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Driven by Corporate Social Responsibility?

Driven by Corporate Social Responsibility?

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Published by ComunicaRSE
Autor: SOMO
Autor: SOMO

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Published by: ComunicaRSE on Mar 03, 2010
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08/18/2010

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1SOMO paper
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The civil war that rages in the eastern provinces o theDemocratic Republic o the Congo (DRC) has led tocountless atrocities, including murder, rape and slavelabour, being committed by the armed groups in theregion. There are numerous political, historical, culturaland economic reasons or this conict, and a wide rangeo actors are involved. However, a clear link existsbetween these atrocities and the mining o mineralsin the region, as well as the use o these minerals inconsumer products worldwide. The income generatedrom the mining o minerals used in consumer productsis used to fnance arms that are wielded against the localpopulation. Awareness o this link between consumerproducts and civil war has been raised through NGOcampaigns, media attention and political movementsboth in the United States and in Europe. The use o minerals such as tin, tungsten, gold and coltan romthe DRC in laptops and mobile phones is subject toincreasing public pressure, and there is a widespreadcall or more tracing, transparency and supply chainresponsibility to tackle these grave problems.
The situation in the DRC might be the gravest example o how mineral extraction can uel conict and suering, butis certainly not the only one. Throughout the global south,local communities, workers and the environment aresuering rom the consequences o mining operations.Issues such as land expropriation, mining in environmentallyragile areas, contested water use and contamination,community tensions, child labour and orced labour, andhazardous working conditions can be ound in numerousmining operations. Examples include the mining o cobaltin the southern region o the DRC, platinum mining inSouth Arica, tin mining in Indonesia, etc.A large portion o the demand or non-errous metalscomes rom two end user industries; the electronics andthe automotive industry. Where cobalt, platinum groupmetals (PGMs) and rare earth metals are concerned, thecombined demand rom the two sectors is more than hal o the global demand. At the same time, a continuallyincreasing percentage o car components are electronic,which contributes to an increase in overlap between themineral demands o both industries.The large and well-known electronic brands are increasinglyrecognising their responsibility as major end users o minerals that are concerned with social, environmental andlabour issues. This year, the sector’s sustainability initiative,the Electronics Industry Citizenship Coalition (EICC), hascommissioned research into the sector’s use o aluminium,cobalt, palladium, copper, gold and tin.
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Drivn by Corporat Social Rsponsibility?
Top Tn Car Manufacturrs: A CSR Analysis
SOMO paper | February 2010
 
2Extractives Sector
It has also issued public statements o position and hascommissioned a project to map the supply chain o someo these metals, which is currently underway. These eortsillustrate that this sector is moving towards a more compre-hensive approach o its supply chain responsibility, to thepoint where it will encompass the ull supply chain.
Research aim and design
The automotive industry has been much less active in thepublic debate around controversial metals than the elec-tronics industry. This briefng paper assesses the currentstate o the automotive sector with respect to its eortstowards a ull supply chain responsibility that includes theuse o metals. It intends to provide an overview o theapproach used by the largest companies in the automotivesector to address the social, environmental and labourissues in the mining phase o its supply chain. By analysinginormation about the Corporate Social Responsibility o these companies (eg, policies and the implementationthereo) that is publicly available, the paper evaluates thelargest players in the automotive sector on our indicators;1. Whether the company has a CSR policy, and how thisis constructed and implemented.2. Whether the company recognises its supply chainresponsibility, and how this is implemented.3. Whether the company is transparent about andsustainable in its use o minerals.4. Whether the company conducts proper recyclingactivities.All chapters start with a general introduction that describesthe relevance o the indicator or the social and environ-mental issues in the extractive phase, ollowed by ananalysis o the state o the industry asd a whole regardingthat indicator. Each chapter also briey describes theapproaches o the largest individual automotive companiesor the respective indicator.The ten largest automotive companies, on the basis o annual production o motor vehicles, are Toyota, GeneralMotors (GM), Volkswagen, Ford, Honda, Nissan, PSAPeugeot Citroën (PSA), Hyundai, Suzuki and Fiat.
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About SOMO
SOMO, a Dutch non-proft research and advisory bureau,was established in 1973. SOMO investigates the conse-quences o the internationalisation o business and o MNC policies, particularly where developing countries areconcerned. SOMO’s primary goal is to enhance thecapacity o civil society organisations worldwide to inuencecorporate behaviour and business regulations in theinterest o sustainable development and poverty eradication.Through knowledge combined with action, SOMO strivesto achieve sustainable economic, social and ecologicaldevelopment, the improvement o workers’ lives and theeradication o exploitation, poverty and inequality. SOMOis the coordinator o the makeITair campaign, whichocuses on achieving sustainability throughout the supplychain o electronic products.
Corporat Social Rsponsibility
To assess what is needed or automotive companies toconront the issues in the extractive phase, the frst stepis to look at how these companies deal with such issuesin general. A solid CSR policy addresses both social andenvironmental issues, and is based on the relevant interna-tionally accepted norms and standards. These standardsinclude the Universal Declaration o Human Rights, theInternational Labour Organization’s Declaration onFundamental Principles and Rights at Work, the RioDeclaration on Environment and Development and theUnited Nations Convention Against Corruption. Ideally,companies make explicit reerences to these standards,but they can also commit to them indirectly through varioussustainability initiatives. Proper management systems needto be in place to ensure that these CSR policies are imple-mented in day-to-day business operations. This paperevaluates the CSR policies o the automotive companieson the basis o these criteria, which are derived rom theCSR Frame o Reerence o the Dutch CSR Platorm.
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Industry as a whole
Almost all o the large brands publish an annual CSR orsustainability report in which they describe their eorts,policies and achievements. A number o companies publishadditional social, economic or environmental policies.Overall, it seems that most companies provide inormationabout their approach towards environmental, social andeconomic issues. The sector also seems to be aware o theimportance o proper management systems being in placeto ensure that the CSR policies are implementedthroughout all the business activities o a company, as mosto the companies discussed here have executive directorsresponsible or CSR. Around hal o the companies discussedhere make explicit mention o relevant international stan-dards, such as the Core Conventions o the InternationalLabour Organisation (ILO), the Universal Declaration o Human Rights o the United Nations and the 1992 RioDeclaration on Environment and Development.
Individual company approaches
Hyundai:
Hyundai has a number o ethics regulationsand an environmental strategy, and publishes an annualCSR report.
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Hyundai is a member o the UN GlobalCompact, and thereby indirectly committed to interna-tional labour, environmental and human rights standards.
 
