Pioneering CSR
-
An analysis of Danish frontrunners in Corporate Social Responsibility
Authored by
GLOBAL CSR
for
The Danish Business Authority
Developed by GLOBAL CSR for the Danish Business Authority
Disclaimer: This report was prepared by GLOBAL CSR for the Danish Ministry of Business & Growth, and
was financed by the Danish Business Authority (Erhvervsstyrelsen). The report does not necessarily
reflect the official view of the Danish Government.
Cover photography: Henrik Brahe for GLOBAL CSR©
February 2013, Copenhagen, Denmark
This publication can be downloaded from: www.samfundsansvar.dk
1
Table of Contents
1
2
3
Executive Summary................................................................................................................. 4
1.1
Key Findings - CSR compliance ......................................................................................... 4
1.2
Key Findings - Beyond Compliance .................................................................................... 5
1.3
Challenges and Opportunities ........................................................................................... 5
Introduction ........................................................................................................................... 6
2.1
The Triple Bottom-Line .................................................................................................... 8
2.2
CSR Compliance.............................................................................................................. 8
2.3
Beyond CSR Compliance .................................................................................................. 9
Reflections and experiences in relation to CSR Compliance ......................................................... 11
3.1
3.1.1
Policy commitment - Social ......................................................................................... 14
3.1.2
Due Diligence - Social ................................................................................................ 15
3.1.3
Remediation - Social .................................................................................................. 18
3.2
Policy Commitment - Environment ............................................................................... 20
3.2.2
Due Diligence – Environment ...................................................................................... 21
3.2.3
Remediation - Environment ......................................................................................... 21
Economic Compliance .................................................................................................... 22
3.3.1.
Policy Commitment - Economy .................................................................................... 23
3.3.2.
Due Diligence - Economy ............................................................................................ 24
3.3.3.
Remediation - Economy .............................................................................................. 25
3.4
Danish Frontrunners and CSR Compliance ........................................................................ 26
Beyond CSR Compliance ........................................................................................................ 27
4.1
Best Practice Strategic CSR Focusing on Social Sustainability .............................................. 28
4.1.1
ISS: Diversity as a Competitive Advantage ................................................................... 29
4.1.2
DONG Energy: Multi-Stakeholder Initiative on Responsible Supply Chain Management ....... 30
4.1.3
Carlsberg: Initiative on Responsible Drinking ................................................................ 31
4.1.4
Novo Nordisk: Integrating CSR in Business Strategy for China ......................................... 32
4.2
Best Practice Strategic CSR Focusing on Environmental Sustainability .................................. 33
4.2.1
Maersk: Triple-E ........................................................................................................ 33
4.2.2
DONG Energy’s Climate Partnerships ............................................................................ 34
4.2.3
Carlsberg: Sustainable Packaging ................................................................................ 35
4.3
Best Practice Strategic CSR Focusing on Economic Sustainability ......................................... 36
4.3.1
ISS: Business Integrity is non-Negotiable ..................................................................... 36
4.3.2
Novo Nordisk: Learning the Hard Way .......................................................................... 37
4.3.3
Maersk: Maritime Anti-Corruption Network.................................................................... 38
4.4
5
Environmental Compliance ............................................................................................. 19
3.2.1
3.3
4
Social Compliance ......................................................................................................... 12
Danish Frontrunners and Strategic CSR ........................................................................... 39
General Challenges and Opportunities...................................................................................... 42
2
5.1
CSR; A Moving Target .................................................................................................... 42
5.2
Lack of Awareness and Capacity ..................................................................................... 42
5.3
A Business Case to End Them All..................................................................................... 44
5.4
The Importance of Ownership ......................................................................................... 44
5.5
Context Matters ............................................................................................................ 45
5.6
Concluding Remarks ...................................................................................................... 45
3
1
Executive Summary
This report provides an analysis of five Danish frontrunner companies’ Corporate Social Responsibility
(CSR) approaches and activities. A.P. Moeller Maersk, Carlsberg, DONG Energy, ISS World Services and
Novo Nordisk have shared their manifold CSR-experiences, as well as their insightful views on the
challenges and opportunities that the CSR agenda holds. The analysis is based on the internationally
recognised framework for CSR, consisting of the triple bottom-line of the UN Global Compact and the UN
Guiding Principles for Business and Human Rights (UNGPs).
The report is aimed at inspiring more Danish companies to become CSR pioneers. It offers a current
insight into what these five frontrunners currently do in relation to social, environmental and economic
compliance. In addition, it describes best practices in relation to voluntary initiatives that go beyond
compliance on all three bottom-lines; commonly referred to as strategic or proactive CSR. Such efforts
are showcased and connected with interesting examples from international frontrunners.
1.1
Key Findings - CSR compliance
Recent developments, i.e. the adoption of the UNGPs, the updated OECD Guidelines for Multinational
Enterprises and the EU Strategy for CSR, have had quite an impact on how the compliance dimension of
CSR is understood internationally.
The five Danish frontrunners are all experienced CSR practitioners. This means that they have many
policies and processes in place to ensure a solid foundation for their CSR activities. However, even among
these frontrunners there is a need to adjust existing processes to ensure alignment with current
compliance expectations.
When it comes to environmental compliance, Danish companies are generally characterised by strong
and robust management systems, mostly due to strong regulation and the obvious business case related
to reducing energy consumption. Anti-corruption has been characterised by increasing regulation, most
notably through the adoption of the UK Bribery Act in 2010. This has spurred quite a bit of action among
Danish companies, many of whom have since created policies, conducted training and set up
whistleblower hotlines. When it comes to social compliance however, the case is somewhat different. The
emphasis of the UNGPs on the need to incorporate the full spectrum of human rights in compliance
activities requires a new mindset in most Danish companies. For example, all of the frontrunners have to
adjust the scope of their processes to include all human rights. In addition, the expectation that
companies have to ensure access to remedy for victims is a challenge for companies, including the
Danish frontrunners, most of which have yet to set up operational level grievance mechanisms.
Although the business case for investing in environmental compliance is initially clearer, the frontrunners
highlight how being able to display an equally sound compliance system and a good track record on social
and economic sustainability means good business. Firstly, because a strong CSR-profile can heighten
motivation among employees, attract new investors, pave the way for new business partnerships, and
open up new market opportunities. Secondly, some of the participating companies highlight how drawing
a strict line between compliance and beyond compliance can be counterproductive. To them, compliance
is a valuable element in identifying areas in which the company can work strategically with CSR. As such
they stress the synergies between the compliance and beyond compliance dimensions.
4
1.2
Key Findings - Beyond Compliance
The five Danish CSR-frontrunners display an interesting portfolio of strategic CSR initiatives. Within all
three bottom lines they work strategically with minimising risks, reducing costs, developing products,
building brand value, improving employee satisfaction, stakeholder relations and the like. Simultaneously
their efforts contribute to bettering global standards on health, safety, diversity, education, environment,
anti-corruption, etc. The Danish frontrunners do this via multi-stakeholder initiatives, partnerships, CSR
based innovation, base of the pyramid investments, organisational learning and lobbying. This report
further highlights corresponding examples drawn from international giants like Coca Cola, Hitachi,
Siemens, General Electric, Novartis and Cerrejón. These examples can help expand current perceptions of
what strategic CSR initiatives can consist of.
The proactive CSR dimension can help companies stand out among peers. According to the frontrunners,
however, voluntary CSR efforts have to be strategic and add value to the company. When carried out in a
strategic manner, this part of CSR is about competitiveness and improving the core of the business.
1.3
Challenges and Opportunities
Throughout the report, readers are presented with a range of challenges and opportunities in making
more Danish companies CSR pioneers. Five key and crosscutting areas, which are closely interconnected,
are worth highlighting:
Moving target: To many, CSR is still a somewhat intangible and complex business area. Recent years
have brought about much change, which puts pressure on companies that have to adapt to ever-evolving
regulations, demands and expectations. Current convergence trends can help simplify the area and
enable more companies to work with CSR in a manner that corresponds with international trends.
Awareness and capacity: The constant development in the field of CSR results in a constant need for
awareness, capacity development and not least corporate agility. Authoritative guidance and awareness
raising activities are therefore essential in order to inspire more companies to join the forefront of the
CSR agenda.
Business case: The need for a demonstration of the financial prospects of CSR is perhaps the most
recurring remark among the five frontrunners. A clear business case is the most effective driver for the
CSR agenda and key to getting more companies on board.
Ownership: While there is little doubt that hard law and regulation can fast-track CSR implementation
and change, companies and their employees need to have a sense of ownership for the changes to be
substantial and sustainable. Dialogue and engagement are crucial for the inclusion of more companies in
the CSR agenda.
Context matters: Operating across borders means operating within different laws, levels of enforcement,
traditions etc. This is challenging for many companies that often find it difficult to exert their influence on
CSR issues across contextual differences. Often the global challenges require global solutions and
collective action is necessary. As such the role of international multi-stakeholder initiatives is important,
especially for frontrunners.
5
2
Introduction
This report presents an analysis of Corporate Social Responsibility (CSR) efforts of five of the largest
companies with headquarters in Denmark. The report describes aspects of the CSR work carried out by A.
P. Moeller Maersk, Carlsberg, DONG Energy, ISS World Services, and Novo Nordisk.
The report provides insights into the perception of CSR in leading Danish businesses and discusses the
challenges and opportunities they face. It also presents examples of strategic CSR activities and
initiatives. The participating companies represent different business sectors and a variety of CSR
strengths and weaknesses.
The aim of the report is to inspire and assist more Danish companies in becoming CSR pioneers. It is
worth noting that even the five ambitious Danish CSR frontrunners selected for this report face
challenges and barriers in their CSR work. CSR is an ever-evolving field and in light of recent changes all
large Danish companies are in a continuous learning process. Even the best in the field continuously
experience room for improvement. Annette Stube, Director of Group Sustainability in A. P. Moeller
Maersk (hereafter: Maersk) explains:
”CSR takes time. It needs to settle in our minds to make sure that it becomes part of our daily routines.
In fact CSR is about change management.”
Examples of CSR challenges are integrated throughout the report. In addition the report highlights best
practice on business-related proactive initiatives and seeks to inspire other companies to identify and
reap the benefits of strategic CSR.
Table 1 presents the key characteristics of each company. These include industry, revenue, geographical
spread, and number of employees. The interviewed representatives from each company are presented in
the last column. GLOBAL CSR is very grateful to all of the respondents who were kind enough to share
their valuable knowledge and time.
Table 1. Key characteristics of participating companies including names of respondents
Company
Industry
Brewery group
2011
Geographical
CSR
Revenue
presence and
representatives
no. of
– interview
employees
respondents
63,561
The Carlsberg
Morten Nielsen,
million DKK
Group employs
Director CSR &
41,000 people.
Public Affairs &
Activities in
Eskild
Northern &
Andersen,
Western Europe,
Group
Eastern Europe
Environmental
and Asia.
Manager
6
Energy
The business is
56,842
Operating in
Filip Engel,
million DKK
Northern Europe
Head of
with
Stakeholder
approximately
Relations
based on procuring,
producing,
7000 employees
distributing and
trading in energy
and energy related
products in
Northern Europe.
Healthcare focusing
66,346
Novo Nordisk has
Susanne
on diabetes care.
million DKK
33,900
Stormer, Vice
employees in 75
president,
countries and
Corporate
markets its
Sustainability &
products in more
Peter Munch-
than 190
Madsen
countries
Programme
Novo Nordisk also
works within
haemophilia care,
growth hormone
therapy and
hormone
Manager,
replacement
Corporate
therapy.
Sustainability
Facility
77,644
ISS operates in
Joseph
Management
million DKK
more than 50
Nazareth, Group
countries with
Vice President,
more than
Group Health,
Cleaning Services
Support Services
530,000
Property Services
employees
Safety and
Environment
(HSE) and
Catering Services
Corporate
Security Services
Responsibility
(CR)
The Maersk Group
322,520
The Maersk
Annette Stube,
operates in two
million DKK
Group employs
Director of Group
main industries:
117,000 people
Sustainability
shipping and oil &
and has a global
gas.
presence.
7
2.1
The Triple Bottom-Line
What is CSR? In order to ensure a common framework for understanding the findings, it is important to
define what the term CSR covers. Answers to the questionnaire and interviews with participating
companies revealed that each company has its own perception of what CSR means. Susanne Stormer,
Vice president Corporate Sustainability, Novo Nordisk explains:
“We use the TBL (Triple Bottom-Line) as a filter for decision-making, which aims to ensure that we
always consider the implications of our actions on people, communities and the environment.”
Morten Nielsen, Director CSR & Public Affairs, Carlsberg, explains that their company has a different
approach to CSR:
“We work with CSR as a central part of our business, we do not divide it into bottom-lines; not in
communication nor in processes. We focus on the functions and the business processes.”
Four of the five companies use the TBL as the overall framework, but it is apparent that even within this
framework, the perception of CSR and how to work with the concept varies from company to company.
Annette Stube, Maersk explains:
”The past four years we have been focusing on mastering the responsibility agenda so that we can pick
up pace and focus more on the positive contributions, that Maersk has on sustainable development.”
