A Cool Idea to Heat Buildings in Sweden

posted by Andrew Cuneo

All around the world, we’re seeing innovation that can turn back the clock on our climate change dilemma. Companies are making strides never before seen that illustrate ways to conserve energy and water, while cleaning our air.

But this story out of Stockholm, Sweden makes the grade as the most innovative, and perhaps most unusual, means to generate heat and electricity – the human body.

That’s right, as reported by the BBC last Sunday, Stockholm’s Central subway station is harvesting the body heat of the 250,000 passengers that ride each day.  So how is this being done?  Well, “Heat exchangers” in the station’s ventilation system are converting all excess body heat into hot water which is then pumped into a nearby building to keep it warm. And it’s saving that building a tremendous amount of energy.  In fact, the 250,000 daily passengers in Stockholm are actually saving that building 25 percent of its normal energy bill.

The human body is providing a new source of heat for Stockholm buildings – and that’s pretty cool.

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Imperceptible But Meaningful Change

posted by Chad Tragakis

by Chad Tragakis, Senior Vice President, Hill & Knowlton, Washington

“If mankind is not to perish after all the dreadful things it has done and gone through, then a new spirit must emerge.  And this new spirit is coming not with a roar but with a quiet birth, not with grand measures and words but with an imperceptible change in the atmosphere – a change in which each one of us is participating…”

If ever there were a New Year’s wish for humanity, this beautiful prose from Albert Schweitzer would fit the bill perfectly.  A new year, a new spirit, a new chance to live and work responsibly and sustainably.  It is the season for looking back and looking ahead, and I’ve been doing a lot of both lately.  Colleagues, clients and friends have been asking me what I’m seeing in terms of coming trends in corporate responsibility and sustainability.  Here’s what I’ve been telling them.

In spite of changes in Congress, questions over the validity of research, and a general “green fatigue” on the part of many Americans, climate change will still be accepted as the primary environmental issue and challenge of our time.  Research strongly suggests that citizens expect businesses to play a role in mitigating it, and act in concert with government to address it.  Additionally, business risk related to climate change will remain increasingly important to mainstream investors, and many will continue to scrutinize corporate sustainability reports and other collateral as a window into the company and its exposure. 

Leading companies are recognizing and responding to consumer demands for action and information regarding climate change, and embracing this as an opportunity for reputation building and thought leadership.  To stand out, companies will need to rethink where and how they share and celebrate their climate change related programs, policies and partnerships with customers and stakeholders.  As is often the case, one innovative and memorable effort will be worth more than dozens of smaller ones.

External influencers and organizations will continue to impact consumer brand perceptions more than corporate PR or CSR reports.  Research suggests that consumers want more information on a company’s commitment to corporate responsibility and sustainability, but need that information in simpler ways and where it connects to them.  In response to these changing influences on consumer brand perceptions, sector leaders will need to integrate their company’s CSR story into mainstream consumer communications channels – from marketing and television advertising to in-store displays and product packaging to digital communications.      

Interest in the environment will remain strong on the part of both businesses and consumers. We will also continue to see an increase in firms applying for LEED certification for their facilities, and entering into strategic partnerships with environmental conservation organizations.  It will be essential for companies to carefully navigate “green” opportunities and partnerships, as vocal consumers, activist NGOs and government regulators such as the Federal Trade Commission continue to call firms out for greenwashing, fraudulent claims and abuse of marketing communications.        

Water use, availability and scarcity will continue to be of growing concerns in nearly every part of the world, posing a major operational and reputational issue for companies.  This is especially true for firms in water-intensive industries, but since every company uses water, it will be an issue for the entire business sector.  Companies will need to get in front of the water issue first by conducting assessments of their true water “footprint”, taking steps to minimize use throughout their supply chains and product lifecycles and then highlighting success stories and sharing best practices with customers, partners, regulators and other stakeholders.

