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Title: Presentation Pack


1
Presentation Pack
Corporate responsibility and business success in
China
2
Structure
Sustainable development Facts about
China Sustainable development in China Business
role and responsibilities Business implementation
3
Getting started
Sustainable development meets the needs of the
present without compromising the ability of
future generations to meet their needs
Brundtland Commission, Our common future, 1987
  • Who has previously heard about sustainability? In
    what context?
  • What would be your definition of sustainable
    development?
  • How important is sustainable development
  • To you?
  • To your company?

definition "de-f-'ni-shn
Q
4
Human activity impacts
Global Warming
Ozone Depletion
Water, Air, Land Pollution
Reduction of Biodiversity
Resource Depletion
Population Increase Economic Growth
5
Sustainable development covers many topics
  • Demography
  • Wealth
  • Nutrition
  • Health
  • Education
  • Consumption
  • Energy
  • Pollution
  • Emissions and waste generation
  • Efficiency
  • Ecosystems
  • Climate change
  • Agriculture
  • Human rights
  • Water
  • Urbanization
  • Mobility
  • Communications
  • Labor
  • Democracy
  • Accountability
  • Privatization
  • Biodiversity

6
A changing global landscape
In a world of instant communications, whistle
blowers, inquisitive media, and googling,
citizens and communities routinely put firms
under the microscope. Tapscott and Ticoll (2003)
  • Issues include
  • Communications CNN world
  • Changing expecations of consumers
  • Valuation including intangibles and knowledge
  • Free movement of goods and services
  • Finite nature of resources carrying capacity
  • Changing demographics haves and have nots
  • Changing role of business and government

7
Context Demography
  • Today 6 billion human beings on Earth
  • 2030 population will reach 8 billion, of which 7
    billion will live in the developing world
  • Populations will increasingly move towards
    cities, creating megalopolises

8
Context Natural resource needs

Poverty eradication population growth lead to a
rising demand for materials and natural resources
OIL, GAS, URANIUM, MINERALS, CLEAN, WATER are
finite and limited resources, and could become
rare in the near future
9
Land pollution
  • Land Pollution
  • Agriculture industrial activities waste
    generation
  • Intensive use of chemical fertilizers
  • Intensive land exploitation

x 4.5 in 40 years
10
Air pollution
  • - Main environmental threat to human health
  • - SO2 and NO2 emissions ? Acid rain

11
The Greenhouse Effect
12
Biodiversity
  • Global biological diversity is decreasing, due
    to direct and indirect human activity hunting,
    loss of natural habitat (deforestation,
    desertification), etc.
  • The continuous decrease in animal and plant
    populations results in a loss of genetic
    diversity

13
Roles and responsibilities
Globalization goes together with the emergence of
a growing number of stakeholders (more demanding
and powerful)
PRESERVE PEACE STABILITY SEEK GLOBAL LONG-TERM
SOLUTIONS POWER TO RULE, INCITE, TAX
Institutions
DEMAND MORE TRANSPARENCY, INFORMATION AND ETHICS
INCLUDE SOCIAL ENVIRONMENTAL PERFORMANCE IN
BUSINESS NOTATION POWER TO PROVIDE FUNDS
Investors
DEMAND TO BE CONSULTED AND ASSOCIATED POWER TO
INFORM AND DENOUNCE (MEDIA, INTERNET, JUSTICE, )
NGOs
Individuals
SEEK QUALITY OF LIFE AND SECURITY DEMAND FREE
CHOICE POWER TO VOTE, DENOUNCE, BOYCOTT
Businesses
CONTRIBUTE SERVICES, PRODUCTS AND TECHNOLOGY TO
SOCIETY BALANCE ECONOMIC PROFITS WITH THE
LONG_-ERM SUSTAINABILITY OF THE BUSINESS
14
Increased awareness
1948 Declaration of human rights 1961 WWF,
amnesty international 1970s Environmental
movements 1980s 1984 Bhopal 1986 Chernobyl
1989 Exxon Valdez 2002 Enron, WorldCom
15
Global frameworks and initiatives
SarbOx
The search for solutions is happening on a global
scale and is being led by both public
institutions and as part of private initiatives.
Solutions include new legislation, stakeholder
partnerships, voluntary agreements, codes of
conduct, multilateral agreements, interdependent
actions, etc.
16
Key for success in sustainable development
  • Maintain the balance between economic growth,
    environment, and social aspects by
  • An integrated approach for business operations
  • Partnerships among stakeholders
  • A Cross-disciplinary approach.

