lower-risk countries. This flexible approach allows an internet company to argue that their information and equipment falls under the domain of a different jurisdiction. The ethics in this scenario are fairly simple: If the service is blocked or taken down, it’s not their doing.
However, the reverse is true for telecommunications companies. In order to offer services in a specific country, a telecoms company will need to do two things: sign a license with the local government and build an extensive, multi-billion dollar telecoms network that is physically located in that country. This puts the telecoms company in a triple-bind: The company has little or no say on the terms of the license, and with a local physical network in place, it is clearly under the jurisdiction of local law enforcement agencies. In addition, the company has thousands of employees in the country, so its room for maneuver is greatly restricted by the need to protect the safety of its local employees.
So what to do? For me, a key reference point is the Principles and Implementation Guidelines of the Global Network Initiative, a multi-stakeholder initiative designed to protect freedom of expression and privacy online. These documents suggest three responsible courses of action for telecoms companies entering markets with poor human rights records:

• First, undertake human rights due diligence before entering a market. The decision to invest billions of dollars and enter a new country is a significant business decision and telecoms companies will already undertake substantial due diligence on the risks involved. However, it is important to integrate human rights into this due diligence, even though this can raise its own ethical complexities. Who is to say, for example, whether the beneficial impacts of freedom of expression over many years outweigh the risks that services will be suspended during times of local unrest?
• Second, push back on government demands that restrict freedom of expression. What goes on behind the scenes between a government and a telecoms company is the subject of much speculation, but from an ethics perspective there is surely an onus on telecoms companies to do what they can to push back when the demands made of them conflict with international human rights standards and the rule of law.
• Third, identify ways to minimize the extent of compliance. Companies can investigate means to reduce the extent of compliance, such as providing services in some areas or reducing the range of information blocked.

So has Vodafone done the right thing? I’m an optimist on the role of communications technology in enabling human rights, especially freedom of expression, and so I have no difficulty whatsoever with Vodafone’s presence in Egypt in the first place. But were they right in suspending their services? For me, it’s too early to tell because we only have a blurry picture of the events that led to the shutdown of services.
Did Vodafone attempt to push back? We don’t know yet what dialogue took place, and we probably won’t for some time. Did Vodafone push the boundaries of compliance with the demand to suspend services? We don’t yet know. We also don’t really know what actions the Egyptian government could have taken—such as closing Vodafone’s network altogether—had Vodafone pushed things further. Vodafone’s account of these events, should it become available, will surely make for fascinating reading.

By Aron Cramer, President and CEO

In Davos this past week, there was much talk of the "G-Zero" world. This stands in stark contrast to last year's event, when all the talk was about the "G-2," or the United States and China as the de facto world leaders. The thinking behind the "G-Zero" is that neither those two nations, nor any others, are providing leadership on topics ranging from climate change to economic recovery to security in Asia. Those advancing the "G-Zero" theory are claiming that the international community is, in effect, leaderless.

In my view, this logic is precisely backwards. In fact, whether on the streets of Cairo or in the meeting rooms in Davos, we are in fact seeing the emergence of a world led by the "G-Everybody," with leadership coming from an unprecedented number of sources.
Examples of this abounded in Davos. Based solely on meetings I participated in (with 2,500+ attendees mixing over five days, one person can't be everywhere), the spirit of productive partnerships was in strong evidence.

A coalition of companies joined with the UN Global Compact and the WWF to launch "Windmade," the first product label providing consumers with the ability to find and purchase products made with wind energy. A group of consumer product companies discussed plans to work jointly with governments over the coming year to develop innovative policy solutions promoting more sustainable consumption models. And the World Economic Forum itself is exploring the creation of guidance for multi-stakeholder partnerships to help them go to scale and deliver results.

All this was happening against the backdrop of the events in Tunisia and Egypt. These latest examples of what used to be called "people power" reinforce one of the most central realities of our times: power and influence are distributed more widely than ever before.

