september free mag - part 2

an approach that is “fact-based and transparent”.Companies with a gap between what they claim

and what they do “will be exposed really fast”,Laljani says. Companies are no longer just keepingtheir shareholders happy, but must be concernedabout the risks arising from the need to meet theinterests of a wide variety of stakeholders.

One example of a subject that ultimately becomesa PR issue is tax, according to Corporate Citizenship.In a paper published in May, the company arguesthat corporations need to communicate appropri-ately about the amount of tax they pay because it hasbecome a corporate responsibility issue in the age ofausterity. Organisations such as UK Uncut threatento embarrass corporations that do not fully appre-ciate the reputational risk, the paper says.

New tax approachWhen it comes to tax, “the traditional defence ofcompliance is dead; the distinction between evasion(illegal) and avoidance (lawful) has dissolved in theeyes of governments, NGOs and citizens,” Corpo-rate Citizenship says. “We believe that companiesneed a new approach to manage and communicatetax effectively.”

Comfortingly for the world’s biggest corporations,the paper adds: “This does not, in essence, involvepaying more tax.” However, it does mean thatcompanies must “identify a coherent and credibleposition on tax and find a language to defend it”.

Few firms have done this so far. “Most companieshave been woefully silent on the issue,” the papersays. “They have failed to put in the public domaina clear position on why their tax policy is sensible

for investors or society at large.”To remedy this, Corporate Citizenship sets out a

“tax map”. Are companies engaged in what could beconstrued as evasion, or setting up structures purelyfor tax planning purposes? Or are they in factpaying more tax than they could legally get awaywith, because they believe it is the right thing to do?

Companies in a more risky place on the tax mapcan decide to move to where they want to be andput the necessary policies in place. Only then willthe company be “ready to speak to the outsideworld”, and it should do so in language that can be“understood by stakeholders like your employeesand customers – not just the lawyers and tax author-ities,” Corporate Citizenship says.

The challenges faced by some corporations inthis area are shown by examples cited in the paper.Vodafone, Corporate Citizenship says, has articu-lated a new approach to tax, promising to align itstax risk policy with its corporate values, while HSBChas highlighted its “role in collecting taxes such asVAT and stamp duty”.

But these companies are among the top targetsfor tax campaigners. UK Uncut says Vodafone is“fighting tooth and nail” to avoid paying tax bills inBritain and India, while HSBC channels moneythrough tax havens, and is threatening to move itsdomicile to Hong Kong to avoid tighter Britishfinancial regulations. Some companies clearly havework to do to bridge the gap between the ethicsthey profess and the actions they take. n

Additional research by Boris Peters.For more on tax see strategy and management p37.

19

Companies need to communicateabout the tax they pay

Briefing: public relationsEthical Corporation • September 2011

Monsieur Nature

NewsLab is a strategic communications agency based inAmsterdam. NewsLab’s senior PR consultant, Isabelle Los, says thatcorporate responsibility is “clearly on the agenda of the companieswe work for. But sometimes we have to tell clients that it is some-thing worth telling others about. They are doing something butdon’t always realise that it is worth communicating about.”

An example of this is the firm’s work for holiday provider CenterParcs, which is one of Europe’s largest importers of tropical plants.Center Parcs spokesman Michel Busman says that each park includesa sub-tropical area, but that the plants that populate it areimported for conservation and educational purposes. Thecompany often rescues plants that would otherwise be destroyed.“People who are on holiday can learn about this,” Busman says.

NewsLab pitched stories to journalists about the care taken byCenter Parcs to source and transport tropical plants. The companysays its “environmental specialists trek into the jungle themselves,in order to remove the trees carefully ... Center Parcs never sourcesplants or trees from nature reserves or protected regions.” Theplants then go on a long sea voyage to Europe, which they spend “in a state of suspended animation”. This, Center Parcs says, is part of its ethosthat “makes sure that nature runs its own course”.

Center Parcs has given its conservation work a human face in the person of Monsieur

Nature de Center Parcs, Belgian biologist Jean Henkens. He has been the focus of shortfilms about Center Parcs and biodiversity, maintains a blog on conservation matters, andis much easier for customers and the media to relate to than a dry corporate responsi-bility strategy.

Carefully-sourced tropical playground

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Activist organisations

He who pays the piper…By Stephen Gardner and Jon Eldridge

There is a healthy level of distrust between organisations that conduct campaignsbased on ethical principles and organisations that conduct campaigns for fee-paying clients

Briefing: public relations20

It comes as no surprise to learn that non-governmental organisations typicallydistrust public relations companies, oftenregarding them as an operational arm ofcorporations or governments engaged inbad behaviour.

Andy Rowell of campaign group Spin-watch says “most PR agencies are client-led”and when those clients are engaged inunethical practices, the PR brief is invariablyto “gloss over, tone down and greenwashsome of our more controversial industries”.

Alex Wilks, campaign director for commu-nity campaign website Avaaz.org, says:“Sometimes PR companies try to defend theindefensible, and often they are unable tohold up the opinion that their clients want.”

Avaaz works by creating a critical mass onan issue by bringing together concerned indi-viduals through its website. Wilks cites itsrecent campaign against Formula 1 racing inBahrain. Avaaz put pressure on the Formula 1teams, saying that the 2011 Bahrain GrandPrix should be scrapped after governmentsuppression of pro-democracy protests. Theteams subsequently put pressure on raceorganisers, and the event was duly cancelled.

Avaaz “managed to expose the lie”, Wilkssays. “Our members sent messages to RedBull, Mercedes, Ferrari and others, sayingthat they should make sure their teams stayout of Bahrain.”

In its ultimately fruitless efforts to resistthe Avaaz pressure, the Bahrain govern-

ment was assisted by its PR agency, BellPottinger. Its brief was to “try to show thatall was well there, which was palpably notthe case”, Wilks says, adding that one partof the PR effort, a tour to Bahrain for racingofficials, would have been “laughable if ithadn’t been so serious”.

Avaaz does not use outside PR help. “Wewant to stand on our two feet. Most NGOswant to be independent in their actions andtrue to their founding ethic and purpose,”Wilks says. This extends to the communica-tions and PR functions.

Greenpeace International takes a similarview. Spokesman Mike Townsley says: “SomePR companies on the one hand work for an

environmental organisation and on the otherhand are getting paid by some agent of themilitary-industrial complex.” This would beuncomfortable for Greenpeace.

“We have a credo of independence,which means that we neither solicit noraccept monies or support from commercialenterprises and companies. That allows usto maintain the integrity of our agenda.”

However, Townsley adds: “That’s not tosay that we have never worked with a PR

agency, or that we don’t employ ad agenciesor do pro bono work with them. For acertain campaign, we might employ a PRcompany to help us with a press conferenceor a media event.”

Greenpeace in most cases does not needthe assistance of a PR company. “We’vebeen in existence for 40 years and have builtup quite significant relationships withmedia partners,” Townsley says. “I’m morelikely to come across a PR company repre-senting an industry and trying to counter a[Greenpeace] campaign.”

PR companies are also unlikely to earnfrom NGOs the fees that they can commandfrom corporate clients. If Greenpeace doeswork with a PR agency, “we usually try toget a relationship in which we can pay themas little as we can get away with – hopefullynothing”, Townsley says.

Common platformsCampaign groups can, however, be targetsfor PR agencies looking to broker reputa-tion-boosting partnerships for their clients,though such partnerships are not neces-sarily just about polishing corporate profiles.Alliances can be mutually beneficial, saysMartin Porter, managing director of Brusselslobbying and PR firm Edelman The Centre.

Partnerships can arise because companieswant to make progress on a specific issue, andthis coincides with the interests of an NGO.In some cases, the NGO can benefit becauselawmakers might be more likely to put theirweight behind an issue if it has corporatebacking, which can equate to a demonstra-tion of the economic benefit, Porter says.

However, “NGOs want to make surethey are not being taken for a ride”. Trustand personal relationships between theparticipants are key, Porter says.

He gives the example of the Coalition for

Ethical Corporation • September 2011

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“Sometimes PR companies tryto defend the indefensible”Alex Wilkes, Avaaz.org


Energy Savings. This is a multi-memberplatform pushing for the European Unionto adopt binding energy efficiency targets,similar to targets it already has for reducinggreenhouse gas emissions and for rampingup renewable energy. Edelman The Centreprovides a secretariat for the coalition.

Its members include industry associations,such as the European Committee of DomesticEquipment Manufacturers and the EuropeanInsulation Manufacturers Association, along-side NGOs and foundations including theClimate Action Network Europe, Friends ofthe Earth Europe and WWF.

Catherine Pearce of the European Envi-ronmental Bureau, another of the NGOmembers, says such coalitions are a reflec-tion of a move beyond a “traditional blackand white view of NGOs and businesses”.There are now “different shades of greenacross various stakeholders”, she says.

The Coalition for Energy Savings“evolved out of a need” on which all theparticipants broadly agreed, and does notrepresent a compromise for the NGOsinvolved, she adds.

The main aim is to get things done. “Aswith every coalition, the members are notgoing to agree on everything. There havebeen discussions where there is not a clearcommon line on something.” However, theparticipants have a common willingness tosee where there is agreement and whereprogress can be made, Pearce says.

