Directions 2009 - Mapping the Shifting Landscape of European Corporate Responsibility

DIRECTIONS THE FULL REPORT 2009

MaPPing THE LandscaPE OF EUROPEan cORPORaTE REsPOnsibiLiTy

Multi-diMensionalMulti-layeredMulti-speed

stakeholder dialogue: trustOn environmental issues, 36% of Europeans trust environmental protection associations, 18% trust consumer associations and only 2% trust companies.

responsible marketing: advertising51% of Europeans don’t trust TV advertising and 50% don’t trust newspaper advertising.

42% agriculture

23% industry

18% urban use

18% energy production

energy: usage across europe Energy usage across Europe has a clear split.

Water: safe drinking water Over 100 million Europeans lack access to safe drinking water resulting in nearly 40 child deaths from diarrhoea every day.

100m no access to safe water

sustainable consumption: labellingsweden has recently made carbon emission labels on food mandatory.

saLTERbaxTER » directions 2009 » 1saLTERbaxTER » directions 2009 » 1

in a region made up of so many distinct cultures, languages and approaches it’s hardly surprising that this landscape is anything but uniform.

it’s multi-dimensional: the issues morph and change and cR is viewed differently from country to country. it’s multi-layered: issues are connected and conflicting, there are big challenges and big opportunities. and it’s multi-speed: countries, governments, companies and consumers across Europe are at different points on their sustainability journey for different reasons – some good, some not so good.

but all of this just makes it more interesting.

We’ve asked a range of specialists to contribute their thoughts on some of the bigger ‘plates’ that are moving under this shifting landscape. The list is obviously not designed to be exhaustive, but we’ve picked:

Future energy

Water

stakeholder dialogue

Responsible marketing

sustainable consumption

sO WHaT Has diREcTiOns UnEaRTHEd?companies and governments are going at different speeds; some companies are making impressive headway but the regulatory framework isn’t there to shape the future – and companies are now crying out for regulatory consistency; stakeholders are more important than ever, and there are more ways to engage with them than ever before; the current economic climate may actually prove to be the best environment to help the sustainability agenda as longer term thinking is now seen as essential; trust and confidence in business are still a struggle but responsibility in marketing is improving; water is looming as the next major crisis – and the water footprint of European business reaches way beyond the continent itself.

so this year’s directions starts to map out some of the big areas of interest in cR across Europe – but it’s a huge topic and we only scratch the surface so let us know what’s going on where you are, what you’d like to see debated, what the big issues are in your country or what you think of what we think.

as ever, please get in touch with the cR team at salterbaxter, [email protected]

and you can also follow us on twitter, @salterbaxter

MULTi-diMEnsiOnaL » MULTi-LayEREd » MULTi-sPEEd

diREcTiOns 2009

THis yEaR WE aRE bROadEning OUR REacH TO cOVER THE WHOLE EUROPEan LandscaPE OF cORPORaTE REsPOnsibiLiTy.

2005 Best in show of this year’s crop

2007 Cutting through the noise of the climate change debate

2006 Is CR in your blood?

2008 Sustainability gets tough

FUTURE EnERgyWWF 2_4 Zero carbon by 2040, rhetoric or reality?

e.on UK 5_6 the energy ‘trilemma’

cArBon discLosUre ProJect 7_8 on the path to carbon reduction

sALterBAXter & MAPLecroFt 9 Facts and maps

WaTERsABMiLLer & WWF 10_12 the complexity of the water challenge

sALterBAXter 13_14 step-by-step approach, a footprint is only the first…


sTakEHOLdER diaLOgUEteLeFÓnicA 16_17 A partnership model – value in engagement

inteL 18_19 to tweet or not to tweet – intel joins its stakeholders online

sALterBAXter 20 Have you seen my sidewiki?


REsPOnsibLE MaRkETingAsA 22_23 shades of green advertising – keeping it real

cocA-coLA GB 24_25 What’s the secret ingredient in coca-cola’s new responsible Marketing charter?

sALterBAXter 26 Facts and maps

sUsTainabLE cOnsUMPTiOnsUstAinABLe consUMPtion institUte 27_29 three crises, but a once-in-a-lifetime opportunity

UniLever 30_31 What does your shopping say about you? the role of sustainable brands


cOnTacT Us 33

icOn issUE LOcaTiOn

ABoUt directions

Directions is in its ninth year. It is widely viewed as the leading annual publication on trends in corporate responsibility and communications. Salterbaxter also produces regular supplements on key topics throughout the year.

directions rePorts

Please contact us to request back issues, see page 33 for contact details.

cOnTEnTs

The emerging stars of sustainability

CR and Brands

Are you focusing on the issues that matter most?

GRI – the third generation. The guidelines grow up ExTRa FacTs FROM saLTERbaxTER

We have added extra facts and snippets of information throughout the report to complement the articles.

A FeW oF oUr sUPPLeMents

2 » saLTERbaxTER » directions 2009 saLTERbaxTER » directions 2009 » 3

Zero carbon by 2040, rhetoric or reality?

WiTH aLL THE cLaMOUR aROUnd cOPEnHagEn, WHaT is acTUaLLy nEEdEd TO MakE EUROPE’s cOnTRibUTiOn TO TackLing cLiMaTE cHangE a REaLiTy?

aRTicLEs by » JasOn andERsOn, HEad OF EnERgy and cLiMaTE cHangE POLicy, WWF » JEREMy daViEs, diREcTOR OF bRand and cOMMUnicaTiOns, E.On Uk » JOanna LEE, diREcTOR, cOMMUnicaTiOns & cORPORaTE PaRTnERsHiPs,

caRbOn discLOsURE PROJEcT

FacTs and MaPs » saLTERbaxTER and MaPLEcROFT

We know that we need to see global carbon emissions peak and start to fall in the next decade to avoid irreversible consequences.

Let’s be absolutely clear here: there is a huge gap between the rhetoric and reality. a lot is said by companies and governments about how seriously they take the issue of climate change, but we need much more action than we are currently seeing – and soon.

What is needed is a new policy agenda,

backed by legislation, because we

have seen that companies will not

voluntarily sign up to the scale of

changes necessary.

For example, nobody is getting rewarded for going to their cEO and saying we need to invest 1bn Euros to completely refit our refinery even though it will save 1.5 billion down the line. However, that is the kind of change that is needed, so without legislation we don’t see that there is an incentive for any cEO to voluntarily give that kind of project the go-ahead.

POLicy cERTainTycompanies like to point out that they are being asked to make significant investments without any certainty about the policy framework beyond a five or ten year horizon. To a degree, we sympathise with that position.

However, the general trajectory of policy can be plotted with a fair degree of confidence – tighter emissions standards, a workable carbon price and so on.

nonetheless, the world’s governments can provide more certainty through the copenhagen agreement or at the very least we need a major player such as the Us to make a big announcement, which would clearly show that the game has changed for good.

THE PRicE is WROngWe need the EU Emissions Trading scheme (ETs) to set a carbon price where investment makes sense and a company can have confidence that the price of carbon will rise over time. at the moment the price of carbon is far too low to stimulate sufficient action. and in some cases there are companies who are able to meet their commitments by making fairly basic efficiency improvements.

The post-2020 reduction trajectory in the ETs is also not steep enough to drive the change needed. it needs to be tougher. We need to have the power sector at zero carbon by 2040 and that is not too far away.

and the recent history of free carbon credit giveaways and the massive use of offsets has not encouraged companies to change their own operations in any significant way. There is a lot still to be done.


FUTURE EnERgy

Jason Anderson,Head of Energy and Climate Change Policy,WWF

Europe needs to have a power sector at 0% carbon output by 2040

By 2010 the 20 partner companies of WWF’s Climate savers programme will have collectively reduced their Co2 emissions by 50 million tonnes.

saLTERbaxTER » directions 2009 » 54 » saLTERbaxTER » directions 2009

The Energy ‘Trilemma’

The energy debate is far from straightforward. There aren’t many subjects that can cause greater division or even unity of opinion, or become the catalyst for so much impassioned argument and indeed action.

it is perhaps not surprising that so many people have an opinion when it comes to energy. as the end users, we are all affected by it to varying degrees.

one thing that is now certain is that things cannot stay as they are; something needs to change.

The crux of the matter lies in the complexity of the issue. We refer to the energy debate in the singular, but there are actually three distinct strands. These strands are interdependent but are based on many separate variables: creating the required change is therefore very challenging.

eu energy efficiency action plan target is to reduce energy consumption by 20% by 2020.

nokia’s Jacu Factory in romania received a Gold rating for leadership in energy and environment design (leed) – one of the world’s leading green buildings and the first in romania.

UsE LEss!The EU energy efficiency action plan to reduce energy consumption by 20% by 2020 implies that we are not just talking about carbon savings but also about energy savings.