The theme of Davos this year was "Shared Norms for the New Reality." Within the halls of the Congress Centre, where the meeting takes place, I spoke to a lot of people who questioned whether there are in fact "Shared Norms" shaping the world in 2011. And indeed, if we look to a small group of governments, whether a G-20, a G-8, G-2, or G-Zero, to dictate these norms for the rest of us, shared norms are hard to find.

But if we look more widely, shared norms are in fact emerging. Our thinking, our communication, and our social organization are being shaped today by distributed power. Welcome to the world of the "G-everybody," where our information, perspectives and influence come from more sources than we can possibly count. This is our new reality.

This blog also appears on The Huffington Post at http://www.huffingtonpost.com/aron-cramer/davos-2011-welcome-to-the_b_815993.html

By Laura Ediger, Environmental Manager
Ports are going clean and green: Amsterdam announced that it will give discounts on port fees to ships with high scores on the Environmental Ship Index (i.e. lower air emissions than required by International Maritime Organization standards), and San Diego, California, has started a Green Business Challenge for port tenants to improve their environmental performance. But in terms of global throughput, eight of the 10 top ports in the world are in Asia—Shanghai just overtook Singapore last year as the busiest port in the world.
With new funding from the Rockefeller Brothers Fund, BSR will build on our experience with the Clean Cargo Working Group in evaluating environmental performance of freight carriers, and extend supply chain sustainability to ports and terminal operators. As global customers look to their logistics and transportation supply chains for carbon efficiency, they increasingly have information about relative carbon emissions of different routes or transport types, but they are still lacking good comparable data on the overall environmental performance of ports. Through this new initiative, we will work with companies and stakeholders to understand ports’ most significant sustainability issues and develop a comprehensive framework for ports to consistently report relevant metrics—thereby aligning port sustainability efforts with existing global supply chain sustainability frameworks.
Because our project is international in scope but focused on ports in China, we will work to harness the best of what has been put in place in ports globally (including efforts here in Asia like the Fair Winds Charter) but ground it in the local context. We are excited to expand this part of our transportation work to a new node of the supply chain, and we look forward to sharing our progress along the way.
Happy Year of the Rabbit!

By Aron Cramer, President and CEO

My time at Davos began on an early morning panel at the launch of Edelman’s 2011 Trust Barometer, an event that’s become a staple at Davos.

Unlike recent years, when the crisis led to steep falls in trust for nearly all sectors, this year’s results are more mixed: some ups and some downs. A couple of key messages stand out.

First, trust in business has stabilized after the crisis. Despite some high profile corporate travails—think BP, Toyota—in 2010, faith in business overall has come back after the depths of the recession.

Second, general trust levels in the United States are abysmal. Edelman calls the broad drop in trust of American institutions the “stark exception” to more positive readings in other parts of the world. Americans have lost their sense of trust in all four sectors Edelman measured: government, business, media, and NGOs. This no doubt reflects ongoing economic sluggishness, particularly high unemployment, and even more, the sharply polarized political environment, which has soured the public.

Third, trust in the media is at an all-time low, especially in the United States and the U.K. Richard Edelman, his namesake firm’s CEO, attributed this to the sharp tones in both countries’ media, as well as the rise of social media that have undercut the monopoly held by more traditional outlets.

What are the lessons for business in all this?

2010’s worst events, from Toyota’s widespread product safety problems to the failure of the Deepwater Horizon in the Gulf of Mexico, reinforce the notion that companies that don’t get the basics right have no chance of earning public trust.

But equally—and less obviously—important is that just getting the basics right won’t earn the public’s trust either. The future—and the highest degree of trust—will be won by companies who tackle big global challenges as part of their business strategies. Recent announcements from Walmart on reducing food waste, from GE on expanding Ecomagination, and from Unilever on its Sustainable Living Plan are great examples of companies saying, “Your challenges are our challenges.”

At the end of the day, businesses that deliver something that goes beyond profit are most likely to earn the trust they are seeking. 

