SUSTAINABLE DEVELOPMENT CONFERENCE

Transcription

1 SUSTAINABLE DEVELOPMENT CONFERENCE Johan G. Nel Centre for Environmental Management Potchefstroom University Tel: (018) Fax: (018) Rev 06 1

2 BUSINESS AN COMMUNITY BASED DEFINITIONS OF SUSTAINABILITY 2

3 Definition of Sustainability Sustainability means to develop our economic activities in such a way that the desired quality of life is secured or even raised, while simultaneously reducing the use of natural resources (in the long run to about one fifth). In this way the basis of life for future generations can be preserved, while opening up globally viable paths of development. Centre for Environmental Management 3

4 Definition of Sustainable Business Development Sustainability is long term business success while contributing towards economic and social development, a healthy environment and a stable society Centre for Environmental Management 4

5 THE BUSINESS JOURNEY TOWARDS SUSTAINABILITY 5

6 A THREE STAGE JOURNEY Business Sustainable Development Environmental Performance Impact and risk management Legal compliance Economic performance Centre for Environmental Management 6

7 FROM CONFLICT TO SUSTAINABILITY Legal compliance Impact Management Sustainable Business Development INCREASED BUSINESS VALUE Sustainable products and communities Product stewardship - Partnership experiments Triple bottom line experiments - GRI SHEQ ms integration - SCR Management systems - eco-efficiency - Social Corporate Investment Projects Pollution prevention - public information strategies Compliance preactive - labour reforms/ staff equity Compliance Secrecy reactive/protectionist policies Waste / costs / non-compliance - Conflict with NGOs??????? Global view Outward view Inward focus Unprepared Aware/ reactive Pro-active Mainstreaming Mature highly integrative Centre for Environmental Management 7

8 DEFINITION OF CSR There is a fundamental distinction between corporate philanthropy and CSR 8

9 DEFINITION Corporate social responsibility (CSR) promotes a vision of business accountability to a wide range of stakeholders and investors besides shareholders and investors. Key areas of concern: Environmental protection Well being of: Employees Communities and Society Now and in the future Centre for Environmental Management 9

10 DEFINITION CSR is essentially a concept whereby companies decide voluntarily to contribute to: A better society and Cleaner environment Centre for Environmental Management 10

11 DEFINITION WBCSD definition CSR is the commitment of business to Contribute to sustainable economic development Working with employees Their families The local community, and Society at large To improve their quality of life Centre for Environmental Management 11

12 CSR SCOPE 12

13 INTERNAL SCOPE Equitable human resource management Labour issues Health and safety Adaptation and change Environmental impact management Eco-efficiency Centre for Environmental Management 13

14 EXTERNAL SCOPE Local communities Business partners, suppliers and consumers Human rights Global environmental issues Centre for Environmental Management 14

15 DRIVERS Companies that prepare themselves to meet the high standards of social and environmental sustainability stand to gain in two areas: their proactive strategies can free them from harsh criticism of activist groups and consumers, and they can achieve competitive advantage in rethinking their management and productive processes. 15

16 DRIVERS The new political economy Shrinking role of government MBO Alternative tools for environmental governance Empowerment if civil society Demand for greater disclosure Increased customer interest Growing investor pressure Competitive labour markets Centre for Environmental Management 16

17 DRIVERS New concerns and expectations from: Citizens Consumers Public authorities Shareholders NGOs Social criteria influence investors and consumers Increased transparency and connectivity A new business model Centre for Environmental Management 17

18 DRIVERS A new business model Hard assets vs. soft assets Networks Supply chains Relationships Globalisation Focus on long terms share holder value Centre for Environmental Management 18

19 DRIVERS Lets face it, SCR is all about risk exposures: In the sense of uncertainty rather than Threats Where uncertainty pose risks CSR risks are not: Clearly understood Well articulated Difficult to demonstrate benefits over the short to medium term Centre for Environmental Management 19

20 THE BUSINESS CASE FOR SCR The business case for poverty reduction is straightforward. Business cannot succeed in societies that fail 20

21 BUSINESS CASE Business, technology, communications, workplace and the wider society Have all been transformed over the recent years And will continue to change in future This demands new thinking and new strategies Centre for Environmental Management 21

