oekom Corporate Responsibility Review
Taking stock of sustainability performance in corporate management
March 2013
Table of contents Editorial................................................................................................................................................................................................... 2 Robert Haßler, CEO oekom research AG 1. Corporate responsibility – status and trends.................................................................................................................. 3 1.1 Basis for the analysis: the oekom Corporate Rating............................................................................................. 3 1.2 Corporate responsibility: overall performance in sectors and countries................................................... 6 1.3 Labour rights, human rights, environmental protection – how seriously do companies take international standards?........................................................................... 9 1.4 Profiles – what individual sectors are doing to promote sustainable development......................... 15 2. Global Challenges – how do global players deal with the main challenges of sustainable development?.......................................................................................................... 26 2.1 Climate protection and adaptation to climate change...................................................................................... 27 2.2 Protecting species diversity and ecosystems....................................................................................................... 31 2.3 Supply of clean water........................................................................................................................................................ 35 2.4 Forest protection.................................................................................................................................................................39 2.5 Combating poverty.............................................................................................................................................................43 2.6 Demographic change....................................................................................................................................................... 48 2.7 Combating corruption....................................................................................................................................................... 51 3. Outlook – from what can be done to what needs to be done...............................................................................54 oekom inside......................................................................................................................................................................................56 Annex: glossary, company index, sources.......................................................................................................................... 57
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Editorial Robert Haßler, CEO oekom research AG When the international community agreed, at the world summit in Rio de Janeiro in 1992, to make sustainability the key model for future political, social and economic development, there was a sense that a new era was beginning. Twenty years ago, inspired by this, the sustainability rating agency oekom research began measuring companies‘ sustainability. At the time, many companies viewed this as a monstrous imposition. Manager were not used to having outsiders systematically and comprehensively scrutinising their social, environmental and ethical behaviour. Especially as this scrutiny was unsolicited, since oekom research’s sustainability ratings were commissioned not by the companies themselves, but by the investors using the ratings. oekom research has thus been a witness to the development of corporate social responsibility over the past 20 years. And there have definitely been changes: around 40 per cent of the 3,000 or so companies oekom research regularly evaluates have started integrating social and environmental aspects into their business activities systematically. Around one in six companies currently demonstrates sufficient commitment to sustainable development for oekom research to award them Prime Status in recognition of their sound sustainability management systems. On the other hand almost 60 per cent of companies as yet show little or no commitment to sustainable development, and even the best companies still fall some way short of truly sustainable management practices. For this reason, one of the main objectives of the oekom research Report is to introduce some of the pioneering companies leading the way towards a more sustainable economy and thereby to document what can and should be expected from companies. At the same time, however, we want to point out where commitment is lacking. We have set the bar high here: the issue at stake is nothing less than the question of how companies can contribute to addressing the seven great challenges of sustainable development. These are climate change, species and ecosystem protection, clean water supplies, forest protection, the fight against poverty, demographic change and the fight against corruption. In this review, we look in specific detail at the relevant industries and the best companies and present examples of sound measures. The analysis of the seven areas for action is supplemented by data and facts about general developments in companies and profiles of a total of 20 industries. All the analyses are based on oekom research’s sustainability ratings. Institutional investors, such as churches, foundations, pension funds and insurance companies, as well as banks and asset managers, use these in order to factor issuers’ sustainability performance into their capital investments. In Europe, a total of more than 6.7 trillion euros is currently being invested based on a variety of sustainability strategies. Many investors also feel that it is important to motivate companies to make a greater commitment to sustainable development.
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1. Corporate responsibility — status and trends 1.1 Basis for the analysis: the oekom Corporate Rating oekom research has been evaluating companies and countries according to social and environmental criteria since 1993. We currently have 34 analysts, from a variety of professional backgrounds, who collect relevant data from companies and independent sources. This information is then evaluated on the basis of industry-specific criteria. Our ratings are used by more than 75 clients from ten countries in the management of their capital investments and for designing appropriate investment products. Our ratings currently influence the management of investments valued at over 520 billion euros.
The universe: companies rated The oekom Universe currently comprises around 3,000 companies from over 50 countries. We cover major international indexes such as the MSCI World, MSCI Emerging Markets and Stoxx 600 as well as national indexes such as the Austrian ATX, the French CAC40, the German DAX family and the Swiss SMI. The oekom Universe can be subdivided into three categories of issuers: 1. large listed companies from conventional sectors; the analyses in this report focus on these companies; 2. listed, often small and medium-sized companies from sectors closely linked to sustainability, e.g. renewable energies and energy efficiency, recycling technologies or water treatment; 3. non-listed bond issuers, e.g. regional banks, supranational organisations such as the World Bank or railway companies. In a two-stage process, we identify from a parent population those securities which meet the requirements of sustainability-oriented investors, i.e. those which perform well in terms of sustainability and/ or do not breach the exclusion criteria selected by the investors. As a first step, the oekom Corporate Scouting process identifies the companies which can demonstrate that they meet minimum requirements in terms of social and environmental measures and of transparency thereon. Companies which do not meet these admission requirements are grouped together in the oekom Scouting Universe.
Fig. 1: Number and structure of companies analysed and rated by oekom research; as at 31.12.2012; source: oekom research (2013)
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These currently make up approximately 2,000 of the total of 3,000 companies rated. oekom research’s analysts conduct an indicative rating of these companies. The Scouting Universe is updated annually. Companies which clear this first hurdle are included in the oekom Rating Universe: The oekom Rating Universe The oekom Rating Universe comprises around 1,000 companies in total, of which approximately 800 are large listed companies from conventional sectors. In general, these are companies which, although they have already taken the first steps toward sustainability, do not necessarily yet meet all the requirements defined by oekom research. A comprehensive analysis is done for the companies in the oekom Rating Universe based on a detailed list of criteria comprising up to 100 individual criteria. In addition to the oekom Universe and the oekom Rating Universe, the companies listed in the MSCI World equity index also form an important basis for the analyses in chapter 1. This index includes companies from the oekom Rating Universe and the oekom Scouting Universe: MSCI World – the global players The MSCI World index is one of the world’s major equity indexes. It is calculated by the US financial service provider Morgan Stanley Capital International and currently comprises around 1,600 companies. The securities are selected based on their free-float market capitalisation. 537 companies from the MSCI World index have currently made it into the oekom Rating Universe, with 268 attaining oekom Prime Status. The MSCI World traditionally contains a large proportion of US companies. On average, these make up between 47 and 50 per cent, while Europe accounts for 30 to 34 per cent and Japan for around ten per cent. The rest of the portfolio is divided among the remaining regions and countries. Please note: The individual analyses in chapter 1 and 2 give reference to the parent population of companies on which the evaluations are based.
The rating methodology Companies are analysed with regard to two aspects: Exclusion criteria The use of exclusion criteria excludes from investment those companies which earn their money through controversial products or which attract attention due to controversial business practices. oekom research examines possible violations of a total of 18 exclusion criteria. These distinguish between controversial business areas, such as alcohol, nuclear power and armaments, and controversial business practices, such as violations of human rights or labour rights. Figure 2 shows the ten exclusion criteria most frequently activated by oekom research’s clients.
Fig.2: Top 10 of the exclusion criteria used by oekom research‘s clients; as at 31.12.2012; in %; source: oekom research (2013)
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Best-in-class rating and oekom Prime Status The aim of the best-in-class rating is to evaluate companies’ sustainability performance comprehensively and to identify those companies which demonstrate a particular degree of commitment to sustainable development within individual sectors. To this end, companies are rated against a large number of criteria, relating to all areas of corporate responsibility. Sustainability-oriented investors aim at triggering competition among all the companies rated for the top spots. The theory is that if capital is invested only in those companies which are leaders in their industry in terms of sustainability, it works as a great incentive for companies to vie to achieve best-in-class status in their industry. A distinction needs to be drawn between the relative and absolute best-in-class approaches. In the relative approach, a certain percentage of companies in an industry is defined as “best-in-class“, e.g. the top 20 or 30 per cent. The disadvantage here is that the lowest-scoring companies which make it into the leading group do not necessarily have to satisfy high sustainability standards. In the case of the absolute best-in-class standard, an attempt is made to avoid this by defining (ideally industryspecific) minimum standards companies have to meet in order to be awarded best-in-class status. oekom research employs an absolute best-in-class approach. Under this approach, the only companies which qualify for best-in-class status are those which have achieved a minimum rating score set by oekom research on its rating scale, which ranges from A+ (highest score) to D-. In this context, oekom research uses the term Prime threshold, which is set separately for each industry. The greater the industry‘s (potential) adverse impact on the environment, employees and society, the higher the threshold. Companies exceeding this threshold are awarded Prime Status by oekom research. In the oil & gas sector, for example, companies have to achieve a minimum score of B- in order to be rated as best-in-class – oekom research has introduced the term Prime to describe this category. Software manufacturers, on the other hand, only need a C. The lists of criteria each comprise around 100 individual criteria, a large proportion of which are industry-specific. These are regularly updated in order to take into account e.g. new technical, social or legal developments. To illustrate this better, in some ratings (especially in chapter 2) the alphabetical scores have been converted to numerical scores on a scale from 0 to 100 (highest score).
The rating process The rating of companies in the oekom Rating Universe is essentially based on two pillars. Firstly, the analysts use information provided by the companies themselves. Environmental and sustainability reports play a central role here. In addition, as part of an in-depth dialogue with our analysts, companies also provide internal documents such as environmental, anticorruption and antidiscrimination guidelines, which are reflected in the ratings. As a general rule, the more closely involved companies are in the rating process, the better the quality of the rating. Constructively critical dialogue with companies is thus an essential mark of quality of a comprehensive sustainability rating. As it is not the companies but the investors who commission oekom research’s ratings – which is what fundamentally distinguishes sustainability ratings from conventional financial ratings à la S&P, Moody’s and Fitch – there is no danger, despite the close collaboration, that companies will improperly influence the rating results. Secondly, information sources outside the company are also used, e.g. analyses and studies by trade unions and human-rights or environmental organisations. On the one hand, this information serves as a plausibility check for the data provided by the company, and on the other hand, it supplements the available data in areas in which the companies themselves scarcely provide any information, such as on violations of labour rights and human rights. These independent sources also have to satisfy strict quality requirements, for example regarding the credibility of sources or documentation of allegations against companies. Based on this information from both inside and outside the company, the various criteria are evaluated and aggregated to give an overall score. oekom research provides the company with comprehensive information about the results of their rating, free of charge. The ratings are continuously updated, and the lists of criteria are revised regularly.
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Presentation of the results The results of the ratings of industries and companies are presented in a variety of formats: Industry ratings The MSCI World forms the basis for both the rating performance at industry level and for determining the frequency of violations of exclusion criteria. We publish the average rating grade for all companies in the industry which are listed in the MSCI World and the proportion of companies in the industry which have violated each exclusion criterion. Rating of measures in the seven areas of action In sections 2.1 to 2.7 we will look at examples of companies in each of the selected sectors. The performance of six companies will be shown in numerical form on a scale from 0 to 100 (highest score). In each case, the companies chosen will be the three best in the sector plus three other companies which are well known or which are particularly important within the sector. In addition, we will indicate the average score for the sector for each rating criterion. In case it is not possible to provide an indicator-based numerical score on certain issues, we will name the three leading companies in this area in alphabetical order. These companies have performed well overall; however they have not necessarily scored full marks. Such overviews are marked with the following symbol:
1.2 Corporate responsibility: overall performance in sectors and countries There is no shortage of declarations of commitment to corporate responsibility. More than two-thirds of listed companies in Germany claim to see sustainability as crucial to their own future development.1 In a survey of medium-sized enterprises from Germany, Austria and Switzerland, over 92 per cent of respondents expressed that they expected the public – especially advertisers, business partners and customers – would look even more closely at how responsibly a company is managed in social and environmental terms in the future. Approximately 70 per cent of the CEOs surveyed believe that acting responsibly is also financially beneficial.2 From 2008 to 2011 the proportion of companies pursuing a sustainability strategy has risen from approximately 50 per cent to 62 per cent. This data comes from a survey conducted by the auditing and advisory firm KPMG of 378 companies in Europe, the USA, Canada and the Asia-Pacific region on the significance of sustainability to their company.3 61 per cent of those surveyed are convinced that implementing sustainability programmes has paid off, either in the form of cost reductions or through increasing profitability. These are striking figures. Unfortunately, the companies’ perception of themselves does not stand up to external scrutiny. The following pages will give a more realistic picture of the situation.
Overall performance As mentioned above, the self-image of companies does not stand up to external scrutiny. On the contrary, only one in six of the companies from the MSCI World rated by oekom research (16.7 per cent) currently demonstrates a high level of commitment to sustainable development, while no companies have yet qualified for the “very good” category. Around one-third of the companies (31 per cent) have shown evidence of satisfactory sustainability management initiatives, but these are not being implemented systematically on a group-wide level. Over half the companies have so far taken little or no action in this area.
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Fig. 3: Evaluation of the sustainability performance of companies from the MSCI World; in %; as at 31.12.2012; source: oekom research (2013)
The industry leaders A Renault electric car in the garage, a telephone line provided by BT, medicines from GlaxoSmithKline, a stereo system by Sony, cleaning and washing products by Henkel and a summer holiday in a Sofitel hotel: this is what your basket of goods and services might look like if you based your choice of provider on oekom research’s sustainability ratings. These are just a few of the companies which have shown a particularly high level of commitment to sustainable development within their respective sectors. Table 1 gives an overview of the top performers in each sector. This shows two things: firstly, the overwhelming majority of the companies are from Europe. British companies are particularly strongly represented, heading no fewer than seven of the sectors. Germany, France, Japan and Sweden are each represented by two companies. The USA did not have a single sector leader (see sub-section “The most active countries”). Sector
Best company 2012
Country
Rating
Automobile
Renault
FR
B
Chemicals
Linde
DE
B
Commercial Banks
Westpac Banking
AU
C+
Construction
Berkeley Group
GB
B-
Consumer Electronics
Sony
JP
B-
Food & Beverages
Coca Cola Hellenic Bottling
GR
B-
Household Products
Henkel
DE
B
Insurance
Swiss Re
CH
C+
IT
Ricoh
JP
B+
Leisure
Accor
FR
B-
Machinery
Atlas Copco
SE
B
Media
Reed Elsevier
GB
B-
Metals & Mining
Anglo American Platinum
ZA
B
Oil & Gas
OMV
AT
B-
Paper & Forest
Svenska Cellulosa
SE
B
Pharmaceuticals
GlaxoSmithKline
GB
B-
Real Estate
British Land
GB
C+
Retail
Marks & Spencer
GB
B-
Telecommunications
BT Group
GB
B
Utilities
EDP – Energias do Brasil
BR
B
Tab. 1: The best-performing companies in selected sectors; as at 31.12.2012; basis: MSCI World; source: oekom research (2013)
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On the other hand, even the best-performing companies only manage scores in the B range, sometimes even only a C+. oekom research has never yet awarded a rating in the A range to a large international corporation. The underlying assessment is that even those companies leading in the sustainability field are still a long way from being managed in a sustainable way.
