feb 2013 cover and extract

Corporate ownershipAlternatives that work

Climate change Post Doha, what now?

Cradle-to-cradle The Desso approach

February 2013 www.ethicalcorp.com

Extractivesector ethicsThe security and human rights challenge

ECM Feb_Layout 1 30/01/2013 17:18

Do you know an innovative programme in nutrition, water or rural development?

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ContentsEthical Corporation • February 2013 3

Contents

Strategy and management

33 DessoInnovative sustainability

36 EssayWhat board directors need to do

40 China columnPaul French on Chinese sustainable businessdrivers

Review

41 Academic news

42 Report: Co-operative Group

43 Report: Volvo

44 New books

People

45 CommutingIt’s easier by bike

48 People on the move

50 Toby WebbDo what good communicators do

5 From the editor

EthicsWatch

6 EnergyDo shale gas economics add up?

7 Cashflow management The squeezed middle

8 Anti-corruptionBribes still popular

9 Gold standardConflict free

10 Mallen Baker2013 speculation

11 Extractive sectorHuman rights underground

16 CRwatchGarment industry waste

18 Peter KnightWelcome home!

19 Climate changeOut of time?

p11 Human rights abuses still abound

p45 On your bike

p29 Brotherly profit

24 Sustainable energy Hong Kong’s inexhaustible supply

26 Cheat sheetAll the info you need

28 NGOwatchDrones v poachers

29 Corporate ownershipThere are alternatives

COVE

R IM

AGE: SHO

TBYD

AVE/ISTO

CKPH

OTO.CO

M

p19 New venue, same problem

ECM Feb_Layout 1 30/01/2013 17:19

Find more information and download an entry form>www.ethicalcorp.com/awards

Last year’s winners included:

� Heathrow

� Timberland

� UPM

� Credit 360

� Deutsche Telekom

� Marks & Spencer

� National Australia Bank

� Compartamos Banco

Are you the next winner?Gain recognition as a global leader in Corporate Sustainabilityand boost your reputation for ethical best practice

ENTERyour company by21st March2013!

The Responsible Business Awards 20134TH ANNUAL

V

05/12/2012 13:51 Page 1ECM Feb_Layout 1 30/01/2013 17:19

From the editor 5Ethical Corporation • February 2013

Welcome to the February 2013 issue

It’s great to be back after our winter break. Kicking off 2013, ourcover story this time reflects on how the extractive sector’shuman rights record has improved over the first 12 years of theVoluntary Principles on Security and Human Rights. The violentclashes at South African mines hit the headlines in late 2012, butthese were not isolated incidents. In the past few months there hasbeen similar violence at mines in Peru, Bolivia, Guatemala, Ghanaand others. The spark for these incidents is often the proximity of local communities, and a heavy-handed attitude towardsprotesting on the part of some facilities’ management, or over-reaction to relatively minor incidents.

This is despite, of course, the real and definite progress made bymany of the big international mining companies, not least throughthe provisions of the voluntary principles. As is so often the case,hard work through multistakeholder initiatives, and genuinedetermination to make progress is hard to translate on the ground,where older attitudes prevail.

Elsewhere this issue, we reflect on the implications of the recentUnited Nations climate summit in Doha. There is a growing sense,as we reflected in our review of 2012 in December, that we arerapidly moving from a question of if we will need to deal with theimplications of climate change to how we are going to avoid theworst impacts.

Even in the face of the strong – albeit anecdotal – experience ofso many violent or extreme weather events over the past couple ofyears, governments are incapable of taking the leadership posi-tions required. NGOs and smart, progressive companies can helpshow the way, of course, but this is an instance where heads ofgovernment need to get beyond politics and do their jobs. Thereare still opportunities for sustainable growth, but these need to be grabbed, and now.

With corporate reputation generally so low, we’ve been consid-ering how the performance of organisations with alternative

ownership structures compares to more traditional companies.The results are interesting. In the financial sector – which has been taking a trust battering recently – over 20 to 25 years, money invested in organisations with mutual ownership structurestypically out-competes traditional funds by 25%. UK top-end high street chain John Lewis is owned by its employees, who all shared in £165m divided up from total profits of £354m in 2012. And 13.5 million people in theUK are now members of some sort ofcooperative. So they must be doingsomething right.

Sticking to this theme, in our reviewsection we consider the latest reportfrom the Co-operative Group, the UK’s biggest cooperative, alongside carmanufacturer Volvo’s latest offering.And as usual we also have all the latestanalysis and comment from ourregular columnists.

Please do let us know if there any specific issues you’d like us to cover this year. Upcoming stories are regularly updated on Ethicalcorp.com. �

Ian Welsh Editor

Contributors: Rob Bailes, Mallen Baker, Oliver Balch,

Jeni Bauser Yaghoubi, Aleksandra Dobkowski-Joy,

Paul French, Stephen Gardner, David Grayson,

Andrew Kakabadse, Peter Knight, Lisa Leath,

Claire Manuel, Eric Marx, Sam Phipps, Rikki Stancich,

Toby Webb

Publisher: Toby [email protected]

Editor: Ian [email protected]

Contributing editor: Mallen Baker

Sub editors: Sarah Burton, Gareth Overton

[email protected] | +44 (0) 20 7375 7575

Corporate subscription packages from £495

People on the [email protected]

Advertising and sales: Oliver [email protected] | +44 (0) 20 7375 7518

Design: Alex Chilton [email protected] | +44 (0) 20 7042 6340

Ethical Corporation is printed by Four Way Print Ltd on Green Coat plus paper, which

comprises 80% recycled and 20% Forest Stewardship Council certified source material.

7-9 Fashion St, London E1 6PX UK

Subscriptions: +44 (0) 20 7375 7575

Editorial: +44 (0) 20 7375 7213

ISSN 1758-1575

Business Intelligence for Sustainability

ECM Feb_Layout 1 30/01/2013 17:19

feb 2013 cover and extract

Documents