22 BUSINESS CASE The principle of CSR is underpinned by the idea that corporations can no longer act as isolated economic entities operating detached from civil society Traditional views of competitiveness, survival and profitability are eroded Centre for Environmental Management 22

23 BUSINESS CASE Profits remain the prime concern of business, however they are also expected to contribute to Social and Environmental development By adding CSR into their: Core business strategy Business instruments Operations Centre for Environmental Management 23

24 BUSINESS CASE Engage with and invest in stakeholders that can influence their license to: Operate Sell, and Grow It is an investment rather than a cost! Philanthropy is a cost SCR is an investment Centre for Environmental Management 24

25 BUSINESS CASE Two dimensions of a business case for CSR Clear risks to shareholder value from poor management of: Supply chain Inadequate environmental management Human rights abuses Poor treatment of workers, suppliers and customers Potential for competitive advantage Centre for Environmental Management 25

26 INDICATORS In the majority of companies, sustainability has not yet been posted on the agenda. 26

27 FTSE4Good Introduced May 2001 Sets out 4 SRI indices Lists companies that demonstrate responsible behaviour on: Human rights The environment Society Centre for Environmental Management 27

28 DOMINI 400 SOCIAL INDEX (DSI) Outperformed the S&P 500 by 1% on an annualised total return basis since its inception in 1990 Centre for Environmental Management 28

29 DOW JONES SUSTAINABILITY INDEX The DJSI (World) measures company performance ito: Economic Environmental and Social criteria. Centre for Environmental Management 29

30 DOW JONES SUSTAINABILITY INDEX (DJSI) Since the launch in 1999 when the Dow Jones Sustainability Index (DJSI) began tracking the performance of leading sustainability-driven companies world-wide, the index has consistently outperform the Dow Jones Global Index (DJGI) Suggesting sustainability is moving into mainstream asset management Centre for Environmental Management 30

31 DOW JONES SUSTAINABILITY INDEX The DJSI has grown by 180% since 1993, compared to the DJGI growth of 125% The DJSI outperformed the DJGI for 5 years before 2001 with an annualised return of 15.8% compared to 12.5% Centre for Environmental Management 31

32 JSE AND SUSTAINABILITY The JSE and FTSE developed a FTSE/JSE index focusing on sustainability. Centre for Environmental Management 32

33 ASSOCIATION OF BRITISH INSURERS Evidence from the Association of British Insurers report: Investing in Social Responsibility Risks and opportunities Overall conclusions from the study: CSR has a positive impact on business success This is reflected in conventional financial performance and drivers The business case is strong when CSR is incorporated into mainstream business strategy Evidence is not yet conclusive CSR may be consequence of good business Rather than a driver of high performance Centre for Environmental Management 33

34 ASHBRIDGE BUSINESS SCHOOL Research: Ashbridge Business School 2001 Explored views of senior executives of companies from four countries with SCR programmes Important benefit is corporate performance 50% said performance was the main driver 30% reported stakeholder needs Centre for Environmental Management 34

35 ASHBRIDGE BUSINESS SCHOOL Research has shown that about 50% of the above average performance of socially responsible companies may be attributed to their SCR programmes Centre for Environmental Management 35

36 CSR BENEFITS 36

37 CSR BENEFITS Many CSR benefits are Intangible and Long term Hard statistics are elusive Centre for Environmental Management 37

38 CORPORATE BENEFITS Aligning business practices with stakeholder expectations Adopting a strategic approach rather than a crisis management approach Innovation rather than reaction Reduced regulatory intervention Improved financial performance Lower operating costs Enhanced brand image and reputation Centre for Environmental Management 38

39 CORPORATE BENEFITS Increased sales and customer loyalty Greater productivity and quality Reduced regulatory oversight Improved access to capital Workforce diversity Product safety and reduced liability Improved attractiveness to investors Improved relationships Centre for Environmental Management 39

40 STRATEGIES FOR CHANGE Acting responsibly, government, citizens and companies can all make a difference to those global forces which are beyond our individual control 40