Front groupsOther initiatives that superficially looksimilar to the Coalition for Energy Savingscan be little more than front groups set upby PR agencies, however. The BromineScience and Environmental Forum (BSEF)sounds like it could be a partnershipbetween NGOs and academics, but it is infact a group of four companies broughttogether by PR firm Burson-Marsteller.

BSEF’s main aim is to prevent the regula-tion of brominated flame retardants, whichare used to stop sofas and beds catching fire.Scientific evidence, published for exampleby the United States National Institute ofEnvironmental Health Sciences, has shownthat the substances can accumulate inpeople and animals, and can be passed, forexample through breast feeding, to infants.But according to the BSEF, concerns aboutbrominated flame retardants have been“overblown for political reasons”.

In Europe, three of the four companiesBSEF represents – Albemarle, Chemturaand ICL Industrial Products – are also

members of the European Flame RetardantsAssociation, a more clearly labelled lobbygroup working on exactly the same issue.This raises the question of why the BSEF isneeded in the first place.

Sabine Wimpissinger, a consultant to BSEF with Burson-Marsteller says the forumis “the bromine industry’s global organisa-tion,” and it “ensures global coordination of

the industry’s scientific and regulatoryprogrammes”. BSEF commissions researchfrom independent scientists and sets out to“inform decision-makers and other stake-holders about the results of this science, and torepresent the bromine industry on issues ofenvironment and human health,” she adds.

BSEF is an example of what thecampaign group Spinwatch calls the “thirdparty technique”. This is the separation ofan organisation behind a message – forexample, an oil company – from themessage it wants to put across – for examplethat climate change is not a problem.

Another strategy, according to Spin-watch, is the “3D” campaign: denying aproblem, delaying action, then dominatingthe response in the media or by politicians.This can be done by “promoting scientificuncertainty to create an impression that thejury is still out over a particular issue”.

Spinwatch accuses oil giant Shell ofindulging in such practices over many years

to protect its activities in the Niger delta,where problems arose in the early 1990sover pollution and the treatment of indige-nous peoples. Since then, Shell has “spentmillions on its PR activities”, says Spin-watch’s Andy Rowell.

The money was dedicated to changingthe company’s image, rather than thecompany itself, Rowell says. Shell Nigeriadeals extensively with pollution issues on itswebsite, where it emphasises that there is alack of security in the Niger delta and“militant groups... cause massive pollution... by damaging wellheads and other facili-ties”. Shell says that 70% of spills are “theresult of sabotage, oil theft and illegalrefining by criminal gangs”.

But this emphasis might have been adistraction from dealing with the environ-mental integrity of Shell’s own operations.In early August 2011, Shell admitted liabilityin a legal case about major oil spills in theNiger delta in 2008 and 2009, while, sepa-rately, a United Nations EnvironmentProgramme report found that in the Ogoni-land region, Shell had not properlymaintained or decommissioned oilfieldinfrastructure, and that most polluted sitesthat Shell said it had remediated “still havepollution exceeding [Shell] (and govern-ment) remediation closure values”.

Shell Nigeria managing director MutiuSunmonu says the company will do “every-thing in our control to reduce operationalspills,” but that “until effective action istaken to curb all illegal activities, there islittle that can be done to bring an end to theproblem of spills”. n

Briefing: public relations 21Ethical Corporation • September 2011

The 3D campaign: deny, delay then dominate theresponse

Shell's involvement in Niger delta pollution remains murky


Briefing: public relations22

PR and sustainability

Silence thatspeaks volumes

The public relations industry has todevelop a proper ethical approach,argues Brendan May

In most sectors, vaguely enlightenedcompanies respond to at least some of thesurveys they are sent about their sustain-ability performance. Of course, it is notpossible to complete them all. But on thewhole, when a credible organisation sendsout a sustainability survey, it can expect areasonable response.

With this in mind, Ethical Corporationdispatched a PR industry survey toaccompany this month’s briefing. The PRindustry cannot claim not to know aboutEthical Corporation. They are never off thephone plugging their clients to the editorand bagging conference slots or offering up the columns they will ghost write fortheir clients. Which makes the response tothis survey all the more amusing, albeitdepressing.

Ethical Corporation sent 103 surveys topeople at the top PR firms in the world.Responses? One.

This should not really come as a surprise.The PR industry remains almost unique inits sluggishness to embrace the sustainabilityagenda.

Companies don’t know what their carbonfootprint is. They don’t have sustainableprocurement policies. They don’t report ontheir impacts, set targets or run employeeprogrammes to green up the workplace.They don’t require standards of suppliers,although their clients will increasinglydemand standards of them. They might buyoffsets, but they don’t address their biggestimpact – air travel.

Tail wagging the dogIn general, PR firms’ clients raisesustainability with them, not the other wayround. It is a bizarre situation in which theindustry that should be warning its clients ofdeveloping trends is playing a fruitless gameof catch-up to find out what is going on. Thata client should pay thousands of pounds amonth to educate its own advisers is aperverse reality.

There will have been four reactions in the

PR firms when Ethical Corporation’s surveyarrived.Indifference. For all the media wizardry

they deploy for their clients, PR people aretheir own worst marketeers. Many won’thave realised this was an opportunity, not athreat.Panic. In some agencies, the survey

will have been bounced around from one recipient to another. No one will have been in charge, and eventually thesurvey will have crawled into its last inboxwhere it is still sleeping as this briefing goes to press. Over-confidence. In some cases, a smart

person may have spotted the opportunity toland some “key messages” about theiragency’s good work and done their best tocomplete the survey and provide some casestudies. Sadly, those at the top will havevetoed responding to anything that askedsomething as outrageous as whether or notthey turn down business on environmentalgrounds. Arrogance. “We don’t do surveys like

that.” Fair enough, perhaps. But most ofyour clients do. Wake up.

In fairness, WPP, which owns many of thebest-known PR firms in the world, has longattempted something of the corporateresponsibility reporting now commonplaceamong multinationals. Anyone readingWPP’s annual sustainability reports wouldeasily be impressed, if not wowed, by theirefforts.

But it still falls way short of good enough.WPP owns Cohn & Wolfe, infamousapologist for Asia Pulp & Paper.Unfortunately this makes it hard to takeWPP’s assertions on sustainability seriously.

Burson Marsteller, part of the WPP family, was the only agency to respond to

the survey. Its client case study was on the Marine Stewardship Council and the role it played in advising Unilever toestablish it – in 1995. Good work, but to cite16-year-old client engagement borders onthe desperate.

But at least WPP has done something.Most other giant communications groupsbarely have policies beyond bribery, ethics

and corruption. If they have environmentalpolicies, they will be bottom of the ladder,such as ISO 14001. Even Asia Pulp & Papercould get that one.

The PR industry is soundly asleep onsustainability. It has few public championspointing out the inevitable seismic change tocome. To be ahead of the game meansmaking the serious commercial decisionsthat companies such as Unilever, Nestlé andcountless others are making.

If you don’t change, we won’t work withyou. That’s what they have told their palmoil suppliers. It’s what supermarkets havetold unsustainable tuna brands. The PRindustry needs to develop a point of view,very quickly. It will no longer do to preachabout sustainability on their websites (asthey all do) while taking dirty money fromtarnished brands. n

Brendan May is founder of the Robertsbridge Group, formerchief executive of the Marine Stewardship Council, and UKchairman of the Rainforest Alliance. He is a contributingeditor to Ethical Corporation.


Is the PR industry frozen in time?

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The PR industry remains almost unique in its sluggishness to embracesustainability


So, they organised the ArabSpring on Twitter, or was it

Groupon? Just think of how muchearlier Nelson Mandela could havebeen released if only he had a readytweet or two. “@RobbenIsland.Gearing up for another weekend ofheavy rock crushing…”

Despite the great excitementabout the civic promise of socialmedia – the greatest social advanceAmerica has brought to the worldsince it abandoned slavery – it looksunlikely that Facebook et al will domuch to promote sustainability.

There seems to be little socialpurpose to the social mediaindustry other than to sell moreconventional stuff.

Boosting consumerism mayindeed be what’s needed right now,as we drag ourselves from the reces-sionary mess we created bybelieving that we could use ourhomes as ATMs. But as Twitterreaches a value of $8bn, we arelooking four square at the lie thatsocial media are somehow moresocially wholesome than old-fash-ioned media.

Convenient truth?This belief is predicated on the ideathat social media provide opportuni-ties for individuals and underservedgroups to propagate and spreadtheir messages, enhancing democ-racy and increasing opportunity.

This is partly true, as it is withconventional media. But when itcomes to the commercial entities wecall the social media (Twitter,Facebook and their progeny), notonly are social media no differentfrom newspapers, magazines andtelevision, but their technical supe-riority also enables them to furthertheir own commercial agendas byundermining our abilities to differ-

entiate fact from fantasy. In the old days you could

easily distinguish a sales pitch fromobjective reporting – it had “adver-tisement” written on it. No matterwhat your views were on inherentbiases of the media, at least therewas some way of knowing whatyou were being offered: objectivityor blatant bias.

And you could teach yourchildren how to distinguish betweenthe two. Even in the good old dayswhen they used the medical profes-sion to sell cigarettes, you at leastknew that it was the men fromCamel who were telling you abouthow the doctors found cigarettesmoke soothing on the throat.

