Corporate Ethics and Sustainability:

Building the Bottom Line Through (Good) Corporate Citizenship

Prepared for the World Bank/ International Monetary Fund Annual Meeting
September 23, 2000
Prague, Czech Republic

Carlo di Florio
Director, Global Risk Management Solutions
PricewaterhouseCoopers, New York

I. OVERVIEW

In its April 22, 2000 edition, The Economist observed that unprecedented scrutiny toward
business ethics issues by the media, investment community, regulators, NGOs and protestors has
launched corporate accountability onto the global agenda and on to the agenda of every business
manager.i As company valuation becomes wrapped up in brands and reputation, ethical,
environmental and social performance are becoming increasingly important strategic assets.

From corruption to human rights to environmental sustainability, a company’s reputation,

governance and ability to operate successfully over the long term increasingly requires it to have
a clear sustainability or “Corporate Citizenship” policy and program. A “sustainable” business is
one that incorporates social, economic and environmental values and practices within a long-term
framework, mindful of its global context and impact. Sustainability builds upon the notion that
the current generation should use resources and generate value in a way that allows future
generations to enjoy an undiminished quality of life.

The WTO protests in Seattle and the World Bank/IMF protests in Washington signaled a new
chapter in the relationship between society and business, and it served as a reminder that,
ultimately, it is society that provides business the license to operate. Given the new environment,
CEOs and boards are finding that public relations efforts alone are not enough to satisfy the
market. Rather, corporate leaders are discovering that by engaging stakeholders, adopting
rigorous business conduct strategies, and implementing reputation and good governance systems,
they can more effectively establish trust with stakeholders, gain a competitive advantage, mitigate
the impact of crises, and preserve their company’s reputational value.

Chief Executive magazine recently profiled the rise of the sustainability movement, noting that,

“Efforts to showcase socially and environmentally responsible behavior

have become the focus of more and more major corporations, such as
DuPont Corp., Sunoco, The Home Depot, and Levi Strauss & Co.”

Following on the pioneering social accountability work of Patagonia and The Body Shop,
companies such as Johnson & Johnson, Shell, Enron, BPAmoco and Nike have recognized the
importance and value of incorporating sustainability and stakeholder engagement into their
corporate strategy.

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This new paradigm – sustainability (or corporate social responsibility)- is redefining the
successful relationship between corporations and society in the new information and global
economy. Ethics, transparency, good governance and social accountability are becoming strategic
sustainability issues as companies seek to balance financial performance with social
responsibility.

Enlightened self-interest is a catalyst for companies that embrace these new sustainability
principles. They are expected to experience a long-term comparative advantage over those that
fail to consider broader stakeholder interest and continue to operate under the belief that they are
judged only by financial performance and accountable only to shareholders. The objective
remains to build the bottom line – optimize shareholder value and economic success through core
business - while meeting existing and emerging social expectations.

Civil Society has become a key stakeholder whose interests a company ignores at its own peril.
Shell learned this after experiencing the human rights and environmental protests against it
regarding the sinking of the Brent Spa oil installation and the exploration for oil in the Niger
Delta which was allegedly destroying the habitat and human rights of the Ogoni tribe. Shell
responded by understanding and implementing sustainable development principles and becoming
a leader in triple bottom line reporting.

Similar reputational and financial harm, followed by sustainability strategy and triple bottom line
reporting, was experienced in the sweatshop boycotts of Nike, the genetically engineered food
outcry against Monsanto and the privacy backlash against DoubleClick. Increasingly well-
organized and vocal social interest groups are having a powerful impact on a targeted company’s
bottom line. The discussion that follows will explore the mounting evidence that good corporate
citizenship improves the bottom line as ethical companies are rewarded with greater fund
investment, increased customer loyalty, selective strategic alliances and enhanced shareholder
value.

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II. THE EVIDENCE: STUDIES CORRELATE SOCIAL ACCOUNTABILITY WITH PROFITS

More and more, studies support a strong correlation between social, environmental and financial
success. The Dow Jones Sustainability Group Indexes demonstrates that companies with
sustainable strategies are even more profitable than their competitors.

The following discussion briefly highlights this correlation.