Filip Engel, Head of Stakeholder Relations, DONG Energy, explains how DONG Energy has found it
necessary to focus their efforts within CSR:
“The transformation to green energy is an integrated part of our company strategy. We invest in green
energy because it is profitable. But it is also one of our most important CSR efforts because we are
contributing to the development of concrete responses, such as offshore wind, to one of our
big
challenges: climate change.”
Joseph Nazareth, Head of Group Health, Safety and Environment (HSE) and Corporate Responsibility
(CR), ISS World services (hereafter ISS), stresses the business case for CSR:
“CSR used to be a luxury. Now it is fundamental to our business strategy and our business growth.”
This report rests on a widely recognised understanding of CSR, which is based on the TBL. The TBL
consists of internationally agreed upon principles as represented by the UN Global Compact (UNGC):
Social sustainability (human & labour rights), Environmental sustainability and Economic sustainability
(anti-corruption).1
Although not every company perceives or undertakes CSR with consideration to international principles,
such categorisation provides for a structured and globally acknowledged understanding of CSR, enabling
comparison between companies and a meaningful categorisation of CSR efforts.
2.2
CSR Compliance
CSR and CSR activities related to the three bottom-lines can be divided further into two dimensions; 1)
CSR compliance and 2) activities that go beyond compliance; often referred to as proactive or strategic
1
http://www.unglobalcompact.org/
8
CSR. This two-dimensional understanding of CSR is in line with the EU Commission’s CSR strategy from
2011, in which CSR is defined as;
“The responsibility of enterprises for their impacts on society … with the aim of:
- maximising the creation of shared value for their owners/shareholders and for their other stakeholders
and society at large;
- identifying, preventing and mitigating their possible adverse impacts”. 2
According to the EU, CSR compliance is about identifying, preventing and mitigating possible adverse
impacts. This understanding is derived from the concept of due diligence as defined in the UN Guiding
Principles on Business and Human Rights (UNGPs).3
The UNGPs were unanimously adopted by the UN in 2011. Although these principles were developed with
the purpose of defining the universal responsibility connected only to the social bottom-line, they have
been applied to cover all three bottom lines by e.g. the OECD’s Guidelines for Multinational Enterprises 4
and the EU. In other words the UNGPs have influenced the entire CSR field, including how businesses are
expected to manage adverse impacts on environmental and economic sustainability.
In addition the UNGPs have been incorporated into the latest Danish Action Plan on CSR (March 2012)
and form the cornerstone of the Danish Mediation and Complaints-Handling Institution for Responsible
Business Conduct.5 The relevance to all companies of this globally agreed upon CSR compliance standard
is evident. This report explores how Danish companies act in light of this new CSR compliance
framework. An international and systematic approach further enables translation of these companies’
CSR efforts into a global business context.
2.3
Beyond CSR Compliance
When expecting that all companies will align their processes for CSR compliance with international
standards in the next few years, it is useful and motivating to also portray companies that have proactive
or strategic CSR activities. Strategic CSR initiatives cover inter alia voluntary sustainability projects as
well as programs and activities that Danish companies carry out in order to respond to major risks or to
achieve business advantages. The report pinpoints a few of the strategic focus areas of participating
companies. By showcasing key learning points from current experiences in this dimension of CSR6, the
report seeks to inspire more Danish companies to work strategically with CSR. As a comparison the
report highlights a few best practice strategic CSR initiatives from non-Danish companies. These
examples were chosen from sectors or topics similar to the Danish companies or their initiatives to bring
further inspiration. Table 2 illustrates the analytical framework of this report.
2
3
4
5
6
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:EN:PDF, p. 6
http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf
http://www.oecd.org/daf/internationalinvestment/guidelinesformultinationalenterprises/48004323.pdf, p. 23, art. 14.
http://www.businessconduct.dk/due-dilligence
What Porter and Kramer refer to as ‘creating shared value’; confer also the new CSR definition by the EU
9
Table 2. Analytical CSR Framework
The
The social bottom-line
environmental
bottom-line
(UNGC 1-6)
bottom-line
(UNGC 10)
(UNGC 7-9)
Policy
The economical
Section 3.1.1
Section 3.2.1
Section 3.3.1
Section 3.1.2
Section 3.2.2
Section 3.3.2
Section 3.1.3
Section 3.2.3
Section 3.3.3
Due diligence
- Identification
Compliance
- Prevention
- Mitigation
- Accounting for
Access to remedy
Strategic CSR e.g.:
Multi-stakeholder initiatives
Section
4.1.2
&
Section 4.3.3
4.1.3
Partnerships
Section 4.1.1, 4.1.3
Section
& 4.1.4
4.2.3
Beyond Compliance
CSR-based Innovation
Section
4.2.1,
4.2.1,
4.2.2, 4.2.3
Base of the pyramid
Section 4.1.4
Organisational Learning
Section 4.1.1, 4.1.2
Section
& 4.1.4
4.3.2
Lobbying
4.3.1,
Section 4.3.1
The table synthesizes what the report covers and indicates how CSR can be implemented. As indicated,
the report describes CSR from a compliance and beyond compliance angle across the three bottom-lines.
Furthermore it showcases a sample of best practices on different types of strategic CSR. References on
where to find specific content is indicated in the table. The empirical data of this report has been collected
through desk research, questionnaires and interviews.
10
3
Reflections and experiences in relation to CSR Compliance
The CSR governance expectations set forth by the UNGPs are used to contextualise the Danish
frontrunners’ approaches to CSR compliance. In effect, this means that their commitment, their due
diligence processes and how they deal with victims of possible or actual adverse impacts on all bottomlines are presented below. However, this understanding of CSR compliance is still new. CSR and how
companies understand the concept is evolving. Therefore, to most companies, CSR compliance is not yet
a concept that is set in stone. One could also rightly ask whether the term ‘compliance’ should be used to
describe compliance with legal requirements only, or whether the term also covers alignment with
international expectations.
Obviously companies must, as a minimum, comply with national law. Legal compliance thus forms the
basis of CSR. A company that does not live up to national law cannot be considered socially responsible.
But for many of the frontrunners, meeting expectations, for instance by implementing the UNGPs, which
in most places are not yet incorporated into binding legislation is equally important. Susanne Stormer,
Novo Nordisk explains:
”Compliance is a broad concept, from legal compliance at the base to compliance-plus. For example the
UNGPs are not a legally binding set of rules. Still, I think of them as a set of minimum standards and they
have to be understood as part of the compliance work.”
Thus, to many of the frontrunners, CSR compliance is not just about meeting legal requirements; it is
also about being one step ahead of public regulation by complying with soft law instruments and even
frontier expectations and issues that might become business demands over time. Figure 1 below
illustrates the idea of an issue’s life cycle, i.e. how an issue often travels from being an issue of public
debate to ending up as a hard law requirement.
Figure 1. An issue’s life cycle, McKinsey & Co 2006
11
The frontrunners argue that if you want to maintain a frontrunner position, you need to be able to
navigate in the ever-changing landscape of CSR expectations. A skilled CSR department can help spot
trends and tendencies and determine which expectations have come to stay. Annette Stube, Maersk
explains:
“The legal department appreciates the CSR department’s role in picking up frontier expectations, as our
company needs people that can pick up on those things. But it is very important that the lawyers also
understand this part of CSR.”
CSR compliance is often perceived as the ‘boring’ or ‘cumbersome’ part of CSR, because it is about
complying with demands and expectations, rather than forming voluntary initiatives. In contrast to this
view, the frontrunners highlight how this perception of compliance might be counterproductive. Susanne
Stormer from Novo Nordisk emphasises the dynamics between good compliance work and strategic CSR
initiatives:
“When you do your compliance work properly, you identify areas that would be relevant to approach
proactively. In effect you are turning a risk into an opportunity. Working diligently with compliance gives
you a good opportunity for understanding where the company has significant untapped potential.”
The strict dichotomy between compliance and beyond compliance activities is questioned by Maersk.
Annette Stube highlights the synergies that often exist between the two dimensions and stresses that
they should be utilised wherever possible:
“Instead of compliance and beyond compliance we talk about risk mitigation and opportunities. With that
we deliberately try to blur the distinction between compliance and beyond. The interesting initiatives
often arise when we are able to bridge the divide and make it more value adding to work with risks.”
Such perspectives add to the relevance of sharing more information and good practices on the
compliance side of CSR. Companies can learn from and be inspired by more than just the voluntary
proactive initiatives of other companies; they can just as easily and readily benefit from experiences in
relation to risk identification, prevention, mitigation, etc.
3.1
Social Compliance
While the UNGPs are relatively new to CSR (June 2011), they have already made an impressive mark on
the CSR field. In particular the UNGPs have made strong progress in regards to the social part of the
compliance agenda, i.e. the field of business and human rights. As mentioned, the importance of the
UNGPs is well reflected in their broad international recognition; e.g. by the UN, the EU commission, the
OECD and ASEAN.7
The UNGPs have also influenced the Danish business environment and all interviewed companies were
familiar with them. However familiarity does not mean that the companies have implemented the UNGPs
in their entirety or that they have even begun implementing the principles. Filip Engel from DONG Energy
highlights that this area is new to many:
7
Working Group Report to the UN General Assembly, 2012, p.10 ff http://www.businesshumanrights.org/media/documents/un-working-group/un-working-group-business-human-rights-report-to-genassembly-10-aug-2012.pdf
12
“Some parts of social compliance are unchartered territory for most companies; especially in relation to
supply chain management.”
While many of the companies have robust and comprehensive environmental management systems, the
same is not always true for social sustainability or human rights. Susanne Stormer indicates how this
picture is about to change:
”Just as you expect companies to manage their environmental impacts, we must also expect companies
to do the same in relation to human rights. This would result in a level playing field.”
Most of the frontrunners have several existing processes in place that can be aligned with the UNGPs
without too many efforts. Joseph Nazareth, ISS exemplifies:
“The UNGPs help a lot in developing the foundation. We have all the policies and systems in place, and
that is the first step. We are now on the next step of ensuring that we are implementing the processes
throughout our operations and that they are fully aligned with the UNGPs. This is a continuous journey.”
Nearly all of the companies further share the challenge of having to adjust the scope of their current
processes to include all human rights. Morten Nielsen, Carlsberg, states:
”We do have all the processes, but our scope is different.”
When looking at most companies’ Codes of Conduct there is, for instance, a clear trend to focus on
selected human rights, most often 4-8 core labour rights.
The companies appreciate that human rights compliance may add value. Therefore some companies
might feel that implementation of the principles brings value in itself. Several of the companies
emphasise that ‘respect for human rights’ is integral to their company’s performance. ISS, with 535,000
employees worldwide and 10,000 employees in Denmark, understands and appreciates the importance of
ensuring respect for human rights. The company just won a contract for a major pharmaceutical
company and is in no doubt that its strong CSR profile played a decisive role. Joseph Nazareth, ISS:
“Ensuring human rights is part of our value proposition – we offer credible and effective risk
management. Our value proposition is to take on the risk from our customers such as the risks related to
human and labour rights.”
Filip Engel from DONG Energy further reflects on the added value of the UNGPs:
”We have considered human and labour rights part of our responsibility since the creation of DONG
Energy in 2006; it is also part of the UN Global Compact. So it has always been part of our mindset, but
it will definitely be more institutionalised with the UNGPs. It is a strength that the UNGPs offer a
framework and an authoritative reference point that we can use in our dialogue with external
stakeholders.”
In 2012 Maersk used compliance with the UNGPs as a way to enter the Myanmar market. Annette Stube,
Maersk explains:
“We initiated a project with Danish and UK human rights institutes, governments and other international
companies to use human rights as a "market opener". If companies, including our own, proactively,
openly and sincerely incorporated the UNGPs, when operating in Myanmar, the company would be well
13
protected to work in the country, which had so far been very high risk for reputation reasons. We’ve
further stressed the importance of engaging in multistakeholder dialogues to understand the risks and
impacts.”
Maersks recent involvement in Myanmar is a very
interesting example of how the CSR dimension,
which is often claimed to bring little value to the
companies, namely compliance, can have quite the
opposite effect. Annette Stube, Maersk elaborates:
”We are curious to see if human rights can be a
market opener – and that is a big value to a
Human rights open a door for Maersk in
Myanmar
Following speedy reforms, Myanmar, home to
about 60 million people, was opened to business
in 2012. Many companies see new business
opportunities, but are equally wary of risks.
In 2012 the Danish Institute for Human Rights
company. Until now it has been too risky, but so far
and the Institute for Human Rights and Business
this actually seems to be working although it is still
began to lay the foundations for a resource
early days.”
centre on responsible business in Myanmar. As
Through this project Maersk hopes to be able to
part
fulfil several ambitions: Build their own business
Maersk participated in a fact finding mission to
mainly for the subsidiaries Damco and Maersk Line
while
mitigating
Maersk’s
risks,
and
assisting
of
Myanmar
this
in
initiative
March
representatives
2012.
from
Subsequently
a
resource centre was established in Yangon.
customers in doing the same. As such, Maersk is aiming to be a preferred long-term partner in Myanmar.
