Tuesday, October 21, 2014

Rainforest Alliance VP on the limits to certification, Forest Stewardship Council and consumer awareness of deforestation

Dominique Gangneux is the sustainable markets vice president at the Rainforest Alliance, where he is working on forestry, food & agriculture and tourism.

I sent him a few questions recently. Here's what he had to say.

Dominique Gangneux
What does Rainforest Alliance do today? What's your elevator pitch? 

It is easy for people to assume that because of the Rainforest Alliance Certified seal all we do is certification, but we are about so much more than that.

We work to help all actors in the value chains we are focusing on – forestry, food & agriculture, and tourism – to embed sustainability practices in their business practices and personal lives.

That includes landowners, producers, farmers, foresters, tourism operators, workers, governments, traders, buyers, producers, brands, and retailers, and consumers.

Standard development and certification is just one tool in our toolbox but we also use education – via technical training, schools programmes and reaching out to consumers about what sustainable choices look like. If you like we are sustainability guides.

How can you scale up certification so it goes mainstream?

Standards and certification is an important tool and one that requires new innovation – something we are currently working on for example with the Sustainable Agriculture Network for our work in agriculture.

Some of the easy wins have already been made, so now it is about repurposing the tool to help us reach smallholders and those producers who are harder to reach to help them access the benefits certification brings – and that’s the key to mainstreaming.

Certification has to focus on meaningful outcomes on the ground; better productivity, growing more on the same amount of land or less, improved quality, better treatment of workers, better livelihoods, healthier environment etc.

And in doing so it helps at the other end of the value chain.  Consumers trust third party certification, and as the benefits the Rainforest Alliance is delivering at the field level become more apparent to them, the trust and value in the standards we work with and with our seals can grow.  Giving consumers a real choice to be part of something better.

Does it matter no one really recognises what sustainability logos mean?

Consumers are already closely connected to many of the brands they buy and use. Through our seal they also connect with the producers, so knowing what our seal stands for is important yes.

We shouldn’t under estimate the importance of 3rd party trusted seals to help consumers to make the right choices and show their support for achieving better outcomes for farmers, foresters and communities. And we shouldn’t underestimate how many consumers are actually making the choice to buy a more sustainable product everyday – actually more than ever across the regions of the world.

For example, according to the last Ethical Consumer Markets Report in 2013, consumer demand for ethical food and drink rose by 36 percent in the UK in 2012, and was worth £10.16 billion.

We also know that from 2012 to 2013, Rainforest Alliance Certified (RAC) coffee production grew globally by 20% (it's now 5.2% of global production), RAC tea grew 28% (now 14% of global production) and RAC cocoa grew 41% (now 13% of global production).

All in all, today, up to 15% of the world’s cocoa and tea supply is now under sustainable management.

That’s close to being a tipping point, right? That is significant. But, there’s still 85% to go. So, we are no longer niche but we are nowhere near there yet.

Could we do a better job of explaining what lies behind that seal? Of course, that’s why we are running our Follow the Frog campaign and working with the Guardian to expand our outreach to consumers worldwide.

At the end of the day the seal is a shorthand for a better choice, so if that’s all a consumer takes away I can live with that.


Labels under pressure
What is your view on the current credibility challenge facing FSC?

The FSC has been one of the world’s most successful sustainability standards. But we need to remember that this is a system that is still relatively young – 20 years this year.

It is facing strains, and there is a need for change but it still represents the best option for delivering responsible forest management globally.

We had a team in Seville Spain few weeks ago for the seventh FSC General Assembly – a gathering of the membership every three years to determine the future direction for the standard and organisation behind it.

There were some clear signals sent by the membership with votes to focus on a global strategy, on working to bring small producers into the system by streamlining the process.

I think the FSC and certification in general is in a really critical juncture – watch this space, it is going to be very interesting.

What's your outlook on sustainable forestry in general? Brazil is improving but SE Asia worsening. Are you optimistic or pessimistic and why? 

We are seeing some really interesting developments in forestry at present. The zero deforestation agenda has reignited debate around the role of forests in the world.

While we are seeing real gains we are also still struggling with the biggest pressures on forests, which are urban sprawl and agricultural expansion. In the case of agriculture expansion the Rainforest Alliance supports standards that build in protection of natural areas as well as the regeneration of ecosystems.