Not any more. The stratosphericvaluations on social media busi-nesses are based on the promisethat the social and gaming mediawill once again enable doctors totell us how good their throats feelafter a Camel.

Ironically, doctors themselves aretargeted by a free iPhone app calledEpocrates (geddit?) that enablessearches for suitable drugs toprescribe. More than half the doctorsin the US are reported to use the app.

But as with everything free,there is a social cost because thedoctors searching for informationhave first to pass through a wall ofmedical “alerts” which are adver-tisements dressed up as news.

What does it matter if society isdevising better ways to encouragegreater consumption? Let’s forgetthe obvious concern about how wecan possibly afford to continueorganising our economies in exactlythe same way as we have for thepast few centuries. Let’s just look athow the current internet bubble iswasting talent that could be somuch better used to contribute to a

more prosperous, more sustainablesociety.

What bright, brainy graduatewould not want to be Mark Zucker-berg or any of the other badlydressed but insanely rich socialmedia moguls?

Chasing the dollar The sadness of the social mediahype is that earlier generationslooked for ways to find new worldsin space, or devise new medicalcures, or develop advanced mate-rials to make life better.

Now the world’s top brains areworking on ways to make the socialmedia make money. How to infiltratesales messages into 140 characters.How to integrate more commercialsinto Facebook. These huge intellectsare heading to California where darkrooms, bright screens and pots ofgold await those who can find waysto sell more deodorant, rejuvenatetired shampoo brands and convinceus we definitely need more blades onour razors.

As the space shuttle Challengerlanded for the last time, I thoughthow insular America had become,how myopic. Instead of looking tothe heavens and dreaming of newworlds, we turn instead to search forfriends on our little screens; behindwhich social media barons are doingvery little more than devising themodern version of the 1950s Cameladvertisements. Got a match? n

Peter Knight is president of Context America. [email protected]

Letter from America

Is social media just oldnews rehashed?

Living your life through Twitter and Facebook might feel cuttingedge, but you risk being a modern victim of good old-fashionedmarketing, argues Peter Knight

Columnist: Peter Knight 23

Fun but insular

Does it matter if society isdevising better ways to encouragegreaterconsumption?


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COLUMNIST:PETER KNIGHT


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CRwatchBy Jeni Bauser in New York

How mobile phones can reunite refugees, Amnesty’s Arabian troubles and VW under scrutiny

24 CRwatch Ethical Corporation • September 2011

App helps refugees findloved onesIn partnership with the UnitedNations High Commissioner forRefugees and Refugees United (RU),Ericsson, the communications infra-

structure group, is helping refugeesregister, locate and reconnect withloved ones using a custom mobileand internet platform.

The programme got a boost thissummer with the addition of Androidapp technology, allowing refugees touse SMS and mobile browsing tolocate missing relatives – in additionto RU’s existing internet platform.Mobile functionality is particularlyvaluable in Africa, where mobilephone penetration is above 50%, ascompared with PC-based internet atjust 10%.

Ericsson helped develop RU’sweb-based platform for mobilephones and connect them withglobal mobile operators, such asSafaricom and MTN in Africa.

Refugees United co-founderChristopher Mikkelsen says theAndroid app is predominantly gearedtowards refugees with smart phones(usually those who have alreadyresettled) and NGO staff.

The programme is also expandingbeyond the pilot in Uganda to Kenyaand other “refugee-populous” hostand resettlement countries.

“Realising the immense treasuretrove of knowledge corporations

possess, we wanted to create a hybridbetween the passion of the NGO andthe strategy, structure and disciplineof the private sector,” Mikkelsen says.

Refugees can register for the RUplatform in two ways. Those whohave been resettled mainly access thedatabase via the internet or mobileplatform. People still in refugeecamps, who use the service the most,register with the help of RU andpartner staff.

According to Elaine Weidman,Ericsson’s vice-president of sustain-ability and corporate responsibility,the partnership is a natural fit withthe company’s Technology for Goodinitiative, which “harnesses thepower of informational and commu-nication technology to address climatechange and socio-economic develop-ment issues”.

VF acquires Timberland Timberland has been snatched up byUS clothing giant VF Corporation,owner of big name brands includingNorth Face, Vans, 7 For All Mankindand Wrangler.

The acquisition marks VF’s overar-ching strategy to expand itsouterwear brands, which VF chiefexecutive Eric Wiseman says “willcontinue the transformation of VF’sportfolio, propelling VF’s Outdoor &Action Sports businesses to 50% oftotal revenue”.

“Timberland is proud of its richheritage, its track record of successand its reputation as a responsibleand environmentally consciousglobal citizen, all of which will bepreserved and enhanced by becomingpart of the VF family of brands,” saysJeffrey Swartz, Timberland’s chiefexecutive.

Timberland has remained tight-lipped concerning the details of thedeal, so only time will tell how thiswill affect Timberland’s operations(and those of VF), and its leadershipposition in sustainability.

Timberland made headway as agreen leader with its 2006 green

Amnesty International blocked in Saudi ArabiaAmnesty International’s global website was temporarily blocked in SaudiArabia in reaction to the organisation’s vocal stance against a proposedSaudi anti-terrorism law, which would sanction authorities to prosecutepeaceful dissent as a terrorist crime.

Amnesty says the law “would entrench, exacerbate, and offer a cloak of‘legality’ to long-standing oppressive measures taken by the Saudi Arabiangovernment in the pretext of countering terrorism”. In particular, the lawwould allow suspects of supposed “terrorist crimes” (a term also looselydefined) to be held for an indefinite period without charge or trial, andwithout access to a lawyer. It would also grant tremendous power to theminister of the interior, without judicial oversight.

The Saudi government released a statement calling Amnesty’s concerns“baseless” and “completely without foundation”.

“We completely disagree,” says Amnesty’s Neil Durkin. “Meanwhile, theSaudi Arabian authorities do not seem willing to enter into a proper discus-sion about the issues. Blocking sites is hardly the hallmark of an opencountry that welcomes free debate.”

There have also been reports that Amnesty’s UK site was blocked. TheArabic script of the anti-terror law has since been transferred to Amnesty’sblog protectthehuman.com.

“As to the likelihood of it being passed – it’s extremely difficult to say,”Durkin says. “Other punitive laws have come into force in Saudi Arabia in

recent years, but also much of its legal code is either kept secret or isgoverned by pronouncements – fatwas – by the Council of Senior Ulema.It’s true to say, indeed, that the entire justice system remains largely secre-tive.” Amnesty says it will continue to monitor the situation closely.

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InterfaceFlor launchesanother firstInterfaceFlor, the modular flooringdivision of US-based sustainabilityleader Interface, has developed oneof its most environmentally friendlyproducts to date.

The new line, Biosfera I, is thefirst carpet collection to use 100%recycled yarn, and is independentlyverified to boot.

In the 2011 line, 30% of the yarn

CRwatchEthical Corporation • September 2011

packaging commitment to reduce itsenvironmental footprint and put a“nutritional label” on its packagingto educate consumers about products’life-cycles. Timberland is a foundingmember of the Eco-Index, anindustry-wide rating that assesses aproduct’s environmental impact, andhas had great success with its Earth-keepers collection, which usesrecycled and organic materials thatare sustainably sourced.

the greenhouse gas emissions of everyconsumer product. And all this isachieved while maintaining competi-tive prices.

“Strategic, long-term collaborationis key to the success of a sustainablefuture,” says InterfaceFlor’s DeepaVyas. “Establishing a mutual relation-ship with suppliers on sustainabilityinitiatives can help to make your ownproducts and business more resilientand sustainable.” n

comes from post-consumer-recycledraw materials such as reclaimedcommercial fishing nets, textile andplastic waste, and materials fromInterfaceFlor’s products. Theremaining 70% of recycled materialmainly comes from pre-consumerexternal sources. The line uses as littleyarn as possible to reduce emissionsand waste.

InterfaceFLOR also uses its CoolCarpet practice to calculate and offset

Greenpeace targets Volkswagen Greenpeace spoofed Volkswagen’s highly successful “The Force” advert (atake on the Star Wars tale) with its “Away from Darkside” campaign tochallenge the company’s green commitments.

Volkswagen Group is the world’s second largest car manufacturer.According to Greenpeace’s Leila Deen, VW holds the most board seats on thepowerful European Automobile Manufacturers Association, which “hasbeen leading the charge against strong fuel efficiency standards in Europeand pushing hard to block key climate laws”.

Greenpeace is also asking VW to include its impressive efficiency tech-nology on all vehicles as the norm, rather than an added cost. “[If] theydesire to be the most eco-friendly, they have an obligation to set stan-dards,” says Deen.

The campaign, launched in June, is now in 15 countries and has morethan 250,000 supporters.

“Our shift to a low carbon future is full of opportunity, and corporateadvisers should be pushing companies to focus on thinking afresh about theirbusiness model, getting ahead in the race for low carbon technology, ratherthan spending money on trying to hold back an inevitable tide,” Deen says.

“Otherwise EU and US companies will find themselves left behind by the moreambitious companies of newly developing countries, such as China, who havealready seen and acted on the opportunities this transition affords.”

Is VW pushing as hard as it should?