Natural resources energy
Health Safety, equity
Economic growth
17
Structure
Sustainable development Facts about
China Sustainable development in China Business
role and responsibilities Business implementation
18
Facts about China
  • China's population is 1.31 billion people.
  • GDP is US 1.41 trillion and expected to grow 8
    in 2004.
  • It already accounts for 13 of world output.
  • Largest recipient of foreign direct investment.
  • China produces 2/3 of all photocopiers, microwave
    ovens, DVD players and shoes, over 1/2 of all
    digital cameras and around 2/5 personal
    computers.
  • In the last two decades, almost 200 million
    people have been lifted out of poverty.
  • Every year, 10 million more people join the job
    market.

Ref The Economist, UNDP and UNFPA
19
Size matters
  • 60 of the population still lives in the
    countryside but.
  • At present there is only one car for every 70
    people in China, against one car for every two
    Americans, but.
  • The Chinese government estimates that there are
    500,000 HIV positive individuals in China, or a
    prevalence rate of less than 0.2 but.

Ref The Economist, UNDP and UNFPA
20
Increasing energy needs Coal
Lack of jobs in western China
74 of electricity produced in coal plants
Coal reserves mainly in western China
Shortage of electricity production capacity
Strain on rail transport
Safety of workers in mines
New coal plants built in urgency
Energy shortage prevents shutdown / modernization
of old coal plants
Limited implementation of standards Pollution,
safety health health issues
Health and Safety conditions
Efficiency
Pollution
Strain on resources
CO2 emissions, global warming
Coal prices on the rise
21
Increasing energy needs Oil
China is the second largest consumer of oil after
the USA, and accounts for two-fifths of the
increase in global consumption since 2000.
China occupies the second place among the major
greenhouse gas emitters worldwide (13.5).
China only has 1.7 of worldwide oil
reserves. Expected of needs to be imported 50
in 2010 85 in 2030.
22
Mobility
China is expected to become the world's third
largest automaker by 2010.
  • Oil consumption for mobility has risen sharply,
    contributing to making China dependant on
    importing oil.
  • Air pollution in the big cities is on the rise.

23
Electricity production capacity
Current issues
  • Electricity demand increased 16.5 in 2003
  • Shortage of production capacity in 2003
  • At its peak 40 GW
  • Average 15 GW
  • Direct impact on the economy, as 70 of
    electricity is consumed by industry
  • 2005 forecast to meet its 2020 economic
    objectives, China must build the equivalent of
    one nuclear plant every 15 days for the next 15
    years.

24
Energy efficiency
Less than 10 of new buildings are made according
to existing isolation standards
Energy growth is increasing faster than GDP (
power elasticity co-efficient)
  • 2005-2020 Government objectives
  • - Increase GDP four-fold
  • Increase electricity production capacity
    two-fold (Objective to improve energy efficiency
    by 25)

Power elasticity co-efficient should be less than
1.0 (opposite to current trend)
Ref UNIDO
25
Depletion of natural resources
  • Land degradation and desertification
  • The use of chemical fertilizers in China is two
    times higher than in other countries
  • Continuous expansion of desert
    desertification
  • 1950s 1970s 1,500 km2/yr
  • 2003 3,000 km2/yr
  • Sandstorms from the Gobi desert hit Northern
    China every year, reaching into Korea and Japan,
    and sometimes even crossing the Pacific Ocean and
    arriving at west American shores
  • Ref UNIDO

