THE UN GLOBAL COMPACT

1
THE UN GLOBAL COMPACT

• FROM PRINCIPLE TO PRACTICE
• Session E6 The GC Toolkit
• Environmental Principles

2
The GC Toolkit - Environmental Principles
Introduction and Overview

• Different types of Environmental Sustainability
  Tools
• Environmental Management Tools
• Environmental Assessment Tools
• Environmental Monitoring and Auditing Tools
• Environmental Reporting and Communication Tools
• Note the next few slides provide some examples
  of specific tools for each of these broad general
  types. Each of these types of tools is then
  linked to the UNGC Performance Model introduced
  in the previous Module.
• A comprehensive Framework for Action is provided
  in Appendix 1 of the Manuals, showing the
  inter-relationship between the various tools, the
  GC principles, the training modules and the
  Performance Model.

3
The GC Toolkit - Environmental Principles
Introduction and Overview

• Different types of Environmental Sustainability
  Tools
• Environmental Management Tools
• Environmental Assessment Tools
• Environmental Monitoring and Auditing Tools
• Environmental Reporting and Communication Tools

• Environmental Management Tools
• Environmental Management Systems e.g. ISO 14001
  or EMAS
• Environmental Management Strategies
• Cleaner Production, Sustainable Consumption and
  Eco-efficiency
• Life-cycle management
• Design for the Environment/ Eco-design
• Product stewardship
• Product-services systems
• Industrial ecology
• UNEP APELL 

4
From Principle to Practice Relating
environmental management tools to the GC
Performance Model
GC TOOLS Environmental Management Strategies
(e.g. Cleaner Production, Life Cycle Management,
Design for Environment)
GC TOOLS Environmental Management System (E.g.
ISO14000)
Environmental Management System
Environmental Management System
Internal Communication (as part of an EMS)
Environmental Management Tools (E.g. Life-Cycle
Management)
Environmental Management Tools (E.g. Product
Stewardship, Product-Services Systems)
5
The GC Toolkit - Environmental Principles
Introduction and Overview

• Different types of Environmental Sustainability
  Tools
• Environmental Management Tools
• Environmental Assessment Tools
• Environmental Monitoring and Auditing Tools
• Environmental Reporting and Communication Tools

• Environmental Assessment Tools
• Environmental Impact Assessment
• Environmental Risk Assessment
• Cleaner Production Opportunity Assessment
• Environmental Technology Assessment
• Life-Cycle Assessment
• Total Cost Assessment

6
From Principle to Practice Relating
environmental assessment tools to the GC
Performance Model
GC TOOLS Environmental Assessment Tools (E.g.
Risk Assessment, CPOA, LCA, TCA)
GC TOOLS
Environmental Assessment Tools (E.g. Risk
Assessment, EnTA)
Environmental Assessment Tools (e.g. Supply Chain
Assessment, Life-Cycle Assessment)
Environmental Risk Assessment
7
The GC Toolkit - Environmental Principles
Introduction and Overview

• Different types of Environmental Sustainability
  Tools
• Environmental Assessment Tools
• Environmental Management Tools
• Environmental Monitoring and Auditing Tools
• Environmental Reporting and Communication Tools

• Monitoring and Auditing Tools
• Environmental Performance Indicators
• Environmental Auditing
• Pollution and Waste Audits
• Supply chain audits and assessments

8
From Principle to Practice Relating monitoring
and auditing tools to the GC Performance Model
GC TOOLS Environmental Auditing Monitoring Tools
GC TOOLS
Environmental Monitoring Tools (e.g. KPIs)
Environmental Monitoring Auditing Tools
Environmental Auditing Monitoring Tools (e.g.
Supply Chain Audits)
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The GC Toolkit - Environmental Principles
Introduction and Overview

• Different types of Environmental Sustainability
  Tools
• Environmental Assessment Tools
• Environmental Management Tools
• Environmental Monitoring and Auditing Tools
• Environmental Reporting and Communication Tools

• Reporting and Communication Tools
• Corporate Environmental / Sustainability Reports
• Stakeholder engagement activities  
• Developing partnerships for progress
• Environmental labelling programmes
• Ecological footprints