This is instinctively good sense. building new supply is expensive and once it is built, you are locked into using it. We welcome the steps to ban incandescent light bulbs, it represents a fairly aggressive approach to picking the low-hanging fruit in energy efficiency. but it’s only one of many steps that need to be taken, including ensuring that our buildings are vastly more efficient.

Mind THE cREdibiLiTy gaP

energy companies have the

fundamental problem that they make

more money by selling more energy.

They are quick to ratchet up prices when their costs increase, and the supposed benefits of liberalisation are not evident, so they lack credibility with consumers.

add to that the windfall profits they made meeting the lax carbon thresholds in the Emissions Trading scheme and you can see why there is scepticism about handing out public subsidies to explore how to cut emissions through technology, like carbon capture and storage.

We are willing to entertain some kind of subsidy in the beginning but we are cautious about what that is – and it needs to come very closely linked with a requirement for power plants to avoid emissions above certain levels – an emissions performance standard (EPs).

it’s a two-way street. if companies want public subsidy to explore how to meet carbon reduction commitments, then they have to sign up to meeting targets.

How they are achieved is down to the undoubted skill and expertise of the people in the power industry – and the EPs idea is fairly agnostic about what technology should be used. but a commitment to the EPs principle is needed: we are firm believers that it will really focus corporate minds and will enhance companies’ credibility.

sO WHaT nExT?an ambitious programme needs to be agreed at copenhagen, combined with a better Emissions Trading scheme and energy efficiency measures as well as carbon reduction efforts. but perhaps the biggest hurdle yet to leap is for power companies to recognise that their long-term interests are best served by fulfilling their part of a legislated policy framework which is firmly rooted in the goal of ensuring a green, zero-carbon energy sector by 2040.


FUTURE EnERgy Continued...

Jeremy Davies,Director of Brand and Communications,E.ON UK


On the path to carbon reduction

across Europe many companies have carbon reduction targets in place. The most popular targets are cO2 equivalent reduction targets, which aim to cut greenhouse gas emissions directly. Targets typically specify an absolute or production-adjusted percentage reduction over a set period of time and against a baseline year. companies also adopt energy efficiency or energy consumption targets, which will impact the overall carbon footprint by cutting energy use. These may be company-wide, or may focus on one or more parts of the business.

in 2009, cdP introduced a carbon performance score for the first time in collaboration with our global advisor, Pricewaterhousecoopers, which assessed corporate responses to the carbon disclosure Project. allianz, basF, nokia, Reckitt benckiser, siemens and swiss Re, all show high performance and demonstrate a range of qualities.

sO WHaT dOEs THE PaTH TO gOOd PRacTicE LOOk LikE?

WorLd-LeAdinG, BUt is it enoUGH?Within Europe, we are seeing companies leading on performance and disclosure – some 20-25% ahead of their peers in other parts of the globe. European companies are also leading on setting targets to reduce greenhouse gas emissions. The first ever cdP Europe Report, produced by ca cheuvreux, is based on the largest 300 European companies’ responses to climate change. it shows that although European companies outperform other world regions in terms of setting emissions reduction plans, their collective reduction targets will only deliver an average emissions reduction of 2.2% a year. Unfortunately, this level of performance is not high enough to hit the EU goal of cutting absolute emissions by 20% by 2020.

Joanna Lee,Director Communications and Corporate Partnerships,Carbon Disclosure Project

We’ve also started to post our thoughts on the energy trilemma, and those of other experts, on youtube (www.youtube.com/talkingenergy)

in the next two decades this will all change. consumers will use less gas, less petrol and more electricity. gas for domestic heating will begin to be replaced by electricity driven heat pumps; the internal combustion engine will be confined to history as petrol begins to be replaced, firstly by hybrid then electric cars. better measurement of energy consumption will also lead to more efficient usage.

so, the shift required to reduce the carbon output of our society and our economies will require more electricity – not less – and all energy sources need to be considered to meet this need: renewables, nuclear and cleaner fossil fuels. The scale of investment needed to achieve the necessary change can only happen with the right framework in place, and global level discussions such as those in copenhagen are absolutely necessary to achieving this.

it’s also important that these discussions don’t stop in copenhagen, but are held on our streets and in our homes. People need to be engaged in the issues and committed to playing their part.

E.On believes that only by having adult-to-adult conversations with our customers can we start to involve them and make a change at a local level. We’ve started these conversations already, and our intent to involve people is reflected in our latest advertising. We’ve also started to post our thoughts on the energy trilemma, and those of other experts, on youTube (www.youtube.com/talkingenergy) – and we’re actively asking people to let us know their views too.

The solution to the energy trilemma is not easy and will rely on technology, global cooperation, and business and government involvement – but success will also require a shift in individuals’ relationship with energy, public consent and significant cultural change.

The issues around energy aren’t confined to any one country. The three energy challenges that we face aren’t just challenges to the Uk, or even Europe. These challenges are global and can be summarised as:

1. caRbOn it is clear that to minimise the impact of climate change a significant reduction – with the eventual aim of completely decarbonising our energy supply system – is not only needed, but needed urgently.

2. sEcURiTy OF sUPPLyWe need energy for people to maintain a certain quality of life and for industry to have the necessary power to operate. Maintaining the security of energy supplies is critical to this provision. Fossil fuels by their very nature are finite and long-term sustainable solutions need to be found.

3. cOsTThe last energy challenge is affordability. Energy needs to be priced fairly so that it is available to everybody, regardless of income levels.

in short, energy needs to be reliable, affordable and low carbon.

With these three challenges defining the debate, we believe that we are facing more of a ‘trilemma’ than a dilemma, a problem where none of the three challenges can be solved in isolation.

as a major energy supplier, E.On recognises that it plays a key part in solving this trilemma, but no organisation can do so on its own. We’re at a pivotal moment and action is needed not only by energy suppliers, but also businesses, ngOs, political leaders and consumers.

it’s very important that as consumers we realise we all have a part to play in helping to solve the problem too. For the past 20 years we have used three main forms of energy in pretty much the same way – electricity to power our homes, gas to heat them and petrol to run our cars.



A transparent approach to climate change activities and performance – companies must report their emissions data and climate change strategies.

Establishing and achieving emissions reductions plans – high performing companies must implement plans and detail any carbon cuts they have achieved so far, and how they intend to continue to achieve reductions.

Implementing innovative ideas – to capitalise on climate change opportunities and demonstrate good management of risks. Provision of low carbon technologies, products and services, will generate large revenue streams for those that spot these opportunities early.

Driving the business towards climate change mitigation – offering incentives to employees can encourage behaviour change. senior management find these schemes can also enhance staff recruitment and retention.

Demonstrating Board level involvement in climate change strategies – shows an understanding of the importance of the issue.

Demonstration of low carbon intensity – companies who are running the most carbon efficient operations will be best positioned as we move to a low carbon economy.

edF energy ran an advertisement that started with the song: ‘it’s not easy being green’, originally sung by Kermit!



FacTs and MaPs

89% of european companies setting carbon reduction or energy efficiency targets are looking for increased regulatory certainty.

Our data shows that, although many companies are acting ahead of regulation, 89% of European companies setting carbon reduction or energy efficiency targets are looking for increased regulatory certainty. This will enable them to plan for the future and invest in low carbon technologies, many of which have a long investment horizon.

interestingly, 90% of the 300 companies in the report now see regulation as an opportunity.

sO HOW TO acHiEVE THE TaRgETs OncE THEy HaVE bEEn sET?Emissions reductions across the business can be achieved in a number of ways – from carbon management strategies through to encouraging behavioural change in employees to support carbon reductions.

Uk for example has set itself a target to supply the entire Uk business with renewable energy and plans to improve energy efficiency associated with gHg emissions originating from energy and electricity use in factories by 20% indexed to local sales by 2011.

Telecoms company has set targets to reduce energy consumption of its products and services, for example mobile phone chargers. it has also set reduction targets for suppliers. While is retrofitting some of its properties with insulation and has set a target of 2% absolute reductions per annum.

has invested significantly in 2008 to support energy saving installations in ten countries including china, the czech Republic and Hungary. in Hungarian stores solar panels are being installed.

has set a number of reduction targets – including an aim to ‘grow the business not the carbon’ and it uses photovoltaics in california, solar-thermal installations in France and wind turbines

in the Uk. Many companies highlight the importance of smart technologies and process innovation to decrease the amount of energy required.

uses large campaigns to raise staff awareness of environmental impact. has a similar approach, training employees on energy use.

encourages staff to save emissions by offering free bikes to commute across larger business campuses.

, , and are all participating in the cdP

supply chain Programme to work with their suppliers to gain a better understanding of their impacts.