26
Depletion of natural resources
  • Water pollution and consumption
  • Water availability in China is between 4 and 5
    times less than world average
  • Presently 70 of cities have water shortages
  • Availability Irrigation, that accounts for 60 of
    use of water, suffers from leakages and losses
    of great magnitude
  • Pollution 60 of rivers and 90 of urban
    underground water are highly polluted
  • Inefficiency Industrial output needs on average
    about 7 times more water than more sustainable
    economies
  • Requirements 30 bln US required to solve urban
    water management in all cities (gt 600.000)
  • Ref UNIDO

27
Depletion of natural resources
Mineral deposits China is already the worlds
largest consumer of many commodities, such as
steel, copper, coal and cement. Its increased
needs account for much of the 50 rise in the
worlds commodity prices over the past three
years.
  • Coal
  • Largest producer and consumer in the world, and
  • Consumption expected to rise further from 1.2
    billion metric tons (2000) to 2.2 billion (2030)
  • US 120 billion would be required to modernize
    mines install clean combustion systems (IEA)

Reserves 334.5 billion metric tons (only 3rd
in the world)
28
Pollution of natural resources air pollution
  • Caused by high SO2 emissions from coal combustion
    China focus acid rain as a serious problem
  • A growing volume of traffic results in growing
    NOx emissions
  • China is responsible for 36 of worldwide
    pollutant emissions
  • Respiratory and heart diseases related to air
    pollution are the leading cause of death in China

Out of the 20 most polluted cities in the world,
16 are in China.Estimated annual health costs due
to air pollution is 44 bln RMB
Ref The Economist, UNIDO
29
Urbanization and poverty
  • Rural poverty - while 60 of the population
    lives in rural areas, they contribute to only 16
    of GDP- income ratio urban-rural estimated at 3
    to 1
  • Urbanization rate of migrant workers approx. 8
    million people each year
  • Cities are facing problems in delivering
    infrastructure and services
  • Slums may start to appear in cities
  • Increased urban unemployment and loss of social
    security tied to state-owned enterprise reform
  • These trends are causing a growing urban poor
    class.

30
Structure
Sustainable development Facts about
China Sustainable development in China Business
role and responsibilities Business implementation
31
Recent headlines
32
Current SD issues in China
Population growth and change in social demands
  • Which sustainable development issues could result
    from the tension between these 3 conditions ?

Limited natural resources
Fast economic growth
Q
33
Striking a balance
Good lasting SD practice
Ecological
Economic Growth
Equity
Imbalance
Balance
  • How to
  • Provide employment opportunities
  • Maintain economic growth
  • Remain a competitive business environment
  • Reduce income inequalities
  • Yet also
  • Sustaining the environment
  • Improving social aspects
  • Main Drivers
  • Population Size Growth
  • Globalization
  • Cultural shifts

34
Call to action.
Same issues apply to all countries their
significance in China is the rate and magnitude
at which they create imbalances
Resources and efforts from all stakeholders are
required to correct the imbalances Failing to
act immediately only worsens the severity of the
required solutions
Implementation is everyones responsibility
NGOs, business and government
35
Legislation
  • Central government recognizes the need for
    action.
  • Programs initiated to counter Chinas SD
    challenges
  • Agenda 21
  • Millennium Development Goals
  • Xiaokang (1980) Tenth Five-Year Plan (2001)

36
Government
Key Government Organizations with EHS
Responsibilities
Key (chart showing approximation of
hierarchy) NPC National Peoples
Congress SEPA State Environmental
Protection Administration MII
Ministry of Information Industry AQSIQ
Administration for Quality Supervision,
Inspection and Quarantine MOFCOM Ministry of
Commerce SAC Standardization
Administration of China (within AQSIQ) SDRC
State Development Reform Commission ( or NDRC)
37
National Peoples Congress
  • Chinas Clean Production Promotion Law (CPPL)
  • Enacted June 29, 2002, effective January 1, 2003
  • Statute providing legislative authority for a
    wide range of materials restriction and related
    initiatives in China
  • Clean production defined in law to include
    fundamental reduction of pollution from sources,
    enhancement of resource utilization, reduction in
    or prevention of pollution during production and
    in the use of services and products through
    continual design improvements, use of cleaner
    energy resources and raw materials, adoption of
    advanced technologies, and improvement in
    management to reduce or eliminate harm to human
    health and environment
  • This directive is the foundation of new
    regulations