The most active industries In a sectoral comparison, the paper and forest industry achieved the highest rating. They scored 47.7 on a scale from 0 to 100 (highest score) and were thus the most successful in fulfilling oekom research’s industry-specific minimum requirements for sustainability management. Manufacturers of household products came second, with an average rating of 45.4, followed by car manufacturers, which achieved an average score of 40.8. Languishing at the bottom of the rankings were retail (21.7), real estate (20.6) and oil & gas (18.9), three sectors which have a key role to play in overcoming the major challenges of sustainability (see chapter 2). Insurance companies and banks, too, failed on average to reach even 25 per cent of the maximum possible points. Sector
Sustainability performance rating
Paper & Forest
47.7
Household Products
45.4
Automobile
40.8
Consumer Electronics
38.1
IT
30.2
Food & Beverages
30.2
Utilities
28.9
Machinery
27.8
Pharmaceuticals
27.2
Media
26.6
Leisure
26.1
Telecommunications
25.9
Metals & Mining
25.0
Chemicals
24.6
Insurance
24.1
Commercial Banks
23.0
Construction
22.4
Retail
21.7
Real Estate
20.6
Oil & Gas
18.9
Tab. 2: Average rating of companies from selected industries on a scale ranging from 0 (very poor sustainability performance) to 100 (very good sustainability performance); basis: MSCI World; as at 31.12.1012; source: oekom research (2013)
The most active countries An analysis of the quality of the sustainability management systems of companies listed in the MSCI World, by country of origin, gives the following picture: half of the Italian and Finnish companies listed in the MSCI World achieved oekom Prime Status. In Finland’s case, it should however be noted that the sample involved, comprising a total of just 14 companies, is comparatively small. There are 47 German companies listed in the MSCI World, and of these, too, almost half (48.9 per cent) achieved oekom Prime Status. The proportion for the Netherlands was 44.8 per cent.
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The quality of sustainability management in North America and Asia is significantly lower. In the USA, not even one in ten companies achieved oekom Prime Status (9.5 per cent), while for Japan the figure was 7.3 per cent. Not a single company from Singapore made it into the Prime category. Number of companies in the MSCI World
Proportion of companies with oekom Prime Status
Italy
24
50.0
Finland
14
50.0
Germany
47
48.9
Netherlands
29
44.8
France
68
39.7
UK
102
38.2
Country
Sweden
34
35.3
Spain
23
30.4
Ireland
14
28.6
Switzerland
48
27.1
Australia
67
14.9
USA
570
9.5
Japan
315
7.3
Canada
98
6.1
Canada
40
5.0
Singapore
32
0.0
Tab. 3: Proportion of companies with oekom Prime Status in various countries; basis: MSCI World; as at 31.12.2012; source: oekom research (2013)
1.3 Labour rights, human rights, environmental protection – how seriously do companies take international standards? Responsible company management is also particularly reflected in whether, and if so to what extent, companies take recognised international standards into account. In view of this, we will analyse the extent to which companies infringe labour rights, human rights and environmental standards.
Labour rights The ILO estimates that there are almost 3.1 billion employees worldwide (2010). A substantial proportion of these work in global supply chains. In many developing and emerging economies, jobs in the supply chains of multinational corporations represent an important branch of the economy. The following statistics illustrate that the situation for many people working in these supply chains is in need of improvement: • According to the ILO, every year around 2.3 million employees lose their lives through accidents at work or work-related illnesses. Worldwide, the proportion of workers who, together with their families, are living below the poverty line of less than two US dollars a day stands at 39 per cent. According to a 2010 ILO study on child labour, the global number of children working amounts to 215 million. More than half of these are engaged in work classified as hazardous.4 • In 2010, the NGO Oxfam published data illustrating the precarious situation in some countries and industries: In Bangladesh, 75 per cent of workers in the textile industry (working on an hourly basis) had no written contract, and 89 per cent do not know what their basic wage without overtime is. 68 per cent of labourers in Morocco’s agricultural industry earn less than the legal minimum wage.5
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• The International Trade Union Confederation (ITUC) rates South America as the most dangerous part of the world to engage in trade union activities. In 2010, 90 trade unionists were murdered, 49 of them in Colombia alone. There were 75 reported death threats and at least 2,500 arrests. More than 5,000 people were dismissed on account of their trade union activities.6 The “core labour standards” drawn up by the ILO represent important standards for global labour rights. These core labour standards comprise eight conventions which embody the four fundamental principles of the ILO: • freedom of association and the right to collective bargaining, • elimination of forced labour, • abolition of child labour and • prohibition of discrimination in respect of employment and occupation. In 1998, the ILO adopted the “Declaration on Fundamental Principles and Rights at Work”.7 The ILO’s core labour standards are internationally recognised as “qualitative social standards” and can be characterised as universal human rights which have a claim to validity in all countries, irrespective of their level of economic development. The right to work, to fair working conditions, to form trade unions and to strike were also enshrined in the United Nations‘ International Covenant on Economic, Social and Cultural Rights of 1966.8 Besides the ILO core labour standards, further key issues play a role in oekom research’s sustainability rating including workplaces which pose a health hazard, forced pregnancy testing or HIV testing, excessive working hours and extremely poor wages. All these issues are taken into account in the following analyses. While companies began to outsource production processes to emerging and developing countries with low labour costs as long ago as the 1960s, it was not until the 1990s that the public really became aware of the poor working conditions in the global supply chains of multinational companies. One of the best-known campaigns by NGOs was directed against the sports equipment manufacturer Nike, which came under severe pressure due to allegations that it was using child labour.
Fig. 4: Proportion of companies in individual sectors which have infringed labour rights; basis: MSCI World; in %; as at 31.12.2012; source: oekom research (2013)
Even today, the textiles industry leads the field when it comes to proven serious violations of labour rights. More than one in five companies listed in the MSCI World (22.2 per cent) breach recognised labour standards either themselves or through their supply chains. In the retail sector, the proportion stands at 13.3 per cent. In the IT sector, which for example has made headlines in recent years due to the poor working conditions at the Taiwanese supplier Foxconn, 6.8 per cent of companies breach the standards. By far the majority of the cases documented here relate to poor working conditions in global supply chains. However, in some individual cases it is the company itself which has breached the standards. Here, systematic discrimination against women is a comparatively frequent cause of violations identified by oekom research.
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oekom World Map of Labour Rights Violations
1 USA: anti-union behaviour in the private sector 2 Central America: restrictions on freedom of association and discriminatory practices in free trade areas 3 Colombia: persecution and murder of trade union members; generally poor health and safety conditions in mines, inadequate workplace safety 4 Brazil: cases of forced labour in agriculture; poor working conditions in textiles factories 5 Spain: poor working conditions for migrant agricultural workers 6 Egypt: child labour in agriculture 7 Ivory Coast: child labour and forced labour in the cocoa industry 8 DR Congo: forced labour and child labour in the mining of coltan, cobalt, tin and gold 9 Malawi: bonded labour on tobacco plantations 10 South Africa: frequent serious accidents and widespread occupational diseases such as sili cosis in gold mines 11 Uzbekistan: child labour in the cotton industry 12 Kazakhstan: bonded labour on tobacco plantations; serious accidents due to poor safety standards in coal mines 13 India: generally poor occupational safety conditions in mines, inadequate workplace safety 14 Bangladesh, China, India: forced overtime, below-subsistence-level wages, inadequate health and safety standards in the manufacturing industry 15 China: child labour and forced internships in IT suppliers
Fig. 5: Selected cases of labour rights violations; source: oekom research (2013)
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Human rights Bloody clashes between mine workers and security forces at the Western Platinum Mine in South Africa on 16 August 2012 left 34 dead and around 80 injured. The mine is operated by the British mining company Lonmin and forms part of the Marikana mine complex around the town of Rustenburg. The outbreak of violence was preceded by large-scale strikes. On 10 August 2012, 3,000 unionised mine workers downed tools and began armed, violent protests to reinforce their demands for a significant increase in wages from 4,000 South African rand (equivalent to around 390 euros) to 12,500 rand. Lonmin’s role has not yet been definitively clarified, but in oekom research’s view, the company bears at least a share of the responsibility for the events around the mine. The large-scale use of physical violence against third parties, together with the commissioning of and/or active support for such violence, for example by security forces, is an example of human rights violations relevant in the corporate context. Here, the boundary drawn by oekom research between labour rights and human rights is a fluid one. In oekom research’s view, human rights violations also include • Measures by companies which knowingly put the health or lives of local residents, customers or other persons at serious risk; • Human trafficking; • Measures which grossly violate the rights of third parties to self-determination; • Measures which grossly disregard the right of third parties to cultural self-determination or their cultural dignity. Companies in the mining industry are by far the most frequently involved in human rights violations. Almost eleven per cent of companies from the MSCI World have perpetrated this kind of violation. These often involve the forced displacement of local residents and inadequate compensation paid to them following the expansion of mines, or the disruption of the livelihoods of the local population due to destruction of the natural environment. Health problems also occur as a result of environmental pollution, for example due to the use of harmful substances such as mercury in gold mining.
Fig. 6: Proportion of companies in individual sectors which have committed violations of human rights; basis: MSCI World; in %; as at 31.12.2012; source: oekom research (2013)
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oekom World Map of Human Rights Violations
1 Guatemala: inadequate compensation of the local population following relocation, as well as detrimental effect of company activities on people’s livelihoods 2 Peru: deaths and injuries following deployment of police and security forces during demonstrations against mining 3 Colombia: threats made to inhabitants, forced relocation and inadequate compensation 4 Brazil: deaths and injuries among demonstrators following deployment of a security firm; destruction of/damage to the livelihoods of indigenous peoples 5 Argentina: human trafficking/placement of workers in precarious employment 6 South Africa: forced resettlement and inadequate compensation of local population, destruction of places of worship and graves; deaths following deployment of police during armed strike 7 Nigeria: destruction of livelihoods through large-scale environmental pollution from oil production 8 Ghana: use of force, threats to and intimidation of population, damage to livelihoods (arable land) coupled with inadequate compensation 9 Ethiopia: displacement of indigenous peoples damage to the livelihoods 10 Tanzania: deaths following deployment of security firm in a mine 11 India: violent clashes between pro- and anti-mining activists 12 Indonesia: mass intimidation and force used against the population by the military, supported/paid for by mining companies 13 Papua New Guinea: forced evictions and threats of violence, killings of illegal prospectors by security personnel 14 Philippines: mining industry profiting from intimidation and force (including killings) by military and guerrillas Fig. 7: Selected cases of human rights violations; source: oekom research (2013)
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Environmental protection The ThyssenKrupp steelworks in Brazil has been fined four million euros by the environmental authorities in Rio de Janeiro. The reason was graphite dust emissions which were polluting the neighbourhood of the factory. According to media reports, since the industrial complex started operation in June 2010 residents have constantly complained of coughs and inflamed airways caused by the air pollution. The Nigerian Maritime Administration and Safety Agency (NIMASA) has accused Shell of having made false statements about the extent of an oil spill off the Nigerian coast. According to Shell, up to 40,000 barrels of oil leaked into the sea during deep-sea drilling carried out by Shell Nigeria at the Bonga oilfield off the coast of Nigeria. These are just two examples from 2012 of the enormous impacts that companies continue to have on the natural environment. In these cases, the source of the environmental destruction was the operation by companies from industrialised countries of their own plants in emerging and developing countries. In these countries, legal environmental standards are frequently not very high or are not implemented consistently. In oekom research’s view, it is therefore particularly important for companies from industrialised countries to set themselves uniformly high environmental standards worldwide and observe these consistently. Environmental violations are particularly common in the mining industry and the oil & gas sector, where interventions in the natural world sometimes take place on a massive scale. Of the companies in these two sectors from the MSCI World analysed by oekom research, 29.2 and 26.3 per cent respectively have committed this kind of violation. As regards the mining industry, the main issue is the impact of opencast mining, but the repercussions of the use of toxic substances, for example mercury and cyanide in the extraction of gold, are also a concern.
Fig. 8: Proportion of companies in individual sectors which have committed violations in the area of environmental protection; basis: MSCI World; in %; as at 31.12.2012; source: oekom research (2013)
Environmental destruction in the oil & gas industry results from the exploration for and extraction of oil and gas and the associated construction of the necessary infrastructure. Production is increasingly frequently taking place in sensitive natural environments, for example in Alaska, in the Niger Delta or in the deep sea. The construction and operation of pipelines also has an adverse impact on the environment, particularly due to leaks. For example, in the winter of 2011 the Trans-Alaska pipeline was shut down for several days due to an oil leak. Alyeska Pipeline Service, the operator of the pipeline, is majority-owned by the oil company BP, with other shareholders including ConocoPhillips, Exxon Mobil, Chevron and Koch Industries. Environmental violations in the banking sector result from the financing of controversial projects or companies, for example dam projects in South America or operators of palm oil plantations in Indonesia, both of which have very serious adverse effects on nature. Besides problems at companies’ own sites and subsidiaries, serious environmental pollution may also be caused by low environmental standards in (supplier) companies in emerging and developing countries. According to media reports in autumn 2011, for example, ten per cent of all China’s agri-
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cultural land is polluted by lead, mercury, cadmium or other heavy metals of industrial origin. These factories are often manufacturing products for the European, Japanese or North American markets. By introducing appropriate environmental standards in the procurement of raw materials and intermediate products, industrial and commercial companies in industrialised countries can exert influence over manufacturers in emerging and developing countries and thereby improve environmental protection measures in such companies.
1.4 Profiles – what individual sectors are doing to promote sustainable development A brief outline of the sectors, which are particularly relevant to sustainable development is given below. In each case, information is given on the following aspects: How many large listed companies from • Total number of companies the sector concerned have been analysed by oekom research in total? How many of these companies meet the • oekom Prime Status sector-specific minimum requirements in terms of sustainability management? • Key sustainability issues What sustainability issues are of particular importance in the sector? • Top companies Which three companies are currently tackling sustainability challenges particularly successfully?
Please note: The following data on the number of companies analysed and the best companies in a sector relate to the large listed companies included in the oekom Universe. Companies are rated on a scale from A+ (highest score) to D-. Prime Status is awarded to companies which meet sector-specific sustainability management requirements. The greater a sector’s (potential) social and environmental impact, the higher the relevant threshold score. Breaches of exclusion criteria are not explicitly taken into account here, but are reflected in the rating. Further information on the rating methodology can be found in section 1.1.
