Supply Chain Carbon Management: From Disclosure to Better Performance

Ryan Schuchard, Manager, Climate and Energy, BSR

A company’s supply chain is one of its top levers for addressing climate change. However, as the Carbon Disclosure Project’s latest supply chain report shows, it is challenging in practice to reduce supplier greenhouse gas (GHG) emissions. According to the report, which describes the actions of more than 2,300 suppliers, there remains a significant gap in efforts to reduce GHG emissions between multinational corporations (MNCs) and their suppliers.

For example, while 92 percent of the MNCs who request supplier information also have emissions reduction targets, only 38 percent of the reporting suppliers do. And, while 69 percent of those MNCs are investing in emissions reduction, only 27 percent of suppliers are doing the same.

This gap exists for good reasons. A disproportionate number of suppliers are based in emerging markets like China, where energy is relatively inexpensive. The MNC participants also tend to be global brands with sophisticated management systems, while many suppliers are smaller and less mature.

What will it take to close this gap? BSR sees three opportunities:

• Be a part of the solution. MNCs need to not only ask suppliers questions but also help them get the technical assessments, coaching, and resources they need. Some managers mistakenly believe that disclosure requests will automatically send a signal that leads suppliers to reduce emissions, while in reality, surveys are often assigned to personnel without budgets, and carbon-reducing investments are not made. Therefore, companies that are serious about supplier GHG reduction cannot stop with surveying—they need to develop literacy around the energy management issues their suppliers face and understand individual supplier's specific opportunities.
• Use data that’s useful. To play a more active role, companies need to understand what is happening inside supplier operations. However, the data expressions many are most familiar with—lifecycle assessments (which compare categories of suppliers) and carbon footprints (which outline a supplier’s overall energy use)—say little about what individual factories have done or should do. Companies need to add to data collection efforts aimed at diagnosing managerial and technical weaknesses for energy efficiency, identifying specific energy-saving opportunities through energy audits on the ground, prioritizing potential energy-saving actions, and understanding what stands in the way of the suppliers taking the next step.
• Enable different kinds of suppliers, together. Supplier situations are diverse. In electronics, for example, the energy use of the top 10 percent of suppliers may be 10 times greater than the average (see figure below). Also, some suppliers will have not yet made any proactive investments in energy efficiency, while others are already managing carbon and energy in a sophisticated way. A single, middle-of-the road approach to training will serve neither of these groups. Companies need to find ways to drive forward suppliers of different shapes, scales, and stages of evolution together.

Source: Responses from more than 350 suppliers to the Electronics Industry Citizenship Coalition 2012 Carbon Reporting System survery

Building on the two-year Energy Efficiency Partnership (EEP) pilot project, which developed management capability for energy efficiency for more than 100 suppliers in China, BSR is launching a Supplier Carbon Performance (SCP) initiative. Using technical energy management as a frame of reference, SCP acquaints suppliers with best practices for managing and reducing carbon. SCP also adds several resources for which suppliers have articulated needs: on-site factory consulting, group trainings organized by common sectors and situations, and a diagnostic tool for quickly evaluating efficiency improvement opportunities at the outset.

Disclosure of supplier climate issues is vital—yet it is not alone sufficient to drive GHG reduction. Companies need to complement disclosure and reporting efforts with initiatives that investigate suppliers’ individual needs and play an active part in helping them to set and achieve their own commitments.

reference: BSR blog

The Rise of Reporting in China: How State-Owned Companies Can Dig Deeper

Chengbo Wang, Director, Advisory Services, BSR

In May 2011, the State-Owned Assets and Administration Commission (SASAC) mandated that all Chinese State-Owned Companies (SOEs) publish an annual corporate social responsibility report in an effort to increase their competitiveness. According to a report by leading Chinese news site "Renmin Online," the number of SOEs publishing CSR reports increased from 1,006 to 1,337 between October 2011 and 2012. Since the release of this mandate (also known as Guide 2.0), many Tier 1 cities—the most affluent, populous, and competitive cities in the country including Beijing, Chengdu, Shanghai, and Tianjin—have also hosted numerous events and seminars to help educate and train people from business, government, and civil society on the reporting process. 

The results of all this activity are, on the one hand, very positive. Most reports are well-designed and contain information that meets both local and international standards. On the other hand, many of the reports exist to meet SASAC requirements only—to perhaps show “face” rather than reshape a company’s long term business goals and sustainability strategy. More importantly, what appears to be missing in this rush to report is evidence of the process itself: how a company has demonstrated engagement with internal and external stakeholders, or an assessment of its strategy and integration of the topics most important to a company’s business model, such as supply chain management, local community development, human rights, and climate change.

To ensure a strategy beyond the reporting process exists, SOEs may need to consider institutionalizing their in-house CSR function and providing the resources needed to carry out related activities. CSR in Chinese companies often sits in the human resources or public relations functions, and even when a CSR unit does exist, many still fail to perform well due to budget constraints, shortages of skilled staff, and unclear or undefined responsibilities and scope. Secondly, SOEs also need to consider developing a medium and long-term strategy so staff can engage with a wider stakeholder group—such as local communities, business units, employees, and suppliers—and prioritize their needs combined with the material issues that the company wants to address. Finally, companies need to educate internal staff to solve sustainability issues through training, sharing, and peer learning among senior and mid-level management to ensure buy-in and longer-term success.