We are increasingly working on these issues in SE Asia, Africa, and Latin America in agriculture – including palm and cattle, and also through our forestry, tourism and climate programmes.

I think we are going to see some innovation in this area, a rethink of the role plantations can have and how they can play a positive role in the protection and enhancement of natural forest for example.

The challenge is far from over, but I think there are signals that are positive and I chose to focus on how we can build upon those.

More from Rainforest Alliance at: www.thefrogblog.org.uk / @RnfrstAll_UK

Richard Donovan, VP for forestry at Rainforest Alliance, will be speaking on a number of sessions at Innovation Forum's "How business can tackle deforestation - Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends" on 28th-29th October, 2014, London. (That's next week people)

For the full agenda take a look here. Here's the full conference website.

There are still a few places left. If any blog readers would like to come, email me as soon as you can. 

Monday, October 20, 2014

Final agenda for deforestation event next week. 34 speakers from companies, NGOs and others in London

In case I hadn't mentioned it, we're hosting a conference next week on how business can effectively tackle deforestation. It will be in London on Oct 28-29th.

About 150 large companies, key social and environmental NGOs will be there.

We've got 34 speakers, and the event is generously sponsored by Robertsbridge and Sky/WWF.

Just added to the agenda are Asia Pulp & Paper and Cargill, amongst quite a few others.

The latest, full agenda is here, no login or information needed.

It's also embedded below. Full conference website is here. Hope you can make it.

Agenda embedded below. We are quite proud of this one.

The DC version of the event will be on April 14-15 2015. Let us know if you'd like to take part in that. Email azadeh.ardakani@innovation-forum.co.uk if so.

Sunday, October 19, 2014

Greenpeace vs. Lego, was the outcome worth the effort?

News that Lego firmly rejects the Greenpeace campaign against it working with Shell emerged the other day.

See: here for the CEO statement.

The real upshot? 

Lego won't work with Shell to promote Lego products to kids beyond the current deal.

That suits both Greenpeace and Lego. 

GP claims 'victory', whilst Lego says it hasn't given in to brand blackmail and hasn't broken a business deal with Shell. 

Shell, meanwhile, probably don't care that much either way. 

Whatever the outcome, Greenpeace is going to continue to target them anyhow. 

I am a monthly donor to, and member of (if such a thing as membership exists beyond marketing) Greenpeace.

But I was not a fan of the recent Lego campaign. It struck me as dreadfully opportunistic and immature. And whatever the outcome, it won't make a blind bit of difference to Shell. 

It was just another excuse to target a vulnerable brand with a small connection to a bigger target. 

Excellent for publicity. But also useful evidence for opponents to point out how Greenpeace can be very small minded and is consumer brand focused to the point of hysteria. 

I appreciate the campaign against Shell drilling in the arctic is a difficult one for Greenpeace. 

But there are surely better ways (safety grounds, spill responses, regulatory breaches, stranded asset arguments etc) than going after brands like Lego with the goal of changing Shell's business plans. 

Greenpeace has built a lot of credibility with big business on issues such as deforestation/palm oil in recent years.

The international leadership needs to reflect on that, and the damage that may be done to their ability to change big business supply chains for the better (as they have helped do on soy, palm oil and forestry) if they lose brand trust (in both senses) by launching more tenuous campaigns such as that against Lego. 

Just because you have tools, that doesn't mean you should always use them. 


When stressed, men are more prone to taking risky bets with little payoff

Interesting NY Times piece this weekend that makes the case for more diversity in stressed decison making:

"Credit Suisse examined almost 2,400 global corporations from 2005 to 2011 — including the years directly preceding and following the financial crisis — and found that large-cap companies with at least one woman on their boards outperformed comparable companies with all-male boards by 26 percent". 

Sunday, October 12, 2014

15 tips on speaking at business events

I have an confession to make. 

OK, an admission. 

I've been responsible for about 100 conferences, maybe more, in the last 15 years.
Scary, but manageable

Sorry. 

I know conferences sometimes (often?) have a bad reputation. 

Many are dull. I get that.

In my defence, I've always tried to make mine interesting. 

Generally I hope I've succeeded. But it's not up to me to judge. I may well be delusional. 

Anyhow. My point is that I've been responsible for a fair few, and speak at a fair few more. And have sat through quite a few others, often as moderator. 

I've seen great speakers, I've seen mediocre speakers. I've seen awful speakers.