For many companies 40-60% of carbon emissions are generated in the supply chain.

There is clearly a lot of activity around emissions reductions within major European based companies and there are also considerable opportunities for those companies who reduce their own emissions, from a cost as well as leadership and efficiency perspective. There are also opportunities for companies able to provide low carbon solutions and to develop new technologies which will help others to significantly reduce their emissions.

it will be through a combination of significant internal emissions reductions coupled with the creation of a new generation of low carbon products, such as smart grids, energy efficient buildings, video-conferencing and a considerable increase in the use of renewables, that we will achieve the cuts required to prevent dangerous climate change. as demonstrated through the stern review of 2007, the faster we make the transition to a low carbon economy, the less it will cost us all.


For more information www.maplecroft.com

Country rank riskBelarus 14/166 Extreme

Moldova 16/166 Extreme

Ukraine 17/166 Extreme

Estonia 18/166 Extreme

Netherlands 29/166 Extreme

Poland 30/166 Extreme

Belgium 32/166 Extreme

Luxembourg 37/166 Extreme

Czech Rep 38/166 High

Russia 43/166 High

There are many challenges and multiple layers to the European energy landscape. The growing civil movement around climate change has added to the consensus view that rapid change is needed to shift to a low carbon economy. but the roadmap for change is contested and most importantly a workable framework for change doesn’t exist yet. There are pockets of achievement with efficiency gains and technology, and although Europe is on target to achieve its kyoto targets, the EU’s 2020 targets seem a long way off. The recession has led to cuts in greenhouse gas emissions around Europe showing that the goal of decoupling energy use from economic growth is no closer. so, all eyes are on the world’s governments and a call goes out for them to deliver a clear and robust direction, one that will allow the market to respond, shape energy companies’ efforts and galvanise action among all types of energy users.

The Unsustainable Energy index (UEi) quantifies the level of unsustainable energy use in each country. specifically, it evaluates the risk of being unable to source energy from low carbon sources and/or operating/investing/lending in an energy intensive economy. Over the longer term, reliance on unsustainable energy may impact the economy of some countries, in particular those that are heavily reliant on imported fossil fuels. The UEi forms one of the four main components of Maplecroft’s climate change Risk Report 2009/10.

top 3Europe-based Bayer, BASF and HSBC are the top 3 companies in the Carbon Disclosure Project’s leadership index, all scoring above 90 out of 100 for disclosure of climate risks and performance.

54%The EU currently imports 54% of its energy needs. This is set to increase to 70% by 2030.

no.2In 2008, Germany fell to no.2 behind the U.S. as the country with the most installed wind power capacity.

59.9%Turnover of Spanish wind turbine manufacturer Gamesa has grown by 59.9% between 2006 and 2008.

Danish Vestas has grown by 56.6% in the same period. Wind power is predicted to triple between 2008 and 2013.

tHe MULti-diMensionAL LAndscAPe oF sUstAinABiLity in eUroPe is PLAin to see in tHe enerGy deBAte.

unsustainable energy use index

™maplecroft

Extreme risk

High risk

Medium risk

Low risk

No data

swiss packaging manufacturer tetra pak has achieved a 12% absolute reduction in Co2 emissions (2005 – 2008). energy use in 2008 was similar to 2002 although packaging output had increased 32%.


Andy Wales,Group Head of Sustainable Development,SABMiller

Dave Tickner,Head of Freshwater Programmes,WWF UK

The complexity of the water challenge

Very few activities occur in the world today that do not rely on freshwater in one way or another. Whether this dependence is for personal sustenance, basic hygiene, growing crops, producing energy, manufacturing goods or maintaining ecosystems to keep the earth in balance – human beings are inextricably linked to freshwater.

Facing THE cHaLLEngEsUnless water management improves significantly, we will face major challenges in securing enough water to support the growing world population, to underpin economic growth and to meet environmental needs. To date, the track record on managing water sustainability in many parts of the world is poor.

For most governments water management is not, in practice, a priority and societies largely fail to value and govern their freshwater resources adequately. so despite significant strides in legislation and water-efficiency technology in recent years, water scarcity and water pollution continue to be all too common occurrences. climate change will add to the challenge in many parts of the world, bringing increasing uncertainty over rainfall patterns and an increased likelihood of extreme weather events, such as droughts.

WaTER FOOTPRinTing – assEssing LiFEcycLE iMPacTsin addition to this target which primarily relates to how efficiently water is used within breweries, it is also becoming increasingly important to understand and evaluate the way water is used throughout the value chain. To do this, sabMiller has partnered with WWF to undertake water footprints of the beer value chain in south africa and the czech Republic.

Environmental footprinting has been growing for a number of years, in particular with the development of value chain and carbon footprint tools in the last three years. given the growing awareness of water scarcity, water footprints have been considered as a natural next step, although there are important differences.

For the context of beer production, the key components of a water footprint include crop cultivation (including direct water use in growing crops, and indirect water use linked to energy use in farming, irrigation and crop transportation) crop processing; brewing and bottling; and waste disposal.

Following these key components and using a tool developed by the Water Footprint network, sabMiller and WWF have conducted

HOW aRE cOMPaniEs REsPOnding?in parallel, as a result of a better awareness of the water challenge, there is a rapid increase in private sector recognition of the importance of water for the wellbeing of society, the growth of the economy and the protection of the environment. numerous reports and activities around water have emerged, while business forums such as the Un global compact’s cEO Water Mandate and the World Economic Forum (WEF) have helped to distil these important debates. Organisations such as the Water Footprint network (WFn) and the alliance for Water stewardship (aWs) have also been established to help measure and set standards around water use.

For a company such as sabMiller, given the nature of the beverage industry, the reliance on water-intensive agricultural ingredients and the fact that several operations are in water-stressed regions, the scarcity of water – as well as its quality – are increasingly critical issues. in response to these issues, in november 2008, sabMiller announced a target of cutting the amount of water used per hectolitre of beer produced to an average of 3.5 hectolitres by 2015 – a 25% reduction from 2008.

two water footprinting exercises; one of south african breweries (sab) in south africa, and a second of Plzeñský Prazdroj in the czech Republic.

The results of the footprinting show that the percentage split of water use across the four key components of the beer value chain are comparable for south africa and the czech Republic breweries. in both studies crop processing, brewing and bottling and waste disposal account for a small percentage of the total water footprint, while crop cultivation is in excess of 90% of the footprint.

in terms of absolute numbers, however, the south african footprint is more than three times that of the czech Republic’s footprint; in south africa the estimated water footprint of one litre of beer was 155 litres whereas in the czech Republic it was estimated as 45 litres.

so why the differing results? Factors include the greater evaporative demand on crops in south africa due to climatic conditions; a higher reliance in south africa on irrigated crops; different levels of crop imports for brewing (south africa imports more than the czech Republic); and the different types of packaging used.

WaTER scaRciTy, and THE cHaLLEngE THis PREsEnTs TO aLL cOMPaniEs, is FasT Rising UP THE cORPORaTE agEnda. HOW aRE cOMPaniEs REsPOnding?

aRTicLEs by: » andy WaLEs, gROUP HEad OF sUsTainabLE dEVELOPMEnT, sabMiLLER, and daVE TicknER, HEad OF FREsHWaTER PROgRaMMEs, WWF Uk » cR TEaM, saLTERbaxTER

FacTs and MaPs: » saLTERbaxTER and MaPLEcROFT

societies largely fail to value and govern their freshwater resources adequately.

Water footprinting is the next step for application throughout businesses.

WaTER



a 2-3oC rise in global temperatures could potentially result in water scarcity for over 3bn people in the near future.

step-by-step approach, a footprint is only the first…

in 2007, the intergovernmental Panel on climate change stated that a 2-3°c rise in global temperatures could result in water scarcity for over 3 billion people – almost half the world’s population. and if people are short of water so are businesses and the potential for conflict over usage rights escalates massively. The focus on water is certainly growing with initiatives, reports and tools such as water footprinting. yet following a positive start, the cEO water mandate has recently been criticised for fostering corporate control and threatening access to water. so how do we make sense of the water debate?

Recently there have been calls for water, climate change and energy to be linked together at the cOP15 negotiations in copenhagen. in simple terms you need water to generate energy and energy to provide water; demand for both is also increasing. so the two are inseparable. add to this the predicted impacts of climate change on water supplies, let alone population growth, and the landscape of water is one that is certainly going to change.

are companies ready to deal with this changing landscape? some 40% of Fortune 1,000 companies said the impact of a water shortage on their business would be ‘severe’ or ‘catastrophic’ – but only 17% said they were prepared for such a crisis*. so why are so few businesses responding, and what do they need to do?

diREcT and indiREcT aPPROacHas with many challenging issues, the starting point is to understand the issue and work first on areas where a business has direct control – measuring the operational footprint and identifying efficiency improvements. Mapping supply chain impacts comes next often using a water footprint. and once the high impact areas have been identified, businesses can prioritise action and form water reduction

* The Marsh Center for Risk Insights

plans. The importance of measuring supply chain water impacts is well illustrated by Unilever, which estimates that only 5% of its water footprint comes from manufacturing.