10
From Principle to Practice Relating reporting
and communication tools to the GC Performance
Model
GC TOOLS Communication Tools (e.g. Stakeholder
engagement)
GC TOOLS Communication Tools (E.g. Stakeholder
engagement)
Communication Tools (E.g. Stakeholder engagement)
Communication Tools (e.g. Eco-labelling)
Environmental Reporting Communication
Tools (E.g. Sustainability Reporting)
11

UN Global Compact Performance Model
Vision

• Coporate environmental and social responsibility
  (CESR) / corporate citizenship

CESR entry point values-based
CESR entry point values-based
Leadership

• Operational technical e.g. cleaner production,
  eco-efficiency, ISO14001 EMS

Stakeholder dialogue
Resources
Policies Strategy
Empowerment

• Sustainable consumption

• Entering the business elements of the operations
  of the corporation in terms of enablers and
  results
• And super-imposed
• Mapping out corporate environmental and social
  responsibility (CESR), and Sustainable
  Consumption Production (SCP), as called for in
  the Johannesburg Plan of Implementation (WSSD
  PoI, 2002)
• overlapping areas and different entry points

Processes Innovation
Impact onvaluechain
Impact onemployees
Impacton society
Reporting
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The GC Toolkit - Environmental Principles
Environmental Management Tools

• Environmental Management Systems
• An EMS is the part of the overall management
  system that includes organizational structure,
  planning activities, responsibilities, practices,
  procedures, processes and resources for
  developing, implementing, achieving, reviewing
  and maintaining the environmental policy. Key
  examples include ISO 14001 and EMAS.
• EMS are used to
• Help companies to identify and prioritise their
  key environmental impacts in a structured and
  systematic manner
• Provide a framework for setting clear objectives
  and targets for managing these impacts
• Ensure that structured processes and procedures
  are in place for measuring and monitoring
  performance
• The type of EMS depends on the nature, size and
  complexity of the companys activities, products
  and services

13
The GC Toolkit - Environmental Principles
Environmental Management Tools
ISO 14001 Environmental Management System
Plan
Continual Improvement
Act
Do
Check
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The GC Toolkit - Environmental Principles
Environmental Management Tools
ISO 14001 Environmental Management System

• Plan
• Identify aspects and impacts, hazards and risks
• Document legislation and other requirements
• Set objectives and measurable targets
• Policy and management programme

Continual Improvement
Act
Do
Check
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The GC Toolkit - Environmental Principles
Environmental Management Tools
ISO 14001 Environmental Management System

• Do
• Structure and responsibility
• Training, awareness and competence
• Communication
• EMS documentation
• Document control
• Operational control
• Emergency preparedness response

Plan
Continual Improvement
Act
Check
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The GC Toolkit - Environmental Principles
Environmental Management Tools
ISO 14001 Environmental Management System
Plan
Continual Improvement
Act
Do

• Check
• Monitoring, measuring and auditing performance
• Maintaining records
• Schedule, plan and conduct system audits
• Non-conformance and corrective action

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The GC Toolkit - Environmental Principles
Environmental Management Tools
ISO 14001 Environmental Management System
Plan

• Act
• Implement corrective actions
• Track improvement
• Management review

Continual Improvement
Do
Check
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The GC Toolkit - Environmental Principles
Environmental Management Tools
Implementing a CP Management Programme
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The GC Toolkit - Environmental Principles
Environmental Management Tools

• Cradle-to-Cradle Design Environmentally
  Intelligent
• New paradigm modeling human industry on
  natures processes in terms of which
• WASTE FOOD
• Materials are viewed as nutrients circulating in
  healthy, safe metabolisms
• 1) Nature's biological metabolism should be
  protected and enriched
• all waste food for biological system
  (biodegradable)
• 2) Technical metabolism enhanced through
  circulation of mineral and synthetic materials
• All waste food for another industrial system
• Cradle-to-Cradle by William McDonough Michael
  Bragnaurt
• http//www.mbdc.com

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The GC Toolkit - Environmental Principles
Environmental Management Tools

