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Corporate Social Responsibility (CSR) is an idea that corporations have to consider the interests of customers, employees, shareholders, communities, and ecological considerations in all
Socially responsible investing (SRI) describes an investment strategy which combines the intentions to maximize both financial return and social good.

green@work : Magazine : Newlines : Fall 2004

Actions and initiatives worth noting

GM Opens Fourth Landfill Gas Plants

General Motors’ Shreve-port, LA, assembly facility has become the company’s fourth location to utilize landfill gas as energy. Three other GM facilities—Toledo, OH; Orion, MI; and Fort Wayne, IN—also use landfill gas to power plant boilers, and a fifth project is underway at Oklahoma City, OK. In addition, GM’s Service Parts Operations headquarters in Grand Blanc, MI, utilizes landfill gas by purchasing eight million kilowatt-hours of electricity annually, generated from the Granger Energy landfill gas-to-electricity project. According to the World Resources Institute and the Green Power Market Development Group, GM is the largest non-utility user of landfill gas in the U.S.

“All of GM’s landfill gas projects have proven to save money, generating annual savings greater than $500,000 at each plant,” said Joseph C. Bibeau, group director of GM’s Energy and Utility Services.

By driving energy conservation initiatives and by using various renewable energy sources, such as methane gas, GM has reduced its natural gas consumption by 21 percent since 1995 and is on its way to achieving its 25 percent energy reduction goal by 2005. The sum of the landfill gas being utilized at the four GM plants is 1.6 trillion BTUs per year, which is equivalent to the energy needed to power over 45,000 households.

Have CR Initiatives Hit Limit?

Gearing Up, a new SustainAbility report launched at the United Nations Global Compact Leaders Summit in June, concludes that despite achieving impressive momentum, the corporate responsibility (CR) movement is bumping up against real limits. Some responsible businesses have scratched the surface of global issues like climate change and HIV/AIDS, but just as many work to maintain the status quo. The efforts of business, in combination with government and civil society, are quite simply being outpaced by the problems.

SustainAbility’s report concludes that the CR movement is constrained by too narrow a focus and the lack of appropriate links to wider global, regional and national governance frameworks. Where links do exist, they are often dominated by regressive lobbying.

On climate change, the report notes that a few companies have made significant cuts in CO2 emissions, but globally emissions have increased 8.9 percent since 1990, against a 60 percent reduction target. On the health front, some companies are helping to fight HIV/AIDS by providing anti-retrovirals to their employees. Yet in the poorest countries, less than 10 percent of the six million people who need such drugs currently get them. Too often, it’s a case of too little, too late.

In order to make real progress, and reverse the unfolding backlash against globalization, the authors call on Global Compact participants and other leading companies to help drive system-level change. Business is generally encouraged to stay out of politics, but the challenge business leaders face is increasingly political. “Corporate responsibility has the potential to bring about positive change on a much larger scale,” agrees Georg Kell, executive head of the Global Compact. “But to get there, the CR movement will need to focus on two things simultaneously: achieving critical mass across all industry sectors, and connecting private actions with public policy efforts so that root causes of problems are tackled. CR cannot operate in isolation any longer.”

To make these connections in a legitimate way, companies must be more transparent and consistent in their public policy positions—and they will need to involve other interested parties. The report encourages business leaders to:

* increase transparency and demonstrate real progress in integrating CR into core business operations;

* work alongside civil society and governments in ‘progressive alliances’ to achieve public policy changes that directly address social and environmental challenges;

* and champion policies that ensure more responsible forms of globalization.

UPS Helps Manage Unwanted Electronics

UPS Supply Chain Solutions now offers a service that helps companies properly manage the disposition of used and obsolete electronic goods and components. Through its new Asset Recovery and Recycling Management service, UPS Supply Chain Solutions oversees the final disposition of these electronics through repair, recycling or disposal in an environmentally safe manner, all while controlling logistics-related activities. The new service tackles the growing problem of how to manage used and obsolete electronic goods, such as computers, cell phones, printers as well as their electronic components.

