Snippets from AD’s electoral manifesto: (1) Corporate Social Responsibility

Environment

The following extract is taken verbatim from Chapter 14 of AD’s Electoral Manifesto

Corporate Social Responsibility (CSR)
In today’s world various organisations publish reports on a regular basis in which they list their impacts primarily on the community in which they operate.
In Malta only two companies do so, Bank of Valletta and Vodafone. To date they have published two editions of their reports. Each of these publications is of a positive nature but in every case there is room for improvement both in the policy direction as well as in content.
It is necessary that all companies listed on the Stock Exchange as well as parastatal organisations such as Enemalta and the Water Services Corporation together with all companies employing more than 1000 employees publish such information. It is important to underline that environmental reporting is as important as financial reporting and hence it should also be audited.

L-estratt segwenti hu mehud kelma b’kelma mill-Manifest Elettorali ta’ Alternattiva Demokratika (Kaptlu 14)

Responsabbiltà Soċjali tal-Industrija u n-Negozju (CSR)
Fid-dinja tal-lum huma diversi l-organizzazzjonijiet li jippubblikaw fuq bażi regolari rapporti li fihom jelenkaw f’dettall l-impatti tagħhom prinċipalment (iżda mhux biss) fuq il-komunità fejn joperaw.
F’Malta huma żewg kumpaniji biss li jagħmlu dand: il-Bank of Valletta u Vodafone. S’issa ppubblikaw żewg edizzjonijiet tar-rapporti tagħhom. Kull wieħed minn dawn il-pubblikazzjonijiet hu ta’ kontribut pożittiv imma f’kull każ hemm lok għal titjib kemm fid-direzzjoni politika kif ukoll fil-kontenut tar-rapport.
Huwa neċessarju li dan ikun estiż għall-kumpaniji kollha elenkati fil-Borża kif ukoll għall-Korpi Parastatali bħall-Enemalta u l-Korporazzjoni għas-Servizzi tal-Ilma flimkien ma’ dawk il-kumpaniji fis-settur privat li jimpjegaw iktar minn 1,000 ruħ. Huwa importanti li jkun sottolineat li r-rappurtaġġ ambjentali huwa importanti daqs dak finanzjarju u għaldaqstant għandu jkun ukoll soġġett għal proċess tal-verifika.

Profits with principles

stakeholders

The business of business is not just business. It is much more.  It is much wider.

Business is responsible towards its shareholders but it is accountable towards its stakeholders: employees, customers, consumers, trade unions, environmental groups and also future generations. Business must develop a dialogue with this wider stakeholder group. Such a dialogue must be based on trust and, consequently, it must be both transparent and leading to genuine accountability.

 It is not just governments that need to be accountable! CSR reporting is a tool that can be of considerable assistance in achieving this purpose.

AD’s Electoral Manifesto proposes putting Corporate Social Responsibility on a sound footing in Malta.

“It is necessary that all companies listed on the Stock Exchange as well as parastatal organisations such as Enemalta and the Water Services Corporation together with all companies employing more than 1000 employees publish such information. It is important to underline that environmental reporting is as important as financial reporting and hence it should also be audited.”

Disclosure and stakeholder engagement are basic elements of CSR.  CSR reporting will define the duty of disclosure of the major business and industrial operators. Through this proposal AD in Parliament  will ensure that transparency is the order of the day not just in government but also in the private sector.

 As profits and priciples can co-exist.

published in di-ve.com on February 1, 2013

Reflections on an Environment Policy

The current debate on what should form part of a National Environment Policy is a healthy exercise. It is focusing not only on the different aspirations of each citizen but also on the role of each one of the towns and villages which together constitute this country.

The environmental issues we face are the result of the manner we organise our lives both individually and as a community. In fact it can be safely stated that the manner in which economic activity has been organised throughout time has created different environmental and social impacts.

The exercise at this point in time is hence the clear identification of these impacts and subsequently seeking the best manner in which they can be tackled. This is done on two fronts: firstly through the formulation of an environment policy and secondly by integrating this environment policy with economic and social policy within the National Strategy for Sustainable Development (NSSD).