• Cradle-to-Cradle Design Benefits
• Design for life-time customers products leased
  again again to customer base
• Risk management risks to environmental and
  human health are reduced by eliminating the
  concept of waste selecting materials that are
  safe to both human and natural systems
• Cost reduction dramatically reduce legal
  material costs
• Product differentiation products that offer
  customers excellence by all measurements
• Cradle-to-Cradle designs have positive effects
  extending beyond the client company to its
  suppliers, customers, communities, and the
  natural world
• William McDonough

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The GC Toolkit - Environmental Principles
Environmental Management Tools

• Industrial ecology 
• Industrial ecology encompasses a variety of
  related areas of research and practice,
  including
• Material and energy flow studies ("industrial
  metabolism") 
• Dematerialization and decarbonization 
• Technological change and the environment 
• Life-cycle planning, design and assessment 
• Design for the environment ("eco-design")
• Extended producer responsibility ("product
  stewardship") 
• Eco-industrial parks ("industrial symbiosis") 
• Product-oriented environmental policy
• Eco-efficiency 

22
The GC Toolkit - Environmental Principles
Environmental Assessment Tools

• Environmental Impact Assessments
  (EIAs)
• Aim to
• Predict environmental impacts at an early stage
  in project planning and design
• Find ways and means to reduce adverse impacts
• Shape projects to suit the local environment
• Present the predictions and options to
  decision-makers
• Benefits
• Reduced cost and time of project implementation
  and design
• Avoided treatment/clean-up costs
• Avoided impacts of laws and regulations.

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The GC Toolkit - Environmental Principles
Environmental Assessment Tools

• Environmental Risk Assessment
• A process which helps answer the following
• What can go wrong? (risk perception)
• What is the likelihood and severity of any
  adverse occurrence? (risk assessment)
• What can be done to manage any significant
  adverse occurrence and who should be involved?
  (risk management and risk communication).
• Formula Lots of simple and complicated
  formulas
• Example (simple) Possibility 1-3 X Consequence
  1-3

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The GC Toolkit - Environmental Principles
Environmental Assessment Tools

• Life-Cycle Assessment (LCA)
• A systematic approach to measuring resource
  consumption and environmental releases throughout
  a products life cycle, from extraction through
  to disposal, with the aim of aiding
  decision-making when comparing the relative
  environmental merits of two or more product or
  service categories
• Key stages in LCAs
• Identify and quantify environmental loads
• Assess and evaluate the potential environmental
  impacts of these loads
• Assess options for reducing environmental impacts

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The GC Toolkit - Environmental Principles
Environmental Assessment Tools

• Life-Cycle Assessment

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The GC Toolkit - Environmental Principles
Environmental Assessment Tools

• Total Cost Assessment
• Developed in 1991 by the Tellus Institute as a
  tool for integrating business and environmental
  objectives, TCA seeks to capture costs and
  savings that are generally ignored by traditional
  approaches.
• It goes beyond traditional accounting by
  examining changes in direct, indirect, contingent
  and less-quantifiable costs and savings over the
  longer term
• The 5 major TCA Principles
• Accounting for costs rather than outlays
• Accounting for hidden costs
• Accounting for overhead and indirect costs to
  individual services
• Accounting for past and future costs
• Accounting for costs according to activities or
  paths

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The GC Toolkit - Environmental Principles
Environmental Monitoring and Auditing Tools

• Environmental Auditing
• A systematic, documented verification process of
  objectively obtaining and evaluating audit
  evidence to determine whether specified
  environmental activities, events, conditions,
  management systems, or information about these
  matters, confirm with audit criteria, and
  communicating the results of this process.
• Environmental audits may assess compliance
  against with e.g.
• Environmental laws and standards
• A companys environmental management system (e.g
  ISO 14001)
• A companys environmental/sustainability report

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The GC Toolkit - Environmental Principles
Reporting and Communications Tools

• Corporate Environmental / Sustainability
  Reporting
• Increasing community, regulatory and financial
  pressure on companies to report on their
  environmental performance
• Such reporting should respond to the interests of
  key stakeholders and should report on issues that
  are material to core business
• The process of reporting should feed into
  development of company strategy, and provide a
  stimulus for continuous commitment and
  improvement
• The report should provide evidence that the
  company understands its key environmental impacts
  and should demonstrate its commitment to
  addressing these in an effective manner
• Provision should be included for external
  verification / assurance

