Pioneering CSR

- An analysis of Danish frontrunners in Corporate Social Responsibility

Authored by

GLOBAL CSR

for

The Danish Business Authority

1

Developed by GLOBAL CSR for the Danish Business Authority

Disclaimer: This report was prepared by GLOBAL CSR for the Danish Ministry of Business & Growth, and

was financed by the Danish Business Authority (Erhvervsstyrelsen). The report does not necessarily

reflect the official view of the Danish Government.

Cover photography: Henrik Brahe for GLOBAL CSR©

February 2013, Copenhagen, Denmark

This publication can be downloaded from: www.samfundsansvar.dk

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Table of Contents

1 Executive Summary................................................................................................................. 4

1.1 Key Findings - CSR compliance ......................................................................................... 4

1.2 Key Findings - Beyond Compliance .................................................................................... 5

1.3 Challenges and Opportunities ........................................................................................... 5

2 Introduction ........................................................................................................................... 6

2.1 The Triple Bottom-Line .................................................................................................... 8

2.2 CSR Compliance .............................................................................................................. 8

2.3 Beyond CSR Compliance .................................................................................................. 9

3 Reflections and experiences in relation to CSR Compliance ......................................................... 11

3.1 Social Compliance ......................................................................................................... 12

3.1.1 Policy commitment - Social ......................................................................................... 14

3.1.2 Due Diligence - Social ................................................................................................ 15

3.1.3 Remediation - Social .................................................................................................. 18

3.2 Environmental Compliance ............................................................................................. 19

3.2.1 Policy Commitment - Environment ............................................................................... 20

3.2.2 Due Diligence – Environment ...................................................................................... 21

3.2.3 Remediation - Environment ......................................................................................... 21

3.3 Economic Compliance .................................................................................................... 22

3.3.1. Policy Commitment - Economy .................................................................................... 23

3.3.2. Due Diligence - Economy ............................................................................................ 24

3.3.3. Remediation - Economy .............................................................................................. 25

3.4 Danish Frontrunners and CSR Compliance ........................................................................ 26

4 Beyond CSR Compliance ........................................................................................................ 27

4.1 Best Practice Strategic CSR Focusing on Social Sustainability .............................................. 28

4.1.1 ISS: Diversity as a Competitive Advantage ................................................................... 29

4.1.2 DONG Energy: Multi-Stakeholder Initiative on Responsible Supply Chain Management ....... 30

4.1.3 Carlsberg: Initiative on Responsible Drinking ................................................................ 31

4.1.4 Novo Nordisk: Integrating CSR in Business Strategy for China ......................................... 32

4.2 Best Practice Strategic CSR Focusing on Environmental Sustainability .................................. 33

4.2.1 Maersk: Triple-E ........................................................................................................ 33

4.2.2 DONG Energy’s Climate Partnerships ............................................................................ 34

4.2.3 Carlsberg: Sustainable Packaging ................................................................................ 35

4.3 Best Practice Strategic CSR Focusing on Economic Sustainability ......................................... 36

4.3.1 ISS: Business Integrity is non-Negotiable ..................................................................... 36

4.3.2 Novo Nordisk: Learning the Hard Way .......................................................................... 37

4.3.3 Maersk: Maritime Anti-Corruption Network .................................................................... 38

4.4 Danish Frontrunners and Strategic CSR ........................................................................... 39

5 General Challenges and Opportunities ...................................................................................... 42

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5.1 CSR; A Moving Target .................................................................................................... 42

5.2 Lack of Awareness and Capacity ..................................................................................... 42

5.3 A Business Case to End Them All..................................................................................... 44

5.4 The Importance of Ownership ......................................................................................... 44

5.5 Context Matters ............................................................................................................ 45

5.6 Concluding Remarks ...................................................................................................... 45

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1 Executive Summary

This report provides an analysis of five Danish frontrunner companies’ Corporate Social Responsibility

(CSR) approaches and activities. A.P. Moeller Maersk, Carlsberg, DONG Energy, ISS World Services and

Novo Nordisk have shared their manifold CSR-experiences, as well as their insightful views on the

challenges and opportunities that the CSR agenda holds. The analysis is based on the internationally

recognised framework for CSR, consisting of the triple bottom-line of the UN Global Compact and the UN

Guiding Principles for Business and Human Rights (UNGPs).

The report is aimed at inspiring more Danish companies to become CSR pioneers. It offers a current

insight into what these five frontrunners currently do in relation to social, environmental and economic

compliance. In addition, it describes best practices in relation to voluntary initiatives that go beyond

compliance on all three bottom-lines; commonly referred to as strategic or proactive CSR. Such efforts

are showcased and connected with interesting examples from international frontrunners.

1.1 Key Findings - CSR compliance

Recent developments, i.e. the adoption of the UNGPs, the updated OECD Guidelines for Multinational

Enterprises and the EU Strategy for CSR, have had quite an impact on how the compliance dimension of

CSR is understood internationally.

The five Danish frontrunners are all experienced CSR practitioners. This means that they have many

policies and processes in place to ensure a solid foundation for their CSR activities. However, even among

these frontrunners there is a need to adjust existing processes to ensure alignment with current

compliance expectations.

When it comes to environmental compliance, Danish companies are generally characterised by strong

and robust management systems, mostly due to strong regulation and the obvious business case related

to reducing energy consumption. Anti-corruption has been characterised by increasing regulation, most

notably through the adoption of the UK Bribery Act in 2010. This has spurred quite a bit of action among

Danish companies, many of whom have since created policies, conducted training and set up

whistleblower hotlines. When it comes to social compliance however, the case is somewhat different. The

emphasis of the UNGPs on the need to incorporate the full spectrum of human rights in compliance

activities requires a new mindset in most Danish companies. For example, all of the frontrunners have to

adjust the scope of their processes to include all human rights. In addition, the expectation that

companies have to ensure access to remedy for victims is a challenge for companies, including the

Danish frontrunners, most of which have yet to set up operational level grievance mechanisms.

Although the business case for investing in environmental compliance is initially clearer, the frontrunners

highlight how being able to display an equally sound compliance system and a good track record on social

and economic sustainability means good business. Firstly, because a strong CSR-profile can heighten

motivation among employees, attract new investors, pave the way for new business partnerships, and

open up new market opportunities. Secondly, some of the participating companies highlight how drawing

a strict line between compliance and beyond compliance can be counterproductive. To them, compliance

is a valuable element in identifying areas in which the company can work strategically with CSR. As such

they stress the synergies between the compliance and beyond compliance dimensions.

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1.2 Key Findings - Beyond Compliance

The five Danish CSR-frontrunners display an interesting portfolio of strategic CSR initiatives. Within all

three bottom lines they work strategically with minimising risks, reducing costs, developing products,

building brand value, improving employee satisfaction, stakeholder relations and the like. Simultaneously

their efforts contribute to bettering global standards on health, safety, diversity, education, environment,

anti-corruption, etc. The Danish frontrunners do this via multi-stakeholder initiatives, partnerships, CSR

based innovation, base of the pyramid investments, organisational learning and lobbying. This report

further highlights corresponding examples drawn from international giants like Coca Cola, Hitachi,

Siemens, General Electric, Novartis and Cerrejón. These examples can help expand current perceptions of

what strategic CSR initiatives can consist of.

The proactive CSR dimension can help companies stand out among peers. According to the frontrunners,

however, voluntary CSR efforts have to be strategic and add value to the company. When carried out in a

strategic manner, this part of CSR is about competitiveness and improving the core of the business.

1.3 Challenges and Opportunities

Throughout the report, readers are presented with a range of challenges and opportunities in making

more Danish companies CSR pioneers. Five key and crosscutting areas, which are closely interconnected,

are worth highlighting:

Moving target: To many, CSR is still a somewhat intangible and complex business area. Recent years

have brought about much change, which puts pressure on companies that have to adapt to ever-evolving

regulations, demands and expectations. Current convergence trends can help simplify the area and

enable more companies to work with CSR in a manner that corresponds with international trends.

Awareness and capacity: The constant development in the field of CSR results in a constant need for

awareness, capacity development and not least corporate agility. Authoritative guidance and awareness

raising activities are therefore essential in order to inspire more companies to join the forefront of the

CSR agenda.

Business case: The need for a demonstration of the financial prospects of CSR is perhaps the most

recurring remark among the five frontrunners. A clear business case is the most effective driver for the

CSR agenda and key to getting more companies on board.

Ownership: While there is little doubt that hard law and regulation can fast-track CSR implementation

and change, companies and their employees need to have a sense of ownership for the changes to be

substantial and sustainable. Dialogue and engagement are crucial for the inclusion of more companies in

the CSR agenda.

Context matters: Operating across borders means operating within different laws, levels of enforcement,

traditions etc. This is challenging for many companies that often find it difficult to exert their influence on

CSR issues across contextual differences. Often the global challenges require global solutions and

collective action is necessary. As such the role of international multi-stakeholder initiatives is important,

especially for frontrunners.

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2 Introduction

This report presents an analysis of Corporate Social Responsibility (CSR) efforts of five of the largest

companies with headquarters in Denmark. The report describes aspects of the CSR work carried out by A.

P. Moeller Maersk, Carlsberg, DONG Energy, ISS World Services, and Novo Nordisk.

The report provides insights into the perception of CSR in leading Danish businesses and discusses the

challenges and opportunities they face. It also presents examples of strategic CSR activities and

initiatives. The participating companies represent different business sectors and a variety of CSR

strengths and weaknesses.

The aim of the report is to inspire and assist more Danish companies in becoming CSR pioneers. It is

worth noting that even the five ambitious Danish CSR frontrunners selected for this report face

challenges and barriers in their CSR work. CSR is an ever-evolving field and in light of recent changes all

large Danish companies are in a continuous learning process. Even the best in the field continuously

experience room for improvement. Annette Stube, Director of Group Sustainability in A. P. Moeller

Maersk (hereafter: Maersk) explains:

”CSR takes time. It needs to settle in our minds to make sure that it becomes part of our daily routines.

In fact CSR is about change management.”

Examples of CSR challenges are integrated throughout the report. In addition the report highlights best

practice on business-related proactive initiatives and seeks to inspire other companies to identify and

reap the benefits of strategic CSR.

Table 1 presents the key characteristics of each company. These include industry, revenue, geographical

spread, and number of employees. The interviewed representatives from each company are presented in

the last column. GLOBAL CSR is very grateful to all of the respondents who were kind enough to share

their valuable knowledge and time.

Table 1. Key characteristics of participating companies including names of respondents

Company Industry 2011

Revenue

Geographical

presence and

no. of

employees

CSR

representatives

– interview

respondents

Brewery group 63,561

million DKK

The Carlsberg

Group employs

41,000 people.

Activities in

Northern &

Western Europe,

Eastern Europe

and Asia.

Morten Nielsen,

Director CSR &

Public Affairs &

Eskild

Andersen,

Group

Environmental

Manager

7

Energy

The business is

based on procuring,

producing,

distributing and

trading in energy

and energy related

products in

Northern Europe.

56,842

million DKK

Operating in

Northern Europe

with

approximately

7000 employees

Filip Engel,

Head of

Stakeholder

Relations

Healthcare focusing

on diabetes care.

Novo Nordisk also

works within

haemophilia care,

growth hormone

therapy and

hormone

replacement

therapy.

66,346

million DKK

Novo Nordisk has

33,900

employees in 75

countries and

markets its

products in more

than 190

countries

Susanne

Stormer, Vice

president,

Corporate

Sustainability &

Peter Munch-

Madsen

Programme

Manager,

Corporate

Sustainability

Facility

Management

Cleaning Services

Support Services

Property Services

Catering Services

Security Services

77,644

million DKK

ISS operates in

more than 50

countries with

more than

530,000

employees

Joseph

Nazareth, Group

Vice President,

Group Health,

Safety and

Environment

(HSE) and

Corporate

Responsibility

(CR)

The Maersk Group

operates in two

main industries:

shipping and oil &

gas.

322,520

million DKK

The Maersk

Group employs

117,000 people

and has a global

presence.

Annette Stube,

Director of Group

Sustainability

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2.1 The Triple Bottom-Line

What is CSR? In order to ensure a common framework for understanding the findings, it is important to

define what the term CSR covers. Answers to the questionnaire and interviews with participating

companies revealed that each company has its own perception of what CSR means. Susanne Stormer,

Vice president Corporate Sustainability, Novo Nordisk explains:

“We use the TBL (Triple Bottom-Line) as a filter for decision-making, which aims to ensure that we

always consider the implications of our actions on people, communities and the environment.”

Morten Nielsen, Director CSR & Public Affairs, Carlsberg, explains that their company has a different

approach to CSR:

“We work with CSR as a central part of our business, we do not divide it into bottom-lines; not in

communication nor in processes. We focus on the functions and the business processes.”

Four of the five companies use the TBL as the overall framework, but it is apparent that even within this

framework, the perception of CSR and how to work with the concept varies from company to company.