The NSSD has already been formulated and approved by Cabinet almost three years ago after a long process of consultation. It established targets and objectives which have unfortunately been ignored by the same Government which has approved them. This necessarily leads to the conclusion that these exercises can be a waste of time as their only purpose seems to be an exercise to prove that the new hands on deck can do things in a better way than those they have replaced. 

The National Environment Policy Issues Paper identifies a number of areas which are to be tackled but excludes a number of important ones. What is in my view objectionable and bordering on the insulting is the ignoring by the Issues Paper of the NSSD. It also ignores matters which have been tackled by the NSSD as well as the specific targets identified. This the NSSD did after extensive consultation with civil society, which the Issues Paper promises to go through again.

 

Eco-taxation

One such case refers to the use of economic instruments to attain environmental objectives. The Issues Paper queries whether and to what extent there is agreement  with the use of such instruments to further environmental objectives. Simultaneously with the publication of the Issues Paper, Finance Minister Tonio Fenech through the pre-budget document was lauding the idea of introducing a carbon tax and the possible utilisation of the proceeds to affect a tax shift. This is in the spirit of the former EU Commission President  (French Socialist) Jacques Delors’ 1993 EU White Paper entitled “On growth, competitiveness and employment. The challenges and ways forward into the 21st century”.

So whilst the Environment Ministry is requesting our opinion on the use of eco-taxation (and other instruments) it seems that the Finance Ministry is dead-set to proceed.  Do these two Ministries form part of the same government? 

Both the Environment Ministry and the Finance Ministry would do well to go back in time to the debate on the introduction of the eco-contribution (2003-05) where they could identify a number of issues raised by civil society.

Should fiscal objectives be the purpose of environmental taxation or would it rather be environmental improvement? All over the globe governments declare that their aim in applying eco-taxation is environmental improvement. Yet they resist transferring political responsibility for environmental taxation from the Finance Ministry to the Environment Ministry. Such a move would lend credence to statements on the environmental objectives of eco-taxation and would ensure that the design of specific measures is more in line with encouraging changes in behaviour. Retaining political responsibility for environmental taxation at the Finance Ministry on the other hand signifies that the objective is to tax behaviour but not  to change it. This reluctance is generally reflected in the manner  in which eco-taxes are designed. Fiscal policy makers pay attention to the fact that changing behaviour would mean drying up a source of revenue. Hence eco-taxes designed for fiscal objectives are intended not to affect the elasticity of demand. This is done by selecting items in respect of which there are no alternatives and thus irrespective of tax added to the price there is no alternative to purchasing the product or service. The eco-contribution exercise clearly illustrates this argument.

 

Environmental nuisance 

The Issues Paper has failed to project an understanding that environmental issues can be most effectively tackled at a micro-level. In fact the Issues Paper adopts an exclusively macro approach and does not give any weight to the real life issues. Issues of environmental nuisance are the ones which the man in the street feels strongly about. These include primarily noise, air quality and odour nuisance caused by neighbours in residential areas. They could range from an air conditioner fixed below your bedroom window to a neighbour’s fireplace chimney spewing smoke right into your living room or a bakery belching black smoke onto your washing line. Or the newly opened restaurant or snack bar in a transformed ground floor flat whose operator wouldn’t care less about where the odours from his kitchen end up.    

Information

Access to environmental information is an important aspect of environment policy. Yet the drafters of the Issues Paper ignored it. The environmental information aspects of the Åarhus Convention have been incorporated into Maltese legislation as a direct result of Malta’s EU accession. This legislation provides a mechanism through which the citizen requests the release of information which up till then would be withheld by the authorities. This is a very primitive form of governance. The state should release information without having its hand forced to do it. This is the minimum required in an age of transparency and accountability. 

Policy proposals and other initiatives must be buttressed by studies which not only justify the proposal or initiative but which also identify the resulting impacts and the manner in which these can be addressed. Studies must be published at an early stage and not in the final stages of a discussion. Otherwise the public debate cannot be fruitful.

