The Corporate Responsibility Code Book. Revised Second Edition

The Corporate Responsibility Code Book. Revised Second Edition

 

By Deborah Leipziger

 

Publisher: Greenleaf Publishing

ISBN 978-1-906093-39-6

 

This review first appeared on CSRwire.com on 29th September 2010

 

Description

 

The field of corporate responsibility and sustainability has changed radically since the publication of the first edition of The Corporate Responsibility Code Book in late 2003. This second edition of the book reflects these changes, with the inclusion of a raft of new initiatives, revisions reflecting the improvements made to many others and the elimination of several initiatives that have been outgrown by developments.

 

The second edition includes:

• New initiatives such as the UN Principles for Responsible Investment, the Equator Principles, ISO 26000, and the Extractive Industry Transparency Initiative;
• Updated versions of the UN Global Compact and the Global Reporting Initiative;
• The addition of codes and principles that have become more relevant, such as the ILO Code of Practice on HIV/Aids;
• The description of linkages between initiatives and the complex web of alliances that have grown in the field of CR as it has matured.

The Corporate Responsibility Code Book is a guide for companies trying to understand the landscape of corporate responsibility and searching for their own, unique route towards satisfying diverse stakeholders.

 

Commentary

 

You work in the field of CSR or sustainability. Do you need the Code Book? Let's check. Here is a little quiz:

 

1. Launched in 1977, whose Declaration of Principles focusing on Human Rights is Tripartite?

 

2. Which draft CR Standard defines "stakeholders" differently to the traditional definition of those who impact or are impacted by an organization?

 

3. Which framework, developed in Sweden, addresses the systematic causes of environmental problems and saved US$120 million for Interface, who was the first US company to implement the framework?

 

4. Which set of principles, developed in 1989, cannot be unilaterally endorsed by a company but require a two way process of dialogue and engagement?

 

5. Which global standard for transparency addresses both governments and companies?

 

The answers are at the bottom of this review. Got fewer than 5 correct? You need The Code Book. Got 5 out of 5 correct? You still need The Code Book. These 5 questions are just some of the interesting data-bytes you can find in the second edition of the 535 page The Corporate Responsibility Code Book, revised in 2010, to include new initiatives such as the UN Principles for Responsible Investment and King III, the King code on Corporate Governance issued in September 2009. But the value of this book is not in these individual references to individual codes. The true value is the entire collection, all in one place, of the leading initiatives which serve as a basis for the way in which businesses approach, mainly voluntarily, the whole field of CSR and sustainability. All the codes mentioned in the book are reproduced in full in 10 sections: global initiatives, human rights, labor rights, health issues, combating corruption, company codes of conduct, sectorial and regional agreements, and codes focused on implementation standards. Distilling thousands of codes and standards into 34 key tools, this book is a unique reference manual, categorizing the codes and frameworks by focus (process or outcome), by method of development (unilateral, bilateral, multilateral), by scope (key issues such as corporate governance, environment and human rights), by stakeholder focus (trade unions, governments, supply chain, etc.), by sector and by region. Each code, standard or framework, presented is preceded by a discussion which typically includes the background and context in which the code was developed, its strengths and weaknesses, the companies to which the code applies, the questions the code addresses, and insights relating to the "promise and the challenge" of each. Whilst mostly quite brief, particularly in the analysis of strengths and weaknesses, these commentaries provide important insights for those working with the codes or considering adopting one framework or another.

 

Such codes have value beyond the written documents that we can read in The Code Book. Author Deborah Leipziger wites: "The codes and principles described in this work have served to institutionalise dialogue and create for a discussion among actors who had never been in discussion of between whom there was hostility." The process of developing such codes, as anyone who works in or with organizations knows, is just as important as the finished document. Dialogue, engagement, new ways of thinking, generating consensus, working through the detailed nuances of definitions, approaches and objectives are all in themselves valuable actions that advance the cause of CSR and sustainable practices in business. The new ISO26000 draft standard, for example, has taken 5 years to develop with 92 countries and 42 organizations participating in the process. Whilst I am not convinced this particular final product actually brings any new value to our body of knowledge, I am sure these discussions have served to reinforce understanding and commitment.

