Window dressing vs reduced business risks and impacts – which to choose?

Companies have impacts – on people, on the environment – some positive, some negative. Sometimes the negative impacts become very obvious and very negative – for example when a textile factory in Bangladesh collapses. Sometimes the impacts are less visible, displacement of people from their land, discharge of toxic chemicals, or exploitation of fossil fuels.

There are many way of addressing these impacts, including direct legislation, standards & labelling. One approach that sounds promising at first sight – but is yet to really deliver – is company reporting:

• Every year companies must produce financial accounts – so why shouldn’t they also disclose their social and environmental impacts, and what policies they have to reduce them?
• Won’t this encourage them to reduce these impacts, and encourage investors to penalise those companies that aren’t managing these risks?

This is the theory – unfortunately the practice is rather different. There are a profusion of different reporting standards, and these standards are generally too vague to lead to informative, comparable reports. This has been described as ‘fuzzy reporting’ by a former chair of one of these standards, the Global Reporting Initiative.

The EU to the rescue?

There has been a discussion on company reporting around the EU for some years, which has culminated in a legislative proposal (draft law) from the European Commission, published on 16th April 2013.

The legislative proposal is an important start, but as European Coalition for Corporate Justice (ECCJ) said at its launch, “The proposal would allow companies too much discretion about how to report and what on, it lacks concrete indicators and does not include sanctions to ensure companies actually comply with the requirement“

Friends of the Earth Europe (who are members of ECCJ) worked with ECCJ to put on a conference in the European Parliament on 14th May to discuss the new proposal – the Parliament is very important in this process, as the law will have to be agreed by both Parliament & EU Member States (see this page for a brief intro to the process).

The conference was well attended, with speakers from the European Commission, Parliament, Aviva Investors, Oxfam, Marks & Spencers, WRAP, International Trades Union Congress – and from ECCJ & Friends of the Earth.

ECCJ will produce a write up in the near future, but a few things that stood out for me were:

• There was a lot of support for strengthening the law, including the need for clearer requirements and guidance on reporting, to avoid ‘window dressing’ reports that can’t be compared (“mandatory window dressing” as one participant put it). You need some flexibility, but not too much.
• A lot of the requirements of company reporting are actually served by the company doing proper due diligence, for example knowing what the likely risks of a mine could be, and acting to avoid them.
• There are massive opportunities for companies to increase their resource efficiency, and company reporting (“what’s measured gets managed“) is a way to achieve this;  my presentation is here.

The proposal will now be examined in detail by the European Parliament, and by all EU governments. Any part of it can be amended, and the law will either be finalised just before next year’s European Parliament Elections in May 2014, or by the new Parliament in 2015.

You can track the progress of this proposal on its page at the Parliament’s legislative observatory.

Friends of the Earth Europe are now working with ECCJ & others to make this a more effective proposal – for investors, people, the environment & for companies themselves.

For more information:

• ECCJ have produced a detailed briefing for policymakers on the proposal, available here.
• Friends of the Earth Europe also produced a briefing in October 2012, looking particularly at company reporting & resource use.

A more democratic EU? Stop government secrecy!

In UK Prime Minister David Cameron’s EU speech this week he talked of the need to increase the EU’s “democratic accountability”.

One little known fact is that the most secretive and undemocratic piece of the EU is actually ‘Council’, EU Governments (Member States) – including the UK – getting together to decide their view on EU laws.

Council is one of the two decision making bodies of the EU, see this page for a quick explanation, the other being the European Parliament – the European Commission only proposes legislation.

For example, look at this document on the Council’s web site, where the main content of the document is:

“DELETED FROM THIS POINT UNTIL THE END OF PAGE 5 “

And this is not some obscure piece of legislation. This is the negotiations on a new law that would force European mining companies to disclose what they are paying governments around the world, part of a global campaign on transparency – see the “Publish What You Pay” campaign site for more details.

There are thousands of censored documents on the Council web site, many saying useful things like “one Member State said” “Several Member States said”. Governments around Europe are hiding what they are doing at EU level.

So, the electorate is not permitted to see what governments are up to. Sometimes complete documents – or rumours – leak out, but it is a closed, secretive process. These leaks probably also go more often to industry interests than to civil society ones.