The ‘measure to manage’ mantra serves well with water. Pharmaceutical giant abbott conducted water stress assessments for 40 of its manufacturing sites and since 2007 has reduced water consumption by over 1 billion litres – a 37% reduction normalised by sales, or 7% in absolute terms.

and once a business has a robust water management approach, what are the options for communication? There is no one-size-fits-all approach and below we consider some of the communications options.

a LOcaL issUE, a LOcaL aPPROacHThe Uk’s acca suggests that water issues do not only pose a significant risk, but also need a different response to that required for carbon. Unlike carbon, water is a local issue with risks determined by the local water situation. Water impacts such as shortages, drought and pollution are often clearly visible. so it is important to communicate locally, showing efficiency measures taken locally to reassure communities that their water resources are being carefully managed.

an assessment of 110 companies’ reporting on water by the Pacific institute showed that although 89% reported water use data, “relatively few provided data on regional or local water use or any contextual information in which their water uses and/or impacts could be understood”.


WaTER Continued...

Crop cultivation within the beer value-chain is in excess of 90% of the total water footprint.

made aware of the complex and significant role of water in our lives and economies. For WWF and sabMiller, water footprinting is the beginning of a process and can be the bedrock on which meaningful actions can be taken in conjunction with other stakeholders.

‘Measure to manage’ is a phrase that businesses know well, and with agreed and tested methods there is a chance to build strong standards for water users, to define meaningful interventions, and to do so in a coordinated fashion.

The business future around water hinges on an ability to understand, measure and engage. The complex challenges surrounding water in the 21st century will only grow in the coming years and companies must be prepared to engage outside their factory gates – the traditional comfort zone – to ensure the long-term viability of this critical resource.

To help interpret the results of the water footprints for south africa and the czech Republic, full-day workshops were held in each country. The workshops included WWF experts, senior managers from the procurement, operations and corporate affairs functions of the local subsidiaries, as well as senior managers at the global level.

in south africa, water use for agriculture was highlighted as the biggest risk area in the water footprint. currently, WWF south africa has an existing project developing a toolkit for sustainable sugar cane cultivation. Following the water footprinting exercise, sab Ltd is now working with WWF to tailor this toolkit for barley farming. This will complement sab Ltd’s existing agricultural extension workers who engage with farmers on issues such as yield management and water efficiency.

Locally in the czech Republic, sabMiller is also considering projects to help understand the risk of climate change on water availability and how this may have an impact on crop growth in the future. it is also reviewing how legislative changes may influence crop growing areas, with particular reference to groundwater, nitrate limits, and engaging with suppliers in the process.

Looking to the future, we believe that water footprinting will continue to be a useful tool for companies, and more people will be

CR team,salterbaxter

spain has more than 700 desalination plants producing enough water each day for around 8 million inhabitants.



FacTs and MaPs

Before diving into what a water footprint is and how to calculate it, it is important to understand the broader landscape of initiatives around sustainable water management.

insidE OUT aPPROacHOne of the greatest forces for change and efficiency improvements can be a company’s own employees. not even the most robust water strategy will be a success if employees don’t support it. apart from raising awareness and helping to establish a water saving culture, communicating to employees can help to identify where water is being wasted and provide ideas for efficiency savings.

TackLing THE issUEs TOgETHERWater has for some time now been a focus for ngOs, charities and research institutes. Working on a water footprinting exercise is one thing, but a business working in isolation will not be sufficient to solve all the issues. so working in collaboration, as we have seen with sabMiller and WWF, can be very effective.

communicating as part of a credible partnership will not only boost the impact of your communications, it will help to reach audiences that corporate communications alone may not reach.

THE aWaRE and THE nOT sO aWaREa recent Eurobarometer survey showed that 42% of Europeans are worried about water pollution, the second highest issue of concern after climate change. but consumer awareness and action are two very different things, and the likelihood that water impacts are factored into day-to-day purchasing decisions is, at best, low.

so communication with consumers is more of an exercise in education than promoting a product based on its water footprint. What’s required here is communication to address the misconception that water is a free public good and to switch consumers onto the idea of water efficiency.

not surprisingly, utility provider Veolia has the issue of water as a key challenge on its corporate home page and links to a world water week section containing videos on basic elements of providing clean water.

Most companies that report on their environmental impacts cover water in one way or another. a leading example of well-integrated water communications is nestlé. The consumer-facing ‘Water Zone’ campaign is available from the corporate homepage and includes a water quiz, water facts and links to how nestlé is managing water. add to this the focus on water as a key issue in nestlé’s sustainability programme and it shows a solid approach through consumer and standard corporate responsibility communications channels. nestlé also features interactive content such as MP3s and video and produces a stand-alone water management report in addition to its annual sustainability report as does sabMiller.

but not all water reporting is this advanced or broad. The Pacific institute’s research on water disclosure by companies shows there are pockets of good practice. but not enough companies are reporting consistently on direct and indirect impacts and what they are doing to address the issues. Only 15% of the 110 companies surveyed met all of the criteria of the research framework. While 89% reported water use data and 64% water quality indicators, only 7% described their approach to measuring supplier water performance.

networking, partnerships, dialogue with stakeholders – there are lots of communication options. but it seems that even with all these opportunities, water still doesn’t get the attention that it deserves. World Water Week passed in a blink. Water plays an essential role for both businesses and societies and the challenges around the issue are increasing. There is no doubt the issue is creeping up corporate agendas, but arguably not fast enough. and businesses need to communicate better how they are going to tackle this big issue.

WaTER Continued...


Water is often considered a developing world issue. it is also a European issue. nine countries in Europe are considered water stressed and the water footprint of European business stretches all over the world via supply chains and trade. Water and water stress will be more and more discussed in the same forums as carbon and climate change. Though the issues have their differences, they are intrinsically linked. They require both uni- and multi-lateral action to tackle them. businesses will be under increasing pressure to demonstrate water management. but the Ungc cEO Water Mandate has 58 signatories of which 26 are European. it is a tiny proportion of companies who will have to deal with this issue.

The Water security index profiles 162 countries and explores the risk posed by the relative availability of a reliable and suitable fresh water resource for both the local population and industry. Maplecroft created the index to investigate critical water issues that influence a country’s population, economy, environment, national security and international relations. These include: access for human development (the proportion of the population with access to safe drinking water and sanitation); availability (the amount of renewable water accessible to each country and its reliance on external water supplies); water stress (the relationship between available water and supply demands); water intensity (the water dependency of the economy of each country).

9There are 9 water stressed countries in Europe; Belgium, Bulgaria, Cyprus, Germany, Italy, Macedonia, Malta, Spain and the UK.

5thItaly is the 5th largest net importer of virtual water in the world (water used to grow imported crops or make imported products). The UK is the 6th.

100mOver 100 million Europeans lack access to safe drinking water resulting in nearly 40 child deaths from diarrhoea every day.

40%of Europe’s fresh water comes from the Alps. Temperature in the region has gone up 1.48 degrees and the way water is collected and distributed by the mountains is changing.

WAter is A eUroPeAn, As WeLL As, A deveLoPinG WorLd issUe – And tHere Are not MAny coMPAnies deALinG WitH it.

Country rank riskMoldova 31/162 High

Romania 45/162 High

Ukraine 59/162 High

Poland 79/162 High

Bulgaria 81/162 High

Hungary 83/162 High

Belgium 90/162 Medium

Portugal 96/162 Medium

Belarus 97/162 Medium

Germany 102/162 Medium

Water security index

Extreme risk

High risk

Medium risk

Low risk

No data

energy costs account for 40-50% of the total cost of desalinated water. ™maplecroft


a partnership model – value in engagement

nETWORksat Telefónica, we have set up networks with national and multi-national institutions and co-financed projects to promote social inclusion. Many of these types of projects can help companies generate customer loyalty or uncover new market segments, but they might not be profitable in the early stages. by working together, using funds provided by multi-lateral institutions, you can launch initiatives that would not have otherwise been possible, and in doing so, discover new income streams.

EnHancEd sTakEHOLdER diaLOgUEinstead of viewing stakeholder dialogue purely as a method of exchanging information, it can also be an opportunity to develop ‘co-creation formulas’ and launch joint business ventures. an example would be launching products and services for people at risk of exclusion (e.g. older people, people with disabilities, immigrants) in collaboration with the associations that represent their interests. Working in this way helps establish partnerships that are financially beneficial to all parties.