 

In reviewing this book, I cannot help but look beyond the codes and frameworks themselves. The codification and standardization of CSR and sustainability is only a first step. The big leap comes when these codes are widely subscribed to by their target audience and are effectively implemented. The Code Book refers to some of the ways in which some of these codes have gained critical mass, for examples, the UN Global Compact or the Global Reporting Initiative, which have become truly global tools. However, any company adopting any such code needs robust internal processes and strategies, policies and plans to uphold the commitments that adherence to the codes require. Deborah Leipziger discusses in The Code Book the challenges of actual implementation of frameworks such as the UNGC, the GRI and the Equator Principles, and the criticisms that have been leveled at these frameworks because of companies who declare support for these processes and do not follow through. Over 1,000 companies have been delisted from the UNGC for non-compliance with the communication requirements. Some of the codes have overseeing or enforcement mechanisms, such as the Extractive Industries Transparency Initiative, which requires an Independent Validator in each country; or the OECD Guidelines for MNEs, which require an NCP (national contact point) in each member state. I suspect codes that have been developed with a high degree of multi-lateralism and partnership stand a higher chance of ensuring practical effective application because of the common commitment and visibility of such efforts. Some evolve into leading industry standards such as the principles and criteria for sustainable fishing from the Marine Stewardship Council; however, overall, the cynicism these codes must often contend is less of a statement about the codes themselves, and more about the quality of implementation. Individual corporate codes of conduct (two examples are highlighted in The Code Book include the Shell General Business Principles and the Johnson & Johnson Credo), valuable and necessary though they may be, are often not applied with enough downstream organizational thinking or rigour of external verification that facilitate making these codes a reality in business and drivers of required transformation. According to Deborah Leipziger: "Without credible systems for verification and certification, stakeholders may become increasingly cynical about corporate responsibility." The value of this book, then, is in assisting organizations to understand and assess the relevant frameworks for their business, industry, sector, region or issue at hand. The value for people and planet is when companies adhere to these codes in a systematic and consistent way.

 

I cannot begin to imagine the amount of work author Deborah Leipziger invested in order to bring The Code Book and its revised second edition to life. It is truly a masterpiece in the landscape of CSR and sustainability reference books. This is a book which will never move out of arms reach, as far as I am concerned. Please don't ask to borrow my copy.

 

Answers to Quiz:

 

1. The ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy

 

2. ISO26000 Draft Standard

 

3. The Natural Step

 

4. The Ceres Principles

 

5. The Extractive Industries Transparency Initiative

 

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Author of CSR for HR: A necessary partnership for advancing responsible business practices  Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Giving Voice to Values

Giving Voice to Values: How to Speak Your Mind when You Know What's Right


By Mary C. Gentile

Publisher: Yale University Press ISBN-13: 978-0300161182

This review first appeared on CSRwire.com on 23rd September 2010

Description

How can you effectively stand up for your values when pressured by your boss, colleagues, customers or shareholders to do the opposite?

Educator Mary Gentile empowers business leaders with the skills to voice and act on their values and align their professional path with their principles. Her book, Giving Voice to Values, is inspired by a curriculum Gentile launched at The Aspen Institute with Yale School of Management, now housed at Babson College, with pilot programs in over 100 schools and organizations on five continents.

Challenging the assumptions about business ethics at companies and business schools, she argues that often the issue isn't distinguishing what is right or wrong, but knowing how to act on your values despite opposing pressure. Drawing on actual business experiences as well as social science research, Gentile offers advice, practical exercises and scripts for handling a wide range of ethical dilemmas. Published by Yale University Press, Giving Voice to Values is an engaging, innovative and useful guide that is essential reading for anyone in business.

