India’s new CSR law sparks debate among NGOs and businesses
India was the first country in the world to mandate corporate social responsibility when, on 1 April this year, the government implemented new CSR guidelines requiring companies to spend 2 percent of their net profit on social development. However, the recently published ‘Mumbai Declaration’ has highlighted various issues with the guidelines. The joint declaration was issued following the Global Reporting Initiative‘s (GRI) Sustainability Reporting for Sustainable Development conference. It states that the 2 percent ruling could lead to forced philanthropy, ‘tick box’ behaviour, tokenism or even corruption, and masking of data to avoid having to comply. “A recent government bill stating that 2 percent of company’s net profit must be devoted to corporate social responsibility may be welcome, but that still leaves 98 percent. Indeed, the rest of the business also needs to be sustainable”, the report states. Concerns have also been voiced by Azim Premji, head of IT services firm Wipro, part of the global Dow Jones Sustainability Index. “My worry is the stipulation should not become a tax at a later stage … Spending 2 percent on CSR is a lot, especially for companies that are trying to scale up in these difficult times” he said. (Guardian)
Chinese carmakers lead foreigners on social responsibility
Chinese automakers are doing a better job than their foreign counterparts in corporate social responsibility, according to a recent report by the China Association of Automobile Culture. Based on a survey of 39 companies in China, the report says that 87.5 percent of state owned enterprises (SOEs) have made social responsibility part of their development plan, 12.5 percent more than foreign companies. It also found that 87.5 percent of SOEs have established departments dedicated to social responsibility programmes, compared to 75 percent of overseas. The report also says that the most important recipients of CSR programmes, according to respondents, are investors, customers and communities. Guo Jun, a legal expert at the All China Federation of Trade Unions, said while some automakers are doing a relatively good job, others should deepen their understanding of social responsibility. “Sometimes companies made donations not out of responsibility but hoped it would work as advertising”, he said. (China.org)
Environment
Study: Air traffic growth set to undermine carbon reduction measures
Even if substantial carbon reduction measures are put in place, growth in air traffic means that aviation emissions will continue to increase, according to a study by the University of Southampton. Demand for flights is expected to continually increase, with the European Commission predicting that global international aviation emissions will increase by 70 percent between 2005 and 2020. The paper argues that in addition to efforts to improve fuel efficiency and carbon reduction measures, “to achieve an overall reduction in CO2 emissions, behaviour change will be necessary to reduce demand for air-travel”. In order to reduce demand, the report proposes a “yearly 1.4 percent increase on ticket prices”. It states however, that moves to suppress demand would not be welcomed by the airline industry and governments, noting that the International Civil Aviation Organisation lacksthe “legal authority” to work effectively, and arguing that a global regulator “with teeth” is needed to enforce effective carbon reduction measures. (Blue & Green Tomorrow)
Environment group welcomes Scotland’s green pledge
Friends of the Earth, an environmental campaign group, has welcomed a document setting out what the Scottish Government claims are the environmental benefits of independence. Scottish climate change minister Paul Wheelhouse unveiled the constitutional paper this week. The publication, ‘Scotland’s Future and the Environment’, contains five “green gains” which independence would bring. These include enshrining environmental protection in a written constitution, creating a nuclear-free nation, ensuring a fairer share of EU funding for environmental schemes, direct representation in Europe to secure fairer funding and a seat at the global top table to show international leadership in tackling climate change. Wheelhouse said: “Only independence can empower Scotland’s nature for the benefit of all. Enshrining environmental protection in a written constitution is at the heart of our vision for an independent Scotland”. Richard Dixon, director of Friends of the Earth Scotland, welcomes the commitment: “A constitutional guarantee gives the highest possible legal status for protecting and enhancing the environment and acting on climate change”, he said. (Third Force News)
Corporate Reputation
New York prosecutors charge payday lenders with usury
A dozen companies and their owner, Carey Vaughn Brown, were prosecuted this week – charged with enabling payday loans to New Yorkers that flouted the state’s limits on interest rates. Cyrus R. Vance Jr., the Manhattan district attorney, found that Brown had assembled “a payday syndicate” that controlled every facet of the loan process – from extending the loans, to processing payments, to collecting from borrowers behind on their bills. Prosecutors claimed that the companies’ goals were to make expensive loans even in states that outlawed them. Brown incorporated the online payday lending arm, MyCashNow.com, in the West Indies, a tactic that prosecutors say was intended to try to put the company beyond the reach of American authorities. The case also highlighted the lengths Brown’s companies went in scattering operations to avoid the interest rate cap that 15 states have adopted. In New York, usury laws cap loans at 25 percent. However, interest rates on loans tied to Brown’s companies hovered between 350 and 650 percent, prosecutors said. (New York Times)
COMMENTS