Last year I was involved in an event where one panellist simply sat, head down, and read out a legal statement. 

She then refused to say pretty much anything else. 

Presumably this was due to percieved legal risk, or lack of confidence, or both.

So, having done all this, which may not amount to much, I realise, I offer below a few tips for speaking at events, based on what I have seen since 1999. 

Many of these tips, I also know, are in the standard blogger event advice, repeated Ad Infinitum across the web. 

So I make no claim to originality. 

But here's a few thoughts on what I believe works when engaging in public speaking, nonetheless.  

1) Don't speak at all unless you've practiced and rehearsed. A bad speech or set of comments is far worse for you than none at all.

2) Go slow. Slower than you think you need to. 

3) Speak less, say more. That way there is no need for notes or prompt cards. Be interesting in a short space of time, make people think. 

4) Tell them what you are going to tell them, then tell them, then tell them what you told them.

5) Never, ever, ever show a corporate video. If you show video, make it funny.

6) Ban bullet points. In fact, only use PowerPoint if you will show pictures to tell stories with, or some stunning set of stats, or charts.

7) Smile. A lot. But don't grin like a maniac.

8) Make a joke, even a bad joke. People will laugh, that will relax you, and them. 

9) Remember everyone (except perhaps old enemies or competitors) wants to see you succeed and give a good speech. For one simple reason. Because it's their time as well as yours. 

10) Remember there's nothing wrong with a pause

11) People mainly remember stories, not policies. So tell a couple of stories.

12) Thank your hosts. Good grace matters.

13) Turn up early, and reference earlier sessions in your speech. It shows you care enough about engagement to be there earlier in the day. Not just to turn up and be in broadcast mode.

14) Time your speech, practice timing. Sticking to time counts.

15) Build in Q&A time, and end on a note that encourages questions and thought/reflection from the audience. 

I'm sure there's more to add to this list. But any list longer than this risks overwhelming with numerical points, so I will leave it there. Comments on others will be published, unless self-promotional. That's my privilege on this blog.

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Three focused, detailed and practical sustainable business events for your diary

How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here. (In Association with the Institute of Human Rights and Business)

With: John Lewis, Nestle, First State Investments, Aviva, RBS, New Look, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others.

An exclusive two-day executive training workshop, certified by the CSR Training Institute

30-31 October, 2014, London. More details here.

With direct experience from: Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, and many others 

Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S, Waitrose, APP, Golden Agri, and many others 

           

Wednesday, October 08, 2014

Useful overview on the reputation and regulatory risks of aggressive tax avoidance

We all like a short, useful summary of complex issues.

At least I do, given social media and smartphones, twatter etc, has affected my attention span somewhat. (Hang on, who are you again?)

So here is a short, useful summary of the tax debate, as viewed by consultants Global Counsel.

A few snippets for your delectation and delight:

They're coming to get you, kind of...
"Preliminary judgements published by the European Commission last week into corporate tax practices in Ireland and Luxembourg could result in huge retrospective bills for Apple and Fiat Finance and Trade (FFT). More significantly, the judgements illustrate how the landscape for corporate taxation is changing rapidly in Europe."

"...The Commission investigations concern advance tax agreements, which are supposed to give individual companies clarity on how their corporate tax will be calculated. The Commission alleges that in the Apple and FFT cases the agreements entered into have instead allowed improper transfer pricing, distorting the value of transactions between subsidiaries of the same group, and enabling profits to be diverted to countries with lower tax rates."

"...Both cases will now proceed to full investigations, which could take up to a year. If the findings are confirmed then the Commission could require the authorities in each country to retrieve under-paid taxes going back ten years. For both companies this would be embarrassing and expensive, although it would not ultimately threaten their financial position."

"...The Commission is not acting in isolation. Even though the nominal target is unfair competition, the real target is aggressive tax avoidance. Multiple fronts are opening up against such practices and not only in Brussels. These include actions by individual countries. Last week the UK Chancellor George Osborne told his party conference that he will put an end to abuse of the tax system by those companies that go to ‘extraordinary lengths’ to pay little or no taxes. He singled out technology companies as a particular concern and the press has dubbed his initiative as the ‘Google tax’."