Commentary

There is something, I think, that most people overlook in training on ethics and the assimilation of values in business, and that is how you actually put the theoretical knowledge in to practice. It's a little like knowing the calorie count of all the food on your daily menu, but having difficulty actually getting started with, and maintaining, that low-calorie diet. Giving Voice to Values, then, is a habit, perfected by practice, not simply a state of mind. This is the focus and unique value that this book, by Mary C. Gentile, a ten year veteran of Harvard Business School and a pioneer in the fields of business ethics and diversity management, brings to the table.

"Whistle-blowing," which is what all corporate Codes of Ethics require from employees, is a term which has a certain negative connotation. It tends to make us think of telling tales, going behind people's backs, in an almost cowardly and sneaky way. Yet ethical behavior, I believe, never goes unnoticed. There is always someone in any business organisation that knows what's going in, even if they have not been directly complicit in unethical behavior. The success of corporate ethics rests with the individual employee who is prepared to speak up for the values of the business, which hopefully coincide with her or his own personal values, even when this means confronting or whistle-blowing on the behavior of colleagues. Most of us that work in the field of ethics know that getting employees to speak up when they suspect colleagues of unethical behavior is the hardest aspect of any program, even harder than standing your ground when asked to go against your values. The organizational context that enables or disables the voicing of values is not always apparent and can influence individuals in many ways. This book is a welcome and refreshing addition to the many books out there that have been written on the subject of ethics in business because it focuses on how to voice values, and not what values to voice. It's not about persuading us that certain values are more appropriate than others, it's about helping us ensure we are capable of acting on our chosen values. In any organisation, writing the Code of Ethics is the easy bit, publishing it to all employees is also not complex, even conducting training or producing on-line primers on ethics is not so challenging. Truly embedding a culture of ethics which compels every individual to take personal responsibility and act ethically in every situation is what makes it all work. This book offers practical advice on how to "build the muscles" to speak and act, plan "voicing values," "craft scripts" and generally be prepared for a range of situations in which bold action is required. As the author says, "It is not about deciding what the right thing to do is, but rather about how to get it done."

Mary C. Gentile starts out with examples from a study conducted at Columbia Business School in which incoming MBA students were asked to write about a time when they had experienced a conflict between their values and what they were asked to do in the workplace. Whilst the stories were often similar (adjust billable hours, inflate or deflate numbers, misstate time needed to provide services etc), the responses were often different, highlighting discomfort with such conflicts and the need to be creative in finding the right response. This made me think of a popular reality TV program I enjoy watching, called "What Would You Do?" in which the reactions of unsuspecting members of the public are filmed, as they are unwittingly exposed to scenes involving a values conflict, which are fictitious and staged by actors. These may be something to do with discrimination, dishonesty, violence or abuse. Many walk on by without reacting. Some get stuck in and fight the good fight. Even those who do not react are interviewed and almost always, they knew something was wrong, wanted to get involved but were stopped by fear or other inhibitions.

Considering these scenarios ahead of time, and planning your response ahead of time to the question "What would you do?" can make the difference between speaking up and walking away. The author makes a very strong case for this in Giving Voice to Values.

Mary C. Gentile examines the underlying "attitudes, beliefs and capacities that enable our efforts to voice and act on our values," the types of values that are widely shared (and we generally know what these are), the ability we have to make a choice to confront value conflicts, and ultimately, the normalization of such value conflicts, so that we see them as part of our everyday job, and are prepared as far as possible for the types of corners they force us into. Thereafter, in a chapter entitled "Finding my Voice," the author describes several "enablers" or points to consider in how to formulate your own personal approach to dealing with values conflicts, in a way you are comfortable with. A series of appendices provide primers and exercises to help you develop those value conflict management muscles.

Flavored with a range of anecdotes from the author's vast experience, this book was inspired by a program the author developed at the Aspen Institute together with Yale School of Management. It is easy but certainly not light reading, and it targeted at us, as individuals, rather than at those who develop organizational processes. The central argument is persuasive, and the logic is sound. I therefore recommend this book to everyone who works in a business or leads people in business, or more simply put, I recommend it to everyone. Period.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights

Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights

By Thom Hartmann

Published by Berret Koehler Publishers, 2010
Second revised and expanded edition ISBN 978-1-60509-559-2

This review was first published on CSRwire.com on 20th September 2010.