V

Bloomberg donates to anti-coal campaignThe Sierra Club’s Beyond Coal campaign just got a $50m boost from NewYork City mayor Michael Bloomberg’s philanthropic arm, BloombergPhilanthropies.

The Beyond Coal campaign was launched in 2002 and predominantlyfocused on preventing 153 new coal-fired plants from being developedunder the Bush administration (only one actually broke ground).

The campaign is nowworking to retire one-thirdof America’s coal fleet by2020, and put clean energyprojects in their stead. WithBloomberg’s sizable grantover the next four years, thenon-profit group can nowdouble its staff, expand thecampaign from 15 to 45states, and boost member-ship from 1.4 million to 2.4million.

“Michael Bloomberg isvery focused on outcomesand metrics to assess aproblem and how we can fix it,” says Bruce Nilles,founder of the Beyond Coal campaign. “Our work is a measurable way toreduce carbon pollution oneplant at a time, and thatmirrors the type of work he is doing in New York with the Plan NYC greeninitiative.”

The Sierra Club works closely at the state level and with union leaders toensure no one gets laid off as a result of the plant closures. For example,workers can be transferred to another part of the facility, be moved toanother plant, or get trained in alternative energy technology.

Nilles is also quick to point out that new wind and solar facilitiesgenerate more jobs than coal. Plus, the majority of states currently importmillions of dollars worth of coal, but if they could keep money in-state andcreate new clean energy jobs, that’s a win-win.

“When there is an absence of movement on key issues at a state, federalor international level, supporting efforts that are being driven at a local level– by communities, towns and cities – can have a cumulative, significantand measurable impact globally,” says Bloomberg Philanthropies’ MichaelMarinello.

Hands up for clean power, says Bloomberg

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Columnist: Jon Entine26

Eco marketing

What price greenconsumerism?

Plenty of shoppers say they consider environmental impact, but inreality price rules supreme, says Jon Entine

How much do we want green carrots?

Consumers needproof that agreen product is as effectiveand of the samequality as thealternatives

COLUMNIST:JON ENTINE


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Remember the innocent days ofthe 1980s ethical consumer

movement? New Age entrepreneursrode the green wave into the heartsand malls of the world. The promise?Buying pricey ice-cream would makethe world a better place.

That myth crashed. Consumers,it turned out, were not willing tobuy idealism if it came at apremium. Two decades later, greenmarketing remains with us, moreintense than ever. Is green yet morethan a fad?

The Lifestyles of Health andSustainability annual survey esti-mates that 13-19% of Americanadults are dedicated green buyers –a $290bn market. The US-basedCone Communications estimatesthat 70% of American consumersconsider the environmental impactof their purchasing. The UK andEurope show similar numbers.

According to marketing experts,however, these figures are wildlyoverstated, reflecting attitudes, notbuying patterns.

Prof Shruti Gupta of Penn StateUniversity, a world expert in ethicalbehaviour says: “While people love tovoice their idealism to survey compa-nies, the cold facts are they almostalways put their self-interest first.”

Take Elizabeth Romanaux, aconsultant from New Jersey inter-viewed by the American Associationof Retired People for a magazinepiece about green buying. Sheconsiders herself environmentallyconscious. She recycles. Shecomposts. But she won’t pay apremium for an eco-friendly hotelroom or cleaning products. “It isn’tthat I can’t afford them,” she toldAARP Magazine. “It just goesagainst my grain to pay more.”

“Consumers will buy priciergreen products,” Gupta says, “but

only if they are convinced that thesacrifice – higher prices – signalssome measurable value.”

We need proof that a greenproduct or service is “as effective andof the same quality” as alternatives,says Kate James of Grail Research, aconsumer research company. Grailreports that although 85% of USconsumers claim they buy green,fewer than 8% actually do. Accordingto marketing firm Ypartnership,although eight in 10 vacation trav-ellers consider themselves “eco-conscious,” only one in 10 bookstravel based on green considerations.

Eco-consumerism remains amarginal purchase or luxury indul-gence except for a dedicated few. A2008 study funded by the UKEconomic and Social ResearchCouncil found that 30% ofconsumers reported they were veryconcerned about environmentalissues but they struggled to translatethis into purchases. As a result, themarket share for “ethical foods”, oneof the most visible segments of thegreen market, has yet to crack 5%.

Jaded greensBaby boomers, who launched thegreen movement, are now theleading sceptics. Many havemetaphorically traded in theirBeetles for luxury hybrid BMWs,but deceive themselves they are stillbuying green.

Crowd Science, which usesinternet surveys, says 25% ofseniors say shopping green “makes no difference”; most of therest are indifferent. To eco-cynics green consumerism is the ultimate oxymoron, akin to “corpo-rate responsibility”. The genuinesolution, of course, is to buy less.

Three years ago, as green feverwas peaking in Hollywood – green

was declared the new black – VanityFair published its annual “Go Green”issue timed to Earth Day. Muck-raked.com estimated that the issue,printed on non-recycled paper, used2,247 tonnes of trees and produced4,331,757 pounds of greenhousegases, 13,413,922 gallons of waste-water and 1,744,060 pounds of solidwaste. Vanity Fair scrapped thegreen theme issue in 2009.

The green marketing trend iscertainly not all smoke and mirrors.The boom in environmentalmarketing has meant more scrutinyof companies looking to differen-tiate themselves. Green marketershave been forced to raise their gamein transparent and creative ways,focusing on eco-innovation andactual corporate responsibilitycommitments to enhance theirbrand identity. They need todocument their green credentials.

Perhaps the most encouragingtwist is not the fragile green buyingtrend but the turn by manufacturerstowards a more sustainable style ofbusiness – thank you, Wal-Mart andGE. “I believe the real growth inenvironmental consumerism will bein the business-to-business space,not in selling to consumers,” saysGupta. “For them it’s not payingpremium prices, it’s making invest-ments in sustainable productionthat significantly lowers long-rangecosts. Greening the supply chainsaves them money.” n

Jon Entine is director of ESG MediaMetrics andsenior fellow at the Center for Health and RiskCommunication at George Mason University.


The idea thatsustainability is a way to earncompetitiveadvantage is stillnovel in Turkey

Turkey, one of the fastest-growing emergingeconomies, is in the midst of major transforma-

tion. Since the 1980s, market deregulation hasboosted foreign investment. The Turkish economyexperienced boom-and-bust cycles throughout the1990s, culminating in an economic crisis in 2001.Since then, structural reforms have brought politicaland economic stability. Now Turkey is the world’s16th largest economy and is expected to grow at arate of about 5% until at least 2015.

With a population of 71 million, Turkey is a hugepotential market. While its economy is much smallerthan the Bric countries (Brazil, Russia, India andChina), Turkey’s unique geopolitical position gives ita particular importance on the world stage.

Turkey’s sights are focused on achievingmembership of the European Union. While theaccession process is likely to create adjustment costsand regulatory risks for business, it is expected to raiseenvironmental, ethical, and social standards in areassuch as participative democracy, anti-corruption,human rights, and the importance of civil society.

The EU is Turkey’s biggest trading partner, sothere is a lot riding on getting it right. As it integratesits economy with developed countries, Turkishcompanies are competing on a much larger playingfield. The notion that a strong sustainability profileis a competitive advantage is only just taking root inTurkey, where corporate responsibility is oftenregarded as synonymous with philanthropy.

The reasons for this lie in a centuries-old tradition.Since Ottoman times, institutionalised philanthropy,in the form of the “waqf” (a form of charitablefoundation from Islamic tradition) was the mainbasis for the provision of public services such aseducation, social security and healthcare.

Waqfs generally belonged to wealthy familieswho used these foundations to share their wealth inthe form of public goods. Waqfs are still active inTurkey today and most family-owned conglomeratesin Turkey have an associated waqf. In fact, Turkishsociety has come to expect companies to play anactive role in society, especially in education, health,culture, sports and the arts.

Traditional values Sustainability and corporate responsibility havebecome mired in this tradition, where philanthropicdonations and community involvement are seen asmuch the same thing. The idea that sustainability isa way to earn competitive advantage through newopportunities, new markets, and new businessmodels, or to minimise risks, is still novel in Turkey.

“Most companies still consider CR as an add-on,not core to the business,” says Melsa Ararat, aprofessor in strategic management, corporategovernance and business and ethics at SabanciUniversity and the director of the CorporateGovernance Forum of Turkey. “Doing good shouldstart with avoiding harm and understanding your

Overview

The philanthropy problem By Amy Brown

If Turkey’s corporate responsibility movement is to drive real organisational change, companiesneed to see that sustainability is more than philanthropy

29 Modernisation and corporate challenges33 Risks and opportunities35 Change at the top

Country briefing:Turkey

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full impacts and Turkish companies are not there yet.CR is still about marketing and PR.”

That view is shared by Atila Uras, manager of theUN Joint Programme to Enhance the Capacity ofTurkey to Adapt to Climate Change.

“Planting some trees was enough for the privatesector until the first part of this decade,” Uras says.“Then the concept of CR became more familiar andthey began to understand that CR requirespartnership, not just providing funds or charity work.”

He describes Turkish companies as generallyfollowing global trends – not leading them – saying thattheirs is “not a strategic approach, but mostly reactive”.

But there are some signs that things are changing.The proximity to Europe, exposure to energy risks exacerbated by growth, Turkey’s reliance onexternal finance, and the increasing importance ofsustainability globally are moving corporateresponsibility up company agendas.