38
Environmental Regulatory Status
  • Legal standards similar or equal to EU
    legislative and policy initiatives
  • Restriction on Hazardous Substances (RoHS)
    Directive
  • Waste in Electrical Electronic Equipment (WEEE)
    Directives
  • REACH proposal on Chemicals
  • Eco-design of energy-using products (EuP)
  • Prevention and Control of Environmental Pollution
    Caused by Solid Waste drafting work recently
    commenced to amend existing law and include
  • Control of hazardous wastes
  • Provisions reflecting regulatory concepts such as
    extended producer responsibility

39
Do you know about Chinese environmental
legislation? I
  • Which of the following products must meet energy
    consumption standards in China?
  • Air conditioners
  • Irons
  • Refrigerators
  • Rice cookers
  • TV

All of them have to meet legal standards! From 1
March 2005, manufacturers of energy consuming
products will even have to join labels to their
products including - The name brand of the
producer - The degree of energy efficiency - The
energy consumption volume - The China energy
standards referenced to determine the products
degree of efficiency.
Q
40
Do you know about Chinese environmental
legislation? II
Are Chinese companies required to submit reports
on their energy consumption?
  • Of course they are!!!
  • Much more than a simple statement on their level
    of consumption, companies exhibiting significant
    energy consumption are required to periodically
    submit their energy efficiency and the
    implemented saving measures to the relevant
    authorities.
  • Thus progress in energy efficiency is a legal
    requirement in China.
  • The import of backward energy intensive
    technology is illegal before 2008 the law will
    be reinforced by incentives and disincentives
    towards businesses in order to promote energy
    efficiency

Q
41
Do you know about Chinese environmental
legislation? III
The approach to hazardous solid waste
identification is defined by the law as the
prevention and control of environmental pollution
by solid waste. What about liquid waste?
The hazardous waste identification approach
applies to liquid as well as solid waste.
  • Main aspects of the law are the following
  • entities engaged in the business of collecting,
    storing and disposing hazardous waste shall apply
    for licenses
  • Government may impose discharge fees on those
    responsible for the waste discharge that do not
    comply with relevant environmental laws
  • Hazardous wastes are listed in an exhaustive
    catalogue
  • Changing the land use of a previously waste
    dedicated area is submitted to legal control.

Q
42
Do you know about Chinese environmental
legislation? IV
Is it legal to import waste into China?
  • Waste import is basically forbidden (or at least
    highly restricted), except when it can be used as
    raw material.
  • Movements of waste are strictly monitored and
    controlled. This is true for trans-boundary waste
    shipment, as well as for waste movements between
    Chinese provinces.

Q
43
Initiative taken in China - Sustaining natural
resources
  • Land and soil
  • Actions and programs
  • Success and Targets
  • China has afforested around 46.7 million hectares
    since 1950, this is about 26 of total woodland
  • The afforested area is planned to reach 110
    million hectares in 2050, around 28 of Chinas
    total area
  • China has initiated a program to stop
    desertification between now and 2010, to start
    reducing desertificated areas from 2010-2030 and
    to redevelop desertificated areas from 2030-2050
  • In some regions soil erosion has been stopped by
    redeveloping farmland into woodland
  • Ref UNIDO

44
Structure
Sustainable development Facts about
China Sustainable development in China Business
role and responsibilities Implementation
45
The business environment
46
Business demands
  • Doing Business in a networked world
  • Information, knowledge, people and goods move
    around the globe as never before.
  • Beyond compliance, businesses need to meet
    international agreements standards
  • Investors international market - increasing
    demand for sound SD practices
  • Trends accountability and transparency
  • Companies face increasing and partly conflicting
    demands from stakeholders
  • Shareholders - high returns
  • Customers - affordable and high-quality products
  • Public pressure groups - more environmental
    protection and social engagement
  • Trends accountability and transparency
  • Employees safe and healthy workplace with fair
    compensation

