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Monday, April 4, 2011

Ethics, Sustainability... & News Corp?



Introduction
Companies around the world are focusing more and more on ethical business practices and specifically corporate social responsibility and sustainability initiatives to remain competitive in a change business world. The global business environment is slowly changing through a combination of societal demands, consumer wants, and dwindling natural resources. The World Business Council for Sustainable Development (WBCSD) defines Corporate Social Responsibility (CSR) as “the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large.”[1] Within this context, CSR can be a powerful force for change toward a sustainable business model for the future.

In addition to being sustainable, CSR is also an ethical effort made by corporations. The Internet Encyclopedia on Philosophy states that the field of ethics “involves systematizing, defending, and recommending concepts of right and wrong behavior.”[2] While it may be presumptuous to say that sustainability and CSR are the ‘right’ behaviors for companies to be pursuing, it is clear to see that the future will continue to incorporate more and more of these behaviors.

Case Study: News Corp

According to News Corporation’s website, “News Corporation is the globe’s leading publisher of English-language newspapers and their digital brands, with operations in the U.K., the United States, Australia, Papua New Guinea and across Europe and Asia. The Newspaper and Information Services segment includes News International, which publishes four national newspapers in the U.K.; News Limited, which publishes almost 150 national, capital city and suburban newspapers in Australia; the New York Post and Community Newspaper Group in the U.S.; The Wall Street Journal and its many related publications in the U.S., Europe and Asia; and Dow Jones. News Corp. also publishes several special interest magazines in Australia.”[3] News Corp decided, in 2007 to “embed the values of energy efficiency and environmental sustainability into all of our businesses — for the benefit of our communities and our bottom line.”[4]

The action plan and how it represents strategic planning for ethical results

In 2007, News Corp made it an ethical and sustainable priority to make itself carbon neutral. Under the Global Energy Initiative section of News Corp’s website, News Corp recognizes that their impact “extends beyond the bounds of our own operations, but our core responsibilities - and key opportunities - lie within our own walls. Some of our businesses use more energy than others, but our strategy everywhere is the same:
  • First, reduce our use of energy as much as possible.
  • Then, switch to renewable sources of power where it makes economic sense.
  • And, as a last resort, offset emissions we can't avoid.”[5]
These commitments to sustainable business are consistent with News Corp ‘Standard of Business Conduct’. It states News Corp’s “has a firmly established policy of conducting its affairs in compliance with all applicable laws and regulations and observing the highest standards of business ethics. Integrity, honesty, forthrightness and fairness are of primary importance in all business relationships involving the Company.” It goes on to say that the “Chief Executive Officer and senior financial officers to promote honest and ethical conduct; full, fair, accurate, timely and understandable disclosure; and compliance with applicable laws, rules and regulations.”[6] While News Corp’s efforts to manage an ethical administration that utilizes sustainable business practices, whenever possible, might have caught some off guard, there is at least one group it hasn't. The Carbon Disclosure Project has been getting companies to voluntarily report their carbon emissions annually since for years.

The manner of selecting proper goals

While being the first carbon neutral media company in the world is a note-worthy accomplishment, the chairman of News Corp noted in a published memo that, “achieving net zero carbon emissions was never our only goal. Less than four years ago, I invited all of our employees, business partners and audiences to join us in this exciting initiative — and your response has been extraordinary. Today, I'm pleased to share some of our successes across the Company, as well as our long-term commitment to environmental sustainability.”[7] Some of the successes that he was referring to include: improving the energy efficiency of the company’s day-to-day operations, industry leadership to the community at-large, and produce media content that “prove that passionate environmental messages can be fodder for both blockbusters and real-world action.”[8]

Monitoring processes to insure goals

http://gei.newscorp.com/carbon-analysis.html


With regard to News Corp’s goal of carbon neutrality, News Corp has utilized both internal and external controls to ensure appropriate benchmarks were being made and being reported accurately. Since fiscal year 2006, News Corp has measured the “carbon footprint of our global operations, providing insight into the carbon reduction and energy efficiency opportunities at each division. As a last resort, we offset emissions we cannot avoid.”[9] In partnership with Clear Carbon Consulting, a full-service firm renowned for its expertise in carbon and energy analysis, News Corp collected energy usage and cost data from its businesses and calculated its total annual greenhouse gas emissions, News Corp has been able to compile its internal carbon disclosures. Because of this partnership it has been easier to evaluate the transparency and disclosure of its analysis for other external parties like Carbon Disclosure Project. Committed to accelerating solutions to climate change, Carbon Disclosure Project has, since 2000, been actively soliciting companies to voluntarily submit reports on their emissions on an annual basis. “News Corp has consistently ranked high in the Carbon Disclosure Project's annual reports. Last year [2010] it was the leader in the consumer discretionary category and second compared to all companies in the S&P 500 who disclosed their emissions.”[10]

