3 Construction Materials

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1 This table shows a list of topics identified as relevant by different stakeholder groups. They can be considered as stakeholders suggestions or requests for topics to be monitored or disclosed by organizations. Additional information about the project can be found at Research/Pages/default.aspx 3 Construction Materials 28 s Manufacturers of construction materials including sand, clay, gypsum, lime, aggregates, cement, concrete, and bricks. Other finished or semifinished building materials are included in Building Products. Sustainability Environmental Materials Alternative materials use in production Influence on climate change of the company's production processes through CO2 emissions * GHG emissions (caused by production) - guidelines, strategies, measures and targets for increasing energy efficiency in production - use of alternative materials in the production (e.g. industrial waste such as fly ash or blast furnace slag, as well as natural raw materials such as volcanic ash) 262, 396 Financial During the production process, a range of construction materials, such as bricks, cement and glass, as well as some insulation materials, pass through melting or firing processes, which require very high energy inputs. For Sustainability s for Sectors: What do stakeholders want to know? Page 1 of 29

2 example, cement production alone is held responsible for five per cent of global CO2 output. On the other hand, some of its products contribute to improved climate protection. Materials sourcing Wood-based products from responsibly managed forests Cement companies rely heavily on the use of waste as fuel for firing processes in order to lower their CO2 emissions. Looking at the process as a whole, CO2 emissions can be cut in this way, if the method is compared with the emissions which would be released if the waste were burnt at a waste disposal site without utilising the energy produced in the process. However, this approach needs to be viewed critically. If demand for waste for energy production, and with it the price of such waste products, were to rise, then preferred waste management methods such as reprocessing and recycling could fall behind. Moreover, firing processes can generate harmful emissions such as dioxins. The classification of biological waste such as meat and bone meal as CO2 neutral is also questionable and exaggerates the effectiveness of this measure. Sourcing of wood based products (paper, furniture, etc) from responsibly managed forests. The following sections of the GRI reporting guidelines may be used by a reporter to mention FSC related activities, those are: - Profile - Commitments to External Initiatives: 4.12 externally developed economic, environmental, and social charters, principles, or other initiatives to which 185, 569 Civil Society Organization Sustainability s for Sectors: What do stakeholders want to know? Page 2 of 29

3 the organization subscribes or endorses. - Environmental Impact: EN 26: Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. - Product: PR3: Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements. The above indicators are mostly not quantitative and a reporter may find difficult to integrate FSC related information. Ideally there would be a quantitative indicator related to certification scheme or initiative regarding the supply and the final product within the GRI guideline. In order to ease the reporting of FSC related activities, we propose to include two indicators related to supply and final product content. The wording could follow the Food Processing Supplement and worded as follows: Percentage of purchased material by volume and weight which is verified as being in accordance with credible, internationally recognized responsible production standards, broken down by standard. This topic reflects significant impacts, risks and opportunities for an organization itself and its stakeholders as well as requires active management or engagement by the organization. By buying FSC certified products, companies provide incentives for responsible forestry and can enjoy their Sustainability s for Sectors: What do stakeholders want to know? Page 3 of 29

4 purchases knowing it has not contributed to the destruction of the world s forest or even come from companies involved in human rights abuses. Almost everything made from wood and other forest products are available with the FSC label. Finding FSC products becomes easier everyday. Literally every day, more FSC products become available. This topic is relevant for all 52 business/industry activity groups. These simple steps can be followed by companies to find and buy FSC products: 1. Check the FSC marketplace at marketplace.fsc.org (in January 2013, the marketplace is still a beta version) Please note this database will currently only search for manufacturers and distributors, not retailers. There are only a few exceptions where retailers are also certified. To find products carried by your local retailer, please contact them directly. We are working on including other search options to this database in the future. 2. Ask your retailer Chances are, they will carry FSC certified products. If not, let them know you would be interested in certified products. Not all certification systems are equal and only FSC guarantees that the product has been made from environmentally and responsibly managed forests. By asking for FSC certified products, you show that there is a demand. This is an important and simple way how you can help FSC to make a difference. Sustainability s for Sectors: What do stakeholders want to know? Page 4 of 29

