The Aspen Institute
“The Role of Business in Society”
Workshop Block II
Vanderbilt University
March 4, 2006
The Global Compact
The Global Compact
The Global Compact is a voluntary
initiative that seeks to advance
universal principles on human rights,
labour, environment and anti-corruption
through the active engagement of the
corporate community, in cooperation
with civil society and representatives of
organized labour.
The Ten Principles
Human Rights
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Principle 1: Businesses should support and respect the protection of internationally
proclaimed human rights; and
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Principle 2: make sure that they are not complicit in human rights abuses.
Labour Standards
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Principle 3: Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;
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Principle 4: the elimination of all forms of forced and compulsory labour;
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Principle 5: the effective abolition of child labour; and
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Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
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Principle 7: Businesses should support a precautionary approach to environmental
challenges;
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Principle 8: undertake initiatives to promote greater environmental responsibility; and
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Principle 9: encourage the development and diffusion of environmentally friendly
technologies
Anti-Corruption
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Principle 10: Businesses should work against all forms of corruption, including extortion
and bribery.
Global Compact Participants
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Alcan, Inc.
Anglo American plc
BP Plc
DaimlerChrysler AG
Gap Inc.
Hewlett-Packard Company
Nike Inc.
Nissan Motor Co Ltd
Petrobras SA
Pfizer, Inc.
Royal Dutch/Shell Group
Siemens AG
Starbucks Coffee Company
Unilever
Volkswagen AG
Yukos Oil
About 100 of the FT Global 500 Corporations are members of the
Global Compact.
The Equator Principles
Equator Principles Preamble
Project financing plays an important role in
financing development throughout the world.
In providing financing, particularly in
emerging markets, project financiers often
encounter environmental and social policy
issues. We recognize that our role as
financiers affords us significant opportunities
to promote responsible environmental
stewardship and socially responsible
development.
Statement of Principles
We will only provide loans directly to projects in
the following circumstances:
 The borrower has completed an Environmental
Assessment.
 The borrower or third party expert has
prepared an Environmental Management Plan.
 Lenders have appointed an independent
environmental expert to provide additional
monitoring and reporting services.
Equator Principle Participants
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Bank of America
Barclays plc
Citigroup Inc.
Credit Suisse Group
Dresdner Bank
HSBC Group
ING Group
JPMorgan Chase
Royal Bank of Canada
The Royal Bank of Scotland
Wells Fargo
Goldman, Sachs & Co.
Goldman Sachs
Environmental Policy Framework
Goldman Sachs believes that a healthy environment is
necessary for the well-being of society, our people and our
business, and is the foundation for a sustainable and
strong economy.
Goldman Sachs recognizes that diverse, healthy natural
resources - fresh water, oceans, air, forests, grasslands,
and agro-systems - are a critical component of social and
sustainable economic development.
We recognize that as a global company we have an impact
on the environment through the goods we purchase, the
manufacturing and production we finance, and the
investments we make.
Specific policies outlined
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We will make efforts to ensure that our facilities and business practices
adopt leading-edge environmental safeguards.
Goldman Sachs intends to be a leading U.S. wind developer and
generator through our recently acquired subsidiary, Horizon Wind
Energy
We will make available up to $1 billion to invest in renewable energy
and energy efficiency projects.
We will work to make environmental, social and governance criteria a
part of best-in-class investment research.
Goldman Sachs will not finance any project or initiate loans where the
specified use of proceeds would significantly convert or degrade a
critical natural habitat.
We will not finance projects that contravene any relevant international
environmental agreement which has been enacted into the law of the
country in which the project is located.
Merck
Mectizan and River Blindness
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It is a debilitating and agonizing disease that affects more than 18
million people, many of them in Africa and Latin
America. Worldwide, as many as 120 million people may be at risk
for the disfiguring skin infections, painful eye lesions and eventual
loss of sight caused by onchocerciasis, or “river blindness.”
In the 1980s, Merck discovered that the drug Mectizan
(ivermectin) had potential for use in humans infected with the
parasite that causes river blindness.
In 1987, Merck established the Mectizan® Donation Program to
help deliver Mectizan to populations facing a significant public
health threat from this disease.
Treatment programs now exist in 34 countries in Africa, Latin
America and in Yemen in the Middle East, and more than 40 million
people receive Mectizan to treat river blindness each year.
Chiquita
Better Banana Project
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Chiquita supplies nearly 25% of the bananas consumed in
North America and Europe.
In 1992, Chiquita teams up with the Rainforest Alliance and
voluntarily invests $20 million for capital improvements to
farms.
By 2000, 100% of Chiquita’s farms met Rainforset Alliance
social and economic standards. Today, More than 160
banana farms were certified, covering 120,000 acres in
Ecuador, Colombia, Panama, Guatemala, Honduras and
Costa Rica.
Chiquita protects significant swaths of rainforest, recycles or
reuses nearly 80 percent of the plastic bags and twine used
and has reforested more than 2,500 acres with nearly
800,000 trees and bushes.
Beyond Grey Pinstripes
Beyond Grey Pinstripes, a biennial
ranking of business schools, shines a spotlight on
exceptional full-time MBA programs and faculty at the
forefront of incorporating issues of social and
environmental stewardship into the fabric of their
business curricula and research. These programs and
pioneering faculty are preparing students for the reality
of tomorrow’s markets, equipping them with an
understanding of the social, environmental, and
economic perspectives required for business success in a
competitive global economy.
Survey Methodology
 Invited 590 accredited MBA programs to
participate
 Collected data on 1,842 courses, 1,713
extracurricular activities, and 828 journal articles
from 91 global MBA programs
 Conducted all reviews using multiple raters
Survey Findings
Students at Top 30 schools are exposed to relevant topics
in 25% of their core coursework.