Transparency and accountability

Transparency and accountability are not only duties of the state. They are also a responsibility of private enterprise.  Corporate Social Responsibility (CSR) reporting is one way in which private enterprise informs the public on its activities. It is a function as important as financial reporting. Financial reporting having been accepted by society for quite a long time as a reporting requirement.

In Malta currently two companies publish a CSR report. Vodafone (Malta) and Bank of Valletta (BOV) have already published two editions of their CSR report. There has been considerable improvement in the information made available by Vodafone (Malta) in its second report, but BOV’s reporting  can be substantially improved.

The environment policy should identify the type of organisations that should have the duty to report publicly and on a regular basis on their environmental and other impacts. By organisations I understand not just industry and business but also public corporations, government departments and local authorities. A reasonable first step would be for companies quoted on the stock exchange to take the lead followed by public bodies such as Enemalta, Water Services Corporation, Heritage Malta and Air Malta.

CSR reporting should be guided by international standards such as the Global Reporting Initiative G3 guidelines and should be subject to auditing in order to verify that the statements made reflect what the organisation is really up to. 

Alternattiva Demokratika, AD, the Green Party in Malta has earlier this month published a document in reply to the National Environment Policy Issues Paper which lists and discusses the areas missed out by the said Issues Paper.  In addition to focusing on the urgent need to implement the NSSD, environment information, environmental nuisance and environment information it also points out the need to tackle the uptake of environmental management systems such as ISO 14001 and the Eco-Management and Audit Scheme (EMAS) Regulations of the European Union, light pollution, contaminated land, environmental and sustainability planning at a locality level better known as Local Agenda 21,  the role of civil society and environmental NGOs in environment policy and environment  research.  

We hope that when the environment policy is drafted it will include the widest possible list of issues and will tackle them in an holistic manner keeping in mind the parameters established in the National Sustainable Development Strategy.                 

Alternattiva Demokratika considers that environment policy is one of several instruments through which improvement in the quality of life can be attained. Protecting the environment signifies that we better our quality of life. It also signifies that each one of us acts in a responsible manner. However primarily it must be government which leading the way should act in an appropriate manner in order that it leads by example.

 published in

The Independent on Sunday, October 17, 2010, Environment Supplement

AD on Government’s Environment Policy

During a press conference in Valletta, Michael Briguglio, AD Chairperson, said: ‘Alternattiva Demokratika is presenting its reactions to Government’s proposed environment policy. In a nutshell we believe that it would have been wiser if Government implemented the recommendations of the National Commission for Sustainable Development, which have been ignored by Government for over two years. A holistic and effective environment policy should be based on the concept of sustainable development through which environmental, social and economic considerations are given due importance in order to improve the quality of life of people and to protect species. This is precisely what is being proposed in our policy paper, which covers various areas’.
 
Carmel Cacopardo, AD Spokesman on Sustainable Development and Local Government said that AD’s detailed reaction to the National Environment Policy Issues Paper was presented to Parliamentary Secretary Mario de Marco yesterday during a cordial meeting.
 
AD, said Cacopardo, is of the opinion that environment policy and environment measures have to be buttressed by studies which analyse the economic, social and environmental impacts of the proposals. Environmental research is absent from the list of issues dealt with by the document government published for public discussion. This is not a surprise for AD as acting without analysing impacts a priori is this government’s preferred method of action as has already happened when the eco-contribution legislation was introduced.
 
Government has just announced that it is toying with the idea of introducing tax shifting by reducing taxes on labour and introducing a carbon tax. This proposal communicated in the pre-budget document is scant on details such that it is not at all clear what Government is considering. In addition no studies indicating targets, methods and impacts has been published. Nor is it known whether in fact any studies have been carried out. It is for this reason that AD has 15 days ago requested the release of studies on the “carbon tax” proposal in terms of the provisions of LN 116 of 2005 (Freedom of Access to Information on the Environment Regulations).
 