3SOMO paper
As part o its corporate governance, Hyundai has anethics committee that oversees the company’s ethicsmanagement.
PSA:
PSA has a number o CSR policies. The socialcomponent o CSR is covered by an ethics code anda ramework agreement signed between PSA, theInternational Metalworkers’ Federation (IMF) and theEuropean Metalworkers’ Federation (EMF). PSA alsohas an environmental policy and publishes an annualCSR report. PSA is a member o the UN GlobalCompact and explicitly committed to the main interna-tional standards.
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PSA has a sustainable developmentdepartment, which is positioned between the executivecommittee and the unctional and operating divisions.
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Toyota:
Toyota has ormulated a CSR policy that isbased on the company’s Guiding Principles.
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 Additionally, the company has a separate policy onBiodiversity, as well as a Code o Conduct, a Global Vision or 2020, and the Toyota Way 2001, whichoutlines the expectations o how employees shouldbehave. It also has an environmental plan o action thatincludes design production and recycling.
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Toyota has aseparate CSR department, as well as a CSR committeethat includes members o the executive board. Thecompany is a member o the World Business Councilor Sustainable Development (WBCSD), but does notmention any o the relevant international standards inits international CSR report or CSR policy. Severalregional divisions also publish their own annual CSRreports in accordance with GRI standards.
 Volkswagen:
 Volkswagen has ormulated its principleso CSR in the company’s Model o SustainableDevelopment.
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It also has a separate environmentalpolicy.
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Volkswagen manages its CSR through a CSRand Sustainability Coordination Ofce, which reportsto the CSR Steering Committee.
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Volkswagen makesspecifc mention o the ILO Core Conventions andthe OECD Guidelines, and indirectly reers to the UNDeclaration o Human Rights through its membershipo the UN Global Compact.
12
Honda:
Honda’s overall business philosophy is ormu-lated as ‘striving to be a company society wants toexist’.
13
It defnes its environmental policies andenvironmental management system in the HondaEnvironment Statement. In addition to its annual CSRreport, Honda publishes a separate annual environmentalreport. Honda makes no mention o internationalstandards in its CSR report.
Nissan:
Nissan has a CSR policy that contains nine keyareas, including economic contribution, employeesand the environment.
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It also has an ethical codeo conduct as part o its corporate governance.
15
 The company’s CSR activities are managed by aCSR steering group, which consists o 30 mid-levelmanagers.
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This steering committee alls directlyunder the Executive Committee o the company.Through its membership o the UN Global Compact,Nissan has indirectly committed itsel to all interna-tional standards regarding labour, human rights andthe environment.
General Motors:
General Motors does not have a clearCSR policy, nor does it publish annual CSR reports. Itdoes have a section on its website dedicated to itscorporate responsibility, but this section is mostlydescriptive in nature and hardly reers to CSR policiesor commitments.
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It does, however, list the company’senvironmental principles, which seem to be the onlyarea o commitment the company publishes about.Little inormation was ound on how CSR is incorpo-rated into the overall business strategy o the company.None o the people in senior leadership positions seemto be responsible or the company’s CSR.
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Suzuki:
Suzuki also publishes an annual comprehensiveCSR report that deals with the company’s environ-mental, economic and social responsibility. Other thanits Green Procurement Guidelines, discussed inChapter 2, it does not have any additional policydocuments. Suzuki has a Code o Ethics, as well as aspecialised ethics commission.
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The only mention o the ILO is with regards to an occupational health andsaety award it has received in Pakistan.
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It does notmake any explicit commitment to any internationalstandards in its CSR report.
Ford:
Ford publishes its CSR report in the orm o aspecial website, where it publishes inormation on allaspects o CSR. It has a Code o Conduct Handbook,stating the company’s policies with regards to issuessuch as working conditions, ethical business practicesand corruption.
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Ford also has a Code on BasicWorking Conditions, which is based on standards o theILO, UN and OECD.
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Sustainability management is theresponsibility o one o the group’s vice presidents.
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Fiat:
Fiat gives its Sustainability Plan, which can beseen as the company’s commitment to its stakeholders,a prominent place in its annual CSR report. This planincludes a number o goals related to the environment,human resources, suppliers and the community.
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Thecompany’s sustainability is managed by a SustainabilityUnit, and overseen by the Sustainability Committee,which is comprised o group and sector level execu-tives. The corporate governance model o Fiat is basedon its Code o Conduct, which is set to be updated in2009. In its CSR report Fiat mentions that its code o conduct is based on the international labour andhuman rights standards o the ILO and the UN.
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