41 STRATEGIES Business partnerships towards a sustainable future Companies support paid days for community assistance Business Partners for Development (BPD) Tri-sector partnerships to benefit the long term interests of the business sector Business in the Community (BiTC) Race for Opportunity campaign Centre for Environmental Management 41

42 STRATEGIES Neigbourhood renewal partnerships UK: National Strategy for neighbourhood Renewal London Heart of the city ( UK: Local Strategic Partnerships (LSP) UK: Business Brokers supporting LSP UK: Inner City 100 ( UK: City Growth Strategies US: Competitive Inner City ( Centre for Environmental Management 42

43 STRATEGIES Skills development Engaging SMMEs Community involvement Centre for Environmental Management 43

44 INITIATIVES There is no lack of declarations, codes of conduct and principles. What is needed is action. 44

45 INITIATIVES The Danish Social Index Self assessment tool Measuring the degree to which a company lives up to its social responsibilities Centre for Environmental Management 45

46 INITIATIVES Social Accountability International SA 8000 standard Based on ISO and 9001 Basis for social auditing Centre for Environmental Management 46

47 INITIATIVES Social and eco-labels Words and symbols on products which seek to influence the purchasing decisions of consumers by providing an assurance about the social and ethical impact of a business process on other stakeholders Europe has a number of social-labels Centre for Environmental Management 47

48 INITIATIVES Socially responsible investing (SRI) In recent years socially responsible investing (SRI) has experienced a strong surge in popularity among main stream investors. Socially and environmentally responsible policies provide investors with a good indication of sound internal and external management Centre for Environmental Management 48

49 INITIATIVES Sustainable mining Breaking New Ground M&M face some of the toughest challenges Distrusted by many people Fail to convince license to operate Centre for Environmental Management 49

50 INITIATIVES Issues Viability of the mining industry Control, use and management of land Minerals and economic development Local communities and mines Mining, minerals and the environment Integrated approach to use minerals Access to information Artisanal and small scale mining Sector governance Centre for Environmental Management 50

51 INITIATIVES Global compact UN inspired initiative launched in 1999 Objective to promote corporate citizenship Centre for Environmental Management 51

52 INITIATIVES Global Compact: Nine principles Support and respect human rights Not complicit in human right abuses Freedom of association and collective bargaining Elimination of forced labour Abolition of child labour Elimination of discrimination Adopt precautionary approach to environmental issues Promote environmental responsibilities Develop and disseminate ESTs Centre for Environmental Management 52

53 INITIATIVES GRI GRI established 1997 Tasked to tackle the issue of sustainability reporting Develop and disseminate globally applicable guidelines Centre for Environmental Management 53

54 INITIATIVES GRI and mining In June 2001, the GRI entered into an agreement with the Mining, Minerals and Sustainable Development (MMSD) Program, to lay the groundwork for the future development of a mining sector supplement to the core GRI Sustainability Reporting Guidelines. Centre for Environmental Management 54

55 WSSD AND BUSINESS 55

56 WSSD issues for business Corporate Accountability & transparency want a legal framework for multinationals Social investment & stakeholder relations HIV/AIDs programmes, CB, partnerships, rural development, entrepreneurship Poverty alleviation creating local beneficiaries Energy & water Kyoto Protocol CDM opportunities, water resource management Centre for Environmental Management 56

57 WSSD issues for business Innovative financing mechanisms - micro-financing, market incentives which support SD Trust - ethics, anti-corruption and validation of information Biodiversity - active involvement with conservation & more rigorous use of EIAs in planning Regional cooperation cross-boundary impacts & targets Forestry & agricultural - sustainable practices, certification Lastly SD is not as mainstream as we would believe Centre for Environmental Management 57

58 WSSD: Business action Corporate reporting look at the various guidelines available especially the GRI for application to SA companies - improve formats & credibility Greenhouse gas reports & action plans CDM project design & national monitoring mechanisms Indices for benchmarking & setting of standards Centre for Environmental Management 58