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Automobile
• Total number of companies analysed
33
• Number of companies with oekom Prime Status
9
Key sustainability issues • • • • •
Vehicle fleet consumption Alternative drive systems Strategy for addressing climate change and related risks Supply chain management regarding labour issues Reduction of hazardous substances in products and components
Top 3 companies 1 Renault FR B 2 BMW DE B 3 Peugeot FR B-
Chemicals
• Total number of companies analysed 107
• Number of companies with oekom Prime Status
5
Key sustainability issues • • • • •
Chemical and product safety management Implementation of a climate protection strategy Shift to renewable raw materials and their sustainable sourcing Safety of plants and during transportation Worker safety and accident prevention
Top 3 companies 1 Linde DE B 2 Akzo Nobel NL B3 BASF DE B-
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Commercial Banks
• Total number of companies analysed 264
• Number of companies with oekom Prime Status
20
Key sustainability issues • • • • •
Environmental and social standards in lending and investment banking Customer and product responsibility Integration of sustainability aspects into asset management Employee relations and working environment Fair business practices
Top 3 companies 1 Westpac Banking AU C+ 2 Societe Generale FR C+ 3 Dexia BE C+
Construction
• Total number of companies analysed
66
• Number of companies with oekom Prime Status
5
Key sustainability issues • • • • •
Energy and resource efficiency of the built environment Impact on land use and biodiversity Working conditions of employees, especially health and safety and illicit work Involvement in unethical business conduct, e.g. corruption Creation of sustainable communities
Top 3 companies 1 Berkeley Group 2 Skanska 3 Taylor Wimpey
GB BSE BGB C+
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Consumer Electronics
• Total number of companies analysed
18
• Number of companies with oekom Prime Status
6
Key sustainability issues • • • • •
Supply chain management regarding labour issues Reduction of hazardous substances in products and components Energy efficiency of products Take-back schemes and recycling/reuse of products Customer information on energy saving options and hazardous substances
Top 3 companies 1 Sony JP B2 Royal Philips NL B3 Samsung KR C+
Food & Beverages
• Total number of companies analysed 126
• Number of companies with oekom Prime Status
15
Key sustainability issues • • • • •
Sustainable agriculture and fisheries Sustainable water management Strategy for addressing climate change and related risks Strategy for addressing consumer health and nutrition Supply chain management regarding labour issues
Top 3 companies 1 Coca Cola Hellenic B. GR B2 Unilever GB/NL C+ 3 Danone FR C+
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Household & Personal Products
• Total number of companies analysed
26
• Number of companies with oekom Prime Status
9
Key sustainability issues • • • • •
Safety assessment and enhancement of products Responsible marketing and consumer information on product safety Reduction and/or elimination of animal testing Promotion of the use of sustainable renewable raw materials in products Minimisation of the environmental impact of packaging
Top 3 companies 1 Henkel DE B 2 Natura Cosmeticos BR B3 L’Oreal FR B-
Insurance
• Total number of companies analysed 104
• Number of companies with oekom Prime Status
11
Key sustainability issues • • • • •
Customer and product responsibility Integration of sustainability aspects into property insurance business Integration of sustainability aspects into proprietary and third-party capital investment business Strategy for addressing climate change and related risks Employee relations and working environment
Top 3 companies 1 Swiss Re CH C+ 2 Ass. Generali IT C+ 3 Allianz DE C+
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IT
• Total number of companies analysed 161
• Number of companies with oekom Prime Status
26
Key sustainability issues • • • • •
Supply chain management regarding labour issues Reduction of hazardous substances in products and components Energy efficiency of products Take-back schemes and recycling/reuse of products Customer information on energy saving options and hazardous substances
Top 3 companies 1 Ricoh JP B+ 2 Intel US B+ 3 Hewlett-Packard US B
Leisure
• Total number of companies analysed
37
• Number of companies with oekom Prime Status
9
Key sustainability issues • • • • •
Environmental impacts along the whole product chain Customer orientation Creation of social/cultural benefits through tourism and prevention of (child) sex tourism Supply chain management regarding labour issues Casino operators: protection of risk groups from gambling
Top 3 companies 1 Accor FR B2 Carnival GB/US B3 TUI Travel GB B-
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Machinery
• Total number of companies analysed 120
• Number of companies with oekom Prime Status
21
Key sustainability issues • • • •
Eco-efficiency of products Resource-conserving production Health and safety in the company and in the supply chain Customer-focused product responsibility
Top 3 companies 1 Atlas Copco SE B 2 SKF SE B3 Cummins US B-
Media
• Total number of companies analysed
46
• Number of companies with oekom Prime Status
7
Key sustainability issues • • • • •
Editorial responsibility Guardianship for recipients Media access Reduction of environmental impacts of media production and distribution Working conditions for staff and freelancers
Top 3 companies 1 Reed Elsevier GB B2 British Sky GB B3 ITV GB B-
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Metals & Mining
• Number of companies with oekom Prime Status
• Total number of companies analysed 130
11
Key sustainability issues • • • • •
Local integration and protection of human rights and livelihoods Anti-corruption, transparency on payments and traceable supply chains Minimisation of environmental risks and impacts of mining and processing of minerals Worker safety and accident prevention Climate protection through energy efficiency and the use of secondary raw materials
Top 3 companies 1 Anglo American Platinum 2 Gold Fields 3 Norsk Hydro
ZB
B
ZA NO
B B
Oil & Gas
• Total number of companies analysed 161
• Number of companies with oekom Prime Status
9
Key sustainability issues • • • • •
Climate protection and gradual shift to low-carbon and non-fossil energy sources Minimisation of environmental risks and impacts Employee and contractor safety and accident prevention Prevention of corruption and transparency on government relations and payments Protection of human rights and livelihoods
Top 3 companies* 1 OMV AT B2 Total FR B3 Hess US B* highest-ranked integrated oil & gas companies
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Paper & Forest Products
• Total number of companies analysed
20
• Number of companies with oekom Prime Status
6
Key sustainability issues • • • • •
Sustainable management of forests/plantations Use of recycled wood/fibre and sustainable procurement of fresh wood/fibre Reduction of environmental impacts in further processing of wood to wood products/pulp/ paper products Protection of human rights and livelihoods Employee and contractor safety and accident prevention
Top 3 companies 1 Svenska Cellulosa SE B 2 Stora Enso FI B 3 Holmen SE B
Pharmaceuticals & Biotechnology
• Total number of companies analysed
69
• Number of companies with oekom Prime Status
10
Key sustainability issues • • • • •
Advancing access to medicines in developing countries Fair marketing & business practices Water strategy covering production and product use Ethics in research and development (e.g. clinical trials) Transparency on lobbying and influence on public policy
Top 3 companies 1 GlaxoSmithKline GB B2 Novozymes DK B3 Novartis CH B-
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Real Estate
• Total number of companies analysed 148
• Number of companies with oekom Prime Status
7
Key sustainability issues • • • • •
Climate protection, energy-efficient buildings and use of renewable energies Green building considerations in design, acquisitions, use and refurbishments Health and well-being of building users Work safety and employees‘ rights on building sites Ecological and social aspects for site selection
Top 3 companies 1 British Land 2 Unibail-Rodamco 3 Capital Shopping C.
GB C+ FR C+ GB C+
Retail
• Total number of companies analysed 132
• Number of companies with oekom Prime Status
10
Key sustainability issues • • • • •
Labour standards in the company and supply chain Customer information on product characteristics Promotion of products with an added value regarding ecological or social aspects Sustainable cultivation and production methods in the supply chain Strategy for addressing climate change and related risks
Top 3 companies 1 Marks & Spencer 2 Kingfisher 3 Hennes & Mauritz
GB BGB BSE C+
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Telecommunications
• Number of companies with oekom Prime Status
• Total number of companies analysed 104
15
Key sustainability issues • Climate protection through reduction of energy use and provision of products that help others reduce their GHG emissions • Customer orientation: data protection, child protection, feedback management, responsible marketing, reduction of the digital divide • Responsibility for social and environmental conditions in the supply chain • Handling and prevention of electronic waste
Top 3 companies 1 2 3
BT Group Deutsche Telekom Telecom Italia
GB DE IT
B B B
Utilities
• Number of companies with oekom Prime Status
• Total number of companies analysed 143
18
Key sustainability issues • • • • •
Climate protection through increased use of renewable energies and energy efficiency Secure and reliable energy and water supply for all sections of the population Environmentally sound operation of plants and infrastructure Fair business practices Worker safety and accident prevention
Top 3 companies* 1 EDP-Energias do Brasil 2 Suez-Environnement 3 EDP-Energias de Portugal
BR FR PT
B B B
* without network operators
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2. Global Challenges – how do global players deal with the main challenges of sustainable development? In the past, repeated attempts have been made to reduce the complexity of the sustainable development model by drawing up lists of concrete targets. The eight “Millennium Development Goals (MDG)” agreed by the United Nations in 2000 must surely rank among the most well-known such targets.9 Their aims include halving the number of people living on under one dollar a day and the proportion of people suffering from hunger by 2015. Further targets relate to primary school education for all children, combating extreme poverty and hunger, equality for women and ensuring a sustainable environment. Doubts are now increasingly being cast on the feasibility of achieving these targets, as insufficient progress has been made in many areas over the past decade. At the European level, too, the sustainability strategy of the European Commission has defined seven priority areas for sustainable development.10 These include climate change and the development of clean energies, sustainable consumption and sustainable production, protection and management of natural resources, and addressing global challenges in the areas of poverty and sustainable development. At the company level, the UN Global Compact is of key importance.11 Its ten Principles define how responsible companies should behave in the areas of human rights, labour standards, environmental protection and corruption. To date, more than 7,000 companies have undertaken to comply with the Principles and to report annually on their progress in implementing appropriate measures. This makes the UN Global Compact the world’s largest corporate initiative of its kind. From the latter and from other comparable lists of political and business-related targets, such as the United Nations Environment Programme’s (UNEP) “Global Environmental Outlook”12, oekom research has picked out seven major sustainable development challenges, which will be examined below. First we will present key facts about the seven challenges and will then analyse the contribution made by key sectors to addressing these challenges (see table 4).
Global Challenges
Key sectors & key issues
Climate change
Automobile
Energy Suppliers
Biodiversity
Oil & Gas
Leisure
Water
Food & Beverages
Pharmaceuticals
Water Suppliers
Forest protection
Construction
Media
Paper & Forest
Poverty
Fair Trade
Microfinance
Pharmaceuticals
Demografic change
Retail
Real Estate
Media
Corruption
Cross-sector analysis
Oil & Gas
Tab. 4: Global sustainability challenges and key sectors and issues for addressing these; source: oekom research (2013)
The selection of these sectors does not mean that other sectors are not also relevant to these seven areas for action. For example, in its latest “Global Chemicals Outlook” the UNEP assigned the chemicals industry a key role in paving the way towards a green economy.13 The engineering industry can make a substantial contribution to climate protection by increasing the energy efficiency of its machinery, just as the IT sector can help to bridge the so-called “digital divide“. However, the selection presented here purports to include those sectors which oekom research sees as particularly relevant in terms of opportunities and measures. The individual areas for action are not independent of each other. For example, the impacts of climate change on the food situation and therefore on opportunities for combating poverty are even now becoming increasingly apparent. The UN Food and Agriculture Organisation (FAO), for example, is proceeding on the assumption that climate change will render two-thirds of currently available agricultural land unusable by 2025.14 The British development organisation Oxfam predicts that by 2030, climate change will cause food prices to rise by 50-90 per cent more than they would otherwise
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have done.15 Lastly, the World Food Programme forecasts that by 2050, the number of people at risk of hunger worldwide will rise by an additional 10-20 per cent if climate change is not curbed.16 Climate change also impacts on species diversity and the ability of ecosystems such as moors and coral reefs to function. Changes in temperature and precipitation, shifting of the seasons and the spread of pests are just a few examples of how climate change alters living conditions. The golden toad from Costa Rica is considered to be the first species which has verifiably become extinct as a result of recent climate change. Studies have shown that global warming greatly reduced the frequency of mist and rain in its range. A further example: poverty and population growth are often treated as being directly linked, but their impacts need to be examined separately. The simple formula, which states that the population explosion is one of the causes, if not the main cause, of poverty in emerging and developing countries, is now being called into question. For example, experts point to the fact that the food situation and thus agricultural efficiency are the primary causes of poverty.17 However, agricultural yields are in turn increasingly dependent on climate change.
2.1 Climate protection and adaptation to climate change 2.1.1 Facts Much has been published in recent years about climate trends and human influence on these. The current state of research is summarised in a number of studies, which were published in the run-up to the world climate summit in the desert state of Qatar at the end of November 2012: • In its “Emissions Gap Report 2012”, the UNEP documents a 20 per cent rise in global CO2 emissions since 2000.18 A total of 50 gigatonnes of CO2 are now being emitted every year. In order to achieve the so-called “two-degree target“, i.e. limiting the rise in global temperature to a maximum of two degrees above pre-industrial levels, it would be necessary to cut emissions to a maximum of 44 gigatonnes. The international community agreed on the two-degree target at the world climate summit in Cancún in 2010. • The auditing and consulting firm PricewaterhouseCoopers (PwC) is also sceptical about the two-degree target. Its report “Too late for two degrees? Low carbon economy index 2012” states that while CO2 emissions did rise by less than economic output in 2011, carbon intensity, or the ratio of CO2 emissions to real GDP, improved by just 0.7 per cent. According to PwC, this level of CO2 reduction is not enough to limit global warming to two degrees. For this to happen, PwC calculates that carbon intensity would have to fall by 5.1 per cent every year until 2050.19 • The UN’s World Meteorological Organisation (WMO) sees 2012’s capricious weather as reflecting changes in climate which began a long time ago.20 For example, 2012 was the ninth-hottest year since modern records began in 1850. According to the WMO, 2012 was characterised by above-averagely high temperatures and extreme weather events. For example, the mix of heat waves and drought sparked numerous forest fires in the northern hemisphere. The WMO sees such events as a foretaste of our future climate. • A study by the Potsdam Institute for Climate Impact Research shows that sea level is rising significantly faster than was previously assumed. Based on satellite measurements, researchers have calculated that sea level is currently rising not by 2 but by 3.2 millimetres a year.21 • Alliance Development Works, an alliance of German aid organizations including Brot für die Welt [Bread for the World], terre des hommes and Welthungerhilfe [World Hunger Aid], records in its “WorldRiskReport 2012” a total of 4,130 natural disasters, involving more than a million fatalities and economic losses of at least 1.195 trillion US dollars for the decade 2002 to 2011.22 The report includes the WorldRiskIndex, drawn up by the United Nations University‘s Institute for Environment and Human Security (UNU-EHS) in collaboration with Alliance Development Works. The index calculates the risk of falling victim to a disaster as a result of a natural event for 173 countries around the world. According to the index, the disaster risk is greatest in the Pacific island state of Vanuatu, which is assigned a risk value of 36.31 per cent. Malta and Qatar, with values of 0.61 and 0.10 per cent respectively, have the lowest risks worldwide. Germany, at 3.27 per cent, is ranked 146th, which puts it in the lowest of the five risk classes.
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At the end of November 2012, the 18th Climate Change Conference took place in Doha, the capital of “low-risk” Qatar. The aim of the conference was to come up with a follow-up agreement to the Kyoto Protocol, which was agreed on 11 December 1997, entered into force on 16 February 2005 and expired on 31 December 2012. It is the only global climate protection treaty to date to have agreed binding targets on greenhouse gas (GHG) emissions. More than 190 countries ratified it. A few countries with high CO2 emissions, such as China and the USA, have so far refused to participate, which seriously limits the effectiveness of the Protocol. Under the Protocol, the industrialised nations jointly undertook to reduce their emissions of the major GHGs to at least five per cent below 1990 levels by 2012. Countries committed themselves to varying levels of emissions reductions. Germany took on a reduction of 21 per cent. This target has already been reached, largely due to the collapse of East German industry. The game of “pick-up-sticks” over emissions limits in Doha resulted in a minimal consensus, whereby it was agreed to extend the Kyoto Protocol, but without tightening the reduction targets. This second commitment period began on 1 January 2013 and is intended to continue until the end of 2020. By 2015, the intention is to agree a new treaty which will oblige not just industrialised countries but also developing countries to reduce their GHG emissions. This is expected to enter into force in 2020. Environmentalists and climate protection advocates criticised the outcome of the conference as inadequate. International climate policy identifies two basic strategies for combating climate change and its consequences: • Mitigation: combating the causes of climate change by cutting GHGs • Adaptation: adapting to the consequences of climate change e.g. by constructing higher dykes In both areas, opportunities are opening up for companies, through appropriate products and services, to make a contribution to implementing these strategies and at the same time to open up attractive business areas for themselves. For example, renewable and low-carbon energies and energy efficiency technologies help to reduce GHG emissions. In oekom research‘s corporate ratings, greater weight is attached to mitigation of the causes of climate change than to adaptation. The Kyoto Protocol provides three instruments which give the signatory states flexibility in the implementation of their reduction targets (flexible mechanisms or “flex mechs“): international emissions trading, the clean development mechanism (CDM) and joint implementation (JI). The basic idea behind all three flex mechs is that the industrialised countries can partially fulfil their reduction commitments abroad and thus more cost-effectively than would be possible at home. Emissions trading, in particular, is a climate protection instrument which affects companies directly. For example, numerous sectors have been included in the European Union Emissions Trading System (EU ETS), most recently aviation, on 1 January 2012.
2.1.2 Measures taken by companies
Automobile
According to Verkehrsclub Deutschland (VCD), a German transport and environmental organisation, around 29 per cent of EU-wide CO2 emissions currently come from traffic.23 While CO2 emissions in the EU have fallen overall in many sectors in recent years, those from traffic rose by 27 per cent between 1990 and 2010. Current EU rules stipulate that all new cars sold in the EU since 2012 must on average emit no more than 120 grams CO2 per kilometre. From 2020, the emissions limit is to be reduced to 95 grams CO2. In the past, there was criticism of the German automotive industry, in particular, for the relatively high carbon dioxide emissions of its cars. The CO2 emissions of cars are directly linked to fuel consumption. A further tightening of the limits, as demanded by various environmental organisations, is under discussion. In this context, oekom research rates various areas with regard to the reduction of CO2 emissions: firstly, the progress made by car manufacturers in reducing fleet consumption, i.e. the average fuel consumption of all the vehicles sold by a manufacturer. Here, suppliers of small and mid-range vehicles have a natural advantage over high-end manufacturers, even if these like to score points now and then by referring to the “consumption per horsepower” ratio. In Europe, the leaders in this area are currently Peugeot, Renault and VW. Manufacturers often introduce particularly efficient ran-
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ges of models to demonstrate what might be possible in terms of consumption. However, these are often manufactured in very small series. In oekom research’s view, the leaders here currently include Daimler, Smart, Toyota and VW. Secondly, oekom research rates series production of vehicles with alternative drives. Toyota scores well here with its wide range of hybrid vehicles, while Peugeot and Renault have been supplying electric cars for a number of years now. The other suppliers are also active in both these areas, though the importance of fuel cells is tending to dwindle.