The theme for this year’s Davos is “Shared Norms for the New Reality.” If purposeful business becomes one of those norms, trust levels—and human well-being—will both rise in the years ahead.
 

By Kai Robertson, Director, Food, Beverage & Agriculture Practice, Advisory Services
My European colleagues recently shared with me an article by the UN Food and Agriculture Organization (FAO) on edible insects, which made me pause and think. I did not know that around 1,000 species of insects are eaten worldwide. And it turns out they’re an excellent source of protein, fats, and micronutrients. In addition, a recent study by Wageningen University in the Netherlands, examined the greenhouse gas (GHG) and NH3 emissions of five insect species—mealworms, house crickets, locusts, sun beetles, and the Argentinean cockroach—to assess whether they could serve as a more environmentally friendly alternative for the production of animal protein. From the perspective of GHG and NH3 emissions, they could. Given increasing constraints on land, fertilizers, and energy, alternative protein sources sure make sense from both economic and environmental perspectives.
Consider this:

• In Mexico, chapulines (young grasshoppers) are collected from maize and alfalfa fields. This not only provides communities with a cheap source of protein and supplemental incomes, but it also serves as a form of pest control, helping to prevent crop damage.
• Researchers are studying the potential of insect protein in livestock feed as an alternative to grain, which is increasingly under pressure. 
• Insects provide essential ecosystem services such as pollination, dung removal, and pest control. Sustainable harvesting of wild insect populations could help build the case for forest preservation, thus playing a valuable role in conserving biodiversity and the associated ecosystem services.
• The FAO is taking a closer look at experimental insect breeding to see whether it can be both ecologically and economically sustainable. Perhaps edible insects will be the next wave of farmed species.

Next step for me—if I can get over my Western-biased squeamishness—may just have to be a trip to the Mexican restaurant Oyamel in Washington, D.C., where I’ve read the chapulines are quite tasty.

By Marshall Chase, Manager, Advisory Services
The U.S. Securities and Exchange Commission (SEC) released draft conflict minerals reporting rules in December 2010 that have significant implications for a range of corporate sustainability issues—from supply chain monitoring and transparency to integrated reporting and responsible investing. In the short term, however, many people are simply focused on understanding and commenting on these rules, which are open for comment until the end of January 2011.
A wide range of companies and industries are affected by these rules, and BSR has developed an issue brief to help companies understand whether they may have to respond. Additionally, companies can learn more about the underlying issues and avenues for action in BSR’s background report on conflict minerals.
The multi-stakeholder group that drafted the conflict minerals reporting recommendations to the SEC last year—with BSR’s support—is reviewing the draft rules and developing a targeted comment based on the original recommendations. If you would like to see these recommendations and consider signing on to them, please contact Marshall Chase or Sasha Radovich at BSR.
We are interested in hearing more about how companies are preparing for these rules. Are you working with suppliers and discussing these issues with your customers? How are you addressing related slavery and other human rights issues not directly addressed by the SEC rules? Will you be ready to declare any of your products "DRC Conflict Mineral Free"?
We are also preparing to run a Sustainability Matters webinar for BSR members focused on conflict minerals, and would like to hear from you on what specific topics you would like to discuss at this event. Again, please send your thoughts to Marshall Chase or Sasha Radovich.

