If organisations want to be profitable in the future, they need to focus on shareholders, society and the environment simultaneously according to a report published by a group of leading corporate responsibility academics on January 15. A New Mindset for Corporate Sustainability outlines this “triple-pronged strategy” as well as how sustainability can be utilised to build innovation and collaboration across organisations.
It further highlights the ten steps corporations should take to become sustainable:
– Make innovating for sustainability part of the company’s vision;
– Formulate strategy with sustainability at heart;
– Embed sustainability in every part of the business;
– Walk the talk: Emphasise actions, not words;
– Set up a body at board level with the power to make sustainability matter;
– Set firm rules;
– Bring stakeholders on board;
– Use people power;
– Join the networks;
– Think beyond reporting; align all business systems with the company’s vision of sustainability.
The study was based on company case studies including Cemex and Marks & Spencer and the six academics hailed from China, Singapore, Spain, Britain and the US. They included Professor David Grayson, director of the Doughty Centre for Corporate Responsibility at Cranfield School of Management. It was sponsored by Cisco and BT and also forms part of BT’s Bigger Thinking initiative, which aims to stimulate debate that will “challenge the status quo”. Contact Bigger Thinking www.biggerthinking.com/sustainability/innovation
M&S achieves
Marks & Spencer is to receive the Gold Medal for International Corporate Achievement in Sustainable Development from the World Environment Center for its Plan A programme. The announcement was made on December 5, and the UK retailer will receive the award on May 9 in Washington DC. Plan A is Marks & Spencer’s 100-point five-year sustainability initiative, which aims to engage customers and suppliers in combating issues such as climate change, waste, the protection of natural resources and ethical trade. The WEC is a global organisation that works towards the advancement of sustainable development through the business practices of member companies and partnerships with governments, multi-lateral organisations, NGOs and other stakeholders.
The Prince of Wales announced the findings of his year-long Accounting for Sustainability Project on December 12, and through this produced two tools to help organisations become more sustainable.
These are:
– A free website resource providing guidance, systems and examples of good practice ( www.sustainabilityatwork.org.uk ).
– A ‘connected reporting framework’ that helps organisations take a new approach to reporting sustainability more clearly, concisely and comparably. Sainsbury’s, Aviva, EDF Energy, HSBC, BP and BT are all using one or both of the tools. Contact The Prince of Wales www.theprinceofwales.gov.uk
Alcan prize for sustainability
A centre for sustainable development based in India has won the Alcan Prize for Sustainability 2008. The Utthan Centre for Sustainable Development and Poverty Alleviation will receive the $1m prize, which is awarded annually to an organisation that demonstrates a comprehensive approach to addressing, achieving and further advancing economic, environmental and social sustainability. The prize started in 2004 and is jointly developed, facilitated and managed by The Prince of Wales International Business Leaders Forum. Rio Tinto Alcan is a global aluminium company.
Contact Alcan Prize for Sustainability http://alcanprizeforsustainability.com
ACCA Awards for Sustainability Reporting
UK telecommunications company, BT, won the award for best report at the 2007 ACCA Awards for Sustainability Reporting: Rewarding Transparency in December. Unilever, the global consumer products company, was runner-up. The other awards were as follows:
– Commendation for reporting on materiality: BT
– Commendation for transparent disclosures on public policy, lobbying and taxation: Vodafone
– Commendation for transparency in approach to assurance: BP
– Joint commendations for SME reporting: Shared Interest; Traidcraft
– Winner, electronic media commendation: BHP Billiton
– Runner up, electronic media commendation: Centrica
The awards aim to recognise the efforts of organisations in reporting environmental, social and sustainability information and further aim to raise awareness around corporate transparency issues.
