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CSR

Osaka / rooftop urban garden

Hoewel ik het hier al weer heb gehad over een volgende werkreis naar het Oosten, ben ik momenteel nog druk bezig met het opvolgen van gelegde contacten en opgedane kennis in Tokyo toen ik daar in mei was. Want dat was een erg succesvolle week, dus daar wil ik juist veel mee gaan doen in Nederland.

Door te laten zien wat er in Japan speelt op het gebied van MVO en duurzaamheid (zoals duurzame stedelijke ontwikkeling, waar ik gisteren ook over schreef) hoop ik ook aan een Nederlands publiek te tonen dat hier interessante dingen gebeuren en dat er raakvlakken liggen voor Nederlandse organisaties.

Maar waar laat je dat zien? Bijvoorbeeld via de (nog relatief jonge) site Katern: Japan waar vandaag mijn eerste artikel over MVO in Japan verscheen. Binnenkort verschijnt deel 2.

In a post a few weeks ago, I mentioned the OECD Guidelines: international guidelines on responsible business conduct – or corporate social responsibility – supported by 44 (soon: 45) countries world wide.

Since late last year I have been working for the Dutch National Contactpoint for the OECD Guidelines, which is an organisation set up in each of those 44 countries who have committed themselves to the Guidelines, with the main purpose of working towards the practical application of the Guidelines by internationally operating companies.

And now, I don’t even have to share long articles or texts with you to explain the basics of what the Guidelines, and the work of the NCP’s – is about. All you have to do is watch this 10-minute film, which was one of my projects over the last few months.

OECD Guidelines & Netherlands NCP: the story from OESO richtlijnen on Vimeo.

I’ve just finished my last meeting, closing off this week with an interesting dicsussion with officials from the Ministry of Economy, Trade and Industry and a Ministry of Foreign Affairs representative talking about CSR policy in Japan, but also answering their questions on CSR in the Netherlands. Interestingly, they see the Netherlands as one of the leading countries on CSR, accentuated by for example the GRI conference in Amsterdam this week, a new Dutch appointment at the OECD for the Working Group on Responsible Business Conduct and many Dutch speakers at the upcoming Global Conference on Responsible Business Conduct in Paris in June.

Their first question started with exactly this: why is CSR so important and prominent in the Netherlands…. I hope my answer made sense!

But looking back at this week, I have gained so much more knowledge and understanding of this topic in the Japanese context. So I am very happy with how this week has gone and the many different people I’ve had the opportunity to speak with. Of course, there is still much more to learn and many more people I would love to talk to. Next time.

As I’m sipping a coffee, I’m also mentally listing the main points of this week. I’ll add them here below in short bullets, in case it will take me a long time to write out all the things I’ve learnt more fully.

> main premise is that a company is part of society, and contributes to society;
> CSR is something a company just has to ‘do’, there doesn’t seem to be a discussion on the need for a business case, as there seems to be in the Netherlands. This only becomes relevant here when talking about sustainability & sustainable development;
> focus within local community: do good?;
> focus within environmental topics: do no harm;
> extensive tradition of reporting follows from major environmental incidents in the 1960’s & ’70’s but is also part of a business tradition of reporting on many things, including CSR;
> additionally: peer pressure in Japan is high, which is also an explanation for the high percentage of reporting companies;
> but, CSR reports seem to be somewhat limited: focus is mostly on environment, governance and domestic situation (in general);
> major international companies make the connection to the international discourse on CSR (relevance of supply chain, stakeholder dialogue, due diligence), but for many others this is still not quite there;
> only recently, issues such as human rights and labour are coming to be seen as part of CSR (which was also part of a METI-research project)
> ISO26000 is best known from the international CSR frameworks, and is government-backed; ISO-systems are very popular in Japan, but with this ISO26000 runs the risk of becoming a checklist;
> relevance of UN Guiding Principles on Business and Human Rights is not yet well understood among business;
> sustainability is slowly seen as a business opportunity: sustainable building is ‘hot’, investment in renewable energy is increasing. But, incentive is also strongly financial;
> the local ngo’s have a relatively weak position vis-a-vis the general society and business.

Do you gain trust by being transparent? Or do you become more transparent when people trust you?

These are some questions I’m left with after getting a bit more perspective on corporate social responsibility (CSR) reporting in Japan today. According to a 2011 survey of KPMG, 99% of Japanese companies publish a CSR report. An impressively high number, especially when you realize that there is no government regulation telling them to do so.

And, not only do many companies report – these reports are also easily accessible. No less than three (competing) Japanese websites focus on sharing CSR reports online and offer related services, such as extended search options, a report cover design award and seminars on this topic. But most of all: they offer exposure of these reports.

Today, I spoke to the people behind one of these websites, CSR Japan, about their work and about the characteristics of CSR reporting in Japan. I initially contacted this organisation as I assumed it would be the CSR association in Japan, much like MVO Nederland is in the Netherlands. The information on their website quickly showed their focus on collecting CSR reports (the website currently contains almost 500 reports of over 200 companies) and making these accessible.