Annette Stube, Maersk explains:

”The past four years we have been focusing on mastering the responsibility agenda so that we can pick

up pace and focus more on the positive contributions, that Maersk has on sustainable development.”

Filip Engel, Head of Stakeholder Relations, DONG Energy, explains how DONG Energy has found it

necessary to focus their efforts within CSR:

“The transformation to green energy is an integrated part of our company strategy. We invest in green

energy because it is profitable. But it is also one of our most important CSR efforts because we are

contributing to the development of concrete responses, such as offshore wind, to one of our big

challenges: climate change.”

Joseph Nazareth, Head of Group Health, Safety and Environment (HSE) and Corporate Responsibility

(CR), ISS World services (hereafter ISS), stresses the business case for CSR:

“CSR used to be a luxury. Now it is fundamental to our business strategy and our business growth.”

This report rests on a widely recognised understanding of CSR, which is based on the TBL. The TBL

consists of internationally agreed upon principles as represented by the UN Global Compact (UNGC):

Social sustainability (human & labour rights), Environmental sustainability and Economic sustainability

(anti-corruption).1

Although not every company perceives or undertakes CSR with consideration to international principles,

such categorisation provides for a structured and globally acknowledged understanding of CSR, enabling

comparison between companies and a meaningful categorisation of CSR efforts.

2.2 CSR Compliance

CSR and CSR activities related to the three bottom-lines can be divided further into two dimensions; 1)

CSR compliance and 2) activities that go beyond compliance; often referred to as proactive or strategic

1 http://www.unglobalcompact.org/

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CSR. This two-dimensional understanding of CSR is in line with the EU Commission’s CSR strategy from

2011, in which CSR is defined as;

“The responsibility of enterprises for their impacts on society … with the aim of:

- maximising the creation of shared value for their owners/shareholders and for their other stakeholders

and society at large;

- identifying, preventing and mitigating their possible adverse impacts”. 2

According to the EU, CSR compliance is about identifying, preventing and mitigating possible adverse

impacts. This understanding is derived from the concept of due diligence as defined in the UN Guiding

Principles on Business and Human Rights (UNGPs).3

The UNGPs were unanimously adopted by the UN in 2011. Although these principles were developed with

the purpose of defining the universal responsibility connected only to the social bottom-line, they have

been applied to cover all three bottom lines by e.g. the OECD’s Guidelines for Multinational Enterprises4

and the EU. In other words the UNGPs have influenced the entire CSR field, including how businesses are

expected to manage adverse impacts on environmental and economic sustainability.

In addition the UNGPs have been incorporated into the latest Danish Action Plan on CSR (March 2012)

and form the cornerstone of the Danish Mediation and Complaints-Handling Institution for Responsible

Business Conduct.5 The relevance to all companies of this globally agreed upon CSR compliance standard

is evident. This report explores how Danish companies act in light of this new CSR compliance

framework. An international and systematic approach further enables translation of these companies’

CSR efforts into a global business context.

2.3 Beyond CSR Compliance

When expecting that all companies will align their processes for CSR compliance with international

standards in the next few years, it is useful and motivating to also portray companies that have proactive

or strategic CSR activities. Strategic CSR initiatives cover inter alia voluntary sustainability projects as

well as programs and activities that Danish companies carry out in order to respond to major risks or to

achieve business advantages. The report pinpoints a few of the strategic focus areas of participating

companies. By showcasing key learning points from current experiences in this dimension of CSR6, the

report seeks to inspire more Danish companies to work strategically with CSR. As a comparison the

report highlights a few best practice strategic CSR initiatives from non-Danish companies. These

examples were chosen from sectors or topics similar to the Danish companies or their initiatives to bring

further inspiration. Table 2 illustrates the analytical framework of this report.

2 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0681:FIN:EN:PDF, p. 6 3 http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf 4 http://www.oecd.org/daf/internationalinvestment/guidelinesformultinationalenterprises/48004323.pdf, p. 23, art. 14. 5 http://www.businessconduct.dk/due-dilligence 6 What Porter and Kramer refer to as ‘creating shared value’; confer also the new CSR definition by the EU

10

The table synthesizes what the report covers and indicates how CSR can be implemented. As indicated,

the report describes CSR from a compliance and beyond compliance angle across the three bottom-lines.

Furthermore it showcases a sample of best practices on different types of strategic CSR. References on

where to find specific content is indicated in the table. The empirical data of this report has been collected

through desk research, questionnaires and interviews.

Table 2. Analytical CSR Framework

The social bottom-line

(UNGC 1-6)

The

environmental

bottom-line

(UNGC 7-9)

The economical

bottom-line

(UNGC 10)

Co

mp

lian

ce

Policy Section 3.1.1 Section 3.2.1 Section 3.3.1

Due diligence

- Identification

- Prevention

- Mitigation

- Accounting for

Section 3.1.2 Section 3.2.2 Section 3.3.2

Access to remedy Section 3.1.3 Section 3.2.3 Section 3.3.3

Beyo

nd

Co

mp

lian

ce

Strategic CSR e.g.:

Multi-stakeholder initiatives Section 4.1.2 &

4.1.3

Section 4.3.3

Partnerships Section 4.1.1, 4.1.3

& 4.1.4

Section 4.2.1,

4.2.3

CSR-based Innovation

Section 4.2.1,

4.2.2, 4.2.3

Base of the pyramid Section 4.1.4

Organisational Learning Section 4.1.1, 4.1.2

& 4.1.4

Section 4.3.1,

4.3.2

Lobbying

Section 4.3.1

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3 Reflections and experiences in relation to CSR Compliance

The CSR governance expectations set forth by the UNGPs are used to contextualise the Danish

frontrunners’ approaches to CSR compliance. In effect, this means that their commitment, their due

diligence processes and how they deal with victims of possible or actual adverse impacts on all bottom-

lines are presented below. However, this understanding of CSR compliance is still new. CSR and how

companies understand the concept is evolving. Therefore, to most companies, CSR compliance is not yet

a concept that is set in stone. One could also rightly ask whether the term ‘compliance’ should be used to

describe compliance with legal requirements only, or whether the term also covers alignment with

international expectations.

Obviously companies must, as a minimum, comply with national law. Legal compliance thus forms the

basis of CSR. A company that does not live up to national law cannot be considered socially responsible.

But for many of the frontrunners, meeting expectations, for instance by implementing the UNGPs, which

in most places are not yet incorporated into binding legislation is equally important. Susanne Stormer,

Novo Nordisk explains:

”Compliance is a broad concept, from legal compliance at the base to compliance-plus. For example the

UNGPs are not a legally binding set of rules. Still, I think of them as a set of minimum standards and they

have to be understood as part of the compliance work.”

Thus, to many of the frontrunners, CSR compliance is not just about meeting legal requirements; it is

also about being one step ahead of public regulation by complying with soft law instruments and even

frontier expectations and issues that might become business demands over time. Figure 1 below

illustrates the idea of an issue’s life cycle, i.e. how an issue often travels from being an issue of public

debate to ending up as a hard law requirement.

Figure 1. An issue’s life cycle, McKinsey & Co 2006

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The frontrunners argue that if you want to maintain a frontrunner position, you need to be able to

navigate in the ever-changing landscape of CSR expectations. A skilled CSR department can help spot

trends and tendencies and determine which expectations have come to stay. Annette Stube, Maersk

explains:

“The legal department appreciates the CSR department’s role in picking up frontier expectations, as our

company needs people that can pick up on those things. But it is very important that the lawyers also

understand this part of CSR.”

CSR compliance is often perceived as the ‘boring’ or ‘cumbersome’ part of CSR, because it is about

complying with demands and expectations, rather than forming voluntary initiatives. In contrast to this

view, the frontrunners highlight how this perception of compliance might be counterproductive. Susanne

Stormer from Novo Nordisk emphasises the dynamics between good compliance work and strategic CSR

initiatives:

“When you do your compliance work properly, you identify areas that would be relevant to approach

proactively. In effect you are turning a risk into an opportunity. Working diligently with compliance gives

you a good opportunity for understanding where the company has significant untapped potential.”

The strict dichotomy between compliance and beyond compliance activities is questioned by Maersk.

Annette Stube highlights the synergies that often exist between the two dimensions and stresses that

they should be utilised wherever possible:

“Instead of compliance and beyond compliance we talk about risk mitigation and opportunities. With that

we deliberately try to blur the distinction between compliance and beyond. The interesting initiatives

often arise when we are able to bridge the divide and make it more value adding to work with risks.”

Such perspectives add to the relevance of sharing more information and good practices on the

compliance side of CSR. Companies can learn from and be inspired by more than just the voluntary

proactive initiatives of other companies; they can just as easily and readily benefit from experiences in

relation to risk identification, prevention, mitigation, etc.

3.1 Social Compliance

While the UNGPs are relatively new to CSR (June 2011), they have already made an impressive mark on

the CSR field. In particular the UNGPs have made strong progress in regards to the social part of the

compliance agenda, i.e. the field of business and human rights. As mentioned, the importance of the

UNGPs is well reflected in their broad international recognition; e.g. by the UN, the EU commission, the

OECD and ASEAN.7

The UNGPs have also influenced the Danish business environment and all interviewed companies were

familiar with them. However familiarity does not mean that the companies have implemented the UNGPs

in their entirety or that they have even begun implementing the principles. Filip Engel from DONG Energy

highlights that this area is new to many:

7 Working Group Report to the UN General Assembly, 2012, p.10 ff http://www.business-humanrights.org/media/documents/un-working-group/un-working-group-business-human-rights-report-to-gen-assembly-10-aug-2012.pdf

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“Some parts of social compliance are unchartered territory for most companies; especially in relation to

supply chain management.”

While many of the companies have robust and comprehensive environmental management systems, the

same is not always true for social sustainability or human rights. Susanne Stormer indicates how this

picture is about to change:

”Just as you expect companies to manage their environmental impacts, we must also expect companies

to do the same in relation to human rights. This would result in a level playing field.”

Most of the frontrunners have several existing processes in place that can be aligned with the UNGPs

without too many efforts. Joseph Nazareth, ISS exemplifies:

“The UNGPs help a lot in developing the foundation. We have all the policies and systems in place, and

that is the first step. We are now on the next step of ensuring that we are implementing the processes

throughout our operations and that they are fully aligned with the UNGPs. This is a continuous journey.”

Nearly all of the companies further share the challenge of having to adjust the scope of their current

processes to include all human rights. Morten Nielsen, Carlsberg, states:

”We do have all the processes, but our scope is different.”

When looking at most companies’ Codes of Conduct there is, for instance, a clear trend to focus on

selected human rights, most often 4-8 core labour rights.

The companies appreciate that human rights compliance may add value. Therefore some companies

might feel that implementation of the principles brings value in itself. Several of the companies

emphasise that ‘respect for human rights’ is integral to their company’s performance. ISS, with 535,000

employees worldwide and 10,000 employees in Denmark, understands and appreciates the importance of

ensuring respect for human rights. The company just won a contract for a major pharmaceutical

company and is in no doubt that its strong CSR profile played a decisive role. Joseph Nazareth, ISS:

“Ensuring human rights is part of our value proposition – we offer credible and effective risk

management. Our value proposition is to take on the risk from our customers such as the risks related to

human and labour rights.”

Filip Engel from DONG Energy further reflects on the added value of the UNGPs:

”We have considered human and labour rights part of our responsibility since the creation of DONG

Energy in 2006; it is also part of the UN Global Compact. So it has always been part of our mindset, but

it will definitely be more institutionalised with the UNGPs. It is a strength that the UNGPs offer a

framework and an authoritative reference point that we can use in our dialogue with external

stakeholders.”

In 2012 Maersk used compliance with the UNGPs as a way to enter the Myanmar market. Annette Stube,

Maersk explains:

“We initiated a project with Danish and UK human rights institutes, governments and other international

companies to use human rights as a "market opener". If companies, including our own, proactively,

openly and sincerely incorporated the UNGPs, when operating in Myanmar, the company would be well

14

protected to work in the country, which had so far been very high risk for reputation reasons. We’ve

further stressed the importance of engaging in multistakeholder dialogues to understand the risks and

impacts.”

Maersks recent involvement in Myanmar is a very

interesting example of how the CSR dimension,

which is often claimed to bring little value to the

companies, namely compliance, can have quite the

opposite effect. Annette Stube, Maersk elaborates:

”We are curious to see if human rights can be a

market opener – and that is a big value to a

company. Until now it has been too risky, but so far

this actually seems to be working although it is still

early days.”

Through this project Maersk hopes to be able to

fulfil several ambitions: Build their own business

mainly for the subsidiaries Damco and Maersk Line

while mitigating Maersk’s risks, and assisting

customers in doing the same. As such, Maersk is aiming to be a preferred long-term partner in Myanmar.

With this partnership, Maersk hopes to support the opening of one of the world’s last untouched markets

and help Myanmar gain entry to global trade through improved infrastructure. A foundation of social

compliance brings new business opportunities for Maersk in Myanmar.

