csr

Global Compact Critics is an informal network of organizations and people with concerns about the UN Global Compact. It appears that UN Secretary General Ban Ki-moon also has concerns about the Compact in its current incarnation as last week at the World Economic Forum he called for a new version of the initiative called Global Compact 2.0.

The Global Compact Critics blog is a place for individuals to gather and share information and opinions about the program. Yesterday one of the contributors posted the piece about Ban Ki-moon, stating: “The key, according to Mr. Ban, is credibility – which Compact participants would have to earn and maintain through annual Communication on Progress reports. Recent polls – for example the Edelman Trust Barometer – show that only a third of people in the world trust business to do the right thing: “half what it used to be,” Mr. Ban said. And not only do Global Compact participants need to nurture credibility, so too does the Compact itself.”

Indeed in the rush for corporations to jump on the CSR bandwagon, there is a big question of which corporations are merely putting up window dressing and which ones are fully committed to placing people over profit. A company’s participation in the UN Global Compact is a good sign, but it is not a green light, because it appears that for some corporations it is a greenwash. Click here for an example from the Global Compact Critics website.

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The world’s second-largest retailer after Wal-Mart, France’s Carrefour operates thousands of stores around the world. The company is unable to build new stores in its homeland due to regulations protecting smaller stores, so Carrefour has been expanding through acquisitions at home and abroad. The French retail behemoth is particularly focused on China, where it is the country’s largest foreign retailer, with about 90 “hypermarkets” in 20-plus cities.

In December there were protests in China over the fact that French president Sarkozy met with the Dalai Lama. This is the latest in tensions between France and China over Tibet. As reported by the UK’s The Guardian, in April 2008 Nationalist protests against Carrefour spread across China, with thousands demonstrating outside stores over the west’s stance on Tibet. Carrefour appeared to be taking the blame for France as a whole after a protester in Paris tried to snatch the Olympic flame from a paralympian during the relay, and because of a rumor that the supermarket had donated money to the Dalai Lama. Carrefour says it has never given money to any political or religious cause.

Carrefour has established solid Corporate Social Responsibility Policies including a comprehensive “Charter for Commitment to Protect Human Rights.” The company is in a tricky situation. On the one hand, its continuing growth in China is key to its growth and financial success, and on the other hand the company is indirectly participating in one of the greatest human rights travesties of all time: the gradual and violent eradication of Tibetan culture by the Chinese. Surely this is at odds with the company’s commitment to protect human rights.

What do you think?

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Germany’s Deutsche Bank, one of the largest banks in the world, recently announced the establishment of the “Deutsche Bank Middle East Foundation,” an initiative focused on advancing the Bank’s Corporate Social Responsibility (CSR) program in the region.

Dr. Josef Ackermann, Chairman of the Management Board and the Group Executive Committee, said: “Our decision to establish the Deutsche Bank Middle East Foundation stems from our deep-seated belief in the necessity of companies contributing to the societies in which they operate.  Our commitment today reflects a strong and long-standing commitment to the Middle East and its people, and our desire to positively contribute to shaping its future, and in turn, our own.”

The Deutsche Bank Middle East Foundation will focus on funding investments in education, community development, sustainability, and volunteering in the Middle East North Africa region.

Henry Azzam, Deutsche Bank’s CEO in the Middle East and North Africa, said “We are very pleased to establish the Deutsche Bank Middle East Foundation as a stepping stone for an active regional CSR program. Our aim goes beyond a mere financial commitment; we want to build social capital by creating opportunities, fostering talent and ensuring long-term viability in the region.”

This announcement comes at a time when the Arab-Israeli conflict is once again in the spotlight and it exemplifies a need for corporations that operate in sensitive regions to go above and beyond in their CSR efforts. We applaud Deutsche Bank’s initiative and we look forward to hearing details about the Deutsche Bank Middle East Foundation.  

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Editor Erika Yost reports on two companies in this week’s 2N2 report: French technology company Alcatel Lucent and Japanese auto parts maker Freudenberg NOK.

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Early this year Crédit Agricole joined forces with Grameen Bank, the pioneering provider of microfinance, to support fledgling microlenders around the world. The French banking group said it would inject €50m to endow a foundation that will work with Grameen to provide financial guarantees and expertise to help launch microfinance institutions. According to the Grameen Crédit Agricole Microfinance Foundation website, “A microfinance institution (MFI) is a local entity that provides small-scale financial services (credit, savings, insurance) to people with no access to the traditional banking system, by giving them the resources they need to develop a business.”

Founded in 1983 by Muhammad Yunus, laureate of the 2006 Nobel Peace Prize, Grameen Bank (village bank) is known world-wide for its efforts to eradicate global poverty. Through Grameen Trust, Grameen has developed its model in 38 countries so far. Overall, $6bn has been lent to 7 million people. In 2007, The Banker magazine named Crédit Agricole Global Bank of the Year for its socially and environmentally responsible policies.

The partnership is a poignant illustration of how a corporation, Crédit Agricole in this case, can go above and beyond in their Corporate Social Responsibility (CSR) efforts. Competition among corporations to outdo one another in CSR initiatives would be healthy competition indeed. We will monitor the progress of the Grameen Crédit Agricole Microfinance Foundation and hope that the changes the foundation will engender are real and sustainable.

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In this report, Aegon and Roche receive their comeuppance as responsible public companies.

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Is it just me or does anybody else find corporate ad campaigns eschewing social responsibility a bit duplicitous?

I was standing on the subway platform in Washington DC this weekend. Looking around, I saw this ad sponsored by Chevron.  They have been waging this campaign on billboards and television for a while now touting all things sustainable: save energy, turn off lights, drive a hybrid car, and so on.  These are nice virtues that we can all agree with. The problem is I am being told to be more environmentally responsible by a FREAKING OIL COMPANY!

Here is my question: Do campaigns and non-core business activities like this serve the public interest or is this really just a bad publicity stunt that wastes money?

From a corporate social responsibility perspective, I want to see companies behave better and be responsible to all stakeholders. The problem is that I often notice that companies choose form over substance: a corporate ad campaign condemning energy use or smoking cigarettes (Chevron, RJR), charitable giving while destroying social infrastructure (Wal-Mart), helping children while undermining public health (McDonalds).  For those of us looking at and evaluating companies from a social and environmental perspective, it’s easy to take a quick look at what a company says it does and give them a thumbs up or down. Sustainability reports, charitible giving and codes of conduct are nice to see but at the end of the day, does it really matter? Isn’t what companies “do” as companies the primary if not the only factor by which we should measure their true responsibility?

I invite your comments on this question. I would also like to hear from you about examples of what you would consider corporate social hypocrisy. Email me at info@jmr-financial.com

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In this edition of our weekly video, 2N2, Rob Kellogg discusses two companies: Banco Santander, a Spanish banking company and BAE Systems, a U.K. based aerospace and defense company.

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You might think that a Danish Bank would have long been squeaky clean in terms of Corporate Social Responsibility (CSR), but Danske has really been sudsing itself up in recent months. The fact is that the bank probably was already “clean” relative to many others around the world, but under the close scrutiny of a highly vigilent populace, they have been pushed to take a number of signifigant measures.

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