5 Production, recycling and reuse of byproducts Use of by-products Volumes, recycling loops ("Kreislaufwirtschaft" in German) 611 Business By-products are a major issue for basic material companies as they "produced" in large amounts. There are several ways to increase recycling and reuse of byproducts (e.g. slag sand for cement production). Life Cycle Assessment (LCA) of construction materials Please create a business category for materials in general or at least for basic materials. This industry is not only construction materials (e.g. steel industry is missing). The global impact of the materials industry is partly very important. Rapid urbanization in emerging markets as well as rising awareness of environmental issues and new building methods have made the building materials sector a highly dynamic industry. The sector covers a diverse set of producers engaged in the production of materials used in the construction and refurbishment of buildings and structures, including bathroom and kitchen fixtures, plumbing supplies and central air-conditioning and heating equipment. The industry s diverse nature results in varying competitive environments. Cement manufacturing consumes large amounts of energy and is a prime source of greenhouse gas emissions. As a result, reductions in greenhouse gas emissions, environmental life cycle analyses and examinations of reuse/recycling options will be top priorities in the sector. 460 Financial Sustainability s for Sectors: What do stakeholders want to know? Page 5 of 29

6 Life Cycle Analysis (LCA) evaluates all inputs and outputs across all process of materialisation. From sourcing raw materials, production and processing of raw materials or recycled materials, processing upcycled products, including the application of materials to specific contexts, their use in site and/or by consumers and how they are managed at their end of life. It spans across all stakeholders and encourages deeper engagement in design at front end, use, maintenance and end of life. 475, 546 Mediating Institution Life Cycle Analysis examines all sources of components used in making materials-metals, fibres etc and the resources required for their extraction/production/processing/fabrication/use/maint enance and end of life. Measurements of: use of recycled materials, raw materials, energy, water, CO2 emissions, type and amounts of chemicals, toxicity, water during these stages and others. The report using C2C assists better decision making form the design process as the front end takes more responsibility for the end of cycle. New laws will encourage ownership of products and materials at end of life stage and this evaluation method will on an annual LCA evaluates all things in the material category. The topic also extends to and interconnects other categories examined. LCA examine resources as inputs, outputs, maintenance and end of life making all aspects accountable in decision Sustainability s for Sectors: What do stakeholders want to know? Page 6 of 29

7 making, highlighting areas of weakness and focuses on areas requiring improvement. LCA evaluation is becoming widely understood by consumers and LCA certification is used as a marketing success tool for companies. Life Cycle Analysis is supported by Government agencies. Road construction materials LCA already has software that analyses the required data and is widely used internationally. LCA is taught in Design courses in high schools and in Tertiary education-product design and in Foundation courses across all industry using materials. It is a tool of comparison, provides rigour and builds capacity to set goals, meet targets and ultimately improve the environment, health of workers, consumers, sustainability of resources and materials. Road Construction Materials Distance imported aggregate travels per kilometre of constructed road; Tonnes of materials imported to project; Percentage of alternative materials for road base (considering the longevity and security of supply); Percentage of materials recycled (both on and off project); Percentage of project specific raw-material extraction (adaptive reuse); The use of adaptive reuse or rehabilitation options (considering cost and legacy); Lifespan of pavement (total years and maintenance programs); Impact on materials longevity from maintenance activities over life; Volume of bitumen used (considering potential exposure to oil price increases); Percentage of alternative materials for bitumen 467, 486 Mediating Institution Sustainability s for Sectors: What do stakeholders want to know? Page 7 of 29

8 (considering the longevity and security of supply); The use of results of innovative trials in materials (in situ stabilisation); The opportunity for innovative materials trials as part of project; The level of strategic risk-taking on alternative materials; Rehabilitation (costs and community legacy. Within the construction phase the most sizeable reductions in carbon intensity can be gained by altering the materials used in road construction, including aggregates, asphalt, and concrete. Studies exploring extractive resource availability in Australia estimate that current resources approved for extraction (including rock, sand, gravel, loam and other materials from a pit or quarry) may be depleted in the near future. Comparing demand estimates from 2005 to 2026 with extractive material currently available in South East Queensland, a study predicts that current resources that are approved for extraction will be depleted by the year 2015, and that there will be a shortfall of 509 million tonnes of resources available for extraction by The methodology for mitigating the risks associated with resource scarcity focuses on building a business case for alternative materials in road construction. Resource scarcity will be combated by both more efficient use of virgin resources and the use of innovative materials and products. The world's road network and transport infrastructure is facing increasing pressure from a range of factors, including population growth and urbanisation, changes Sustainability s for Sectors: What do stakeholders want to know? Page 8 of 29