There are several areas where we have put the idea of networks and co-creation into practice, with initiatives around productivity; education; energy efficiency; health solutions; and products for older people or people with disabilities.

» Looking at energy and climate change, we’ve collaborated with intel to help sMEs improve their energy efficiency by using next generation equipment; and, together with the main service providers for tele-metering, we’ve helped develop intelligent building solutions for energy management, enabling the control of multiple building management systems from a single location.

» We have also recently strengthened agreements with hospitals and specialist institutions to help convert their R&d activities into practical solutions for older people. Working in spain with a specialist organisation that offers care facilities for older people, Mapfre Quavitae, we developed a tele-assistance pilot which uses mobile phone technology to help provide remote care and enable families to stay in touch with their relatives.

in looking for cR 2.0 collaborations that benefit our business and contribute to society, there are other types of beneficial alliances that we can explore, such as sectoral collaboration. This type of partnership can really help drive progress on certain issues, such as child protection or ethical supply chain issues. not only can this encourage self-regulation but it can also enable the launch of new initiatives such as the ‘teachtoday’ websites which provide teachers with a wealth of resources on new technologies and which are supported by a number of telecommunications and social networking companies.

in summary, the journey towards cR 2.0 is paved with dialogue, conversation and co-creation of sustainability solutions for delivering value to our business and to society. after all, none of us exist in a vacuum.

sTakEHOLdER diaLOgUE


sTick TO THE TRadiTiOnaL EngagEMEnT MOdEL OR LOOk TO PaRTnERsHiPs as an OPPORTUniTy TO cREaTE VaLUE? WHERE nExT FOR sTakEHOLdER EngagEMEnT?

aRTicLEs by » aLbERTO andREU PiniLLOs, diREcTOR OF cORPORaTE REPUTaTiOn, idEnTiTy and sUsTainabiLiTy, TELEFónica s.a.

» sUZannE FaLLEndER, gLObaL ManagER cORPORaTE REsPOnsibiLiTy, inTEL cORPORaTiOn » saLTERbaxTER and caRiEn dUisTERWinkEL OF csR EUROPE


Alberto Andreu Pinillos,Director of Corporate Reputation, Identity and Sustainability,Telefónica S.A.

successful cR 2.0 (going beyond operational housekeeping to develop business growth and sustainable products and services) relies on collaboration.

as with Web 2.0, partnerships and cooperation are a natural and necessary part of meeting corporate responsibility’s core objectives in this new age: contributing to the growth of the company and the progress of society.

To understand what this means in practice, there are some fundamental questions we need to consider. How can cR generate more revenue? can it reduce costs or minimise risks? does it impact our profit margins or customer satisfaction levels? Or help improve employee satisfaction? Effective partnerships can help provide solutions to some of these questions. at Telefónica we have explored two approaches to partnerships: networks and enhanced stakeholder dialogue.


1.9m The Justmeans site receives 1.9million page views per month – this site is used by companies as a platform to engage with stakeholders on their approach and progress in corporate responsibility.

100m Europe now has 100 million Facebook users – more users than the U.S.

To support this relationship-based approach, intel worked to create the right mix of policies, training and metrics to enable employees around the world to integrate social media technologies into their daily interactions with customers, investors, partners and the media. We created a social Media centre of Excellence, publicly available social media guidelines, and a comprehensive internal ‘digital iQ’ training course for employees interested in participating in social media on behalf of the company.

it was on this foundation that we began to ask ourselves how we could effectively incorporate social media to improve the impact of our cR communications and engagement. How could we use these new tools to improve our cR reporting and reach new audiences? could we better engage employees to take action to improve our environmental performance? could we deepen our understanding of stakeholder concerns and priorities and better identify emerging issues?

LEaRning one of the obvious impacts of the widespread adoption of social media is the significant increase in online conversations about your company at any given time.

There is a great deal of knowledge to be gained by actively listening to and participating in discussions on csR topics about your company in external communities. Earlier this year, we began participating in the social media csR community, Justmeans.com, in which we regularly read and share ideas and thoughts on emerging issues and best practices in the area of csR, and feed this information back into internal discussions and planning.

We have learned a great deal during our relatively short time using social media technologies in our csR communications. yet, the landscape continues to change. To be successful in the long-term, we will need to continue to challenge our own assumptions regarding our objectives and success metrics, and identify and incorporate best practices into our activities. Perhaps most importantly we will need to be able to recognize when not to use a particular social media tool, or even when to not use social media at all. some performance data may be too complex to communicate via a tweet, or possibly even via a blog post. not all of our stakeholders have embraced social media, and perhaps some never will. certain difficult conversations may just be better suited to sitting across the table from each other.

at the end of the day, it will come down to matching the right communication channel with each audience. social media, applied effectively, will uncover significant opportunities for us to deepen current relationships and develop new ones – relationships that will help us to continue to improve our csR performance over time.

The rapid adoption rate of social media tools by consumers and the general public is causing more companies to stand up, take notice, and take action. While metrics to evaluate the impact of social media continue to be developed and refined, there is increasing recognition that social media engagement can create real business value. it is helping companies improve customer relationships, engage and motivate employees, extend the reach of marketing dollars, and yes, even improve the effectiveness of their cR communications and stakeholder engagement.

at intel, we recognized a few years ago the potential of social media to fundamentally change the way we communicate and engage. To be effective, we recognized that our use of social media could not be something separate – it needed to become an integral part of our overall communications strategy. it also could not just be about the tools themselves – blogs, Twitter, Facebook, wikis, etc. at its core, social media is about relationships – and relationships happen between people.

TRansPaREncyin mid-2007, we created the csR@intel blog to bridge the gap between our annual csR reports, providing ongoing updates on new initiatives, ‘behind-the-scenes’ views of managing csR at intel, and executive perspectives on csR and sustainability topics.

Bloggers respond to reader comments – both positive and negative – and use this feedback to improve our reporting and planning.

To encourage further discussion and readership on the blog, we began using Twitter in 2009 to promote posts with other bloggers in the csR field.

EngagEMEnTin april, we launched a new internal online community to engage employees to take actions to reduce our energy use to help us achieve our corporate environmental goals. Employees are also encouraged to exchange ideas on ways we can reduce our environmental footprint and to communicate directly with senior leaders on intel’s environmental performance. The community – ‘green intel’ – has amassed some 1,500 members in just three months, making it the largest single employee group on our internal community platform. This forum has created a direct voice for employees to provide input on sustainability issues and a team is currently evaluating submitted ideas for possible implementation later this year. in another example, we created the online ‘Teachers Engage community’, a dedicated forum for teachers serving as trainers for the intel® Teach Program to share resources and best practices, supporting the continued expansion of the program which enables millions of teachers around the world to more effectively incorporate the use of technology and 21st century skills into their classrooms.


To tweet or not to tweet – intel joins its stakeholders online

Suzanne Fallender,Global Manager, Corporate Responsibility,Intel Corporation

sTakEHOLdER diaLOgUE Continued...

allianz’s Knowledge partnersite – a network of leading partners – provides information in a central place on material issues.

Be open and transparent. It pays dividends in trust and credibility.

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Be appropriate - One size does not fit all. Find ways to tailor your messages to stakeholders

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FacTs and MaPs

CR team,salterbaxter

With some insights from Carien Duisterwinkel, CSR Europe

Hewlett-packard releases the names of its top tier suppliers. a transparent approach – working together to improve performance amongst suppliers.

We would add to that “and where most sustainable benefit can be delivered”.

so what are the top tips to take the standard stakeholder engagement model to the next level? We think:

» Lay the groundwork. There are no shortcuts. you do need a robust way to find out who your key stakeholders are, get to grips with the material issues and get internal buy-in on the strategy.

» be open. Once you’ve done the groundwork, try to be as transparent as possible, both with information and in your tone of delivery. it pays dividends in trust and credibility.

» dip your toe in. Even if the big wide world of social media engagement and stakeholder partnerships seems a scary place, you need to start somewhere. Try the unknown. start small and build up.

» be appropriate. We’ve been on about this for years, but it’s an extension of what we’ve all known for a while – one size does not fit all (for that read cR reports). Find ways to tailor your messages, your information and the communication method you use for stakeholder groups.