As companies and individuals continue to take action and find new ways to be more responsible and sustainable in the year ahead, 2011 presents an opportunity for humanity’s finest hour.  The critical changes we need don’t have to come with a roar or with grand measures, to paraphrase Schweitzer’s poignant words, although many of our greatest challenges certainly deserve and require them.  In the spirit of an ambitious New Year’s resolution for the world, it would be wonderful to see every individual, organization and company ask themselves how they can participate in that imperceptible but meaningful change.

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A CSR tale of two mines: when the path chosen makes all the difference

posted by Tara Knight

In November of 2010, the Canadian government rejected an $800 million copper-gold project of Taseko Mines, called “Prosperity” in my home province of B.C. Although the federal government ultimately cited environmental concerns in declining the license to operate, relations between the company and the First Nations communities in the areas around the mine really hit rock bottom during a federal environmental review process for the project.

Taseko’s “Prosperity” mine had potential to generate significant economic wealth for the Williams Lake region of BC, an area hard-hit by other economic factors and desperately in need of jobs. However critical stakeholders, such as the First Nations in the area of the proposed mine believed their communities would not benefit from the mine in their territory and actively opposed the project during the environmental review.

Interestingly, on the same day the Canadian government rejected the Taseko Mines Prosperity project, it approved a $915 million copper-gold project (“Mount Milligan”) in a different area of the province. In speaking about its decision, the federal government indicated that the Mount Milligan project (Prosperity mine rejected, Mt. Milligan approved) had designed appropriate mitigation measures and minimized environmental impacts and that as a result, was likely to cause significant adverse environmental effects. 

In further contrast to how Taseko Mines managed key stakeholders such as the First Nations communities in the area around their proposed mine, Thompson Creek Metals (Mount Milligan copper-gold project) reached out to First Nations communities in a meaningful way, and adopted Principles for Sustainable Relationships with First Nations, a framework developed by the Association for Mineral Exploration BC.

The Mount Milligan project had First Nations support in the form of a revenue-sharing agreement between the province and the McLeod Lake Indian Band – only the second such deal in the province. Further, Thompson Creek Metals partnered with post-secondary institutions to create an environmental training employment program for First Nations – allowing them to participate in project operations.

Although neither mine is without opposition, nor serious environmental and local concerns, it is an interesting contrast of the employment of two very different stakeholder strategies. It is also a powerful narrative about the power of relationship building for economic prosperity, and recognizing stakeholder dynamics as a critical component in a company’s social license to operate.

What is the cost of developing a solid CSR program that incorporates social and environmental responsibility concerns into the cost of business? In this tale of two mines, the path chosen made all the difference.

Disclosure: Taseko Mines and Thompson Creek Metals are not clients of Hill & Knowlton.

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The medium sends a message…

posted by Tara Knight

Maybe the format of CSR reports isn’t keeping you up at night (OK, it’s not keeping me up at night either) but each year, I find it fascinating to review the CSR Trends 2010 report from PricewaterhouseCoopers’ Sustainable Business Solutions practice and Craib Design & Communications.

If you haven’t had a chance to review the report – PwC and Craib do a great job of sifting through hundreds of reports mainly from Europe, Japan, Australia, The United States and Canada, reviewing trends and providing a useful snapshot of the differing expectations business cultures have about CSR reporting – and the best practices you may want to emulate. The report doesn’t address truthfulness, instead it delves into how effective companies are in communicating their CSR strategies and performance.

No surprise, there is still a significant difference in how much North American companies report on CSR in comparison to their European counterparts. Virtually 100% of European companies surveyed had CSR information on their corporate website – and 81% published a CSR report. North American companies are further behind than I would expect, with 80% of American and 72% of Canadian companies posting CSR information on their website, but only 37% of Canadian companies and 40% of American companies following up with a published CSR report.