"...The Commission’s investigations into FFT and Apple takes the EU state aid policy into new territory, giving the Commission a locus on tax that it has not enjoyed before. Other investigations are in the pipeline. These include an investigation into the tax treatment of Starbucks by the Netherlands, which is already underway, and investigations into practices in Gibraltar and Luxembourg’s treatment of Amazon, which have only just been announced."

More on all this, here.

Global Counsel's chairman, Lord Mandelson, also former EU trade commissioner, will be speaking at this event on October 28 in London, about how trade policy can and should be adapted to meet growing demands for sustainability.

Good article on the costs of poor stakeholder engagement in the extractive sector

This article notes that:

"Researchers at the Centre for Social Responsibility in Mining interviewed employees at several dozen major international corporations who are involved with extractive activities, and found that companies are increasingly having to deal with the social and environmental impacts of their work, and that it’s hurting them where it hurts most: their bottom lines."

"The researchers, led by Daniel Franks, took a look at 50 planned major extractive projects (oil drilling, new mine construction, that sort of thing) and found that in fully half of them, local people launched some sort of “project blockade.” In 40 percent of the projects, someone died as a result of a physical protest, and 15 of the projects were suspended or abandoned altogether, according to Franks' study, published in Proceedings of the National Academy of Sciences."

“There is a popular misconception that local communities are powerless in the face of large corporations and governments,” Franks said in a statement. “Our findings show that community mobilization can be very effective at raising the costs to companies.”

And also that:

"Delays, even early in a project, can be extremely costly—at a major mining project, $20 million per week in lost revenues and lost investment isn’t uncommon. According to the study’s respondents, a nine-month delay at a Latin American mine cost a company $750 million; protests that shut down power lines at another operation cost $750,000 a day. Even before drilling or extraction has started, lost wages and startup delays can cost $50,000 a day when programs are forced to a standstill after they’ve started."

Read the rest here.

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On October 30 and 31st in London around 15 oil, gas, mining, and heavy industry executives will be joining Professor Wayne Dunn and myself along with some former senior executives/CSOs from oil, gas, biofuels, palm oil/agribusiness and mining industries to focus on ways to engage stakeholders in difficult situations.

Read more about it here, or email me if you'd like to come along: tobias.webb@innovation-forum.co.uk

There are a few places left if you'd like to join us or send a colleague along. It will be interesting. We also have a special guest speaker from the mining sector joining us. 

Monday, October 06, 2014

Eight self-serving steps to creating a CSR Program

Wayne Dunn offers some thoughts to becoming successful in driving responsible business inside a company

Self-interest. What’s in it for me? This is the true heart of CSR and stakeholder engagement. How could it be otherwise?

Why would companies, individuals, communities and others not act in their own interest? CSR is simply about finding ways to align those self-interests.

CSR is about finding ways that you win by helping other stakeholders to win too. It is about aligning interests so that others win when you win. So that you win when others win.

CSR:  Simple, but far from easy.

Here are eight steps to creating a CSR program. They are far from the whole answer and each could be discussed in much more detail than I do here.

As you read it you may find yourself thinking of additional steps, or disagreeing with some of these.

That is perfect! Make it your own. Take what you like and leave the rest.

The main purpose of this article is to stimulate thinking and, hopefully action.

Wayne Dunn
Many of the answers lie within us and if this or any other article helps you to find them, that serves my self-interest!

1. Admit that it is all about self-interest.  What’s in it for me?

Sure, this is uncomfortable. Many of us are working in this space because we truly care about others and want the world to be a better place. It is those other people who are just in it for themselves.

Perhaps your self-interest is that you want things to be better.  For others to benefit.   For the world to be a better and fairer place.

If that makes you feel good then there is your self-interest. Feeling good about yourself and the outcome is what is in it for you.

But, I suspect if we are honest we have more self-interest than that. But, it doesn’t matter. The simple truth is nobody and no company is going to do CSR if it isn’t somehow in their self-interest.  Why would they?

The essence of CSR and stakeholder engagement is really quite simple.  It is what’s in it for me.

2. Find out who else cares. Or should or could care. Make a list.

Start by identifying who might win or lose if your business or project is successful. Who is effected?  Who might be effected? Who could be effected?

This step is critical.  Don’t just limit yourself to the obvious.

When identifying stakeholders boldly go far beyond where others stop. Your most perfect and influential ally might be lurking way out there.

And, just because you list them at this step doesn’t mean you need to engage with them.  You just want to make your list as broad as possible at this point.