» Tell others what you are doing. We’ve a long way to go before this stuff becomes second nature so why not get the credit by signposting what you are up to on your web pages? it’ll help with measuring your success and impact.

can TRadiTiOnaL MOdELs kEEP UP WiTH THE nEW WORLd OF sTakEHOLdER diaLOgUE?There was a time when stakeholder engagement meant calling a few of your closest customers and suppliers, getting a bit of feedback as to how the relationship has been recently, then adding a few of their quotes in a presentation or a memo to circulate internally. box ticked.

it is an over-simplification of course (we hope!). but standard stakeholder engagement models are creaking at the seams when expected to deliver real value to the business, to help deliver progress against challenging sustainability targets, and to go beyond traditional dialogue to partnerships and online dialogue. a process involving mapping stakeholders, assessing the issues they raise, determining which are material and how they should be addressed, then rolling out tailored stakeholder engagement with measurement attached is a best practice model. but it should also be a hygiene factor. Taking that engagement forward to deliver real change to business and to society, perhaps even delivering against top level global goals like the Millennium development goals – that is where the challenges truly lie.

There is no doubt that these challenges will require tough management. The closer you get to stakeholders the more noise you have to deal with. For example google has recently launched the sidewiki tool, where users can post comments alongside any web page. The noisier it gets the harder it is to cut through to material issues where you can have most influence. carien duisterwinkel from csR Europe rightly states, “successful engagement does not imply satisfying the demands of all these stakeholders, but rather a willingness to listen, create dialogue and change behaviour and policies where possible and desirable”.


Have you seen my sidewiki?

sTakEHOLdER diaLOgUE Continued...


Country rank riskDR Congo 1/183 Extreme

Chad 2/183 Extreme

Niger 3/183 Extreme

Afghanistan 4/183 Extreme

C A R 5/183 Extreme

Ethiopia 6/183 Extreme

Myanmar 7/183 Extreme

Burkina Faso 8/183 Extreme

Rwanda 9/183 Extreme

Burundi 10/183 Extreme

stakeholders are a varied bunch. Each has specific interests and concerns, and responding to all of these – if that’s ever achievable – is an ongoing challenge. across Europe there is a big gulf between the leaders and the laggards who only pay lip service to engagement. and trust in companies is still elusive. The stratospheric rise of social networking has left many pondering how to use the medium in a credible way for cR communication. it doesn’t provide a magic bullet for stakeholder engagement, rather another communication channel to add to the mix. The digital divide, illustrated below, also shows that digital communication will not reach stakeholders across much of the world. We still need traditional methods of stakeholder engagement – interviews, questionnaires, roundtables, workshops. Partnership models and co-creation are also on the rise and demonstrating how innovative products and services can be developed that simultaneously create revenue and address sustainability issues.

The digital inclusion Risk index 2009 captures the relative levels of access to information and communication technology for 183 countries. Maplecroft created the map using data from the international Telecommunication Union’s icT Opportunity index. This index tracks the digital divide by measuring the relative difference in icT Opportunity levels among economies. The index is a composite of 10 core icT indicators, which cover access to computers, internet and broadband access, mobile telephony and fixed line telephony. it places specific emphasis on mobile technologies, which are a key driver of icT access in developing countries.

500,000The number of unique visitors to CR networking site Justmeans in 2008 was 500,000. The site receives 1.9million page views per month.

36%of Europeans trust environmental protection associations, 18% trust consumer associations and only 2% trust companies.

40,000+Accurate figures are lacking, but it is estimated there are 40,000 NGOs operating internationally. At a national level numbers are much higher, Russia is thought to have 227,000 NGOs.

60Anglo-American’s Socio-Economic Assessment Toolbox (SEAT), which is in place at 60 sites worldwide, is a leading example of local stakeholder engagement.

tHe ProoF tHAt sUstAinABLe BUsiness BeHAvioUr GenerAtes reAL revenUe is BUiLdinG ALL tHe tiMe.

digital inclusion risk index ™maplecroft

Extreme risk

High risk

Medium risk

Low risk

No data


Peppermint green Spearmint green Algae green Bottle green Grass green Envy green

Spinach

Moss green

Grey green

Eco green

Tree green

Not green at all Mould green

Questionably green Racing green

Wishy washy green Swampy

Would like to be green Just green

More blue than green Very green

Wanna be green Lettuce green Fresh apple green Almost

Tries to be green Isn’t really green Greeny green Slightly green Lime green Green

Not quite green Off green Just green Shouldn’t be green Green green Slime green

shades of green advertising – keeping it real

REsPOnsibLE MaRkETing

iMPROVing TREndsLooking at environmental claims in ads in 2008* the asa found the compliance rate was an encouraging 94%, although this is still some way short of the 99% compliance rate for alcoholic drinks advertising**. also, after the spike in complaints in 2006/07 the asa received 33% fewer complaints in 2008.

cOMMOn PiTFaLLsThe most important mistake to avoid is over claiming. The oil giant shell once claimed that its cO2 was being used to grow flowers. While this was true, shell didn’t mention that only 0.325% of its total cO2 emissions was being used. Friends of the Earth considered this to be misleading, and the asa upheld their complaint.

another pitfall is making absolute claims, like ‘green’. suzuki’s ‘great green credentials’ referred to their cO2 emissions being lower than other cars, but the asa ruled that this implied that the car as a whole was good for the environment. instead, it should have shown in the ad that the claim only applied to the emissions from the product.

Using terms where there is no common agreement or understanding of its meaning is another mistake. This was clearly illustrated by the ban on ads from cotton Usa selling their cotton as ‘sustainable’. With the huge differences of opinion on what ‘sustainable’ means in practice, the asa agreed with complaints made about the advertising.

kEEPing FOcUsRegardless of improving trends, the asa is not resting on its laurels. From 2007 to 2008 investigations into environmental claims in ads nearly doubled and the number of ads banned rose by 140%. interestingly the main culprits were from the motoring, utilities and energy sectors – companies with large environmental impacts.

it is also interesting to see that most complaints come from consumers, rather than pressure groups who you might imagine would be keeping tabs on corporate advertising.

The asa does not want to dissuade advertisers from marketing their environmental positives; our aim is to ensure that any claims made are truthful and can be substantiated. For this reason, top tips and advice on avoiding the common pitfalls can be found on www.copyadvice.org.uk

The asa has become a standard bearer in standardising green terminology in advertising and will continue to respond to consumer concerns, ensuring that messages in ads, whether headline claims, small-print, or the overall effect, are not misleading or harmful to consumers. it is an ongoing process, but overall, the future for green claims looks bright.

* ASA Compliance Report: Environmental Claims Survey 2008

** ASA Compliance Report: Alcohol Advertising Survey 2008

About the ASA:

The ASA has been regulating non-broadcast ads since 1962 and now also regulates TV and radio advertising under contract from the UK’s communications regulator, Ofcom.

Olivia Campbell,Communications and Policy,Advertising Standards Authority

With a strong urge to ride the green consumer wave it was inevitable that mistakes would be made. between 2006 and 2007 there was a five-fold rise in complaints about environmental claims in advertising, up to a record 561 complaints, and an increase in asa rulings against advertisers. at the time, consumer mistrust of business and fears about the rise of corporate greenwashing seemed understandable.

in response to the increasing complaints, the asa and committee of advertising Practice (caP) worked to establish boundaries for the evolving area of green claims. Part of this process is about setting precedents for the kinds of claims advertisers can make. by defining what certain terms and wording mean and how advertisers can use them, the asa gives advertisers greater clarity.

However, the asa’s work has shown that misleading green claims aren’t as widespread as might have been suspected. and one of the major reasons why environmental claims have come under the spotlight is because the ‘green terms’ used are new and definitions have not been fully established. advertisers and the public alike are gradually having to learn a new green vocabulary.

in 1962 the Uk’s advertising industry came together and agreed that adverts should be legal, decent, honest and truthful. These broad principles are still applied today and a crucial aspect of their success is that they work with all products, sectors, target markets and types of claims. so whether you’re advertising shoes, cars, alcohol or food, the rules are constructed around these key principles to keep advertising responsible.

The fact that the principles work regardless of the situation is particularly useful when it comes to new types of advertising, as has been seen most recently with environmental claims.

in recent years concern about the environment has escalated markedly, with the issue rocketing up government and media agendas. With the public’s growing appetite for cleaner, greener and ethical products and services, businesses have been quick to advertise their environmental credentials. This is not always straightforward and as ‘green’ claims in advertising have increased, so have the number of complaints to the advertising standards authority (asa).

in judging the ads, the asa has once again been led by the broad code principles: promotions must be careful not to over-claim or mislead, either by implication or ambiguity, and advertisers must ensure they hold the documentary evidence to substantiate any claim made.

say iT WiTH MEaning – kEEPing MaRkETing REsPOnsibLE

aRTicLEs by » OLiVia caMPbELL, cOMMUnicaTiOns and POLicy, asa » caTHRyn sLEigHT, MaRkETing diREcTOR, cOca-cOLa gb

FacTs and MaPs » saLTERbaxTER


norway has banned terms like green, environmentally friendly, and natural in all car advertising on the basis that no vehicle is actively beneficial for the environment.

ryanair claimed it was “europe’s greenest, cleanest airline” and was later asked to withdraw this claim by the asa.