One of the things I was surprised to see in the report is how few companies are taking greater advantage of the benefit of websites and the social web for communicating their CSR commitment. Although 28% of American companies surveyed are using blogs to engage with stakeholders, that is more than double the rate of Europe and Canada. Of all the companies surveyed, while 48% are using CSR microsites, just 35% are leveraging video (particularly for stakeholder testimonials) and only 23% are using interactive diagrams or maps.

The lower use of interactive maps and diagrams particularly surprises me, given that graphics are such an incredibly powerful way to communicate complex information – and websites are a perfect vector for interactive visual mapping and diagrams. Given how many graphics are developed for printed CSR reports, companies clearly understand the value in making complex information clear with the use of design. So, I am a little astonished that more companies are not considering how they could translate these to better leverage the attributes of the web.  (If you are really keen, the report covers some very impressive “best practices” in online communications and interactivity starting on page 42 – such as my personal favourite, Stora Enso’s sustainability microsite (which I wrote about previously here, and is a client of H&K Finland.) 

Bottom line? Move ahead of the pack by first – talking about your CSR activities, and second, building your CSR reporting into every aspect of your communications. Use the attributes of the communication tools you already have to make your CSR reporting come alive.

@TaraKnightHK

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Let’s Make This Holiday Season Better for All – Together

posted by Andrew Cuneo

At ResponsAbility, our goal is to share and celebrate best practices and new ideas in corporate responsibility.

We share highlighted news items, offer our expertise and provide insight into ways corporations can improve their social standing. It’s also important for our readers to know we also practice what we preach.  Every year, Hill & Knowlton’s DC office hosts a toy drive for needy families around the holiday season. We do it not because it improves our reputation, but because it feels good.

I’m one of the fortunate individuals who looked forward to this holiday season every year. Food would always be on the table, a fire in the fireplace, and a Christmas tree with presents underneath every year.  As a new parent, I can truly appreciate what my parents did to make my holiday a bit brighter.  My daughter, just four months old, will hopefully look back years from now and remember with fondness the family holidays.

But as a new parent, it also breaks my heart to know some kids might wake up and not have a gift to open, a large dinner on the table or even a warm fire to sit next to. That’s exactly why I’m so proud of our agency for making a real difference.  We’re proud to be working with Martha’s Table to collect food and toys for families in need.

There are so many ways you can help kids smile this holiday season. Just by donating canned goods, toys or even clothing, you can bring a smile to a child’s face and relief to a parent’s heart. This holiday season, let’s make a difference together.  Forget bottom lines, smiles are worth millions.

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Factoring CSR performance in executive pay

posted by Tara Knight

I stumbled upon an article recently about the summary of the recent removal of Shell from the Dow Jones Sustainability Index (DJSI).

According to the article in The Responsible Investor, Dow Jones and its partner SAM, dropped Shell from the index in September.  DJSI rules allow for elimination of companies from the Index following extraordinary events (for example, BP was removed in June following the Gulf of Mexico oil spill) however, there seems to be no specific reason given for the decision to remove Shell from the index that I have come across. It’s pretty clear that Royal Dutch Shell (in a post on their website) was very surprised by the move too.

Curious, I decided to look up Shell’s most recent Sustainability Report (2009). Sustainable development happens to account for 20 percent of their executive compensation scorecard.  For 2010, the Dow Jones sustainability Indexes assessment of Shell’s performance accounts for half of the sustainable development element in the scorecard for members of the Executive Committee. It’s no surprise that Shell is seriously re-considering this executive bonus program as a result (“Shell to review Dow Jones Sustainability Index as bonus metric after being dumped from benchmark“). Being dropped (unceremoniously) from the DJSI is a serious hit to potential compensation, and there are likely a lot of concerned executives about this event.

What I hadn’t realized (until I dug a bit) is that this is part of a wider trend for Dutch businesses to seriously consider, and link, sustainability performance with senior management compensation packages. In fact, Royal Dutch Shell is one of a number of Dutch companies (including Dutch life sciences giant DSM, and postal operator TNT). According to Sustainable Sourcing this kind of incentive plan was pioneered by Akzo Nobel which based its long-term bonus payment structure according to its position in the Dow Jones sustainability index for chemical companies.