Alternative drives: The leading automobile companies • • •
Peugeot Renault Toyota As at 31.12.2012; in alphabetical order
Energy suppliers
According to the Intergovernmental Panel on Climate Change (IPCC), energy supply accounts for over 25 per cent of worldwide anthropogenic greenhouse gas emissions.24 Given the omnipresence of climate change and financial regulations such as emissions trading systems, no company can avoid the issue of climate protection. Accordingly, most of the companies analysed by oekom research publish comprehensive information on their climate and risk management. However, very few of them have set themselves ambitious targets for reducing their greenhouse gas emissions. Where targets do exist, they are often limited to particular regions or activities. The fact that some energy suppliers base their climate strategies to a large extent on the expansion of nuclear power, which carries high environmental and safety risks with it, and, under the banner of “clean coal“, on technologies that are not yet fully developed, such as carbon capture and storage (CCS), is also highly questionable. Some utility companies have a reputation for obstructing national climate strategies and the restructuring of the energy system by engaging in extensive lobbying activities. Positive measures in this area include improving the efficiency of energy conversion and expanding the use of renewable energies. A number of companies, including EDP – Energias de Portugal and SSE, have impressive climate strategies in place. The Portuguese energy supplier EDP has set itself the target of reducing the carbon intensity of its energy production by 70 per cent (compared to 2008 levels) to 120g CO2/kWh by 2020. In order to achieve this target, the company is investing in, among
Fig. 9: Evaluation of selected companies’ climate targets and measures for cutting GHG emissions; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
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other things, wind power and hydroelectricity and in converting conventional coal-fired power stations to gas and steam cogeneration plants. SSE has also set itself a specific reduction target. From 2006 to 2020, the carbon intensity of its electricity generation is to be reduced by 50 per cent, from an initial value of 600g CO2/kWh. Besides expanding its use of renewable energies, measures cited by the UK company also include reducing its use of coal-fired power stations and improving the efficiency of its gas-fired power stations. On average, the companies in this sector scored just 48 out of a possible 100 points on this key issue. The German company MVV Energie and the Austrian company EVN were among those receiving below-average ratings for climate targets and measures to cut GHG emissions. In the area of renewable energies, oekom research’s view is that energy providers should set themselves specific expansion targets and should publish information on relevant planned investments. The industry clearly still has a lot of catching up to do in this area. While almost all the companies report on relevant initiatives, only a few can point to a convincing overall strategy. Where information on planned investments exists, this is hardly ever shown in the context of investments by other energy suppliers. EDP is one of the most progressive and transparent companies in this regard. The expansion of the networks and the establishment of a flexible electricity network (Smart Grid) are also of key importance in the area of renewable energies. Promising projects are already being implemented in this area, for example the installation of smart electricity meters and research on innovative storage technologies. However, the majority of initiatives are still in their infancy.
Oil & gas
As with the energy suppliers, the majority of the companies from the oil & gas sector analysed by oekom research have also identified climate protection as a key area for action in their environmental protection work. Many of the companies have provided relevant declarations of intent and detailed emissions figures. However, these declarations are often not followed up by appropriate action. In particular, large numbers of companies shy away from setting concrete reduction targets for their GHG emissions. In the rating of reduction targets for GHG emissions and of corresponding action plans and measures, the only company to perform well was Hess (USA). It has pledged, among other things, to reduce specific GHG emissions by 20 per cent (compared to 2008 levels) by 2013 on a group-wide basis. Specific GHG emissions is understood here to mean GHG emissions relative to production volume. The company’s climate protection strategy states, among other things, that when building a production plant, it will always conform to the highest industry standard, that it will implement a company-wide programme to increase energy efficiency, and that it will draw a significant proportion of the electricity it uses from renewable energy sources.
Fig. 10: Evaluation of selected companies’ climate targets and measures for cutting GHG emissions; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
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The French company Total has also set itself comparatively ambitious reduction targets. The company is striving to cut its GHG emissions by 15 per cent (compared to 2008 levels) by 2015. In addition, both Total and Hess have set themselves targets for reducing gas flaring, which is responsible for almost one-third of Total’s GHG emissions. The aim here is to reduce emissions to 50 per cent of 2005 levels by 2014. With an average score of 42 out of 100, in this key area the industry falls far short of the potential demonstrated by Hess. The companies with below-average scores include Shell and BP.
Degression: fracking In its campaign to become the world’s largest oil & gas producer by 2020, the USA is relying on the controversial technique of fracking. This extraction method involves pumping a fluid underground into the reservoir rock, e.g. shale, in order to create, enlarge and stabilise fractures. This is meant to increase the permeability of the rock layers so that natural oil and gas can be extracted more easily. The fluid used consists of water and sand, to which various chemicals are added. Environmental campaigners fear that these chemicals may have adverse effects on the environment, particularly on groundwater. In Germany there are also plans to extract natural gas by means of fracking.25 Companies currently using fracking include BP, Chevron, Exxon, Shell and Statoil.
2.2 Protecting species diversity and ecosystems For a long time, companies have tended to see the protection of rare animals, for example where infrastructure projects are concerned, as a burdensome obligation or as a putative argument for preventing such projects. Recently, the relationship between species protection and industry has been discussed on a more rational plane, and companies have realised that the issue presents not only great risks, but also opportunities for business success. This realisation was urgently needed: WWF estimates that between three and 130 species are dying out every day and that the total number of species decreased by 40 per cent just in the period from 1970 to 2000.26 The complex web of relationships between companies and biodiversity will be analysed below.
2.2.1 Facts Biodiversity refers to the diversity of species on Earth, the diversity within species and the diversity of ecosystems. Coordinated by the 2010 Biodiversity Indicators Partnership, a series of quantifiable indicators for biodiversity and its development over time has been compiled.27 These include, for example, the concentration and distribution of species, forested areas, and the area of land that is protected, e.g. by nature reserves. Just under two million species have now been described worldwide. Based on this figure, the Millennium Ecosystem Assessment has put the number of species on Earth at 13.6 million.28 Other estimates put the figure as high as 100 million species. The term “biodiversity“ tends to suffer from the same problems as the term sustainability: despite growing awareness, the term still lacks wide recognition and a concise definition. Although 83 per cent of Swiss and 42 per cent of Germans have heard of the term, only 37 and 20 per cent respectively have any idea what it means.29 According to the Red List of threatened species regularly published by the International Union for Conservation of Nature (IUCN), over 19,800 plant and animal species worldwide are threatened with extinction.30 The Living Planet Report 2012 published by WWF also clearly shows how humanity is putting increasing pressure on plants and animals.31 The Living Planet Index documents a decline of around 30 per cent in stocks of selected species since 1970, and in tropical regions of as much as 60 per cent on average. WWF sees the destruction of the habitats of many animals and plants, environmental pollution, climate change and invasive species which are carried by global traffic movements into new regions and which supplant native species as the drivers of biodiversity loss. In Germany alone, over 800 new plant and animal species have become established in recent decades, including
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the raccoon and the Chilean flamingo.32 Species loss does not affect only wild animals and plants, but can also be observed among animals and plants used in agriculture. For example, around 15 species of plants and eight livestock species now form the basis for feeding the entire world population. According to the UNEP’s Global Environment Outlook, more than 60 per cent of all ecosystems worldwide, such as forests, lakes, moors and reefs, are damaged. Besides climate change, the study sees the intensification of agriculture as being one of the prime causes. For example, 70 per cent of available fresh water reserves are used for irrigation. Agriculture uses large quantities of fertilizers and pesticides, which pollute both groundwater and drinking water. Ecosystems provide numerous services which are of social and economic relevance (see table 5). Against this background, there is currently a heated debate about the economic value of biodiversity and ecosystem services. In the world’s largest-scale study concerning this issue, The Economics of Ecosystems and Biodiversity (TEEB) commissioned by the German federal government and the EU Commission, the authors put the value of the services provided by nature in protected areas alone at five trillion US dollars a year. The study also shows that insects alone provide pollination services valued at 153 billion US dollars annually. Coral reefs “generate” 172 billion US dollars a year in income, food and other revenues.33 The United Nations Environment Programme Finance Initiative (UNEP FI) has calculated that if the world’s 3,000 largest companies were billed for the damage they cause to the environment and to species it would cost them more than 50 per cent of their profits or a good seven per cent of their turnover. The cost of such damage is put at around 2.15 trillion euros a year.34
Ecosystem Service
Examples
Raw materials
Food, biomass, drinking water, genetic resources, biochemicals and pharmaceutical raw materials
Regulatory services
Services relating to water and air quality, climate protection, prevention of soil erosion and flooding
Cultural value
Amenity, aesthetic value of nature
Tab. 5: Ecosystem services; source: oekom research (2013)
Opinions differ about the meaningfulness of putting a monetary value on such benefits. Proponents of this approach point to the function of price in the market economy and the need to give species diversity and ecosystem services a price. In order to do so, they say, it is necessary to put a value on such services. Critics point out firstly that nature has an intrinsic value which cannot be measured in monetary terms. They fear that if species diversity is “economised“, then in future only those things which are of use in economic terms will be protected. Secondly, they point out a basic methodological problem. Putting a monetary value on natural resources presupposes that these can be replaced by capital. Critics see this as a premise that is not only false but fatal.
2.2.2 Measures taken by companies Opportunities and risks for the individual sectors depend largely on the level of the (negative) impact of the sector on species diversity and the ability of ecosystems to function and/or how heavily it depends on relevant natural services (see table 6).
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Sector
Dependence
Impact
Agriculture
high
high
Food & Beverages
high
medium
Leisure
high
high
Metals & Mining
low
high
Oil & Gas
low
high
Paper & Forest
high
high
medium
medium
low
high
Pharmaceuticals Utilities
Tab. 6: Selected companies’ dependence on and impact on biodiversity and ecosystem services; source: oekom research (2013)
We will illustrate below what the oil & gas industry and the tourism sector can do, against this background, to protect species and ecosystems. We will also look at some industry initiatives aimed at the protection of species and ecosystems.
Oil & gas
Reports on tanker accidents or accidents on drilling platforms, such as at the Deepwater Horizon rig in the Gulf of Mexico in 2010, invariably include depressing images of oil-covered seabirds and polluted beaches. The difficulties faced by the operators of the platform in shutting off the leak at a depth of around 1,500 metres below sea level are symptomatic of the trend toward taking on risks that are increasingly difficult to control, in order to reach oil reserves which are difficult to access. These include deep-sea reserves and those in polar regions. This trend is in many cases leading to systematic environmental pollution and increasingly to serious accidents. This is partly due to the fact that there are (as yet) no safe, environmentally-compatible technologies available for extracting such reserves or for capping uncontrolled leaks at great depths. Besides extraction, other stages in the value chain fraught with environmental risk include refining and transportation (in tankers or via pipelines). In the sustainability rating, oekom research first evaluates whether companies have created the management framework necessary to tackle the issue of biodiversity systematically. We check, for example, whether a company has a biodiversity strategy and who is responsible for its implementation. Secondly, we look at concrete measures for mitigating potential environmental damage at individual exploration and production sites. The main issue here is the extent to which companies factor biodiversity aspects and later remediation into new projects right from the planning stage and minimise the impact on species and ecosystems during operation. In evaluating performance in this area, it must be remembered that these companies’ activities inevitably have a massive impact on the natural environment. In other words: the production of oil and gas – at least in sensitive natural environments – is never going to be completely environmentally neutral. In light of this, the main issue is that the companies operating in this field should make a comprehensive assessment of the anticipated impacts and proactively seek to minimise these as far as is possible. It has been shown to be useful here for companies to bring in experts from specialist organisations, for example from environmental organisations, in order to develop programmes and measures that are as effective as possible. Of the oil & gas sector companies rated by oekom research, the Austrian company OMV is currently addressing these challenges most successfully, although it still only scored 45 out of a maximum 100 points. On average, companies in this industry scored a disappointing 19 out of 100 in this area. Shell, BP and the Russian company Lukoil all only managed below-average performances. Overall, there is obviously a serious need for action here. OMV has, among other things, enshrined the protection of species and ecosystems in its Environmental Guidelines for Exploration and Production. Before a new project begins, environmental impact assessments are carried out to analyse and evaluate the potential impacts on biodiversity comprehensively. There are particularly stringent criteria governing activities in sensitive natural
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environments. However, relevant measures for implementing the guidelines are still in their infancy, according to the company. In its Biodiversity Policy, Total also pledges to protect species and ecosystems. Its guidelines are intended to ensure that these aspects are taken into account in all relevant activities. The fact that Total did not receive a better rating, despite this policy, is due first and foremost to recent accidents which have had adverse effects on the environment. These include an oil spill in a production area in Nigeria and a gas leak on the Elgin drilling platform in the North Sea in spring 2012.
Fig. 11: Evaluation of measures by selected companies to reduce the environmental impact of exploration and production of oil and gas; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
Leisure
Beautiful pristine beaches, flowering alpine meadows, abundant wildlife – the tourism industry, more than any other, uses the appeal of an intact natural environment in its advertising and is thus in tune with the spirit of the time. Beyond party tourism, holidaymakers are more and more frequently seeking rest and relaxation by experiencing a healthy environment. This means for example that when booking a trip, they are increasingly looking at whether hotels are run in an environmentally-friendly way. Hotels and other infrastructure associated with tourism, such as roads, airports and also golf courses and hotels‘ private beaches have a massive impact on the habitats of animals and plants. They also adversely affect the surrounding ecosystems, particularly through water consumption and waste disposal. Tourism companies ought therefore to have a vital interest in preserving the natural capital underpinning their business. Measures seen here as relevant by oekom research include written guidelines on the protection of species and ecosystems and recognition of international standards and treaties on species protection. Informing holidaymakers and employees about the right things to do in order to protect plants and animals, e.g. about the ban on the export of protected species or correct diving etiquette on coral reefs, is another important element. Of the tourism companies rated by oekom research, Accor, Thomas Cook and TUI currently show the greatest commitment in this area. TUI, for example, has adopted a company-wide biodiversity strategy which highlights the importance of this issue to tourism companies and at the same time sets out appropriate measures for species and ecosystem protection. These measures include observing international treaties and conventions on nature conservation and species protection, conducting species protection campaigns in holiday regions to raise awareness among visiting tourists and the local population, and developing appropriate products, such as responsible whale-watching expeditions. Thomas Cook is also committed to preserving the environment. The company regularly reviews its suppliers which offer animal attractions regarding species-appropriate animal husbandry. Its measures in this area also include raising awareness of species protection among employees and customers, as well as working together with NGOs. Accor claims that it takes biodiversity aspects into account when acquiring and designing holiday resorts and together with IUCN has developed a guide to the sustainable management of biological resources.
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Biodiversity: The leading leisure companies • • •
Accor Thomas Cook TUI / TUI Travel As at 31.12.2012; in alphabetical order
2.3 Supply of clean water The German journalist Claus Kleber writes in his book “Spielball Erde. Machtkämpfe im Klimawandel”35 [The Earth as a plaything – power struggles over climate change] about the Chinese General Guo Kai, who planned to blast a tunnel through the Himalayas using nuclear explosions and divert the Brahmaputra river in order to meet China’s growing demand for water. Certainly a drastic example and despite Chinese faith in technology (hopefully) an unrealistic scenario, but still an indication of how seriously the availability and distribution of the commodity known as “blue gold” should be taken. In other regions of the world, too, conflicts over water threaten or have already broken out. These may also be of significance to companies.