The US government has made reporting on US investments in Myanmar mandatory. The report has to be

forwarded in two versions – one for the government and one for public use, which the State Department

will make publicly available. The information that companies have to report on includes information

regarding policies and procedures with respect to human rights and workers’ rights, among other areas.8

In addition, the EU encourages European companies to explore business opportunities in Myanmar and

expects companies operating in Myanmar to do so with:

“the highest standards of integrity and corporate social responsibility.” 9

The EU explicitly refers to the OECD Guidelines for Multinational Enterprises, the UNGPs, and the EU's

own CSR strategy, as this standard of CSR.

3.1.1 Policy commitment - Social

Most of the five Danish frontrunners commit to respecting human rights in differing ways. For some it is

via their participation in the UN Global Compact, whilst others make direct reference to Human Rights in

their Code of Conduct, their CSR policy or in a specific human rights policy. As an example of such a

policy, Novo Nordisk’s commitment to human rights is presented below.

8 Administration Eases Financial and Investment Sanctions on Burma, Office of the Spokesperson, Washington DC, July 11 2012: http://www.state.gov/r/pa/prs/ps/2012/07/194868.htm 9 Council conclusions on Burma/Myanmar, 3159th FOREIGN AFFAIRS Council meeting, Luxembourg, 23 April 2012, section 7: http://eeas.europa.eu/myanmar/docs/council_conclusions_april_2012_en.pdf

Human rights open a door for Maersk in

Myanmar

Following speedy reforms, Myanmar, home to

about 60 million people, was opened to business

in 2012. Many companies see new business

opportunities, but are equally wary of risks.

In 2012 the Danish Institute for Human Rights

and the Institute for Human Rights and Business

began to lay the foundations for a resource

centre on responsible business in Myanmar. As

part of this initiative representatives from

Maersk participated in a fact finding mission to

Myanmar in March 2012. Subsequently a

resource centre was established in Yangon.

15

Morten Nielsen from Carlsberg is

well aware that there are certain

requirements to make

acommitment to human rights.

According to the UNGPs a

commitment to respect human

rights needs to include several

elements and these are yet to be

fully implemented by many

companies. Morten Nielsen,

Carlsberg explains:

“Our Labour and Human Rights

policy, which was implemented in

2010, is in line with the United

Nations Universal Declaration of

Human Rights and the International

Labour Organisation's Declaration

on Fundamental Principles and Rights at Work. However, we are aware of the broader interpretation of

Human Rights as set forth in the UNGPs and this will be reflected in our policies and procedures as part of

their continuous development.”

The UNGPs set forth five explicit and one implicit expectation to companies’ policy commitments. For

instance, companies have to state that they respect all human rights and that they expect the same from

entities that they do business with. In doing so, they should also empower employees and relevant

stakeholders with clear guidance on the desired way of doing business with respect for human rights. 10

In addition companies need to embed, or integrate, the policy commitment in relevant internal systems

so that there is an adoption of such principles in practice and a change in an organisation’s culture for all

employees. Top management also needs to approve of the policy commitment. Ensuring compliance with

all of the UNGPs’ expectations of a company’s policy commitment has not been ensured by all five

companies, although some elements were implemented by all of them.

3.1.2 Due Diligence - Social

A policy commitment is only the start of a company’s social compliance work. The commitment then has

to be reflected throughout a company via an ongoing due diligence process. The due diligence process

has four elements: identification, acting (preventing and mitigating), tracking and communicating, see

figure 2 below.

The human rights due diligence process is similar to other existing management processes, e.g. safety

management systems (SMS) or environmental management systems (EMS). In effect most companies

already have similar processes in place, but might still need to adjust the scope of such processes to

include human rights.

10 http://www.novonordisk.com/sustainability/sustainability-approach/human_rights.asp

Novo Nordisk’s commitment to human rights:10

At Novo Nordisk we are committed to respecting and supporting

globally recognised human rights throughout our operations and

business relationships. Governments carry the primary

responsibility for protecting human rights, but companies have an

independent responsibility to respect human rights. Our human

rights management approach builds on the UN Guiding Principles

on Business and Human Rights and our objectives are to:

Identify, prevent and mitigate human rights risks throughout

our operations and business relationships

Remediate any adverse human rights impacts that our

business causes or contributes to

Account for how we address our impacts on human rights

Promote the respect and protection of human rights with those

we do business with

Positively influence business respect for human rights through

our example and presence

Contribute to promoting the implementation and dissemination of international standards on human rights for business

16

To start the due diligence process, companies

are expected to assess all parts of their

business identifying any potential or actual

negative human rights impacts. In this

regard Maersk has carried out a gap analysis

across 11 units. Annette Stube, Maersk

elaborates:

“It started out as an exercise of duty. But it

resulted in some good discussions in the

business units. Now people understand the

agenda. In addition we identified issues that

we were aware of, but had not considered in

a human rights context. You discover new

aspects by approaching your business

through a human rights lens. As an example,

90,000 external truck operators work at our terminals in the ports every day. If something happens it is

our responsibility, and accidents do happen in dealing with heavy materials. Today, this issue is becoming

more prominent, as it is understood as a human rights issue.”

The remaining companies are yet to carry out human rights impact assessments in full alignment with

the UNGPs. Most carry out risk assessments that include selected human rights. Susanne Stormer from

Novo Nordisk explains:

“We have had an external gap analysis, and while the conclusion was that human rights impacts appear

to be well-managed, the report recommended that we conduct a more comprehensive risk assessment in

relation to all human rights. This is still to be done. It is huge task that we have to break into smaller

pieces. We have started to address potential risks. As an example we are reviewing internal labour

conditions across the global organisation to ensure that our practices are consistent with standards we

require of our suppliers.”

ISS has included human rights in their internal audits and established targets to carry out audits in at

least 20% of the countries they operate in. Historically internal audits were focused only on financial

indicators; however a growing trend has emerged towards corporate governance audits that focus on

compliance with certain human rights. Carlsberg has such a process in place. At Carlsberg, the Group

Internal Audit function identifies risks across the company on an annual basis and includes CSR risks. At

Carlsberg each policy owner is responsible for addressing potential risks, including adverse social

impacts. In contrast to Carlsberg, DONG Energy finds it necessary to prioritise where to start the

identification process. Filip Engel, DONG Energy explains:

“Right now we prioritise working with our supply chain over assessing our own operations. That decision

was based on a risk assessment. DONG Energy operates in North Western Europe where human rights

standards are high. In contrast some of our suppliers are based in countries where negative impacts on

human rights occur more frequently. So we decided to start with our supply chain where the risks are

Identify

Act – Prevent and mitigate

Track

Communicate

Figure 2. The Due Diligence Process

17

biggest. But we also need to look at our own operations to determine if and where we have human rights

challenges.”

As a part of ISS’ overall CSR work and participation in the UN Global Compact, they have assessed the

regions where they do business and the possible challenges each area might raise from a CSR

perspective. As a result, ISS is aware of the special conditions connected with doing business on the West

Bank.

In recent years, ISS has been contacted by Danish

research media DanWatch concerning the company’s

activities in Israel; particularly in the Golan Heights

and on the West Bank. Critics have argued that ISS’

activities are problematic and risk infringing on

human rights. In 2012, Danish mainstream business

media picked up on the story, which led to a high

profile interview with ISS’ CEO on the subject. ISS

strongly disagrees with the criticism, which they

have clearly stated. Joseph Nazarath from ISS

explains:

“We are doing everything possible to ensure that

human rights are not negatively impacted. In addition, we firmly believe that our activities on the West

bank are positively contributing to ensuring a number of human rights, e.g. the right to work, the right to

a healthy work environment, and acceptable minimum wages. In other words, it is ISS’ opinion that we

contribute to ensuring human rights and the dignity of the local Palestinian population.”

Engaging in constructive dialogue with NGOs can be a valuable element in a company’s due diligence

process. NGOs can be a good source of information for identifying adverse impacts.

As the first step in the due diligence process, identification is naturally the focus of most of the companies

at this early stage of implementation. However, it is worth noting that our frontrunner companies have

relevant experience preventing and mitigating negative impacts on selected human rights; especially in

responsible supply chain management programs and in dealing with the right to safe and healthy working

conditions. Filip Engel, DONG Energy outlines DONG Energy’s approach:

“When a risk is identified in our supply chain, we seek to prevent and mitigate it by engaging in dialogue

with the supplier. A basis for such dialogue can be an audit undertaken by a third party. The audit is

followed by a dialogue with the supplier on the findings and a corrective action plan is developed in order

to mitigate identified negative social impacts.”

Susanne Stormer from Novo Nordisk finds that some prioritisation may be relevant in future prevention

and mitigation efforts:

“Not all adverse impacts are equally important, or equally urgent to address. We will rank our adverse

impacts from critical over significant to minor. We do the same in our responsible supply chain

management.”

ISS responds to criticism:

In 2011, when ISS was first approached by

Danish research media DanWatch who was

critical of the company’s activities in the West

Bank and the Golan Heights, they tried to

organise a meeting with them. Initially

DanWatch was not available, but in 2012

DanWatch interviewed ISS twice and were in

contact via phone and email. ISS is

committed to continuing the dialogue with

other relevant organisations, but has not

been in contact with DanWatch since.

18

The UNGPs allow for prioritisation where a company operates in a context or under circumstances where

prioritisation is necessary.11 However, for most companies it should be possible to address all identified

potential and actual adverse impacts.

DONG Energy, ISS and Maersk display a lot of experience with tracking performance, as part of the due

diligence process. Due to sector risks all three companies have been tracking performance on one human

rights issue, the right to safe and healthy working conditions, for years. Annette Stube, Maersk explains:

“All safety incidents are systematically tracked and monitored. We annually report publicly on safety

incidents, including fatalities. We do not systematically track all social impacts, but do publicly report, if

significant gaps have been identified and how we have approached mitigation.”

Joseph Nazareth from ISS similarly explains:

“People are our business. If we use the hearts and minds analogy, ensuring the health and safety of our

employees is fundamental to how we work and the way we run our business. We have therefore

implemented a systematic approach of risk management in this area and also a systematic approach to

reporting and monitoring across the ISS group.”

In addition, Carlsberg highlights how they track CSR performance on a broad scale. Morten Nielsen

explains:

“Annually we measure our CSR performance through our CSR reporting system (total amount of users:

650), where we measure on more than 600 indicators in total, spanning all our CSR areas, environment,

business ethics, labour and human rights, consumer issues, community engagement, responsible

drinking and marketing communication.”

None of the companies systematically identify adverse impacts on all human rights and thus do not track

performance on the prevention and mitigation of adverse impacts.

Due to the Danish Annual Accounts Act, all interviewed companies report on CSR. In addition, all of the

companies are UNGC participants and publish annual communications on progress. From 2013 and

onwards the amendment to the Danish Annual Accounts Act requires reporting on human rights impacts.

Susanne Stormer from Novo Nordisk explains how reporting on human rights impacts is a challenge:

”Reporting meaningfully on human rights is not easy – there is a lack of good reporting guidelines. The

UNGPs require of companies that we report on respect for human rights, but we need to figure out how;

for instance, how to identify meaningful performance indicators.”

In other words, good practices for reporting on human rights impacts will evolve over the coming years.

3.1.3 Remediation - Social

According to the UNGPs, companies are expected to have an effective grievance mechanism in place, and

provide for, or cooperate in, the remediation of any negative impacts on human rights once they have

been identified. The issue of remediation, or making right what went wrong for victims of negative human

rights impacts, is the one compliance issue where most of the companies acknowledge that they are not

yet compliant. Thus three of the five companies openly state that they do not yet provide access to

11 UNGPs principle 24

19

remedy as per the UNGPs. Providing access to remedy

for victims of a company’s negative human rights

impact is therefore new ground to most companies,

including the Danish frontrunners.

However, when it comes to establishing a grievance

mechanism, Novo Nordisk has taken advantage of the

fact that they already had a whistleblower mechanism

in place connected mainly to business ethics or anti-corruption. Susanne Stormer, Novo Nordisk explains:

“Our compliance hotline12 is run by our business ethics department, but complaints can be about

anything relating to the Novo Nordisk Way, which includes human rights. The hotline is flagged on our

webpage, but we need to make it more visible. A challenge relating to human rights is how to articulate

the subject in a way that is relevant for the people we want to target.”

The company has not had any complaints related to human rights yet. Hopefully this is simply because

there are no serious infringements, but some alternative explanations should also be considered. Lack of

complaints could be attributable to the fact that the hotline is not widely known or that understanding

human rights in a business setting is still new to many. Thus companies and even frontrunners with quite

advanced due diligence systems have a considerable task in making the link visible and evident for

relevant stakeholders. Annette Stube from Maersk is well aware of this challenge:

”There is a translational task to be done in relation to human rights, which is much more demanding than

with other issues. There is a basic conception that human rights are issues for states. So we put quite an

effort into translating it to ‘safety’, ‘labour standards’, and so on.”