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The GC Toolkit - Environmental Principles
Reporting and Communications Tools

• The GRI Sustainability Reporting Guidelines
• GRI launched in 1997, by CERES and UNEP
• I was a board member Dec. 1997-Jan. 2001
• ITT Flygt was one of 21 pilot testers of the
  first version of the GRIs Guidelines (March
  1999)
• I'm a member of the Stakeholder Council, since
  March 2002.
• Also a member of three working groups (Talent
  Management, Communication and Research
  Education)

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What is GRI?

• GRI is
• A multi-stakeholder process and an independent
  institute
• Mission
• To develop and disseminate globally applicable
  sustainability reporting guidelines

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GRI Reporting Framework
32
G 3 - Table of Contents

• Preface
• Introduction
• Overview of Sustainability Reporting
• Part 1
• Defining Report Content, Quality and Boundary
• Part 2
• Standard Disclosures
• Strategy and Profile
• Economic
• Environmental
• Social
• General Reporting Notes

33
Number of indicators?

• Performance Core Additional Total
• Economy 7 2 9
• Environment 17 13 30
• Social 25 15 40
• Sum 49 30 79

34
Use the web!

• www.globalreporting.org
• All participation and active
• engagement in the GRI work is
• through Internet

35
Principles for content and quality

• Principles for defining
• the CONTENT
• Materiality
• Stakeholder inclusiveness
• Sustainability context
• Completeness

• Principles for defining
• the QUALITY
• Balance
• Comparability
• Accuracy
• Timeliness
• Clarity
• Reliability

36
Part 2. Standard DisclosuresStrategy and Profile

• 1. Strategy and analysis 2
• 2. Organizational profile 10
• 3. Report parameters 13
• 4. Governance, commitments and engagement 7
• 5. Management Approach and Performance Indicators
• Economic (EC) 9
• Environmental (EN) 30
• Social (LA, HR, SO, PR) 40
• Labour practices and decent work (LA 14)
• Human rights (HR 9) Society (SO 8)
  Product responsibility (PR 9)

37
Standard disclosuresStrategy and Profile

• 1. Strategy and analysis
• 1.1 Statement from CEO on strategic relevance of
  sustainability
• 1.2 Description of key impacts, risks and
  opportunities
• 2. Organizational profile
• 2.1 Name of the organization
• 2.2 Primary brands, products, services
• 2.3 Operational structure of the organization
• 2.4 Location of headquarters
• 2.5 Number and names of countries of operations
• 2.6 Nature of ownership and legal form

38
Standard disclosuresStrategy and Profile forts.

• 2.7 Markets served
• 2.8 Scale of reporting organization
• 2.9 Significant changes during reporting period
• 2.10 Awards received
• 3. Report parameters
• Report profile
• 3.1 Reporting period
• 3.2 Date of most recent report
• 3.3 Reporting cycle
• 3.4 Contact for questions

39
Standard disclosuresProfile forts.

• Report scope and boundary
• 3.5 Process for defining report content
• 3.6 Boundary of the report
• 3.7 Specific limitations on report scope or
  boundary
• 3.8 Basis for reporting joint ventures etc
• 3.9 Data measurement techniques, assumptions,
  estimations etc.
• 3.10 Explanation of effect of any re-statements
• 3.11 Significant changes in scope, boundary etc
• GRI content index
• 3.12 GRI content index
• Assurance
• 3.13 Policy and practices regarding external
  assurance

40
Standard disclosuresStrategy and Profile forts.

• 4. Governance, commitments and engagement
• Governance
• 4.1 Governance structure, including board
  committees etc.
• 4.2 Separate CEO and board chairperson
• 4.3 Independence of board members
• 4.4 Mechanisms for shareholder and employee
  feedback
• 4.5 Link between board/management compensation
  and performance
• 4.6 Process for avoiding conflicts of interest
• 4.7 Process for determining board qualifications
  (sustainability issues)
• 4.8 Mission, values, codes of conduct