I haven’t seen anything similar in the Netherlands, and I love how you can really search the relevant themes you want to know about – and it will give you the individual pages from the various reports. Imagine how much easier that makes it if you want to compare what various companies write about supply chain management, to give just one example. And on the plus side for companies who have their report listed here, they can get an overview of what pages have been viewed how often, and there’s a weekly ranking of the most searched for topics. This week, the top 5 consists of: company mission, work-life balance, investor relations, biodiversity and ‘relation with society and the environment’.

And as mentioned, CSR Japan is just one of three:

Eco Hotline has the largest collection with reports from more than 500 companies

CSR Toshokan has published reports from 400 companies

Each comes with their own additional services, of which Eco Hotline’s Report Cover Design Award is one example. [I will update this post when I have an answer to the question where this difference in quantity comes from. My guess is companies pay for the advantage of being listed, but I need to check]

So, why are these companies happily writing these reports, while in Europe there is a debate going on that making reporting mandatory will lead to higher costs for business? Why are Japanese companies doing this voluntarily?

CSR Japan explains this through the fact that there have been some major environmental disasters in Japan in the past (of which a well known example is Minamata). This has increased awareness from the public and from companies that it is important to be transparent about their business activities and their (environmental) impact.

Because indeed, the reports of Japanese companies seem to focus more (in comparison to for example European reports) on environmental than on social aspects of CSR. This also came back in other talks I have had today. The explanation for this may be sought in the fact that Japan has developed their own guidelines for reporting, but these focus solely on environmental issues: Environmental Reporting Guidelines by the Ministry of Environment. Luckily the other topics are partly covered by reporting through a combination of these guidelines, GRI and ISO26000.

So, it appears that Japanese companies are mostly transparent about their activities – which is of course very good. We then spoke about who reads the reports and whether or not this makes companies vulnerable. In Europe and the US, NGO’s sometimes maintain a type of watchdog function to make sure that companies are behaving correctly – hence the vulnerability by reporting what you do, or do not do. Interestingly, Japanese NGO’s do not seem to have this function at all – and in fact are usually very trusting of Japanese companies. There are hardly examples of big campaigns being set up when something has gone wrong, because it turns out that much more than in many other countries the population of Japan overwhelmingly trusts its corporations. And doesn’t particularly think of the NGO-sector of being trusted to do the right thing.

This interesting bit of information comes from the Edelman Trust Barometer, which I heard about in a later meeting, and which surveys the level of trust annually across around 20 countries worldwide in the government, the media, business and ngo’s. This is quite a different view towards corporations than for instance in the Netherlands, where it sometimes feels that NGO’s have no trust at all in companies (and where in fact some NGO’s and politicians are calling for more regulation and monitoring on CSR topics to ensure that companies will not do anything wrong through their business activities).

I also feel that this situation changes the dynamic of CSR in Japan, compared to Europe. It may be too early to draw that conclusion, after only a few discussions. Of course you would hope that the watchful eye of NGO’s and consumers is not the sole reason for companies to behave responsibly. However, knowing that you are being held accountable for your actions – or maybe rather, knowing that no one is really watching what you are doing – must make for different choices in putting together and implementing a company’s CSR policy.

Which brings me back to the question: does transparency beget trust, or is it the other way around?

When it comes to news on CSR in Asia, this week has been all about the collapsed factory in Bangladesh. As I’m writing this, the news is announcing a still rising death toll, up to 500+ by now.

A tragedy. And I feel it does show that the prices we pay for our clothes in Western Europe are not sustainable, least of all for the people who manufacture these clothes. Would it kill us to pay a few euro more for a t-shirt so that other people can have a slightly better standard of living?

The problems in Bangladesh’ textile production industry aren’t new, and a search on the BBC News site will bring up reports from many accidents over the last few years. A change is long overdue.

Today I also heard the news that Disney is withdrawing its production from Bangladesh (and several other countries).* Apparently this had already been decided after the fire in a textile factory in Dhaka killing over a 100 people in November 2012.

However, even if this may be an effective way for Disney to reduce its risks, this can’t be the way that that change is going to take place. Without the textile industry in Bangladesh, many many more people would be without a job and without any income. Bangladesh depends in large on this industry for its exports. Should we boycott the country? Or should industry take responsibility and work together with (local) government and ngo’s to improve the labour circumstances on the ground, and thereby improve the quality of life of many people?

An easy choice, when writing it down like that. But a difficult process to begin and to get going effectively. And, it can’t be down to industry alone. It also means that consumers have a responsibility to ask for better produced clothing. Unfortunately, that requires information: how does your favourite brand rank when it comes to labour, safety, health in its production locations?

