In a year of turmoil, what were CSR's key events?January 2011
EP asked a selection of senior people in CSR and SRI to identify the most significant thing to happen in the world of responsible business during 2010
Jon Woodhead, director , Two Tomorrows
Any recollections of 2010 cannot fail to be dominated by BP's tragic accident in the Gulf of Mexico, the Pike River Coal tragedy in New Zealand, and the MAL tailings spill in Hungary. The concept of 'social licence to operate' has been around for a long time, but these events brought it into stark relief once more. We can expect to see increased pressure on companies to make a more convincing and understandable explanation of their activities. Did Deepwater Horizon change public attitudes towards the human and environmental costs of oil? I doubt it, but showing the 'sustainability return on investment' is set to become a key communications challenge for many in 2011.
Seb Beloe, head of SRI research, Henderson Global Investors
The rejection of Proposition 23 in the US, which would have rescinded California's legislation on climate change, was I believe a seminal moment. This was the first time there was effectively a plebiscite on climate change law in the US - and the result was a resounding endorsement of the legislation by a margin of more than 2-1. In a reversal of the normal politics, a large proportion of the investor and business community backed the legislation - which is testament to the growing significance of the low-carbon business lobby.
Stephen Hine, head of responsible investment development, Eiris
One of the key, but not necessarily well noted, developments in 2010 was the surge of interest in SRI/ESG/CSR in emerging markets. A number of new sustainable indices from emerging market stock exchanges were announced, including ones in Turkey and Mexico. The Emerging Market Disclosure Project, of which Eiris is a member, has seen investors co-operate to encourage better ESG disclosure - and with evident success. Governments in these regions are also taking initiatives to require corporate responsibility reporting and are looking at ensuring stock exchange listing rules encompass ESG reporting.
Alison Holder, senior policy adviser, development policy and private sector, Save the Children
What stood out for me was the announcement in August that Mitra Forouhar, a human rights adviser in the CSR department at Statoil, had filed a lawsuit against the company alleging that she was hired on false pretences - and that the corporate structure of Statoil made it impossible for her to implement the human rights policies she thought she was hired to develop. Whatever the facts of this case, I think it signals a trend that companies should expect to be more rigorously and openly held to account - even by their own employees - for the corporate responsibility commitments they make.
Rachel Woods, head of corporate & brand reputation, Fishburn Hedges
I'd pinpoint the exponential rise of social media in 2010. A number of corporates have come under fire, whether from Wikileaks, a fake Twitter feed or a Facebook group whose sole aim is to pick holes in a company's sustainability policies and performance. In a world in which news travels as fast as someone can re-tweet it, even the most carefully tended corporate reputation can be destroyed in a matter of hours. That said, corporates who use social media to their advantage can reap the reputational rewards.
Hans-Ulrich Beck, global director, research, Sustainalytics
There was great momentum during 2010 in the area of investor engagement. I definitely see signals that responsible investors are taking this further, through new coalitions and collaborative engagement. There are also interesting discussions about applying engagement strategies to countries whose bonds are held in portfolios. This raises very interesting questions on the roles and responsibilities of responsible investors vis-a-vis sovereign states.
Plinke Eckhard, head of sustainability research, Bank Sarasin
One of the most important events in 2010 was the BP oil spill. It showed several things: first, that oil extraction is getting more risky and expensive the more we approach 'peak oil'. Second, that environmental risks can have a very significant impact on the financials of companies (the BP share lost 50 per cent after the accident). Third, that although BP didn't act responsibly enough, the risks of deep sea drilling also apply for the oil industry as a whole, and they are largely industry-specific. That's why, for the purpose of SRI, sustainability standards for companies in oil and other high-impact industries should be stricter. Our SRI approach is based exactly on this principle, which is why - unlike a number of SRI funds - we weren't invested in BP.
Kristin Vorbohle, CSR consultant, akzente kommunication
The world’s third largest oil company changes its logo to a green-yellow sun, its slogan from British Petroleum to 'beyond petroleum' and then causes the world’s largest environmental disaster of the 21st century. The conclusion is clear: BP did window-dressing. But what’s wrong with 'first talking, then walking'? Nothing, if the company is acting within an acceptable timeframe. Companies do create facts by communicating – this is an important instrument for CSR-Managers to accelerate CSR-activities in their company. But from the moment companies start to communicate they need to be responsive to problems, transparent in their actions and honest about their progress if they are to remain credible.
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