Contrast this with the elected EU parliament, where you can see who tables which amendments, and where votes are open & often available in full (‘roll call votes’). This detailed information enables people like VoteWatch and environmental groups to monitor exactly what each MEP is up to. VoteWatch also tries to analyse government voting patterns, but its only data is the formal votes that happen at the end of a process, not the real debate on what governments will or won’t accept.

So is David Cameron’s ‘reform’ plan going to include openness for council?

Will the UK take a unilateral decision to open up all of its negotiation documents?

Let’s wait and see…

Commission nominees give written responses to Parliament’s questions

Next week in Brussels the European Parliament’s committees will be cross-examining the nominees for the new Commission – the timetable is here. The Parliament has sent written questions to the nominees already, and has now published their responses on their Hearings web site.

The Environment nominee Janez Potočnik says in his response that his “three priorities .. would be promoting a green economy, halting the loss of biodiversity and implementing and improving existing environmental legislation.”

He also puts a welcome emphasis on the importance of making Europe more resource efficient, which is a priority for my work at Friends of the Earth (see our Resources & Consumption campaign web page for more info):

Resource efficiency will be a critical component of any strategy to protect our environment and enhance our competitiveness. It will mean putting in place the right mix of smart regulation, incentives and market-based mechanisms to foster eco-innovation and sustainable consumption and production, finding ways to promote the changes needed which fully respect our levels of environmental ambition. This will include presenting action plans for eco- innovation, environmental technologies and the next phase of Sustainable Consumption and Production to make the EU more resource efficient.

He also acknowledges that environmental policy is not about selecting one “silver bullet” – ‘If we are to achieve ambitious environmental objectives, we must act on many policy fronts.’

Welcome pack for Environment Committee MEPs, briefing documents on climate policy

The Institute for European Environmental Policy’s (IEEP) latest newsletter is full of interesting stuff, including links to a couple of projects involving training MEPs, and stories on EU land use, sustainable development indicators & promoting the importance of biodiversity:
http://www.ieep.eu/publications/pdfs/newsletters/newsletter_autumn_2009.pdf

The first training project is a set of briefing documents on climate policy, aimed at MEPs and assistants (they are also running a training programme):
http://www.ieep.eu/climatebriefings//

The second is a welcome package for new MEPs on the Environment Committee, which summarises legislative progress in the last parliament, identifies some priorities for the next & lists upcoming implementation and review dates for legislation:
http://www.europarl.europa.eu/activities/committees/studies/download.do?language=en&file=26671

Barroso wins the Parliament’s vote – though without great enthusiasm

The European Parliament has today voted for Barroso to be the Commission president – 382 MEPs voted for him, 219 against and 117 abstained – which was enough to give him the job, but clearly also shows a considerable level of opposition, reflected by the quotes in this BBC story.

The next step in creating a new line-up of European Commissioners is on hold until after the Irish vote again on the LIsbon treaty on 2nd October. At some point after this vote (whatever the outcome), Barroso will start to put together the team of 26 other Commissioners, using the people nominated by EU governments. The European Parliament will then get a chance to question and vote on these nominees.

Barroso approaches his big Parliament vote tomorrow

Tomorrow (Wednesday 16th) the European Parliament will vote on whether to give the Commission president José Manuel Barroso a second term. EU governments have already supported him, but some political groups in the Parliament – notably the Greens – have been rather less keen. There’s no obvious alternative candidate though….

As part of his campaign for the job, Barroso has unveiled his own five year plan (covered by Euractiv here) for the European Commission.

The plan contains some general statements about climate change and sustainability, e.g. “We need to start working now on a radical pathway to reaching a far more sustainable Europe by 2020″, but the European Environment Bureau have criticised the narrow focus of his proposals in a letter to MEPs:

‘Despite being a subject of prime concern, the EEB warns that the sustainability issue moves far beyond that of climate change.

“If consumption patterns of people in all societies in the world would be at the same level of EU consumers, we would need almost three planets to provide the resources and neutralise the resulting pollution.” Wrote John Hontelez, Secretary General of the EEB, the largest federation of European environmental NGOs; “The EU requires a more holistic resource efficiency approach.’