A. The Millennium Poll on Corporate Social Responsibility

According to The Millennium Poll on Corporate Social Responsibility, there is a direct and
positive correlation between corporate social performance and financial performance. ii The
poll, sponsored by PricewaterhouseCoopers, interviewed 25,000 citizens from across 23
countries on 6 continents. Here are some of its findings:

 People worldwide focus on corporate citizenship ahead of either brand reputation or

financial factors when forming impressions of companies. Nearly 60% form their
impression of a company based upon labor practices, business ethics, responsibility
to society at large, or environmental impacts.

 Two out of three citizens want companies to go beyond simple financial performance
and focus on contributing to broader societal goals.

 More than 75% hold companies totally or partially responsible for avoiding bribery
and corruption, keeping operations and supply chains free of child labor, preventing
discrimination, protecting worker health and safety, and not harming the
environment.

 Over one in five consumers report rewarding or punishing companies in the past year
based on perceived social performance.

B. The Dow Jones Sustainability Group Indexes (DJSGI)

The Dow Jones Sustainability Group Indexes (DJSGI) are focused on meeting the financial
market's increasing demands for:

 A global, rational, consistent, flexible and, most importantly, investable index to

benchmark the performance of investments in sustainability companies and funds.

 An independent reliable index as a basis for derivatives and funds focused on

sustainability companies

The DJSGIiii, (for which PricewaterhouseCoopers verifies the methodology and processes –
www.sustainability-index.com) have consistently outperformed the broader Dow Jones Global
Indexes (DJGI) by a considerable margin on the 5, 3, and 1 year periods.

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The investor benefits from the more favorable risk/return profile for sustainability companies,
which is a direct result of adhering to the principles of sustainability and of the high level of the
companies selected. The DJSGI World index has a favorable risk/return ratio of 10.8% (standard
deviation) / 17.0% (annualized return) in comparison to the DJGI World index's 9.8% / 13.0%."
The new Dow Jones Sustainability Group Indexes (DJSGI) are based on the world's first
systematic methodology for identifying leading sustainability-driven companies worldwide.

The DJSGI family is derived from and fully integrated with the Dow Jones Global Indexes
(DJGI), and they share the same methodology for calculating, publishing and reviewing the
indexes. The DJSGI consists of more than 200 companies that represent the top 10% of the
leading sustainability companies in 73 industry groups in the 33 countries covered by the DJGI.

C. Financial Times/PricewaterhouseCoopers "Most Respected Companies" Survey

Recently, 750 chief executives were asked their views on the most important business challenges
for companies in 2000. Of those challenges listed, "increased pressure from stakeholder groups"
was ranked the second most important. iv Stakeholder influence can pressure companies to
improve and change conduct and practices. Examples of stakeholder pressure include shareholder
resolutions, consumer boycotts, employee strikes, loss of government contracts/ financing/
insurance, and elimination from screened mutual funds.

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D. Internet Surveys

Recent Wall Street Journal Articles (9/23/99, 11/18/99) report that in a U.S. on-line survey of
15,000 respondents, those companies that demonstrate vision, innovation, social responsibility
and emotional appeal while maintaining strong economic performance are those companies with
the best corporate reputations.v

E. CEO Survey

In a 1999 poll of 650 CEOs, published in Chief Executive magazine, 96 percent said their
company's reputation is "very important" to achieving strategic business objectives, and 63
percent said that reputation is more important than it was five years ago—but only 19 percent of
those polled have a formal system to measure the value of their corporate reputation. vi

F. Business and Society Study

A recent Business and Societyvii study found that social irresponsibility can result in a negative
effect on a company’s profitability – especially when it makes the front page of the newspapers.
A 1997 analysis in Business & Society (Vol. 36, No. 3, Sept. 1997) measured the stock market’s
reaction to 27 events of socially irresponsible or illegal behaviors, and found that companies
involved in such occurrences suffered significant losses in shareholder wealth. The analysis
measured the stock market’s reaction to incidences of social irresponsibility, and found that there
is indeed a direct correlation, although the data cannot tell us if the losses are long-term or short-
term.