9 Energy efficiency of end products to weather patterns, increases in energy and resource prices, road material resource shortages, and the changing usage and expectation of roads and transport. On the one hand, reports suggest that in the developed world the use of cars has peaked, resulting in less need for roads and greater sharing of road space as demographic and digital change impacts on traditional movement patterns. On the other hand, the OECD reported in 2012 that Australia is suffering from an infrastructure deficit, and is experiencing increased congestion in its transport infrastructure. There is a growing imperative for road agencies to be cognisant of these changing trends and pressures and to proceed with informed and transparent approaches to this rapidly changing world. Many road and transport agencies have developed use cutting edge best practices in road planning, assessment, building and management. However, such practices will need to be supplemented with a number of new technologies and processes in response to the growing pressures on the future of roads. One of the most immediate pressures is the need to respond to climate change, and in particular the need to reduce carbon intensity. Increasingly sophisticated building materials meet tighter energy- and water-efficiency regulations while integrating innovative technologies such as solar cells. The building materials industry represents 9% of EU GDP, 8% of employment and in the region of 2 trillion annual turnover. The sector provides one of the cheapest and 460 Financial 479 Business Sustainability s for Sectors: What do stakeholders want to know? Page 9 of 29

10 easiest solutions to tackling climate change, and is therefore a key focus of the EU s Climate & Energy plan. Globally buildings are responsible for 40% of primary energy use and have the largest potential of any sector for greater efficiency and CO2 reduction. Energy use could be reduced by up to 80% using a range of conventional technologies like more efficient insulation and windows or heating, cooling and lighting systems. Energy efficiency measures come at little or even negative cost given the payback on initial investment and help tackle a broad swath of challenges including rising energy costs, maintenance costs for business and ordinary households, energy cost and long-term energy security, as well as the positive economic and employment growth impacts. Energy efficiency of products: positive impacts of offered products on climate protection through contribution to enhanced energy efficiency Relevant measures in the area of research and development (construction materials which improve the energy efficiency of buildings). 263, 396 Financial Adaptations to buildings which are becoming necessary due to climate change are also placing increasing demands on construction materials. In addition to the increase in energy efficiency in production already mentioned (topic 1), they are also expected to contribute to energy efficiency during the period for which they are in use. Sustainability s for Sectors: What do stakeholders want to know? Page 10 of 29

11 Energy efficiency of operations Melting or firing processes Relevant measures range from special insulating glass (Asahi Glass Company Group) and a variety of insulating materials (Sto, Hirsch Servo, Rockwool International and Owens Corning, among others) to roof garden systems which reduce solar radiation and thus the energy consumption of air conditioning systems (Siam Cement Group) or consultancy services relating to energyefficient and sustainable building (Rockwool International). Influence on climate change of the company's production processes through CO2 emissions * GHG emissions (caused by production) - guidelines, strategies, measures and targets for increasing energy efficiency in production - use of alternative materials in the production (e.g. industrial waste such as fly ash or blast furnace slag, as well as natural raw materials such as volcanic ash) 262, 396 Financial During the production process, a range of construction materials, such as bricks, cement and glass, as well as some insulation materials, pass through melting or firing processes, which require very high energy inputs. For example, cement production alone is held responsible for five per cent of global CO2 output. On the other hand, some of its products contribute to improved climate protection. Cement companies rely heavily on the use of waste as Sustainability s for Sectors: What do stakeholders want to know? Page 11 of 29