Description

Did Supreme Court sell out America's citizens in the nineteenth century, with consequences lasting to this day? Is there a way for American citizens to recover democracy of, by, and for the people?

Thom Hartmann takes on these most difficult questions and tells a startling story that will forever change your understanding of American history. Amongst a deep historical context, Hartmann describes the history of the Fourteenth Amendment created at the end of the Civil War to grant basic rights to freed slaves and how it has been used by lawyers representing corporate interests to extend additional rights to businesses. Prior to 1886, corporations were referred to in U.S. law as "artificial persons." But in 1886, after a series of cases brought by lawyers representing the expanding railroad interests, the Supreme Court ruled that corporations were "persons" and entitled to the same rights granted to people under the Bill of Rights. Since this ruling, America has lost the legal structures that allowed for people to control corporate behavior.

Commentary

In 2009, "the transnational pharmaceutical giant Pfizer pled guilty to multiple criminal felonies. It had been marketing drugs in a way that may well have led to the deaths of people … [Pfizer] paid a $1.2 billion 'criminal' fine to the U.S. government … as well as an additional $1 billion in civil penalties… None of its executives… saw even five minutes of the inside of a police station or jail cell … in the autumn of 2004, Martha Stewart was convicted of lying to investigators about her sale of stock in another pharmaceutical company. Her crime cost nobody their life, but she famously was escorted off to a women's prison. Had she been a corporation instead of a human being, odds are there never would have been an investigation."

This punchy opening of this surreal book by Thom Hartmann gets you hooked from the very first line. It's true. What are corporations if not the actions of the people who work in them and for them? If a corporation does wrong, simply writing a check to the government doesn't seem to cut it, when the people responsible for the wrong-doing retain their jobs, their pay-checks and all privileges, and avoid punishment under the law. Hartmann explains, in great historical detail, how corporations became "persons" under US national law, with rights equivalent to those of "natural persons" (you and me, flesh and blood, individuals) including the First Amendment right of all persons to free speech, the Fourth Amendment right to privacy, the Fifth Amendment protection against double jeopardy and self-incrimination and the Fourteenth Amendment right to non-discrimination. Moreover, Thom Hartmann, blow by blow, explains how corporations have exploited these rights to advance their own interests, or at least, those of the "persons" who stood to benefit, at the expense of the common good and the people of the United States.

It all began, apparently, in 1886 when the Supreme Court Justice Morrison Waite pronounced judgment in a case of the Southern Pacific Railroad versus Santa Clara country, about the taxation levied on this corporation by the County. The lawyers claimed that the railroad corporation was entitled to the same rights as a "person". The court reporter noted in the written record of the case that, "The defendant corporations are persons within the intent of the clause in section 1 of the Fourteenth Amendment to the Constitution of the United States, which forbids a State to deny any person within its jurisdiction the equal protection of the laws." This written record, Thom Hartmann goes on to show, was actually an error and not the explicit intention of Justice Waite. Nonetheless, this record set the tone and served to legitimize all subsequent claims to corporate personhood for the rest of history until the present day. Further, Hartman postulates that this was all a big conspiracy engineered by the railroad lawyers who stood to make significant financial gain through defending more corporations in this way. The story is as incredible as it is outrageous and has the reader in a state of both disbelief and indignation. Surely the whole basis of corporate law in the US couldn’t have been derived from little more than a mistake? This is quite fascinating and the arguments are succinctly articulated with references to original documents and records of the time. If we are to believe this author, the entire legal infrastructure governing corporations may well have been a complete farce, opening the floodgates for unchecked corporate abuse of the law as it was originally intended.