3. What’s in it for them?

Go through your list asking “What’s in it for them?” Good or bad. Make a list of how your success, or failure, would affect the stakeholders on the list.

Go back over the list again and push the boundaries. Ask “What might be in it for them?  What could be in it for them?” Be crazy, be creative.

No idea is wrong at this point. Push the horizons. The gem may lay on the far horizon and you’ll miss it and leave a lot of value on the table if you don’t push.

4. What are their biggest wants/needs?

Go through your list again and try to make a list of the biggest wants and needs of each stakeholder.  Don’t confine yourself to whether or not the want or the need is related to your business.

5. Where does What’s in it for me? meet What’s in it for them?

Go through your list, stakeholder by stakeholder and look to see where/if your interests meet theirs.  Positively or negatively. Even tangentially.

6. Group, arrange and re-arrange the stakeholder interests

There is no magic here. Some of the stakeholders will have the same or similar interests. Some will have complimentary interests. Some will have opposing interests.

Sometimes two stakeholders may have common, complimentary and opposing interests, all at the same time.

The point is that by analyzing stakeholder interests you will get an understanding of the interest landscape as it relates to your business.

Remember, much of the success of CSR and stakeholder engagement rests on efficient and effective alignment of interests. The better you understand the interest landscape the better your chances of success.

7. What’s in it for me?  (Again!)

Look through the interest landscape you have created and see where there are natural intersections, positive and negative and ask yourself some questions and take a few actions.

What are the stakeholder interests that will be naturally supported by the success of your venture?

What are the stakeholder interests that, no matter how hard or creatively you try, just have nothing to do with your business?

What are the stakeholder interests that, at first glance, are harmed by your business?

Set aside those interests that have nothing to do with your business.

Put your creative hat on and go through those interests that would seem to be harmed by your business. See if there is any way that you might do things differently, or the stakeholders may do things differently that would eliminate or mitigate the negative impact.

Prioritize those interests that are naturally supported by your business. When prioritizing be sure to keep value in mind. The value of the interest to society at large. The value to the stakeholder(s) and the value of the affected stakeholders to your business (how much can they support or hinder your social license and business operations.)

Do the same for those interests that, at first glance, are negatively affected by your business.

Working from the highest priorities of both the negative and positive impacts look for opportunities to accentuate the positive and mitigate the negative. What does it take to make the positive impacts stronger and the negative impacts less?

When doing this, think about natural partners.

Repeat the above steps often.  Do it alone, do it with internal partners, involve external partners and stakeholders. Bring in fresh sets of eyes (yes, consultants can be very helpful here!).

The more work you do on understanding the interest landscape the more value you will find, for you and for the stakeholders.

As you review and analyze the interest landscape the basic elements in a CSR plan will emerge.

Use this as the basis for developing your CSR and stakeholder plans, programs and activities.

8. CSR and stakeholder engagement are about business efficiency and value too!

Successful businesses are those that, amongst other things, are able to optimize the value of output in relation to the cost of input. In other words, they are the most efficient at getting things done effectively.

CSR and stakeholder engagement is no different. This isn’t a do-gooders game. This is about the interests of the business and the shareholders. It is about creating value. Creating value for shareholders. Creating value for society. And doing both efficiently and simultaneously.

Be efficient. Look for those activities and leverage points that create the most value for stakeholders at the least cost of time and money for the business.

Look for ways to have more positive impacts with less resources. Hint: Partners are great for this.

In another article I’ve written about the CSR Value Continuum and how all CSR activities can be looked at along a continuum from value distribution to value creation.

This and other tools can help you to analyze your CSR and stakeholder engagement in terms of value efficiency.  And, believe me, value efficiency in CSR is in your self-interest!

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The steps in this list won’t give you all of the answers.  But, hopefully it stimulates you to think creatively and find some new and exciting answers.

The reality is that this space we call CSR and Stakeholder Engagement is an emerging space and is evolving rapidly.

There are no experts.  We are all learning.  Learning from and with each other.  Learning from our own mistakes and the mistakes of others.

I’ve learnt a lot from the feedback I’ve gotten from readers of my CSR Thoughtpiece series.  Please do me the favour of giving me any feedback or insights you have.  Feel free to do it privately or publicly.

Our self-interest is served if we can help ourselves and help others to make the doing of CSR more effective.