12 fuel for firing processes in order to lower their CO2 emissions. Looking at the process as a whole, CO2 emissions can be cut in this way, if the method is compared with the emissions which would be released if the waste were burnt at a waste disposal site without utilising the energy produced in the process. However, this approach needs to be viewed critically. If demand for waste for energy production, and with it the price of such waste products, were to rise, then preferred waste management methods such as reprocessing and recycling could fall behind. Moreover, firing processes can generate harmful emissions such as dioxins. The classification of biological waste such as meat and bone meal as CO2 neutral is also questionable and exaggerates the effectiveness of this measure. Energy efficiency of products: positive impacts of offered products on climate protection through contribution to enhanced energy efficiency Relevant measures in the area of research and development (construction materials which improve the energy efficiency of buildings). 263, 396 Financial Adaptations to buildings which are becoming necessary due to climate change are also placing increasing demands on construction materials. In addition to the increase in energy efficiency in production already mentioned (topic 1), they are also expected to contribute to energy efficiency during the period for which they are in use. Sustainability s for Sectors: What do stakeholders want to know? Page 12 of 29

13 Water consumption Material extraction sites Relevant measures range from special insulating glass (Asahi Glass Company Group) and a variety of insulating materials (Sto, Hirsch Servo, Rockwool International and Owens Corning, among others) to roof garden systems which reduce solar radiation and thus the energy consumption of air conditioning systems (Siam Cement Group) or consultancy services relating to energyefficient and sustainable building (Rockwool International). Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring 396 Financial Many of the companies extract relevant raw materials themselves, sometimes in countries with very low employment and environmental standards. The extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. And thus calls for guidelines and measures on land use planning and site rehabilitation for building material extraction projects is therefore self- Sustainability s for Sectors: What do stakeholders want to know? Page 13 of 29

14 Water efficiency of end products Biodiversity management Material extraction sites evident. Water (in m 3 ) user per amount (e.g. in tonnes) of product manufactured Increasingly sophisticated building materials meet tighter energy- and water-efficiency regulations while integrating innovative technologies such as solar cells. Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring 153 Financial 460 Financial 396 Financial Many of the companies extract relevant raw materials themselves, sometimes in countries with very low employment and environmental standards. The extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. and thus calls for guidelines and measures on land use planning and site rehabilitation for building material extraction projects is therefore selfevident. Sustainability s for Sectors: What do stakeholders want to know? Page 14 of 29

15 Emissions to air Production of construction materials Production of construction materials (e.g. bricks, cement, glass, and some insulation materials) Emissions to air 1. Greenhouse Gases 2. Acid Rain, Eutrophication and Smog Precursors 3. Dust and Particles 4. Ozone Depleting Substances 5. Volatile Organic Compounds 6. Metal emissions to air 109 Mediating Institution Total CO 2, NO x, SO x, VOC emissions in million tonnes 153 Financial Influence on climate change of the company's production processes through CO2 emissions * GHG emissions (caused by production) - guidelines, strategies, measures and targets for increasing energy efficiency in production - use of alternative materials in the production (e.g. industrial waste such as fly ash or blast furnace slag, as well as natural raw materials such as volcanic ash) 262, 396 Financial During the production process, a range of construction materials, such as bricks, cement and glass, as well as some insulation materials, pass through melting or firing processes, which require very high energy inputs. For example, cement production alone is held responsible for five per cent of global CO2 output. On the other hand, some of its products contribute to improved climate protection. Sustainability s for Sectors: What do stakeholders want to know? Page 15 of 29

16 Emissions to air - Fugitive emissions Dust Cement companies rely heavily on the use of waste as fuel for firing processes in order to lower their CO2 emissions. Looking at the process as a whole, CO2 emissions can be cut in this way, if the method is compared with the emissions which would be released if the waste were burnt at a waste disposal site without utilising the energy produced in the process. However, this approach needs to be viewed critically. If demand for waste for energy production, and with it the price of such waste products, were to rise, then preferred waste management methods such as reprocessing and recycling could fall behind. Moreover, firing processes can generate harmful emissions such as dioxins. The classification of biological waste such as meat and bone meal as CO2 neutral is also questionable and exaggerates the effectiveness of this measure. Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring Many of the companies extract relevant raw materials themselves, sometimes in countries with very low employment and environmental standards. The 396 Financial Sustainability s for Sectors: What do stakeholders want to know? Page 16 of 29