I am now very curious about other companies tying their executive bonus packages with external sustainability indices. Clearly, this kind of association will cause real shifts in decision making around sustainability within organizations. Do you know of North American companies who are experimenting with new models for their senior management compensation packages?

@TaraKnightHK

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A Ray of Light from the White House

posted by Andrew Cuneo

By Andy Cuneo, Senior Account Executive, Washington, D.C.

It’s one thing to preach energy sustainability – it’s another lead by example. That’s just what the White House is doing here, as President Obama is having solar panels placed atop the beautiful mansion at 1600 Pennsylvania Avenue. The panels will serve as a means to power the entire house – from press room to the President’s basketball court – serves as a reminder of the differences we can make – one panel at a time.

President Jimmy Carter was the first to implement solar panels when he had them built to heat the White House water. President Carter made a famous prediction that day, saying: “In the year 2000 this solar water heater behind me will still be here supplying cheap, efficient energy. A generation from now this solar heater can either be a curiosity, a museum piece, an example of a road not taken, or it can be just a small part of one the greatest and most exciting adventures ever undertaken by the American people.”

President Obama and many others around the U.S. are relying on new energy means to power this country. For generations, we’ve relied heavily on coal and foreign oil to heat our homes, power our transportation, towns and cities.  Today, we have an incredible opportunity to do what no generation has done prior. We can utilize advanced technologies to take advantage of the wind and solar energy we have in the U.S. Plus, technology is also allowing us to safely obtain near infinite amounts of natural gas and use nuclear as yet another means.

President Obama took the first step. He’s placed solar panels on his residence.  What will you do to match?

Hill & Knowlton works with the CASEnergy Coalition,  the America’s Natural Gas Alliance and other companies within the solar and wind energy sectors.

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New “standard” for CSR? ISO 26000 gets official November 2010

posted by Tara Knight

Last week, I had the opportunity to review the final draft of the International Standard ISO 26000, Guidance on Social Responsibility with Robert White, who sits as a Canadian Representative and Expert Member of ISO 26000 Social Responsibility Working Group. Approved in September, the ISO 26000 guidelines will be officially published in November 1, 2010.

If you haven’t been following the story, it’s been a long wait for this standard – ISO 26000 has been in development for well over five years. Given that CSR as an area of business concern is relatively new, rapidly evolving, and frequently difficult to accurately define, it’s no surprise that this document has been subject to vigorous overview and discussion. A multi-stakeholder effort, 400 people took part in developing the standard, which makes it ISO’s biggest working group to date.

So what is it? ISO 26000 sets out an international consensus on definitions and principles of Social Responsibility (SR); identifies seven core issues to be addressed, and provides guidance on how to integrate Social Responsibility throughout the operations of an organization. Significantly, the standard has been intentionally written to be accessible to non-specialists, and unlike many other ISO standards, it is a voluntary guidance standard, meaning it is not eligible for certification.

You can review an overview of the contents of ISO 26000 here. If you are looking for the ‘quick hit” version, ISO 26000 defines seven core principles of Social Responsibility, as: Accountability, Transparency, Ethical Behavior, Respect for Stakeholder Interests, Respect for the Rule of Law, Respect for International Norms of Behavior and Respect for Human Rights.

Under these principles of SR, the guidelines lay out an additional seven core subjects to consider in integrating Social Responsibility in an organization. These are organizational governance; human rights; labour practices; the environment; fair operating practices; consumer issues; and community involvement and development. Economic aspects, as well as aspects relating to health and safety and the value chain, are dealt with within each of these core subject areas.