By Pei Bin, Director, China Partnership Development
Although I have worked in China's nonprofit sector since 1991, 2010 was the most exciting year for new developments in philanthropy in China.
Here are just some of the notable moments:
Social media and public opinion shaped philanthropic policy in China. In response to public dissatisfaction with regulation that required all charitable donations following the Yushu earthquake in Qinghai to be distributed through the provincial government, the Ministry of Civil Affairs established a special office to collect public opinions. With more than 420 million internet users and more than 805 mobile phone users in China, technology and social media are quietly transforming policy making in China as more people proactively share their opinions online.
The Beijing Normal University One Foundation Philanthropy Research Institute was founded, marking the efforts to build the first professional technical and educational academy for philanthropists in China. Using case-based training and tailor-made consulting, the institute trains leaders on foundation formation and professional management and programming.
The China Foundation Center was established after a decade of continued efforts. Its database includes information on foundations' financials, activities, and performance, and is groundbreaking in its attempt to increase transparency, hold foundations accountable, and enable the public to compare foundations online.
Intel launched—with support from the Ministry of Civil Affairs and local NGOs—a Social Innovation Award. This award reinforces Intel's vision and commitment to enhance the value of social investment in China by providing financial and technical support to innovative NGOs across the country.
 The Social Innovation Forum in Shanghai—also called the New Philanthropy Carnival—was organized by the China Social Entrepreneur Foundation to catalyze new thinking on addressing China’s social, economic, and environmental challenges. The Shanghai municipal government is one of the first to invest in and support social innovation centers in China.
Thirty-four NGOs released a report on heavy metal pollution from the information and technology sector—a huge milestone in terms of the professional development and growth of NGOs in China.
 Bill Gates and Warren Buffett held a memorable dialogue with Chinese billionaires about "doing good while doing well." The dialogue generated a nationwide discussion on how wealthy entrepreneurs in China can make impactful social investments and become strategic philanthropists. 
 Gates Foundation CEO Jeff Raikes met with influential business and foundation leaders in China to generate ideas on catalytic philanthropy—where business and foundations play a unique role in investing in ideas and new innovations that help change the world and make a substantial difference to people who otherwise might not benefit from the market.
Amway was the first multinational company to receive approval to establish a foundation in China, laying the groundwork for other multinationals to increase their commitments to local development.
Cao Dewang, chairman and chief executive of Fuyao Glass Industry Group, established his family foundation, demonstrating an important shift in focus from commercial investment to social investment and creating a model for other philanthropists to follow.
The Jet Li One Foundation was the first private foundation to be legally registered as a public fundraising foundation—a sign that the government is loosening its control over philanthropy by allowing people to raise money for the public good.
BSR launched CiYuan, an initiative that builds innovative, cross-sector partnerships to enhance the value of social investment in China. Working with the Taproot Foundation, BSR will introduce a skills-based volunteerism model in China to leverage corporate human capital to build NGO capacity.

By Dunstan Allison Hope, Managing Director, ICT Practice, Advisory Services 
Settling in at my desk after a relaxing holiday break felt like the perfect time to sketch out my 2011 hopes for sustainability in the information and communications technology (ICT) industry. I’m a proponent of short lists, not long ones, as they tend to stand a much better chance of success.
So here it goes:

1. Sustainability solutions for all industries: The ICT industry has done a fantastic job recognizing how ICT can provide solutions to the world’s sustainability challenges. A great example is the Global e-Sustainability Initiative’s "SMART 2020" report. However, if you examine the sustainability strategies of leading companies in other industries—such as food and agriculture, energy, and retail—ICT is rarely mentioned. ICT companies have the opportunity to engage more effectively with major customers to realize the true potential of ICT.
2. Human rights impact assessments: We live in a world today where vast ICT infrastructures and extensive flows of information are natural features of modern life. However, this brings a wide range of new human rights risks and opportunities for companies across the industry, and I’m far from convinced that the industry has these under control. Human rights impact assessments are an essential first step to effective human rights management.
3. Rapid obsolescence: As previously mentioned in BSR’s report, achieving sustainability requires a reconfiguration of our consumption-based growth model. Rapid obsolescence—achieving revenue growth on the premise that consumers will replace existing gadgets at an increasing rate—needs to be addressed. BSR plans to put forward new thinking on this topic later this year.
4. Gender impacts: One report above all others caught my attention in 2010: GSMA’s report on mobile usage by women subscribers in low- and middle-income countries. The ICT industry can increase its impact by more effectively examining its products and services through a gender lens. At BSR, we’re exploring how lessons learned from our HERproject initiative can be applied to the sector.
5. Conflict minerals: The ICT industry is not the only sector implicated in the “conflict minerals’” discussion, but it has been the most proactive by far. In addition to implementing the U.S. Security Exchange Commission’s new due diligence requirements, the industry can enhance its leadership by exploring other economic development-based solutions to conflict in the Democratic Republic of the Congo.
    

