Shanghai: Sustainability will be the key driving dynamic at the heart of the shipping industry for the coming generation. A Det Norske Veritas seminar in Shanghai described how companies can use Corporate Social Responsibility reporting to articulate their sustainability credentials.
DNV is at the forefront of CSR enhancement and verification, both globally and in China.
At the seminar held at Shipping China 2007 conference in Shanghai today, the Country Manager – DNV Industry, Greater China, Sangem Hsu said: “Companies use financial reporting for their tangible assets. Corporate social responsibility reports are the vehicle to measure, manage, and protect intangible assets such as their brand, reputation, human capital, and license to operate.”
He added: “There is a remarkable upswing to a company’s health, both financially and fundamentally, by adhering to a more sustainable approach to business,” citing the example of COSCO Group’s annual sustainable development report under the United Nations' Global Compact Initiative.
Mr Hsu described how COSCO established a Global Compact Social Responsibilities Management System that in turn generated the sustainable development report. He quoted COSCO President Capt Wei Jiafu’s comment that the CSR initiative meant that “COSCO Group can be listed among the top-grade enterprises in the world, and stand shoulder-to-shoulder with giants of industry.”
COSCO was the first Chinese enterprise to compile such a Global Compact report according to requirements of the Global Reporting Initiative. The report, audited by Det Norske Veritas (DNV), covers the three critical aspects of sustainability - economic performance, environmental protection performance, and social impact.
COSCO is also the first enterprise in Asia that applied the VeriSustain verification protocol of Det Norske Veritas (DNV) in an audit of sustainable development report.
DNV is working with other Chinese companies in the banking, energy and industrial fields to develop CSR reports and verification.
In addition to Cosco, the other practitioners of CSR reporting in the shipping industry are most visible in Japan and Europe. He pointed out that over half of the Global 500 companies are issuing CSR reports.
“Chinese companies need CSR for international markets. The China market is also now demanding CSR credentials from foreign companies that wish to operate in China,” said Mr Hsu in his presentation.
Shipping companies are already highly attuned to compliance with international requirements to protect life, property, and the environment. Global stakeholders such as society, customers, government, employees, and partner companies have all stepped up their scrutiny of shipping’s sustainability. Shipping companies in turn are also stepping up their transparency and reporting.
Energy management is an obvious key aspect of the CSR report. “Fuel consumption is of crucial importance both internally and externally. By having a formal system to measure fuel costs companies can actually discover ways to reduce costs and save energy,” said Mr Hsu.
Another important area is the treatment of employees such as seafarers, which is already a fundamental part of human resources policy and procedures. The CSR report compiled by the shipping company and verified according to the Global Reporting Initiative (GRI) standard provides an internal measure, and also has significant external credibility. A third element of a shipping company’s sustainability reporting would also involve operational performance and safety programmes.
DNV is a leading organization in providing CSR training, rating, and report verification. The half day seminar was designed to give attendees an overall understanding of how to implement CSR in their organization and how to report CSR performance to stakeholders. “DNV is ready to assist shipping and other businesses in the voyage to a sustainable future,” concluded Mr Hsu.
Additional background presented at the DNV CSR seminar:
CSR risk is real
The wide range of risks that organisations face today is accompanied by increasing pressure to be responsible, transparent, and accountable for corporate behaviour across the board. Managing this new risk reality while guaranteeing consistent business results means staying ahead in all facets of Corporate Responsibility – environmental, social, and economic. What’s more, the accelerating activities linked to Corporate Responsibility shows it is here to stay. The integration of environmental and social issues into business practices was not just a passing phase of the 1990s. Only by responding in the best possible way to these growing concerns will major players assure themselves of an ongoing position in today’s constantly evolving corporate environment.
CSR is top driver of today’s business dynamics
Responsible and transparent corporate behaviour brings clear benefits in terms of reputation, perceived brand value, the gaining of stakeholder trust, and positive communication potential. This in turn attracts both quality investors and employees. An increasing number of institutional investors document environmental, social, and corporate governance metrics, and use this data to assess company competitiveness, overall value, and future performance potential. Responsible corporate behaviour reduces the risks that prescriptive legislation will be enacted. Sustainable shipping is, this year, one of the hot topics affecting the industry, with many international bodies urging firms to act now or face a severe operating environment. The shipping industry now accepts that it is on verge of dramatic changes in environmental standards.
Turning goals into rewarding action
The result is that as a company today you have everything to gain from embracing these responsibilities. But to do so, you need to integrate Corporate Responsibility into your core business, transform your goals and plans into actions, measure your performance, and finally to produce relevant and reliable reports. In doing so, you will re-assert your license to operate, strengthen your brand image, and enjoy greater control over tangible and intangible assets; a truly effective way to gain real corporate value.