Among the developments since 2010: the launch ofthe Istanbul Stock Exchange’s Sustainability Index; thefirst Turkish signatories to the United Nations’ Principleof Responsible Investment programme and CarbonDisclosure Project (to date, 20 companies have joined);an increase in the number of Global Reporting Initiativereports published; and a growing number of Turkishcompanies signing up to the UN Global Compact.

The pressure exerted from external institutionsand market forces will probably continue to be biggerdrivers for better sustainability practice in Turkeythan either government policy or civil society.

“There is no pressure from Turkish society orgovernment for the private sector to improve itscorporate responsibility practices, and that is not

likely to change,” says Serdar Dinler, president of theCSR Association of Turkey, an NGO.

Change must therefore come from within. Andwhile there is still a long way to go, Dinler iscautiously optimistic.

“A growing number of companies recognise thecompetitive and reputational advantages of CR andsome are implementing better practices,” Dinler says.But only a few are making it a strategic part of theirbusiness, and none are taking it to the next level byintegrating CR throughout their supply chain. “InTurkey, most leading companies are at theimplementation level.”

Consumer demandTurkish society and its millions of consumers alsoneed to drive sustainability, says Engin Guvenc,executive director of the Business Council forSustainable Development Turkey.

“It is not only companies who should be makingsociety aware of sustainability, consumers are also beingaffected. If there isn’t a demand for products producedin a more socially and environmentally responsibleway, there will be less action from industry,” she says.

It comes down to changing corporate culture, sheadds. “We have a culture handed down over thegenerations, so it is difficult to change the mindset.”

As Turkish markets become more competitive,civil rights are better respected, the legal and judicialsystem improves, and the intensified political andeconomic interaction with Europe affects socialvalues. Against this backdrop, Turkish business hasno choice but to take on a long-term perspective –and that bodes well for sustainability in Turkey. n

28 Country briefing: Turkey Ethical Corporation • September 2011

Turkey factsheetSocio-economic statistics

Population: ................78.8 million (2011 estimate)

GDP: ..............................$960bn (PPP 2010 estimate)

GDP per capita: ..........$12,300 (PPP 2010 estimate)

Human Development Index: ..0.679 (83rd / 169)

Current leadershipPresident: ............................................ Abdullah Gul

Type: .......... Republican parliamentary democracy

Import partnersRussia ..............................................................13.8%Germany ..........................................................10.0%China....................................................................9.0%

Export partnersGermany ............................................................9.6%France ..................................................................6.1%UK ........................................................................5.8%

Focus of CSR/sustainability 1. Reporting2. Employee engagement 3. Resource efficiency

Turkey sustainability leaders most mentioned Coca-Cola Icecek, Koç Holding

Foreign sustainability leaders most mentionedNovo Nordisk, Vodafone

Guidelines and initiatives most used

Global Reporting Initiative

Global Compact

Guideline and standards statistics

GRI reports in 2010..........................................................10

Global Compact participants ........................................13

UNPRI signatories ..............................................................7

References:• Socio-economic statistics obtained from recent publications from the CIA Factbook and the Human

Development Index.• Corporate responsibility data obtained from an August 2011 Ethical Corporation survey. The small sample

of this survey means that the results should be regarded as an indication of trends in Turkey and not asscientific research.

• Guideline and standards statistics obtained during August 2011 from official website of each initiative.

Corporate responsibility statistics: Ethical Corporation survey results

The importance of sustainabilityglobally is movingCR up companyagendas

This briefing has been written by OneStone, with special contribution fromIstanbul-based correspondent JenniferHattam. One Stone is a global teamoffering sustainability consultancy andcommunications expertise. One Stone’spartners and associates are based inStockholm, Edinburgh, Sydney, Portland,Oregon and Washington DC. One Stonehas more than two decades’ experienceworking with multinational companies toguide sustainability leadership strategiesand provide focused sustainabilitycommunication.

April Streeter is a writer specialising insustainability since 1998. Formerly basedin Sweden, where she covered Scandi-navia for Windpower Monthly, she nowlives in Portland, Oregon and is a bloggerfor Tree Hugger and The Huffington Post.

Amy Brown, based in Washington DC, haswritten the award-winning sustainabilityand integrated annual reports for NovoNordisk, Electrolux and Ericsson. She’salso written extensively for the Interna-tional Herald Tribune on sustainabilityissues and was editorial consultant forthe World Business Council for Sustain-able Development’s 10th anniversarypublication Walking the Talk.


Turkey facespressure from the EU to provideconcrete emissionsreductions

Population growth, urbanisation, rising incomesand energy consumption are straining Turkey’s

natural resources. Turkey is also highly vulnerableto climate change, with a carbon-intense economythat has an increasing energy shortage and depend-ence on imports.

In contrast with many emerging markets, Turkeyis a net commodity importer. About $35bn of oil andnatural gas each year has to be imported (equivalentto almost 5% of GDP). The country has an unsus-tainable carbon-based transport system. And withits large coal reserves, use of coal is expected tomultiply over the next decade.

On the bright side, Turkey is one of the pilotcountries in the Clean Technology Fund, whichfinances low-emissions technologies for greenhousegas reductions within countries’ investment plans.Through CTF, Turkey hopes to jump-start the privatemarket for energy efficiency and renewable energy.

Turkey has substantial renewable energyresources, including hydroelectric, wind, geo-thermal and solar power. The long-awaitedRenewable Energy Law, enacted January 2011,includes an incentive scheme to promote renewableenergy use and production.

Looming water scarcityWith a climate strategy criticised as vague, Turkeyfaces pressure from the EU to provide concreteemissions reductions. Lack of certainty overTurkey’s position with respect to internationalagreements has led to a weak approach and lowawareness of the issue by most corporations inTurkey.

Companies and sustainability

Corporate hurdles

By Amy Brown

Turkey has big ambitions, but in its efforts to modernise, a range of sustainability challengesmust be confronted

Country briefing: Turkey 29Ethical Corporation • September 2011

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“Water scarcity is a big, big issue,” says Atila Uras,manager of the UN Joint Programme to Enhancethe Capacity of Turkey to Adapt to Climate Change.

“Turkey is among the most highly vulnerablecountries in world, and the major impact of climatechange will mostly be in terms of water. By 2070 it ispredicted Turkey will experience 30% less rainfall, in[what is] an important regional basin for agricultureand food security.”

Few companies embrace the environmentalagenda of the country, turning instead to their longlegacy of contributing to social needs such as educa-tion. Unemployment at 14% is the most pressingeconomic and social issue, mostly affecting Turkey’syouthful population (44% are under the age of 24).

“Many young people are graduating withoutskills, which is a very dangerous thing, a timebomb,” says Serdar Dinler, president of the CSRAssociation of Turkey, an NGO. “This is a veryimportant challenge for Turkish society.”

Atilla Yerlikaya, corporate affairs director atCoca-Cola Icecek, agrees. “Capacity building for theyoung, dynamic population of Turkey is extremelyimportant. Formal and vocational education iscritical for the future of the country.”

The EU accession process has improved Turkey’sinfrastructure for protection of human rights butthese institutions lack resources, independence andimpact, according to Prof Melsa Ararat of SabanciUniversity.

Trade union rights are another weakness. Thenumber of workers covered by collective agree-ments in Turkey is as low as 3% of registeredworkers. While Turkey has a labour unions law, it


does not apply to certain sectors of theeconomy where informality is high. Healthand safety at work is therefore a serious

concern, given the size of the informalmarket and low level of unionisation.

The Turkish textile industry has seizedon corporate responsibility as a competitiveadvantage against the threat of Chinesetextiles and engaged voluntarily in projectswith European civil society organisationssuch as the Clean Clothes Campaign toimprove social standards.

Turkey’s corporate sectors are rapidlyinternationalising. The automotive andtextile industries that depend on trade withEurope face requirements for capping theircarbon, or reporting their emissions to theircustomers.

Multinational companies have a benefi-cial effect on the growth of corporateresponsibility and sustainability in Turkey,with companies such as Unilever, Carrefour,

Procter & Gamble and Coca-Cola settingstandards that domestic companies mustfollow to stay competitive.

Consumer-product companies, such asappliance manufacturer Arcelik, whichhave growing numbers of local consumerswho view environmental performance as adifferentiating factor, are taking the agendamore seriously and investing in environ-mentally efficient products.

And the banking sector is often regardedas a leader in corporate responsibility,according to Ararat, not least because international loan institutions set environ-mental, social and corporate governancestandards for loan recipients.

A family affairTurkey’s corporate landscape is defined bythe group of powerful families that ownhalf a dozen leading conglomerates, amongthem Eczacibasi, Kocabiyik, Sabanci, Koç,Yazicilar and Ozilhan. These conglomeratesstand out in opinion surveys about socialresponsibility conducted by Capitalmagazine and the market research firmGSK-Turkey.

Given their influence in Turkish society,these companies seem to have embraced

Koç Holding: social historyBy Amy Brown

“I live and prosper with my country,” declared VehbiKoç, founder of Koç Holding, the largest industrialconglomerate in Turkey.