47
In summary Why is SD in China so important for
businesses?
  • Chinas environmental impact affects the whole
    world
  • Great business opportunities for both Chinese and
    foreign companies
  • Major economic growth in China large country of
    (potential) consumers
  • Economy open to both foreign and local investors
  • High quality and availability of labor force
  • Investors increasingly demand sound SD practices
  • Sound SD practices as a criterion in selection of
    suppliers
  • Sound SD practice is becoming a
    license-to-export
  • Compliance with global environmental regulations
    required
  • Olympics scheduled in Beijing in 2008
  • Opportunity to show the world that Chinese
    business practice includes sound environmental
    and social management

48
The business case for sustainable development
  • The business case for sustainability is a concept
    promoting corporate sustainability based on
    economic logic.
  • It points to opportunities companies have to
    create economic value by means of improving
  • environmental performance
  • e.g. increase eco-efficiency, reducing pollution
  • social performance
  • e.g. engage in community development
  • beyond compliance.

49
Improving business performance
  • Short term
  • Demand from the emerging world huge market
    opportunities
  • Consider local needs and conditions
  • Cleaner more efficient production better
    industrial efficiency and cost-effectiveness
  • More efficient/eco-friendly products Less use
    of resources and energy and less waste generation
    cost effective for the business and for
    consumers
  • Transparency, social standards, codes of conduct
    are part of the companys image
  • SD policy is taken into account more and more by
    investment groups and financial analysts
    providing the company more financial access
  • (Even stock exchanges are joining the Global
    Compact!)

50
From risk to opportunity
  • Longer term
  • Sustainable use of finite resources
  • Minimizing environmental impacts of business
    operations
  • Enhance stability in the communities where the
    business operates
  • The reduction of regional inequities on a global
    scale is necessary to preserve the stability
    that business needs to make profit.

51
Example Cleaner production
Efficient use of water, energy, raw
materials Starting at the source (not
end-of-pipe)
  • Cost savings on water, energy, raw materials,
    directly add to bottom-line result
  • Improved efficiency reduced waste/leakage
  • Technology leadership
  • Contribution to solve environmental issues
  • Positive company reputation

C
52
Example Eco-efficient products
  • More efficient and eco-friendly products
  • Example Energy Star products (the US)
  • Blue Angel (Germany)

  • Preferred by consumers lower running cost of
    equipments tax breaks lower cost in the life
    cycle company can place a price premium
    higher profits
  • Technology leadership and brand recognition
  • Contribution to solve environmental issues
  • Less concern for the waste if using less toxic
    materials more appealing products

C
53
Example Health safety
Healthy, happy employees neighbors
  • Reduced medical costs for employees
  • Fewer lost working days
  • More efficient workforce
  • Happy, healthy consumers
  • Positive company reputation
  • Access to highly qualified human capital

C
54
Summary of business roles and opportunities
55
Structure
Sustainable development Facts about
China Sustainable development in China Business
role and responsibilities Business implementation
56
Evolution of tools
Sustainable Livelihoods
CSR
Economic Instruments
Env. Footprint
Co-regulatory Agreements
Responsible Entrepreneurship
Command Control Legislation
Sustainability
Factor X
Agenda 21
Eco-efficiency
Our Common Future
Cleaner Production
Government Agenda
Compliance
Business Agenda
SustainabilityStrategy
EMS Standards
EHSAuditing
ICC-Charter
Time
57
Implementing sustainable development
  • Has your company taken any SD initiatives?
  • Can you identify any gaps?
  • What can you do as an individual, as a team,
    function or company, to contribute to limit use
    of energy, water and other resources?
  • What resources will enable you to achieve this?
    Can you identify any barriers?