25%
20%
15%
10%
5%
0%
Top 30
The Rest
Survey Findings
54% of schools in our survey require a course in ethics, CSR, sustainability, or
business and society, a near 60% increase on 2001.
60%
50%
40%
30%
20%
10%
0%
2001
2003
2005
Fields of curriculum innovation:
Base of Pyramid
Number of courses
on BOP issues
 In the 2002/2003 school years, 4 courses were offered
 In the 2004/2005 school years, 27 courses were offered
30
25
20
15
10
5
0
2002/2003
2004/2005
Years
Fields of curriculum innovation:
Sustainability
Number of courses
on sustainability
offered
 2000/2001, 13 courses
 2002/2003, 40 courses
 2004/2005, 60 courses
80
60
40
20
0
2000/2001
2002/2003
School Year
2004/2005
The Top 30
1 Stanford
2 ESADE
3 York (Schulich)
4 ITESM (EGADE)
5 Notre Dame (Mendoza)
6 George Washington
7 Michigan (Ross)
8 North Carolina (Kenan-Flagler)
9 Cornell (Johnson)
10 Wake Forest (Babcock)
11 UC Berkeley (Haas)
12 Nottingham
13 Virginia (Darden)
14 Western Ontario (Ivey)
15 Boston College
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
Erasmus (Rotterdam)
Colorado (Leeds)
New Mexico (Anderson)
Asian Institute of Management(SyCip)
Portland State
Yale
McGill
Case Western (Weatherhead)
INSEAD
Calgary
Jyväskylä
Navarra (IESE)
Wisconsin-Madison
Minnesota (Carlson)
Georgetown (McDonough)
References
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Goldman Sachs Environmental Policy Framework
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The Global Compact – The Ten Principles
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http://www.merck.com/about/feature_story/05192004_mectizan.html
Chiquita and the Better Banana Project
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http://www.equator-principles.com/principles.shtml
Merck: Mectizan and River Blindness
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http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html
Equator Principles
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http://www.gs.com/our_firm/our_culture/social_responsibility/environmental_policy_fra
mework/docs/EnvironmentalPolicyFramework.pdf
http://www.rainforestalliance.org/programs/profiles/documents/ChiquitaProfile.pdf
Beyond Grey Pinstripes 2005
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www.beyondgreypinstripes.org
 A free service of the Aspen Institute Business
and Society Program. CasePlace offers a wide
range of business education materials in social
impact management, sustainability and
business ethics. The site contains cases and
teaching notes, teaching modules, journal
articles, course syllabi, books, conference
announcements, current events and more!
CasePlace.org
 Bringing Sustainability and social and
environmental consciousness to the
Business School Classroom
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Cases
Teaching Modules
References
Announcements
The Promise and Perils of
Globalization: The Case of Nike
 This case illustrates:
 The complexities inherent in being a good
corporate citizen in a global economy
 the evolution of Nike’s strategies vis-à-vis
working conditions, wages, and standards
for workers producing Nike brand shoes but
employed by independent contractors
Case Overview
 By 2001, Nike established itself as the industry
leader in the design, distribution, and
marketing of Athletic Footwear with over 35%
of the market
 Nike moved into the apparel sector
 Int’l. trade laws and differences in footwear
and apparel industries created different
relationships between Nike’s footwear suppliers
and Nike’s apparel suppliers
Case Overview
 The same factors that permitted Nike to grow
at an impressive rate over the last several
decades also created serious problems for the
company in the 90’s
 A series of PR nightmares and continued
criticism of the company combined to tarnish
Nike’s image
 Low Wages in Indonesia
 Child Labor in Pakistan
 Health and Safety Problems in Vietnam
Case Overview
 At first, Nike managers refused to accept
responsibility for labor and
environmental/health problems found at their
suppliers’ plants
 By 1992, this hands-off approach changed
 Code of Conduct
 New Departments: Labor Practices, NEAT, Corporate
Responsibility and Compliance Department
 Increased monitoring and inspection efforts: SHAPE
 UN Global Compact and Global Alliance for Workers
and Communities
 Grading system for suppliers
Conclusions…???
 The results of these various activities have
begun to produce some significant changes
among Nike suppliers
 Not all of Nike’s critics are convinced though
 Nike’s continuing controversy over its various
activities are not in any way particular to Nike they are reflective of much broader debates
about the definition of corporate citizenship
and the process of globalization
Group Discussions
 Purpose: To provoke discussion, debate, and
reflection on the role of corporations in society
 Background questions to consider:
 How should Global Corporations behave in the new
international world order?
 What constitutes good corporate citizenship in a
world where the stakeholders are diverse and
dispersed around the globe and where no clear or
consensual rules and standards exist?
Questions for Discussion /
Workshop
 Nike recognizes its responsibility to its shareholders
(financially) and its employees (labor laws, minimum
wage, etc.). What type of ethical and legal obligations
does Nike have to the employees of their suppliers and
subcontractors?
 Because there are no laws requiring corporations to
promote standards as rigorously as Nike does, what can
be done to encourage other businesses who outsource
their production to encourage their suppliers and
subcontractors to act responsibly?
 If some companies promote and monitor for higher
standards and others do not, it’s possible that these
“good” corporate citizens might lose their competitive
edge. What if being a good corporate citizen causes a
company to go out of business?
Questions, continued.
 Corporate decision making is driven, to different extents
by various stakeholders (shareholders, the environment,
employees, local communities, etc.). How does one
measure and account for these competing priorities?
Which stakeholders do corporations have an obligation to
consider, and why?
 Who should be responsible, if anyone, for developing
labor, environmental and health standards? National
governments, intl. organizations, NGO’s, or local trade
unions? Why not the free market itself? Or perhaps a
combination?