With government enforcement of proper handling standards increasing globally, the new service is designed to help companies address the fragmented logistics processes to reclaim these goods from many locations, the high costs of managing returns, and the liability associated with this activity if done incorrectly. UPS’s Asset Recovery and Recycling Management service provides companies with a single point of contact, enhanced visibility and tracking and governmentally compliant documentation. UPS Supply Chain Solutions, through its vendors, also offers resale and remarketing services on behalf of companies for their used electronics.

SRI Funds Generate Double-Digit Returns

Of the 60-odd socially responsible investment (SRI) mutual funds tracked by, two funds have produced year-to-date (YTD) returns in the double digits at the half-year mark, according to a report issued on July 21, 2004 authored by William Baue. The Ariel Fund generated YTD returns of 11.84 percent, placing it in the third percentile compared to its peers—domestic equity value funds that invest in small- and mid-cap companies. (In other words, it performed better than 97 percent of its peer funds.) The Pax World Growth Fund produced YTD returns of 10.61 percent, ranking in the second percentile compared to its peers—domestic equity growth funds that invest in mid- and large-cap companies.

Performance statistics cited were current as of June 30, 2004, and are based on data provided by Thomson Financial Network, unless otherwise noted.

On social issues, the two funds converge on some screens. Both funds exclude companies that produce weapons, nuclear power, tobacco and negative impacts on the environment, and both have positive screens for strong employment policies. Neither fund practices community investment.

The funds diverge on other social issues. For example, the Pax World practices shareowner advocacy, engaging with companies it holds to encourage progressive social and environmental policies and practices; Ariel does not. The Pax World Growth Fund also employs several additional screens, such as exclusions on companies involved in alcohol and gambling. In contrast, the top holding in the Ariel Fund portfolio is Caesars Entertainment, a casino operator.

Ford, BP to Build Hydrogen Fleets, Fueling Stations

Ford Motor Co. and BP plc are undertaking a major initiative aimed at moving the United States closer to a hydrogen economy. Ford intends to place up to 30 hydrogen-powered vehicles, and BP plans to build a network of fueling stations to support them, in metropolitan Sacramento, CA; Orlando, FL; and Detroit, MI. The proposed fleets and fueling stations are in response to the U.S. Department of Energy’s solicitation entitled “Controlled Hydrogen Fleet and Infrastructure Demonstration and Validation Project.”

The Ford and BP joint proposal calls for Ford to provide up to 30 hydrogen-powered Ford Focus Fuel Cell Vehicles (FCV). Assembly of the vehicles will begin in the fourth quarter of 2004, depending on the timing of successful contract negotiations with the U.S. DOE and various state and local entities. The Ford Focus FCV uses an 85kW fuel cell stack supplied by Ballard Power Systems. It is hybridized with the addition of a nickel metal–hydride battery pack and a brake-by-wire electro-hydraulic series regenerative braking system.

BP plans to install a network of stations demonstrating state-of-the art fueling technologies to support the hydrogen fuel cell vehicles. Some BP hydrogen refueling stations will evaluate technologies that have near-term commercial feasibility, such as reformation of natural gas, while others will explore more long-term technology options and assess the potential to produce renewable-based hydrogen that achieve U.S. DOE hydrogen fuel cost targets.

GHG Protocol Revised

The World Business Council for Sustain-able Development (WBCSD) and World Resources Institute (WRI) have released a new edition of The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, an international standard used worldwide by businesses to report and set targets for their greenhouse gas emissions (GHGs). This standard, first launched in 2001, has become the most widely used global standard for corporate accounting of greenhouse gas emissions. It was developed by over 500 experts from businesses, NGOs and governments, and adopted by over 150 companies, including industry associations representing pulp and paper, aluminum and cement.

The revised standard reinforces and solidifies the standards of its widely used predecessor, but adds more case studies, annexes and guidance, including a new chapter on how to set credible GHG reduction targets. These additions draw upon the experiences of numerous businesses and climate programs that used the first edition.

The GHG Protocol reduces transaction costs for business, improves consistency, and ultimately facilitates efforts to link different trading schemes into a global market. It is also contributing to other accounting efforts, such as the forthcoming ISO standard on GHG accounting, which has signaled its intent to be compatible with GHG Protocol. The objective is also to rally more companies globally to use the protocol and thus facilitate corporate action on climate change.

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