With this partnership, Maersk hopes to support the opening of one of the world’s last untouched markets
and help Myanmar gain entry to global trade through improved infrastructure. A foundation of social
compliance brings new business opportunities for Maersk in Myanmar.
The US government has made reporting on US investments in Myanmar mandatory. The report has to be
forwarded in two versions – one for the government and one for public use, which the State Department
will make publicly available. The information that companies have to report on includes information
regarding policies and procedures with respect to human rights and workers’ rights, among other areas.8
In addition, the EU encourages European companies to explore business opportunities in Myanmar and
expects companies operating in Myanmar to do so with:
“the highest standards of integrity and corporate social responsibility.” 9
The EU explicitly refers to the OECD Guidelines for Multinational Enterprises, the UNGPs, and the EU's
own CSR strategy, as this standard of CSR.
3.1.1
Policy commitment - Social
Most of the five Danish frontrunners commit to respecting human rights in differing ways. For some it is
via their participation in the UN Global Compact, whilst others make direct reference to Human Rights in
their Code of Conduct, their CSR policy or in a specific human rights policy. As an example of such a
policy, Novo Nordisk’s commitment to human rights is presented below.
8
Administration Eases Financial and Investment Sanctions on Burma, Office of the Spokesperson, Washington DC, July
11 2012: http://www.state.gov/r/pa/prs/ps/2012/07/194868.htm
9
Council conclusions on Burma/Myanmar, 3159th FOREIGN AFFAIRS Council meeting, Luxembourg, 23 April 2012,
section 7: http://eeas.europa.eu/myanmar/docs/council_conclusions_april_2012_en.pdf
14
Morten Nielsen from Carlsberg is
Novo Nordisk’s commitment to human rights:10
well aware that there are certain
requirements
to
acommitment
According
to
commitment
rights
to
needs
human
the
to
to
At Novo Nordisk we are committed to respecting and supporting
make
globally recognised human rights throughout our operations and
rights.
UNGPs
business relationships. Governments carry the primary
a
respect
human
include
several
responsibility for protecting human rights, but companies have an
independent responsibility to respect human rights. Our human
rights management approach builds on the UN Guiding Principles
elements and these are yet to be
fully
implemented
companies.
Morten
by
many
Nielsen,
“Our Labour and Human Rights
policy, which was implemented in
2010, is in line with the United
Universal


Carlsberg explains:
Nations
on Business and Human Rights and our objectives are to:
Declaration
of
Human Rights and the International




Identify, prevent and mitigate human rights risks throughout
our operations and business relationships
Remediate any adverse human rights impacts that our
business causes or contributes to
Account for how we address our impacts on human rights
Promote the respect and protection of human rights with those
we do business with
Positively influence business respect for human rights through
our example and presence
Contribute to promoting the implementation and dissemination
of international standards on human rights for business
Labour Organisation's Declaration
on Fundamental Principles and Rights at Work. However, we are aware of the broader interpretation of
Human Rights as set forth in the UNGPs and this will be reflected in our policies and procedures as part of
their continuous development.”
The UNGPs set forth five explicit and one implicit expectation to companies’ policy commitments. For
instance, companies have to state that they respect all human rights and that they expect the same from
entities that they do business with. In doing so, they should also empower employees and relevant
stakeholders with clear guidance on the desired way of doing business with respect for human rights. 10
In addition companies need to embed, or integrate, the policy commitment in relevant internal systems
so that there is an adoption of such principles in practice and a change in an organisation’s culture for all
employees. Top management also needs to approve of the policy commitment. Ensuring compliance with
all of the UNGPs’ expectations of a company’s policy commitment has not been ensured by all five
companies, although some elements were implemented by all of them.
3.1.2
Due Diligence - Social
A policy commitment is only the start of a company’s social compliance work. The commitment then has
to be reflected throughout a company via an ongoing due diligence process. The due diligence process
has four elements: identification, acting (preventing and mitigating), tracking and communicating, see
figure 2 below.
The human rights due diligence process is similar to other existing management processes, e.g. safety
management systems (SMS) or environmental management systems (EMS). In effect most companies
already have similar processes in place, but might still need to adjust the scope of such processes to
include human rights.
10
http://www.novonordisk.com/sustainability/sustainability-approach/human_rights.asp
15
Figure 2. The Due Diligence Process
To start the due diligence process, companies
are expected to assess all parts of their
business identifying any potential or actual
Identify
negative
human
rights
impacts.
In
this
regard Maersk has carried out a gap analysis
across 11
units. Annette
Stube, Maersk
elaborates:
Act – Prevent
and mitigate
Communicate
“It started out as an exercise of duty. But it
resulted in some good discussions in the
business units. Now people understand the
agenda. In addition we identified issues that
we were aware of, but had not considered in
Track
a human rights context. You discover new
aspects
by
approaching
your
business
through a human rights lens. As an example,
90,000 external truck operators work at our terminals in the ports every day. If something happens it is
our responsibility, and accidents do happen in dealing with heavy materials. Today, this issue is becoming
more prominent, as it is understood as a human rights issue.”
The remaining companies are yet to carry out human rights impact assessments in full alignment with
the UNGPs. Most carry out risk assessments that include selected human rights. Susanne Stormer from
Novo Nordisk explains:
“We have had an external gap analysis, and while the conclusion was that human rights impacts appear
to be well-managed, the report recommended that we conduct a more comprehensive risk assessment in
relation to all human rights. This is still to be done. It is huge task that we have to break into smaller
pieces. We have started to address potential risks. As an example we are reviewing internal labour
conditions across the global organisation to ensure that our practices are consistent with standards we
require of our suppliers.”
ISS has included human rights in their internal audits and established targets to carry out audits in at
least 20% of the countries they operate in. Historically internal audits were focused only on financial
indicators; however a growing trend has emerged towards corporate governance audits that focus on
compliance with certain human rights. Carlsberg has such a process in place. At Carlsberg, the Group
Internal Audit function identifies risks across the company on an annual basis and includes CSR risks. At
Carlsberg each policy owner is responsible for addressing potential risks, including adverse social
impacts. In contrast to Carlsberg, DONG Energy finds it necessary to prioritise where to start the
identification process. Filip Engel, DONG Energy explains:
“Right now we prioritise working with our supply chain over assessing our own operations. That decision
was based on a risk assessment. DONG Energy operates in North Western Europe where human rights
standards are high. In contrast some of our suppliers are based in countries where negative impacts on
human rights occur more frequently. So we decided to start with our supply chain where the risks are
16
biggest. But we also need to look at our own operations to determine if and where we have human rights
challenges.”
As a part of ISS’ overall CSR work and participation in the UN Global Compact, they have assessed the
regions where they do business and the possible challenges each area might raise from a CSR
perspective. As a result, ISS is aware of the special conditions connected with doing business on the West
Bank.
In recent years, ISS has been contacted by Danish
ISS responds to criticism:
research media DanWatch concerning the company’s
In 2011, when ISS was first approached by
activities in Israel; particularly in the Golan Heights
Danish research media DanWatch who was
and on the West Bank. Critics have argued that ISS’
critical of the company’s activities in the West
activities are problematic and risk infringing on
Bank and the Golan Heights, they tried to
human rights. In 2012, Danish mainstream business
organise
media picked up on the story, which led to a high
DanWatch was not available, but in 2012
profile interview with ISS’ CEO on the subject. ISS
DanWatch interviewed ISS twice and were in
strongly disagrees with the criticism, which they
have clearly stated. Joseph Nazarath from ISS
explains:
contact
a
meeting
via
phone
with
and
them.
email.
Initially
ISS
is
committed to continuing the dialogue with
other relevant organisations, but has not
been in contact with DanWatch since.
“We are doing everything possible to ensure that
human rights are not negatively impacted. In addition, we firmly believe that our activities on the West
bank are positively contributing to ensuring a number of human rights, e.g. the right to work, the right to
a healthy work environment, and acceptable minimum wages. In other words, it is ISS’ opinion that we
contribute to ensuring human rights and the dignity of the local Palestinian population.”
Engaging in constructive dialogue with NGOs can be a valuable element in a company’s due diligence
process. NGOs can be a good source of information for identifying adverse impacts.
As the first step in the due diligence process, identification is naturally the focus of most of the companies
at this early stage of implementation. However, it is worth noting that our frontrunner companies have
relevant experience preventing and mitigating negative impacts on selected human rights; especially in
responsible supply chain management programs and in dealing with the right to safe and healthy working
conditions. Filip Engel, DONG Energy outlines DONG Energy’s approach:
“When a risk is identified in our supply chain, we seek to prevent and mitigate it by engaging in dialogue
with the supplier. A basis for such dialogue can be an audit undertaken by a third party. The audit is
followed by a dialogue with the supplier on the findings and a corrective action plan is developed in order
to mitigate identified negative social impacts.”
Susanne Stormer from Novo Nordisk finds that some prioritisation may be relevant in future prevention
and mitigation efforts:
“Not all adverse impacts are equally important, or equally urgent to address. We will rank our adverse
impacts from critical over significant to minor. We do the same in our responsible supply chain
management.”
17
The UNGPs allow for prioritisation where a company operates in a context or under circumstances where
prioritisation is necessary.11 However, for most companies it should be possible to address all identified
potential and actual adverse impacts.
DONG Energy, ISS and Maersk display a lot of experience with tracking performance, as part of the due
diligence process. Due to sector risks all three companies have been tracking performance on one human
rights issue, the right to safe and healthy working conditions, for years. Annette Stube, Maersk explains:
“All safety incidents are systematically tracked and monitored. We annually report publicly on safety
incidents, including fatalities. We do not systematically track all social impacts, but do publicly report, if
significant gaps have been identified and how we have approached mitigation.”
Joseph Nazareth from ISS similarly explains:
“People are our business. If we use the hearts and minds analogy, ensuring the health and safety of our
employees is fundamental to how we work and the way we run our business. We have therefore
implemented a systematic approach of risk management in this area and also a systematic approach to
reporting and monitoring across the ISS group.”
In addition, Carlsberg highlights how they track CSR performance on a broad scale. Morten Nielsen
explains:
“Annually we measure our CSR performance through our CSR reporting system (total amount of users:
650), where we measure on more than 600 indicators in total, spanning all our CSR areas, environment,
business ethics, labour and human rights, consumer issues, community engagement, responsible
drinking and marketing communication.”
None of the companies systematically identify adverse impacts on all human rights and thus do not track
performance on the prevention and mitigation of adverse impacts.
Due to the Danish Annual Accounts Act, all interviewed companies report on CSR. In addition, all of the
companies are UNGC participants and publish annual communications on progress. From 2013 and
onwards the amendment to the Danish Annual Accounts Act requires reporting on human rights impacts.
Susanne Stormer from Novo Nordisk explains how reporting on human rights impacts is a challenge:
”Reporting meaningfully on human rights is not easy – there is a lack of good reporting guidelines. The
UNGPs require of companies that we report on respect for human rights, but we need to figure out how;
for instance, how to identify meaningful performance indicators.”
In other words, good practices for reporting on human rights impacts will evolve over the coming years.
3.1.3
Remediation - Social
According to the UNGPs, companies are expected to have an effective grievance mechanism in place, and
provide for, or cooperate in, the remediation of any negative impacts on human rights once they have
been identified. The issue of remediation, or making right what went wrong for victims of negative human
rights impacts, is the one compliance issue where most of the companies acknowledge that they are not
yet compliant. Thus three of the five companies openly state that they do not yet provide access to
11
UNGPs principle 24
18
remedy as per the UNGPs. Providing access to remedy
for victims of a company’s negative human rights
impact is therefore new ground to most companies,
including the Danish frontrunners.
Morten Nielsen, Carlsberg:
”It
is
quite
interesting
actually.
The
environment has no voice to advocate for
itself, but nevertheless it is the area that we
However, when it comes to establishing a grievance
have primarily focused on so far. It is due to
mechanism, Novo Nordisk has taken advantage of the
the fact that the business case is so evident.”
fact that they already had a whistleblower mechanism
in place connected mainly to business ethics or anti-corruption. Susanne Stormer, Novo Nordisk explains:
“Our compliance hotline12 is run by our business ethics department, but complaints can be about
anything relating to the Novo Nordisk Way, which includes human rights. The hotline is flagged on our
webpage, but we need to make it more visible. A challenge relating to human rights is how to articulate
the subject in a way that is relevant for the people we want to target.”
The company has not had any complaints related to human rights yet. Hopefully this is simply because
there are no serious infringements, but some alternative explanations should also be considered. Lack of
complaints could be attributable to the fact that the hotline is not widely known or that understanding
human rights in a business setting is still new to many. Thus companies and even frontrunners with quite
advanced due diligence systems have a considerable task in making the link visible and evident for
relevant stakeholders. Annette Stube from Maersk is well aware of this challenge:
”There is a translational task to be done in relation to human rights, which is much more demanding than
with other issues. There is a basic conception that human rights are issues for states. So we put quite an
effort into translating it to ‘safety’, ‘labour standards’, and so on.”