The use of economic instruments for environmental improvement should be the responsibility of the Ministry of the Environment and not of the Ministry of Finance. This would ensure that environmental objectives and not fiscal ones are the primary objectives when such instruments are used
 
The Issues Paper added Cacopardo does not consider a number of important areas of action such as : Light Pollution, Environmental Impacts of Organisations, CSR, environmental nuisance, land contamination, the role of civil society and eNGOs in environment policy formulation, access to environment information and environment research.
            
AD considers that in view of the large number of vacant properties a moratorium on large scale residential development is long overdue. The regulating of funding of political parties would also ease the pressure of the building development lobby on politicians.  
 
Press here to download full AD paper

Holding Business to Account

times_of_malta196x701

published on April 11, 2009

by Carmel Cacopardo

_________________________________________________________________________________________ 

On September 13, 1970, in the New York Times magazine, economist Milton Friedman said that the sole purpose of business was to generate profits for shareholders. The business of business, he argued, is business.

Forty years on some still think on the same lines: that shouldering environmental and social impacts generated by business is not the business of business. They insist that, if pressed to address its impacts, business would consider relocating, seeking countries where legislation relative to environmental and social protection is minimal or inexistent.

By publishing its Corporate Social Responsibility report for 2006-08, Vodafone Malta is making a very powerful statement: modern business thinks otherwise. It considers that the business of business is much wider than business. In its second CSR report, Vodafone outlines its initiatives in managing its corporate risks and responsibilities in greater detail than it did two years ago.

CSR signifies a commitment that business is carried out in a responsible manner. Tree-planting and sponsorship of worthy causes, though laudable, are marginal to CSR!

Vodafone’s statements on the management of hazardous waste relating to mobile phones are welcome as are its declarations on its reduced carbon footprint.

The listing of ethical purchasing criteria make excellent reading although the manner in which these have been applied could have been substantially more informative. In particular, it would have been appropriate if stakeholders were informed whether there were any suppliers who fell foul of the said criteria during the reporting period. The adopted criteria use the available guidelines, standards and tools that have been drawn up globally to facilitate sustainability benchmarking and reporting. They are largely modelled on the social accountability standard SA8000, full compliance to which should lead to the ethical sourcing of goods and services. This standard has also been used by others, among which Avon Products Inc., The Body Shop, Reebok International, Toys ‘R’ Us and The Ethical Trading Initiative.

On a different note, reporting on the radiation emission levels of its base stations and the identification of the standards to which it conforms makes Vodafone’s second CSR report an adequate reporting tool. This is an issue, however, which requires more analysis and discussion.

In line with global CSR reporting standards, Vodafone discloses of being in breach of consumer legislation on one occasion during the reporting period relative to comparative advertising. Such disclosure, though not yet an everyday occurrence in these islands, is an essential element of CSR reporting.

Vodafone’s third CSR report should move a further step forward: Its statements should be subject to an audit and be independently verified as being correct. CSR reporting is as important as financial reporting and should be subject to the same level of assurance.

Vodafone has made an important contribution to CSR reporting in Malta.

Together with BOV, it has made the first strides locally in this previously unexplored domain. It is hoped that the competition in the communications industry in Malta would make equally valid contributions. While Go plc could substantially improve on its 61-word paragraph devoted to CSR in its 2007 annual report (the latest available), stakeholders await Melita’s first utterances on the matter.

Although some tend to equate CSR with corporate philanthropy, this is just one tiny element of CSR. To make sense, corporate philanthropy must be founded on and be the result of a sound CSR. A company can sponsor environmental initiatives but, if its own environmental policy is blurred, the sponsorships dished out could only be considered as an exercise in green-washing. When deciding on sponsorships, business should be consistent with the manner it carries out its day-to-day operations. Corporate philanthropy would thus be much more than another cheap marketing ploy.

Vodafone Malta, through its CSR report is laying its cards on the table. As a result, its corporate philanthropy can be viewed in context. It would be quite a feat if, for example, the banking sector in Malta could follow suit by determining and applying environmental criteria in the advancing of finance to the building industry and, subsequently, informing stakeholders of its achievements through CSR reporting! With just one stroke of a pen, the banking sector in Malta can prevent substantial damage to both the natural and the historical environmental.