2.3.1 Facts Although around 72 per cent of the Earth’s surface is covered by water, only one per cent of this is usable as drinking water, with a further two per cent locked up in glaciers and polar ice. Around 900 million people have no access to clean water, and one-third of these live in the Sahel, which is currently suffering from drought. The increasing pollution of surface water and groundwater with fertilizers, pesticides, animal and human excrement, salts, toxic waste, and detergent and pharmaceutical residues is exacerbating the crisis still further. For example, approximately 80 per cent of all illnesses in developing countries can be traced back to polluted water. Up to four million children a year die from water-related diarrhoeal diseases and infections. Agriculture accounts for around 70 per cent of global water demand.36 In addition, it contributes substantially to the deterioration of water quality. Nitrates from fertilizers are the most common chemical pollutants in groundwater worldwide. The increase in livestock and fish farming also has a negative impact on water quality. Changing patterns of consumption are among the main reasons for the rising numbers of farm animals. Far more water is needed for the production of meat and milk products than for grain or vegetables. For example, 2,500 litres are needed to produce one kilogramme of rice, while a kilogramme of beef requires over 15,000 litres.37 As foodstuffs are frequently imported, the water consumption occurs in the supplier countries. For example, it has been calculated that 62 per cent of water used in the UK is “virtual water“ imported e.g. in the form of food, with only 38 per cent of water consumed in the UK originating from within the country. Despite this “globalisation“ of water consumption, even in industrialised countries some regions are threatened by water shortages, often as a result of climate change. The Mediterranean region will be affected, as will some regions in eastern Germany. The south and southwest of the USA and parts of Australia are already struggling with prolonged droughts. The efficient use of water will thus also be relevant in these countries.
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2.3.2 Measures taken by companies
Food & beverages
The food sector is closely linked to water in many ways. Firstly, water is a significant ingredient in many products – not just in Dutch tomatoes, as is sometimes rather maliciously implied – and is also used as a production resource in food production. In addition, rivers, lakes and oceans are home to fish and other living creatures which are processed by the food industry. Secondly, the sector’s close association with (industrial) agriculture gives it the opportunity to influence water consumption and the use of water-polluting substances in agriculture. The sector also bears responsibility for the condition of its own waste water. The rating of companies in the oekom Corporate Rating therefore relates to agricultural production, which largely takes place in the supply chain, as well as to industrial production. It takes into account, among others, the following aspects: • The quality of guidelines on the management of water; • The recording and presentation of data on water consumption; • Measures to reduce water consumption; • Measures to protect bodies of water and watercourses from pollution by agriculture and by waste water from industrial production. As regards the companies’ own production, a large number have already pledged to reduce their water consumption and waste water, and these announcements have at least in part been translated into action. For example, the Anglo-Dutch food company Unilever committed itself in its “Unilever Sustainable Living Plan”, published in 2010, to stabilise water consumption at 2008 levels by 2020, while simultaneously significantly increasing production. As by far the largest proportion of the water it uses is consumed in the production of raw materials, i.e. in agriculture and livestock farming, the company is also working together with the Water Footprint Network (WFN). This network develops methods which can be used to record and assess water consumption over the entire lifecycle of foodstuffs. A case study on water consumption in the manufacture of margarine, for example, showed that more than 99 per cent of its “water footprint“ was attributable to agriculture, particularly the irrigation of sunflower plants. Unilever is also a member of the CEO Water Mandate working group, which forms part of the UN Global Compact. Water consumption also plays an important role in the supply chain of the international brewery SABMiller. Together with WWF, the company has run a pilot project to analyse water consumption at all levels of the value chain. This showed, for example, that the production of one litre of beer in South Africa used a total of 155 litres of water, 98 per cent of it in agriculture. The company therefore regularly reviews the availability of water, particularly in countries with water shortages, such as Peru, South Africa and Ukraine, where SABMiller has production plants, in order to identify relevant production risks. The company is also working on reducing water consumption through the use of new technologies.
Fig. 12: Evaluation of selected companies’ water strategies; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
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The companies in the industry achieved an average score of 37 out of 100. In the light of its heavy dependency on water on the one hand and its huge impact on the availability and quality of water on the other, this is an unsatisfactory result. Action is needed here at all levels of water management, including support for appropriate measures in agriculture, cutting the amount of water used in production and designing products so as to avoid the use of particularly water-intensive raw materials and ingredients.
Pharmaceuticals
It is not just research and production that requires large quantities of excellent-quality water; clean water also plays an important role as an ingredient in medicines and in the taking of pills. However, due to climate change, the availability of this scarce resource will decline in some regions. Moreover, the medicines themselves pose an additional threat to water. Active ingredients enter the water cycle through wastewater from production, secretions from patients and improper disposal of medicines, and these ingredients, even in small quantities, can disrupt ecosystems. For example, hormones contained in contraceptive pills have been found to be responsible for the feminisation of male fish. Pharmaceutical residues are now even found in drinking water. Nonetheless, the industry still puts a low priority on the problem of medicine pharmaceutical residues, which has been known about for a long time. Although some companies train their research teams (e.g. Novartis, Bristol-Myers Squibb) or give them tools for predicting environmental impacts (e.g. AstraZeneca), there is still little evidence of any success. Manufacturers point to the fact that the rising proportion of more readily degradable biopharmaceutical drugs in their product portfolios will reduce water pollution. However, as changes in the design of medicines are generally fraught with difficulty, the industry is concentrating instead on monitoring wastewater from its factories. A number of companies are now reporting on their use of special technologies for destroying active ingredients in wastewater. These measures, however, are generally limited to specific factories and also exclude relevant suppliers of active ingredients. In addition, only a few companies (e.g. AstraZeneca) mention residue limits. Many manufacturers are now much more committed to reducing their water consumption. They have used risk analyses to identify production sites at risk of water shortages, set themselves watersaving targets and established appropriate programmes of action. The main differences are in the quality of the targets. For example, only a few manufacturers (e.g. AstraZeneca, Eli Lilly) are striving to achieve an absolute reduction in water consumption.
Fig. 13: Evaluation of selected companies’ water strategies; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
Initiatives to involve suppliers are also still rare. GlaxoSmithKline, for example, has now demanded consumption data from its suppliers for the first time, and AstraZeneca is planning targets and action plans for its major suppliers. Overall, the two UK companies Astra Zeneca and GlaxoSmithKline, which each scored 67 out of a possible 100, achieved the best results in the water strategy rating. The average score for the industry amounted only to 33.
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Water suppliers
The European Citizens’ Initiative “Water is a human right” is hoping to collect a million signatures on a public petition to prevent liberalisation of the water market in Europe.38 However, alongside municipal water suppliers, numerous listed companies are already active in the water business. These include firstly specialist water suppliers such as the UK’s Severn Trent or the French company Veolia Environnement, and secondly a number of energy suppliers, such as EVN and MVV Energie, which are also active in the water supply segment to a limited extent. In view of water’s importance as a fundamental component of essential services, its provision by private companies is highly controversial. On the one hand, it is often only investment by companies that enables the construction of appropriate infrastructure, and on the other hand, price rises and local competition between water suppliers may occur. In the 1990s, in particular, there were numerous conflicts surrounding the privatisation of water, especially in Latin America. Companies operating in the field of water supply in developing countries should therefore address these problems thoroughly and secure the supply for poorer sections of the population. Companies with progressive initiatives in this area include Suez Environnement and Veolia Environnement, which operate globally, and Acea, which operates in Italy and Latin America.
Water supply in developing countries: the leading water suppliers • • •
Acea Suez Environnement Veolia Environnement As at 31.12.2012; in alphabetical order
Suez Environnement claims that since 1990 it has helped secure access to water and sanitary facilities for around 12 million people in developing countries such as Morocco, Indonesia, Columbia and Chile. The company stresses that such access must always be compatible with the income of poorer families. In Algiers, a public-private partnership provides the population with round-the-clock access to water. In 2005, only eight per cent of the population was guaranteed uninterrupted access. The company’s Water for All foundation also works in the area of capacity building, i.e. developing technical and institutional capacities in developing countries, and supports NGOs which specialise in water and development. Veolia Environnement runs various projects in developing countries, often in cooperation with UN agencies and local authorities. In Morocco, for example, it has a special programme providing families on low incomes with access to water and power supplies as well as sanitary facilities. The company claims that the programme has reached a total of 120,000 families, some of them from informal settlement areas. Veolia Environnement’s company foundation is also involved in water supply in developing countries. The Italian supplier Acea’s Committee for Africa, whose members include employee representatives and the company’s chairman, selects projects in the areas of water and energy from a list put forward by employees in cooperation with humanitarian organisations. Financial support is provided by employees and by the company itself. The projects include the construction of numerous wells in Ethiopia, Burkina Faso, Cameroon, Kenya and Senegal.
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2.4 Forest protection The state of forests has been hitting the headlines for years: public debate centred in the 1980s on forests dying due to acid rain, in the 1990s on the destruction of huge areas of forests in the tropical and boreal rainforest – a trend that continues even now – while today the focus is on the contribution forests can make to international climate protection. The area of the world covered by forest is shrinking by an average of 15,000 hectares a day, primarily as a result of the conversion of forest into agricultural areas, of illegal logging and of climate change. At the same time, demand for timber and wood products is rising, in the wake of global population growth and a renaissance in the use of timber for fuel in industrialized countries.
2.4.1 Facts The FAO carries out a regular “inventory“ of the extent and state of the world’s forests.39 According to the Global Forest Resources Assessment 2010, forests cover 31 per cent of the world’s land area, or a little over 4 billion hectares.40 In 2010, approximately 36 per cent of the global forest area consisted of primary forest and 57 per cent of other natural forest, while 7 per cent consisted of planted forest, the latter proportion having increased in recent years. The FAO estimates that around 13 per cent of the world’s forests are legally protected areas (e.g. national parks) and around 80 per cent of the world’s forests are under public ownership. The proportion of forests owned and managed by groups of people, individuals or private companies and investors is growing. 30 per cent of the world’s forest area is used primarily for the production of timber and other forest products (e.g. food). A further 24 per cent is designated for multiple use, for example for a combination of production and other functions such as soil and water protection, biodiversity protection or social purposes. According to the FAO, around 13 million hectares of forest a year have been destroyed over the past decade. Taking into account reafforestation efforts and natural forest growth, the organisation puts the net loss of forest between 2000 and 2010 at around 5.2 million hectares a year (compared to 8.3 million hectares between 1990 and 2000). The loss of such habitats cannot be made good simply by reafforestation, particularly where the areas affected by deforestation are rich in biodiversity and worth protecting. Illegal logging and timber trading have an enormous impact on deforestation. The proportion of global timber production that comes from illegal logging is estimated at between 20 and 40 per cent. This covers all processes to do with the felling, transportation, buying and selling of timber which breach national or international laws. The principal regions of origin of illegally logged timber are Eastern Europe (including Russia), Africa, South-East Asia and Latin America. According to WWF estimates, illegally logged timber depresses the market price of legal timber by between 7 and 16 per cent.41 Players in importing countries contribute to these problems if they import timber and wood products without ensuring that these originate from legal sources. According to a 2008 WWF analysis, between 16 and 19 per cent of timber imports into the EU were the products of illegal logging. Around 300 million people worldwide live in forests, 60 million of whom belong to indigenous peoples who are almost completely dependent on forests for their livelihoods.42 The environment in which they live is under increasing threat of exploitation by commercial forestry. To enable the felling of tropical timbers in rainforests, logging roads have to be built to make it possible to transport logs and machinery. These are seen as gateways into the rainforests, as they attract settlers and poachers. This destroys the traditional way of life of forest-based indigenous peoples and poses a threat to their forest home.
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2.4.2 Measures taken by companies
Construction
Even though one might get the impression walking through the uniform cities of the world that architecture is dominated by concrete, glass and steel, wood continues to play a key role in the construction industry. It is estimated that the construction industry is responsible for 30 per cent of the global demand for raw materials and 70 per cent of the demand for timber. Factoring sustainability criteria into the procurement of timber and wood products is therefore very important in this sector. The use of timber from primary forests should be systematically excluded in order to protect them. The top scores in the oekom Corporate Rating were achieved by construction companies which in their internal company guidelines pledged both to refrain from procuring timber from primary forests and illegal logging and to use timber from (certified) sustainable forestry. The proportion of overall consumption accounted for by such timber is also assessed. Here, oekom research views the Forest Stewardship Council (FSC) certification as having particular credibility. The top rating in this respect was achieved by the UK construction firm Balfour Beatty. It has published guidelines on the sustainable procurement of raw materials and has set itself concrete targets. According to these, all timber and wood products are to be procured from recognised sustainable sources by 2013. In 2011, the proportion of timber spend accounted for by FSC-certified timber stood at around 41 per cent. Carillion, another UK-based company, has stipulated in its guideline on responsible procurement of timber and wood products that it will give preference to products which are FSC-certified and intends to avoid timber of unknown provenance or from illegal logging. On average, the companies in the industry managed only a modest 32 out of 100.
Fig. 14: Evaluation of selected companies’ measures for the sustainable procurement of raw materials; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
Media Although newspapers are now under huge economic pressure due to competition from internet-based information services, printed products are still very important in the media sector. In Germany alone, according to the Federation of German Newspaper Publishers (BDZV), there are 333 daily newspapers with a combined total circulation of at least 18.4 million copies.43 Europe’s 2,500 or so newspapers have a daily circulation of 85 million copies. Worldwide, India and China are the largest newspaper markets, with daily circulations of 118 million and 110 million copies respectively. Japan, with a circulation of at least 48 million copies, comes in third place. In the light of this high overall demand for resources, oekom research firstly assesses whether companies have drawn up guidelines on paper procurement which set out clear rules on the provenance and environmental quality of the paper used. Secondly, we analyse which measures have been taken to ensure that these guidelines are also implemented by suppliers. These may include, for example,
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audits of suppliers, training, and the introduction of “traceability systems“ to trace the origins of wood that has been purchased. Finally, the company rating also looks at the proportion of recycled and certified paper fibres used compared to the total amount of paper used and at the extent to which the use of genetically modified wood is excluded in paper manufacture. The best rating here was achieved by the UK media company Pearson, which owns the Financial Times and Penguin Books, among others. The company has adopted guidelines for purchasing paper in which it pledges not to buy any paper classified by WWF as “critical”. Pearson states that it encourages its paper suppliers to comply with the FSC standard and expects all paper mills to have an environmental management system certified to ISO 14001. In addition, the company has plans to increase the proportion of recycled paper it uses. Finally, Pearson is a member of the working group Publishers for Responsible Environmental Paper Sourcing (PREPS). This group has established a database documenting the environmental properties of various types of paper.
Fig. 15: Evaluation of selected companies’ measures for the sustainable procurement of paper; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
The German publishing company Axel Springer Verlag (Bild, Welt) has drawn up standards for its suppliers which cover aspects including sustainability of forest management and biodiversity as well as consideration of the concerns of indigenous peoples. The company states that it supports the use of wood from forests certified to FSC or PEFC standards and excludes wood from illegal logging. PEFC stands for Programme for the Endorsement of Forest Certification Schemes and, like the FSC, is a system for guaranteeing and marketing sustainable forest management.44 With an average score of just 27 points, the sector as a whole is still a long way from practising sustainable paper procurement.