Barroso himself took part in what sounds like quite a heated debate with the green group, as reported by EUObserver:

They should have sold tickets to this wrestling match, and offered popcorn and hot dogs in the committee room. The standing-room-only chamber in the European Parliament was filled with reporters, MEPs, their assistants and anyone who wanted to see that rarest of Brussels events – an out-and-out political brawl.

“Look, you’re already totally against me,” Mr Barroso responded. “I don’t understand that …The Greens are amongst the most pro-European of parties and there is a convergence between us on many questions: climate change, energy, fundamental rights …But even before this discussion, you have decided: ‘Stop Barroso!’”

German MEP Rebecca Harms, the co-president of the Green group alongside Mr Cohn-Bendit, reacted: “I’m sorry to say this, but whether you are a lame duck or not, this is an opinion which is not decided in three months, but a position that the public has already taken.”

There are even – at this late stage – proposals for alternative ‘fall back’ candidates, as reported by the Economist:

WITH a deliciously malicious sense of timing, the French daily, Le Monde, has lobbed a rock into the Brussels duckpond this morning, reporting that the French prime minister François Fillon would be prepared to step in as the centre-right candidate for boss of the European Commission, if the incumbent, José Manuel Barroso, cannot pull off a necessary vote of approval in the European Parliament.

What’s the Parliament’s Environment committee done in the last 5 years?

If you want to know what the European Parliament’s Committee on Environment, Health and Food Safety have done in the last 5 years (‘The 6th Parliamentary Term’), they have produced a 189 page (!!) activity report

The report demonstrates the importance of this committee, as it led the Parliament’s discussion for almost 1/4 of all codecision laws passed by the parliament:

[Codecision = Parliament and Council must reach agreement, Consultation = Parliament can comment, but Council decides]

During the 6th parliamentary term, the Environment Committee was responsible as a lead committee for 172 procedures. This figure includes both legislative (114 co-decision procedures, 16 consultation procedures) and nonlegislative (38 initiative reports and several comitology-related procedures) procedures. Over 200 reports were adopted. …

Of 114 co-decision (COD) procedures, 96 were successfully concluded by a final vote of the 6th European Parliament. Those 96 procedures represent almost one quarter of the total of the approximately 400 co-decision procedures which were successfully concluded by the 6th Parliament.

Co-decision procedures were concluded at the following stages:

o 9 procedures were concluded at 3rd reading (=9.4%)

o 28 were concluded at 2nd reading (=29.3%)

o 59 were concluded at 1st reading (=61.3%)

I hadn’t realised was quite how many procedures are agreed at ‘First Reading’ – i.e. an agreement is reached between Parliament and Member State governments early in the process, rather the two sides disagreeing at the first reading and compromising on the second reading, or even the third reading (conciliation).

Even now, UK schools don’t tell pupils about the EU?

Dave Keating, an American journalist living in London but working in Brussels has a long post on his ‘Gulf Stream Blues’ blog about the sorry state of reporting – and understanding of – EU issues in the UK.

Commenting on the extensive UK coverage of the BNP MEPs taking their seats:

It was yet another illustration of how much the British media don’t understand how the EU works. Faced with the challenge of having to explain the complexities in the formation of a new parliament, they preferred to go with the easy “British fascist takes a seat” story.

And then on the coverage of the ‘will Blair be president of the EU’ story:

Their inclination for the easy story was again born out later in the week when Gordon Brown is nominating Tony Blair to be the first “president of Europe” (should such a position be created by the passing of the Lisbon Treaty) further demonstrated the astonishing ignorance of the British on all things European. Last night on Question Time, an audience member asked the guests whether Tony Blair would make a good European president. The panel, composed of senior politicians and journalists, proceeded to descend into a string of bizarre statements that betrayed the fact that they actually didn’t know what the new president position is. For that matter, they didn’t seem to know much of anything about the EU at all

Unfortunately this is all too true – as someone who works on both UK and EU level, it is shocking how little people in the UK know about the EU. This is even true of people at quite senior levels in UK politics-related jobs, who will say things like ‘but the parliament doesn’t actually have any power, does it?”… which was true 15 years ago, but isn’t now.