That philosophy has guided the actions of thispowerful family-owned company for the past 40 years.A tradition of social responsibility began with the VehbiKoç Foundation, supporting education and the arts.But in recent years that view has shifted to a moreencompassing definition of corporate responsibility thatis less about being a wealthy benefactor and moreabout recognising a business case for sustainability.

Where Koç Holding leads, others follow. It comprises117 companies, representing 10% of Turkey’s totalexports, and generates a combined turnover equiva-lent to 7% of Turkey’s national income. It is the onlyTurkish company in the Fortune 500 list.

With that kind of leverage comes a sense ofresponsibility, says Oya Ünlü Kizil, head of corporatecommunications and external affairs. “Our sustain-ability depends on the sustainability of the society atlarge,” she says.

With Turkey’s large number of unemployed andunskilled young, Koç Holding started a vocationaleducation programme with the ministry of educationand local NGOs to encourage young people to enrol invocational education and to contribute to the trainingof a qualified workforce. This initiative goes beyondphilanthropy, explains Kizil, in that it positively affectsbusiness outcomes by increasing the pool of skilledhuman resources.

On the environmental side, the company endorsed aclimate change strategy in 2010 with an eye to trans-forming potential risks into opportunities. “A low-carboneconomy,” Kizil says, “has significant potential to createimportant new business and job opportunities.”

An energy efficiency coordination group has shownresults: a 100% group-wide improvement in energyefficiency in two years, saving about 330,000 tonnesof CO2 emissions in 2010. Companies within Koç stand out as leaders, such as Arcelik, which hasdeveloped world-leading energy-efficient homeappliances, and automakers Tofas and Otokar thatproduce hybrid and electric vehicles.

Koç produces an annual CR report and was one ofthe first signatories to the UN Global Compact. In 2010the group developed a sustainability performanceevaluation and reporting system. All of this has tomatter to the bottom line if sustainability is to becometruly entrenched as a way of doing business, Kizil says.

“The sustainability of CR activities largely dependson their returns for the companies. It’s a two-waystreet. The companies’ ability to analyse social andenvironmental risks and mitigate them through CRactivities is the key for their sustainability as well asleadership in the 21st century.”

Responsible textiles have a competitive advantage

Consumer product manufacturers are investing in environmental efficiency

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their leadership role in raising sustainabilityon the corporate agenda.

The huge SME sector (SMEs make up90% of all companies in Turkey) is playingcatch-up. SMEs receive a significantly lowershare of the credit supply in Turkey, so theyare more likely to opt for informality and taxevasion. As a result, it is not uncommon tofind a SME extolling an educational or socialprogramme and claiming to have adoptedcorporate responsibility, while engaging intax avoidance.

“You cannot call what these SMEs aredoing CR as such,” Ararat says. “The activi-ties aim to have a reputational benefit to thecompany. But at the same time, thesecompanies wouldn’t mind not paying taxes or being involved in the informaleconomy. They do not see corporate respon-sibility as a measure of overall goodcorporate citizenship.”

Among the companies that stand outconsistently in Turkish opinion surveys andregional and international rankings oncorporate responsibility is Turkcell, Turkey’sbiggest communications and technologycompany. Recognised as one of the top fivecompanies in Europe for its financial disclo-sure procedures in 2011 by the IR GlobalRankings, and recipient of “company of the

decade” award by World Finance Magazine(an award partly based on a company’ssustainability track record), Turkcell is theonly Turkish company to be listed on theNew York Stock Exchange.

Turkcell has become well known for itsactivities to support education in Turkey.Turkcell’s main educational project,“Modern Girls of Modern Turkey”, whichstarted in 2000, grants scholarships to young

women in less developed parts of thecountry. These “Kardelenler” (snowdrops)projects, conducted in partnership with alocal NGO, are now collectively one of thebiggest social responsibility projects in theworld. So far, 27,500 students have beengranted scholarships, 11,000 have gradu-ated from high school, 3,500 passeduniversity entrance exams and 1,250 gradu-ated from university.

Recognising that Turkey needs greaterinvestment in vocational training andhuman resources, Turkcell also supports a

number of youth and vocationalprogrammes and, for example, has anemployment creation programme focusedon call centres.

“With 34 million customers, we rely onour call centres and at the same time thiscreates employment opportunities. We arecreating community value by investing inthe local community,” says Zeynep Ozbil,head of corporate citizenship at Turkcell.

While he sees Turkcell’s initiatives withineducation as commendable, Serdar Dinlerof the CSR Association says the company isstill missing the big picture. “CSR is aboutchanging organisational culture, not just aproject,” he says.

Among the companies moving awayfrom the philanthropy model to morestrategic sustainability is Coca-Cola Icecek(see case study). Risk management andreputation are key drivers, along withglobal expansion.

“Research and development related toeco-innovation could be better encouragedby the government by announcing specificprojects, giving more support to SMEs andjoint projects. Such programmes alreadyexist in Europe,” says Oya Ünlü Kizil, headof corporate communications and externalaffairs at Koç Holding.

Petkim: pure petrochemicals? By April Streeter

Petkim Petrochemical Holdings is Turkey’s largest petrochemicals producer and its giantplant dominates the spit of coast it occupies on the gulf of Izmit, 125km from Istanbul.The company make nearly 2m tonnes of chemical products each year, ranging from PVC to ethylene. Petkim is well aware it is in one of the most energy-intensive indus-tries, and due in part to expansion plans, the company made the move in 2010 tomeasure and report its greenhouse gas emissions through the Carbon DisclosureProject.

Project manager Gediz Kaja of the Gaia Carbon Team (Petkim worked with the UK’sEcometrica as well) says Petkim’s awakening to corporate responsibility and carbonmanagement are part of a trend among companies grappling with the reality of theneed for a low-carbon economy.

It is also considered necessary as Petkim pushes ahead with an ambitious five-yearexport expansion plan. Perhaps to some degree the move is also a result of previouspressure from NGO Greenpeace over Petkim’s waste and pollution. Not regulateddomestically, Petkim is acting voluntarily.

“Petkim’s status in international markets plays an important role in its decision tostrengthen its CSR,” Kaya says. “Nevertheless, there is some internal motivation –starting with the CEO, there is strong faith in the company that it should play an impor-tant role, to contribute to environmental and social sustainability in its region andnationwide. It sees itself as a role model and strongly believes that as an institution itcan do it.”

Though Petkim hasn’t publicly disclosed the results of its CO2 measurements (compa-rable competitors Chevron and ExxonMobil emitted 63m and 131m tonnes of CO2respectively in 2009), and is not currently setting quantitative targets for GHG emissions,

it is already reducing its carbon intensity.The company has identified 43 energy-efficiency projects it could undertake, and has

23 of these projects already in progress. Petkim has also received permits for a 25MWon-site wind power plant. These measures are estimated to save 90,000 tonnes of CO2equivalent a year.

In addition, Petkim is getting ready to release its first full sustainability report in 2011.“Petkim has become a superior example of sustainability and corporate social respon-

sibility practice,” Kaja says, “in an environment where such actions are not mandatory.”

Petkim makes a big impact

Turkey needs greater investment in vocation trainingand human resources



Taking a firmer line on climate changewould also be enhanced by strongergovernment incentives, she adds. “Estab-lishing a voluntary internal carbon marketconnected with international regulatoryand voluntary markets may be anothermeans to encourage investments toimprove energy efficiency and carbonreduction activities.”

Confronting the challengesCoca-Cola Icecek is among the Turkishcompanies confronting the issue of genderequality. Its female executive rate is 73%,compared with only 16% globally.

“There is an increasing understanding ofthe global CR agenda in Turkey, especiallyin the last two to three years. Right now, Ibelieve Turkish companies are closing thegap with MNCs,” says Atilla Yerlikaya,

corporate affairs director of Coca-ColaIcecek.

The “360 degree view” of sustainability is being championed by NGOs such as the Business Council for Sustainable Devel-opment.

BCSD’s executive director Engin Guvencsays that the organisation’s role is to makesure companies understand their risk areasand help contribute to the company’s finan-cial strength. “For example, withoutknowing its carbon emissions impact, acampaign to plant trees is clearly just formarketing purposes. But if the company isaware of their emissions impact and seesthe risks associated, and this awarenessbecomes part of the culture of the companyto address these emissions – that is morecorporate responsibility and sustainability.”

Particularly when it comes to climate

change, companies are no longer able tohide their heads in the sand, Atila Uras says.

“Climate change is emerging in Turkey as an issue for corporates, both to address within the organisation and as amarketing tool,” he says. Uras believes thatcompanies are beginning to see that thereturn on investments in energy efficiencyor waste reduction is coming back veryquickly and that there is an enormousopportunity for greater visibility andcommunication around a more environ-mental, low-carbon, responsible way ofoperating their business.

“As more evidence of the business case emerges, I expect to see growing investment by companies as they realisethere is an opportunity to do somethinggood and receive economic benefit at thesame time.” n

Coca-Cola Icecek: bottled ethics By Amy Brown

In a country and region expected to face serious water shortages in coming years, Coca-Cola Icecek (CCI), the Turkish-owned company that is the sixth largest bottler in theCoca-Cola empire, is proud of having the best water and energy usage rates in theglobal Coca-Cola system.

“We are operating in an environment where natural resources are under tremendouspressure. Therefore efficient use of water, energy and packaging materials is critical forsustainability,” says Atilla Yerlikaya, director of corporate affairs at CCI.