The issue of remediation is further complicated by the fact that the concept of adverse or negative

impacts is new to companies – at least in a remedy context. Maersk explains how the relevance of

remediation depends on the impact. Annette Stube, Maersk elaborates:

“I believe there can be many definitions of "social impacts" and therefore many interpretations of when

remedy is required. Examples of remedies we provided earlier on include the offering of jobs and

compensation to workers illegally employed by a hiring agency on a rig in Australia; compensation in

case of accidents etc.”

3.2 Environmental Compliance

Environmental compliance is a much more established part of the compliance dimension of CSR than

social compliance. Not only is the area subject to more public regulation, companies have also been

quicker in establishing management systems with the aim of controlling their environmental

performance.

This is mainly due to the somewhat obvious business case connected to environmental risk management.

The potential for cost reduction and the added value connected to environmental management are

perspectives the frontrunners all agree on. Filip Engel from DONG Energy exemplifies how the status of

environmental sustainability is different from other CSR topics:

12 http://novonordisk.com/about_us/contact_us/contact_audit_committee.asp

Morten Nielsen, Carlsberg:

”It is quite interesting actually. The

environment has no voice to advocate for

itself, but nevertheless it is the area that we

have primarily focused on so far. It is due to

the fact that the business case is so evident.”

20

”In DONG Energy environmental sustainability is not really understood as CSR, but more as core

business.”

Similarly Susanne Stormer from Novo Nordisk highlights that:

”Using sustainability as a competitive edge contains a very powerful rationale; especially concerning the

environment. It is good business to think about energy-savings.”

The obvious business case has helped cement the environmental area in company policies and processes

to an extent that is difficult to find replicated in social and economic compliance approaches. The special

nature of environmental compliance has led to a very high degree of institutionalisation for example in

the form of ISO 14001 certifications.

Further guidance on the area is found in the

UNGC’s 3 principles on environmental

responsibility (see box to the right).13

Key documents such as the Rio Declaration,

Agenda 21 and the Brundtland report underpin

these principles and have helped form the

environmental CSR compliance agenda over the

past decades.

To demonstrate compliance with these principles,

many companies including the Danish

frontrunners have established processes similar

to the ones outlined by the UNGPs.

Examples of how the Danish frontrunners have integrated respect for the environment in their practices

are presented below.

3.2.1 Policy Commitment - Environment

The companies generally commit to environmental sustainability through formal and written policies.

Morten Nielsen, Carlsberg exemplifies:

“Our Carlsberg Group Environmental Policy sets the environmental standards to which all our production

facilities should adhere. It thereby aims to reduce the negative environmental impact of our operations

and increase the efficiency with which we use natural resources. The focus areas of our environmental

policy include waste, waste water, water, packaging, energy and emissions, systems and documentations

and stakeholders. We have further strengthened our commitments to environmentally responsible

operations through our 3 year targets for energy, water and CO2 emissions.”

Environmental policy commitments are mandatory requirements for companies in certain sectors, which

is a good example of the institutionalisation of environmental CSR compliance.

13 http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/environment.html

UN Global Compact principles 3-6:13

Principle Seven: Business should support a

precautionary approach to environmental

challenges;

Principle Eight: Business should undertake

initiatives to promote greater environmental

responsibility; and

Principle Nine: Business should encourage the

development and diffusion of environmentally

friendly technologies.

21

3.2.2 Due Diligence – Environment

Among most, if not all, of the frontrunners, environmental due diligence is completely integrated in

company processes via management systems such as ISO 14001. Carlsberg exemplifies how

environmental due diligence is comprehensively integrated in the company and many processes run

automatically with fixed intervals. In order to keep their ISO 14001 certification the company identifies its

impacts, acts on the results, and tracks and communicates its actions. Morten Nielsen from Carlsberg

explains:

“According to our ISO 14001 certifcation it is mandatory to review the enviromental aspects, which are

relevant for the brewery sites, regulary. Periodically, we also do thematic assessments for high risk

aspects such as water scarcity. An extensive survey was done in 2011 to understand our exposure to

water risk. Each year, we collect global information about the environmental impacts of our operations.

These findings are included in our annual CSR report.”

Furthermore several of the due diligence elements are required by law, as Filip Engel from DONG Energy

exemplifies:

”Environmental impact assessments are part of every major construction project we initiate – it is

integrated in the business and required by law. We have to be able to prove that we do not have

negative impacts. We consistently screen for environmental risks in relation to all our operations. This is

the case when it comes to our individual operations, such as power plants or wind farms, where we

conduct environmental impact assesments. But it is also the case on an aggregated level where we asses

the company's overall impact in relation to a number of environmental variables such as emissions of

carbon, sulphur dioxide, impact on biodiversity and waste production. At DONG Energy our responses to

environmental challenges go beyond trying to limit potential negative impacts from our activities. The

production of clean energy is at the core of DONG Energy's business strategy.”

In other words, environmental due diligence activities are just the foundation for DONG Energy’s CSR

activities within the environmental bottom-line. Joseph Nazareth from ISS explains how environmental

due diligence is also central to their services:

“We work to limit the impact from the activities, which we can influence – at our own sites and the

process and equipment at our customers’ sites. We are well positioned to deliver environmentally

friendly facilities services, such as Green Cleaning. We have documented processes, supplier relationships

and a structured management approach to help our customers reduce their risks in this area.”

3.2.3 Remediation - Environment

When companies have adverse impacts on the environment it is the environment itself that is the

‘victim’. However, negative environmental impacts might spill over into negative human rights impacts.

An example is Coca Cola’s water use in Kerala, India, which led to accusations of the company having

caused water shortage and drought ultimately impacting people’s right to adequate food and water and

their right to health14. In other words, there is often a connection between negative environmental

impacts and negative human rights impacts. However, sometimes it is difficult to determine actual

victims of environmental impacts.

14 http://www.righttowater.info/ways-to-influence/legal-approaches/case-against-coca-cola-kerala-state-india/

22

Environmental remediation is therefore less about ensuring that victims get access to remedy and more

about cooperating with relevant authorities if and when damage has been done. Morten Nielsen explains

how this responsibility is met in Carlsberg:

“Violations or negative environmental impacts are recorded and reported to the authorities where

applicable. An example is our approach to our waste water effluent. Depending on the region, specific

agreements are made between our local production site and the local authorities regarding quantity and

quality of waste water. In cases of non-compliance, these are reported to the local authorities and

agreements are made to solve the issues.”

Filip Engel from DONG Energy also explains:

“In general, dialogue with the authorities on our various initiatives to minimize environmental impacts is

strong, comprehensive, and on-going as it should be. And if, for instance, an accident was to occur in our

operations that would lead to serious adverse environmental impacts, we would of course always report it

and find solutions in collaboration with relevant authorities.”

In cases of negative environmental impacts, possible victims are often compensated indirectly via

agreements made with relevant public authorities.

3.3 Economic Compliance

The field of economic compliance is, in close competition with social sustainability, perhaps the bottom-

line, which has experienced the most significant increase in attention over the last couple of years;

typically under the umbrella term ‘business ethics’. Annette Stube, Maersk explains:

“The pace of change from frontier expectations to hard law is faster than ever before. That makes it extra

relevant for us to be able to identify frontier expectations. Anti-corruption is an example where the

journey has been very quick.”

Since 2004 companies’ responsibility connected to economic sustainability has been internationally

defined by principle ten of the UNGC, which reads:

“Businesses should work against corruption in all its forms, including extortion and bribery.”15

The UN Convention against Corruption, which was adopted in December 2003 and entered into force in

December 2005, is the underlying instrument of this UNGC principle.16 However one of the big motors

behind the mentioned growth of this area has been the adoption of the UK Bribery Act in July 2011.

This Act holds any company with activities in the UK legally accountable for acts of bribery.17

Understandably, the act has therefore spurred a range of activities connected to anti-corruption. Filip

Engel, DONG Energy says:

“We have always taken anti-corruption very seriously but after the UK Bribery Act we decided to conduct

a thorough revision of our processes.”

15 http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html 16 http://treaties.un.org/Pages/ViewDetails.aspx?src=IND&mtdsg_no=XVIII-14&chapter=18&lang=en 17 http://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf

23

According to the UNGC, economic compliance is only understood as an anti-corruption matter. A number

of the participating companies highlight how the UNGC does not capture all relevant areas related to

economic sustainability. Susanne Stormer from Novo Nordisk elaborates:

”The UNGC only has weak links to what is usually considered core business, namely financials. The

economic dimension is much more than anti-corruption. Tax is for example not part of the UNGC, so if

you want to be a pioneer in CSR you have to think beyond the Global Compact.”

Annette Stube from Maersk explains how it is increasingly interesting to understand economic

responsibility as more than anti-corruption:

“We are working more and more systematically to understand our broader economic impacts throughout

our industries, not confined to corruption, but as a key actor in the industries we are operating in.

Economic sustainability is more than anti-corruption, and there is much potential in this agenda.

International trading companies ought to focus more on this aspect. We need to improve our

understanding of the economic contributions that we make to society, in order to mitigate the negative

impacts and accelerate the positive impacts. The economic bottom-line is misunderstood in Denmark as

simply ‘financial’ or even ‘anti-corruption’, and we need to challenge that to fully unfold CSR and its

potential.”

There is a high probability that currently unregulated topics within economic sustainability will become

compliance issues in the future, but at the moment anti-corruption is still the only topic that has moved

in to the sphere of regulation and law; see Mckinsey & Co. in figure 1 for an illustration of how topics

move to become regulation and law. In the future, new topics can potentially go through the same

transformation, but currently companies that establish CSR projects or initiatives related to other topics

under the economic sustainability heading – e.g. tax – must be considered as going ‘beyond compliance’

and can rightfully be acknowledged as CSR pioneers.

Due to the lack of internationally recognised agreements on other potential areas within the economic

bottom-line, the compliance framework of this report – similar to the UNGC – is limited to anti-

corruption.

3.3.1. Policy Commitment - Economy

All five companies have a policy on anti-corruption or a business ethics policy. Carlsberg’s business ethics

policy is available online and states that:

”In the Carlsberg Group, we believe in fair and transparent business practices. Our Business Ethics Policy

seeks to ensure ethical business conduct by guiding our employees when they face dilemmas of a

business ethics nature in their day-to-day tasks.”18

ISS’s Business Ethics philosophy is presented below. The company tries to be very clear in its approach

to anti-corruption, Joseph Nazareth explains:

18 http://www.carlsberggroup.com/csr/ourfocusareas/BusinessEthics/Documents/Business%20Ethics%20policy%20-%202010.pdf

24

“We have a zero-tolerance commitment to anti-corruption and we take that very seriously. Business

integrity is non-negotiable in ISS. Business integrity is a central element of the terms on which we hire

and potentially give members of our staff disciplinary sanction. We recognise that the challenge to avoid

unethical business practices is greater in some areas of the world than others, but cultural factors or

weak legal frameworks are not valid excuses: the ISS Code of Conduct and the Anti-Corruption Policy

apply everywhere we do business.”19

In 2012 Denmark once again came in at the top of the

Transparency International’s yearly Corruption

Perception Index20. This year Denmark shares the first

place with Finland and New Zealand. Danish

companies, in other words, have a number of best

practices on anti-corruption to share with international

peers. Finally, some companies have a more inclusive

commitment to economic sustainability. Susanne

Stormer, Novo Nordisk explains:

“In terms of economic responsibility, we have

company-wide policies for business ethics, finance, tax

and purchasing.“

However, these steps were not common among the other companies and demonstrate Novo Nordisk’s

desire to be a frontrunner and their eye for upcoming issues on the CSR agenda.

3.3.2. Due Diligence - Economy

The next step for a company that wishes to steer clear of corruption is an efficient due diligence system.

Apart from the procedural requirements for such a system

– identification, prevention and mitigation, tracking and

communication – the practical implementation of due

diligence and the tools used, vary from company to

company, and from setting to setting. Filip Engel explains

how DONG Energy approaches the issue:

”In the second half of 2011 we made a comprehensive risk analysis with an external consultancy on anti-

corruption. As expected the analysis found very few risks, because the countries where we operate are

ranked very highly on the Transparency International anti-corruption list. But we are, for instance,

operating in Poland and there are some risks related to being there. In Poland it is normal that companies

make smaller donations to the local society, when you are there. We do not do that. The reason is that

we want to avoid accusations that we are buying our way in. We have implemented some specific

initiatives after the analysis. For example, 95 per cent of our employees have been trained in good

business conduct via e-learning. And we have clear guidelines on what types of gifts and hospitality that

can be accepted and under what circumstances.”

19 http://www.issworld.com/corporate_responsibility/approach_to_cr/pages/vision_and_approach.aspx 20 http://www.transparency.org/cpi2012/results

Business Ethics in ISS:19

Conducting our business in a lawful

manner

Competing for business on fair terms

and solely on merits of our services

Combating corruption and bribery

Carrying out our activities according to

principles of good corporate governance

Ensuring that the social, environmental

and ethical commitments of ISS are

reflected in dealings with customers,

suppliers and other stakeholders.