17 Emissions to air - GHG emissions Management and reduction extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. and thus calls for guidelines and measures on land use planning and site rehabilitation for building material extraction projects is therefore selfevident. Air quality/emissions refers to greenhouse gas emissions and the management of these emissions 210 Business As per GRI Indicators EN16 - EN20 Waste management Material extraction sites Greenhouse gas emissions are the main cause of climate change. Tracking and reducing greenhouse gas emissions can improve the overall life cycle performance of products and services, and serve as part of a comprehensive design-for-environment program. Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring 396 Financial Many of the companies extract relevant raw materials themselves, sometimes in countries with very low Sustainability s for Sectors: What do stakeholders want to know? Page 17 of 29

18 Land management and site rehabilitation Material extraction sites employment and environmental standards. The extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. and thus calls for guidelines and measures on land use planning and site rehabilitation for building material extraction projects is therefore selfevident. Waste Scope I: Total waste in tonnes Waste Scope II: Percentage of total waste which is recycled Waste Scope III: Hazardous waste in total tonnes Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring 153 Financial 396 Financial Many of the companies extract relevant raw materials themselves, sometimes in countries with very low employment and environmental standards. The extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. and thus calls for guidelines and measures on land use planning and site rehabilitation for Sustainability s for Sectors: What do stakeholders want to know? Page 18 of 29

19 Noise building material extraction projects is therefore selfevident. Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring 396 Financial Many of the companies extract relevant raw materials themselves, sometimes in countries with very low employment and environmental standards. The extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. and thus calls for guidelines and measures on land use planning and site rehabilitation for building material extraction projects is therefore selfevident. Sustainability s for Sectors: What do stakeholders want to know? Page 19 of 29

20 Social Occupational and consumer health and safety management Production and product use Health & Safety Aspects of Product Spending on product safety per unit produced corporate Taking health and safety considerations into account in product development Measures such as systematic testing throughout the product lifecycle. Provision of comprehensive and targetgroup-specific information on health and safety aspects of products to customers. 153 Financial 396 Financial Child labor and forced labor Health risks posed by construction materials are relevant during both the processing and usage phases and should be taken fully into account right from the product development stage. Environmental and social/labour issues related to the extraction of construction materials * guidelines and measures on land use planning and site rehabilitation for building material extraction projects - measures to minimise dust and noise emissions, water consumption and waste - biodiversity strategy and programme - measures to prevent child labour and forced labour and to ensure minimum standards for health and safety - supplier standards and monitoring Many of the companies extract relevant raw materials 396 Financial Sustainability s for Sectors: What do stakeholders want to know? Page 20 of 29

21 Land use rights Local communities and indigenous peoples themselves, sometimes in countries with very low employment and environmental standards. The extraction of construction materials such as sand, gravel, minerals or limestone represents a substantial intervention in nature. and thus calls for guidelines and measures on land use planning and site rehabilitation for building material extraction projects is therefore selfevident. The right to access the land is not restricted by a narrow interpretation of property rights. The rights holders have human rights, which may not include land ownership rights, partly because some countries do not recognize individual property rights, and partly because some people may not have legal title to the land on which they live or work, but may have customarily done so for years, if not generations. That aspect has huge significance for the landless and other rights are also involved. It affects those with land rights, and those who work on the land, such as sharecroppers, and those who use land seasonally, such as pastoralists or informal businesses common in many parts of Africa. These groups often correlate with those that are already the most vulnerable groups in society (e.g. due to gender, caste or age discrimination). Their not owning property rights does not mean they do not have rights 255 Mediating Institution The impact on human rights is felt much before business operations begin even when a company expresses its intention to develop a project in a particular area, there are human rights implications, because of raised Sustainability s for Sectors: What do stakeholders want to know? Page 21 of 29

22 Migrant workers Recruitment and employment expectations within a community. The power asymmetry between State and communities, between private economic interests and individuals or groups, often becomes the determining factor in shaping the land ownership dilemma. Business, civil society, and governments have a common interest in developing a framework that prevents human rights abuses at all stages of business relationship with land before acquisition, during acquisition, and after operations have commenced and, if necessary, concerning appropriate relocation, rehabilitation and compensation. The extraction of natural resources oil, gas, and mining has commanded considerable attention in the area of business and human rights, but other businesses tourism, manufacturing, infrastructure projects, power plants, public highways, irrigation projects, and even urban office complexes and supermarkets require land. Recruitment and employment of migrant workers Number of migrant workers employed Countries of origin Gender of workers Positions within company Length of contracts Recruitment channels Any fees for recruitment Passport retention 253 Mediating Institution Migrant workers both internal and external are a significant and growing feature of all company activities. Sustainability s for Sectors: What do stakeholders want to know? Page 22 of 29