The issue of remediation is further complicated by the fact that the concept of adverse or negative
impacts is new to companies – at least in a remedy context. Maersk explains how the relevance of
remediation depends on the impact. Annette Stube, Maersk elaborates:
“I believe there can be many definitions of "social impacts" and therefore many interpretations of when
remedy is required. Examples of remedies we provided earlier on include the offering of jobs and
compensation to workers illegally employed by a hiring agency on a rig in Australia; compensation in
case of accidents etc.”
3.2
Environmental Compliance
Environmental compliance is a much more established part of the compliance dimension of CSR than
social compliance. Not only is the area subject to more public regulation, companies have also been
quicker in establishing management systems with the aim of
controlling their environmental
performance.
This is mainly due to the somewhat obvious business case connected to environmental risk management.
The potential for cost reduction and the added value connected to environmental management are
perspectives the frontrunners all agree on. Filip Engel from DONG Energy exemplifies how the status of
environmental sustainability is different from other CSR topics:
12
http://novonordisk.com/about_us/contact_us/contact_audit_committee.asp
19
”In DONG Energy environmental sustainability is not really understood as CSR, but more as core
business.”
Similarly Susanne Stormer from Novo Nordisk highlights that:
”Using sustainability as a competitive edge contains a very powerful rationale; especially concerning the
environment. It is good business to think about energy-savings.”
The obvious business case has helped cement the environmental area in company policies and processes
to an extent that is difficult to find replicated in social and economic compliance approaches. The special
nature of environmental compliance has led to a very high degree of institutionalisation for example in
the form of ISO 14001 certifications.
Further guidance on the area is found in the
UNGC’s
3
principles
on
environmental
responsibility (see box to the right).13
UN Global Compact principles 3-6:13
Principle Seven: Business should support a
precautionary approach to environmental
Key documents such as the Rio Declaration,
challenges;
Agenda 21 and the Brundtland report underpin
Principle Eight: Business should undertake
these
initiatives to promote greater environmental
principles
and
have
helped
form
the
environmental CSR compliance agenda over the
past decades.
responsibility; and
Principle Nine: Business should encourage the
To demonstrate compliance with these principles,
development and diffusion of environmentally
many
friendly technologies.
companies
including
the
Danish
frontrunners have established processes similar
to the ones outlined by the UNGPs.
Examples of how the Danish frontrunners have integrated respect for the environment in their practices
are presented below.
3.2.1
Policy Commitment - Environment
The companies generally commit to environmental sustainability through formal and written policies.
Morten Nielsen, Carlsberg exemplifies:
“Our Carlsberg Group Environmental Policy sets the environmental standards to which all our production
facilities should adhere. It thereby aims to reduce the negative environmental impact of our operations
and increase the efficiency with which we use natural resources. The focus areas of our environmental
policy include waste, waste water, water, packaging, energy and emissions, systems and documentations
and stakeholders. We have further strengthened our commitments to environmentally responsible
operations through our 3 year targets for energy, water and CO2 emissions.”
Environmental policy commitments are mandatory requirements for companies in certain sectors, which
is a good example of the institutionalisation of environmental CSR compliance.
13
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.html
20
3.2.2
Due Diligence – Environment
Among most, if not all, of the frontrunners, environmental due diligence is completely integrated in
company processes via management systems such as ISO 14001. Carlsberg exemplifies how
environmental due diligence is comprehensively integrated in the company and many processes run
automatically with fixed intervals. In order to keep their ISO 14001 certification the company identifies its
impacts, acts on the results, and tracks and communicates its actions. Morten Nielsen from Carlsberg
explains:
“According to our ISO 14001 certifcation it is mandatory to review the enviromental aspects, which are
relevant for the brewery sites, regulary. Periodically, we also do thematic assessments for high risk
aspects such as water scarcity. An extensive survey was done in 2011 to understand our exposure to
water risk. Each year, we collect global information about the environmental impacts of our operations.
These findings are included in our annual CSR report.”
Furthermore several of the due diligence elements are required by law, as Filip Engel from DONG Energy
exemplifies:
”Environmental impact assessments are part of every major construction project we initiate – it is
integrated in the business and required by law. We have to be able to prove that we do not have
negative impacts. We consistently screen for environmental risks in relation to all our operations. This is
the case when it comes to our individual operations, such as power plants or wind farms, where we
conduct environmental impact assesments. But it is also the case on an aggregated level where we asses
the company's overall impact in relation to a number of environmental variables such as emissions of
carbon, sulphur dioxide, impact on biodiversity and waste production. At DONG Energy our responses to
environmental challenges go beyond trying to limit potential negative impacts from our activities. The
production of clean energy is at the core of DONG Energy's business strategy.”
In other words, environmental due diligence activities are just the foundation for DONG Energy’s CSR
activities within the environmental bottom-line. Joseph Nazareth from ISS explains how environmental
due diligence is also central to their services:
“We work to limit the impact from the activities, which we can influence – at our own sites and the
process and equipment at our customers’ sites.
We are well positioned to deliver environmentally
friendly facilities services, such as Green Cleaning. We have documented processes, supplier relationships
and a structured management approach to help our customers reduce their risks in this area.”
3.2.3
Remediation - Environment
When companies have adverse impacts on the environment it is the environment itself that is the
‘victim’. However, negative environmental impacts might spill over into negative human rights impacts.
An example is Coca Cola’s water use in Kerala, India, which led to accusations of the company having
caused water shortage and drought ultimately impacting people’s right to adequate food and water and
their right to health14. In other words, there is often a connection between negative environmental
impacts and negative human rights impacts. However, sometimes it is difficult to determine actual
victims of environmental impacts.
14
http://www.righttowater.info/ways-to-influence/legal-approaches/case-against-coca-cola-kerala-state-india/
21
Environmental remediation is therefore less about ensuring that victims get access to remedy and more
about cooperating with relevant authorities if and when damage has been done. Morten Nielsen explains
how this responsibility is met in Carlsberg:
“Violations or negative environmental impacts are recorded and reported to the authorities where
applicable. An example is our approach to our waste water effluent. Depending on the region, specific
agreements are made between our local production site and the local authorities regarding quantity and
quality of waste water. In cases of non-compliance, these are reported to the local authorities and
agreements are made to solve the issues.”
Filip Engel from DONG Energy also explains:
“In general, dialogue with the authorities on our various initiatives to minimize environmental impacts is
strong, comprehensive, and on-going as it should be. And if, for instance, an accident was to occur in our
operations that would lead to serious adverse environmental impacts, we would of course always report it
and find solutions in collaboration with relevant authorities.”
In cases of negative environmental impacts, possible victims are often compensated indirectly via
agreements made with relevant public authorities.
3.3
Economic Compliance
The field of economic compliance is, in close competition with social sustainability, perhaps the bottomline, which has experienced the most significant increase in attention over the last couple of years;
typically under the umbrella term ‘business ethics’. Annette Stube, Maersk explains:
“The pace of change from frontier expectations to hard law is faster than ever before. That makes it extra
relevant for us to be able to identify frontier expectations. Anti-corruption is an example where the
journey has been very quick.”
Since 2004 companies’ responsibility connected to economic sustainability has been internationally
defined by principle ten of the UNGC, which reads:
“Businesses should work against corruption in all its forms, including extortion and bribery.”15
The UN Convention against Corruption, which was adopted in December 2003 and entered into force in
December 2005, is the underlying instrument of this UNGC principle.16 However one of the big motors
behind the mentioned growth of this area has been the adoption of the UK Bribery Act in July 2011.
This Act holds any company with activities in the UK legally accountable for acts of bribery.17
Understandably, the act has therefore spurred a range of activities connected to anti-corruption. Filip
Engel, DONG Energy says:
“We have always taken anti-corruption very seriously but after the UK Bribery Act we decided to conduct
a thorough revision of our processes.”
15
16
17
http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html
http://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=XVIII-14&chapter=18&lang=en
http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf
22
According to the UNGC, economic compliance is only understood as an anti-corruption matter. A number
of the participating companies highlight how the UNGC does not capture all relevant areas related to
economic sustainability. Susanne Stormer from Novo Nordisk elaborates:
”The UNGC only has weak links to what is usually considered core business, namely financials. The
economic dimension is much more than anti-corruption. Tax is for example not part of the UNGC, so if
you want to be a pioneer in CSR you have to think beyond the Global Compact.”
Annette Stube from Maersk explains how it is increasingly interesting to understand economic
responsibility as more than anti-corruption:
“We are working more and more systematically to understand our broader economic impacts throughout
our industries, not confined to corruption, but as a key actor in the industries we are operating in.
Economic sustainability is more than anti-corruption, and there is much potential in this agenda.
International trading companies ought to focus more on this aspect. We need to improve our
understanding of the economic contributions that we make to society, in order to mitigate the negative
impacts and accelerate the positive impacts. The economic bottom-line is misunderstood in Denmark as
simply ‘financial’ or even ‘anti-corruption’, and we need to challenge that to fully unfold CSR and its
potential.”
There is a high probability that currently unregulated topics within economic sustainability will become
compliance issues in the future, but at the moment anti-corruption is still the only topic that has moved
in to the sphere of regulation and law; see Mckinsey & Co. in figure 1 for an illustration of how topics
move to become regulation and law. In the future, new topics can potentially go through the same
transformation, but currently companies that establish CSR projects or initiatives related to other topics
under the economic sustainability heading – e.g. tax – must be considered as going ‘beyond compliance’
and can rightfully be acknowledged as CSR pioneers.
Due to the lack of internationally recognised agreements on other potential areas within the economic
bottom-line, the compliance framework of this report – similar to the UNGC – is limited to anticorruption.
3.3.1. Policy Commitment - Economy
All five companies have a policy on anti-corruption or a business ethics policy. Carlsberg’s business ethics
policy is available online and states that:
”In the Carlsberg Group, we believe in fair and transparent business practices. Our Business Ethics Policy
seeks to ensure ethical business conduct by guiding our employees when they face dilemmas of a
business ethics nature in their day-to-day tasks.”18
ISS’s Business Ethics philosophy is presented below. The company tries to be very clear in its approach
to anti-corruption, Joseph Nazareth explains:
18
http://www.carlsberggroup.com/csr/ourfocusareas/BusinessEthics/Documents/Business%20Ethics%20policy%20%202010.pdf
23
“We have a zero-tolerance commitment to anti-corruption and we take that very seriously. Business
integrity is non-negotiable in ISS. Business integrity is a central element of the terms on which we hire
and potentially give members of our staff disciplinary sanction. We recognise that the challenge to avoid
unethical business practices is greater in some areas of the world than others, but cultural factors or
weak legal frameworks are not valid excuses: the ISS Code of Conduct and the Anti-Corruption Policy
apply everywhere we do business.”19
Business Ethics in ISS:19

Conducting our business in a lawful
In 2012 Denmark once again came in at the top of the
Transparency
International’s
yearly
Corruption
20
manner
Perception Index . This year Denmark shares the first
Competing for business on fair terms
place
and solely on merits of our services
companies, in other words, have a number of best

Combating corruption and bribery
practices on anti-corruption to share with international

Carrying out our activities according to
peers. Finally, some companies have a more inclusive
principles of good corporate governance
commitment
Ensuring that the social, environmental
Stormer, Novo Nordisk explains:
and ethical commitments of ISS are
“In
reflected in dealings with customers,
company-wide policies for business ethics, finance, tax
suppliers and other stakeholders.
and purchasing.“


with
terms
Finland
to
of
and
New
economic
economic
Zealand.
sustainability.
responsibility,
Danish
Susanne
we
have
However, these steps were not common among the other companies and demonstrate Novo Nordisk’s
desire to be a frontrunner and their eye for upcoming issues on the CSR agenda.
3.3.2. Due Diligence - Economy
The next step for a company that wishes to steer clear of corruption is an efficient due diligence system.
Apart from the procedural requirements for such a system
– identification, prevention and mitigation, tracking and
communication – the practical implementation of due
diligence and the tools used, vary from company to
company, and from setting to setting. Filip Engel explains
how DONG Energy approaches the issue:
Annette Stube, Maersk:
“Make bribery a No-Go; Identify biggest
risks; Work with your commercial and
operational
people
for
practical
solutions; Monitor compliance.”
”In the second half of 2011 we made a comprehensive risk analysis with an external consultancy on anticorruption. As expected the analysis found very few risks, because the countries where we operate are
ranked very highly on the Transparency International anti-corruption list. But we are, for instance,
operating in Poland and there are some risks related to being there. In Poland it is normal that companies
make smaller donations to the local society, when you are there. We do not do that. The reason is that
we want to avoid accusations that we are buying our way in. We have implemented some specific
initiatives after the analysis. For example, 95 per cent of our employees have been trained in good
business conduct via e-learning. And we have clear guidelines on what types of gifts and hospitality that
can be accepted and under what circumstances.”
19
20
http://www.issworld.com/corporate_responsibility/approach_to_cr/pages/vision_and_approach.aspx
http://www.transparency.org/cpi2012/results
24
DONG Energy’s risk analysis is a good example of how an initial identification phase is followed up with
different actions to prevent and mitigate identified risks: e-learning and a special caution in areas with
certain risks.