Hartmann deals with many controversial and poorly understood issues relating to the power of corporations over the human rights of individuals, providing detailed case studies of an array of events and actions in relation to corporations. The reading is riveting, and even though we have heard many of these stories before, the "get to the real truth" approach of the author makes this compelling reading. We read about the events leading to the Boston Tea Party, which was a protest against the power of the East India Company, who had successfully lobbied to support the Tea Act which gave the East India Company full and unlimited access to the American tea trade as well as tax exemptions, thus helping to drive other tea-traders out of business. Hartmann recounts the astounding story of why the Marc Kasky case against Nike's "right to lie" in their marketing materials in the name of freedom of speech was never tried in court. Other chapters include the exposure of issues such as the lawsuit by the Texas beef barons against Oprah Winfrey for commenting that she would avoid eating hamburgers after an outbreak of mad-cow disease, the concentrated corporate ownership of the not-so-free press, corporate support for political campaigns, the limitations of federal authorities to carry out spot checks on businesses to assess health and safety compliance, comparisons of US versus European law and the application of the precautionary principle which is not law in the USA, the use by politicians and companies of Professional Blog Warriors who blast the Internet from all corners to make campaigns more effective, the complication of global corporations doing business across borders, military spending and corporate interests and more. All these stories show how the power of corporations threatens the basis of democracy and the protection of the human rights of "natural" persons. John Ruggie would feel extremely validated, reading this book.

As a non-lawyer, I found this book immensely readable, despite several long legal texts used to provide substance to the author's presentation of the issues. These cases are sometimes so incredible that they defy belief. Thom Hartman is "the (US) nation's #1 progressive radio talk show host" as well as being an award-winning well-respected author of over 21 books (he also works for humanitarian causes). He appears in this book to have conducted thorough research, though make no mistake about his intention: to convince us that we must get our rights back from corporate predators who not only do not deserve them but also abuse them. His concluding chapter offers suggestions as to how we might go about doing this, including references to democracy campaigners and organizations, such as the Community Environmental Legal Defense Fund or ReclaimDemocracy.org. Whether you believe in the conspiracy theories or the "hegemony of corporate personhood", or whether you do not, this book is certainly a recommended read. It is entertaining, using a dramatic story-telling pace to recount history, and very thought-provoking indeed.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict., author of  CSR for HR: A necessary partnership for advancing responsible business practices. Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en

Accounting for Sustainability: Practical Insights

Accounting for Sustainability: Practical Insights


Edited by Anthony Hopwood, Jeffrey Unerman and Jessica Fries

Published by Earthscan, 2010 (paperback) ISBN 978-1-849-71067-1

This review first appeared on CSRwire.com on 10th September 2010






Description

Perhaps the most critical challenge facing business and society generally is to tackle climate change and live within our ecological limits while continuing to enjoy economic prosperity. Key to addressing this challenge is the need for all organizations, public and private, to embed sustainability into their "DNA." Although sustainability accounting has developed in recent years, relatively few organizations have comprehensive systems and procedures to ensure that sustainability considerations are taken into account fully and consistently in decision-making and reporting. This book presents examples of how organizations have used accounting for sustainability tools and principles to embed sustainability into their DNA and includes examples of processes that have been followed to enable sustainability issues to be taken into account clearly and consistently in strategic and day-to-day decision-making and case studies from a range of companies.

Commentary

Integrated reporting. Connected thinking. Total accountability. Embedding sustainable practices. The business case for sustainability. Interconnectedness. Measure what matters. The jargon abounds. The practice does not. Accounting for Sustainability is an attempt to encourage the practice, adding a little more jargon, by proposing a "Connected Reporting Framework" and showing examples of how this has been applied in several organizations including Sainsbury's, EDF Energy, BT, HSBC, Aviva, Novo Nordisk and two non-business organizations, the West Sussex County Council and the Environment Agency.