CSR reporting should not be considered a public relations exercise. In our experience, CSR strategy and performance are both equally important to enhancing a company’s competitiveness. What a company values most or believes is material to its business should be the markers by which sustainability plans are drawn up—it doesn’t stop at the report.

Note: In January 2013, the Ministry of Industry and Information (MIIT) formally released China’s first localized CSR standard, called DZCSR3000, which was developed by Dingzun Business Consulting in association with the Chinese Academy of Social Sciences (CASS), MIIT, China Enterprise Confederation-China Enterprise Directors Association (CEC-CEDA), and local government leaders including representatives from State Grid Corporation of China (SGCC), Daimler AG, and Gelly. China Daily reports that the standard meets global ISO26000 standards and is also designed to appeal to local Chinese CSR culture. BSR will share details of this standard as soon as they are available.

refference: staronline

RM2.7b for green projects

KUALA LUMPUR: A total of RM2.7bil is still available for green technology projects under the Green Technology Financing Scheme (GTFS), according to Malaysia Green Technology Corp acting CEO Ahmad Zairin Ismail.

“Under phase one, a total of RM1.5bil has been allocated for GTFS and there is a balance of RM700mil. In the Budget 2013 announcement last week, an additional RM2bil had been made available for GTFS,” he said on the sidelines of the Green Technology Financing Bankers’ Conference.

So far, RM805mil worth of projects benefiting some 65 companies have been approved by over 20 participating banks in the country, while over RM250mil worth of loans have been disbursed.

GTFS is a soft loan financing scheme established by the Government. Under the funding scheme, between RM10mil and RM50mil is allocated for a project, depending on the criteria. The Government will bear 2% of the total interest rate and also guarantee 60% of the financing amount. The scheme aims to improve the utilisation of green technology in the energy, water and waste management, building and transportation sectors.

Bank Negara deputy governor Datuk Muhammad Ibrahim said in order to create a more diverse and robust financing ecosystem for green ventures, the sukuk market and venture capital industry can play a more active role in supporting this sector.

“To promote long-term financing, the sukuk market presents an additional avenue to meet market demand. Sukuk which uses a principles-based approach on having real productive underlying assets is an ideal financing solution for green technology projects, which have large capital outlays and long gestation periods.

“Another is the promotion of a vibrant venture capital industry in Malaysia to complement the banking system, as it has the potential to facilitate the development of small and innovative businesses and the commercialisation of intellectual property,” Muhammad said in his speech earlier at the conference.

He said green businesses needed support as the industry might be technically strong but lacked the capabilities to develop comprehensive business plans and cash flow projections. .

Muhammad urged financial institutions to constantly develop expertise in support of green technology sector. “Green financing teams should have in-depth knowledge and capacity across the entire financing process flow, including development, promotions, sourcing of viable projects and holistic risk management.”

He noted that the ability to leverage on the opportunities in green technology financing would accelerate the growth of the green technology sector in Malaysia.

The two-day conference was jointly organised by Bank Negara and the Institute of Bankers Malaysia and supported by the Energy, Green Technology and Water Ministry, the Malaysian Green Technology Corp and the Sustainable Energy Development Authority Malaysia.

Meanwhile, the ministry secretary-general Datuk Loo Took Gee said although the take-up rate was low in the initial stage, the achievement of the GTFS had been commendable.

“As of end-September, a total of 209 applications had been issued with the green certificates, out of which 67 projects received loan offers from financial institutions amounting to RM815mil. The expected carbon dioxide reduction from these projects is estimated to be 1.2 million tonnes of carbon dioxide equivalents a year and an estimated 440 new green collar employment is expected to be created,” she said.

reference: thestar online

Malaysia's December inflation up 1.2% on-year, below estimate of 1.4%

KUALA LUMPUR: Malaysia's inflation rate, measured by the consumer price index, rose 1.2% in December 2012 from a year ago, but the increase was slower than economists' estimate of 1.4%.

The Statistics Department said on Wednesday the index for food & non-alcoholic beverages and non-food for December rose 2.0% and 0.9% respectively on-year.

When compared with November, the CPI for December remained unchanged at 105.5. The index for food & non-alcoholic beverages increased by 0.3% while the index for non-food fell 0.1%.

"The CPI for the period January to December 2012 increased by 1.6% to 104.9 compared with that of 103.2 in the same period last year," it said.

For January to December 2012, the index for food & non-alcoholic beverages and non-food increased by 2.7% and 1.2%.

Malaysia supports Fatah-Hamas reconciliation

Friend in need: Najib and Rosmah accompanied by Haniyeh (left) being introduced to Hamas Cabinet ministers in Gaza. — Bernama

GAZA CITY: Malaysia has offered to help unite rival Palestinian groups Fatah and Hamas.

The first Malaysian Prime Minister to visit Palestine, Datuk Seri Najib Tun Razak expressed support for a reconciliation plan to end the division between the two Palestinian movements.