41
Standard disclosuresStrategy and Profile forts.

• 4.9 Procedures for board overseeing performance
  and compliance
• 4.10 Process for evaluating board performance
• Commitments to external initiatives
• 4.11 Application of precautionary principle
• 4.12 External charters or principles endorsed
• 4.13 Memberships in (industry or other)
  associations
• Stakeholder engagement
• 4.14 List of stakeholder groups engaged by
  organization
• 4.15 Basis for identification and selection of
  stakeholders to engage
• 4.16 Approaches to stakeholder engagement
• 4.17 Topics and concerns raised through
  stakeholder engagement

42
Standard disclosuresStrategy and Profile forts.
5. Management approach and performance indicators

• This part includes reporting of management
  policies and indicators/measurements for each
  sustainability dimension
• Economic
• Environmental
• Social (Labour, Human Rights, Society, Product
  Responsibility)
• For each dimension
• Disclosure on Management Approach
• Core Indicators
• Additional Indicators

43
Economic performance indicators
Core
Additional

• Economic (729)
• Economic Performance (40)
• Market Presence (21)
• Indirect Economic Impact (11)

44
Environmentalperformance indicators

• Environmental (171330)
• Materials (20)
• Energy (23)
• Water (12)
• Biodiversity (23)
• Emissions, Effluents and Waste (73)
• Products and Services (20)
• Compliance (10)
• Transport (01)
• Overall (01)

45
Social performance indicators

• Labour Practices and Decent Work (9514)
• Employment (21)
• Labour/Management Relations (20)
• Occupational Health and Safety (22)
• Training and Education (12)
• Diversity and Opportunity (20)

46
Social performance indicators

• Human Rights (639)
• Investment and procurement practices (21)
• Non-Discrimination (10)
• Freedom of Association and collective bargaining
  Child Labour (10)
• Child labour (10)
• Forced and Compulsory Labour (10)
• Security Practices (01)
• Indigenous Rights (01)

47
Social performance indicators

• Society (628)
• Community (10)
• Corruption (30)
• Public Policy (11)
• Anti-Corruption Behaviour (01)
• Compliance (10)

48
Social performance indicators

• Product Responsibility (369)
• Customer Health and Safety (11)
• Products and Services Labelling (12)
• Marketing Communication (02)
• Customer Privacy (01)
• Compliance (10)

49
GRIs Guidelines are incremental
Structure and criteria
Externally assurance gives a

Outside GRI
According to GRI


B
A
C
50
GRIs three Application Levels
51
GRI recommends the use of external assurance for
sustainability reports in addition to any
internal resourcesSource Sustainability
Reporting Guidelines (GRI G3 October 2006)
52
Standards used for assurance of sustainability
reports
IFAC Code of Ethics for Professional Accountants
International Framework for Assurance Engagements
Audits and reviews of historical financial
information
Assurance Engagements other than Audits or
Reviews of Historical Information
ISAE 3000 International Standard on Assurance
Engagements
ISA 100 International Standards on Auditing
ISA 2000 International Standards on Review
Engagements
National Sustainability Assurance
Standards Sweden, Germany, Netherlands, France
Annual Audit
Non-Financial Reports
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The GC Toolkit - Environmental Principles
Reporting and Communications Tools

• Environmental Labelling Programmes 
• e.g. Eco-Labels
• Why Label?
• Allows consumers to make informed decisions about
  what they are buying
• Shows commitment to reduced environmental impact
• Third party verification gives credibility

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The GC Toolkit - Environmental Principles
Reporting and Communications Tools

• Types of environmental labels
• TYPE I Voluntary label verified by independent
  body, awarded to products fulfilling criteria
  corresponding to the best environmental
  performance within each particular product group.
• TYPE II Self-declared labels used by
  manufacturers to indicate the environmental
  aspects of a product or service. The label may
  take the form of statements, symbols or graphics
  on product or packaging labels, product
  literature, advertising or similar.
• TYPE III Label licensed by independent
  organisations, serving as a report card and
  providing information on the possible
  environmental impact of a product, leaving it to
  the consumer to decide which product is best.
  Also known as an Environmental Product
  Declaration.

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The GC Toolkit - Environmental Principles
Reporting and Communications Tools
Environmental Labelling Programmes