Wayne Dunn
President, CSR Training Institute
Professor of Practice in CSR (McGill)
wayne@csrtraininginstitute.com 

Further practical reading from Wayne Dunn: http://tobiaswebb.blogspot.co.uk/search?q=wayne

Also see:

The top five mistakes companies make in engaging stakeholders

Stakeholder engagement: Six best practices and one critical principle for success

Seven proven ways to get colleagues on board with sustainability and corporate responsibility

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Three focused, detailed and practical sustainable business events for your diary

How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here. (In Association with the Institute of Human Rights and Business)

With: John Lewis, Nestle, First State Investments, Aviva, RBS, New Look, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others.


An exclusive two-day executive training workshop, certified by the CSR Training Institute

30-31 October, 2014, London. More details here.

With direct experience from: Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, and many others 

Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S, Waitrose, APP, Golden Agri, and many others 
           

Sunday, October 05, 2014

A useful overview of the stake of play RE deforestation

Growing economies while avoiding deforestation

Stephen Donofrio, Principal & Founder of Greenpoint Innovations, examines the important role that avoiding deforestation and degradation plays in mitigating climate change, and describes the benefits to businesses from tackling forest risk.

First published on the Corporate Citizenship blog here. Thanks for permission to reproduce.

I usually only publish original articles and posts on here, but this one is useful enough to make an exception. It's a good summary of where we are on this important issue. 

Many corporations have found competitive advantages through implementing environmental sustainability measures at both their direct operations and supply chains.

Fueled by substantial encouragement from governments, NGOs and global institutional investors (through consortiums such as CDP and UN PRI), companies managing greenhouse gas emissions are pursuing a variety of business benefits, including improved bottom line economic and environmental performance, increased investor and customer interest, regulatory compliance, brand differentiation, risk management, new business opportunities, and adherence to stakeholder interests.

In an effort to broaden the scope of climate change mitigation opportunities beyond that of fuel and electricity consumption, we are more recently witnessing a collective head-first dive from companies and their stakeholders into identifying how forest risk commodities, mainly palm oil, soy, cattle and wood products, contribute to climate change and fit within corporate environmental sustainability materiality metrics.
Sumatra, January 2014. Photo: Toby Webb

The business link between climate change and forest risk commodities

Studies show that approximately 15% of all greenhouse gas emissions are caused by deforestation and degradation in the tropics and subtropics.

According to a recent Forest Trends report, “nearly half (49%) of all recent tropical deforestation is the result of illegal clearing for commercial agriculture… and around half of this illegal destruction was driven by overseas demand for agricultural commodities including palm oil, beef, soy, and wood products.”

Corporations and their stakeholders have become more sophisticated in their understanding of where they have impact and influence on mitigating climate change within business operations and value chains. As a result, sustainable supply chain management of forest risk commodities is increasingly receiving more of the spotlight as a solution.

Gail Klintworth, Unilever’s former Chief Sustainability Officer, puts it this way in her commentary in the CDP 2013 Global Forests report: “Deforestation…makes a significant contribution to global climate change, which has huge risks for our business – from the impact of droughts and flooding on our agricultural supply chains to the way water scarcity affects our consumers. Combating deforestation through sustainably grown crops is one of the most significant ways we can help prevent climate change and biodiversity loss, while also providing benefits for farmers and our consumers.”

Investors can have a strong influence on businesses to address the climate impacts of agricultural commodities. CDP’s forests program, which requests information on corporate deforestation risk, now has 240 individual investor signatories representing US $15 trillion in assets.

In the US, a record number of shareholder resolutions in the 2014 proxy season led 20 international corporations to commit to reduce greenhouse gas emissions or sustainably source palm oil.

One case in particular, the Norwegian pension fund, Norges Bank, with assets worth $260 billion, has divested from both timber and palm oil companies that did not meet their standards.

NGOs have also had a significant impact. In addition to the CDP forests program, companies are being ranked on the transparency and performance of their forest risk commodities efforts by a growing number of other leading NGOs, including WWF, Union of Concerned Scientists’ Palm Oil Scorecard, Greenpeace’s Tiger Challenge and Forest Heroes’ Green Tigers palm oil ranking. High-profile campaigns against major brands have played no small role in spurring corporate commitments on deforestation.