What’s the secret ingredient in coca-cola’s new Responsible Marketing charter?

in February 2009, we launched our Responsible Marketing charter. The charter has clarified our responsible marketing commitments and shows how marketing can remain a positive force for good in the changing times ahead.

central to our approach to marketing is a respect for the role of parents. because of this we don’t target any of our marketing at children under the age of 12. We always aim to provide choice and we want to empower both consumers and parents to make the right choices for themselves and their families. We recognise that we share the responsibility with parents for helping children make the right diet choices. so we take our responsibilities in this area very seriously.

Moving forward, the aim of our Marketing Charter is to turn marketing from something that we have to defend into something positive and a force for good – a way that the Coca-Cola brand can address societal challenges such as active lifecycles and promoting recycling.

REsPOnsibLE MaRkETing in acTiOnThe charter demonstrates our approach to responsible marketing in action. We have been doing responsible marketing for many years but our intention is to keep our commitments up to date and to be explicit about what they mean in practice.

it is intended to provide a common sense and realistic approach. We continue to review and improve our policies to keep up-to-date with societal expectations and the fast-changing

marketing environment and commercial world. in addition we have been listening to parents’ concerns about advances in online marketing.

We feel our charter is ahead of the game and not simply in a ‘beyond compliance’ sense. it provides clarification on grey areas that we are often challenged on and which a lot of stakeholders – regulators included, probably need to get their heads round themselves.

the Charter requires us to review all marketing initiatives to ensure that they comply with our responsible marketing principles.

We also require that our external partners, including media buyers and marketing agencies, abide by our standards and policies.

indEPEndEnT MOniTORing is kEyWe recognise it is all very well making these statements and commitments on our own. and it is for this reason that independent checking is a critical element in the effectiveness of the charter, and for building credibility. by February 2010 we will be able to talk about the results of our new independent auditing process. yes there may be occasions where something has slipped through, but we hope the results will show we’re 99% compliant with our charter. knowing where we’ve gone wrong will also help us to continue to make improvements in the future.

kEEPing UP-TO-daTEanother key issue is technology and how it is going to change. We will have to review the way our auditing is carried out and in 2010 we will incorporate feedback from stakeholders and consumers into the charter.

Cathryn Sleight,Marketing Director,Coca-Cola GB

the responsible Marketing Charter provides clarification on grey areas that our stakeholders often challenge us on.

One key area of change is online marketing. 2009 was the year online advertising spend in the Uk overtook TV advertising for the first time. To address this new and fast-changing area, in 2009 we established a Responsible Marketing Online network in partnership with the international business Leaders Forum. The forum brings together a range of marketing experts and thought leaders to discuss challenges in this area so that we can work to solve existing and emerging problems together.

Our intention is that the charter is a live document that is continuously improved and honed to ensure that it encapsulates all the issues and concerns raised in this multi-dimensional world in which we operate.

WidER REsPOnsibiLiTiEs: dEsignaTEd dRiVER caMPaignTackling the health risks associated with alcohol is a massive societal challenge. We know that our drinks are a credible alternative to alcohol and we need to use our marketing skills and expertise to create campaigns that are positive and motivating, for example rewarding drivers for not drinking alcohol.

We’re pretty good at understanding what motivates consumers and what makes them tick and ultimately how to change behaviour. it is quite a skilful art and something that we’ve been doing for decades. between the charter and programmes such as our anti-drink driving campaigns, we aim to demonstrate that we will always do what is right for the consumer and we will always do it responsibly.

Zero marketing to kids under 12yrs

Zero marketing to kids under 12yrs



REsPOnsibLE MaRkETing Continued...


MULTi-diMEnsiOnaL » MULTi-LayEREd » MULTi-sPEEdMULTi-diMEnsiOnaL » MULTi-LayEREd » MULTi-sPEEd

FacTs and MaPs

Country %Denmark 28

Italy 32

Lithuania 34

Germany 35

Norway 38

Austria 38

France 39

UK 49

Spain 49

Turkey 51

A

B

C

D

E

F

G

H

I

J

Less outlandish claims, less complaints and a better understanding that consumers care enough about the issues to not be fooled by exaggerated claims and pretty pictures. On the face of it things are improving with responsible marketing. However Europe’s trust in business is still low and changes to marketing are a relatively recent phenomena. it is interesting that compliance for alcohol marketing has improved quickly in the face of EU and WHO pressure around alcohol and health, something that sweden is focusing on in its presidency of the EU in the second half of 2009. The fear of following in the footsteps of tobacco no doubt plays a part too. For trust in marketing to improve business needs to prove to consumers and legislators that self-regulation works and marketing can be clean, green and truthful.

51%of Europeans don’t trust TV advertising and 50% don’t trust newspaper advertising.

2/3of respondents, ages 25 to 64, in nine EU-member countries report they are less trusting of business’ today than they were at the same last year.

18%of Europeans trust consumer organisations.

36%of Europeans trust scientists and environmental NGOs.

2%of Europeans trust companies as a source of information about the environment.

£0mSince 2004 Pepsi UK has not spent anything on advertising the full sugar version of Pepsi.

24%of consumers trust text message ads, the least trusted form of advertising.

on tHe FAce oF it coMPAnies Are GettinG Better At Green AdvertisinG.

trust in advertising

sUsTainabLE cOnsUMPTiOn

Prof. Mohan Munasinghe,Director-General,Sustainable Consumption Institute (SCI)

TOO MUcH and nOT EnOUgH – WHaT sHOULd sUsTainabLE cOnsUMPTiOn LOOk LikE?

aRTicLEs by » PROFEssOR MOHan MUnasingHE, diREcTOR-gEnERaL, sUsTainabLE cOnsUMPTiOn insTiTUTE

» sanTiagO gOWLand, VP bRand and gLObaL REsPOnsibiLiTy, UniLEVER PLc


Three crises, but a once- in-a-lifetime opportunity

The most visible and short-term [crisis] is the global recession, triggered by the financial meltdown.

Equally daunting is the problem of poverty which has now been exacerbated by deepening unemployment.

Widespread environmental degradation and global warming, threaten to derail progress for centuries.

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Globally the nations with the lowest average level of trust of all forms of advertising are all European countries, with the exception of China with a level of 38%.

*Trust in Advertising, a global Nielsen consumer report. The Nielsen Company, October 2007.

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28 » saLTERbaxTER » directions 2009

The world is in the grip of a three-fold crisis, which manifests the clear symptoms of global unsustainability. The greatest danger is that these three threats will interact catastrophically. The business community, together with governments and civil society, will need to play dynamic roles in averting such an outcome.

Tackling the global recession, global poverty and global warming in sequence increases the risk of failure, as each one feeds on the other. yet, while governments have quickly pledged over $4 trillion to restore shaky financial systems, less than one hundred billion a year is devoted to reduction of chronic poverty. Moreover, the economic crisis is dampening enthusiasm for even minimal investments to tackle climate change, as we approach the copenhagen summit in december 2009.

FOR REcEssiOn, REad OPPORTUniTyThe crucial question is how the triple danger can be addressed simultaneously and the current economic crisis provides a unique chance to do just that. The major economies plan to spend huge sums to stem the recession.

there is greater motivation for coordination of policies among the leading players. so this is a rare opportunity, not just to get the money out the door, but to spend it in far better ways than in the past.

The economic crisis, which has provided the motivation for such unprecedented spending, can also provide the political support for investments that might have been tough to carry out in more normal times. Recognising this opening, it would pay to take coordinated action in three areas – investments, social safety nets and price policies – in ways that help us to confront the triple danger.

inVEsT WisELyFirst, we must take extra care to ensure that the increased spending is not used merely to maintain current expenditures, but is also spent on investment which supports infrastructure and social development. Unfortunately, across both developing and industrial countries this has not been happening. Money is being spent protecting salaries and subsidies, while quality investment budgets with a high impact on long-term growth are being slashed.

but what exactly is quality investment? it is true that investment in infrastructure does not automatically generate growth and some of the most wasteful spending has been in construction. investment in education, however, can be very effective, provided it is in high-impact areas like skills. but for quick impacts, there is a premium on effectively completing mature projects rather than initiating new ones.

in today’s economic downturn, we must work even harder to promote green technologies. The capital costs of hydro, wind, geothermal, and solar have declined, providing a powerful reason to invest in those renewable technologies now. improving building codes and the efficiency of energy systems will help even more. Programmes to arrest deforestation or provide sustainable livelihoods for the poor while helping to reduce atmospheric carbon can also play a role.

cREaTE JObs and PROVidE saFETy nETs second, as part of the fiscal expansion, there must be a special focus on creating jobs. Promoting international trade will aid recovery and also help to create jobs in manufacturing and information technology exports.