G. PwC Transparency Project and Opacity Index

In March 2000, former U.S. President Jimmy Carter and James Schiro, CEO of PwC, announced
the launch of the Transparency Project, a private-public partnership involving broad consultation
with experts from academia, civil society, the private sector, government, and international
organizations, to study the value of transparency and good governance. Specifically, the
Transparency Project will examine the impact of opacity, including corruption and bribery, on
economic development and the cost of capital at the sovereign, market and company levels.

Preliminary PwC studies indicate that countries and markets with poor corporate governance,
accountability and transparency standards suffer a substantial increase in their cost of capital,
thereby stifling economic growth opportunities. At the company level, PwC Value Reporting
studies indicate that greater transparency will increase management credibility, increase long-
term investors, improve access to capital and improve company share price. These studies reveal
the degree to which investors, lenders and business partners value transparency, integrity and
good governance.

A new survey by McKinsey & Company, focusing mostly on developed countries, confirms that
institutional investors are prepared to pay a premium of more than 20% for shares of companies
that demonstrate good corporate governance.

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III. FORCES DRIVING THE NEW BUSINESS ENVIRONMENT

A. Globalization and Stakeholder Activism

In an age when claims of corporate injustice or abuse can be broadcast by the media or NGOs
over the internet in seconds, little remains concealed and many multinationals spend as much
time engaging consumer groups and NGOs, such as Transparency International, Human Rights
Watch and Greenpeace, as they spend consulting employee groups, governments and trading
partners. Boards and executive leaders are demanding that stakeholder considerations be
incorporated into strategic, operational and management decisions.

The Council on Economic Priorities reports that NGOs and media are increasingly targeting
multinational corporations operating in developing countries, arguing that their policies (use of
child labor, lack of community consultation, hiring of alleged paramilitaries as security firms)
threaten to exploit communities, destroy traditional ways of life, cause human rights abuses or
perpetuate cycles of poverty.viii

As the following examples demonstrate, ignorance of these stakeholder considerations can lead to
severe crises and eroded reputationsix:

 An energy firm received government approval to dispose of a contaminated oil

installation into the ocean. Management assumed that regulators were the only
stakeholder that mattered. Not so. Environmental activists protested to the governments,
consumers, shareholders, and the company's customer base. Letters and calls for boycotts
poured in, and several facilities were firebombed. After suffering severe damage to its
reputation, the company reversed its decision.

 Similarly, a consumer products company negotiated market access with a government

widely known for its human rights abuses. However, its management was caught off-
guard by student protests, consumer pressure, shareholder resolutions, and other efforts
urging the company to abandon this market. Several U.S. cities refused to procure goods
and services from that company. The company sold its stake in the venture, admitting that
business strategy and stakeholder discontent were equal factors in its pullout.

B. Social Investment Funds – Follow the Money To Ethical Business

Investment managers exercise considerable power over a company’s ability to raise capital, and
their decisions guide where money in the financial markets is allocated, how share prices rise and
fall, and the composition of boards of directors. Poor management of corporate reputation (e.g.,
bribery and corruption), employee practices (e.g., sweatshop allegations), product stewardship
(e.g., efficient cars) and environmental management (e.g., emission technologies and recycling)
can all give rise to social and environmental risks that damage shareholder value. Managers of
Socially Responsible Investment funds have been incorporating this social analysis into
investment decisions for two principle reasons: 1) a recognition and knowledge of investor
values; and 2) a recognition that socially responsible companies are good investment prospects. x

New studies and developments are showing that corporate ethics and sustainability attracts
investment, and ethical investing is growing at unprecedented rates: xi:

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  According to the U.S. Social Investment Forum there is over $1,497 billion under
management in socially screened portfolios, and over $2.16 trillion are managed in some
way as part of a socially-responsible investment. There are 144 ethical funds in the U.S.

 In the U.K. there are currently 40 socially responsible investment funds, worth more than
£70 billion. In addition, the Local Authority Pension Fund Forum has approximately £40
million committed to active engagement under management

 The Storebrand Scudder Environmental Value Fund (EVF) has consistently beaten the
Morgan Stanley Capital International World Index. The EVF has grown from $70
million to $140 million in three years

 Innovest Strategic Value Advisors asserts that eco-conscious companies outperform the
S&P500 by 2.8% per annum average

 Sustainable Asset Management’s “best in class” selection of chemical and pharmaceutical

firms gave investors a return of 227.5% over four years, compared with 119.3% for less
environmentally aware companies

 Gerling, Swiss Re, Victoria/Ergo, ING Group, Sustainability Asset Management and
Storebrand have recently launched a joint venture capital consortium called Sustainability
Investment Partners.