Paper & forest
Forestry is seen as the cradle of sustainability. Its philosophy is that no more timber should be felled than can regenerate over the same length of time. Today, there is more to sustainability in the paper and forestry industry than simply assuring a constant supply of wood. It also involves the impact of the industry on biodiversity, the water balance, soil quality and the living conditions of the local population. Further examples include obtaining sites through “land grabbing” (see digression on the following page) and infringing upon the traditional way of life of indigenous peoples in forests. As wood is a renewable raw material, and one which absorbes CO2 from the atmosphere while it is growing, the cultivation of timber and thus also the use of wood is often portrayed as being environmentally friendly per se. However, where species-rich primary forests are cleared and replaced by monocultural plantations, there can be no question of this being the case. The companies with the highest ratings, such as Holmen, have comprehensive guidelines on sustainable forest management in place which address issues such as excluding felling in primary forests, carefully managing forests of particular conservation value, excluding the conversion of forests into plantations, forest certification and excluding the commercial use of genetically modified trees. In the best cases, guidelines for sustainable forest management are implemented via management
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plans, in which soil and groundwater protection, fire management and the reduction of pesticide use are among aspects accorded an important role. Additional measures to protect biodiversity, such as taking certain areas out of production, preserving corridors for animal migration and retaining deadwood in forests, are also seen as being extremely important. Sustainability certificates for wood and wood products are now commonplace, with particular importance being attached to the FSC and PEFC certification systems described above. There are currently three companies (Holmen, Mondi and Svenska Cellulosa) which have had all their forests and plantations certified to the FSC standard. These three companies are also the overall leaders in terms of sustainable forest management. The Swedish company Holmen has a sustainable forest management policy which specifies, among other things, that the natural reproduction rate of the forest must be taken into account. The environmental conditions for indigenous animals and plants are to be managed in such a way as to ensure their longterm survival. The company has implemented detailed guidelines on the sustainable management of forests. In order to protect species, some parts of the forests owned by the company are set aside and not used. In 2010, this applied to 18 per cent of the forest area owned by Holmen.
Fig. 16: Evaluation of selected companies’ measures for the sustainable management of forests; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
Svenska Cellulosa is another Swedish company. It has adopted a six-point plan for integrating forest management and environmental protection. In this plan, it pledges to factor in environmental protection aspects at all levels of management, including tree-felling, thinning and cleaning up forest areas and soil cultivation. Mondi, which manages plantations and forests in South Africa and Russia, performs very well in the area of biodiversity protection. Relevant measures, such as the decommissioning of forest areas, are strategically embedded in the company through e.g. monitoring of the impact of the company’s activities and the development of plans for the management of ecosystems. Here, the biodiversity value of an area is measured, and building upon this a development strategy is drawn up for that area. With 49 points out of 100, the industry’s average score is considerably above other average scores seen in chapter 2. This means that overall, the industry is well on the way towards managing forests sustainably. Nevertheless, there is still room for significant further action here, too.
Degression: land grabbing In recent years, the phenomenon of land grabbing has been reported on increasingly. The background is that investors from industrialised countries, and also countries such as China, have secured large areas of agricultural land in developing countries through lease or purchase agreements. These are used primarily to cultivate food or energy crops for export, which benefit the food and energy security of the investor countries. Access to raw materials is another decisive motivating factor. One of the most serious problems often associated with land grabbing is the expulsion of local smallholders, whose land is managed according to traditional land rights and who often have no legally enforceable claims to compensation. The loss of useful arable land can also have adverse effects on the supply of food for the indigenous population and on food prices.45
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2.5 Combating poverty If you can buy a t-shirt at a discount clothing store for 4.99 euros, this might lead you to suspect that the pay and other working conditions in the textile factories in China, Bangladesh and other emerging economies are probably not that good. However, even in the case of expensive textiles not much is left over for the seamstresses. They often receive just 40 cents for a pair of trainers sold in designer shops in Berlin, Paris or Rome for 100 euros.46 The Südwind Institute, in a joint study with Indonesian organisations, has investigated the situation of Indonesian workers in textile companies. They summarised it as follows: overtime, targets almost impossible to reach and starvation wages are all part of everyday life for hundreds of thousands of textile workers.47 By creating jobs and income, global players make an important contribution to improving the living conditions of people in emerging and developing countries. However, this must be done in compliance with recognised labour rights and independently of whether the workplace is a site owned by the company itself or by a supplier. Good working conditions are also the principal concern of the “fair trade“ movement, which seeks specifically to support small-scale farming. One of its aims is to ensure better living conditions through fair prices. Microcredits also often focus on achieving living wages, and micro health insurance can provide income protection in the event of illness. The following section will look at the importance attached to fair trade by food companies and the retail trade and at how active banks and insurance companies are in the area of microfinance. It will also analyse the contribution made by the pharmaceuticals industry to improving the provision of medicines, especially to people in emerging and developing countries.
2.5.1 Facts Poverty has many faces: more than a billion of the world’s population have less than one dollar a day to live on, and a further 2.7 billion people have to survive on less than two dollars a day. Around 870 million people go to bed hungry, and more than half of these live in Asia and the Pacific region.48 Hunger poses the greatest risk to health worldwide. Every year, more people die of hunger than of AIDS, malaria and tuberculosis put together. Aside from the food situation, in many areas of the world poverty is also characterised by a lack of educational opportunities. Worldwide, 67 million children of primary school age do not attend school.49 In sub-Saharan Africa, approximately 10 million children leave primary school early. Around 17 per cent of the world’s adult population lack basic literacy and numeracy skills, and two-thirds of these are women. If the mother can read, the chance of its child surviving the first five years of life is doubled. The average income of a person in low-income countries increases by ten per cent for each school year completed.
2.5.2 Measures taken by companies
Fair trade
In Germany alone, consumers spent 477 million euros on fair trade products in 2011. According to the Fair Trade Forum, that means that turnover has doubled within the space of three years.50 There are currently 12,000 fair trade products on sale in Germany. Around 9,000 of these are craft, textiles and other non-food products. However, foodstuffs make up the largest proportion of turnover by far at 83 per cent. Approximately 65 per cent of fair trade food is certified to be organically grown. In 2011, the turnover of fair trade products reached a volume of 4.9 billion euros worldwide.51 According to Fairtrade International, over 1.2 million small-scale farmers and labourers in just under 830 certified organisations in over 60 countries are benefiting from the advantages of fair trade. If their families are included, this means that fair trade has improved the working and living conditions of more than six million people.
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Retail sector The retail sector acts as a “gatekeeper”, as it is largely responsible for deciding whether fair trade products will be offered to consumers. In Germany, according to the Fair Trade Forum, fair trade products are now on sale in around 36,000 grocery shops, supermarkets and discount stores, including those of the German Metro Group, which says that it sells 50 products carrying the Fairtrade logo. However, the global leaders in this area are the three UK retailers J Sainsbury, Marks & Spencer and Tesco. According to figures from the Fairtrade Foundation, in 2011 J Sainsbury had the largest range of fairly-traded products of any retailer worldwide, with a total of 800. In 2012, the company’s sales of these products amounted to around 350 million euros, and by 2020 this figure is expected to rise to over 1.2 billion euros. Some product lines, such as bananas, tea and sugar, have already been switched completely to Fairtrade products, and further product lines, including pineapples, coffee, rice and chocolate, are to follow suit in the next few years. In connection with this, J Sainsbury is helping to draw up fair trade standards for new product groups. Marks & Spencer was the first major retailer worldwide to switch its entire coffee and tea range over to Fairtrade products. The range now includes numerous other products such as fruit and jams. The company encourages farmers to add value, for example by training them to package their tea themselves. Marks & Spencer also stocks a large range of Fairtrade-certified cotton clothing. In the 2012 financial year, the company sold a total of 4.5 million articles of clothing bearing the Fairtrade label. Tesco conducts large-scale marketing campaigns for fair trade products. During its Fair Trade weeks, for example, advertisements and commercials are placed and fair trade products are actively promoted in store. The two Swiss retailers Coop and Migros also demonstrate a high level of commitment in this area. As these are cooperatives and are not listed on the stock exchanges, they have not been looked at in detail for this report. Fair trade: the leading retailers • • •
J Sainsbury Marks & Spencer Tesco
As at 31.12.2012; in alphabetical order
Food As buyers and processors of a large proportion of the annual harvest of agricultural commodities, producers of foods and beverages have an enormous influence on working conditions in the supply chain. Although the business relationships are often indirect, the impact of the prices paid by the companies is felt directly by workers. For a long time, the companies argued that there was very little they could do to help improve working conditions in the raw material supply chain, but in the last few years there has been a discernible rise in the number of initiatives on the part of companies. The companies’ first concern here is to procure certified raw materials and print the appropriate label on the product packaging. The Fairtrade label can be seen here as the clearest indication of a move towards fair trade, as it guarantees the producers an additional price premium. However, there are also other certifications, such as those of the Rainforest Alliance and UTZ, aimed at improving working conditions, even if these are less binding than the Fairtrade one. Apart from the procurement of certified raw materials, companies are also working on securing access to increasingly scarce commodities by cooperating directly with agricultural producers. They help the producers to organise cultivation more efficiently, to increase the quality and volumes of crops harvested and thereby to improve their income. The global leaders here are D.E. Master Blenders 1753, Starbucks and Unilever. D.E. Master Blenders 1753, a coffee and tea producer based in the Netherlands and the product of the division of the US company Sara Lee in 2012, concentrates primarily on buying coffee and tea with the “UTZ-certified” label. The company’s aim is that by 2015, it will be purchasing more than 20 per cent of all its coffee from certified sources. In 2011, UTZ-certified tea already accounted for 40 per cent of the total. The company’s own DE Foundation helps commodity producers to improve the quality of their products and gain easier access to markets.
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The US coffee shop chain Starbucks plans to be buying all its coffee from sustainable sources by 2015. The company also uses the Fairtrade label, but relies mainly on a certification system it has developed jointly with the NGO Conservation International (C.A.F.E. Practices), which is externally audited. In 2011, the proportion of coffee from sustainable sources amounted to 94 per cent (eight per cent Fairtrade; 85.7 per cent C.A.F.E.). Starbucks also supports small producers, for example by providing loans, and is taking steps to make its purchasing of tea and cocoa more sustainable. Unilever employs a variety of approaches: in November 2010 the group published its “Unilever Sustainable Living Plan”, which contains quantitative targets for sustainable procurement. According to these, the group intends to be procuring 100 per cent of its agricultural commodities sustainably by 2020. Unilever relies here not just on the Fairtrade label, but also on other certification systems such as the Rainforest Alliance one. The group also plans to integrate 500,000 small-scale farmers into its supplier network and help them to improve their cultivation methods and thus become more competitive. Despite these positive initiatives, NGOs continue to report poor working conditions in agriculture as well as poverty among the population concerned. In order to improve these conditions significantly, it will be necessary for companies to support ambitious certification systems and to look not only at securing their own raw material supply, but also to look at working conditions on the ground in its direct supplier relationships, not least by paying fair prices. Fair trade: the leading food companies • • •
D.E. Master Blenders 1753 Starbucks Unilever As at 31.12.2012; in alphabetical order
Microfinance The umbrella term “microfinance” is used to refer to financial services for people who do not have access to “conventional” banks and insurance companies. These services include, in particular, microcredits, microinsurance and microsavings. Some 30 years after the first microcredits were issued in Bangladesh by the microcredit pioneer and later Nobel Peace Prize winner Muhammad Yunus, microfinance services are now commonly encountered all over the world – not only in emerging and developing countries. There is widespread consensus that microfinance makes an important contribution to economic and social development in developing and newly industrialised countries. The contributions made towards improving the economic situation of microfinance customers and to supporting women, for example, are given a positive rating. At the same time, there are a number of aspects open to criticism: these include the business models of microfinance institutions (MFIs) and their (high-) interest-rate policies as well as the risk of a “microfinance bubble” caused by the influx of capital from private and institutional investors into this market. A wave of suicides among Indian microcredit borrowers in 2010 highlighted the problems involved in this area of business. Besides borrowers and insurance policyholders, there are two main groups of players active in the microfinancing market: providers of capital and microfinance institutions. The capital providers include large national and supranational organisations such as the World Bank, regional development banks such as IADB, ADB and AfDB as well as the German bank KfW. The latter, with a portfolio of around 800 million euros, is one of the largest funders of microfinancing worldwide. Large commercial banks and insurance companies are also engaged in this area. Still a relatively new development on the donor side is the emergence of a group of investors who have found the microfinance market to be an attractive investment market. The pioneers here include the Oikocredit cooperative, which operates globally.52 The MFIs form an important link between the capital providers and the borrowers. Figures for the numbers of MFIs operating globally lie between 1,500 and 10,000. They include both tiny village funds with fewer than a hundred customers and huge MFIs with a countrywide network of branches.
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Banks A microcredit is a small sum of money, frequently between 50 and 1,500 US dollars, which is generally lent without security, at interest and in local currency to individuals or groups, most commonly for income-generating projects. The number of recipients of microcredits is currently estimated at around 100 million worldwide. Due to the high costs of providing advice and processing the credit, the annual interest rate for this type of credit lies at around 20 per cent on average, with the term of loans generally falling between six and 36 months. The repayment rate, according to various experts, is often higher than that for conventional loans in industrialised countries. The capital is frequently deployed to implement a business idea or to purchase equipment to increase agricultural yields, such as a plough. This is aimed at laying the foundations for people to earn a regular income and at creating jobs. According to experts, the best access to MFIs is currently available in Asia. In Africa, by contrast, the sector is seen as being underdeveloped, despite an increasing number of MFIs, and here the population’s access to such services is comparatively low. Microfinancing is also available in some South American countries, in particular in Peru and Colombia, in the Caribbean and in Eastern Europe. In many countries in Western Europe, microcredits are becoming an increasingly common tool for borrowers with no collateral. Examples here include the French “Association pour le droit a l‘initiative economique” (Adie), which gives priority to the unemployed in its lending, and the UK’s “Women’s Employment, Enterprise & Training Unit” (WEETU), which gives preference to women with disabilities or on low incomes and to single mothers when extending credit. Many of the players active in this area have joined together to form the “European Microfinance Network” (EMN). Banks are also increasing their activities in this area. For example, the German GLS Bank issues loans, via “Mikrofinanzfonds Deutschland”, exclusively to borrowers in Germany, particularly to the unemployed and those on benefits. The loans are intended to provide a step towards independence. Among the large commercial banks, the French Societe Generale is comparatively active in this field. International branches of the bank have been involved in establishing MFIs in sub-Saharan Africa. They cooperate financially with other MFIs. By the end of 2011, the bank had lent almost 80 million euros to MFIs. Its collaboration with the Dutch Fairtrade organisation Max Havelaar in providing finance to producers of Fairtrade products should also be mentioned here. While National Australia Bank offers relevant programmes primarily in Australia, for example lowcost microcredits for people with very low incomes, Deutsche Bank reports that it is active in 48 emerging and developing countries, providing capital to more than 110 MFIs. In 2011, the volume of such loans reached a level of around 1.25 billion US dollars, and microcredits had been extended to just under 2.7 million microenterprises. The average rating for the sector was 31 out of 100, signalling a significant need for further action.
Fig. 17: Evaluation of selected commercial banks‘ measures for supplying microcredits and other products of major social benefit; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
Insurance companies Microinsurance functions in the same way as conventional insurance, but with reduced coverage and therefore smaller insurance premiums. Since the principal threats to people’s livelihoods in developing countries are diseases, the death of a breadwinner, accidents or even natural disasters, life
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insurance and health care insurance, as well as insurance protection against natural disasters or extreme weather conditions, for example in the agricultural sector, are in particular demand. Actual figures for the levels of premiums are rarely publicly available. The premiums for insuring life, invalidity and critical illness with the Colombian life insurance company Apoyofuturo, for example, are between 1 and 6 US dollars a month, while building/dwelling insurance against burglary, theft, robbery, fire and natural disaster costs between 0.3 and 10 US dollars a month. The ILO puts the number of people worldwide covered by microinsurance at around 500 million.53 80 per cent of these live in Asia, with the remainder divided in roughly equal proportions between Latin America and Africa. China and India are the largest microinsurance markets, with around 30 million people insured in each. Allianz is one of the most active of the world’s major insurance companies in this area. It reports that in 2011 it dealt with around 2.6 million microinsurance customers in Asia, Africa and South America. Its range includes accident and health insurance and insurance for cattle as well as for cotton and maize for small-scale farmers in Burkina Faso and Mali. Munich Re offers a range of products in the areas of both primary insurance and reinsurance, principally in Latin America and Asia. These include for example weather derivatives, but also health, life and accident insurance policies. Here, Munich Re works together with the German aid organisation Gesellschaft für Internationale Zusammenarbeit (GIZ). The reinsurer Swiss Re offers a similarly wide spectrum of products. Other insurance companies have so far shown only piecemeal involvement in this area. With an average score of 27 out of 100, the sector as a whole is performing significantly below its potential where microinsurance is concerned.