Tracking and communicating on the implementation effort are also important aspects of maintaining a
solid system. Annette Stube explains how Maersk tracks and communicates on its performance:
“All facilitation payments and incidents of bribery are tracked. Furthermore, Business units are required
to answer a questionnaire which monitors progress in terms of implementation of policy or rules each
year. We report annually in our Sustainability Report on implementation progress and incidents.”
However, incorporating a well-functioning compliance system on anti-corruption in business operations is
not a clear and straightforward journey. As specified in the box below, the interviews uncovered a range
of challenges related to implementation of anti-corruption policies. Filip Engel explains one of DONG
Energy’s biggest challenges:
“The biggest challenge was to develop an implementation plan that developed the awareness of
employees so that they know that even to accept a sincere appreciation from a commercial partner such as a dinner above a certain price level - is not in line with good business conduct. We put a lot of
initiatives in place to reach the employees.”
3.3.3. Remediation - Economy
Companies need to have an established channel for victims or stakeholders wanting to complain about
breaches of a company policy or due diligence processes. As mentioned, several of the Danish
frontrunners have such ‘whistleblower mechanisms’ or
Identified implementation challenges:
hotlines.
- Cultural differences
whistleblower mechanisms are open to internal and
- Wide-spread demand for facilitation
payments
- Lack of awareness
Internationally
speaking,
best
practice
external stakeholders alike. Carlsberg describes their
whistleblower mechanism, aimed at employees only, on
their webpage. Morten Nielsen, Carlsberg explains:
”The Carlsberg Group Whistleblower System enables employees to report activities that may involve
criminal conduct or violations of our company policies and guidelines. It consists of a website and a
hotline phone number, which are managed by an independent third party to ensure the highest level of
security and confidentiality.”21
In June 2012 ISS launched a whistleblower system that is open to all their stakeholders and linked to the
ISS Code of Conduct.22 The whistleblower system is available on their corporate website.23
Companies furthermore have to cooperate with relevant authorities once negative impacts have been
identified and according to the Danish frontrunners this is currently the case. Morten Nielsen, Carlsberg
states:
“We cooperate with the authorities, when relevant.”
21
22
23
http://www.carlsberggroup.com/csr/ourfocusareas/BusinessEthics/Pages/BusinessEthicsPolicy.aspx
http://www.publications.issworld.com/ISS/External/issworld/Career/ISS_Code_of_Conduct/
https://iss.whistleblowernetwork.net/About/TermsAndConditions.aspx
25
But as the compliance dimension of CSR is constantly expanding, there is room for improvement in most
companies. Annette Stube, Maersk explains:
“We sometimes collaborate with local authorities when identifying negative impacts related to anticorruption, but this will be approached more systematically in 2013.”
3.4
Danish Frontrunners and CSR Compliance
CSR Compliance is regarded by many as the boring part of CSR, a cost that rarely brings added value.
However, valuable experiences are hidden in the Danish frontrunners’ CSR compliance activities,
especially when these companies bridge the divide between risks and opportunities; between compliance
and beyond. Furthermore, Danish companies are often far ahead of their international peers in many
aspects of CSR Compliance via legal compliance. For example, Danish companies often give employees
36 weeks of maternity leave, despite the fact that the international minimum is only 14 weeks.24
Maternity leave is an example of an ‘undiscovered’ CSR story, which Danish companies and Denmark in
general could benefit from, and market themselves, on in international markets. The same could be true
for anti-corruption.
There is, however, always room for improvement. The CSR compliance bar is constantly moving and
therefore even frontrunners have challenges, when it comes to implementation and documentation. This
is also the case with the UNGPs, which are still new and challenging to many. The UNGPs pave a way for
a level playing field that can create convergence in a very diverse area. Susanne Stormer, Novo Nordisk
highlights the need for such a trend:
“It would be really helpful if there could be consensus on one definition of CSR. For companies wanting to
embrace this mindset, there is a risk of just drowning in commitments.”
Usually it is difficult to compete on the compliance level as demands and expectations are the same for
all companies. However, right now there is a window of opportunity for competing on compliance,
because the UNGPs are rather new and the whole world is looking for best practice examples of
implementation. Danish companies, and Denmark as such, have the opportunity of turning an
expectation or a duty into an opportunity.
Susanne Stormer from Novo Nordisk emphasises that public regulation, or lack thereof, has a decisive
effect on company behaviour and incentives in this area:
“Implementation of the UNGPs is not an impossible task. What would be an incentive is a deadline
determining, when we are expected to have the processes in place. Without a clear timeline companies
are likely to keep postponing it. Internally we have not set a deadline. A signal would be helpful to create
a ‘burning platform’ and incentives to put efforts behind compliance with the UNGPs, but that may not
come.”
24
ILO Maternity Protection Convention (No. 183),
http://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0::NO::P12100_ILO_CODE:C183
26
4
Beyond CSR Compliance
All interviewed companies engage in CSR activities that can be described as proactive in relation to
sustainable development; i.e. beyond compliance with international expectations. This section presents
examples of ‘best-practice’ proactive CSR or strategic CSR among Danish companies. The five
participating companies represent major actors in different Danish business sectors. The diverse
representation of businesses seeks to enable an appreciation from all Danish businesses that strategic
CSR makes good business sense.
Whereas CSR compliance is defined by a set of standards that specify certain requirements that
companies should meet when claiming to be responsible, the second dimension of CSR, how business can
contribute to sustainable development, is more flexible and dynamic. Due to the less formalised nature of
the ‘beyond compliance’ dimension of CSR, it is difficult to clearly determine what constitutes good
examples of strategic CSR. A few criteria have been applied in the selection of examples presented.
Strategic CSR initiatives should be closely linked to the core business in question. Companies should be
able to achieve greater and more sustainable impacts where CSR initiatives tie into key products,
services or capacities or where the initiative provides for sustainable solutions to major business risks.
Joseph from ISS explains how beyond compliance is closely linked to core products and services:
“Our strategy is to move beyond compliance; it is to build CSR as a competitive advantage offering CSR
as a value proposition to our customers. CSR is key to our delivery model and is becoming a key
differentiator.”
Secondly, proactive initiatives should contribute to fulfilling one or more key internationally recognised
principles for social, environmental, or economic sustainable development. Thus, ‘beyond compliance’
efforts on the social bottom-line, should contribute to social sustainability, i.e. the enhanced protection or
fulfilment of one or more human rights.
Table 3 below presents the proactive part of the analytical framework for the report. It illustrates how
proactive CSR efforts can be captured within the same bottom-lines as CSR compliance. It may be
difficult to capture a project within a single bottom-line, as initiatives may have positive impacts on more
bottom lines; e.g. initiatives in relation to clean water have direct positive impacts on both internationally
agreed principles on environmental and social sustainability. In the column to the left a few examples of
methodologies applied by corporations in achieving their positive CSR impacts are outlined. The list is not
exhaustive but covers the examples represented in this report.
27
Table 3. The analytical framework for beyond compliance CSR activities
The social
The environmental
The economical
bottom-line
bottom-line
bottom-line
(UNGC 1-6)
(UNGC 7-9)
(UNGC 10)
Strategic CSR e.g.:
Multi-stakeholder initiatives
Section
4.1.2
&
Section 4.3.3
4.1.3
Partnerships
Section 4.1.1, 4.1.3
Section
& 4.1.4
4.2.3
Beyond compliance
CSR-based Innovation
Section
4.2.1,
4.2.1,
4.2.2, 4.2.3
Base of the pyramid
Section 4.1.4
Organisational Learning
Section 4.1.1, 4.1.2
Section
& 4.1.4
4.3.2
Lobbying
4.3.1,
Section 4.3.1
Most of the examples of best practice listed below are relatively novel, paying testimony to the fact that
CSR is a field in exponential growth. What was considered best practice only ten years ago has been
exceeded by new and improved CSR initiatives. As the boundaries for what can be considered best
practice continue to move, it becomes an increasingly more demanding endeavour to remain a CSR
pioneer. Susanne Stormer from Novo Nordisk remarks:
”CSR has become mainstream and that makes it even harder to maintain a pioneer position.”
However, the Danish companies have a wealth of innovative strategic CSR initiatives and approaches,
some of which are presented below. These cases are mixed with examples of international best practice.
Whenever international best practice is presented it is matched by a Danish company either by industry
or substance – i.e. the focus area for the CSR initiative in question.
4.1
Best Practice Strategic CSR Focusing on Social Sustainability
The best practices on social contributions are presented below. The CSR projects vary, ranging from
improving diversity, a single human right, i.e. the right to safe and healthy working conditions, to
addressing the full spectrum of human rights. In addition contributions vary in terms of their delivery
from multi-stakeholder initiatives on responsible supply chain management to CSR-based innovation, and
from specific efforts in China or France to global or regional efforts.
28
4.1.1
ISS: Diversity as a Competitive Advantage
ISS has continually had a global focus on minimising negative impacts in relation to freedom from
discrimination and the right to equal opportunities. Its efforts are enhanced by proactively contributing to
diversity. The company is able to display a comprehensive portfolio of diversity initiatives across nations
and has also won recognition and received
awards
for
their
efforts.
In
Australia
the
GAP Inc. – P.A.C.E.
company received an award from the Australian
In 2007, GAP Inc. launched the P.A.C.E. (Personal
Employment
Advancement & Career Enhancement) program to
Covenant
Chairman
and
in
Portugal, the EDC Group named the company
enable
‘best
developing countries to advance beyond entry-level
supplier’
in
the
Corporate
Social
female
garment
workers
in
economic
Responsibility category for the fifth time. Joseph
positions and fulfil their potential.
Nazareth, ISS explains:
P.A.C.E. was designed and developed in partnership
“Diversity is a key issue for us. We have more
than
160
nationalities
in
ISS
–
and
we
sometimes say that we speak more languages
than the foreign ministry. That is why we’ve
chosen to work proactively with diversity – it is
one of the focus areas in our CSR strategy.”
with Swasti Health Resources and the International
Center for Research on Women (ICRW). CARE
International is a key implementing partner and
GAP Inc.’s vendors also play a critical role. The
programme currently
operates
in
Bangladesh,
Cambodia, China, India, Sri Lanka, and Vietnam
and is globally evaluated by the ICRW.
In Australia ISS is making use of affirmative
Evaluation reports demonstrate that programme
action to enable employment of a previously
participants feel they gained greater confidence,
suppressed Australian minority. Specifically, ISS
built stronger communication skills, and learned the
Australia operates an Indigenous Employment
importance of goal setting and practical financial
Programme
practices. Additionally, factory managers report
within
the
Human
Resources
Division, which has an objective of providing
improved
training
advancement and lower rates of absenteeism from
and
employment
to
Aboriginal
and
efficiency,
increased
professional
Torres Strait Islanders who are significantly
P.A.C.E. graduates.25
disadvantaged in areas of health, employment
Contributing to the fulfilment of women’s rights
and housing. The programme has assisted in
makes
providing
approximately 70 % of employees and 70 % of
for
more
than
500
employment
opportunities to indigenous Australian’s since
good
business
sense
for
GAP
where
customers are women.
mid-2008. 25
In France, ISS has focused on improving job opportunities for people with disabilities. Actively favouring
people with disabilities has been supported by a series of initiatives:

Awareness raising among all employees

Management of a network of division correspondents

Direct and indirect recruitment systems for employees with disabilities

Induction support for employees
25
http://www.gapinc.com/content/gapinc/html/csr.html;
http://www.gapinc.com/content/gapinc/html/media/pressrelease/2012/med_pr_Gap_Inc_PACE_Program_to_Expand0
92412.html
29

Work station adaptation

Development of external partnerships and insertion of committees within each division.
This initiative has resulted in employment of 1,614 people with disabilities from 2001 to 2011.
The appreciation of diversity is engrained in ISS’ values and leadership principles, which applies to all
staff members. ISS Finland has signed the Finnish Diversity Charter as one of the first Finnish companies
and joined the Finnish Diversity Network. HR Director, ISS Finland Sirpa Huuskonen says:
“Diversity creates competitive advantage. Diversity and equality, their management and measurement, is
an integral part of the way we work. Our staff is our most important resource. It is our strength to be
able to employ persons of different ages, genders and nationalities, as well as a variety of people with
different educational backgrounds for short- and long-term, part-time or full-time employment according
to each employee's life situation. Our managers have an important role in managing diversity. They offer
their team members equal opportunities for career development and ensure that tasks are truly open to
everyone. Diversity is also reflected in managers' training programs.”
In the above box a strategic CSR initiative focussing on gender diversity, by the international clothing
company GAP Inc., is briefly described.
4.1.2
DONG Energy: Multi-Stakeholder Initiative on Responsible Supply Chain Management
In the coming years DONG Energy will continue to reduce its use of coal in preference of biomass. This
will lower the groups' ability to influence
supplier practices in relation to the coal fired
power plants that will still remain in the
As an active participant in various CSR initiatives, such
group's portfolio.
Even today DONG Energy is a small importer
of coal and therefore a small customer for
the coal producers. But the company still
considers the coal supply chain a complex
and
high-risk
area.