New laws in both Europe and the United States are requiring mutual funds to report on the social,
economic and environmental policies of the companies they invest in. In the UK, several events
over the last year have boosted interest in social responsibility in the investment sector: 1) a
reform of pension law will require trustees to disclose in their Statement of Investment Principles
what, if any, social, environmental or ethical criteria are considered; 2) submissions to the
company law review are calling for companies to be made more socially accountable; and 3) the
“Turnball” consultation on corporate governance asks companies to disclose how they are
managing their social and environmental risks. Analysts are noting that the reform of pension
legislation will bring substantial new demand for socially responsible investment and trustees will
increasingly select investment firms on their ability to pay greater attention to socially responsible
business practices.xii

C. The Global Reporting Initiative – Moving Toward The Triple Bottom Line

The first comprehensive set of guidelines for corporate sustainability reporting aimed at a global
audience was published recently to a hearty initial response.

The Global Reporting Initiative (GRI), which has been under development since 1997, is a
voluntary code governing economic, environmental and social dimensions that aims to
achieve the rigor and comparability for sustainability reporting in the 21st century that financial
reports achieved in the 20th.

Convened by the US-based Coalition for Environmentally Responsible Economies (CERES), it is

the result of a debate involving companies, NGOs, consultancies, accountancy organizations,
business associations, universities, and other stakeholders from around the world. Their

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publication represents a major step towards a generally accepted, global framework for
sustainability reporting.

The steps taken by large multinationals toward sustainability are well documented, but it is
important to note that the move toward social reporting is not limited to the United States and
Europe, nor is it limited to only large multinationals. In Latin America, for example, over 60
Brazilian companies have issued social reports. xiii

D. A New Sustainability Curriculum: Business School and Academic Re-orientation

Business ethics and corporate social responsibility is also making its way on to the agenda and
curriculum of business schools. Increasingly, academic leaders are advocating that if the
globalization process is to be deemed a success, business has to accept new responsibilities for
protecting the environment, promoting human rights, encouraging the development of
participatory democracy, fighting fraud and corruption, and helping to build partnerships between
government, industry and civil society. xiv

Indeed, universities are not only shaping tomorrow’s business leaders with sustainability
management principles and expectations, but they are also producing some of the most vocal
protests against globalization.

E. The United Nations Global Compact

Proposed by U.N. Secretary-General Kofi Annan, the Global Compact asks business leaders to
promote and apply responsible business practices globally. Participating companies will post best
human rights and environmental practices as well as challenges and problems on a dedicated
website. Other concerned groups, including labor unions, U.N. experts and human rights and
environmental groups, will have the opportunity to respond via the online forum.

Among the companies that agreed to the initiative known as the Global Compact, are
DaimlerChrysler, Ericsson, Healtheon/WebMD, Deutsche Bank AF, BP Amoco plc, Unilever and
Nike. In an August 1, 2000 Financial Times article Philip Knight, chairman and CEO of Nike,
noted that Nike has “concentrated on monitoring Code of Conduct compliance, using internal and
external resources such as specially-trained monitors from PricewaterhouseCoopers."

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IV. SOLUTIONS: CONSTRUCTING A SUSTAINABILITY STRATEGY

So if sustainability is the new challenge facing business and society, what can business do to meet
the challenge successfully and embed sustainability into its values and governance? Start with
the tone at the top.

The global corporate governance movement is evolving from a narrow definition describing the
relationship between shareholders, management and the Board of Directors, to a broader
construct which expands the relationship to include other stakeholders such as employees,
customers, suppliers, creditors and the community, who also determine the performance and
accountability of corporations, as well as being affected by them. xv

Corporate governance principles are premised on the need for corporate accountability and
compliance with standards that reflect society’s values generally, and the concerns of key
stakeholders in particular. Stakeholders require reasonable assurance that the company will
generate stakeholder value in the long-term, and that it can measure and report its progress in this
regard.