Assess the situation
Develop a strategy
Measure success
Implement
 Alternative model The Sigma Guidelines provide
a systematic model of sustainability management
(www.projectsigma.com).
T
58
Assessing General checklist
Benefits to be gained from incorporating
sustainable development into business management
practices
  • Does your company
  • Use energy and water
  • Use natural resources and supplies
  • Generate waste
  • Discharge water, emit air containing chemical
    substances
  • Produce products that use energy and/or water, or
    emit pollution
  • Need to comply with environmental legal
    requirements
  • Have international business practices
  • Provide service/goods to international
    markets/companies
  • Aim to enhance its public image/reputation and
    increase company brand value
  • Have concerned stakeholders (government,
    consumers, businesses, employees, investors,
    NGOs, etc.)

Q
59
Questions for the board
Assessing CSR checklist
Q
60
Assessing eco-efficiency checklist
Assessing eco-efficiency checklist
Q
61
Assessing Dow Jones Sustainability Index
  • The Dow Jones Sustainability Index was the first
    index to try to assess the ability of businesses
    to creates long-term shareholder value by
    embracing opportunities and managing risks
    deriving from economic, environmental and social
    developments.
  • Its methodology looks for the best in class in
    specific sectors. It is forward looking and aims
    to capture not simply end-of-pipe performance but
    the drivers and enablers which set sustainability
    leaders apart in their ability to achieve
    long-term shareholder value.
  • The indexs methodology appears to work in
    identifying future value potential The DJSI has
    outperformed the base index over the past three
    years.
  • 12 out of 18 World Market Sector Leaders are
    WBCSD members
  • Automobiles Toyota
  • Banks Westpac Banking Group
  • Basic resources Alcan
  • Chemicals DSM
  • Cyclical goods services Royal Philips
    Electronics
  • Energy Statoil
  • Food Beverage Unilever
  • Health care Novozymes
  • Industrial goods services 3M
  • Insurance Swiss RE
  • Non-cyclical goods services Procter Gamble
  • Utilities Severn Trent

62
Developing Your companys place in society
Your company is a stakeholder in many shared
societal processes
Your Company
WRI
T
63
Developing eco-efficiency
  • One practical way of measuring the environmental
    performance of business
  • Applicable to every area of activity within a
    company or the entire value chain of a product or
    service
  • Should be an integral part of overall business
    strategy
  • Principle Doing more with less
  • Combination of environmental and economic
    performance
  • OECD definition
  • The efficiency with which ecological resources
    are used to meet human needs
  • Higher eco-efficiency requires
  • Providing more value with less environmental
    impact
  • Re-linking growth of welfare with the use of
    nature
  • Improving both economic and ecological efficiency

T
64
Developing Environmental Management System
approach
  • Obtain management commitment
  • Organize project team
  • Identify barriers solutions
  • Set objectives
  • Pre-assess
  • Identify sources (where)
  • Analyse causes (why)
  • Generate possible options (how)

Sustain Continue
  • Evaluate options on
  • Technical, environmental
  • and economic feasibility
  • Select best options
  • Option implementation
  • Monitoring and evaluation
  • Sustain and continue

T
65
Benefits of an environmentally sound business
practice (e.g. EMS)
  • Increases productivity
  • Reduces production costs
  • Produces safer and better products
  • Reduces levels of pollution and risk
  • Improves workers safety and health
  • Complies with Environmental Management Systems
    (ISO 14000) ? Recognition from business partners
  • Link-up with international markets
  • Improves company image

Implementation of EMS in all aspects of business
will make a company more profitable and
competitive
T
66
Implementing Chronos -- the WBCSDs e-learning
tutorial
  • Chronos is an electronic tutorial designed to
    increase business interest in, and action on,
    sustainable development
  • Developed in partnership with the Cambridge
    University Programme for Industry
  • Aims to encourage employees in a wide range of
    companies and sectors to reflect on personal
    experiences, explore situations, and hone
    problem-solving skills
  • www.sdchronos.org

T
67
Implementing GHG Protocol
  • The GHG Protocols mission is to develop
    internationally accepted greenhouse gas (GHG)
    accounting and reporting standards for business
    and to promote their broad adoption.
  • The GHG Protocol Initiative comprises two
    separate but linked standards
  • GHG Protocol Corporate Accounting and Reporting
    Standard which provides a step-by-step guide for
    companies to use in quantifying and reporting
    their GHG emissions)
  • GHG Protocol Project Quantification Standard
    forthcoming, a guide for quantifying reductions
    from GHG mitigation projects)