Fig. 18: Evaluation of selected companies‘ measures for supplying microinsurance and other similar schemes to target groups on low incomes; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
Pharmaceuticals: access to medicine
Around 80 per cent of the world’s population have little or no access to medicine. There has therefore been an international debate, under the heading “Access to medicine” (ATM), about how to improve supplies, especially to people in emerging and developing countries. Recent years have actually seen an increase in research into neglected tropical diseases, as a number of manufacturers, in the light of rising price pressure in industrialised countries, have turned their attention more and more to the strengthening emerging and developing economies. The leading companies have institutionalised their research into tropical diseases and are employing financing models such as public-private partnerships in the search for new malaria or tuberculosis blockbusters. They are also researching product characteristics such as heat resistance, ease of handling, usability in areas with inadequate infrastructure, suitability for children and compatibility with AIDS medication. GlaxoSmithKline is particularly heavily involved in this field. The company’s initiative for supporting the “least developed countries” (LDCs) and sub-Saharan Africa covers the following areas: dis-
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counted prices for urgently needed medicines and vaccines, technological cooperation and voluntary granting of licences for drugs as well as support for health infrastructure. As part of its pricing strategy, GlaxoSmithKline reinvests 20 per cent of the profits from sales in LDCs in joint ventures with NGOs to improve the local health infrastructure. Sanofi focuses its ATM activities on three areas: preferential pricing of relevant medicines, information and education, and ongoing development of existing medicines. The company’s ATM programmes currently cover areas including malaria, tuberculosis and sleeping sickness medicines, as well as vaccines. Some programmes for the free distribution of medicines are carried out in collaboration with the World Health Organisation WHO. Besides GlaxoSmithKline and Sanofi, Roche and Pfizer also show above-average levels of commitment in the area of ATM. The average rating for the sector was just 36 out of 100. Those with belowaverage scores included AstraZeneca and the German company Merck.
Fig. 19: Evaluation of measures taken by selected companies on access to medicines and vaccines in developing countries; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
2.6 Demographic change On a global level two sharply contrasting trends can be observed in terms of demographic change: on the one hand, the increase in the proportion of elderly people in a large number of industrialised countries, and on the other, the population explosion in many emerging and developing countries. From a corporate perspective, it is currently still the “ageing“ societies in Europe, America and parts of Asia which present the greatest challenge. For this reason, the following section will concentrate on sectors and measures relevant to this issue.
2.6.1 Facts If the world in 2012 were a village with 100 inhabitants, the German Foundation for World Population (DSW) calculates that 60 would be Asian, 15 African, eleven European, nine Latin American and five North American.54 26 would be children under 15, and eight would be over 65. By 2050 there would be 137 people living in the village, 75 of them Asian, 34 African, ten European, 11 Latin American and five North American. In actual fact, there are now more than seven billion people living on Earth, and this figure is expected to rise to 8.1 billion by 2025 and to 9.6 billion by 2050. However, this population growth is taking place almost exclusively in developing countries. Africa south of the Sahara has the youngest population in the world: almost one in two people (44 per cent) is under 15. Germany, on the other hand, has the second-lowest percentage of young people after China: here, only around one in nine inhabitants (13 per cent) is under 15. By 2040, according to calculations by the US Census Bureau, more than 1.3 billion people world-
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wide will be aged 65 or over. This will represent a doubling to 14 per cent from the current level of around seven per cent of the world’s population. The number of people over 80 is increasing particularly rapidly. By 2040, their numbers will have increased fourfold compared to today.
2.6.2 Measures taken by companies Elderly people present particular challenges in terms of the design of products and services, for which companies must find solutions. Two basic approaches can be distinguished here. In the “design for all” approach, products are designed so that people with different levels of ability are able to use them. Special products for the elderly, by contrast, are designed to meet the specific needs of older people, e.g. in terms of sensory qualities, such as visibility and audibility, or of ease of use and intuitiveness. It is important that consideration be given to the needs of the elderly not just in the traditional areas of health and care services, but also in many other industries, e.g. in the retail trade, in the property sector and in the media.
Retail sector
Poorly trained and unhelpful personnel, shopping trolleys that are difficult to steer, too little room behind the counter and unreadable small price labels – according to the German National Association of Senior Citizens‘ Organisations (BAGSO) these are just some of the problems senior citizens have when shopping.55 Since spring 2010, German retailers who want to help remedy these problems have been able to apply for a “generation-friendly shopping“ label. As at November 2012, more than 1,000 businesses had done so.56 Aspects checked include the range of services provided, the furnishing of the business premises and accessibility. The latter covers access to the business, e.g. even paths and clear signposting, unimpeded access to the shop and the layout of the store, for example with regard to adequate lighting, width of walkways and legibility of price labels. In its Corporate Rating of the retail sector, oekom research evaluates measures taken by companies to enable people with restricted mobility to access their store premises and services. Besides elderly people, these also include parents with pushchairs as well as people with mobility difficulties and visually impaired people. The UK companies Marks & Spencer, J Sainsbury and WM Morrison have the best measures in this area. These include, for example, training employees in the particular needs of elderly people, providing especially wide ramps and entrance doors for wheelchair users, and price labels in larger print. Wheelchairs are also often available for mobility-impaired customers to borrow, at least in larger branches. With an average rating of 30, there is plenty of untapped potential for further improvement in the sector as a whole.
Fig. 20: Evaluation of measures by selected companies to ensure access to store premises for persons with restricted mobility; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
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Real estate
Property companies face challenges posed not only by demographic change, but also by the growing desire of older people to live independently in familiar surroundings for as long as possible. Adapting housing to meet the needs of the elderly involves various aspects, including removing steps and sills, installing lifts, widening doorways, providing scope for installing walk-in showers and making controls easy to reach from a sitting position.57 According to calculations by Kuratorium Deutsche Altershilfe (a German foundation for the care of the elderly), only five per cent of existing buildings in Germany have been adapted to make them suitable for older people. Such adaptations cost on average 15,660 euros per household. This means statistically that a total of 39 billion euros would be required in order to adapt all eleven million senior-citizen households in Germany to make them age-appropriate. In its Corporate Rating of the real estate sector, oekom research evaluates the strategies and measures adopted by companies to ready themselves for socio-demographic change and the associated shift in demand. Besides making properties suitable for the elderly, it is also necessary to take into account changes such as the increase in single households and migration in and out of a particular region.
Fig. 21: Evaluation of measures by selected companies for factoring socio-demographic trends into the design of property; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
The companies have not yet achieved much in this area, as can be seen from the average score of twelve. The UK property company SEGRO is the only one to have taken steps toward tackling this issue. Its main concern here, however, is multifunctional property design, which provides for flexible use of rooms, for example as living or office space. This is intended to counteract falling demand for living space following periods of low birth rates. The Australian company Stockland makes explicit reference to the needs of the elderly. It says that it takes the needs of older people into account when designing property. However, its score of 17 out of 100 shows that its work in this area remains rudimentary.
Media In 2012, Germans spent on average as much as 428.5 minutes each day using various media, first and foremost TV and video (172 minutes) and radio (128 minutes). They spent 80 minutes on the internet and 20 minutes using mobile services. At a European level, too, the television is by far the most popular: 87 per cent of EU citizens state that they watch television every day or almost every day, with 98 per cent watching at least once a week.58 Daily or almost daily television consumption via a TV set is particularly high among respondents over 55 (92 per cent daily or almost daily) and pensioners (93 per cent). Elderly people often face particular problems in using various media, e.g. with regard to their ability to hear television programmes, the legibility of newspapers or the clarity of websites. In order to integrate older people and enable them to access information and entertainment services in all media, media companies are already beginning – to varying degrees – to respond to the needs of this group. oekom research evaluates the scope and quality of relevant measures. These include: for television, subtitles in TV programmes, for newspapers and magazines, special large-print publications,
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and accessible internet which can be used by all users, irrespective of physical or technical ability, e.g. through adjustable font sizes. The best ratings here were achieved by the two UK companies British Sky Broadcasting (Sky) and ITV. Sky has implemented a whole range of measures in order to make its programmes accessible to elderly people and people with physical disabilities. For example, programme guides include extra audio information, and many TV programmes have subtitles or descriptive audio channels. Sky offers special remote controls for people with restricted motor control. The company states that it has a specially trained service team to deal with the concerns of elderly and disabled people. ITV says that making programmes accessible to all constitutes one of the cornerstones of responsible media design. The services the company offers for people with impaired vision and hearing include subtitles and audio description. ITV states that it has regular contact with associations for the blind and deaf in order to be able to take account of their specific needs. The average rating for the sector lies way below the scores of these two leading companies, at 44 per cent. Those showing below-average engagement include the US companies Time Warner und Walt Disney.
Fig. 22: Evaluation of measures by selected companies to ensure access to media for elderly and disabled persons; scale: 0 to 100 (highest rating); as at 31.12.2012; source: oekom research (2013)
2.7 Combating corruption In his inaugural address to the Party Congress of China’s Communist Party in November 2012, the newly-elected party leader Xi Jinping criticised corruption in the party and the authorities. And indeed China, with a score of 39, only ranks 80th in Transparency International’s (TI) Corruption Perception Index (CPI).59 In China corruption is referred to as “Tanwu”, in Austria “Schmattes”, in France “pot-de-vin”, in Brazil “propina”, in Greece “Fakelaki”: it takes many names and forms and according to TI is on the increase worldwide. Again and again, we hear of cases where companies have attempted to rely on payments rather than performance when paving the way for new business deals. The section below will shed light on the extent of corruption in individual sectors and on the measures taken by companies to prevent corruption and bribery.
2.7.1 Facts TI’s CPI measures the incidence and scale of corruption in politics and government – i.e. on the “demand side“ – for 176 countries. Denmark, Finland and New Zealand, as the countries with the lowest perceived tendency toward corruption, topped the latest (December 2012) list.60 They achieved a score of 90 out of a possible 100. Politicians and civil servants in these countries are perceived as having particularly high levels of integrity. Afghanistan, North Korea and Somalia, scoring just eight out of 100, were ranked right at the bottom of the list. TI sees the principal problems facing these countries the lack of accountable leadership and effective public institutions.
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Position
Country
Score
1
Denmark
90
1
Finland
90
1
New Zealand
90
4
Sweden
88
5
Singapore
87
6
Switzerland
86
7
Australia
85
7
Norway
85
9
Canada
84
9
Netherlands
84
Tab. 7: Top 10 countries in the Corruption Perception Index 2012; source: Transparency International (2012)
TI has also developed a measurement tool for the “supply side“ in the shape of its Bribe Payers Index. This measures the extent to which companies in the leading economies are willing to pay bribes in their business dealings abroad.61 Altogether, based on a survey of 3,016 managers, the behaviour of companies from 28 countries was assessed. Dutch companies achieved the best rating, with a score of 8.8 on a scale from 0 to 10 (highest score). Switzerland (8.8) and Belgium (8.7) took second and third places. Germany, with a score of 8.6, was ranked 4th. Companies in Mexico (6.5) and Russia (6.1) are the most likely to pay bribes in their foreign business dealings. In July 2012, TI published a transparency ranking of the 105 largest listed multinational companies.62 The rating was based on publicly available information from the companies. Transparency is seen as being an important prerequisite for a successful corporate anti-corruption policy. TI criticises companies’ lack of transparency regarding profits and tax payments in countries where they do business. These are often the poorest countries, with questionable government structures, while at the same time often having rich reserves of raw materials. It is hard to put a figure on the losses caused by corruption. These include, for example, the increased cost of projects, losses due to decline in quality and the loss of trust in entire industries. The EU Commission estimates that in Europe, losses due to bribery and acceptance of benefits amount to 120 billion euros a year.63
2.7.2 Prevalence of corruption in individual sectors Although the cases have been less spectacular than the Siemens case a few years ago, in 2012 once again numerous companies came under suspicion of having paid bribes. These include EADS, the US companies Pfizer and Wal-Mart, and Lufthansa. From a sectoral perspective, companies in the construction industry are the most conspicuous for their involvement in corruption cases. More than one in ten of the companies from the MSCI World analysed by oekom research (11.5 per cent) have committed this kind of violation. The automotive industry (5.6 per cent) and engineering (5.3 per cent) took second and third places respectively. Bearing in mind that experts estimate that only between five and 20 per cent of corruption cases are detected and investigated, it must be assumed that in many sectors the proportions of corrupt companies are even higher.
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Fig. 23: Proportion of companies in the top 10 sectors which have committed violations relating to corruption; basis: MSCI World; as at 31.12.2012; in %; source: oekom research (2013)
Quality of anti-corruption programmes Unlike TI in its transparency analysis, oekom research evaluates not only the companies’ publicly available information on anti-corruption programmes, but also gains detailed insights into such measures through its rating process. Besides guidelines and activities to prevent corruption and bribery, the rating process also covers measures in this area relating to constraints on competition, cartelisation, accounting fraud, acceptance of gifts and insider trading. Here, IT companies received the best average rating, followed by the paper and forestry industry and the chemicals sector. Even the best-performing sector, however, achieved only just over two-thirds of the maximum possible score. The construction industry, which is particularly susceptible to corruption, achieved an average score of 48.6 for its countermeasures.
Fig. 24: Average rating of guidelines and measures of companies in the top 10 sectors; basis: MSCI World; scale: 0 to 100 (highest rating); as at: 31.12.2012; source: oekom research (2013)
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3. Outlook — from what can be done to what needs to be done In order to decide how to rate the measures outlined in this report in the context of the global challenges we face, two yardsticks can be applied: feasibility, what can be done, and necessity, what needs to be done. The facts described are sometimes overwhelming in terms of the action required to address them. Measured against what needs to be done, the overall level of measures implemented by companies is still inadequate. Just 16.7 per cent of all the companies from the MSCI World rated by oekom research have demonstrated “good” sustainability management initiatives, and no companies have yet qualified for the “very good” category. However, more than half the companies have as yet shown little or no commitment in this area. Moreover, in many of the areas for action examined in the report, the best companies often fail to achieve maximum points, and the industry average generally lies significantly below 50 per cent. Anyone who, like oekom research, has been dealing with the progress and setbacks of sustainability management in companies for many years will know how slow to act large companies, in particular, can be and how protracted decision-making and implementation processes often are. So why should things move forward any faster in the future than in the past? The first reason is that they have to! The facts show that a huge amount needs to be done in all areas. This is particularly true when it comes to combating climate change, which, in view of its impact on the other global areas for action, is of paramount importance. The time remaining for taking decisive political, economic and social action in order to prevent the worst from happening is already running out. The 2-degree target, viewed by many as being vital to our survival, is now probably unachievable, and the outcome of the Doha climate summit has done nothing to change that. But in other areas, too, we are running out of time. From the present-day perspective, the Millennium Development Goals for improving the living conditions of billions of people in the developing countries seem unattainable, while at the same time the world’s population is growing by 158 people every minute. The second reason is that they can! Numerous examples from many different industries and companies show that the ideas, concepts and technical capabilities needed to meet the challenges successfully already exist. Benchmarking is an approach widely used in business, which involves taking a lead from the best companies in the industry when it comes to designing and implementing measures. Similarly, in the area of CSR management and in the tackling of the major challenges of sustainability, there are good role models in many industries from which other companies can take their lead. Far greater use must be made of these “green benchmarking“ opportunities in future. “Sustainability is a luxury” is a reservation that is still put forward comparatively frequently as a reason for not learning from the most sustainable companies. oekom research is not alone in its view that cause and effect are being confused here: environmental and social commitment are not the product of economic success, but rather its root cause. Only those who manage energy and raw materials efficiently, treat their own employees and those of their suppliers fairly and offer products that are tailored to changing market requirements will also be economically successful in the long run. In this sense, sustainability is also described as long-term economics. The third reason is that they should! Even though the term “coalition of the willing“ is politically loaded, you can see evidence of such a coalition when looking at current trends. Members of this coalition include, firstly, growing sections of the financial market which, when investing capital, factor in or even focus on how the companies, whose shares or bonds they are purchasing, earn their money. Even though there are still large differences here in terms of the extent to which sustainability is being integrated into capital investment and the sincerity with which this is being done, the signal to companies is clear: companies which do not take the trouble to address the social and environmental challenges they face will in future have greater difficulty obtaining equity capital (shares) and loan capital (bonds), or will at least have to pay more for this.