Annette Stube, Maersk:

“Make bribery a No-Go; Identify biggest

risks; Work with your commercial and

operational people for practical

solutions; Monitor compliance.”

25

DONG Energy’s risk analysis is a good example of how an initial identification phase is followed up with

different actions to prevent and mitigate identified risks: e-learning and a special caution in areas with

certain risks.

Tracking and communicating on the implementation effort are also important aspects of maintaining a

solid system. Annette Stube explains how Maersk tracks and communicates on its performance:

“All facilitation payments and incidents of bribery are tracked. Furthermore, Business units are required

to answer a questionnaire which monitors progress in terms of implementation of policy or rules each

year. We report annually in our Sustainability Report on implementation progress and incidents.”

However, incorporating a well-functioning compliance system on anti-corruption in business operations is

not a clear and straightforward journey. As specified in the box below, the interviews uncovered a range

of challenges related to implementation of anti-corruption policies. Filip Engel explains one of DONG

Energy’s biggest challenges:

“The biggest challenge was to develop an implementation plan that developed the awareness of

employees so that they know that even to accept a sincere appreciation from a commercial partner -

such as a dinner above a certain price level - is not in line with good business conduct. We put a lot of

initiatives in place to reach the employees.”

3.3.3. Remediation - Economy

Companies need to have an established channel for victims or stakeholders wanting to complain about

breaches of a company policy or due diligence processes. As mentioned, several of the Danish

frontrunners have such ‘whistleblower mechanisms’ or

hotlines. Internationally speaking, best practice

whistleblower mechanisms are open to internal and

external stakeholders alike. Carlsberg describes their

whistleblower mechanism, aimed at employees only, on

their webpage. Morten Nielsen, Carlsberg explains:

”The Carlsberg Group Whistleblower System enables employees to report activities that may involve

criminal conduct or violations of our company policies and guidelines. It consists of a website and a

hotline phone number, which are managed by an independent third party to ensure the highest level of

security and confidentiality.”21

In June 2012 ISS launched a whistleblower system that is open to all their stakeholders and linked to the

ISS Code of Conduct.22 The whistleblower system is available on their corporate website.23

Companies furthermore have to cooperate with relevant authorities once negative impacts have been

identified and according to the Danish frontrunners this is currently the case. Morten Nielsen, Carlsberg

states:

“We cooperate with the authorities, when relevant.”

21 http://www.carlsberggroup.com/csr/ourfocusareas/BusinessEthics/Pages/BusinessEthicsPolicy.aspx 22 http://www.publications.issworld.com/ISS/External/issworld/Career/ISS_Code_of_Conduct/ 23 https://iss.whistleblowernetwork.net/About/TermsAndConditions.aspx

Identified implementation challenges:

- Cultural differences

- Wide-spread demand for facilitation

payments

- Lack of awareness

26

But as the compliance dimension of CSR is constantly expanding, there is room for improvement in most

companies. Annette Stube, Maersk explains:

“We sometimes collaborate with local authorities when identifying negative impacts related to anti-

corruption, but this will be approached more systematically in 2013.”

3.4 Danish Frontrunners and CSR Compliance

CSR Compliance is regarded by many as the boring part of CSR, a cost that rarely brings added value.

However, valuable experiences are hidden in the Danish frontrunners’ CSR compliance activities,

especially when these companies bridge the divide between risks and opportunities; between compliance

and beyond. Furthermore, Danish companies are often far ahead of their international peers in many

aspects of CSR Compliance via legal compliance. For example, Danish companies often give employees

36 weeks of maternity leave, despite the fact that the international minimum is only 14 weeks.24

Maternity leave is an example of an ‘undiscovered’ CSR story, which Danish companies and Denmark in

general could benefit from, and market themselves, on in international markets. The same could be true

for anti-corruption.

There is, however, always room for improvement. The CSR compliance bar is constantly moving and

therefore even frontrunners have challenges, when it comes to implementation and documentation. This

is also the case with the UNGPs, which are still new and challenging to many. The UNGPs pave a way for

a level playing field that can create convergence in a very diverse area. Susanne Stormer, Novo Nordisk

highlights the need for such a trend:

“It would be really helpful if there could be consensus on one definition of CSR. For companies wanting to

embrace this mindset, there is a risk of just drowning in commitments.”

Usually it is difficult to compete on the compliance level as demands and expectations are the same for

all companies. However, right now there is a window of opportunity for competing on compliance,

because the UNGPs are rather new and the whole world is looking for best practice examples of

implementation. Danish companies, and Denmark as such, have the opportunity of turning an

expectation or a duty into an opportunity.

Susanne Stormer from Novo Nordisk emphasises that public regulation, or lack thereof, has a decisive

effect on company behaviour and incentives in this area:

“Implementation of the UNGPs is not an impossible task. What would be an incentive is a deadline

determining, when we are expected to have the processes in place. Without a clear timeline companies

are likely to keep postponing it. Internally we have not set a deadline. A signal would be helpful to create

a ‘burning platform’ and incentives to put efforts behind compliance with the UNGPs, but that may not

come.”

24 ILO Maternity Protection Convention (No. 183), http://www.ilo.org/dyn/normlex/en/f?p=1000:12100:0::NO::P12100_ILO_CODE:C183

27

4 Beyond CSR Compliance

All interviewed companies engage in CSR activities that can be described as proactive in relation to

sustainable development; i.e. beyond compliance with international expectations. This section presents

examples of ‘best-practice’ proactive CSR or strategic CSR among Danish companies. The five

participating companies represent major actors in different Danish business sectors. The diverse

representation of businesses seeks to enable an appreciation from all Danish businesses that strategic

CSR makes good business sense.

Whereas CSR compliance is defined by a set of standards that specify certain requirements that

companies should meet when claiming to be responsible, the second dimension of CSR, how business can

contribute to sustainable development, is more flexible and dynamic. Due to the less formalised nature of

the ‘beyond compliance’ dimension of CSR, it is difficult to clearly determine what constitutes good

examples of strategic CSR. A few criteria have been applied in the selection of examples presented.

Strategic CSR initiatives should be closely linked to the core business in question. Companies should be

able to achieve greater and more sustainable impacts where CSR initiatives tie into key products,

services or capacities or where the initiative provides for sustainable solutions to major business risks.

Joseph from ISS explains how beyond compliance is closely linked to core products and services:

“Our strategy is to move beyond compliance; it is to build CSR as a competitive advantage offering CSR

as a value proposition to our customers. CSR is key to our delivery model and is becoming a key

differentiator.”

Secondly, proactive initiatives should contribute to fulfilling one or more key internationally recognised

principles for social, environmental, or economic sustainable development. Thus, ‘beyond compliance’

efforts on the social bottom-line, should contribute to social sustainability, i.e. the enhanced protection or

fulfilment of one or more human rights.

Table 3 below presents the proactive part of the analytical framework for the report. It illustrates how

proactive CSR efforts can be captured within the same bottom-lines as CSR compliance. It may be

difficult to capture a project within a single bottom-line, as initiatives may have positive impacts on more

bottom lines; e.g. initiatives in relation to clean water have direct positive impacts on both internationally

agreed principles on environmental and social sustainability. In the column to the left a few examples of

methodologies applied by corporations in achieving their positive CSR impacts are outlined. The list is not

exhaustive but covers the examples represented in this report.

28

Most of the examples of best practice listed below are relatively novel, paying testimony to the fact that

CSR is a field in exponential growth. What was considered best practice only ten years ago has been

exceeded by new and improved CSR initiatives. As the boundaries for what can be considered best

practice continue to move, it becomes an increasingly more demanding endeavour to remain a CSR

pioneer. Susanne Stormer from Novo Nordisk remarks:

”CSR has become mainstream and that makes it even harder to maintain a pioneer position.”

However, the Danish companies have a wealth of innovative strategic CSR initiatives and approaches,

some of which are presented below. These cases are mixed with examples of international best practice.

Whenever international best practice is presented it is matched by a Danish company either by industry

or substance – i.e. the focus area for the CSR initiative in question.

4.1 Best Practice Strategic CSR Focusing on Social Sustainability

The best practices on social contributions are presented below. The CSR projects vary, ranging from

improving diversity, a single human right, i.e. the right to safe and healthy working conditions, to

addressing the full spectrum of human rights. In addition contributions vary in terms of their delivery

from multi-stakeholder initiatives on responsible supply chain management to CSR-based innovation, and

from specific efforts in China or France to global or regional efforts.

Table 3. The analytical framework for beyond compliance CSR activities

The social

bottom-line

(UNGC 1-6)

The environmental

bottom-line

(UNGC 7-9)

The economical

bottom-line

(UNGC 10)

Beyo

nd

co

mp

lian

ce

Strategic CSR e.g.:

Multi-stakeholder initiatives Section 4.1.2 &

4.1.3

Section 4.3.3

Partnerships Section 4.1.1, 4.1.3

& 4.1.4

Section 4.2.1,

4.2.3

CSR-based Innovation

Section 4.2.1,

4.2.2, 4.2.3

Base of the pyramid Section 4.1.4

Organisational Learning Section 4.1.1, 4.1.2

& 4.1.4

Section 4.3.1,

4.3.2

Lobbying

Section 4.3.1

29

4.1.1 ISS: Diversity as a Competitive Advantage

ISS has continually had a global focus on minimising negative impacts in relation to freedom from

discrimination and the right to equal opportunities. Its efforts are enhanced by proactively contributing to

diversity. The company is able to display a comprehensive portfolio of diversity initiatives across nations

and has also won recognition and received

awards for their efforts. In Australia the

company received an award from the Australian

Employment Covenant Chairman and in

Portugal, the EDC Group named the company

‘best supplier’ in the Corporate Social

Responsibility category for the fifth time. Joseph

Nazareth, ISS explains:

“Diversity is a key issue for us. We have more

than 160 nationalities in ISS – and we

sometimes say that we speak more languages

than the foreign ministry. That is why we’ve

chosen to work proactively with diversity – it is

one of the focus areas in our CSR strategy.”

In Australia ISS is making use of affirmative

action to enable employment of a previously

suppressed Australian minority. Specifically, ISS

Australia operates an Indigenous Employment

Programme within the Human Resources

Division, which has an objective of providing

training and employment to Aboriginal and

Torres Strait Islanders who are significantly

disadvantaged in areas of health, employment

and housing. The programme has assisted in

providing for more than 500 employment

opportunities to indigenous Australian’s since

mid-2008. 25

In France, ISS has focused on improving job opportunities for people with disabilities. Actively favouring

people with disabilities has been supported by a series of initiatives:

Awareness raising among all employees

Management of a network of division correspondents

Direct and indirect recruitment systems for employees with disabilities

Induction support for employees

25 http://www.gapinc.com/content/gapinc/html/csr.html; http://www.gapinc.com/content/gapinc/html/media/pressrelease/2012/med_pr_Gap_Inc_PACE_Program_to_Expand092412.html

GAP Inc. – P.A.C.E.

In 2007, GAP Inc. launched the P.A.C.E. (Personal

Advancement & Career Enhancement) program to

enable female garment workers in economic

developing countries to advance beyond entry-level

positions and fulfil their potential.

P.A.C.E. was designed and developed in partnership

with Swasti Health Resources and the International

Center for Research on Women (ICRW). CARE

International is a key implementing partner and

GAP Inc.’s vendors also play a critical role. The

programme currently operates in Bangladesh,

Cambodia, China, India, Sri Lanka, and Vietnam

and is globally evaluated by the ICRW.

Evaluation reports demonstrate that programme

participants feel they gained greater confidence,

built stronger communication skills, and learned the

importance of goal setting and practical financial

practices. Additionally, factory managers report

improved efficiency, increased professional

advancement and lower rates of absenteeism from

P.A.C.E. graduates.25

Contributing to the fulfilment of women’s rights

makes good business sense for GAP where

approximately 70 % of employees and 70 % of

customers are women.

30

Work station adaptation

Development of external partnerships and insertion of committees within each division.

This initiative has resulted in employment of 1,614 people with disabilities from 2001 to 2011.

The appreciation of diversity is engrained in ISS’ values and leadership principles, which applies to all

staff members. ISS Finland has signed the Finnish Diversity Charter as one of the first Finnish companies

and joined the Finnish Diversity Network. HR Director, ISS Finland Sirpa Huuskonen says:

“Diversity creates competitive advantage. Diversity and equality, their management and measurement, is

an integral part of the way we work. Our staff is our most important resource. It is our strength to be

able to employ persons of different ages, genders and nationalities, as well as a variety of people with

different educational backgrounds for short- and long-term, part-time or full-time employment according

to each employee's life situation. Our managers have an important role in managing diversity. They offer

their team members equal opportunities for career development and ensure that tasks are truly open to

everyone. Diversity is also reflected in managers' training programs.”

In the above box a strategic CSR initiative focussing on gender diversity, by the international clothing

company GAP Inc., is briefly described.