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New PwC research on corporate governance demonstrates that companies which operate with
integrity and high ethical values draw the best people and most sought-after customer and
supplier relationships.xvi Indeed, companies that operate with integrity and high ethical values are
also more likely to find open doors to critical alliances, partnerships and merger candidates.

To ensure shareholder value in the New Economy, sustainability principles require that
companies implement a strategy and internal control framework designed to provide reasonable
assurance regarding: 1) the sustainability of operations; 2) the reliability of triple bottom line
reporting on the company’s economic, social and environmental performance; and 3) compliance
with applicable sustainability standards and expectations.

Those who have been successful in implementing sustainability report that the leadership of a
company must establish a new set of values and vision that permeate the wider community of
stakeholders and establish a corporate culture that supports the company’s sustainability vision. xvii

A. A Roadmap towards Sustainability

In his article, “Sustainability: The New Bottom Line,” former PwC global managing
partner, Jermyn Brooks (currently serving as a Director with the anti-corruption NGO,
Transparency International) describes how sustainable companies are those that
incorporate economic, social and environmental policies and practices into their values,
objectives, strategies and actions.xviii

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An enlightened company in the New Economy will be designed to maximize all the
forms of value that are consumed or generated by it, for the benefit of all its stakeholders
– shareholders, customers, employees, society and partners. Evolving from profit focus
and philanthropy through stages of community affairs and investment, Brooks notes that
the successful business evolves into the sustainable business by meeting the following
characteristics:

 It internalizes, accounts for, and maximizes social and environmental, as well as

economic value

 It maximizes effective use of all resources (financial, human, intellectual, etc.) –

demonstrating that it is a well-managed company – and reputable one. This good
reputation greatly contributes to customer and employee retention, and becomes the
company’s most valuable asset

 It is able to exist and prosper for many decades, as if offers long-term business
benefits – financially, intellectually, socially, and environmentally – to current and
future stakeholders

 It implements a sustainability program that embraces the following principles:

- Include Society in Your Stakeholders: A sustainable company maintains the

highest standards of management responsibility, organizational culture, and
stakeholder relations with respect to social commitments. For many members of
management this is a new area, and requires adding dialogue with local
community representatives and non-governmental organizations (NGOs) as a
routine task.

- Surpass Shareholder Expectations: A sustainable company meets shareholder

demands with profitability, long-term economic growth, long-term productivity,
increased global competitiveness, and intellectual capital. It also ensures a
competitive return for shareholders by promoting environmentally sustainable,
healthy and safe investments.

- Invest in Your Employees: A sustainable company demonstrates and

encourages the support of its social and environmental commitments with fair
compensation, safe working conditions, and respect for labor and human rights.

- Get Out in Front of Your Industry: A sustainable company is a leader in its

industry’s shift toward sustainability by demonstrating and promoting its
commitment to sustainability, and publicizing its superior performance (e.g.,
notifying customers of environmentally-responsible products and services.

- Respond to Society’s Changing Needs: A sustainable company encourages

lasting social excellence with appropriate and timely responses to social change,
evolving demographics, migratory flows, and shifting cultural patterns. It
demonstrates respect for human rights, fair trade and transparency, local culture,
law and animal rights.

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B. Value Reporting - The Future of Corporate Value

Sustainability is changing the way companies report value. An old business adage holds
that “what gets measured, gets done” and if you can’t measure it then you can’t manage
it. Accordingly, new business valuation methods are incorporating sustainability metrics
and redefining how companies assess and report information. As the information
economy demands more transparent access to corporate data, companies are seeking
innovative ways to provide it. Studies are providing an understanding that greater
transparency will increase management credibility, increase long-term investors, improve
access to capital, and thereby improve a company’s share price.

The PwC Value Reporting chart below indicates the new forms of value that companies
will be reporting and the broader group of stakeholders to whom they are accountable.

Sustainability is achieved through a holistic, integrated, and systematic process. Under

the new value paradigm, PwC Reputation Assurance helps companies transform broad
principled, pledges, and missions into practical management goals and actions xix:

1. Sustainable value starts with a solid base of good governance and sound business
principles.

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2. Building upon this base is the recognition of responsibility across the triple bottom
line – economic prosperity, environmental quality and social justice.

