Financial Times

Deadline to be extended
Community Leader Awards scheme gathers momentum
Sri Lanka's inaugural Community Leader Awards (CLAs) scheme is gathering momentum with several inquiries being made for its first initiative this year - selecting companies with waste management systems that have helped in a clean environment.

"There have been many inquiries. However, since the closing date coincides with the long Sinhala and Tamil Hindu New Year holiday period which could restrict interested firms from applying, the organising committee has agreed to accommodate late entries provided a reasonable explanation is given for the delay," a spokesperson for the organising committee said. The closing date is April 11 but it would be extended on a case-by-case basis for a few more days in view of the intervening holidays. "A few more days would be given to late entries," the official noted.

This innovative Corporate Social Responsibility Awards programme is aimed at bringing the private sector and the community together in a partnership that would steer responsible business ethics and future development of the country. This CSR project is driven by the Chartered Institute of Management Accountants (CIMA), Sri Lanka and The Business Club with John Keells Holdings Limited (JKH) as the strategic partner. This year’s awards would be presented in waste management in three sectors - Large, Medium and Small. Manel Jayamanne, Director-General of the Central Environment Authority (CEA) says the CEA is pleased to be collaborating with the private sector in this exercise "This unique award will create a demonstration-effect on the private sector", she added. In addition to the CEA, the National Cleaner Production Centre (NCPC) is also working with and supporting the CIMA-The Business Club Community Awards.

The Community Leader Awards will be an annual CSR project driven by CIMA and The Business Club with a different theme each year where awards would be presented to the best SriLankan corporate/company/group in different segments. Each year companies would be recognized for different aspects of CSR practice that affects the public. The awards will be presented this year during the Global Leaders Summit organised by CIMA on May 26 at the BMICH in Colombo in the presence of Dr Mahathir Mohamed, the former Malaysian Prime Minister who is the Summit's keynote speaker. Former Pakistani cricket superstar-turned politician Imran Khan will also be among an array of distinguished personalities who would address the gathering.

Applications for entry are available at the CIMA office in Colombo or could be downloaded from the CIMA website at www.cimaglobal.com/srilanka.

It pays to be green - UK environment agency
Businesses and investors should be paying more attention to standards of environmental governance if they want the best financial returns, according to the UK Environment Agency.

In new research on the value of corporate environmental governance, the Agency said there is a clear link between sound environmental governance polices, practices and performance and the financial performance of businesses.

The research, carried out for the Environment Agency by Innovest Strategic Value Advisors, provides strong evidence of higher financial returns, business opportunity and competitive advantage, with differences in financial performance between environmental leaders and laggards being quite marked.

Fifteen case studies covering funds, sectors and individual companies are detailed in the report, alongside the findings of a literature review in which 85% of published studies assessed showed a positive correlation between environmental governance and/or events and financial performance.

The case studies confirm the findings of the literature review, in that changes in financial performance stemming from environmental governance measures can be demonstrated and quantified, although the extent to which these change are due entirely to environmental governance issues is not always clear.

Findings of specific case studies showed that UK based Jupiter Ecology Fund has been an impressive performer, giving a consistently better investment return over five years than the Standard and Poor Global Growth Sector average. The US based Winslow Green Growth Fund consistently out-performed its benchmark over a prolonged period.

Forest and paper product companies with above average environmental governance standards and above average environmental track records financially out-performed companies with below average ratings.

Company case studies showed how environmental management in areas such as risk reduction and pollution control can reduce direct costs and create savings. One area where links can be more clearly established is that of operational impact.

US biotech company Baxter International, for example, uses systematic monitoring, recording and target setting to reduce environmental risks to business. These improvements saved the company US$12.7 million in 2002, with cost avoidance at US$52 million.

Baxter's efforts have resulted in a significant reduction of operating costs. In total, environmental efforts saved the company US$65 million in 2002. At 3M, global fines for the company were US$85,000 in 1998 compared to US$253,000 in 1990, and the share price has grown steadily since the company introduced its environmental programme.

The cost of an eco-efficiency initiative and its financial outcomes can be measured fairly precisely when a company sets up the appropriate environmental accounting procedures.

In the case of 3M and Baxter International, where the impacts could be examined over a sustained period, it was revealed that a long-term environmental governance strategy could yield a continuing financial benefit.

Howard Pearce, Head of Environmental Finance and Pension Fund Management for the Environment Agency, said:

"The Environment Agency commissioned this report to shed light on the value of good environmental governance from a business and investor perspective, and thereby encourage more widespread adoption of sound environmental polices, practices and lead to improved environmental and financial performance.

The findings clearly support the view that companies which reduce their environmental risks and impacts are more sustainable, profitable, valuable and competitive."

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