“A unity government is within reach,” the Prime Minister said after being conferred a honorary doctorate by the al-Aqsa University in East Jerusalem yesterday.

He said that peace and prosperity could only be achieved through unity, a belief strengthened by Malaysia's success in facilitating talks in the southern Philippine to end four decades of conflict that had killed over 120,000 people.

“Should it be needed, we stand ready to offer you the benefit of that experience. Malaysia, always a friend of the Palestine people, is willing to help facilitate the reconciliation plan in whichever way we can,” he said.

A split between the two groups in 2007 led to the West Bank being governed by Fatah and the Gaza Strip by Hamas. The two sides signed a reconciliation plan sponsored by Egypt in May last year.

Najib, who was in Gaza on a humanitarian visit, said his commitment to a peaceful resolution to the Palestinian issue was clear.

“We wish to see an independent, unified Palestine, enjoying the peace and security which all the world's peoples deserve.”

While describing himself as a friend of the Palestinians, he paid tribute to Malaysians for commitment to their cause.

“It is my people who reach out with offers of assistance, who give what they can to help the people here, who keep Palestinian innocents in their thoughts whenever there is violence here,” Najib said.

He said this commitment could be seen in the funds and medical supplies donated to a Malaysian solidarity charity mission and those who travelled to Palestine to disburse them.

Earlier, after crossing the Egyptian border into Gaza by land, Najib, accompanied by his wife Datin Seri Rosmah Mansor, was met on arrival by the Palestinian Prime Minister in Gaza, Ismail Haniyeh.

Najib, who was accorded an official welcome, laid the foundation stone to rebuild the Gaza administrative office building destroyed during an Israeli attack in November before visiting a school project initiated by Malaysia.

Najib and Rosmah later departed for Cairo where the Prime Minister called on Egyptian President Mohamed Morsi.

Malaysia and Egypt then signed a comprehensive economic cooperation agreement.

The Prime Minister leaves Cairo today for Davos in Switzerland for the World Economic Forum.

reference: thestar online

Corporate Governance

 Corporate governance has succeeded in attracting a good deal of public interest because of its apparent importance for the economic health of corporations and society in general. However, the concept of corporate governance is poorly defined because it potentially covers a large number of distinct economic phenomenon. As a result different people have come up with different definitions that basically reflect their special interest in the field. It is hard to see that this 'disorder' will be any different in the future so the best way to define the concept is perhaps to list a few of the different definitions rather than just mentioning one definition.



1. Corporate governance is a field in economics that investigates how to secure efficient management of corporations by the use of incentive mechanisms, such as contracts, organizational designs and legislation. This is often limited to the question of improving financial performance.

2. Corporate governance deals with the ways in which suppliers of finance to corporations assure themselves of getting a return on their investment.

3. Corporate governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance.

4. Corporate governance - which can be defined narrowly as the relationship of a company to its shareholders or, more broadly, as its relationship to society.

5. Corporate governance is about promoting corporate fairness, transparency and accountability.

6. Some commentators take too narrow a view, and say it (corporate governance) is the fancy term for the way in which directors and auditors handle their responsibilities towards shareholders. Others use the expression as if it were synonymous with shareholder democracy. Corporate governance is a topic recently conceived, as yet ill-defined, and consequently blurred at the edges…corporate governance as a subject, as an objective, or as a regime to be followed for the good of shareholders, employees, customers, bankers and indeed for the reputation and standing of our nation and its economy.


reference : http://e.viaminvest.com

Business Ethics

There are many opinion towards business ethics. According to Andrew Crane ''Business is the study of business situation, activities and desicions where issues of right and wrong are addressed." and according to Raymond C. Baumhart "The ethics of business is the ethics of responsibility. The business man must promise that he will not to harm knowingly."

Ethics are moral guidelines which govern good behaviour

So behaving ethically is doing what is morally right

Behaving ethically in business is widely regarded as good business practice.  To provide you with a couple of quotes:

Ethical principles and standards in business:

• Define acceptable conduct in business
• Should underpin how management make decisions

An important distinction to remember is that behaving ethically is not quite the same thing as behaving lawfully:

• Ethics are about what is right and what is wrong
• Law is about what is lawful and what is unlawful

An ethical decision is one that is both legal and meets the shared ethical standards of the community
Businesses face ethical issues and decisions almost every day – in some industries the issues are very significant.  For example:

Should businesses profit from problem gambling?

Should supermarkets sell lager cheaper than bottled water?

Is ethical shopping a luxury we can’t afford?

You will probably note the link between business ethics and corporate social responsibility (CSR).  The two concepts are closely linked:

• A socially responsible firm should be an ethical firm
• An ethical firm should be socially responsible

However there is also a distinction between the two:

• CSR is about responsibility to all stakeholders and not just shareholders
• Ethics is about morally correct behaviour

How do businesses ensure that its directors, managers and employees act ethically?
A common approach is to implement a code of practice. Ethical codes are increasingly popular – particularly with larger businesses and cover areas such as:

• Corporate social responsibility
• Dealings with customers and supply chain
• Environmental policy & actions
• Rules for personal and corporate integrity 

reference:  http://www.tutor2u.net