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Things are also happening at the customer level, though these developments relate more to business customers than to private households. Underlying such developments are the efforts of a growing number of companies to avoid adding to their own environmental and social footprint by purchasing problematic products. If, for example, companies have to include the CO2 emissions of their supply chains in the calculations of their own climate balance sheets, there is a huge incentive for them to motivate suppliers to do more in the way of climate protection. The same is true of procurement by the public sector, as the volumes it purchases provide it with a powerful lever. The European Union, for example, has made “green public procurement“ one of its goals.64 In surveys, private consumers have been expressing a clear preference for socially and environmentally sound products for many years. However, despite growing demand for organic foods, for example, it is still frequently other factors that influence purchasing decisions at the till. Finally, there are encouraging trends in civil society. One example, during the World Climate Summit in Doha, was the first public demonstration in support of climate protection ever to take place in an Arab country. Another example is the increase in the number of “Watch” organisations which keep a critical eye on the behaviour of companies worldwide and publicise their observations internationally via social media. It is only a matter of time until such information leads to critical “green storms“ on the internet which will affect companies’ reputation and sales. Three good reasons, therefore, for a little optimism, despite the fact that there are still major shortcomings in many areas. In its sustainability ratings, oekom research will intensively analyse the question of whether such optimism is justified and will report back on its findings.
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oekom inside oekom research AG is one of the world‘s leading rating agencies. Since 1993, oekom research has actively helped to shape the market for sustainable investments. Our research universe comprises the world‘s major companies and countries. On this basis we offer a comprehensive package of research services for the integration of ethical, social and environmental aspects in the investment management of our clients. Our client base comprises more than 75 asset managers and institutional clients from a total of ten countries. We provide research for assets totaling more than 520 billion euros. Key to the success of oekom research AG is the credibility of our analyses. In order to guarantee this, there are in our view two particular aspects that are of crucial importance: independence – both at agency and at analyst level – and a sophisticated quality management system. In both these areas, oekom research has followed a consistent path since its founding in 1993 and has put appropriate standards in place on various levels. For example, we do not permit any companies which we evaluate, nor any financial market players, to be shareholders in oekom research. We also consciously refrain from providing any form of consultancy to the companies which we evaluate. With regard to the quality of our rating processes, the market has for years acknowledged our leading position over our competitors. Nonetheless, over the last year we have subjected our rating system to a detailed audit by external auditors of our compliance with the internationally recognised quality standard ARISTA® of the Association for Responsible Investment Services (ARISE). At the moment the interdisciplinary team of oekom research consists of 48 members. In all our activities, we try to put the basic principles of corporate responsibility into practice, especially in the way we treat our employees as an employer, and in the way we treat our clients and competitors as a market participant. We take appropriate measures to minimise the load on the environment which our business activities give rise to.
References Institutional investors: • Aktion Mensch • Bayerische Versorgungskammer • Central Mission of the Franciscans • Deutsche Bundesstiftung Umwelt • Deutsche Franziskanerprovinz • Deutsche Welthungerhilfe • Diocese Rottenburg-Stuttgart
• ERAFP • Evangelical Lutheran Church in Bavaria • Evangelisches Johannesstift • FiBEG • Foundation EVZ • Generali Deutschland
• Munich Re • Nestlé Pensionskasse • Novartis Pension Fund • VBV Pensionskasse • WWF Deutschland
Financial services companies: • AGICAM • Allianz Global Investors France • AmpegaGerling Investment • Amundi AM • AXA Investment Managers • Baden-Württembergische Bank • Bank für Orden und Mission • Bank für Sozialwirtschaft • Bankhaus Schelhammer & Schattera • Bankhaus von der Heydt • BayernInvest • BNP Paribas AM • BÖAG • Close Brothers Seydler • CM-CIC AM • Coninco Wealth Management • Daiwa AM • Deutsche Bank • DJE Investment • DZ Bank • EFG Financial Products
• ELAN Capital-Partners • Erste Sparinvest • European Investors • Evangelische Darlehnsgenossenschaft • Groupama AM • Hamburger Sparkasse • HSBC Global AM • HQ Trust • HypoVereinsbank • Kaiser Partner • KD-Bank • Kepler Fonds • La Banque Postale AM • Lampe AM • Landesbank Baden-Württemberg • LBBW AM • MEAG • Metzler • Metzler AM • Nord/LB Kapitalanlagegesellschaft
• ÖkoWorld Lux • Pioneer Investments • Plurimi Capital • Proventus • quirin bank • Raiffeisen Capital Management • Salm-Salm & Partner • Sal. Oppenheim • Schwyzer Kantonalbank • SEB AM • SGSS Deutschland • Sparkasse Oberösterreich • Sparkasse Schwyz • Steyler Bank • Umweltbank • Unicredit • Universal-Investment • VINIS • VKB-Bank • Wilhelm v. Finck Deutsche Family Office
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Glossary Best-in-class approach Under the best-in-class approach, the best companies in an industry are selected for investment, best here being defined as particularly committed to social and environmental matters. A distinction can be made between the relative and the absolute best-in-class approaches. Under the relative approach, a set percentage of the best companies in an industry are selected, irrespective of their effective sustainability performance, for example, always the top 20 per cent. Under the absolute approach a minimum threshold is also taken into account and only companies which satisfy these minimum requirements can be best-in-class. CSR Corporate Social Responsibility; including social and environmental aspects. Engagement Also: active shareholding, approach which is widespread particularly in the Anglo-American world, in which investors attempt through direct dialogue with companies to rectify grievances about the companies’ social and environmental performance. This approach is now also gaining in momentum in continental Europe. ESG This abbreviation stands for Environmental (E), Social (S) and Governance (G) and describes three dimensions of sustainability that are routinely integrated into sustainability ratings and sustainable capital investments. Exclusion criteria Approach, common among sustainability investors, whereby companies which are active in certain areas of business (e.g. relating to alcohol, pornography, military or tobacco) or which attract attention through controversial business behaviour (e.g. human rights and labour rights violations), are excluded from investment. SRI Socially Responsible Investment.
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Company index
Company
Country
Company
Country
Company
Country
Acciona
ES
Hess
US
RWE
DE
Accor
IT
Hewlett-Packard
US
SABMiller
GB
Acea
IT
HSBC Holdings
GB
Samsung
KR
Akzo Nobel
NL
Hochtief
DE
Sanofi
FR
Allianz
DE
Holmen
SE
Sasol
ZA
Anglo American Platinum
ZB
Hyundai Engineering
KR
Segro
GB
Assicurazioni Generali
IT
ING Groep
NL
Shell, Royal Dutch
NL
AstraZeneca
GB
Intel
US
Skanska
SE
Atlas Copco
SE
International Paper
US
SKF
SE
Axel Springer
DE
ITV
GB
Societe Generale
FR
Balfour Beatty
GB
J Sainsbury
GB
Sony
JP
BASF
DE
JM
SE
SSE
GB
Berkeley Group
GB
Kingfisher
GB
Standard Life
GB
BG Group
GB
Lend Lease
AU
Staples
US
BMW
DE
Linde
DE
Starbucks
US
BP
GB
L‘Oreal
FR
Stockland
AU
Bristol-Myers Squibb
US
Lukoil
RU
Stora Enso
FI
British Land
GB
Marks & Spencer
GB
Suez Environnement
FR
British Sky Broadcasting
GB
McDonald’s
US
Svenska Cellulosa
SE
BT Group
GB
Merck
DE
Swiss Re
CH
Capital Shopping Centres
GB
Metro
DE
Taylor Wimpey
GB
Carillion
GB
Mitsubishi Estate
JP
Telecom Italia
IT
Carnival
GB/US
Mondi
GB
Tesco
GB GB
Coca Cola Hellenic B.
GR
Munich Re
DE
Thomas Cook
Cummins
US
MVV Energie
DE
ThyssenKrupp
DE
Danone
FR
National Australia Bank
AU
Time Warner
US
D.E. Master Blenders 1753
NL
Natura Cosmeticos
BR
Total
FR
Deutsche Bank
DE
Nestle
CH
TUI
DE CH
Deutsche Telekom
DE
Novartis
CH
UBS
Dexia
BE
Norsk Hydro
NO
Unibail-Rodamco
EDP Brasil
BR
Novozymes
DK
Unilever
EDP Portugal
PT
OMV
AT
UPM-Kymmene
FI
Eli Lilly
US
Pearson
GB
Veolia Environnement
FR
EVN
AT
PepsiCo
US
Verbund
AT
Exxon
US
Peugeot
FR
Vivendi
FR
FR GB/NL
Fibria Celulose
BR
Pfizer
US
Wal-Mart
US
GlaxoSmithKline
GB
Philips, Royal
NL
Walt Disney
US
Gold Fields
ZA
Reed Elsevier
GB
Westpac Banking
AU
Groupama
FR
Renault
FR
WM Morrison
US
Henkel
DE
Ricoh
JP
Wolters Kluwer
NL
Hennes & Mauritz
SE
Roche
CH
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Sources 1 Flotow, Paschen von/Kachel, Petra (2011): Nachhaltigkeit und Shareholder Value: Ergebnisse einer Umfrage des Deutschen Aktieninstituts e.V. und des Sustainable Business Institute (SBI) e.V., Hrsg. Prof. Dr. Rüdiger von Rosen (Studien des DAI, Heft 50), Frankfurt 2 Compamedia Stiftung: Umfrage zur Unternehmensverantwortung im Mittelstand; www.compamedia-stiftung.de/ergebnisse 3 KPMG International (2012): Corporate Sustainability: A Progress Report 4 www.ilo.org 5 www.oxfam.org 6 www.ituc-csi.org 7 www.ilo.org/berlin/arbeits-und-standards/kernarbeitsnormen/lang--de/index.htm 8 www2.ohchr.org/english/bodies/cescr 9 www.un.org/millenniumgoals 10 www.bmu.de/themen/europa-international/europa-und-umwelt/eu-nachhaltigkeitsstrategie 11 www.unglobalcompact.org 12 www.unep.org/geo 13 UNEP (2012): Global Chemicals Outlook 14 7 Facts about climate change and hunger; at http://de.wfp.org/artikel/7-fakten-%C3%BCber-klimawandel-und-hunger 15 www.oxfam.de/informieren/klimafolgen 16 http://de.wfp.org/hunger/hunger-statistik 17 www.armut.de 18 UNEP (2012): The Emissions Gap Report 2012; www.unep.org/publications/ebooks/emissionsgap2012 19 PwC (2012): Too late fortwo degrees? Low carbon economy index 2012 20 WMO Press Release No. 966, 28.11.2012; www.wmo.int 21 Rahmstorf, S./Foster, G./Cazenave, A. (2012): Comparing climate projections to observations up to 2011. Environmental Research Letters 7 044035 22 Bündnis Entwicklung Hilft (2012): WeltRisikoBericht 2012 23 press release, VCD, 30.11.2012, at www.vcd.org/pressemitteilung.html?&tx_ttnews[tt_news]=102 3&cHash=68fb96b2768e7a798ed492eb0e7e91c5 24 www.ipcc.ch 25 www.gegen-gasbohren.de 26 www.wwf.de/themen-projekte/bedrohte-tier-und-pflanzenarten/warum-artenschutz-und-wie 27 www.bipindicators.net 28 www.millenniumassessment.org 29 Union for Ethicals Bio Trade (2012): Biodiversity Barometer 2012 30 www.iucnredlist.org 31 WWF (2012): Living Planet Report 2012. Biodiversity, biocapacity and better choices 32 press release, Bundesamt für Naturschutz, 10.12.2012, at www.bfn.de 33 www.teebweb.org 34 UNEP FI (2010): CEO Briefing Mythos Naturkapital? Die Integration von Biodiversität und Ökosystemleistungen als feste Größe im Finanzwesen 35 Kleber, Claus/Paskal, Cleo (2012): Spielball Erde. Machtkämpfe im Klimawandel
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36 UNESCO (2012): Weltwasserbericht 2012; Summary at: www.unesco.de/weltwasserbericht4_kernaussagen.html 37 www.wasserfussabdruck.org/?page=files/home 38 www.right2water.eu/de 39 Within the United Nations (UN) there are differing definitions of what a forest is. For example, the UN Food and Agriculture Organization (FAO) defines a forest as land spanning more than 0.5 hectares with trees higher than 5 metres and a canopy cover of more than 10 per cent, or trees able to reach these thresholds in situ. The United Nations Framework Convention on Climate Change (UNFCCC) defines a forest as a minimum area of land of 0.05-1.0 hectares with tree crown cover (or equivalent stocking level) of more than 10-30 per cent with trees having the potential to reach a minimum height of 2-5 metres at maturity in situ. What the UN definitions have in common is that they include not only intact natural forests, but also modified natural forests and planted forests (including tree plantations). 40 www.fao.org/forestry/fra/en 41 www.wwf.de/themen-projekte/waelder/waldvernichtung/illegaler-holzeinschlag 42 www.eea.europa.eu/de/signale/signale-2011/artikel/das-jahr-der-waelder-waelder 43 www.bdzv.de/markttrends-und-daten/wirtschaftliche-lage/wissenswertes 44 https://pefc.de 45 more information can be found at http://land-grabbing.de 46 www.checked4you.de/UNIQ135782869210539/turnschuh 47 Südwind (2012): Arbeitsrechtsverstöße in Indonesien; Was können Investoren tun? 48 http://de.wfp.org/stories/10-fakten-%C3%BCber-hunger 49 www.bildungskampagne.org/informieren/bildung-fakten-und-zahlen 50 vgl. Forum Fairer Handel (2012): Der Faire Handel in Deutschland Zahlen, Entwicklungen und Trends für das Geschäftsjahr 2011 51 Fairtrade International (2012): Annual Report 2011-12; www.fairtrade.net/annual_reports.html 52 www.oikocredit.org/de/home 53 Churchill, C., Matul, M.: Protecting the poor – A microinsurance compendium Vol. II (Hrsg. ILO, Munich Re Foundation, 2012); McCord, et al.: The Landsape of Microinsurance in Latin America and the Caribbean 2012 (Hrsg. Inter-American Development Bank, 2012); McCord, M. et. al: The Landsape of Microinsurance in Africa 2012 (Hrsg. MFW4A, Munich Re Foundation, 2012) 54 Stiftung Weltbevölkerung (2012): Datenreport 2012 55 www.bagso.de 56 www.generationenfreundliches-einkaufen.de 57 http://bvi-magazin.de/hp567/Neues-Wohnen-im-Alter.htm 58 Europäische Kommission (2011): Standard Eurobarometer 76: Die Mediennutzung in der europäischen Union 59 www.transparency.org/research/cpi/overview 60 www.transparency.de/Tabellarisches-Ranking.2197.0.html 61 Transparency International (2011): Bribe Payers Index Report 2011 62 Transparency International (2012): Transparency in corporate reporting: Assessing the world‘s largest companies 63 www.spiegel.de/spiegel/print/d-84162337.html 64 www.pwc.de/de/offentliche-unternehmen/green-public-procurement.jhtml
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