3. This leads to a review of governance processes: developing strategies and policies,

implementing and embedding them, monitoring performance, and periodically
reporting (internally and externally). This is done in tandem with a process of
stakeholder identification and engagement to understand the expectations of those
with an interest in the business.

4. The next step is to understand and influence the company’s reputation drivers – key
business principles with significant impact on its stakeholders

5. A well managed process will lead to a virtuous circle: enhanced reputation, higher
quality and dedicated work force, and sustainable shareholder value.

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V. CASE STUDIES

Being Proactive:

 Royal Dutch Shell

In 1998, Shell began to build its operations around principles of sustainability. Since then it
has successfully engaged its stakeholders in an open dialogue which lies at the very core of
Shell’s decision making process, including stakeholder representation in its corporate
governance structures. Through its 1998 Internal Review, Shell’s Board and executive
leadership affirmed it’s conviction that it has an inseparable responsibility to ensure that
Shell’s business is run in a way that is ethically acceptable to the rest of the world.

 Interface Inc.

For companies that wish to avoid shareholder resolutions forcing sustainability on to the
agenda, a proactive approach is often rewarded. Interface Inc., is a large carpeting company
who became concerned what the industry was doing to the environment. The CEO was
determined to make his company a fully sustainable industrial enterprise, and set out to
design compostable and recyclable carpet. As a result of these sustainability strategies, the
company has experienced significant financial benefits:

 The company’s stock price has gone up 70%, and profits 80%, since 1994
 Annual sales have risen 77%
 Emissions and solid waste are down 30% and 50% respectively, per revenue
dollar
 Within three years of the CEO’s announcement, the company saved $50 million
in reduced material costs, reduced energy costs, and reduced waste.

Creating a Competitive Advantage

 DuPont

DuPont, a company once targeted as falling short of environmental standards, now believes
it can gain a competitive advantage by exceeding minimum regulations and incorporating a
sustainability strategy. Environmental and social policies are no longer a separate initiative
but integral to Dupont's corporate strategies. DuPont’s CFO, Gary Pfeiffer, reports that
policies to reduce waste, for instance, create new production capacity and save on capital
investment costs "in excess of $1 billion." xx

 Dow Europe

Noting that globalization to date has left billions out of the market economy, Claude Fussler,
Vice President of Dow Europe noted that innovation, so prominent on the corporate agenda,
will bring success only if it is inspired with a vision of sustainable development. xxi

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Cooperation vs. Conflict: Working with Stakeholders

 Home Depot

An increasingly networked and informed stakeholder community also means that

corporations are often subject to shareholder activism. Recently, a shareholder resolution
helped convince Home Depot to stop stocking wood sourced from environmentally sensitive
areas.

David Wright, Global Leader of Reputation Assurance in PricewaterhouseCoopers, analyzes

in his article, “Sustainability and Profitability” how informed investors recognize the
importance of sustainability to long-term performance, and are, therefore, more likely to
support environmentally-related shareholder resolutions. xxii Companies are implementing
sustainability strategies accordingly, or being forced to do so by investors.

Shareholders are not only active with regards to environmental issues, but also with social
issues as well. For example, Wright reports that in another recent, unprecedented display of
support, an impressive percentage of shareholders of a major mining company voted to back
two union-initiated resolutions – (1) the improvement of the company’s corporate governance
policies and (2) company compliance with international human rights standards in the
workplace. The vote for human rights standards was especially notable, as it reflects an
increasing awareness by shareholders of the human rights implications of company
operations.

VI. CONCLUSION

The foregoing discussion demonstrates that good corporate citizenship and superior financial
performance are not mutually exclusive. On the contrary, good corporate citizenship and a
demonstrated commitment to sustainability can provide companies with a strategic and
comparative advantage in the New Economy, shaped by information technology, internet speed,
and a growing chorus of civil society demands that globalization be more socially and
environmentally accountable. This social chorus is reaching legislatures and impacting the flow
of capital and media coverage, three powerful forces. Accordingly, reputation and governance are
more important strategic assets than ever before.

Follow the facts. Sustainability is supported by more studies demonstrating an ever-increasing

correlation between social, environmental and financial success. The Dow Jones Sustainability
Group Indexes demonstrate that companies with sustainable strategies are even more profitable
that their competitors.