23 There are over 200 million migrants in the world. They are found within nearly all business sectors and across all regions. Many migrant workers, particularly those working in unskilled jobs are subject to discrimination and are vulnerable to exploitation and abuse. Product design Timber trafficking and Reuse and recycling options of construction materials For many migrants exploitation begins during recruitment. Exorbitant fees and other charges, often at usurious rates of interest can leave many migrant workers effectively bonded labour whatever the subsequent conditions of employment. Company due diligence and reporting should therefore extend into the supply chain for labour. Rapid urbanization in emerging markets as well as rising awareness of environmental issues and new building methods have made the building materials sector a highly dynamic industry. The sector covers a diverse set of producers engaged in the production of materials used in the construction and refurbishment of buildings and structures, including bathroom and kitchen fixtures, plumbing supplies and central air-conditioning and heating equipment. The industry s diverse nature results in varying competitive environments. Cement manufacturing consumes large amounts of energy and is a prime source of greenhouse gas emissions. As a result, reductions in greenhouse gas emissions, environmental life cycle analyses and examinations of reuse/recycling options will be top priorities in the sector. Timber laundering means converting illegally-cut logs to legally-certified timber by exploiting legal loopholes 460 Financial 186, 512 Civil Society Organization Sustainability s for Sectors: What do stakeholders want to know? Page 23 of 29

24 laundering such as those relating to transport of timber, or certification of origin and relying on smuggling channels to bring the goods to market. As a result, companies buy raw timber for further processing and consumers purchase the end products without knowing the origin of the timber they have bought. Other Corporate governance Executive Board compensation Gender participation on governance bodies The high profits involved in the illegal timber trade provide incentives for smugglers to launder illegal timber for sale on international markets Executive board compensation and ROE chosen as pricing factor. High profile securities fraud fines (USD 0.6bn, Goldman Sachs vs. SEC), record ESG related provisions (USD 20bn, BP oil spill) and questionable compensation schemes (18.7% of US TARP used for bonus payments) may suggest need for a general corporate governance review. GOVERNANCE / EUROPE: boardroom lady boom: is it possible without quotas? On 22 June, the CapitalCom agency published its 2011 survey into the boardroom gender mix of CAC 40 companies, with fairly encouraging results: the proportion of women on the board has doubled in recent years, from 10.5% in 2009 to 20.8% in Business 389 Financial In January, the French parliament adopted legislation imposing quotas for the proportion of women on the board of major companies. Under the measures, the development of female board membership is mandatory and gradual: 20% for listed groups, public companies of Sustainability s for Sectors: What do stakeholders want to know? Page 24 of 29

25 an administrative, industrial and commercial nature by January 2014, rising to 40% by January The law also stipulates that companies with no women present on their board must appoint at least one within six months of it being on the statute books (voted on 13 January 2011). In France, some 2,000 companies are affected (the 650 largest listed firms and companies with more than 500 employees and those generating sales in excess of 50bn). In terms of sanctions for noncompliance, appointments that run counter to the parity principles are to be declared null and void and attendance fees are to be temporarily suspended. At the European level and at the instigation of the Vicepresident of the European Commission, Viviane Reding, the European parliament will decide in March 2012 on whether to adopt common legislation on this matter (a mandatory proportion of women in decision-making positions of 30% in 2015 and 40% in 2020). This will depend on the level of improvement seen based on the selfregulation of European companies, in accordance with the equality initiative adopted by the European Commission in December 2010 and the European parliament resolution of 17 January 2008 calling for the Commission and member states to promote a balance between women and men on company boards, particularly where member states are shareholders. Europe as a whole illustrates the degree of hesitation between a soft-law approach and conventional Sustainability s for Sectors: What do stakeholders want to know? Page 25 of 29