Contact ACCA 020 7059 5000www.accaglobal.com
100 most sustainable companies in the world
Innovest, the financial firm, launched the list of the hundred most sustainable corporations in the world at the World Economic Forum 2008 in Davos. The list includes companies such as Yell, Diageo, Lafarge, Sainsbury’s, Centrica and Nike. Thirty-two of the businesses that appeared on the list last year are not included this year and some of these Google, HSBC and Scottish and Southern Energy. A Chinese company – MTR Corporation, which runs Hong Kong’s mass transit system – was included for the first time. The list is drawn up by assessing how effectively corporations managed environmental, social and governance risks relative to their industry peers. Contact Innovest www.innovestgroup.com
In brief
More than 100 companies have signed up to the National Business Travel Network, the government’s network of businesses committed to promoting sustainable travel as a cost effective way for corporations to address climate change while remaining profitable. The NBTN forms part of ACT ON CO2, the cross-government climate change campaign. www.nbtn.org.uk
Pharma: A moral minefield
November 20 2007
by Francesca Wakefield
The 2005 Kaiser Health Poll Report found that 70% of people questioned thought pharmaceutical companies put “profits ahead of people”. The same year the industry found itself the unwilling star of the film, The Constant Gardener. Francesca Wakefield considers how an industry with a mandate to preserve life and alleviate pain has found itself portrayed as the arch enemy of social good.
The allegations
The controversy surrounding pharma is manifold, relating to drugs trials, political lobbying, pricing, patents and access to drugs not to mention research and development. On October 31 this year, Consumers International, the global confederation of consumer organisations, published a report – Drugs, Doctors and Dinners (see News A) – on the sales techniques (free motorbikes, not pens) pharmaceutical companies allegedly use in the developing world to encourage doctors to prescribe their products.
Pharma’s most recent PR casualty was Novartis after it tried, and failed, to put legal pressure on India to change its patenting laws to include incremental improvements as patentable. Critics argue that the move was an attempt to deny vital medicines to patients who could not afford to pay – an increasingly common accusation leveled at an industry whose profits run into the billions.
The issue of access to medicines is arguably the most pressing corporate responsibility issue facing the pharmaceutical industry today. International medical charity Médecins Sans Frontières reported in 2001 that while people in developing countries make up about 80% of the population, they only account for 20% of medicine sales worldwide. The same year 39 pharmaceutical companies notoriously filed a lawsuit against Nelson Mandela’s South African government over the enactment of a law that allowed generic drugs to be imported in an effort to address the HIV/Aids pandemic. Global outrage ensued and they were subsequently forced to drop the case, which the CEO of GlaxoSmithKline (GSK) – one of the companies involved – admits was a “public relations disaster”.
In another high profile scandal, Pfizer was alleged to have conducted illegal drugs trials on Nigerian children during the 1996 meningitis outbreak. Pfizer lacks written authority from the parents and was accused of forging local authority permission for the trial. A case against Pfizer was thrown out of US courts in 2005, only for an illusive Nigerian report to have emerged last year accusing Pfizer of violating international law.
The defence
Pharmaceutical companies are not charitable foundations. Research is expensive and competition fierce, GSK notes that the dilemma is to find ways to meet global healthcare challenges while remaining competitive and profitable. In pharma’s defence, a 2005 PriceWaterhouseCoopers report declares that what is being expected of the pharmaceutical industry “is a call for action far beyond the mandate of the ordinary profit-making company”.
And yet to various degrees, the industry is responding. GSK supports preferential pricing arrangements for developing countries and champions voluntary licensing agreements, whereby generic companies are given the rights to produce patented drugs. The company also works with NGOs and international bodies to research and produce vaccines and treatments for diseases that primarily affect developing countries, such as malaria, TB and HIV/Aids – the top three WHO priority diseases.
The accusations against Novartis following the lawsuit in India are laid at the door of a company that claims to provide the contested drug to 99% of patients for free, and who was ranked the healthcare sector leader in the 2006 Dow Jones Sustainability Index.
While the decision to take legal action against the Indian government was arguably a lesson in public relations Novartis didn’t need to learn, it does not necessarily make the company socially irresponsible. Pfizer meanwhile maintains that they had “verbal consent” from the parents and were merely acting altruistically in a bid to save lives.
The verdict
As contentious industries go, the pharmaceutical business is a moral minefield. Charged with reconciling the dual aims of saving lives and making a profit, pharma doesn’t exactly have it easy when it comes to being seen as socially responsible. While the industry has undoubtedly made some mistakes, the ultimate defence is that if pharma did not charge high prices, there would be no incentive to research new medicines. But, as some of the examples detailed here show, this is not a black and white issue. Progress is still patchy, but companies are starting to take responsibility where they can and in some cases are making a real and positive difference.
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