Given
its
limited
leverage, DONG Energy has come to realise
that
Cerrejón and human rights
sustainability
concerns
in
the
coal
industry are best addressed in collaboration
with others. Therefore, the company works
as a founding member of ‘Bettercoal’.26 27
as the Global Business Initiative on Human Rights and
the UN Global Compact, Cerrejón has focused heavily on
responsible mineral extraction as part of its strategic
CSR efforts.
Cerrejón appreciates the role that local communities
play in the effectiveness of its operations. Consequently
the company has focused on creating clear mechanisms
in which to engage with local communities and unions,
so as to enable effective remediation if and when things
go wrong.
This includes implementing human rights due diligence
Bettercoal is a global, not-for-profit initiative
and a five-year community engagement plan. Following
established in 2010 by a group of major
recommendations from the UN Guiding Principles on
energy companies. The Bettercoal vision is a
Business and Human Rights, Cerrejón also opened a
coal
grievance office and established an operational-level
supply
chain
that
protects
the
environment, respects the rights of people
grievance mechanism.27
and contributes positively to the livelihoods
26
27
http://bettercoal.org
http://www.unglobalcompact.org/Issues/conflict_prevention/Colombia_webinar_2012.html
30
of workers and communities.
DONG Energy has two central aims with its involvement: the development of a robust framework for
managing the sustainability challenges in the coal supply chain and an increase in leverage when
engaging with coal suppliers. Filip Engel, DONG Energy explains:
“We have initiated the set up of a multi-stakeholder initiative that is to create progress on social
standards in the coal supply chain.”
Bettercoal is working with a variety of global stakeholders on the development of the Bettercoal Code,
which will set out the principles and provisions that members expect coal mining companies and other
stakeholders to align their activities with. These will include the UNGPs. When implemented during the
course of 2013, this globally recognised code of practice will form the basis for self-assessments by mine
operators, independent third party site assessments in the mines themselves, and continuous
improvement plans. In the above box you can read how one of DONG Energy’s large suppliers works with
human rights.
4.1.3
Carlsberg: Initiative on Responsible Drinking
In October 2012, Carlsberg joined 12 other producers in a set of unprecedented commitments to reduce
the harmful use of alcohol together with global producers of wine and spirits. Morten Nielsen, Carlsberg
elaborates:
Carlsberg is committed to:
- Reduce underage drinking
”We have entered into a partnership with twelve global
- Strengthen and expand marketing
companies on five areas of action related to harmful alcohol
consumption that we will implement over the next five years.
codes of practice
- Provide consumer information and
responsible product innovation
We will then monitor and track our performance. That is a stepchange to us, in relation to how much we are willing to do,
- Reduce drinking and driving
when you compare with our recent history of proactive social
- Enlist the support of retailers to
sustainability.” 28
reduce harmful drinking
The new commitments clearly signal that the 13 global
signatories fully support the aims of the WHO’s Global Strategy to Reduce Harmful Use of Alcohol and
stress
the
active
role
the
industry
is
envisioned to take in an attempt to achieve
this objective. Commenting on these global
commitments,
Jørgen
Buhl
Rasmussen,
President and CEO of Carlsberg Group said:
Coca Cola – Improving Water Efficiency
Coca-Cola set itself a goal to improve water efficiency by
20% by 2012. However, it achieved this goal in 2011 not
only within its own company, but in its independently
“We will be inviting other brewers from our
owned bottling companies as well.
markets to join us in implementing these
In order to achieve this goal, Coca-Cola partnered with
commitments and will be collaborating with
the WWF and developed a Water Efficiency Toolkit aimed
local
to
specifically at bottling plants. It also worked with the
combat harm and misuse while continuing
WWF to conserve seven of the world’s most important
to promote the responsible consumption of
freshwater river basins.28
28
and
international
stakeholders
http://worldwildlife.org/projects/wwf-coca-cola-s-work-to-conserve-fresh-water
31
beer as a unique, refreshing drink of moderation. It is our commitment to implement them over a
five‐year period commencing in 2013, recognising that some of them will already be in place in some
markets or already subject to local legislation, whilst others will take significant time to implement. From
2013, we will be reporting on how we are progressing with these commitments.”29
In the above box you can read how one of the biggest companies in Carlsberg’s industry, Coca Cola,
works proactively with one of its risks.
4.1.4
Novo Nordisk: Integrating CSR in Business Strategy for China
Since 1994, Novo Nordisk has followed a long-term business strategy in the Chinese market. Central
elements of its business strategy include the need to create strong relations with Chinese society and
cooperate with local actors. Specifically, Novo Nordisk has established research and production facilities
in China and cooperated with the World Diabetes Foundation, the local ministry of health, and local
patient associations to educate doctors and patients in the treatment of diabetes. Awareness campaigns
to prevent diabetes are another example of Novo Nordisk’s CSR activities in China.
Today, Novo Nordisk is the insulin market
leader in China measured by market share as
Novartis – Implementing Living Wage
well as reputation. The share has been growing
Starting
steadily with around thirty percent since 2002
international companies to implement a living wage
and in 2011 sales amounted to 5 billion Danish
in its associate businesses. The programme works
kroner.
The
company’s
investments
to
strengthen the local health care system have
created value for both society and business. For
example Novo Nordisk has documented that
education
increases
the
lifetime
sales
per
educated patient by 3400 DKK and saves
society a cost of 13,000 DKK per educated
patient.
in
2005
Novartis
was
one
of
first
continually to implement a living wage and in 2011,
17
associate
salary
levels
were
adjusted.
To
calculate a living wage, Novartis works with a nonprofit organisation, Business Social Responsibility
(BSR) and categorises living wages for either OECD
countries or economic developing countries.
For instance, in OECD countries these calculations
are based on the cost of a market basket of goods
and services for a male aged 25-50 living in the US.
At the same time Novo Nordisk’s activities have
This figure is then converted based on purchasing
inspired others, which means that the company
power parity, food consumption patterns, and the
can gather various actors around common
assumption that each family has more than one
solutions to diabetes, creating value for all
wage earner. A similar methodology is applied in
30
stakeholders.
economic developing countries.30
An example is a new partnership between the World Diabetes Foundation, Novo Nordisk and HE eye-care
clinics, a local eye-care clinic chain. The collaboration was established after the owner of HE eye-care
clinics became aware that Novo Nordisk in cooperation with the World Diabetes Foundation – among
others – had experience in educating doctors and patients on late diabetes complications. The owner of
the eye-care clinics was becoming more and more frustrated that an increasing number of patients in his
29
http://www.carlsberggroup.com/investor/news/Pages/PR19_ICAP_10102012.aspx
http://www.novartis.com/downloads/corporate-responsibility/responsible-business-practices/living-wage.pdf;
http://www.novartis.com/corporate-responsibility/responsible-business-practices/caring-for-our-people/livingwage.shtml
30
32
clinics were suffering from bad sight because of
Lessons learned:
Think long-term and build strong relations.
Novo Nordisk’s success in China is based on a
long-term business strategy, which, apart
from offering quality products, also focuses on
strengthening the health care system building
strong relations with local stakeholders. This
creates
value
for
Novo Nordisk,
diabetes.
At
the
same
time
he
was
lacking
competencies to educate doctors and patients on
prevention and treatment of these problems. In the
above box you can see how one of Novo Nordisk’s
industry peers, Novartis, works proactively with the
right to a fair remuneration.
Chinese
society and people with diabetes in China.
4.2
Best Practice Strategic CSR Focusing on Environmental Sustainability
The examples of best practice on proactive environmental sustainability presented below cover a variety
of different types of proactive CSR initiatives. The five companies seem to agree that environmental
sustainability is the area within CSR where the business case is the most obvious. Therefore all of the
companies are proactive on environmental sustainability. Presented below are three cases, focusing
mainly on partnerships and CSR-based innovation. All cases clearly show the obvious financial as well as
societal benefits of these efforts.
4.2.1
Maersk: Triple-E
Deliveries of Maersk’s twenty Triple-E class vessels are scheduled for 2013-2015. The name Triple-E
means Economy of scale, Energy efficiency, and Environmentally improved, and the vessels are built for
Asia-Europe trade.31
Currently, Maersk Line has the largest market share of
Hitachi’s Smart Cities
any container shipping line, moving 18 percent of the
A smart city is one that establishes a “well-
container cargo leaving Asia for Europe and 15 percent
balanced relationship between people and
of the container cargo travelling from Europe to Asia.
the Earth.”
The Triple-E vessels are expected to call five Chinese
According to the UN’s forecasts the world’s
ports (Shanghai, Ning-bo, Xiamen, Yantian and Hong
population will reach nine billion by 2050 of
Kong), and the entry of the vessels will make it possible
which an estimated 70 % will be living in
to replace less efficient ships which will then be cascaded
cities. Hitachi’s concept of a smart city
to other trades, where they will be superior to the
responds to this development and refers to
vessels currently deployed there. This cascading will
urban designs that maximize conservation
essentially mean that the Triple-E vessels will not only
of the environment by utilising renewable
benefit the Asia-Europe trade, they will increase energy
energy sources based on the introduction
efficiency of a larger part of Maersk Line’s network.32
of a next-generation power supply control
The vessel’s dramatically improved efficiency will also
technology called a smart grid.32
31
http://www.worldslargestship.com/shipping/
http://www.hitachi.com/rev/archive/2012/__icsFiles/afieldfile/2012/08/08/r2012_technology02.pdf;
http://www.hitachi.com/products/smartcity/vision/index.html;http://www.yomiuri.co.jp/dy/business/T120115001472.
htm
32
33
help limit the environmental impact of the region’s increasing trade. The Triple-E vessels will produce 20
percent less CO2 per container moved compared to Emma Mærsk (Maersk’s biggest ship before Triple-E)
because they are designed for slower speeds and therefore able to carry more containers, with a smaller
engine, than Emma Mærsk. And they will produce 50 percent less CO2 emissions per container moved
than the industry average on the Asia-Europe trade lane.
The vessels´ capacity is also 16% higher
compared to Emma Mærsk. Triple-E is a good example of how sustainable development can drive product
innovation and bring value to business and society simultaneously.33 In the above box you can see how
another major international company, Hitachi, works with CSR and infrastructure.
4.2.2
DONG Energy’s Climate Partnerships
DONG Energy’s climate partnerships build on the
premise that CSR and profitable business go hand in
hand. In the partnership DONG Energy’s consultants
help climate partners get an overview of their energy
General Electric – Ecomagination
Ecomagination
is
General
Electric’s
(GE)
commitment to imagine and build innovative
consumption and their potential for reduction, which
solutions
is typically between ten and thirty percent. The
challenges, while driving economic growth.
energy consultants then cooperate with the climate
partners in setting goals for energy reductions,
prioritising
energy
saving
efforts,
calculating
a
timeframe for return on investment and preparing an
action plan for future energy improvements. Filip
Engel, DONG Energy explains: 34
”Energy
efficiency
is
an
to
today’s
environmental
Since the launch of this green research and
development programme in 2005, it has
reached more than $100 billion in revenue
proving that green business is good business.
The
holistic
approach
to environmentally
sustainable product innovation has seen the
obvious
driver
for
us.
Obviously the cheapest and cleanest energy is the one
birth of more than a hundred new products
and services.34
that we do not use. This understanding is integrated
in our DNA. We work to get people to become more energy efficient. This is perhaps a bit surprising, but
that is how we look at it. Energy efficiency is an area where many companies can win a lot, and the
return of investment timeframe is relatively short.”
Lessons learned:
Partnerships
In
drive
innovation.
Collaboration between WWF and Novo
Nordisk gave Novo Nordisk a clear goal
for
reductions
that
that
required
innovative solutions. In the partnership
with DONG Energy a new model was
developed which has inspired more than
a hundred new partnerships benefitting
both business and the climate.
January
2006
WWF
and
Novo
Nordisk
made
a
partnership agreement, by which Novo Nordisk committed
to reduce C02 emissions from its production by 10% from
2004 to 2014. Therefore, in May 2007, Novo Nordisk
entered a climate partnership with DONG Energy, building
on
a
unique
combination
renewable
energy
assistance
from
of
production.
DONG
energy
Novo
Energy
to
reductions
Nordisk
reduce
and
receives
energy
consumption, while Novo Nordisk earmarks the energy
savings for buying certified green power from the wind
33
http://www.worldslargestship.com/sustainability/
http://www.ecomagination.com/; http://news.cnet.com/8301-11128_3-20008698-54.html;
http://www.reuters.com/article/2012/06/28/idUS208085+28-Jun-2012+BW20120628
34
34
farm Horns Rev 2. At the time of the partnership’s inception, Horns Rev 2 was still on the drawing board
and financing was not in place.
To Novo Nordisk the deal was a cost neutral way to achieve substantial CO2-reductions, while at the
same time the company was contributing to building a market for renewable energy in Denmark. Even
though wind power is more expensive than conventional power the partnership was, and still is, good
business. Each year Novo Nordisk saves more than ten percent of its electricity bill in Denmark and the
energy reduction projects have an average pay-back time of two years. In the above box you can read
how GE works proactively with environmental sustainability.