T
68
Measuring (codes, frameworks, guidelines)Global
Reporting Initiative
  • The Global Reporting Initiative (GRI)
    Sustainability Guidelines are the first attempt
    to develop a generalized set of sustainability
    indicators for organizations.
  • It has become the main point of reference for
    companies that produce sustainability reports,
    although only a minority are able to claim their
    reports are in accordance with the Guidelines.
  • The Guidelines development is influenced by
    companies through a structured dialogue process
    and the GRIs multi-stakeholder governance
    process.
  • The GRI has well developed linkages with other
    standards within an emerging global
    architecture. (e.g. AA1000 Assurance Standard,
    UN Global Compact, etc.)
  • (www.globalreporting.org).

T
69
Measuring (codes, frameworks, guidelines)Global
Compact
  • This international partnership brings together UN
    agencies, business, civil society and public
    sector organizations. Membership is based on a
    highlevel commitment to its ten principles,
    derived from key UN and international
    declarations on labor, human rights, and the
    environment.
  • The principles themselves are not new, but by
    bringing internationally accepted standards
    together and framing them as business
    commitments, the UN Global Compact has set a
    principle-based global benchmark form corporate
    citizenship.
  • It is seen as one of the most significant
    institutions working to align business and
    sustainable development. But while more than
    1,200 companies have signed up, including 200
    large multinationals, very few major US companies
    have joined.
  • www.unglobalcompact.org

T
70
Measuring (codes, frameworks, guidelines)OECD
Guidelines for Multinational Enterprises
  • The OECD Guidelines for Multinational Enterprises
    are the closest thing we have to an comprehensive
    global corporate code of conduct. It is a key
    reference point of international norms for
    business.
  • While the Guidelines are non-binding on
    businesses, adhering governments are committed to
    promoting them and to making them influential
    among companies operating in or from their
    territories.

T
71
Case in PointStakeholder dialogue to
partnerships Degussa
Summary Degussa AG with support from DEG (a
German investment and development company), in a
public-private partnership, conducted a series of
training events in Beijing for employees of
Chinese paper mills on how to optimize wastewater
circuits (2004-2005). Drivers/Benefits To help
paper mills reduce their amount of
wastewater. Results so far One paper mill
implementing zero-effluent technology several
mills short-listed as Nations Model Clean
Production Enterprise. Key success factors
Expert knowledge, working in a public-private
partnership, drive of participants to transfer
training into practice.
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Case in PointStakeholder dialogue to
partnerships ABB
Summary ABB, with the Alliance for Global
Sustainability, devised the China Energy
Technology Program (CETP), an extensive
partnership program bringing together a diverse
group of participants to assess the relative
costs and environmental performance of different
strategies for meeting power demand in
China. Drivers/Benefits To identify the true
costs of electrical power generation and use and
develop cost-effective and efficient solutions
for the future, to bring significant
environmental benefits, not just to China, but
globally. Key success factors Active involvement
and participation of academia, industry and the
stakeholders involved.
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73
Case in PointEnergy recovery facilities CH2M
HILL
  • Summary CH2M HILL was hired to assist the State
    Environmental Protection Agency of China to
    advise on technical and economic feasibility and
    construction requirements for energy recovery
    facilities at municipal waste landfills.
  • Drivers/Benefits Promote better waste management
    practices, rewarded with economic benefits from
    selling recovered methane as fuel.
  • Challenges Institutional barriers to progress
    communication translation problems, funding
    difficulties
  • Key success factors Commitment from all quality
    communication and translation careful choice of
    the host country lead agency