In the Netherlands there are a few resources available, which will hopefully be gaining in exposure. Some examples are Rankabrand and an app by Talking Dress to help you find brands that perform better on these issues.

And if you want to know more about sustainable fashion or CSR in the textile industry, there are a few events coming up in the next two months or so:
> the communications agency Schuttelaar & Partners will host their next Maatschappelijk Café on fair fashion (May 28, Den Haag)
> three Dutch industry associations in textiles and fashion are collaborating to organize a conference on CSR in the textiles industry: Groen is de Rode Draad (June 20, Den Haag)

* UPDATE [5/5] – through a friend I just came across this article which discusses the Disney withdrawal in more detail. I still don’t believe that disengagement is the way forward. However, I can also understand the argument of lack of leverage (assuming Disney’s leverage is as non-existent as they seem to imply) for disengaging if that means you can allow more attention and effort in making sure other production locations are responsibly managed. Nevertheless, I do hope the choice for which country to leave from and in which country to stay was not just based on a Worldbank list as it should also depend on individual factories and local knowledge (available within the company, Disney in this case) – where circumstances may vary a lot locally.

Outside of the office, the last few weeks I’ve been working on my professional plans for the upcoming new year – I will be sharing more on that later but it will not be a surprise that they center on Asia and CSR. Those are also the topics that I (irregularly) write about here.

However, these are also two topics that – in the Netherlands, at least – don’t automatically belong together. CSR discussions and events here are often focused on issues that concern companies in their activities within the Netherlands itself. Understandable, of course.

But at the same time CSR doesn’t limit itself to the borders of the country where a company is based. Especially in a country where international trade is so important to economic growth, companies are naturally confronted with international issues as part of their CSR policy.

I am specifically interested in how CSR is developing in Asian countries, and what this may mean for Dutch or other international businesses. Of course Asia includes some of the world’s largest and fastest growing economies. This means that many foreign companies do business in this region and developing CSR policies that fit local activities will be increasingly important for them.

I try to keep track of many different sources of information on these two topics, but again it seems as if these two themes do not really find eachother on a Dutch platform. As a cautious beginning I started a Dutch-language Twitter account where I will be collecting news, information, blogs and whatever else is interesting to send out into the world about CSR-developments and sustainability topics in Asia. For those in the Netherlands, I hope to see you as followers! Find it here: MVO in Azië

A few weeks ago I posted my favourite books on China: what are must-read’s on this country if you want to get an idea of what is going on in this country, according to mthld of course.

But I don’t only read on China (and in that case, that list possibly would’ve been longer). Especially some of the books which I’ve read on the topic of sustainability and corporate social responsibility have made quite an impact on how I view these topics and what I have done about them in my personal life. But not only that, reading about these issues and getting a better understanding of them has also led me to work towards a career shift. I’m in the middle of this career shift right now in which I will combine the topics of international business and CSR much more than I have done so far. Exciting stuff.

More will follow about that later, for now – what are these books that have made such an impact?

Collapse by Jared Diamond
Diamond is the writer of another fascinating book (Guns, Germs and Steel) which is a recommended read as well – but for me this book is the more interesting of the two. In this book Diamond describes what made the difference for societies to either be successful or to fail. Often, according to Diamond, the reasons behind this are in part environmental and also dependent on how societies work with their natural environment. He sketches how caring for and maintaining the natural environment properly is a critical factor in the survival of a society. Fascinating reading, which gave me a much better understanding of longer term effects of environment and of not handling it as well as we should.

No Impact Man by Colin Beavan
Despite the title of this book, this book – and the one-week experiment that resulted from it, the No Impact Project – has probably influenced my personal life and the choices I make the most. The book is the result of one year living with no (or at least very minimal) impact on the environment in the middle of New York City. Colin Beavan’s year goes to a lot more extremes than is considered comfortable living, but it also shows what is possible. By participating in the No Impact Project (twice, and it’s starting again in the Netherlands in spring 2013) I’ve discovered much more about the possibilities of changes in your own behaviour towards a more sustainable way of living than I expected.

Prosperity without growth by Tim Jackson
Is continuous economic growth possible within the limits of the earth? Jackson argues that it isn’t , but he also argues that economic growth is not necessary for prosperity. However, this does require major changes in the current economic system, and in this book he explains some of them and how to make them work. Persuasive reading, and especially recommended if you are interested in the economic & business side of sustainability.

The necessary revolution by Peter Senge, and others
This is another book which looks at the more economic side of sustainability and the changes needed both to make business more sustainable but also how this will impact the rest of society. It looks at creating partnerships across society and how this will enable change to happen. Interesting ideas, and it contains good examples and best practices.

The ecology of commerce by Paul Hawken
This is an older book on the basics of what sustainibility means for business, and how business can work with this. Still worth a read.

With the amount of books written about CSR & sustainability of course there is a lot more out there. For the moment however, these are my personal favourites – and of course I am always curious to hear your’s. What is missing from this list?