By Kara Hurst, Vice President
My kids asked me the other day why Santa needed to make a list. "Can’t he just remember it all?" they asked. But as Santa and others do this time of year, we are compelled to not only examine the year in retrospect, but to celebrate, analyze, and debate the major events of the last twelve months. 
While no list of CSR events is complete or relevant for very long, the debate itself can shed new light on how we see sustainability now and what we will expect in the coming years. 2010 brought an opportunity to see how companies who lead on CSR deal with tough situations: HP, Google, Toyota, and BP were all in the spotlight, and for some, their leadership reputation may never fully rebound. 
The list that follows is one perspective on the most impactful events of 2010, a year of tough choices, big events, and CSR issues in the mainstream: 
1. Deepwater Horizon Explosion and Oil Spill: It’s no surprise that many CSR events lists will lead with this event, which was catastrophic for the environment and caused the loss of several lives. For many CSR analysts, this event also shed new light on the gaps between how companies talk about sustainability and truly integrate good practices into their business.
2. Human Trafficking: The State of California passed historic legislation in Act SB 657, requiring major retail sellers and manufacturers doing business in California to disclose their voluntary efforts to eradicate slavery and human trafficking from their direct supply chain for tangible goods offered for sale. The first step is already evident: Companies are seeking to understand their impacts and where human trafficking can occur.
3. WikiLeaks, OpenLeaks, and Radically Real Transparency: We’ve been talking about radical transparency for years now, and Julian Assange delivered on it. Right or wrong, this is an example of more to come, and how technology changes the game with regard to accessing information.
4. Google Withdraws from China: In a bold move, Google aimed to deliver on its “Do No Evil” mantra and withdrew from China, highlighting the complexity of operating in a global marketplace.
5. Unilever Sustainable Living Plan: Unilever’s sustainability plan is ambitious not only for the goals it sets but for taking a long-term vision.
6. CSR Goes Mainstream at the Securities and Exchange Commission (SEC): The SEC highlighted the importance of understanding how social and environmental issues impact a company’s valuation through legislation that requires publicly listed companies to disclosure to the SEC both their due diligence to identify conflict minerals in products they manufacture and also that publicly listed companies must report on their climate change risks.
7. Walmart’s Sustainability Index: Walmart started the year by announcing ambitious GHG reduction goals. It then flexed its market positioning and supply chain muscle once again by getting more companies on board with responsible supply chain management so that companies who score higher on the Sustainability Index will get more shelf space. Are you listening, marketing departments?
8. The Nissan Leaf Launch: The Nissan Leaf (also referred to as the LEAF) launched in December in Japan and the United States as the first mass-produced electric car for sale from a major manufacturer. Winning the European 2011 Car of the Year doesn’t hurt either.
9. Citizen’s United Decision: Time will tell if the controversial (and close) decision by the United States Supreme Court will radically shift the political landscape, now that companies and special interest groups can spend to their heart's delight in an attempt to favorably shift the outcomes of political races and ballot measures nationwide.
10. Alien Tort Act: U.S. Court of Appeals ruled that Alien Tort Statute is not applicable to corporations, meaning plantiffs cannot file lawsuits against companies for human rights violations around the world. Individuals may still be sued, however, leaving corporate officers open to liability.

By Adam Lane, Associate, Advisory Services
In celebration of International Volunteer Day on December 5, I attended the inaugural Volunteering Expo in Beijing to get a close look at the evolving state of corporate volunteering in China.