The adoption of CSR by business signifies the acceptance of the fact that its shadow is much wider than its shareholders.

Business is responsible towards its shareholders but it is accountable towards its stakeholders: employees, customers, consumers, trade unions, environmental groups and also future generations. It is with this wider stakeholder group that business must develop a dialogue. Such a dialogue must be based on trust and, consequently, it must be both transparent and leading to genuine accountability. It is not just governments that need to be accountable! CSR reporting is a tool that can be of considerable assistance in achieving this purpose.

BOV’s CSR : The next step

This was originally published on the 5 January 2008 as an article in The Times

BOV’s CSR: The next step

 

Bank of Valletta is to be congratulated on the recent publication of its second Corporate Social Responsibility Report covering 2007.

In its mission statement BOV defines its commitment as being that of playing a leading and effective role in the country’s sustainable development “whilst tangibly proving ourselves to be responsible and caring citizens in the community in which we operate”. The objective of the CSR report is hence that of informing the community as to the manner in which the bank is acting as a responsible citizen. The bank’s CEO makes this even more clear in his statement on page four of the report. In fact, he rightly underlines that while the bank is responsible towards its shareholders it is also accountable towards society.

This is the crux of CSR: the accountability of business towards all stakeholders, the community at large. Profits generated on their own are not a measure of success, as the business of business is not just business!

The bank has ploughed back into the community 1.31 per cent of its profits (Lm350,000 or €815,500) through engagement in seven pillars of activity, namely the arts and culture, heritage, environment, sports, social, education and business sectors.

In particular, BOV has assisted Heritage Malta in preserving the Tarxien Temples. It has furthermore supported the restoration programme at Palazzo Falson, Mdina.

Reading through the BOV 2007 CSR report one encounters many a positive note as to the manner in which the bank is being eco-efficient. First on the list is its Santa Venera centre which, through both design and operation, is energy-efficient. Its Marsascala branch has, during 2007, been equipped with photo-voltaic panels, thereby contributing to an annual reduction of three tonnes of CO2 emissions as a minimum. The other branches await their turn.

BOV recycles its paper and has taken the first steps which will eventually lead to a paperless administration. Furthermore, it makes use of recycled toners and cartridges, not only contributing to less waste going to landfill but also paying less eco-taxes as a result. Reducing environmental impacts has a positive financial impact too!

The BOV report does not mention the environmental impacts generated by the use of transport (by both the bank and its employees). Nor is any reference made to the use of water in its branches, including the collection and utilisation of rainwater.

BOV has also sponsored a number of environmental initiatives aimed at the environmental education of the community.

While BOV is setting a good example which should filter through the business community, this should be seen as only a first step. In addition to improving the management of its direct environmental impacts, thereby reducing them, BOV can move forward, in the process retaining its leading role in banking CSR in Malta.

BOV should, on the basis of this eco-efficient experience, move on to new initiatives that address the eco-effectiveness of the banking system. In addressing its corporate responsibilities, BOV as any exemplary citizen would undoubtedly ask whether its services are being misused. In particular, whether any of its customers have used its services to contribute towards the ever-increasing national environmental deficit.

It would be interesting if in a future report we could read about environmental criteria applied in the consideration of requests for business loans, including those utilised to finance the construction industry. Additional interesting information would be whether BOV has refused its services to any client on the basis of environmental criteria.

The financial balance sheet on its own does not measure progress. It is only concerned with profits. The environmental and social balance sheets need to be addressed too, thereby having a “triple bottom line” approach to measuring progress.

Through its 2007 CSR report, BOV has proven that it is serious about managing its direct impacts. It now needs to move further by managing its upstream and downstream impacts. Managing its upstream impacts signifies addressing the environmental impacts generated by its suppliers – hence the introduction and maintaining of a green procurement service. Managing its downstream impacts would address the environmental impacts of those using its services. When this is done successfully BOV would be eco-effective, as a result contributing to a reduction of Malta’s environmental deficit.

BOV has taken the lead. I hope others will follow because profits and principles can co-exist.