Follow the money. Driven by an increasing awareness of investor values and the fact that
socially responsible companies are good investment prospects, new studies demonstrate that
ethical investing is growing at unprecedented rates.

Follow the evolution of corporate management strategies. Best in their class companies are
incorporating sustainability management principles and triple bottom line reporting on their
economic, social and environmental performance.

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The evidence strongly suggests that the future will reward good corporate citizens as the future
brings a new landscape where:

 the valuation methods used by capital markets and Wall Street analysts will include new
metrics – such as social performance and intellectual capital – to assess more accurately
the net worth of a company

 the majority of companies in Europe and the United States will assign Board
responsibility for areas of reputation and social responsibility

 the majority of multinationals will publish a broader range of key non-financial

information alongside financial data, covering areas such as business ethics, environment,
diversity, and community

Good corporate citizens that have implemented a sustainability strategy and demonstrated
their social values will lead in reputation and shareholder value.

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Page 17 of 15
i
Business Ethics: Doing Well By Doing Good, The Economist, April 22, 2000
ii
The Millennium Poll on Corporate Social Responsibility was conducted by Environics International, Ltd., in cooperation
with the Prince of Wales Business Leaders Forum and The Conference Board.
iii
The new Dow Jones Sustainability Group Indexes (DJSGI) are based on the world’s first systematic methodology
for identifying leading sustainability-driven companies worldwide. The DJSGI family is derived from and fully integrated
with the Dow Jones Global Indexes (DJGI) and they share the same methodology for calculating, publishing and reviewing
the indexes. The DJSGI consists of more than 200 companies that represent the top 10% of the leading sustainability
companies in 73 industry groups in the 33 countries covered by the DJGI.
iv
“Worlds Most Respected Companies,” Financial Times, December 7, 1999, Survey Section.
v
“The Best Corporate Reputations In America,” The Wall Street Journal, September 23, 1999, p. B1; “The Best
Reputations in High-Tech” Wall Street Journal, November 18, 1999, p.B1.
vi
Chief Executive Magazine, April 1999, p.79
vii
Business & Society is the official journal of the International Association for Business and Society, an organization
devoted to research and teaching in all areas encompassed by the relationship between business and society.
viii
Jordana Friedman, “Why Companies Should Care About Conflict,” Visions of Ethical Business (Financial Times
Prentice Hall, 1999)
ix
L. Ponemon, G. Peters and H. Kahn, “Reputation Assurance: The Value of A Good Name,” re: Business (April
2000)
x
Anne-Maree O’Connor, “The Social Dimension of Investment Decision-Making,” Visions of Ethical Business
(Financial Times Prentice Hall, 1999)
xi
James Shaw, Amy Middelburg and Fabio Sparagli, “Good News: Money Does Grow on Trees,” PwC Publications
(June 2000) Shaw, Middelburg and Sparagli, supra n. xi.
xii
Id.
xiii
Deborah Leipziger, “Corporate Social Responsibility: A focus on Latin America,” Visions of Ethical Business
(Financial Times Prentice Hall, 1999)
xiv
Statement of Malcom McIntosh, Director of the Corporate Citizenship Department at Warwick Business School,
Visions of Ethical Business (Financial Times Prentice Hall, 1999)
xv
Janet Nelson, “Business as Partners in Development,” Prince of Wales Business Leaders Forum, 1996
xvi
“Corporate Governance and the Board: What Works Best,” a new report form PricewaterhouseCoopers, authored
by Richard Steinberg and Catherine Bromillow
xvii
John Browne, Sustainability: What Will It Cost?” re: Business (July 2000)
xviii
Jermyn Brooks, “Sustainability: The New Bottom Line,” re: Business (June 2000)
xix
Shaw, Middelburg and Sparagli, supra n. xi.
xx
Hillary Rosenberg, “The CFO’s Balancing Act,” Chief Executive Magazine (June 2000)
xxi
Claude Fussler, “Vision, Innovation and Sustainable Development,” Visions of Ethical Business (Financial Times
Prentice Hall, 1999)
xxii
David Wright, “Sustainability and Profitability,” re: Business (July 2000)