On the global stage, at last month’s UN Climate Summit, in alignment with global efforts to limit temperature increase to 2oC, more than 150 governments, companies, civil societies and Indigenous Peoples endorsed the New York Declaration on Forests.

The Declaration pledges to cut the loss of forests in half by 2020 and, for the first time, to end it a decade later in 2030, collectively cutting between 4.5 and 8.8 billion metric tons of greenhouse gases per year.

 Crucially, this includes a “private-sector goal of eliminating deforestation from the production of agricultural commodities such as palm oil, soy, paper and beef products by no later than 2020, recognizing that many companies have even more ambitious targets.”

Taking advantage of an opportunity

A significant number of companies have made commitments to achieving zero or zero-net deforestation and other related targets. These companies represent all segments of the value chain from producers, traders, consumer goods companies to global financiers.

Over the last year, suppliers of more than 55 percent of the world’s palm oil have committed to produce or trade 100% deforestation-free palm oil.

And while most commitments to date have been for palm oil, some companies are expanding their commitments to other commodities as well, including soy, beef, and pulp and paper.

On the pathway towards meeting these commitments, businesses have an opportunity to achieve in-tandem business and environmental benefits. This is very aptly described in a letter by Aida Greenbury, Managing Director Sustainability, Asia Pulp & Paper:

“Pioneering a new business model in a country such as Indonesia is of course not without its challenges. But the bigger picture, and my hope, is that the economic success of companies operating zero deforestation businesses, will demonstrate to others that it is possible to operate profitably, without having a detrimental impact on the landscape.”

Companies are recognizing that it is important to be transparent and report publicly on their forest risks and on progress towards meeting their commitments.

According to CDP, participation in the CDP forests program almost quadrupled between 2009 and 2013, with the number of countries in which participating companies are registered increasing by almost 50%.

What is the value of these commitments?

Companies across the world are beginning to recognize the value of addressing forest risks. A large and growing number have made significant commitments on eradicating deforestation from their direct operations or value chains.

A number of organizations are working to effectively map and track such commitments, including The Tropical Forest Alliance 2020, and the roundtables for palm oil (RSPO), soy (RTRS) and cattle (GRSB).

These are commendable initiatives, and very valuable sources of insight, which aim to answer several key contextual questions that remain if we are to understand the true value of corporate commitments:

  • What volume of forest-risk commodities are now under commitment?
  • How are companies and their suppliers performing against their promises?
  • Which key players are not at the table?
  • Will supply be able to meet demand for sustainable commodities?
  • And how are rankings on forest risk commitments being integrated with overall corporate climate change management plans?

As deforestation becomes increasingly important and continues to climb the climate change agenda, corporate sustainability leaders will be working diligently to answer the above questions. As much as progress has been made in the past year, more is required and more is yet to come.


Stephen Donofrio is Principal & Founder of Greenpoint Innovations LLC, and has more than 10 years of experience working with companies, communities, governments and not-for-profit organizations. He was formerly Vice President of CDP North America, where he served as the Canada Manager and directed the region’s investor disclosure program for climate, energy, water and forest risk commodities.

On October 29-29 companies and their key stakeholders will convene in London for the Innovation Forum event, How business can tackle deforestation. For a 15% discount, quote IF15 when registering here. The event features leading brands, producers, traders, NGOs and many other experts including Mars, Unilever, Asia Pulp & Paper, Golden Agri, Greenpeace, ADM, Wilmar, TFT, Marks & Spencer, Mondelez, Ikea, and many others.

Our free management briefing on the topic is here: http://www.slideshare.net/Tobiaswebb/if-deforestation-briefing-final

Wednesday, October 01, 2014

Oxfam and Amnesty on human rights regulation and risks for companies

This neutrally-titled piece on the Amnesty International website "European companies allowed to reap rewards from deadly conflict mineral trade" shows a possible direction of travel for EU based or EU trading companies with regard to proving they 'do no harm' via their operations, relationships and sourcing.

"The European Union is failing to stifle a deadly trade in conflict minerals, a coalition of rights groups including Global Witness and Amnesty International warned today, ahead of weak new legislation being discussed in Parliament.

A new analysis by Global Witness shows that companies are bringing billions of euros worth of minerals into Europe without having to disclose if their purchases finance armed groups or human rights violations in countries ravaged by conflict.

“At the moment we have no way of knowing what European companies are doing to avoid funding conflict or human rights abuses,” said Michael Gibb of Global Witness.