Final word? For organizations that feel daunted in even considering or initiating a Social Responsibility program, or processes, ISO 26000 will provide valuable structure and guidance in helping to shape and define Social Responsibility for organizations big or small (or just smaller). For those organizations already leading the way, ISO 26000 may help illuminate areas where Social Responsibility governance or practice is not as developed as it could be, and provide guidelines for improvement. In short – there is something here for everyone to learn.

Which organizations do you think are already leading here? Are “the leaders” too far ahead to benefit from this guidance? I am very curious if organizations that do not currently track their CSR policies/programs will choose to take advantage of this effort and utilize the ISO 26000 guidance standard prior to implementing CSR reporting or policies.

@TaraKnightHK

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Stock market says: CSR = $$

posted by Tara Knight

I feel one of the most pervasive characterizations of CSR is that companies experience a financial penalty as result of subscribing to or integrating CSR practices and policies into their business. Of course, the recent Wall Street Journal  “The Case Against CSR” op-ed is one example of the disconnect that many people have of the value of CSR to a profitable business (Boston College’s The Voice of Corporate Citizenship provides an excellent overview of some of the commentary.)

Making a business case for CSR within a company whose corporate culture believes that integrating CSR comes with a significant cost to the bottom line is a huge challenge.   Recently I have been circulating a couple studies with my colleagues that have been really helpful in reframing this “CSR costs money” debate.

An August 2010 working paper from Harvard Business School, The Impact of Corporate Social Responsibility on Investment Recommendations delves into how sell-side analysts perceive CSR information, and how this information affects their recommendations. The researchers reviewed a large sample of US firms over 16 years, examining the ways corporate CSR activity is communicated to investors through analysts, and how it this affects public equity markets. Analysts’ recommendations can substantially affect stock prices and trade volume. The researchers found that firms with strong CSR strategies are perceived to be value-creating, especially over time, and this is reflected in analyst’s positive recommendations for these firms.

Another collaborative study, Does Corporate Social Responsibility Affect the Cost of Capital? from Principles for Responsible Investment, used a sample of 12,915 U.S. firms. This study found firms with a better CSR score had a lower cost of equity capital – even after controlling for firm-specific issues or type of industry. The study found that CSR investment particularly in improving responsible employee relations, environmental policies, and product strategies substantially contributed to reducing a firms’ cost of equity.

It’s clear that investors are looking for, and paying attention to CSR information. Investors with Bloomberg’s Professional market data service for example are able to access carbon disclosure information supplied to the Carbon Disclosure Project (CDP) by the world’s largest firms.  Analysts and investors are certainly accessing information about CSR policies and practices, and considering this in their investment decisions. CSR may need investment, but whether environmental, social or governance related – smart companies are leveraging strong CSR  practice as a positive factor in improving their market valuation.

@TaraKnightHK

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Sustainability Being Given the ‘Old College Try’

posted by Andrew Cuneo

By Andy Cuneo, Senior Account Executive, Washington D.C.

As a former student at Boston’s Northeastern University, our institution’s former president, a man I respect and admire, would work tirelessly to build Northeastern’s reputation on the U.S. News & World Report college rankings. He succeeded in moving NU from high 150’s into the top 100.

A new ranking, reported on by the Washington Post, takes into account a new standard ranking produced by Washington Monthly that looks at three distinct categories when rating institutions: Social Mobility (recruiting and graduating of low-income students), Research (production of cutting edge scholarships and PhD’s) and Service (encouraging students to give something back to their community).

You’ll see in the report that public colleges fair amazing well – far better than private institutions. But what I really like about this rating system is that it’s not just an alternative way to view success and opportunity in higher education institutions, but rather what prospective students are now looking for in their college experience. In July, USA Today’s Trevor Hughes illustrates that point here.

In addition, more institutions are making the most of their opportunity to become more sustainable. We’ve written on this blog work being done by our local universities here in DC. 

There is a growing enthusiasm from our next generation. I remember stepping onto campus for the first time more than 11 years ago, ambitious in thinking I could change the world. And these people are doing it!

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