External affairs

Hallmarks of a leader in external affairs

  • The organisation openly supports progressive regulation and acts within and beyond its sector to raise standards and performance. It is able to maintain a balance between collaboration and developing a competitive edge without hindering progress on sustainability.
  • The organisation engages actively with the investment community to demonstrate where and how sustainability adds value to the business. It clearly acknowledges that increased sustainability may affect short-term profits, but is able to demonstrate longterm value added.
  • Consistency between public sustainability messages and behind-the-scenes lobbying can be demonstrated, reflecting real integrity in the company’s approach.
  • Fair taxation policies are recognised as contributing to sustainability performance.
  • There is active engagement with trade associations, relevant NGOs and other stakeholders, to identify and address difficult issues.

Case studies

 

B&Q is the UK’s leading home improvement retailer, with a long history of innovation and leadership in the area of corporate sustainability. B&Q reflects its commitment to sustainability not only through its stores and products, but also through persistent lobbying for the development of public policy on green issues.

Since 2001 B&Q has been lobbying for the reduction of VAT to 5% on all energy-efficient products and has been encouraging the government to lobby at EU level for an eventual zero-VAT rate. With almost a third of the UK’s CO2 emissions produced by households, B&Q is in a strong position to help make a significant contribution to reducing emissions.

The company has lobbied national government to help micro-generation products, such as small-scale wind turbines, win approval from local planning offices.  With around 3-4 million visitors each week B&Q has a huge opportunity to communicate green and sustainable values to its customers and help them reduce their environmental impact.

A founder member of the Forest Stewardship council, B&Q has long guaranteed FSC-certified wood in its garden furniture. In early 2008 it extended that pledge to cover its full kitchen range.

The Prince of Wales’s EU Corporate Leaders Group on Climate Change is an alliance of high profile business leaders from major UK and international companies. The group campaigns for the development of new and long-term government policies designed to enable businesses to tackle climate change effectively.

Ahead of the 2007 UN Climate Change Conference in Bali, the Corporate Leaders Group on Climate Change led a communiqué to world leaders calling for an ambitious, comprehensive and legally binding agreement to reduce greenhouse gas emissions. The group wants decisive action to provide businesses with the certainty needed to increase global investment in low-carbon technologies.

The communiqué had the support of 150 global companies from the US, Europe, China and Australia. It called for UN targets to be guided primarily by science. It commented on the recommendations of the Intergovernmental Panel on Climate Change (IPCC) and suggested that the longer governments wait to act, the higher the cost and economic disruption of inaction will be.

The initiative strongly urged world leaders to make the most of the opportunity presented by the Bali conference to ensure that plans will be in place to take effect after the expiration of the Kyoto Protocol in 2012.

The Corporate Leaders Group on Climate Change has a partnership with the UK government aimed at developing policies to reduce CO2 emissions. The group also raises awareness on climate change among British business, the public and other national governments.


Dell and Hewlett Packard worked with the US State of Texas to create a mandatory computer recycling bill, based on programmes they were running as part of their wider sustainability schemes. The companies demonstrated that mandatory recycling would not be cumbersome or overly costly to business, and helped the state design a programme that requires computer companies to provide free recycling services for their machines.  

The bill requires computer manufacturers to provide a "reasonably convenient" recycling plan that requires no additional payments from consumers. It comes into effect on September 1, 2008, and requires computer manufacturers to submit their recycling plans to the Texas Commission on Environmental Quality. Companies also need to file yearly reports on the amount of material recycled.  

By requiring every computer company to implement a recycling programme and to bear the costs of doing so, the law aims to use market incentives to stimulate innovative thinking when it comes to recycling the toxic materials found in computer products.

In 2007 Co-operative Financial Services delivered a statement to the Secretary of State for Trade and Industry explaining that the carbon emissions from UK businesses could be dramatically reduced with the appropriate level of ‘green’ energy planning by the government.

The ‘wish list’, containing the views of 10 major UK companies including Sainsbury's, Alliance Boots, Scottish and Southern Energy and Reckitt Benckiser identified the major obstacles facing the government in achieving its CO2 reduction targets and offered a number of possible solutions.