Recovery also needs to be integrated with poverty reduction. We have learned much from the structural adjustment policies of the 1980s, which were mainly aimed at economic recovery but sometimes produced unintended harmful impacts on the poor. Poverty reduction requires attention to sustainable livelihoods and access to assets for the poor.

sound social safety nets will be needed for the most vulnerable. The experience of countries such as Mexico and brazil tells us that it pays to provide income to the poorest families, but conditional on them investing in health and education. devoting about one percent of gdP for such efforts can make all the difference.

REFORM PRicing POLiciEsThird, this is the moment to reform various pricing policies to get maximum impact from greater spending. subsidized energy prices – a quarter of a trillion dollars in 2005 worldwide – lead to energy wastage and harm to the environment. These subsidies need to be phased out so that energy prices reflect economic costs including the international oil price, as well as the costs of environmental damage via taxes for air pollution and carbon emissions.

iMPROVE gLObaL gOVERnancEimprovements in global governance should include market regulatory reforms, giving more weight to the developing world within the iMF/World bank, making the Un system more responsive, and shifting emphasis from the g7 to the g20. it may be useful for the g20 to create two new bodies – b20 and c20, consisting respectively of business and civil society leaders, who would advise the g20.

if this chance is squandered, the triple crisis could soon become a triple catastrophe. But if the triple danger is confronted together, we have the prospect of a triple dividend sustained over many years.

business has a special responsibility to be innovative and work with governments and civil society to make this happen.

sUsTainabLE cOnsUMPTiOn Continued...

in its lifetime a typical insulation product from danish insulation company rockwool can save more than x100 the energy used in its manufacture, transport and disposal.

H&M aim to increase the use of organic cotton year by year by 50%. this means a 15,000 tonnes target for 2013.


The association between brands and sustainability doesn’t have the greatest track record. brands are accused of driving consumerism, by creating needs based on a set of hedonistic and materialistic values instilled through cynical marketing techniques. and consumerism not only undermines personal wellbeing, but also has a huge impact on environmental degradation. according to WWF we would need three planets if the global population were to consume at European levels (and five planets if we take Us levels).

However, not all brands and marketing approaches are the same, and it is of course necessary to distinguish basic needs from luxury indulgence, to conduct a serious analysis of the association between brands and sustainability. i don’t intend to do that in this short article. i just want to offer a few perspectives that can help deepen the analysis.

bRands THaT MEET inTRinsic nEEdsbrands were created to provide consumers with a guarantee of what they could expect from a given product; they acted as a seal of trust between the producer and the buyer. Unilever’s founder, William Lever, for example, set his company the goal of making hygiene commonplace. in order to lift people to a quality of life not accessible to them, he invented the first hygiene brand, sunlight soap. This brand acted as a brilliant mechanism to simplify choice, by standardising quality, messaging and values. and in doing so, he not only played a key role in raising health levels in Victorian britain, but also drove scale and value creation, creating a business that endures today, all over the world.

Santiago Gowland,VP Unilever Brand & Global Corporate Responsibility,Unilever

Even today, a child dies of diarrhoeal disease every 10 seconds – the world’s second biggest killer of under fives. and our Lifebuoy brand is still making hygiene commonplace and reducing child mortality. by the end of last year Lifebuoy’s swasthya chetna programme* had reached 133 million people in india and a further 26 million in south East asia and africa. Most had never heard about germs before. Many had never used soap. That they have and do now is down to the power of an aspirational brand.

This brand, and other Unilever brands that play a role in nutrition around the world, have a positive societal value/footprint equation because of their belief in creating better futures. Positioned and marketed in the right way, there can be considerable good in brands as a mechanism of trust and as a means to drive positive behavioural change.

OFFERing VaLUEs as WELL as bEnEFiTsThis mechanism has become even more effective since the disruption triggered by the digital mega trend that has shifted the balance of power towards the consumer.

Brands today are “the conversation”. and the relevance of those conversations defines the depth of the relationships with a brand, hence their value.

What does your shopping say about you? The role of sustainable brands

be outside the areas that we directly control, for example worker rights and environmental performance of our suppliers’ factories. brands are now expected to make visible remote areas that remain invisible when you buy a commodity.

sO WHaT’s nExT FOR bRands?at Unilever we believe in the power of brands to play a role in creating a better future for individuals, for communities and for the planet we share. Four years ago we decided to integrate social, economic and environmental strategies into every brand development plan. We developed a process called brand imprint that acted as a catalyst to fuel sustainable innovation in our core business processes. and we ran brand imprint in every category and major brand in the company.

in the future, the main challenge for brands will be the extent to which they can start a new conversation with consumers around sustainable consumption, based on intrinsic values that can lift people everywhere to a fair and rewarding quality of life while preserving the environment.

Global brands have the best opportunity to do this, and the greatest chance to

make a positive impact if they try.

- Respect for the environment- A positive impact on communities- Sourced with integrity- Child labour policy- A fair price

HOW dOEs THis RELaTE TO sUsTainabiLiTy? increasingly people care about the social, economic and environmental challenges the world is facing. sustainability is becoming part of the conversation, and therefore, part of consumer expectations of brands. We are ushering in a new era of marketing where functional and emotional benefits will need to be reinforced by ethical values if a global brand is to succeed.

bRands’ gREaTER REsPOnsibiLiTy it is easier to destroy a brand than to force a corrupt politician out of office.

it can take four years and huge dedication to unseat a politician in democratic systems but a brand can be destroyed the minute organised consumers decide not to buy it. so, the accountability system and responsiveness of brands still works. ngOs have leveraged this to change unacceptable practices that escaped governmental regulations or transcended national frontiers including issues such as human rights, international trade and deforestation. campaigners have successfully challenged brands firstly to change their practices, but more importantly, have advocated for new rules of the game for whole sectors of the economy. companies don’t want to be left behind – and cede competitive advantage.

People expect brands to use their power to create change through their entire value chain, including indirect impacts. in Unilever, typically more than 80% of the social, economic and environmental impacts can

sustainability is becoming part of the conversation, and therefore, part of consumer expectations of brands.

Brands give people the power to ‘buy-cott’ or to boycott.

sUsTainabLE cOnsUMPTiOn Continued...

* Swasthya Chetna means health awakening and the programme spreads awareness amongst rural communities about the importance of washing hands with soap.


revenue from Ge’s ecomagination products has risen 21% to $17 billion and the number of products has risen by 1/3 to 80. Ge employs 100,000 people in europe.



FacTs and MaPs


Extreme risk

High risk

Medium risk

Low risk

No data

Country rank riskAngola 1/170 Extreme

Haiti 2/170 Extreme

Mozambique 3/170 Extreme

Burundi 4/170 Extreme

DR Congo 5/170 Extreme

Eritrea 6/170 Extreme

Zambia 7/170 Extreme

Yemen 8/170 Extreme

Zimbabwe 9/170 Extreme

Rwanda 10/170 Extreme

The road to sustainable consumption requires changes in behaviour, in business models and in regulatory frameworks. it touches so many areas of society and brings into stark relief the inconsistencies between living standards across the world (as shown by the food security index below). Europe and the Us are among the lowest at risk of food security, but the biggest culprits in creating unsustainable consumption. The current economic downturn may provide a unique environment to facilitate change with increased awareness of waste and over-consumption. but according to nEF’s report, The consumption Explosion, we went into eco-debt (the point where we have used more of the earth’s resources than it can sustain) only one day earlier this year. The multi-dimensional, constantly shifting nature of the landscape of European sustainability is clearly present in this issue.

The Food security Risk index (FsRi) measures the availability, stability and access to basic food stocks, as well as the impacts on nutrition and health that result from food insecurity. Maplecroft has rated each country based on performance across 19 key indicators. These include: imports, exports and production of cereals, food production per capita, rate of under nourishment per capita, water resources, gdP per capita and global aid shipments.

18%of Akzo Nobel’s revenue is now made up of sustainable products. Its target is 30% by 2015.

HenkelAwarded Germany’s most sustainable brand.

tHe roAd to sUstAinABLe consUMPtion seeMs LiKe An incrediBLy steeP HiLL.

Food security index™maplecroft

“ Food security is a complex issue affected by a range of factors, including agricultural development and capacity, international trade flows, poverty and income distribution, foreign aid, as well as macroeconomic policies and government programmes on nutrition and food fortification. added to these are the impacts of global population growth and climate change. both the public and private sectors will increasingly be called upon to mitigate risk from food security, in order to maintain a stable societal context conducive to development.” alyson Warhurst, Executive chair, Maplecroft

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Directions 2009 - Mapping the Shifting Landscape of European Corporate Responsibility

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