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Case in PointLocal and global standards Lafarge
Summary Lafarge and DuJiangYan Building
Materials Co., joint venture agreement to
construct a new cement plant in ChengDu, Sichuan
province, in line with latest technology, quality
and safety standards. Drivers/Benefits For
Lafarge -- establishment of substantial
profitable position in region, where an
accelerated infrastructure development program
fuels increase in demand for high quality cement
for Chinese government -- strategic importance
for regional economic development to reduce
persistent supply/demand gap in the
region. Challenges Quality control during
construction, cultural differences, implementing
safety practices, Song relics on site, heavy
rains. Key success factors Financial strength
and technical support strong management team
good working relations between Chinese and
foreign partners Government support listening
to the different parties.
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75
Case in PointIntroducing EMS Automobile Company
in Anhui
Summary This Chinese automobile company first
started production in 1968. It went from a
loss-making venture with revenue of less than 3
million RMB in 1990 to one of the most important
Chinese automobile producers with 5 wholly owned
subsidiaries and revenues of 26 billion RMB in
2000. Drivers/Benefits Systemization of
processes operations and introduction of EMS
increased efficiency and quality, timely delivery
to customers, reduced waste, improved company
image. Challenges Culture change within the
company needed long-term process. Key success
factors Strong management vision, employee
commitment, good cooperation with local
government, starting from at-the-source
principles as opposed to end-of-pipe.
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From Greening Chinese Business by Ulrich
Steger, Fang Zhaoben and Lu Wei
76
Case in PointResponsible care auditing BASF
Summary BASF systematically conducts Responsible
Care (RC) audits of its service suppliers RC a
voluntary improvement process of the chemical
industry, dealing with Environment, Health and
Safety (EHS). Drivers/Benefits The systematic
method provides a tool to evaluate supplier site
risks, in order to select the best alliance
partner and to deliver a contribution to society
and the environment contributes to positive
company reputation. Challenges Investment in
time and effort from both auditing company and
service supplier. Key success factors
Systematic, realistic method and timescale, using
principle of risk EHS performance x hazard
potential good collaboration between service
provider and (potential) customer.
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Case in PointGlobal standards DSM
Summary Jinling-DSM Resins is a Chinese-Dutch
joint venture producing resins in Nanjing.
Employment conditions of its 17 temporary workers
were improved to a level in between those of
surrounding temporary workers and
employees. Drivers/Benefits Achieving the
optimum, realistic balance between international
standards and local circumstances. Challenges
Building on the inheritance of a non-greenfield
operation different cultural perceptions of
appropriate employment conditions for temporary
and permanent workers. Key success factors Open
discussion between management and employees
finding the optimum mix between foreign views and
local culture and habits.
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Case in PointSustainable use of waste Novozymes
  • Summary Novozymes supplies treated wastewater
    and converted biomass from its production
    processes free of charge to TEDA to be used for
    irrigation and as biological fertilizer
    (NovoGro).
  • Drivers/Benefits Sustainable use of wastes,
    reduced consumption of limited resource, support
    for eco-industry, responsible neighbor and good
    company reputation
  • Challenges Infrastructure for storage and
    transportation of treated wastewater, composting
    and expanded application of NovoGro to ensure
    more sustainable use.
  • Key success factors Close cooperation with TEDA,
    advanced waste treatment technology, experience
    in the production and application of NovoGro from
    Europe and US.

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Case in PointFuyang Chemical General Works
Summary Chinese fertilizer plant, in
collaboration with Chinese authorities and CIDA
implemented Cleaner Production, starting with
zero- and low-cost measures and continuing by
implementing medium cost measures.
Drivers/Benefits Enabled reduction of product
losses, efficient use of raw materials and
energy, reduced emissions, reduced waste,
healthier working environment, increased
revenues, improved company reputation. Challenges
Collaboration between parties with different
experience levels, overcome initial investment
requirements for medium cost measures. Key
success factors Management commitment employee
participation, tackling zero- and low-cost
elements first, partnership with Chinese
government, training sharing of information,
stimulating gender equity.
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From the China-Canada Cooperation Project in
Cleaner ProductionPicking Low-hanging Fruit
The Strategic Role of CP in China by M.
Osterman, LL.L.CEA
80
There will be no sustainable world without a
sustainable China
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