4.1.2 DONG Energy: Multi-Stakeholder Initiative on Responsible Supply Chain Management

In the coming years DONG Energy will continue to reduce its use of coal in preference of biomass. This

will lower the groups' ability to influence

supplier practices in relation to the coal fired

power plants that will still remain in the

group's portfolio.

Even today DONG Energy is a small importer

of coal and therefore a small customer for

the coal producers. But the company still

considers the coal supply chain a complex

and high-risk area. Given its limited

leverage, DONG Energy has come to realise

that sustainability concerns in the coal

industry are best addressed in collaboration

with others. Therefore, the company works

as a founding member of ‘Bettercoal’.26 27

Bettercoal is a global, not-for-profit initiative

established in 2010 by a group of major

energy companies. The Bettercoal vision is a

coal supply chain that protects the

environment, respects the rights of people

and contributes positively to the livelihoods

26 http://bettercoal.org 27 http://www.unglobalcompact.org/Issues/conflict_prevention/Colombia_webinar_2012.html

Cerrejón and human rights

As an active participant in various CSR initiatives, such

as the Global Business Initiative on Human Rights and

the UN Global Compact, Cerrejón has focused heavily on

responsible mineral extraction as part of its strategic

CSR efforts.

Cerrejón appreciates the role that local communities

play in the effectiveness of its operations. Consequently

the company has focused on creating clear mechanisms

in which to engage with local communities and unions,

so as to enable effective remediation if and when things

go wrong.

This includes implementing human rights due diligence

and a five-year community engagement plan. Following

recommendations from the UN Guiding Principles on

Business and Human Rights, Cerrejón also opened a

grievance office and established an operational-level

grievance mechanism.27

31

of workers and communities.

DONG Energy has two central aims with its involvement: the development of a robust framework for

managing the sustainability challenges in the coal supply chain and an increase in leverage when

engaging with coal suppliers. Filip Engel, DONG Energy explains:

“We have initiated the set up of a multi-stakeholder initiative that is to create progress on social

standards in the coal supply chain.”

Bettercoal is working with a variety of global stakeholders on the development of the Bettercoal Code,

which will set out the principles and provisions that members expect coal mining companies and other

stakeholders to align their activities with. These will include the UNGPs. When implemented during the

course of 2013, this globally recognised code of practice will form the basis for self-assessments by mine

operators, independent third party site assessments in the mines themselves, and continuous

improvement plans. In the above box you can read how one of DONG Energy’s large suppliers works with

human rights.

4.1.3 Carlsberg: Initiative on Responsible Drinking

In October 2012, Carlsberg joined 12 other producers in a set of unprecedented commitments to reduce

the harmful use of alcohol together with global producers of wine and spirits. Morten Nielsen, Carlsberg

elaborates:

”We have entered into a partnership with twelve global

companies on five areas of action related to harmful alcohol

consumption that we will implement over the next five years.

We will then monitor and track our performance. That is a step-

change to us, in relation to how much we are willing to do,

when you compare with our recent history of proactive social

sustainability.” 28

The new commitments clearly signal that the 13 global

signatories fully support the aims of the WHO’s Global Strategy to Reduce Harmful Use of Alcohol and

stress the active role the industry is

envisioned to take in an attempt to achieve

this objective. Commenting on these global

commitments, Jørgen Buhl Rasmussen,

President and CEO of Carlsberg Group said:

“We will be inviting other brewers from our

markets to join us in implementing these

commitments and will be collaborating with

local and international stakeholders to

combat harm and misuse while continuing

to promote the responsible consumption of

28 http://worldwildlife.org/projects/wwf-coca-cola-s-work-to-conserve-fresh-water

Carlsberg is committed to:

- Reduce underage drinking

- Strengthen and expand marketing

codes of practice

- Provide consumer information and

responsible product innovation

- Reduce drinking and driving

- Enlist the support of retailers to

reduce harmful drinking

Coca Cola – Improving Water Efficiency

Coca-Cola set itself a goal to improve water efficiency by

20% by 2012. However, it achieved this goal in 2011 not

only within its own company, but in its independently

owned bottling companies as well.

In order to achieve this goal, Coca-Cola partnered with

the WWF and developed a Water Efficiency Toolkit aimed

specifically at bottling plants. It also worked with the

WWF to conserve seven of the world’s most important

freshwater river basins.28

32

beer as a unique, refreshing drink of moderation. It is our commitment to implement them over a

five‐year period commencing in 2013, recognising that some of them will already be in place in some

markets or already subject to local legislation, whilst others will take significant time to implement. From

2013, we will be reporting on how we are progressing with these commitments.”29

In the above box you can read how one of the biggest companies in Carlsberg’s industry, Coca Cola,

works proactively with one of its risks.

4.1.4 Novo Nordisk: Integrating CSR in Business Strategy for China

Since 1994, Novo Nordisk has followed a long-term business strategy in the Chinese market. Central

elements of its business strategy include the need to create strong relations with Chinese society and

cooperate with local actors. Specifically, Novo Nordisk has established research and production facilities

in China and cooperated with the World Diabetes Foundation, the local ministry of health, and local

patient associations to educate doctors and patients in the treatment of diabetes. Awareness campaigns

to prevent diabetes are another example of Novo Nordisk’s CSR activities in China.

Today, Novo Nordisk is the insulin market

leader in China measured by market share as

well as reputation. The share has been growing

steadily with around thirty percent since 2002

and in 2011 sales amounted to 5 billion Danish

kroner. The company’s investments to

strengthen the local health care system have

created value for both society and business. For

example Novo Nordisk has documented that

education increases the lifetime sales per

educated patient by 3400 DKK and saves

society a cost of 13,000 DKK per educated

patient.

At the same time Novo Nordisk’s activities have

inspired others, which means that the company

can gather various actors around common

solutions to diabetes, creating value for all

stakeholders.30

An example is a new partnership between the World Diabetes Foundation, Novo Nordisk and HE eye-care

clinics, a local eye-care clinic chain. The collaboration was established after the owner of HE eye-care

clinics became aware that Novo Nordisk in cooperation with the World Diabetes Foundation – among

others – had experience in educating doctors and patients on late diabetes complications. The owner of

the eye-care clinics was becoming more and more frustrated that an increasing number of patients in his

29 http://www.carlsberggroup.com/investor/news/Pages/PR19_ICAP_10102012.aspx 30 http://www.novartis.com/downloads/corporate-responsibility/responsible-business-practices/living-wage.pdf; http://www.novartis.com/corporate-responsibility/responsible-business-practices/caring-for-our-people/living-wage.shtml

Novartis – Implementing Living Wage

Starting in 2005 Novartis was one of first

international companies to implement a living wage

in its associate businesses. The programme works

continually to implement a living wage and in 2011,

17 associate salary levels were adjusted. To

calculate a living wage, Novartis works with a non-

profit organisation, Business Social Responsibility

(BSR) and categorises living wages for either OECD

countries or economic developing countries.

For instance, in OECD countries these calculations

are based on the cost of a market basket of goods

and services for a male aged 25-50 living in the US.

This figure is then converted based on purchasing

power parity, food consumption patterns, and the

assumption that each family has more than one

wage earner. A similar methodology is applied in

economic developing countries.30

33

clinics were suffering from bad sight because of

diabetes. At the same time he was lacking

competencies to educate doctors and patients on

prevention and treatment of these problems. In the

above box you can see how one of Novo Nordisk’s

industry peers, Novartis, works proactively with the

right to a fair remuneration.

4.2 Best Practice Strategic CSR Focusing on Environmental Sustainability

The examples of best practice on proactive environmental sustainability presented below cover a variety

of different types of proactive CSR initiatives. The five companies seem to agree that environmental

sustainability is the area within CSR where the business case is the most obvious. Therefore all of the

companies are proactive on environmental sustainability. Presented below are three cases, focusing

mainly on partnerships and CSR-based innovation. All cases clearly show the obvious financial as well as

societal benefits of these efforts.

4.2.1 Maersk: Triple-E

Deliveries of Maersk’s twenty Triple-E class vessels are scheduled for 2013-2015. The name Triple-E

means Economy of scale, Energy efficiency, and Environmentally improved, and the vessels are built for

Asia-Europe trade.31

Currently, Maersk Line has the largest market share of

any container shipping line, moving 18 percent of the

container cargo leaving Asia for Europe and 15 percent

of the container cargo travelling from Europe to Asia.

The Triple-E vessels are expected to call five Chinese

ports (Shanghai, Ning-bo, Xiamen, Yantian and Hong

Kong), and the entry of the vessels will make it possible

to replace less efficient ships which will then be cascaded

to other trades, where they will be superior to the

vessels currently deployed there. This cascading will

essentially mean that the Triple-E vessels will not only

benefit the Asia-Europe trade, they will increase energy

efficiency of a larger part of Maersk Line’s network.32

The vessel’s dramatically improved efficiency will also

31 http://www.worldslargestship.com/shipping/ 32 http://www.hitachi.com/rev/archive/2012/__icsFiles/afieldfile/2012/08/08/r2012_technology02.pdf; http://www.hitachi.com/products/smartcity/vision/index.html;http://www.yomiuri.co.jp/dy/business/T120115001472.htm

Lessons learned:

Think long-term and build strong relations.

Novo Nordisk’s success in China is based on a

long-term business strategy, which, apart

from offering quality products, also focuses on

strengthening the health care system building

strong relations with local stakeholders. This

creates value for Novo Nordisk, Chinese

society and people with diabetes in China.

Hitachi’s Smart Cities

A smart city is one that establishes a “well-

balanced relationship between people and

the Earth.”

According to the UN’s forecasts the world’s

population will reach nine billion by 2050 of

which an estimated 70 % will be living in

cities. Hitachi’s concept of a smart city

responds to this development and refers to

urban designs that maximize conservation

of the environment by utilising renewable

energy sources based on the introduction

of a next-generation power supply control

technology called a smart grid.32

34

help limit the environmental impact of the region’s increasing trade. The Triple-E vessels will produce 20

percent less CO2 per container moved compared to Emma Mærsk (Maersk’s biggest ship before Triple-E)

because they are designed for slower speeds and therefore able to carry more containers, with a smaller

engine, than Emma Mærsk. And they will produce 50 percent less CO2 emissions per container moved

than the industry average on the Asia-Europe trade lane. The vessels´ capacity is also 16% higher

compared to Emma Mærsk. Triple-E is a good example of how sustainable development can drive product

innovation and bring value to business and society simultaneously.33 In the above box you can see how

another major international company, Hitachi, works with CSR and infrastructure.

4.2.2 DONG Energy’s Climate Partnerships

DONG Energy’s climate partnerships build on the

premise that CSR and profitable business go hand in

hand. In the partnership DONG Energy’s consultants

help climate partners get an overview of their energy

consumption and their potential for reduction, which

is typically between ten and thirty percent. The

energy consultants then cooperate with the climate

partners in setting goals for energy reductions,

prioritising energy saving efforts, calculating a

timeframe for return on investment and preparing an

action plan for future energy improvements. Filip

Engel, DONG Energy explains: 34

”Energy efficiency is an obvious driver for us.

Obviously the cheapest and cleanest energy is the one

that we do not use. This understanding is integrated

in our DNA. We work to get people to become more energy efficient. This is perhaps a bit surprising, but

that is how we look at it. Energy efficiency is an area where many companies can win a lot, and the

return of investment timeframe is relatively short.”

In January 2006 WWF and Novo Nordisk made a

partnership agreement, by which Novo Nordisk committed

to reduce C02 emissions from its production by 10% from

2004 to 2014. Therefore, in May 2007, Novo Nordisk

entered a climate partnership with DONG Energy, building

on a unique combination of energy reductions and

renewable energy production. Novo Nordisk receives

assistance from DONG Energy to reduce energy

consumption, while Novo Nordisk earmarks the energy

savings for buying certified green power from the wind

33 http://www.worldslargestship.com/sustainability/ 34 http://www.ecomagination.com/; http://news.cnet.com/8301-11128_3-20008698-54.html; http://www.reuters.com/article/2012/06/28/idUS208085+28-Jun-2012+BW20120628

General Electric – Ecomagination

Ecomagination is General Electric’s (GE)

commitment to imagine and build innovative

solutions to today’s environmental

challenges, while driving economic growth.

Since the launch of this green research and

development programme in 2005, it has

reached more than $100 billion in revenue

proving that green business is good business.

The holistic approach to environmentally

sustainable product innovation has seen the

birth of more than a hundred new products

and services.34

Lessons learned:

Partnerships drive innovation.

Collaboration between WWF and Novo

Nordisk gave Novo Nordisk a clear goal

for reductions that that required

innovative solutions. In the partnership

with DONG Energy a new model was

developed which has inspired more than

a hundred new partnerships benefitting

both business and the climate.

35

farm Horns Rev 2. At the time of the partnership’s inception, Horns Rev 2 was still on the drawing board

and financing was not in place.