Since the buildup to the 2008 Beijing Olympics began in 2007, volunteering in China has garnered a great deal of attention. And attention has only continued to grow following the Sichuan earthquake and the Beijing Olympics in 2008 and the Shanghai Expo and Asian Games in Guangzhou in 2010. Even though the role of corporate volunteers has received comparatively less attention than volunteering in general, there has been a recent surge in interest from companies as they recognize opportunities to demonstrate their commitments to communities, leverage their employees' skills, and build loyalty among their staff.

Consider three pieces of evidence that support this trend:

• Companies are being more strategic about their volunteering: In the last 18 months, BSR has worked on a number of projects with companies to evaluate their volunteering structures and programs. These projects focused on ensuring positive impacts for the company and the community as well as the volunteers themselves. 
• Intermediaries are making it easier for employees to volunteer: Local and international NGOs, such as Huizeren, Fuping Development Institute, and Hands on China, facilitate companies’ volunteer programs by training volunteers and training NGO partners to better manage volunteers.
• Many companies—from multinationals such as Bayer to state-owned enterprises such as China Mobile—are starting employee associations to drive volunteering and employee engagement.

Discussions with several NGOs attending the Expo confirmed that NGOs are increasing their engagement with, and using, company volunteers—and they seek to do so more in the future. NGOs are customizing events and arranging open activities to make it easier for companies to send their staff to volunteer. Companies are also doing their part by providing staff with paid time off to volunteer.

While the majority of this volunteering is unskilled, there are some notable exceptions: Intel’s staff recently trained 30 NGOs on social media and cloud computing trends, and Microsoft staff regularly participate in their Unlimited Potential program, which aims to teach migrant workers how to use computers and the internet to improve job opportunities and access information related to health and labor rights.

Business is making progress on better utilizing corporate resources, including volunteers, to build NGO capacity. For example, a new ICT Volunteer Alliance launching later this year—which BSR will be  involved with as part of our CiYuan initiative—will aim to leverage ICT companies’ products, knowledge, and staff to help build NGOs’ capacity. Stay tuned or sign up for CiYuan’s newsletter to learn more about resources and activities in this field as it—and CiYuan—develop.

By Faris Natour, Director, Research & Innovation

As if the political fallout from the recent disclosure of U.S. diplomatic cables was not reason enough to follow this story closely, the WikiLeaks saga has now squarely landed in the middle of one of the most pressing business and human rights debates of our time: the responsibility of business to respect the rights to free expression and privacy.

After companies from Amazon to MasterCard cut business ties to WikiLeaks this week citing illegal activity by the group, they are facing allegations from human rights groups that they were complicit in an effort by the U.S. government to censor the site. Hackers supporting WikiLeaks have attacked the online services of those companies in retaliation for the alleged censorship, in some cases causing significant damage.

Wherever you stand on the issue, this development highlights three important lessons:

First, in the age of radical transparency, every business decision can instantly be under a global microscope and those who disagree can mobilize against the company in a matter of hours. The internet and advent of social media have leveled the playing field to the point where one man, Julian Assange, with very limited funds, can take on the major governments of the world and cause serious damage to their policy agendas. The hacker attacks that followed this week underscore the need for business to adapt to this new world order.

Second, companies can face human rights-related risks in every part of the world. Much of the debate on freedom of expression and the right to privacy on the internet focuses on China, the Middle East, and Central Asia. Today, companies like Amazon and MasterCard find themselves fighting allegations of succumbing too easily to pressure from the U.S. government to take down a website in the interest of national security. When facing such requests in any country, companies should insist that government agencies follow due process before complying.

Third, human rights issues like free expression and privacy are difficult to predict, complex, politically charged, and carry significant operational, reputational, and legal risk for the companies involved. As with other sources of risk, companies need robust policies and risk assessment processes to ensure that human rights risks are identified early and managed effectively and in a transparent manner. In the case of free expression and privacy on the internet, the Global Network Initiative has developed useful tools and guidance.

This story is likely only in its first chapter and more companies will find themselves caught between the two sides of the debate around free expression, privacy, and national security. Further, whether Bank of America or another company is WikiLeak’s next target, businesses need to be prepared for all their actions to be publicly exposed at any time and with no warning. The time to adjust to this new reality of radical transparency is now.