The document highlighted that red tape surrounding wind energy is hampering UK companies looking to significantly cut their carbon dioxide emissions

In the advice offered to the government, it cited a report that revealed corporate demand for renewable energy in 2007 was three times more than the accredited green energy generated in 2006.  CFS has called on the government to consider the practical experiences of the private sector, and adopt a multi-stakeholder approach when setting out environmental targets of the future. The government's recent Renewable Energy Strategy commits to implementing many of the points in the 'wish list', including amending planning reform in favour of renewables.

The London Accord is the first open-source, collaborative analysis into opportunities and challenges in the energy supply and climate change market. We need a private sector investment of $600 billion a year in climate change over the next 25 years. “Climate change can be tackled if the investment is there and the London Accord is the first comprehensive map for the investment community" said David Lewis, Lord Mayor of the City of London.

The analysts and authors from over 20 companies, universities, NGOs and consultancies worked together to examine the climate change implications of investments in technologies. These ranged from solar and geothermal energy to carbon-reducing building and transport schemes.

The target audience of the reports is investors. The expectation being that the several million dollars worth of research time will lead to greater investment in the most sustainable technological solutions.


Investor network on Climate Risk (INCR) is a $6 trillion network of investors that promotes better understanding of the financial risks and opportunities posed by climate change. In their latest action plan they state that their goal is “to deploy $10 billion in additional clean technology investment over the next 2 years”. They also recognise the importance of the built environment as they aim to reduce the energy use of their existing property assets by 20% over the next 3 years. From the commercial sector, members include F&C Asset Management, Kleiner Perkins Caulfield and Byers and Generation Investment Management.
 

The food and drink industry accounts for approximately 14% of energy consumption by UK businesses, and 10% of all industrial water use . In recognition of the varied sustainability impacts of this sector, Defra developed the Food Industry Sustainability Strategy (FISS) to address how companies involved in the industry “beyond the farm gate” can deliver sustainable development. The strategy proposed progress targets for key areas. Industry participants were invited to form working groups around key areas of sustainability impacts, from energy and climate change to ethical trading.

Six industry-led Champions’ groups were formed from businesses, representatives from Government departments, industry trade bodies, and NGOs. Each group examined current best practice within the sector, working practices and existing barriers to sustainable behaviour to consider how progress towards the sustainability targets could be achieved.

Involvement in the FISS Champions’ groups has already encouraged the industry to take collective action. In 2007 the Food and Drink Federation launched the Federation House Commitment with Envirowise, the resource efficiency consultants. Signatories pledged to review their onsite water use and take action to reduce it in line with the aim to reduce overall water usage across the sector by 20% by the year 2020. The initial 21 signatories represent many of the big players in the industry with a combined annual turnover of £15bn a year.


The Roundtable on Sustainable Palm Oil (RSPO) is an alliance of civil society, growers, producers, and retailers developing sustainable production and sourcing practices in response to increasing global demand for palm oil. This group recognises the environmental and social challenges linked to the production of palm oil, most notably rainforest destruction in the development of new plantations, and issues of land rights and labour conditions.

The complexity of international supply chains for these products has made it difficult to develop robust chains of custody, underlining the importance of driving up standards across the industry. In response, the RSPO has now developed a certification process to drive verification into the supply chain.

In May 2008, Sainsbury’s launched its reformulated own-brand fish fingers and became the first UK supermarket to sell food containing certified palm oil.The Roundtable’s strength lies in the ability to convene a wide spectrum of stakeholders and in its international nature, bringing together civil society’s understanding of the environmental and social issues, agrarian realities as experienced by producers and the commercial might of the retailers.

That participation in the roundtable is not approached through the lens of competitive advantage has undoubtedly contributed to its success in getting palm oil on the boardroom agenda. The public commitments of its members are a reflection of this: Sainsbury’s and Asda have plans to phase out palm oil from ‘unsustainable’ sources in own-brand products whilst Unilever has committed to sourcing all palm oil from certified sustainable sources by 2015, commencing as soon as certified palm oil becomes available.

The challenge now is for the RSPO to engage on the wider environmental and social issues. To deliver a truly sustainable industry it must demonstrate that it can disconnect palm oil from rainforest destruction and violation of land rights. Without this there is a danger that these practices will continue - simply moving on to areas where international scrutiny is less evident.