To Novo Nordisk the deal was a cost neutral way to achieve substantial CO2-reductions, while at the

same time the company was contributing to building a market for renewable energy in Denmark. Even

though wind power is more expensive than conventional power the partnership was, and still is, good

business. Each year Novo Nordisk saves more than ten percent of its electricity bill in Denmark and the

energy reduction projects have an average pay-back time of two years. In the above box you can read

how GE works proactively with environmental sustainability.

4.2.3 Carlsberg: Sustainable Packaging

Packaging is a vital part of the identity of

a beer brand. Consumer research shows

that packaging influences consumers’

buying behaviour. This means that

packaging can lead to a negative brand

image, for example if cans and bottles

are disposed of in natural environments

or on the street.

In the case of Carlsberg, packaging is

the single largest contributor to

Carlsberg’s CO2 footprint. It amounts to

45% of the Group’s total CO2 emissions,

when looking at the full impact

throughout the value chain.

As a consequence, Carlsberg Group has initiated a large-scale programme in 2012. The programme

revolves around four principles (see figure to the right) with the aim of reducing the environmental

impact, while maintaining first class design and consumer appeal.

In order to measure the company’s

success in relation to the four principles, a

range of activities will be launched in

2013. Examples include a weight

reduction initiative, communication with

consumers on recycling, and the

development of a sustainable packaging

catalogue. The company will also

commence a Cradle-to-Cradle project,

focused on generating positive impacts. 35

The sustainable packaging programme is

35 http://www.cokecce.com/corporate-responsibility-sustainability/sustainable-packaging-and-recycling

Coca Cola – Sustainable Packaging and Recycling

Packaging accounts for nearly half of the carbon emissions

in Coca Cola’s value chain. To reduce this carbon footprint

the company must reassess its packaging from design to

disposal and make better use of natural resources by

using renewable and reusable materials and ensuring that

its own packaging is recyclable.

Coca Cola has made a commitment to set the standard for

low-carbon, sustainable packaging, zero waste in its

operations and recycling more packaging than it uses.35

Figure 3: Carlsberg - Sustainable Packaging

36

expected to drive a number of operational and commercial benefits. In addition to the environmental

benefits, the use of more sustainable packaging is expected to generate cost savings and strengthen the

Group’s relationship with key customers. It will also enable Carlsberg to meet future legislative demands

related to packaging and waste, thereby serving as a means of risk mitigation.

In Poland, Carlsberg has already initiated a project under the name ‘ECO-ACTION’. Through a focus on

educating consumers, the project has increased the collection of bottles and cans, enhanced waste

segregation and recycling as well as promoted the use of returnable bottles. In a span of only three

years, the project has lead to 242 tons of waste packaging being collected. For this reason Carlsberg

Polska has been applauded by Tesco for supporting Tesco’s CSR activities. In the above box you can see

how one of Carlsberg’s industry peers, Coca Cola, works with sustainable packaging.

4.3 Best Practice Strategic CSR Focusing on Economic Sustainability

As stated in the CSR compliance chapter in relation to economic sustainability, internationally agreed

upon principles on anti-corruption is one of the fastest growing CSR areas. Due to the emergence of

extraterritorial national law and regulation in this field, the scope of what companies are expected to do

has widened significantly. By raising the bar, going beyond compliance on anti-corruption becomes

increasingly demanding as compliance in itself is challenging even for frontrunners. Initiatives that were

seen as extraordinary efforts on fighting corruption only a couple of years ago now represent nothing

more than the minimum standards with which all companies are expected to comply. Nevertheless, the

Danish companies in this report have strategic initiatives worth mentioning. Three are presented below.

4.3.1 ISS: Business Integrity is non-Negotiable

Corruption and bribery are considered

serious threats to ISS’ business practices.

As signatories to the UNGC, ISS has

committed to combat the use of

corruption, extortion and bribery,

wherever the company does business.

Below is an example of implementing

anti-corruption policies in a global

company and the case of a successful

whistleblower mechanism is explained. 36

The ISS Anti-Corruption Policy from 2010

cemented and elaborated the company’s

position on corruption and bribery set out

in the Code of Conduct. To ensure that all

managers and key employees understood

and recognised the position, the company

created an e-learning based training module which was rolled out in 2011. In 2012, the e-learning

module was translated and launched in German, French, Spanish and simple Chinese. These new

36http://www.gecitizenship.com/focus-areas/economy/governance-compliance/; http://www.transparency-usa.org/news/documents/TI-USA2010AwardsDinnerBooklet.pdf

General Electric and the Anti-corruption Agenda

General Electric (GE) has taken a strong stand against

corruption. It contributes with human, financial and

political capital to Transparency International and the

broader anti-corruption movement.

Specifically, GE has pushed for an “open reporting

environment” whereby employees are encouraged to report

issues of integrity and feel confident that such actions will

not lead to retaliation. GE uses such reporting proactively,

embracing open reporting as the “first and best line of

defence”.

Notably, GE pushed negotiations forward and US

ratification of the OECD Convention on Bribery of Foreign

Public Officials and the UN Convention against Corruption.36

37

languages enable ISS to reach out with the training across the company. Prior to the launch in October

2012, the company had trained 1,330 managers on anti-corruption. In the period from October to

December 2012 another 1,223 persons completed the module, which means that in total 2,553

employees have been trained.

In 2012, Slovenian ISS employees confidentially contacted the regional management for Eastern Europe

to report observations of what they believed were irregularities in the Slovenian branch. They stated that

they were worried over a number of lost contracts, where the reasons for the losses were unclear. They

were also worried that the country’s top management showed very little concern or surprise over the

repeated loss of business.

An analysis of materials obtained showed that members of the management team were channelling

business into a competing company in which they had a financial interest. Financially, this situation led to

a significant loss for the Slovenian business, but due to timely action made possible by the employees the

predominant part of the business was retained. In the above box you can see how GE has tried to push

the anti-corruption agenda forward.

4.3.2 Novo Nordisk: Learning the Hard Way

In the 2000’s Novo Nordisk realised how the

absence of an effective business ethics

compliance process can put a company in a

vulnerable position. The Oil-for-Food scandal,

described below, hit the company hard.

The Oil-for-Food Program was established by the

United Nations in 1996 to enable Iraq to sell its

oil for humanitarian purposes, in the context of

an extensive international sanctions regime. In

2005 a UN report indicated that Novo Nordisk

was one of 220 companies that had paid kick

backs to the Iraqi authorities amounting to 1.4

million USD. Such payments were not permitted

under the Oil-for-Food Program or other sanction

regimes then in place.

After thorough investigations of the matter Novo

Nordisk made a settlement in 2009 with the U.S.

Securities Exchange Commission, the U.S.

Ministry of Justice and the Danish State Prosecutor for Serious Economic Crime (SØK). Following the

settlements CEO, Lars Rebien Sørensen stated:

“We have recognised that we have made a mistake in relation to the oil for food programme. We are

sorry and we will do what we can to avoid similar situations in the future.” 37

37 http://www.guardian.co.uk/sustainable-business/recovering-business-trust-siemens

Siemens fights corruption

Following a 2006 bribery scandal, Siemens took

extensive action to rebuild public trust. This

included appointing the co-founder of Transparency

International, Michael Hershman, as the company’s

external adviser on anti-corruption.

Further, Siemens took more than 900 internal

disciplinary actions including several high-ranking

dismissals. Siemens also trained more than half of

its 400,000 employees in anti-corruption issues and

announced that it would voluntarily refrain from

markets where corruption was particularly

prevalent, for example in Sudan. Notably Siemens

also agreed to voluntarily suspend its applications

for funding from the World Bank for two years. It

also agreed to a 15-year program to donate $100m

to non-profit organisations that fight corruption.37

38

In Novo Nordisk internally, the Oil-for-Food program case

led to a new strategy for business ethics heavily

emphasising that bribery and corruption are unacceptable

and that there is no room for compromise when it comes to

business ethics. The new strategy contains clear procedures

for ethical business behaviour, an intensive training

programme for employees, enhanced governance, auditing,

reporting and finally a ‘compliance hotline’, where

employees as well as external stakeholders can anonymously report suspected violations of the company

policy on business ethics. Looking back, Susanne Stormer from Novo Nordisk chooses to reflect on the

Oil-for-Food incident in a positive way, stressing that the crisis proved to be an invaluable source of

learning and improvement for Novo Nordisk. She says:

”It was an example of ‘learning the hard way’. With the settlement, we were subject to a deferred

prosecution agreement - we could not afford to make any mistakes. And on top of that, we constantly

see compliance demands related to business ethics increase, particularly in the industry we are in. Even

staying in compliance is actually a big task. Recent analyses tell us that we have a very robust system in

place, and we would not have built that without Oil-for-Food. When you are under pressure and have to

pull your act together it often leads to better compliance.”

In the above box you can see how a large company such as Siemens responded to a bribery scandal.

4.3.3 Maersk: Maritime Anti-Corruption Network

In 2010, Maersk initiated the Maritime Anti-Corruption Network (MACN). MACN is a global business

network working towards its vision of a maritime industry which is free from corruption and enables fair

trade to the benefit of society at large. Today the network has grown to more than fifteen members and

includes both companies and associations.

MACN Members promote good corporate practice in the maritime industry for tackling bribes, facilitation

payments, and other forms of corruption by adopting the MACN Anti-Corruption Principles,

communicating progress on implementation, sharing best practices, and creating awareness of industry

challenges.

External stakeholders including Poul Riiskjær Mogensen, Chairman of the Danish Branch of Transparency

International, have applauded Maersk for their leadership in this field:

“There is no doubt that this [corruption] is a serious problem in the business. Thus these are three good

initiatives presented in the report by Maersk. First of all, they clearly signal that they will not accept it.

Secondly, they launch an internal training programme to create awareness of the problem among the

employees, and third, and probably most importantly, they establish a network with other players. There

is no doubt that the effect will be much greater if they work with others. A single company would have a

very hard time getting the job done.”

Lessons Learned

“Learn from your mistakes. The Oil-for-

Food case was an example of how a

company can improve from crisis by

admitting your mistakes and intensively

working to prevent similar

occurrences.”

39

MACN also collaborates with key external stakeholders, including governments, authorities, and

international organisations in markets where corruption is prevalent, to identify and mitigate the root

causes of corruption in the maritime industry.38

4.4 Danish Frontrunners and Strategic CSR

As mentioned in the above introduction to this section, a minimum of two elements can assist in

evaluating the quality of a company’s voluntary CSR initiatives: Firstly, how is the initiative strategic to

the company, and secondly, in what way does the initiative contribute to the fulfilment of internationally

agreed principles for sustainable development? Table 4 below illustrates how each of the Danish cases

above fit these criteria.

Table 4. The value and key contributions of Danish Strategic CSR initiatives

Danish Cases Company Type of

initiative

How is it ‘strategic’

to the company?

In what way does the

initiative contribute to

sustainable development?

Diversity ISS Organisa-

tional

learning

Proactively turns an

identified risk into a

strategic advantage;

improves work

efficiency of employees

Promotes the right to non-

discrimination and diversity

Responsible

Supply Chain

Management

DONG

Energy

Multi-

stakeholder

initiative

Minimises identified

risks in DONG Energy’s

operations

Improves the standards of

global coal production,

especially with regards to

labour rights

Harmful

Alcohol

Consumption

Carlsberg Multi-

stakeholder

initiative

Minimises a significant

risk in Carlsberg’s

operations

Promotes the right to health

and reduces alcohol related

accidents and negative

impacts globally

Integrating

CSR in the

China

Strategy

Novo

Nordisk

Partnership

and Base of

the Pyramid

Helps Novo Nordisk win

market share and

increases the profit per

patient

Improves the health care

system in China; contributes

to the right to health, access

to medicine and right to

education

Climate

partnerships

DONG

Energy and

Novo

Nordisk

Partnerships

and CSR-

based

innovation

Novo Nordisk minimises

its energy costs

DONG Energy promotes

its green alternatives

and gets access to

Lowers the adverse

environmental impact of

DONG Energy and all

companies engaged in climate

partnerships, promotes green

38 http://www.bsr.org/en/our-work/working-groups/maritime-anti-corruption-network

40

funding energy sources

Triple-E Maersk CSR-based

innovation

Improves the cost-

efficiency and capacity

of Maersk’s cargo

transportation

Lowers the adverse

environmental footprint of

Maersk and, in the future,

potentially the whole shipping

industry

Sustainable

Packaging

Carlsberg Partnership

and CSR-

based

innovation

Strengthens relations

with important

stakeholders and builds

brand value

Lowers environmental impact

of Carlsberg, promotes

recycling procedures

Zero

Tolerance

ISS Organisa-

tional

learning

Minimises and identifies

risk and adds brand

value

Improves the global

standards of anti-corruption

Learning it

the hard way

Novo

Nordisk

Organisa-

tional

learning

Turns reputational risks

into a source for

organisational

improvements

Improves standards of anti-

corruption

MACN Maersk Multi-

stakeholder

initiative

Minimises a significant

identified risk in

Maersk’s operations

Elevates global standards of

anti-corruption in the

maritime industry

All of these initiatives are strategic. Some address identified major risks whilst others expand business

opportunities by incorporating CSR into their core business. In addition the initiatives contribute to

fulfilling internationally agreed principles for sustainable development; e.g. by promoting the fulfilment of

one or more human rights, or by enhancing environmental or economic sustainability. Please note that,

some initiatives seek to minimise adverse impacts on the international principles, whereas others

contribute actively to their fulfilment. Table 5 below illustrates how each of the international cases

described above fit the same criteria as the Danish cases previously presented.