4.2.3
Carlsberg: Sustainable Packaging
Packaging is a vital part of the identity of
a beer brand. Consumer research shows
that
packaging
buying
influences
behaviour.
This
consumers’
means
that
packaging can lead to a negative brand
image, for example if cans and bottles
are disposed of in natural environments
or on the street.
In the case of Carlsberg, packaging is
the
single
largest
contributor
to
Carlsberg’s CO2 footprint. It amounts to
45% of the Group’s total CO2 emissions,
when
looking
at
the
full
impact
throughout the value chain.
Figure 3: Carlsberg - Sustainable Packaging
As a consequence, Carlsberg Group has initiated a large-scale programme in 2012. The programme
revolves around four principles (see figure to the right) with the aim of reducing the environmental
impact, while maintaining first class design and consumer appeal.
In
Coca Cola – Sustainable Packaging and Recycling
Packaging accounts for nearly half of the carbon emissions
in Coca Cola’s value chain. To reduce this carbon footprint
the company must reassess its packaging from design to
to
measure
the
company’s
success in relation to the four principles, a
range of activities will be launched in
2013.
Examples
include
a
weight
reduction initiative, communication with
disposal and make better use of natural resources by
consumers
using renewable and reusable materials and ensuring that
development of a sustainable packaging
its own packaging is recyclable.
catalogue.
The
commence
a
Coca Cola has made a commitment to set the standard for
low-carbon, sustainable packaging, zero waste in its
operations and recycling more packaging than it uses.35
35
order
on
recycling,
company
and
will
Cradle-to-Cradle
the
also
project,
focused on generating positive impacts. 35
The sustainable packaging programme is
http://www.cokecce.com/corporate-responsibility-sustainability/sustainable-packaging-and-recycling
35
expected to drive a number of operational and commercial benefits. In addition to the environmental
benefits, the use of more sustainable packaging is expected to generate cost savings and strengthen the
Group’s relationship with key customers. It will also enable Carlsberg to meet future legislative demands
related to packaging and waste, thereby serving as a means of risk mitigation.
In Poland, Carlsberg has already initiated a project under the name ‘ECO-ACTION’. Through a focus on
educating consumers, the project has increased the collection of bottles and cans, enhanced waste
segregation and recycling as well as promoted the use of returnable bottles. In a span of only three
years, the project has lead to 242 tons of waste packaging being collected. For this reason Carlsberg
Polska has been applauded by Tesco for supporting Tesco’s CSR activities. In the above box you can see
how one of Carlsberg’s industry peers, Coca Cola, works with sustainable packaging.
4.3
Best Practice Strategic CSR Focusing on Economic Sustainability
As stated in the CSR compliance chapter in relation to economic sustainability, internationally agreed
upon principles on anti-corruption is one of the fastest growing CSR areas. Due to the emergence of
extraterritorial national law and regulation in this field, the scope of what companies are expected to do
has widened significantly. By raising the bar, going beyond compliance on anti-corruption becomes
increasingly demanding as compliance in itself is challenging even for frontrunners. Initiatives that were
seen as extraordinary efforts on fighting corruption only a couple of years ago now represent nothing
more than the minimum standards with which all companies are expected to comply. Nevertheless, the
Danish companies in this report have strategic initiatives worth mentioning. Three are presented below.
4.3.1
ISS: Business Integrity is non-Negotiable
Corruption and bribery are considered
serious threats to ISS’ business practices.
General Electric and the Anti-corruption Agenda
As signatories to the UNGC, ISS has
General Electric (GE) has taken a strong stand against
committed
corruption.
corruption,
to
combat
extortion
the
use
and
of
bribery,
wherever the company does business.
It
contributes
with
human,
financial
and
political capital to Transparency International and the
broader anti-corruption movement.
Below is an example of implementing
Specifically,
anti-corruption
global
environment” whereby employees are encouraged to report
company and the case of a successful
issues of integrity and feel confident that such actions will
whistleblower mechanism is explained. 36
not lead to retaliation. GE uses such reporting proactively,
policies
in
a
The ISS Anti-Corruption Policy from 2010
cemented and elaborated the company’s
position on corruption and bribery set out
in the Code of Conduct. To ensure that all
managers and key employees understood
GE
has
pushed
for
an
“open
reporting
embracing open reporting as the “first and best line of
defence”.
Notably,
GE
pushed
negotiations
forward
and
US
ratification of the OECD Convention on Bribery of Foreign
Public Officials and the UN Convention against Corruption.36
and recognised the position, the company
created an e-learning based training module which was rolled out in 2011. In 2012, the e-learning
module was translated and launched in German, French, Spanish and simple Chinese. These new
36
http://www.gecitizenship.com/focus-areas/economy/governance-compliance/;
http://www.transparency-usa.org/news/documents/TI-USA2010AwardsDinnerBooklet.pdf
36
languages enable ISS to reach out with the training across the company. Prior to the launch in October
2012, the company had trained 1,330 managers on anti-corruption. In the period from October to
December 2012 another 1,223 persons completed the module, which means that in total 2,553
employees have been trained.
In 2012, Slovenian ISS employees confidentially contacted the regional management for Eastern Europe
to report observations of what they believed were irregularities in the Slovenian branch. They stated that
they were worried over a number of lost contracts, where the reasons for the losses were unclear. They
were also worried that the country’s top management showed very little concern or surprise over the
repeated loss of business.
An analysis of materials obtained showed that members of the management team were channelling
business into a competing company in which they had a financial interest. Financially, this situation led to
a significant loss for the Slovenian business, but due to timely action made possible by the employees the
predominant part of the business was retained. In the above box you can see how GE has tried to push
the anti-corruption agenda forward.
4.3.2
Novo Nordisk: Learning the Hard Way
In the 2000’s Novo Nordisk realised how the
absence
of
an
effective
business
ethics
compliance process can put a company in a
Siemens fights corruption
Following a 2006 bribery scandal, Siemens took
vulnerable position. The Oil-for-Food scandal,
extensive
described below, hit the company hard.
included appointing the co-founder of Transparency
The Oil-for-Food Program was established by the
International, Michael Hershman, as the company’s
United Nations in 1996 to enable Iraq to sell its
external adviser on anti-corruption.
oil for humanitarian purposes, in the context of
Further, Siemens took more than 900 internal
an extensive international sanctions regime. In
disciplinary actions including several high-ranking
2005 a UN report indicated that Novo Nordisk
dismissals. Siemens also trained more than half of
was one of 220 companies that had paid kick
its 400,000 employees in anti-corruption issues and
backs to the Iraqi authorities amounting to 1.4
announced that it would voluntarily refrain from
million USD. Such payments were not permitted
markets
under the Oil-for-Food Program or other sanction
regimes then in place.
action
where
to
rebuild
corruption
public
was
trust.
This
particularly
prevalent, for example in Sudan. Notably Siemens
also agreed to voluntarily suspend its applications
for funding from the World Bank for two years. It
After thorough investigations of the matter Novo
also agreed to a 15-year program to donate $100m
Nordisk made a settlement in 2009 with the U.S.
to non-profit organisations that fight corruption.37
Securities
Exchange
Commission,
the
U.S.
Ministry of Justice and the Danish State Prosecutor for Serious Economic Crime (SØK). Following the
settlements CEO, Lars Rebien Sørensen stated:
“We have recognised that we have made a mistake in relation to the oil for food programme. We are
sorry and we will do what we can to avoid similar situations in the future.” 37
37
http://www.guardian.co.uk/sustainable-business/recovering-business-trust-siemens
37
In Novo Nordisk internally, the Oil-for-Food program case
Lessons Learned
led
“Learn from your mistakes. The Oil-forFood case was an example of how a
to
a
new
strategy
for
business
ethics
heavily
emphasising that bribery and corruption are unacceptable
and that there is no room for compromise when it comes to
company can improve from crisis by
admitting your mistakes and intensively
working to prevent similar
business ethics. The new strategy contains clear procedures
for
ethical
business
behaviour,
an
intensive
training
programme for employees, enhanced governance, auditing,
occurrences.”
reporting
and
finally
a
‘compliance
hotline’,
where
employees as well as external stakeholders can anonymously report suspected violations of the company
policy on business ethics. Looking back, Susanne Stormer from Novo Nordisk chooses to reflect on the
Oil-for-Food incident in a positive way, stressing that the crisis proved to be an invaluable source of
learning and improvement for Novo Nordisk. She says:
”It was an example of ‘learning the hard way’. With the settlement, we were subject to a deferred
prosecution agreement - we could not afford to make any mistakes. And on top of that, we constantly
see compliance demands related to business ethics increase, particularly in the industry we are in. Even
staying in compliance is actually a big task. Recent analyses tell us that we have a very robust system in
place, and we would not have built that without Oil-for-Food. When you are under pressure and have to
pull your act together it often leads to better compliance.”
In the above box you can see how a large company such as Siemens responded to a bribery scandal.
4.3.3
Maersk: Maritime Anti-Corruption Network
In 2010, Maersk initiated the Maritime Anti-Corruption Network (MACN). MACN is a global business
network working towards its vision of a maritime industry which is free from corruption and enables fair
trade to the benefit of society at large. Today the network has grown to more than fifteen members and
includes both companies and associations.
MACN Members promote good corporate practice in the maritime industry for tackling bribes, facilitation
payments,
and
other
forms
of
corruption
by
adopting
the
MACN
Anti-Corruption
Principles,
communicating progress on implementation, sharing best practices, and creating awareness of industry
challenges.
External stakeholders including Poul Riiskjær Mogensen, Chairman of the Danish Branch of Transparency
International, have applauded Maersk for their leadership in this field:
“There is no doubt that this [corruption] is a serious problem in the business. Thus these are three good
initiatives presented in the report by Maersk. First of all, they clearly signal that they will not accept it.
Secondly, they launch an internal training programme to create awareness of the problem among the
employees, and third, and probably most importantly, they establish a network with other players. There
is no doubt that the effect will be much greater if they work with others. A single company would have a
very hard time getting the job done.”
38
MACN also collaborates with key external stakeholders, including governments, authorities, and
international organisations in markets where corruption is prevalent, to identify and mitigate the root
causes of corruption in the maritime industry.38
4.4
Danish Frontrunners and Strategic CSR
As mentioned in the above introduction to this section, a minimum of two elements can assist in
evaluating the quality of a company’s voluntary CSR initiatives: Firstly, how is the initiative strategic to
the company, and secondly, in what way does the initiative contribute to the fulfilment of internationally
agreed principles for sustainable development? Table 4 below illustrates how each of the Danish cases
above fit these criteria.
Table 4. The value and key contributions of Danish Strategic CSR initiatives
Danish Cases
Company
Type of
How is it ‘strategic’
In what way does the
initiative
to the company?
initiative contribute to
sustainable development?
Diversity
ISS
Organisa-
Proactively turns an
Promotes the right to non-
tional
identified risk into a
discrimination and diversity
learning
strategic advantage;
improves work
efficiency of employees
Responsible
DONG
Multi-
Minimises identified
Improves the standards of
Supply Chain
Energy
stakeholder
risks in DONG Energy’s
global coal production,
initiative
operations
especially with regards to
Management
labour rights
Harmful
Carlsberg
Multi-
Minimises a significant
Promotes the right to health
Alcohol
stakeholder
risk in Carlsberg’s
and reduces alcohol related
Consumption
initiative
operations
accidents and negative
impacts globally
Integrating
Novo
Partnership
Helps Novo Nordisk win
Improves the health care
CSR in the
Nordisk
and Base of
market share and
system in China; contributes
the Pyramid
increases the profit per
to the right to health, access
patient
to medicine and right to
China
Strategy
education
Climate
DONG
Partnerships
Novo Nordisk minimises
Lowers the adverse
partnerships
Energy and
and CSR-
its energy costs
environmental impact of
Novo
based
Nordisk
innovation
DONG Energy promotes
its green alternatives
and gets access to
38
DONG Energy and all
companies engaged in climate
partnerships, promotes green
http://www.bsr.org/en/our-work/working-groups/maritime-anti-corruption-network
39
Triple-E
Maersk
funding
energy sources
CSR-based
Improves the cost-
Lowers the adverse
innovation
efficiency and capacity
environmental footprint of
of Maersk’s cargo
Maersk and, in the future,
transportation
potentially the whole shipping
industry
Sustainable
Carlsberg
Packaging
Zero
ISS
Tolerance
Partnership
Strengthens relations
Lowers environmental impact
and CSR-
with important
of Carlsberg, promotes
based
stakeholders and builds
recycling procedures
innovation
brand value
Organisa-
Minimises and identifies
Improves the global
tional
risk and adds brand
standards of anti-corruption
learning
value
Learning it
Novo
Organisa-
Turns reputational risks
Improves standards of anti-
the hard way
Nordisk
tional
into a source for
corruption
learning
organisational
improvements
MACN
Maersk
Multi-
Minimises a significant
Elevates global standards of
stakeholder
identified risk in
anti-corruption in the
initiative
Maersk’s operations
maritime industry
All of these initiatives are strategic. Some address identified major risks whilst others expand business
opportunities by incorporating CSR into their core business. In addition the initiatives contribute to
fulfilling internationally agreed principles for sustainable development; e.g. by promoting the fulfilment of
one or more human rights, or by enhancing environmental or economic sustainability. Please note that,
some initiatives seek to minimise adverse impacts on the international principles, whereas others
contribute actively to their fulfilment. Table 5 below illustrates how each of the international cases
described above fit the same criteria as the Danish cases previously presented.