59 WSSD: Business action EMS, Social assessment, Biodiversity action plans & information validation/verification - auditing opportunities Certification of sustainable practices new or existing codes Ethics lines, information, surveys, awards, leadership programmes & use of international networks Brokering partnerships which are viable, promote the idea of equity for workers/communities Support of NEPAD - Sustainable livelihoods and poverty alleviation projects Centre for Environmental Management 59

60 CSR A POSSIBLE ISO STANDARD? 60

61 CSR A POSSIBLE ISO STANDARD? 2001 the idea of an ISO standard for CSR was raised Currently opinions are gathered Desirability Feasibility CSR and standards forum In line with ISO and 9000 Centre for Environmental Management 61

62 CSR A POSSIBLE ISO STANDARD? Recommendations: To first study best practices worldwide Do a justification study ISO Board to consider March 2003 Centre for Environmental Management 62

63 SUSTAINABLE COMMUNITIES 63

64 SUSTAINABLE COMMUNITIES 1 ICLEI defines a sustainable community as one that: Manages resources within ecological limits Provides the means for citizens to meet economic needs Promotes socially just and vibrant communities Centre for Environmental Management 64

65 SUSTAINABLE COMMUNITIES 2 Economic issues include: good jobs; good wages; stable businesses; appropriate technology development and implementation business development If a community does not have a strong economy, then it cannot be healthy and sustainable over the long term Centre for Environmental Management 65

66 SUSTAINABLE COMMUNITIES 3 Environmental concerns include: protecting human and environmental health; having healthy ecosystems and habitat; reducing pollution of water, air, land; providing green spaces; pursuing ecosystem management; protecting biodiversity. A community can only be sustainable over the long term only is it is not degrading its environment using finite resources. Centre for Environmental Management 66

67 SUSTAINABLE COMMUNITIES 4 Social issues include: education; crime; equity; inner-city problems; community building; spirituality; environmental justice. If a community has significant social problems, such as serious crime then it cannot be healthy and stable over a long time. Centre for Environmental Management 67

68 CREATING SUSTAINABLE COMMUNITIES 68

69 SUSTAINABLE COMMUNITIES 5 Critical dimensions in creating a sustainable community: Long-term integrated system approach Emphasis is on communication and cooperation among many different interests and stakeholders Sustainability is a evolutionary process Open process in which every member of the community is encouraged to participate Must foster a sense of community by enhancing the feeling of attachment Centre for Environmental Management 69

70 SUSTAINABLE COMMUNITIES 6 Characteristics (1) Sustainable communities can provide the following to it s citizens Balance of rights and responsibilities Feeling of belonging to a larger whole Safety Peace Pleasantness Centre for Environmental Management 70

71 SUSTAINABLE COMMUNITIES 7 Characteristics (2) Sustainable communities manage their economy and population size without exceeding all or part of the planet s ability to absorb environmental insults, replenish its resources, and sustain human and other forms of life over a specified period of time. Living sustainable means living off income and not depleting the capital that supplies the income. A sustainable community learns to live within the carrying capacity of the area of which it is depended on. Centre for Environmental Management 71

72 SUSTAINABLE COMMUNITIES 9 Role Players: Government National Provincial Local Industry and Professional Associations Universities General Public Urban based environmental initiatives Centre for Environmental Management 72

73 SUSTAINABLE COMMUNITIES 10 Advantages of Sustainable communities: Sustainable community efforts help industry, government, community groups and the general public to work together Unique partnerships can be created through sustainable community efforts Economic, social and environmental problems can be addressed Pollution can be prevented and/or reduced in the long term Centre for Environmental Management 73

74 CASE EXAMPLE SC JOHNSON AND THE CITY OF RACINE Racine (Wi) 116 year old HQ of CJ Johnson Racine experienced major problems Growing crime rates Rising unemployment Poorly performing public schools Increased pollution levels Financial decline Vacated factories Growing brown fields Local tax base declined In conflict with CJ Johnson s core value Every place should be a better place because we are there Centre for Environmental Management 74

75 RACINE CASE STUDY Partnership was established between all stakeholders SC Johnson became the catalyst for a sustainable Racine Within a year Long term community vision Key local priorities identified Action plans designed and implemented by all stakeholders Centre for Environmental Management 75

76 GENERAL WEBSITES Centre for Environmental Management 76