26 Political accountability legislation (quotas in this instance), but it is clear from the experience at national level that the second method tends to get much better results. There are various measures of political accountability that can be measured (contributions, disclosure, board oversight). Note that this topic is applicable to more than the three industries noted. Essentially the political accountability practices of any company that is owned by public stockholders. Political contributions, the amount of disclosure and board oversight are among the data items that would be helpful in a sustainability report. 394, 616 Financial In making investment decisions (especially for investors interested in socially responsible investing) is would be helpful to understand how a given company is exposed to political risk (i.e. are they backing the winning candidate, are they subject to potential retribution, why do they find it necessary to make political contributions, etc.). I have found the information I reference to be helpful in constructing investment portfolios that take into account this attribute of sustainability. Since it is not currently an established parameter in the socially responsible investment industry ( adoption by the Global Reporting Initiative would go a long way in moving the topic of political accountability forward. Sustainability s for Sectors: What do stakeholders want to know? Page 26 of 29

27 1 All references can be found at Sustainability s for Sectors: What do stakeholders want to know? Page 27 of 29

28 References All references can be found at Department for Environment, Food & Rural Affairs (DEFRA), Environmental Key Performance Indicators: Reporting Guidelines for UK Businesses, European Federation of Financial Analysts Societies (EFFAS) and Society of Investment Professionals in Germany (DVFA), KPIs for ESG - A Guideline for the Integration of ESG into Financial Analysis and Corporate Valuation, Frankfurt am Main: EFFAS. Forest Ethics, n.d. Model Forest Resources Policy. [Online] Available at: [Accessed 27 March 2013]. Forest Governance Integrity Programme, Transparency International, Analysing Corruption in the Forestry Sector: A Manual, Berlin: Transparency International. 210* Global Reporting Initiative (GRI), Mining and Metals Sector Supplement, Institute for Human Rights and Business (IHRB), 'The Dhaka Principles for Migration with Dignity', Dhaka, Institute for Human Rights and Business (IHRB), Preventing Conflicts over Land: Exploring the Role of Business and the Value of Human Rights Approaches, Draft Position Paper, London: Institute for Human Rights and Business. Intergovernmental Panel on Climate Change (IPCC), Climate Change 2007: Synthesis Report, Geneva: Intergovernmental Panel on Climate Change (IPCC). 389 Natixis, Strategy Note Equity Research - Strategy/SRI: Monthly review June 2011, Paris: Natixis. 394 Nowak, T., Low Fee Socially Responsible Investing. 1st ed. Grayslake: Quantum Financial Planning LLC. 396 OEKOM, Industry Focus, Construction Materials, Munich: OEKOM. 460 Robeco SAM, The Sustainability Yearbook 2012, Zurich: Robeco SAM. Sustainability s for Sectors: What do stakeholders want to know? Page 28 of 29

29 467 Salter, R., Dhar, S. & Newman, P., Technologies for Climate Change Mitigation Transport, s.l.: UNEP Riso Centre for Energy, Climate and Sustainable Development. 475 Seo, S., Tucker, S. & Ambrose, M., Selection of Sustainable Building Material using LCA Design tool, Clayton: CSIRO Victoria Australia. 479 Société Générale, SRI: Beyond Integration, from satellite to core, Paris: Société Générale. 486 Sustainable Built Environment National Research Centre (SBEnrc), The Future of Roads: Road agencies working with industry and universities to find innovative ways to prepare for future challenges, Brisbane: Sustainable Built Environment National Research Centre (SBEnrc), Curtin University and Queensland University of Technology. 512 Transparency International, Timber Trafficking and Laundering: An Anti-Corruption Approach, Berlin: Transparency International. 521 Unicredit, Environmental, Social & Governance Research: The Halo's Creed, London: Unicredit. 546 University of New South Wales, Symposium: Life-cycle analysis tools for "green" materials and process selection, Boston: University of New South Wales. 569 World Wide Fund for Nature (WWF), The WWF Guide to Buying Paper, Worldsteel Association, Achieving the goal of zero-waste, Brussels: Worldsteel Association. 616 Zicklin Center for Business Ethics at the Wharton School of the University of Pennsylvania, CPA-Zicklin Index of Corporate Political Accountability and Disclosure, Washington, D.C.: Center for Political Accountability. Resource available on request and/or for a fee. Sustainability s for Sectors: What do stakeholders want to know? Page 29 of 29