By Joyce Wong, Associate, Advisory Services


As global ministers and high-level delegates arrived in Cancun over the weekend, they landed amid encouraging signs that progress in key areas could be made by the end of this week’s talks. While the future of the Kyoto Protocol remains uncertain, the draft text for a potential Long-Term Cooperative Action (LCA) agreement was released on Saturday. Although not a globally binding agreement that so many developing countries are calling for, the document recognizes that “deep cuts in global emissions are required according to science,” and includes key issues such as mitigation, adaptation, verification, technology development and transfer, forests, and finance. While the critical issues are represented, in some areas, the draft text puts forth multiple options that reflect the different positions of the negotiating countries. While vulnerable nations implore the negotiators to move faster on climate commitments, expectations and progress remain modest and are quietly moving forward.

Down the road from the Moon Palace, there are many other events and conversations taking place for those that want to take action now to address climate change challenges and move toward a low-carbon economy. Weekend events brought country ministers, UN representatives, agricultural and development professionals, producer associations, and researchers and scientists to discuss the current and future states of agriculture, forests, oceans, and development. With the backdrop of COP-16, such events aimed to focus high-level attention on the links among climate adaptation and mitigation, and natural resource conservation, sustainable agriculture, and poverty. These events also provided a dynamic forum for panelists and participants to discuss innovative solutions, outstanding knowledge gaps, and what is needed from policy, capacity-building, and resource perspectives to increase overall climate resiliency.

At WBCSD’s Global Business Day, UNFCCC Executive Secretary Christiana Figueres kicked off the day with recognition of the business community’s efforts to date to reduce GHG emissions, and a call for even bolder action. Figueres outlined the following ways business can lead:

• Reduce carbon footprints up and down the value chain by working with suppliers and educating and providing more climate-friendly products and services for consumers.
• Drive and enable sector transformation through technology innovations.
• Engage governments back home before the next COP.

On this last point, Figueres underscored that any progress toward a global agreement must be preceded by domestic policy at home, which necessarily predetermines to what country negotiators can and cannot commit. With our current system, this is the private sector's key point of influence. Throughout the remainder of the day, panelists discussed examples, opportunities, and challenges for the private sector to be more involved in the dialogue and how business can increase its ability to provide the tools, mechanisms, and technologies needed to reduce climate impact and vulnerability.

While most eyes are focused on the negotiations taking place inside the Moon Palace to set us on a path toward a low-carbon, climate-resilient future, the diverse parties and conversations outside offer insight into emerging needs; the ability to develop (or harness), implement, and scale innovative solutions; and the appetite to forge new partnerships that will allow us to get there.