With a total of 20 plants, CCI employs about 9,000 people and has operations in 10countries in the Middle East. Unlike many other Turkish companies just starting to getthe big picture, CCI is well on the way to integrating sustainability.

It’s a matter of common sense and long-term survival, Yerlikaya says. “Any CRapproach or strategy that is not tied to the future of your business through a businesscase is destined to fail in the long term.”

While aligned with the sustainability priorities of the Coca-Cola System, CCI has carvedout its own priorities around water management, sustainable packaging, energyefficiency and climate change. CCI is hitting all the right notes in entrenching sustain-ability into the company’s fabric.

Sustainability is embedded in CCI’s 2020 Vision and Strategic Framework. The board ofdirectors’ corporate governance committee is responsible for the sustainability strategyand monitors performance. A sustainability committee led by the chief executive andcomprising senior management identifies long-term sustainability targets and setssustainability metrics. Finally, a sustainability working group includes all function headsand plays a critical role in linking sustainability management with field operations andupper-level management.

The company has been a leader on the reporting front, too. CCI published its first CSRreport in 2008, becoming the first company in Turkey to share non-financial perform-ance through a corporate social responsibility report according to the Global ReportingInitiative guidelines. It has continued to report according to GRI in 2010 and 2011 and isa signatory to the Global Compact.

On the climate change front, CCI was among the first companies to sign the Copen-hagen Communiqué in 2009 and the Cancun Communiqué in 2010 and the CCI Turkeyregion president serves on the Climate Change Leaders Group, which supports thebusiness community as Turkey transitions to a low-carbon economy.

“Earning a social licence to operate is only possible through building a business

model that takes stakeholders’ expectations into account,” says Yerlikaya. “In thefuture, companies operating within this framework are going to be more successful than others.”

Cutting a mega brand's impact is a towering task

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Civil society

Growing pains, some gains

By April Streeter

Turkey’s NGOs and business associations are in the challenging process of convincing businesses of the risks and opportunities of sustainability

Aquest by engineer Sibel Bulay to bringsustainable transport to Turkey is an

apt analogy for the current challenges ofmany of the country’s responsibility-focused NGOs and business associations.While opportunities abound, there are alsogrowing pains.

Until recently, businesses’ charitable and philanthropic activities were mouldedby the historical “waqf” structure. Propercorporate responsibility requires a morecomprehensive view, however, and soorganisations have the challenge of bothgrowing stakeholder engagement in asociety that has had limited activist involvement, and increasing corporateinvolvement in order to press forward witha sustainability agenda.

Turkey’s fairly steady macroeconomicgrowth beginning in 2002, and the subse-quent coming of age of a powerful group ofTurkish entrepreneurs spurred the firstwave of sustainability-related NGOs andbusiness associations. Successful, civic-minded leaders such as Hayrettin Karacaand Nihat Gökyigit founded Tema (TurkishFoundation for Combating Soil Erosion)and retired bank chief Ibrahim Bertil startedTog (Community Volunteer Foundation).

Tog, for example, has had success atraising awareness among the Turkish publicabout renewable energy, especially in theyouth population (aged 17-25). For example,the Solar Generation project now at seven

universities is getting students to look forrenewable projects on campuses andadvocate for policy change to their adminis-trations.

Tema has a high profile with the publicand has made inroads inside companies.The “81 Forests in 81 Cities” campaignhelped bring the plight of Turkey’s forests tothe attention of regular Turkish citizens. Inpartnership with Tema, Is Bankasi decidedinternally to shift funds it would normallyuse to send favoured customers New Year’sgifts and instead allocate them and other

cash ($6.5m in total) to the planting of 2mtrees. Nearly a million are already in theground, planted by Tema volunteers,including elementary school children, at 81urban locations.

However, meatier responsibility-centricNGOs frequently run into the cultural resist-ance of Turkish companies to see beyondsimple philanthropy to actual opportunitiesand risks of embracing a broader sustain-ability agenda. As Serdar Dinler, president ofthe CSR Association of Turkey, has put it,

80% of companies see philanthropy assynonymous with corporate responsibility,leaving NGOs with an enormous, evenoverwhelming educational task.

Bulay’s organisation, Sum Türkiye, hasencountered these challenges. Bulay, aformer Ford product development engineerpassionate about mobility, was sponsoredby the World Resource Institute’s Embarqnetwork to start her organisation.

She dived into the country’s snarlytransport issues – in Istanbul, for example,most working men and women commutefor two hours or more in crawling trafficand smoggy air conditions.

Restrictive lawsSum Türkiye started by working on anemissions inventory of road-based trafficwith BP. Bulay soon realised, however, thatSum Türkiye’s fundraising opportunitieswere limited, due to Turkey’s restrictingNGO laws. Thus a significant portion of herworking hours recently have been spentsetting up a foundation and changing theorganisation name to Embarq Turkey.

Now, Bulay’s new Embarq Turkey mustembrace a partnership model for success.

There are two reasons for this. The influ-ence from European and US multinationals’sustainability approach is only just nowspilling over to Turkish domestic corpora-tions, making them not primed for jointprojects just yet.

In addition, as Guvenc Engin, executivedirector of the Turkish BCSD notes, acritical, in-your-face approach, favoured bymany existing Turkish NGOs (she mentionsGreenpeace) is not going to be fruitful forcorporate responsibility and sustainabilityissues.

“Few NGOs have the understanding ofsustainability to pressure companies – many

Organisations have the challenge of growing stakeholder engagement in a society that has had limitedactivist involvement

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were established years ago and workwith a business-as-usual approach –and to criticise companies is themain attraction. Greenpeace can dothis, but other local NGOs can bemore successful by taking the moreconstructive approach,” Engin says.

Bulay clearly knows this, andfavours a constructive approach forEmbarq Turkey.

Yet as far as domestic corporationsare concerned, education aboutcorporate responsibility is stilllacking, Bulay says, and with Embarqthe sole NGO specifically concen-trating on sustainable mobility, it isbeyond her organisation’s capacity.

Embarq is unlikely to grab anyflashy headlines or prizes, as IsBankasi has with “81 Cities”. Instead,Bulay says she must work to gain thetrust of stakeholders, now and in thefuture. That way, she says, “whencompanies are ready to invest theirCSR dollars, we can align their objec-tives with CSR initiatives”.

Embarq Turkey has partneredwith the city of Sakarya’s Transport Direc-torate, as well as the Dutch NGO Interfacefor Cycling Expertise (I-CE), to train a localteam to design safe bicycle corridors in thismid-sized city. Over 90% of Sakarya’scyclists are male – unsafe conditions areseen as a barrier to women riders – and atleast 10% of riders have been in collisions.

Bulay sees the greatest success inSakarya thus far as the Transport Direc-torate’s realisation that cycling is actually amode of transport, worthy of initiatives. Shewants to see that kind of attitude shiftspread to other cities – Antalya will be nextto develop a pilot cycling corridor – and todomestic companies.

“It’s the idea that it’s not about cars perse, it’s about climate change, mobility,democracy,” she says.

Who carries the torch?Back to CSR’s educational deficit, and older,established NGOs such as Tog and Tema arepursuing the slow process of raising aware-ness of environmental and socialsustainability issues among the Turkishpopulace. Yet since smaller nimble playerssuch as Embarq may not have the institu-tional capacity, who will press the CRagenda inside companies?

Probably not the business associations, itseems. In existence since 1971, the TurkishIndustry and Business Association (Tusiad)

is one of the country’s most influentialbusiness organisations. Following Turkey’sapplication for EU membership in 1987,Tusiad has worked ceaselessly to alignTurkish business standards and practiceswith those of the EU. That would seem togive corporate social responsibility at least aplace at the conference table.

Tusiad president Ümit Boyner has madethe right speeches about the low-carboneconomy and Turkey’s needed to transition.

“Intensive work,” she has said, is under wayinside the organisation, for example, tocreate a framework for Turkey’s response toclimate change.

When it comes to action, however, othersin the corporate responsibility communityare not so clear that Tusiad is committed. ACR study group, established in 2007, startedout robustly but has seemed to peter out,according to Serdar Dinler.

That’s in line with what Melsa Ararat,director of the Corporate GovernanceForum of Turkey, calls the “lack of success”by Tusiad and other business associations at

proselytising corporate responsi-bility.

“They organise meetings andspeakers – may publish papers –but when it comes to supportingthe government to improve legisla-tion that impacts the environmentor other CSR issues, they do nottake any action,” Ararat says. Infact, she suggests that they work tooppose more stringent environ-mental or other CR-relevantlegislation that would impactcompanies’ competitiveness orprofitability.

Observers seem unable to singleout any one NGO with clear successin the responsibility/sustainabilityarena. The Turkish BCSD’s effort tocreate a Sustainability Index for theIstanbul Stock Exchange seems acurrent high note, however, espe-cially as 80 companies haveexpressed interest. And the recentformation of a Turkish BusinessNetwork Linked-in CSR group with500 members is a positive develop-

ment.Devin Bahceci, who has worked for the

Turkish Green Party and in a variety ofNGO roles, currently as secretary-general ofthe Earth Association, says the lack of aguiding NGO is particularly dire in the fieldof climate change.