Table 5. The value and key contributions of International Strategic CSR initiatives
International
Company
Cases
Type of
How is it ‘strategic’
In what way does the
initiative
to the company?
initiative contribute to
sustainable
development?
Enhancing
GAP Inc.
Organisational Improves efficiency,
Enhances rights and
Women’s
learning and
increases professional
opportunities of women in
Opportunities
Partnership
advancement and lower
Asia; promotes equality in
rates of absenteeism
the workplace
40
Promoting the
Cerrejón
Organisational Minimises identified
In line with the UN Guiding
learning
risks and strengthens
Principles for business and
Principles on
dialogue with important
human rights and best
Business and
stakeholders
practice on the access to
UN Guiding
Human Rights
Access to
remedy
Coca Cola
Partnership
Water
Improves the efficient
Minimises environmental
use of Coca Cola’s most
footprint; promotes access
important resource:
to water
water
Implementing
Novartis
Organisational Attracts and retains the
Promotes the right to a fair
Living Wage
learning and
best employees in each
remuneration
Standards
Partnership
of the markets they
operate in
Smart Cities
Hitachi
CSR-based
New products and
Develops and promotes
innovation
services; establishes
innovative, social and
competitive advantage
environmental
in green markets
sustainability, especially in
Asia
Ecomagination
General
CSR-based
Innovation of new
Develops and promotes
Electric
innovation
products and services;
innovative, smart and
establishes competitive
green solutions, especially
advantage in green
in the U.S.
markets
Responsible
Coca Cola
Partnership
Strengthens relations
Minimises Coca Cola’s
Packaging and
and CSR-
with important
environmental footprint
Recycling
based
stakeholders and adds
innovation
brand value
Pushing the
General
Organisational Minimises an identified
Improves international
Anti-corruption
Electric
Learning and
risk for General
standards of anti-
Lobbying
Electric’s core
corruption, especially in
operations
OECD countries
Agenda
Fighting Anticorruption
Siemens
Organisational Turns a bad reputation
Improves standards of
Learning
anti-corruption
into a source for
organisational
improvements
41
5
General Challenges and Opportunities
In many ways, CSR is still a contested and changing field and it will continue to be a ‘work in progress’.
Whereas CSR in Denmark and in many other countries is becoming mainstream; approaches, definitions,
and opinions on CSR still vary. However, there is a growing consensus that companies are responsible
and should be accountable for their social, environmental and economic impacts on society. What
appears to be a growing convergence within CSR, based on recently adopted international principles, may
be one of the main opportunities for engaging more companies in CSR.
This final section outlines some of the challenges that may keep more Danish companies from engaging
diligently with CSR. The challenges were identified and have been experienced by the pioneers
represented in this report. The pioneers’ suggestions seek to provide guidance to minimise or overcome
such challenges and possibly turn them into opportunities.
5.1
CSR; A Moving Target
The previous sections illustrate how elements of CSR are, and have been, characterised by frontier
expectations transforming into soft law and eventually hard law requirements (see figure 1). Such
dynamics make CSR a moving target. For example anti-corruption and human rights for businesses have
moved from mere suggestions, over somewhat intangible and unclear expectations to becoming
internationally recognised and regulated areas within CSR. Annette Stube from Maersk notes:
”The human rights agenda has evolved really quickly within the UN and OECD for example. The field is
moving into a law-like-arena.”
The ever-evolving nature of CSR poses a challenge to many
companies, because they have to keep track of the agenda and
Susanne Stormer,
respond to changes. Implementation of CSR requires strong
Novo Nordisk:
competencies in change management, and keeping up with the CSR
“My best recommendation
agenda requires strong corporate agility. What appears to be fringe
CSR-topics or even outside the concept of CSR, such as tax
payments, may suddenly move fast on the agenda in coming years.
Internationally agreed upon standards and guidelines can help
would be to refer to
international standards and
guidelines, such as UN Global
Compact, UN Guiding Principles
and the OECD guidelines.”
create convergence and clarity in a multifarious area, where most
companies need assistance navigating. An authoritative online portal with continuously updated
references and tools would be useful in this regard.
5.2
Lack of Awareness and Capacity
An overarching challenge is lack of awareness. Creating awareness is necessary on several levels. Danish
top-managers, who also occupy the vast majority of Danish Board positions, lack awareness. This
represents a challenge; How to enable comfort zones in a new and rapidly evolving governance field, in
which central actors are already among the busiest people in the country?
CSR departments need continuous internal capacity development to enable company advisors to keep
abreast of developments. Meanwhile CSR professionals usually work long hours and manage very tight (if
any) budgets which add to the pressure. Many efforts are made to create ‘buy-in’ with top management
42
and to influence all levels in the company to act and deliver. Spotting new developments, translating
these into corporate actions, and ensuring corporate transparency around goals and actions are all highly
challenging aspects for a CSR professional.
Finally, in order to integrate CSR in the core business, the
Morten Nielsen, Carlsberg:
entire organisation needs to build awareness. How does a
“Obtaining management support
company ensure that all communication channels, governance
from the beginning is key to a
systems
successful implementation process.”
synchronised messages? Furthermore, lack of awareness
and
vocational
trainings
deliver
updated
and
among external stakeholders such as journalists, academia,
civil society, and public authorities can be a big challenge for companies that fear their criticism.
The need for awareness on many different levels is closely connected to the nature of CSR as a concept
that vertically transcends different levels of management and horizontally ties together different
departments within a company. Morten Nielsen from Carlsberg explains:
“Our department [the CSR department] is very unique because it was born to be cross-functional; it has
from the beginning taken a holistic approach and works across all other departments to support
development of the business.”
Awareness has to be raised on a range of different issues. For instance, there is a need for more
knowledge on well-documented and profitable strategic CSR initiatives with top-managers. Likewise, CSR
departments may have insufficient knowledge about recent trends within the compliance side of CSR.
Lastly, companies need all of their employees to understand core CSR principles, in addition to the
specific corporate policies and strategies. Such awareness is needed to ensure that employees appreciate
their own rights and act in accordance with corporate commitments.
When the CSR agenda shifts, as is the case with the EU strategy and the global uptake of the UNGPs, the
need to raise awareness becomes more evident. The evolving nature of compliance demands and public
expectations pose a challenge because skills and competencies need to keep up with such changes.
Following the unanimous endorsement of the UNGPs, all companies are expected to use internal or
external human rights expertise when designing their policy and when carrying out their due diligence
process. For most companies this translates into a need for new capacities.
Professor
John
Ruggie,
Special
Representative
of
the
Secretary General, and the architect behind the UNGPs was of
course aware of this challenge and has therefore addressed
the international need for capacity-building and awarenessraising in UNGPs principle ten.39 In this principle it is
Filip Engel, DONG Energy:
“Companies need to learn what social
compliance is about, how it matters
and how they can make a difference.”
highlighted how states play a vital role in filling possible knowledge gaps.
Nonetheless companies are restrained in terms of capacity both technically and financially, thus the need
to measure and document the business case for different parts of CSR becomes even more essential.
39
http://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdf
43
5.3
A Business Case to End Them All
The importance of being able to demonstrate the business case for CSR has been highlighted by all
participating companies. Experiencing longer returns on investment in sustainability and CSR than what
other business units are used to, continues to be a key challenge. Morten Nielsen from Carlsberg
explains:
“It is a challenge to manage a long term CSR vision against short term financial targets.”
Joseph Nazareth from ISS adds:
“The business case needs to be understood. We have to show how CSR impacts the bottom-line
positively; CSR needs to be tangible.”
Long
timeframes
and
the
complex
content
of
social,
environmental, and economic sustainability pose a challenge
Susanne Stormer, Novo Nordisk:
for communicating the immediate business value of CSR -
“Make it business-relevant, speak
especially to those who are not familiar with the agenda. This
with facts and data, select credible
challenge does not only pertain to the proactive or strategic
spokespersons from senior
CSR dimension. There is, for instance, still a need to
management who can be role
communicate and develop the business case for respecting
models and speak convincingly and
human rights. For many companies the business case for not
passionately about the issues.”
respecting human rights appears more evident. It will be
necessary to showcase the business case for respecting human rights, if more Danish companies are to
take on this work, although respecting human rights is considered a basic requirement for all businesses
today; whether they profit from it or not.
The frontrunners are well aware of the financial value connected to CSR compliance. Filip Engel from
DONG Energy says:
”Whether it is B2C or B2B it is important that we are able to demonstrate that we are in control of CSR
compliance. It is important in potential business relations. For example when oil and gas authorities look
at whom to grant licenses they also look at CSR. It becomes a license to operate.”
As this report demonstrates, examples of the business case for both strategic CSR and CSR compliance
exist and should continuously be shared. Public authorities play an important role in enabling companies
to share examples of and document the business case.
5.4
The Importance of Ownership
Ownership is an absolutely crucial element of successful CSR implementation. This is pertinent to all
levels of corporate organisations. Ownership is necessary at the management level, where it is often
secured by linking CSR with core business. Top management buy-in is equally crucial for the commitment
of the rest of the organisation.
Additionally, a sense of ownership among employees world-wide is also important. Employees are the
main
drivers
of
successful
CSR
integration;
consequently
a
sense
of
ownership
cannot
be
underestimated. The reverse situation, where CSR is perceived as a mandatory exercise somebody else
wants you to carry out, is highly discouraging. Morten Nielsen from Carlsberg explains:
44
”CSR can easily become a bureaucratic exercise. After all it is already part of our core values, our policy,
and our priorities. We already do a lot of work in this field.”
A sense of ownership can be a challenge in light of the
regulations and requirements that have entered the CSR
Annette Stube, Maersk:
field in recent years; both nationally and internationally.
“It is important for business leaders to
While such instruments can spark progress, ownership
feel in charge themselves, rather than
within companies is a key driver for substantial and
being pushed around by other people.
sustainable change. Engagement and dialogue are key
Listen to others, but make the decision
elements when creating a sense of ownership. In addition
yourself. Enable yourself to argue why
frontrunners
you make the choices you make.”
are
increasingly
making
use
of
CSR
performance pay to ensure that selected employees are
motivated to perform in this area.
5.5
Context Matters
CSR is about what goes on in company headquarters, but just as importantly, it is also about what goes
on in global operations around the world. Furthermore CSR compliance increasingly covers not only a
company’s own operations, but also its business relationships - such as suppliers, customers, investors,
etc. The global aspect of CSR can be quite challenging: legislation and regulations diverge, social and
cultural practices differ and some countries have weak institutions or lack good governance and law
enforcement.
Transnational companies face many challenges in this respect, for instance when they manage operations
in more than a hundred different countries. They continuously strive to achieve the right balance between
centralised and decentralised solutions. Susanne Stormer from Novo Nordisk adds:
“Sometimes we experience institutional gaps – structural issues that are not being addressed either
because governance is weak or regulation is not enforced. Gaps can also be seen as untapped potential
for more sustainable solutions. In areas where we have a strategic interest, we participate in filling this
space; for example in our climate partnership with DONG Energy or with diabetes prevention intervention
in Malaysia.”
Addressing global issues proactively as described in Novo
Filip Engel, DONG Energy:
“If risks are located in the supply chains,
invest time in communicating with and
understanding the suppliers and their
worldview. There is value in operating in
harmony with your surroundings.”
Nordisk’s
approach
is
a
major
challenge
to
most
companies. But in realising the global nature of CSR,
frontrunner companies often look for global solutions.
Many
join
knowledge
global
multi-stakeholder
forums,
sharing, common solutions and
because
collective
actions sometimes are the best solutions to the challenges
faced. Such forums are of importance when seeking to encourage more companies to become CSR
frontrunners.
5.6
Concluding Remarks
It is difficult to determine which of the identified issues poses the greatest challenge for more Danish
companies to become CSR pioneers. The way in which challenges manifest themselves differ across
45
industries and companies. Whereas most identified challenges appear to be general, some may be
relevant to selected companies only. In addition, the challenges outlined above can be supplemented with
a range of additional barriers that may keep companies from becoming more ambitious in dealing with
CSR.
Some challenges are contradictory and some reinforce each other. For example building a sense of
ownership takes time, which is challenged by the fact that CSR is a moving target and an ever-changing
field. Public regulation seems to be the most efficient tool for creating convergence and a common
framework, thereby minimising confusion and creating a level playing field. However, by increasing public
regulation, governments run the risk of minimizing the much needed sense of ownership.
The challenges that keep more companies from pioneering in CSR might be as diverse as the field of CSR
itself. The selection of challenges and opportunities identified in this report is intended to encourage and
inspire more Danish companies to work diligently with CSR; to become CSR-pioneers. According to
current frontrunners, challenging as it may be, there is actually no way around it, and most importantly;
it is good business.
46