Transparent reporting and who this benefits

Upon receipt of a voluntary report the Carbon Disclosure Project reviews the documentation and assesses an overall ‘score’ to the report. Scoring is “applied to most of the company responses to CDP, which are assessed for their level of disclosure. A high carbon disclosure score would indicate a comprehensive response. The response would tend to show clear consideration of business-specific risks and potential opportunities related to climate change and good internal data management practices for understanding GHG emissions. However, the disclosure score does not reflect a company’s actions on climate change mitigation.”[11]

Global 500: Top companies recognized on both the Carbon Disclosure Leadership Index and the Carbon Performance Leadership Index

The companies highlighted in green are those that have been in the Global 500 CDLI for three consecutive years.
Company
Carbon disclosure score
Carbon performance score
Sector
Siemens
98
A
Industrials
Deutsche Post
97
A
Industrials
BASF
96
A
Materials
Bayer
95
A
Health Care
Samsung Electronics
95
A
Information Technology
Lafarge
94
A
Materials
News Corporation
94
A
Consumer Discretionary
Philips Electronics
94
A
Industrials
National Australia Bank
93
A
Financials
Praxair
93
A
Materials
Reckitt Benckiser
93
A
Consumer Staples
Royal Bank of Scotland Group
93
A
Financials

S&P 500: Top 10 companies recognized on both the Carbon Disclosure Leadership Index and the Carbon Performance Leadership Index

Company
Carbon disclosure score
Carbon performance score
Sector
Consolidated Edison
96
A
Utilities
News Corporation
94
A
Consumer Discretionary
Spectra Energy
94
A
Energy
Praxair
93
A
Materials
Cisco Systems
92
A
Information Technology
Dean Foods
91
A
Consumer Staples
CSX
91
A
Industrials
Exelon
90
A
Utilities
PG&E
90
A
Utilities
Xcel Energy
89
A
Utilities
https://www.cdproject.net/en-US/Results/Pages/leadership-index.aspx
For 2010, News Corp ranked high in both carbon disclosure and carbon performance scores.


Standards for maintaining socially responsible results

While any company can lose momentum on its commitments and goals, be it sustainability of any other, it seems clear that Carbon Disclosure Project will provide the foundation and framework for News Corp to maintain their achievements in socially responsible reporting with regard to green house gases. Rupert Murdock the Chairman and CEO of News Corp, states that, “We are well on our way to becoming the innovative, regenerative business we want to be. In the long term, we aim to grow our business without growing our carbon footprint, to power our operations with clean electricity, to minimize solid waste to landfill from our production operations, and to continue to engage our audiences on sustainability issues through partnerships and content of the highest caliber.”[12] The continued support of management within an organization is crucial for maintaining and improving on corporate social responsibility. While Mr. Murdock and Fox News reporting on climate change has been the source of much debate, it seems clear that, whatever the reason, News Corp seems committed to reducing green house gases and continuing to maintain a carbon neutral company into the future.
Conclusion

News Corp has made some amazing strides in recent years to make itself carbon neutral and make itself a leader within the media industry for socially responsible initiatives and sustainability goals. News Corp has “saved millions of dollars by improving the energy efficiency of our day-to-day operations. Our efficiency projects pay for themselves in less than two years, on average, and span from simple solutions like lighting retrofits and automatic PC shut-down to systemic changes like installing telepresence and videoconferencing technology to reduce the need for air travel," Murdoch wrote.[13] While, perhaps the least likely champion for sustainability initiatives and climate changing green house gases for the media industry, News Corp has shown what it considers to be an important business, and ethical trend. If actions speak louder than words, it should not be what News Corp says but rather what it does that’s memorable.

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