Moves from Ecuadorian rainforest, Golden Agri-Resources, China and all the latest from other brands in corporate responsibility and sustainability this month.
End of the beginning?
The mammoth 17-year litigation between inhabitants of the Ecuadorian rainforest and oil giant Chevron – as covered in Ethical Corporation – reached a critical point in mid-February when an Ecuadorian court ordered the US firm to pay $8.6bn in compensation for two decades of toxic waste dumping, starting in the 1970s. The dumping, by Texaco, which merged with Chevron in 2001, had been done recklessly, without concern for people or the environment, the court found.
However, the legal battle looks set to continue. Chevron says the court’s judgment is “illegitimate and unenforceable,” while the plaintiffs believe the compensation award should be much higher.
Palm plan
Indonesia’s biggest palm oil company, Golden Agri-Resources, has published a plan to reduce its deforestation footprint to zero. The company says it has teamed up with the government of Indonesia and the Forest Trust to formulate the plan, which goes beyond Roundtable on Sustainable Palm Oil standards by factoring in the carbon storage capacity of tropical forests, and thus prohibiting the exploitation of “high carbon stock forests”.
Golden Agri-Resources is part of Sinar Mas, which has been under pressure from corporate customers to clean up its environmental act after being labelled a “notorious forest destroyer” by Greenpeace. Rolf Skar of Greenpeace welcomes the plan, however, saying it “could be an historic step towards full forest and peatland protection in Indonesia”.
Behaviour standards
Chinese companies operating outside of China, especially in developing countries, have a poor reputation for sustainable behaviour. But they can expect to come under greater scrutiny later this year when China’s ministries of environmental protection and commerce are expected to jointly publish voluntary environmental guidelines for Chinese firms operating or investing abroad.
The guidelines will initially be targeted at state-owned businesses, and will deal with environmental aspects of project management, green finance and relationships with local communities. The guidelines are currently being tested in Laos, where China’s Sinohydro is working on a dam project. Farmers that will lose land to the dammed river will be provided with facilities and training so they can start producing biogas.
Sustaining sustainability
Sustainability-driven management can be defined through “seven emerging practices”, the journal MIT Sloan Management Review says, in a report published in February. These are a willingness to move early, even if information is incomplete; a balance between a long-term vision and near-term “wins”; a recognition that sustainability should be both top-down and bottom-up; determination to “aggressively de-silo sustainability”; a tendency to measure progress, even if this means developing new techniques; placing a value on intangible benefits; and being authentic and transparent.
In the study, prepared in partnership with the Boston Consulting Group, the MIT review found that corporate leaders now understand the business case for sustainability, but are divided between “embracers” and “cautious adopters”, the latter being mainly concerned with energy savings, resource use efficiency and the risk of being seen as non-sustainable.
Bad apples
Eight per cent of factories supplying technology giant Apple employed under-age workers in 2010, the company’s 2011 supplier responsibility report has shown. All of the facilities were in China, and had hired children under 16, the national minimum age for employment.
The suppliers had “unsophisticated systems for age verification and ID checks,”, according to the report, but one in particular stood out, with many more under-age workers than the others. “We determined that management had chosen to overlook the issue and was not committed to addressing the problem … We terminated business with the facility,” Apple says.
Consumers conned?
The ultimate ownership of “ethical” brands is often not transparent, and consumers can feel conned when they find out that large multinationals have controlling shares, a survey by Which? has found.
Few consumers are aware that Coca-Cola is the majority shareholder in Innocent fruit drinks, or that Green & Black’s organic chocolate is ultimately owned by US giant Kraft. However, while 53% of respondents to the Which? survey said that Green & Black’s was trustworthy, only 21% felt that Kraft was. According to Which?, some ethical brands could be undermined if they were more upfront about their ownership. However, ethical brands that have been bought out by multinationals say their core values have not been interfered with.
Sun fun
Photovoltaic power boomed in 2010, according to preliminary figures from the European Photovoltaic Industry Association. New capacity amounted to about 16 gigawatts, more than double the 7.2 gigawatts installed in 2009.
Solar panels are rapidly being installed, especially in countries such as Germany and Italy, where there are generous tariffs for renewable energy. Falling solar panel prices have also boosted the rollout. However, renewable power is still dwarfed in the energy mix by fossil fuels. Even in progressive Germany, solar energy provides only about 2% of the electricity that coal-fired power stations do.
Emissions resistance
South Korea’s main business and industry federations have called on the government to postpone the introduction of a cap-and-trade scheme for greenhouse gases until at least 2015. The scheme would impose unreasonable costs on industry, and undermine Korea’s competitiveness, business groups say.
Current government plans would see a scheme introduced in 2013, but the industry federations say it should be delayed until more of the world introduces similar regulations. Korean president Lee Myung-bak says the emissions trading scheme will be introduced “at an appropriate time after listening to all industry opinions”.
Meanwhile, in the United Kingdom, the government earned a cool £54m in February by auctioning carbon allowances to European Union emissions trading system participants. The UK treasury has now earned about £835m from carbon allowance auctions, according to analysts Carbon Retirement. None of this income has been earmarked for green investment.