He believes (and I agree) that a key problem is how people learn about the EU. The media is a common source of information across Europe:

The British media do a notoriously horrible job reporting on Europe. The EU is hardly ever mentioned in British news outlets, and when it is, the reports on it are rife with inaccuracy.

Then there is the question of education, where he uses some anecdotal information to suggest that education about the EU in UK schools is (still) virtually non-existent, in contrast to schools on the continent:

So I asked a friend of mine who teaches in a secondary school here if EU civics is now being taught in school. I was shocked by his response. “Nope, nothing,” he answered matter-of-factly. “Not even in a civics class? Or a government course?” I asked. “I’ve definitely never heard of it being taught,” he answered.

This situation seems rather incredible to me. ..It’s a huge disservice to the students who will have to live in a framework where those laws made at the federal level will have a huge impact on their lives, and they will have no idea how they’re made.

I think there is also another important factor – the EU institutions, particularly the parliament, are evolving quite rapidly, so even if you were taught at school about the EU (or the ‘Common Market’), it is likely that what you where told is now out of date.

For the Parliament’s role, the key change in the last 15 years has been the creation and then extension of the ‘Codecision Procedure‘, which allows the Parliament to co-legislate with EU Governments – i.e. the two sides must reach a compromise to finish a law. I have a brief description of this process on the ‘How are EU laws created‘ page.

Polish partners continue to cause problems for Cameron

There’s more problems for David Cameron’s Conservative MEPs in the UK’s Sunday newspapers.

The Observer is reporting that:

One of the most respected figures in the British Jewish community has called on David Cameron to cut all links with the Polish MEP chosen to lead the new centre-right group in the European Parliament, which includes the UK Conservative party, because of his attitude towards a massacre of 1,600 Jews in Poland during the Second World War.

Rabbi Barry Marcus, of the Central Synagogue in London, who has studied the fate of Jews in the north-west Polish town of Jedwabne, said he had “watched in horror” at the appointment last week of Michal Kaminski as chairman of the new European Conservative and Reformist Group (ECR), which now includes the 25 Tory MEPs.

The rabbi told the Observer that he had known for some time that Kaminski, who was Jedwabne’s local MP, was involved in 2001 in a campaign to oppose a national apology for the massacre on its 60th anniversary in July 2001. The rabbi said: “There needs to be some form of statement [from the Conservatives] of disassociation and condemnation. Otherwise they will appear to be condoning these views. Even if one person like this is in power in a democratic process, that is worrying. It is not building bridges. We want to build bridges.”

Meanwhile, in the Independent on Sunday, Joan Smith is also very critical of the new group, and goes back to the original reason why David Cameron committed to leave the European People’s Party during his successful campaign for the Conservative leadership:

Last week’s spectacular bust-up has its origins in a tense moment during the Tory leadership contest in 2005, when Liam Fox was about to withdraw as a candidate. David Davis, a former Europe minister, was not prepared to match Fox’s show-stopping pledge to pull Tory MEPs out of the EPP, but Cameron was. It won him the leadership, but at a cost that has been fully revealed only in the past few days.

Who will work on what in the new Parliament

In the European Parliament most of the in-depth examination of new legislation & policy issues is done within Committees. This makes committee membership one of the most important parts of an MEP’s job.

Like many things in the Parliament, a complex procedure linked to the size of parties, and involving horse-trading over senior jobs, is used to determine committee members and Chairs. The bigger parties tend to get the most important jobs, but the system tends to give small parties reasonable representation too.

Parliament’s first plenary session last week in Strasbourg largely sorted out the membership of the committees.

A full list of committee members is available here; clicking on the names of MEPs will give you further information on each MEP.

Next week the committees meet in the Parliament in Brussels (it’s a ‘committee week’). As can be seen from the Agenda of the Environment Commitee meeting, this meeting is mainly administrative.

Documents from all the committees are available – this is one example of the openness of the European Parliament, with the main challenge being finding information on its copious web site.

There is also a list of just the British and Irish MEPs & their committees available.

Unfortunately, the British National Party MEP Nick Griffin is planning to sit in the Environment, Public Health and Food Safety committee, which is not good news for us environmentalists. His BNP colleague Richard Brons will sit in the Committee on Constitutional Affairs.