“For me the test of NGO success is theability to affect people and government totake necessary steps, both adaptation andmitigation, in order to prevent the destruc-tive threats of climate change,” he says.Bahceci’s view is that there has not been anNGO in Turkey that has been able to do this.Powerful environmental NGOs are “notpolitical enough” to influence the govern-ment, and they generally only provideservices such as “planting trees”.

Bahceci says that from his observation,private sector support of NGOs is still quitelow, and corporate responsibility initiativesinside more mainstream NGOs few and farbetween.

Yet Ararat says the pressure from Europefor Turkish companies to shift their visionfrom responsibility as an “add-on” to part ofthe core business strategy will continue.And as the case study on Petkim’s processalso demonstrates (see p.31), while theeducation and impetus to start that processmay not come from the NGO world at all,once the process has begun Turkish compa-nies’ results can be swift and fruitful. n

NGOs frequently run into thecultural resistance of Turkishcompanies to see beyondsimple philanthropy

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Government

Missing the big pictureBy Jennifer Hattam

There are plenty of well-meaningsustainability initiatives under way inTurkey, but a cultural movement forchange has yet to take hold

Faced with soaring energy costs amidrapid urbanisation and industrialisation,

the Turkish government late last year finallyenacted a long-awaited law setting feed-intariffs for renewable energy generation.

For environmentalists, though, the lawcontained a major catch. It allowedprotected nature areas to be used forproduction facilities for renewable energy –including the massive hydroelectric damsthey have been fighting for years.

The inconsistency reflects what thedeputy director of the Regional Environ-mental Centre’s Turkey office calls a lack ofoverall vision on environmental issues.“There are a lot of laws but they are notenforced and do not serve a target,” saysREC’s Kerem Okumus. “There is no sustain-able long-term regulatory framework.”

The situation parallels that of mostTurkish companies, which largely adoptindividual initiatives that might fall underthe heading of “corporate social responsi-bility” without making deeper changes totheir practices and processes.

“Many companies do not get whatsustainability is about,” says Aykan Gulten,a former Nike corporate responsibilitymanager who now heads works in corpo-rate affairs for Coca-Cola Icecek. “They donot assess their impact on the environmentand society but try to be recognised asresponsible through donations and PRwork.”

Garanti Bank, the country’s secondlargest private bank, has, for example, beenmuch praised for its longstanding sponsor-ship of the environmental group WWFTurkey. The same bank has, however, been atarget of fierce criticism domestically and inEurope for its support for the Ilisu Damproject, a massive hydroelectric power plant in south-eastern Turkey that wouldinundate a 2,000-year-old city and displaceits current residents. European fundershave already pulled out of the project.

“There are a growing number of firmsadopting incremental CSR measures, but as

far as I can tell, no company in Turkey istruly migrating towards sustainability in away that meaningfully challenges thebusiness model,” says John Buffington ofKarbon Ekonomi, a firm that offers sustain-ability consulting to Turkish firms.

Many say the government, since 2007under Abdullah Gul, gives companies littleor no incentive to do so, despite various

commendable laws, including onesmandating building energy performanceand other efficiency measures.

Lacking pressure “Environmental regulation in Turkey ispretty sophisticated but there is not enoughmonitoring, enforcement, and criminalsanctions,” says Gulten. “There are no regu-lations holding companies back fromimproving environmental performance butthere are not enough encouraging it either.”

According to REC’s Okumus, one of themost important moves the governmentcould make would be to establish an emis-sions-reduction target that companieswould have to figure out how to meet.Turkey’s per-capita carbon emissions arenear the world average of 4.5 tonnes a year,but at the current rate of growth, he says,this figure could hit 9 tonnes by 2020,leaving the country trailing.

“Right now there is no motivation, noincentive, no regulatory pressure,” Okumussays, adding that consumer demand andmarket pressure are also lacking when it

comes to sustainability.“Turkey’s environmental agenda is 100%

related to the EU accession process. Everyyear we’re incorporating new EU regula-tions and directives and there’s a hugeamount of compliance work being done atthe company level,” Okumus says, addingthat international climate change negotia-tions also play a significant role.

“[EU accession] has been one of thedrivers in the Turkish clean-tech industry,”says a business leader in the renewable-energy sector. “The EU has been pressuringTurkey since its economy has been growingat high rates in the last decade, but withoutmuch care for the environment.”

The increasing globalisation of theTurkish economy has had a similar influ-ence, with multinationals operating in thecountry often at the leading edge of corpo-rate responsibility efforts. “The real driversright now that I’ve found are a foreignparent company that has a globalprogramme and foreign investors asking forit,” Buffington says.

When looking for a corporate partner forher social entrepreneurship project,Copmadam founder Tara Hopkins likewisefound success with Unilever, a large multi-national. “We did go to several big Turkishcompanies, asking them to sponsor aTurkish development programme, and theywere less than interested,” she says.

Others remain hopeful, however, thatawareness and action are on the rise, partic-ularly in the private sector.

“Turkey is going through the sameperiod the western world completed a fewyears ago,” Gulten says. “At the end of thisperiod, companies with real commitmentwill be able to differentiate their positionfrom greenwashers.” n

Jennifer Hattam is a freelance journalist based in Istanbul.

President Gul's progressive laws could be better enforced

“There is no motivation, no incentive, no regulatorypressure” Kerem Okumus, Regional Environmental Centre



Earlier in the summer, two thingsgrabbed the attention of China

watchers. The outspoken and inter-nationally lauded Chinese artist AiWeiwei was finally released (onbail) after 75 days of detention andChinese premier Wen Jiabao visitedLondon to push the Beijing line on things.

The release of Ai occurred theweek before Wen arrived inLondon. This is not presumed to bea coincidence. Meanwhile Wen’strip was less the usual trade missionand more another step in China’ssearch to find out why nobodyloves her.

In fact very few, if any, newcontracts were concluded duringthe trip. Instead we saw someminor announcements mixed withsome long-arranged deals finallyauthorised by Beijing (the Diageostake in a traditional Chinese spiritsmaker).

There were also some examplesof what the Foreign Office calls (off the record) “reheated” agree-ments that have long been in placebut get rolled out one more timeduring these visits to inflate thenumbers (for example, the contractfor a clean coal plant in InnerMongolia that may, or may not,ever happen).

Why the hush?Two things struck me about theseevents.

First, shouldn’t British businesshave shouted a little louder, or at all,about Ai Weiwei?

Second, why is Beijing so seem-ingly desperate to be loved in thewest? Wen went on a rather cack-handed charm offensive in thewake of Ai being pictured on thefront of every UK newspaper, freedbut unable to speak to journalists

and obviously having had thefrighteners put on him. This did not endear Wen to the Britishpublic.

Most of Fleet Street and the UKarts community publicly showedsupport for Ai. Penguin publishedone of its “specials” on him;Anthony Gormley and other Britishartists called for his release; and hisinstallations at London’s SomersetHouse and Lisson Grove Gallerywere well attended. But littlecomment came from the businesscommunity.

Speak out?So what? Why should businessspeak out for Ai?

Well, for one thing his work hadrecently been the Unilever Installa-tion at London’s Tate Modern. Ai’sSunflower Seeds featuring 100mhandmade ceramic seeds attractedmuch praise – and many visitors.Unilever presumably sponsors theinstallation to appear to besupporting creativity and freeexpression. Yet I cannot find even asmall press release from Unilever inresponse to Ai’s detention. Totalsilence.

Of course, Unilever does morethan €1bn of business a year inChina, a country where the govern-ment regularly takes reprisalsagainst companies that don’t stayon-message. But is it acceptable tous, as consumers, that Unilever gets all the press coverage, kudosand soft power from sponsoring Ai but then, within weeks of hisinstallation ending and when he’sbeen banged up by Beijing, saysnothing?

Kerry Brown, head of the RoyalInstitute of International AffairsChina programme at ChathamHouse in London, has just returned

China column

Desperate to be friends

Paul French says that the Chinese government needs to act verydifferently if it wants to be popular in the west

Wen is on a charm offensive

Beijing feelsthat the world doesn’tunderstand or accept astronger China

Columnist: Paul French36 Ethical Corporation • September 2011

from a trip by western academics toBeijing where the purpose was to“engage” with the Communistparty on its image issues overseas.He tells me that one of the partyleaders’ major concerns is that theyfeel unloved.

They believe they have deliv-ered growth, better standards ofliving and a stronger China – sowhy don’t people appreciate theparty more? Similarly, Beijing feelsthat the world doesn’t understandor accept a stronger China.

No emotional contactThe leadership believes China hasbeen a bulwark against an evendeeper world recession and theworld should be grateful. That thewest focuses on human rights, Tibetand Ai Weiwei genuinely perplexesBeijing. As Brown puts it, “the partyis frustrated that it has failed tomake an emotional contact with the people”.

Still, Beijing’s marketing and PRare not really improving – even as Wen was still in London thecadres in Beijing were announcingthat Ai was an “economic criminal”while telling critical British journalists to go and learn moreabout the “real China” but denying those journalists visas to enter the country.

For now, Beijing and the partyshould probably just get used tobeing unloved. n

Paul French has been based in China for morethan 20 years and is a partner in the researchpublisher Access Asia.

COLUMNIST:PAUL FRENCH


september free mag - part 2

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