Table 5. The value and key contributions of International Strategic CSR initiatives

International

Cases

Company Type of

initiative

How is it ‘strategic’

to the company?

In what way does the

initiative contribute to

sustainable

development?

Enhancing

Women’s

Opportunities

GAP Inc. Organisational

learning and

Partnership

Improves efficiency,

increases professional

advancement and lower

rates of absenteeism

Enhances rights and

opportunities of women in

Asia; promotes equality in

the workplace

41

Promoting the

UN Guiding

Principles on

Business and

Human Rights

Cerrejón Organisational

learning

Minimises identified

risks and strengthens

dialogue with important

stakeholders

In line with the UN Guiding

Principles for business and

human rights and best

practice on the access to

remedy

Access to

Water

Coca Cola Partnership Improves the efficient

use of Coca Cola’s most

important resource:

water

Minimises environmental

footprint; promotes access

to water

Implementing

Living Wage

Standards

Novartis Organisational

learning and

Partnership

Attracts and retains the

best employees in each

of the markets they

operate in

Promotes the right to a fair

remuneration

Smart Cities Hitachi CSR-based

innovation

New products and

services; establishes

competitive advantage

in green markets

Develops and promotes

innovative, social and

environmental

sustainability, especially in

Asia

Ecomagination General

Electric

CSR-based

innovation

Innovation of new

products and services;

establishes competitive

advantage in green

markets

Develops and promotes

innovative, smart and

green solutions, especially

in the U.S.

Responsible

Packaging and

Recycling

Coca Cola Partnership

and CSR-

based

innovation

Strengthens relations

with important

stakeholders and adds

brand value

Minimises Coca Cola’s

environmental footprint

Pushing the

Anti-corruption

Agenda

General

Electric

Organisational

Learning and

Lobbying

Minimises an identified

risk for General

Electric’s core

operations

Improves international

standards of anti-

corruption, especially in

OECD countries

Fighting Anti-

corruption

Siemens Organisational

Learning

Turns a bad reputation

into a source for

organisational

improvements

Improves standards of

anti-corruption

42

5 General Challenges and Opportunities

In many ways, CSR is still a contested and changing field and it will continue to be a ‘work in progress’.

Whereas CSR in Denmark and in many other countries is becoming mainstream; approaches, definitions,

and opinions on CSR still vary. However, there is a growing consensus that companies are responsible

and should be accountable for their social, environmental and economic impacts on society. What

appears to be a growing convergence within CSR, based on recently adopted international principles, may

be one of the main opportunities for engaging more companies in CSR.

This final section outlines some of the challenges that may keep more Danish companies from engaging

diligently with CSR. The challenges were identified and have been experienced by the pioneers

represented in this report. The pioneers’ suggestions seek to provide guidance to minimise or overcome

such challenges and possibly turn them into opportunities.

5.1 CSR; A Moving Target

The previous sections illustrate how elements of CSR are, and have been, characterised by frontier

expectations transforming into soft law and eventually hard law requirements (see figure 1). Such

dynamics make CSR a moving target. For example anti-corruption and human rights for businesses have

moved from mere suggestions, over somewhat intangible and unclear expectations to becoming

internationally recognised and regulated areas within CSR. Annette Stube from Maersk notes:

”The human rights agenda has evolved really quickly within the UN and OECD for example. The field is

moving into a law-like-arena.”

The ever-evolving nature of CSR poses a challenge to many

companies, because they have to keep track of the agenda and

respond to changes. Implementation of CSR requires strong

competencies in change management, and keeping up with the CSR

agenda requires strong corporate agility. What appears to be fringe

CSR-topics or even outside the concept of CSR, such as tax

payments, may suddenly move fast on the agenda in coming years.

Internationally agreed upon standards and guidelines can help

create convergence and clarity in a multifarious area, where most

companies need assistance navigating. An authoritative online portal with continuously updated

references and tools would be useful in this regard.

5.2 Lack of Awareness and Capacity

An overarching challenge is lack of awareness. Creating awareness is necessary on several levels. Danish

top-managers, who also occupy the vast majority of Danish Board positions, lack awareness. This

represents a challenge; How to enable comfort zones in a new and rapidly evolving governance field, in

which central actors are already among the busiest people in the country?

CSR departments need continuous internal capacity development to enable company advisors to keep

abreast of developments. Meanwhile CSR professionals usually work long hours and manage very tight (if

any) budgets which add to the pressure. Many efforts are made to create ‘buy-in’ with top management

Susanne Stormer,

Novo Nordisk:

“My best recommendation

would be to refer to

international standards and

guidelines, such as UN Global

Compact, UN Guiding Principles

and the OECD guidelines.”

43

and to influence all levels in the company to act and deliver. Spotting new developments, translating

these into corporate actions, and ensuring corporate transparency around goals and actions are all highly

challenging aspects for a CSR professional.

Finally, in order to integrate CSR in the core business, the

entire organisation needs to build awareness. How does a

company ensure that all communication channels, governance

systems and vocational trainings deliver updated and

synchronised messages? Furthermore, lack of awareness

among external stakeholders such as journalists, academia,

civil society, and public authorities can be a big challenge for companies that fear their criticism.

The need for awareness on many different levels is closely connected to the nature of CSR as a concept

that vertically transcends different levels of management and horizontally ties together different

departments within a company. Morten Nielsen from Carlsberg explains:

“Our department [the CSR department] is very unique because it was born to be cross-functional; it has

from the beginning taken a holistic approach and works across all other departments to support

development of the business.”

Awareness has to be raised on a range of different issues. For instance, there is a need for more

knowledge on well-documented and profitable strategic CSR initiatives with top-managers. Likewise, CSR

departments may have insufficient knowledge about recent trends within the compliance side of CSR.

Lastly, companies need all of their employees to understand core CSR principles, in addition to the

specific corporate policies and strategies. Such awareness is needed to ensure that employees appreciate

their own rights and act in accordance with corporate commitments.

When the CSR agenda shifts, as is the case with the EU strategy and the global uptake of the UNGPs, the

need to raise awareness becomes more evident. The evolving nature of compliance demands and public

expectations pose a challenge because skills and competencies need to keep up with such changes.

Following the unanimous endorsement of the UNGPs, all companies are expected to use internal or

external human rights expertise when designing their policy and when carrying out their due diligence

process. For most companies this translates into a need for new capacities.

Professor John Ruggie, Special Representative of the

Secretary General, and the architect behind the UNGPs was of

course aware of this challenge and has therefore addressed

the international need for capacity-building and awareness-

raising in UNGPs principle ten.39 In this principle it is

highlighted how states play a vital role in filling possible knowledge gaps.

Nonetheless companies are restrained in terms of capacity both technically and financially, thus the need

to measure and document the business case for different parts of CSR becomes even more essential.

39 http://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdf

Filip Engel, DONG Energy:

“Companies need to learn what social

compliance is about, how it matters

and how they can make a difference.”

Morten Nielsen, Carlsberg:

“Obtaining management support

from the beginning is key to a

successful implementation process.”

44

5.3 A Business Case to End Them All

The importance of being able to demonstrate the business case for CSR has been highlighted by all

participating companies. Experiencing longer returns on investment in sustainability and CSR than what

other business units are used to, continues to be a key challenge. Morten Nielsen from Carlsberg

explains:

“It is a challenge to manage a long term CSR vision against short term financial targets.”

Joseph Nazareth from ISS adds:

“The business case needs to be understood. We have to show how CSR impacts the bottom-line

positively; CSR needs to be tangible.”

Long timeframes and the complex content of social,

environmental, and economic sustainability pose a challenge

for communicating the immediate business value of CSR -

especially to those who are not familiar with the agenda. This

challenge does not only pertain to the proactive or strategic

CSR dimension. There is, for instance, still a need to

communicate and develop the business case for respecting

human rights. For many companies the business case for not

respecting human rights appears more evident. It will be

necessary to showcase the business case for respecting human rights, if more Danish companies are to

take on this work, although respecting human rights is considered a basic requirement for all businesses

today; whether they profit from it or not.

The frontrunners are well aware of the financial value connected to CSR compliance. Filip Engel from

DONG Energy says:

”Whether it is B2C or B2B it is important that we are able to demonstrate that we are in control of CSR

compliance. It is important in potential business relations. For example when oil and gas authorities look

at whom to grant licenses they also look at CSR. It becomes a license to operate.”

As this report demonstrates, examples of the business case for both strategic CSR and CSR compliance

exist and should continuously be shared. Public authorities play an important role in enabling companies

to share examples of and document the business case.

5.4 The Importance of Ownership

Ownership is an absolutely crucial element of successful CSR implementation. This is pertinent to all

levels of corporate organisations. Ownership is necessary at the management level, where it is often

secured by linking CSR with core business. Top management buy-in is equally crucial for the commitment

of the rest of the organisation.

Additionally, a sense of ownership among employees world-wide is also important. Employees are the

main drivers of successful CSR integration; consequently a sense of ownership cannot be

underestimated. The reverse situation, where CSR is perceived as a mandatory exercise somebody else

wants you to carry out, is highly discouraging. Morten Nielsen from Carlsberg explains:

Susanne Stormer, Novo Nordisk:

“Make it business-relevant, speak

with facts and data, select credible

spokespersons from senior

management who can be role

models and speak convincingly and

passionately about the issues.”

45

”CSR can easily become a bureaucratic exercise. After all it is already part of our core values, our policy,

and our priorities. We already do a lot of work in this field.”

A sense of ownership can be a challenge in light of the

regulations and requirements that have entered the CSR

field in recent years; both nationally and internationally.

While such instruments can spark progress, ownership

within companies is a key driver for substantial and

sustainable change. Engagement and dialogue are key

elements when creating a sense of ownership. In addition

frontrunners are increasingly making use of CSR

performance pay to ensure that selected employees are

motivated to perform in this area.

5.5 Context Matters

CSR is about what goes on in company headquarters, but just as importantly, it is also about what goes

on in global operations around the world. Furthermore CSR compliance increasingly covers not only a

company’s own operations, but also its business relationships - such as suppliers, customers, investors,

etc. The global aspect of CSR can be quite challenging: legislation and regulations diverge, social and

cultural practices differ and some countries have weak institutions or lack good governance and law

enforcement.

Transnational companies face many challenges in this respect, for instance when they manage operations

in more than a hundred different countries. They continuously strive to achieve the right balance between

centralised and decentralised solutions. Susanne Stormer from Novo Nordisk adds:

“Sometimes we experience institutional gaps – structural issues that are not being addressed either

because governance is weak or regulation is not enforced. Gaps can also be seen as untapped potential

for more sustainable solutions. In areas where we have a strategic interest, we participate in filling this

space; for example in our climate partnership with DONG Energy or with diabetes prevention intervention

in Malaysia.”

Addressing global issues proactively as described in Novo

Nordisk’s approach is a major challenge to most

companies. But in realising the global nature of CSR,

frontrunner companies often look for global solutions.

Many join global multi-stakeholder forums, because

knowledge sharing, common solutions and collective

actions sometimes are the best solutions to the challenges

faced. Such forums are of importance when seeking to encourage more companies to become CSR

frontrunners.

5.6 Concluding Remarks

It is difficult to determine which of the identified issues poses the greatest challenge for more Danish

companies to become CSR pioneers. The way in which challenges manifest themselves differ across

Filip Engel, DONG Energy:

“If risks are located in the supply chains,

invest time in communicating with and

understanding the suppliers and their

worldview. There is value in operating in

harmony with your surroundings.”

Annette Stube, Maersk:

“It is important for business leaders to

feel in charge themselves, rather than

being pushed around by other people.

Listen to others, but make the decision

yourself. Enable yourself to argue why

you make the choices you make.”

46

industries and companies. Whereas most identified challenges appear to be general, some may be

relevant to selected companies only. In addition, the challenges outlined above can be supplemented with

a range of additional barriers that may keep companies from becoming more ambitious in dealing with

CSR.

Some challenges are contradictory and some reinforce each other. For example building a sense of

ownership takes time, which is challenged by the fact that CSR is a moving target and an ever-changing

field. Public regulation seems to be the most efficient tool for creating convergence and a common

framework, thereby minimising confusion and creating a level playing field. However, by increasing public

regulation, governments run the risk of minimizing the much needed sense of ownership.

The challenges that keep more companies from pioneering in CSR might be as diverse as the field of CSR

itself. The selection of challenges and opportunities identified in this report is intended to encourage and

inspire more Danish companies to work diligently with CSR; to become CSR-pioneers. According to

current frontrunners, challenging as it may be, there is actually no way around it, and most importantly;

it is good business.