By Aron Cramer, President and CEO
Concerns that the U.S. and European economies are condemned to years of slow growth are worrying policymakers, publics, and economists globally. While China, India, and many African countries continue to chug along at growth rates of more than 5 percent, the U.S. and most European economies are limping along, with debt levels limiting their ability to stimulate short-term growth or long-term investments.
At the same time, the steady rise in global temperatures and the return to rising commodity costs remind us that our current economic trajectory threatens to crash because of natural resource constraints.  Just as stagflation—the combination of stagnant economies and inflation—characterized the 1970s, struggling economies and environmental problems may characterize the second decade of the 21st century.
In this context, last week’s World Economic Forum Summit on the Global Agenda took up the question of whether our current measures of economic vitality are appropriate for today’s world. The question of economic growth is at the center of this debate.
The dilemma is clear: Without growth, there is little political will to make the kinds of investments needed to make the transition to a low-carbon economy. (Witness the tepid U.S. approach at Cancun as proof positive of this.) But a focus only on growth, as measured by GDP and reliant on consumption, only exacerbates the sustainability challenge.
In the consumer industry council that I chaired this past week in Dubai, this debate grew white hot. Several observers reminded us of our collective challenge: Current economic models cannot be extended to a planet of 9 billion people because the natural resources are not available to support them. One company executive dismissed this thinking, saying that growth was the only thing that motivates companies: Stasis is not an option. 
In fact, both sides are right. On an individual, enterprise level, competitive economies don’t reward companies that stand still. Yet on a systemwide level, it is equally true that the aggregation of more, more, more will result in planetary overshoot. 
Where does the solution lie? 
Starting at the macro level, new ways to measure economic health are needed. As Joseph Stiglitz and others have argued, measures of economic vitality can be seen in elements of social capital, such as human health, education that fosters innovation, and access to technology. Repealing GDP as a measure is neither desirable nor likely, but augmenting it with additional measures of human progress is sorely needed.
At the level of individual companies, competitive standing will continue to be the ne plus ultra of success. The key is to measure this not only minute to minute, quarter to quarter, but on a longer-term basis. The emergence of integrated reporting—bringing sustainability and financial reporting together—will help, especially if it mitigates the focus on quarterly performance as measured by share price. (Note: I just joined the International Integrated Reporting Committee, which will be producing recommendations for a framework to make this a reality.) 
In many ways, growth is simply an economic expression of the human aspiration to grow and thrive. But for economies as for all of us as individuals, too much of a good thing can do us in. More is not always better; better is better. 
The sooner we develop economic measurements that include growth, but stop fetishizing it, the better off we will all be.

By Aron Cramer, President and CEO, BSR


At last week’s Summit on the Global Agenda, convened in Dubai by the World Economic Forum (WEF), risk was high on the agenda. In fact, risk has been center stage from the very first Summit, held in the late fall of 2008.

This year’s Summit was the WEF’s third, and the emphasis on managing risk called to mind the surreal environment of the first Summit. At that event, the world’s economy was in freefall, and nowhere was that more pronounced than in Dubai, where real estate speculation as hot as summertime in the Persian Gulf was crashing to earth. When Dubai’s ruler told the plenary audience—over and over—that everything was fine, it succeeded only in stoking fears that the opposite was true.

The last couple of years have made clear just how much work needs to be done to manage systemic risks more effectively. The WEF made a significant contribution to that important goal at this year’s Summit by announcing its new “Risk Response Network,” a network of corporate risk officers and other thought leaders who will aim to identify systemic geopolitical and economic risks—and offer potential solutions. The Network will be inaugurated formally at Davos in late January, and convened formally for the first time in New York in early April.

Many of us at the Summit expressed concern that undue focus on avoiding risk will undercut the creativity so crucial to rebuilding global economic vitality. Indeed, in a meeting at the Summit of the Consumer Industry Council, which I chaired, we focused our attention on innovation as the key to building sustainable growth and prosperity.

The mandate of the Council, which includes companies like Pepsico, Best Buy, and Procter & Gamble, and thought leaders from design firm IDEO, the University of Manchester, and Brazil’s Akatu Institute, is to sketch a vision for the consumer products industry over the coming decades, with a report due in June, 2011. Over three days, we debated whether economic models that measure and reward growth are appropriate in an era of growing populations and natural resource constraints.

In charting the industry’s future, we fixed on health and environment as two crucial features that merit increased investment and focus. In just the past several weeks, many high profile consumer products companies have announced sustainability focused initiatives: Nestle’s creation of a new business unit focused on “nutraceuticals,” the combination of food and medicine; Best Buy’s investment in pioneering home energy management systems; and Nike’s making public its environmental apparel design tool, so that peers—and competitors—can use it. These efforts are part of an emerging movement in this and other industries toward sustainable consumption, an issue that BSR considers the next frontier in sustainability.

It is said that generals too often fight the last war, instead of preparing for the next one. The WEF’s Risk Response Network is making a crucial investment by strengthening the world’s collective ability to avoid the mistakes that nearly brought down the global economy. But it is the creative impulse found throughout the Summit on the Global Agenda that will generate the sustainable, inclusive growth that makes the world’s economy worth protecting in the first place.