“The European commission has proposed legislation it claims will tackle the problem, but the draft law only goes so far as to suggest companies voluntarily check and declare the source of their minerals. Studies show companies simply don’t check their supply chains, unless they are required to. Putting it starkly, this legislation will not meaningfully reduce the trade in conflict minerals.”

So campaigners want companies to be legally obliged to check their supply chains.

I can see why. The devil in that idea, is of course in the detail. Hammers can be used to crack nuts, but that doesn't mean they are the best tool, but then they are effective.

Companies, of course, do check their supply chains without being forced to. At least say, the top few thousand in Europe, depending on how you define 'check'.

We all know checking alone won't solve many/any problems, it's what happens with the results that counts, until we bump up against the complex barriers of national law and expectations, culture and institutions and their effectiveness.

What is clear is that campaigners won't be stopping these requests any time soon, and that in some sectors, mining for example, we're seeing more and more reporting requirements.

I can't predict if and when EU companies will be forced to check their supply chains (however that is defined) but if I had to bet whether reporting requirements on the state of supply chains will increase, I'd say it will.

Reporting, after all, is the great government compromise between campaigner demands and big company progress, without being seen as going too far in 'restricting trade'.

In this second recent NGO piece, "Child laborers bring case against food companies: “You’re enabling enslavement” Oxfam write that:

"A class action suit brought by a group of trafficked children from Mali to the US 9th Circuit Court may have an impact on how corporations develop their business models in the future.

In John Doe et al v. Nestle et al, child plaintiffs argued that Nestle, ADM, and Cargill aided and abetted enslavement (and numerous violations of international and US law) in the companies’ cocoa supply chains. The former child slave laborers were allegedly trafficked by cocoa growers into Cote D’Ivoire and forced to work in fields that supplied cocoa beans to the defendants in the case. The court held that they could bring the action under the US Alien Tort Statute. Since 1980, courts have interpreted this statute to allow foreign citizens to seek remedies in US courts for human rights violations for conduct committed outside US borders."

Now, this is just the latest salvo in a long running series of cases against companies for alleged connections to human rights abuses.

In the long run, the companies involved, in this case, Nestle, matter less than the fact that lawyers are trying to find ways to use old US laws to attack companies on human rights issues.

In this particular case, if asked my view, I'd say the idea that Nestle, ADM and Cargill knowingly aided and abetted enslavement is rather far fetched.

However, the lawyers may be able to make the companies uncomfortable in the public eye, and that's been enough to claim victory and secure money for lawyers and some others in the past. And if the case goes to trial, (none have yet, they are usually thrown out, or settled) there's always the chance that the companies can be criticised for unknowingly aiding and abetting enslavement, at least in the court of public media opinion.

The Oxfam blog notes that:

"The John Doe can is significant because it exploits the narrow opening that the Supreme Court left open for Alien Tort Statute plaintiffs following their ruling in the Kiobel v. Royal Dutch Petroleum Co. case in 2013. In this case, the Supreme Court effectively closed the door to most foreign nationals suing foreign corporations in US federal courts. The plaintiffs in Kiobel were Nigerian citizens who claimed that Dutch, British, and Nigerian oil-exploration corporations aided and abetted the Nigerian government during the 1990s in committing violations of customary international law when they brutally crushed peaceful resistance to aggressive oil development in the Ogoni Niger River Delta."

So the case, and its outcome, is worth keeping an eye on.

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Three focused, detailed and practical sustainable business events for your diary

How to get beyond policy, manage risk and build relationships

10 November, 2014, London. More details here. (In Association with the Institute of Human Rights and Business)

With: John Lewis, Nestle, First State Investments, Aviva, RBS, New Look, ABB, Ericsson, Novartis, PUMA, the Economist, Oxfam and many others.


An exclusive two-day executive training workshop, certified by the CSR Training Institute

30-31 October, 2014, London. More details here.

With direct experience from: Arcelor Mittal, BP, Anglo American, Rexam, Golden Star, BHP Billiton, Shell, and many others 


Collaborate effectively with suppliers and NGOs, understand policy and enforcement trends
28th-29th October, 2014, London. More details here.

With: Unilever, Lord Mandelson, Greenpeace, Nestle, Wilmar, TFT, ADM, Mondelez, M&S, Waitrose, APP, Golden Agri, and many others