This book is the outcome of five years of the Accounting for Sustainability (A4S) project started by HRH Prince Charles and supported by a range of sponsors, mostly the big accounting firms. Prince Charles says: "… we cannot have capitalism without capital and … the ultimate source of all economic capital is Nature's capital." The A4S project's challenge is described as ensuring "that sustainability information is included in mainstream reporting and is strategically important so that it forms part of the decision-making process of the business. This differs from much of the current corporate responsibility reporting which is not connected with the business and its strategic thinking." The key to this is integration of business processes and the analysis of how ESG factors influence what businesses do and how this impacts the bottom line in the form of an investment with an ROI or a new business opportunity. By calculating the financial impact of such CSR and sustainability programs, they cannot logically be excluded from financial reporting. This is a move away from sustainability “because it is the right thing to do” and a move towards sustainability as a business case, pure and simple.

The Connected Reporting Framework, "which was developed primarily with the needs of long-term investors and executive management in mind," according to the book, offers a tool for businesses to think holistically about their strategic material issues, establish goals and targets and financial evaluation of social and environmental impacts of business strategy and report in a "Connected Performance" report. Not all of the eight organizations showcased in the book have actually reached the final step of connecting ESG performance with financial performance in a quantified way, though most have had a positive experience through applying the "connected" thinking approach.

The book, after an initial introduction to the rationale for the A4S project and a detailed description of the framework, provides case studies written by a range of (mainly) accounting and finance academics, following interviews and interactions with the companies who have tried to work with the Connected Reporting framework. The quality and length of the case studies differ, and the detail provided varies - though all are characterized by a range of quotes and frank, personal perspectives from interviewees and a plain language approach to this jargon-infested subject matter. Rather than trying to sell the framework, the writers seem to try to reflect authentically where each company is on this A4S journey. Sainsbury's, for example, "is cautiously pleased with the A4S decision-making tool." HBSC has adopted the principles in its sustainability reporting, and Aviva has adopted them both in Sustainability and Annual Reporting. At EDF "adoption of the CRF has been a useful intellectual exercise" and influenced internal reporting processes and quantified benefits or other outcomes in external reporting. Novo Nordisk is included as an example of an integrated reporter, though Novo Nordisk does not use the Connected Reporting framework and "non-financial indicators are not currently financialized or connected to financial outcomes." Novo Nordisk uses a Balanced Scorecard methodology.

The case study that I found most impressive was BT, the global telecommunications company, who published a first Environment Report in 1992. The study of the sustainability evolution at BT shows how the Business Case for CSR was developed, the business benefits BT expects from its sustainability programs, the drive to assess materiality and the application of a more quantitative assessment of BT's sustainability performance in financial terms. "In 2009, BT included in its Annual Report for the first time a summary table of the 'Non-financial corporate responsibility KPI's' as a high level connected reporting summary of the most material sustainability issues." This was also included in the BT Sustainability Review. The table, also reproduced in the book, is excellent, and shows both direct and indirect company impacts, most of which are translated into a money figure. Accountants will clearly love this, as will investors and analysts, and indeed, it does remove some of the fogginess we find in many Sustainability Reports around sustainability initiatives. I suspect this rigor will have to be the way forward for most companies, though we should not be tempted to think that every single sustainability initiative can be quantified so precisely and that, if it cannot, it should not be undertaken. If the Connected Reporting framework supports a more strategic, analytical approach to sustainability, then it welcomes an approach for many businesses, albeit one that demands strong internal alignment and discipline.

All in all, Accounting for Sustainability provides a good overview of the challenges and dilemmas companies face as they evolve their sustainability thinking. My surprise was that the case studies served more to share thoughts and experiences rather than to provide absolute proof that A4S and CFR are the only ways to go. The result is more of a discussion and less of a recommendation, leaving some gaps in the actual degree to which the framework actually lives up to expectations. However, in the eight organizations profiled, there seems to be a consensus that the use of this tool did support clearer thinking, planning and communicating around sustainability objectives. These frameworks clearly have a place in the ongoing debate about the future of (integrated) reporting, and therefore, this book is a useful addition to the body of emerging knowledge in this space.

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict. Contact me via www.twitter.com/elainecohen  on Twitter or via my website www.b-yond.biz/en