9 Jan, 2004

WEF Global Survey Shows People Feel “Unsafe, Powerless And Gloomy”

Imtiaz Muqbil

A survey representing the thoughts of more than one billion people has found that half those questioned think global security is “poor” and that the next generation will live in a less safe world.

1. PEOPLE FEEL “UNSAFE, POWERLESS AND GLOOMY”: A survey representing the thoughts of more than one billion people has found that half those questioned think global security is “poor” and that the next generation will live in a less safe world.

2. WHY GLOBAL CORPORATE CITIZENSHIP MATTERS FOR SHAREHOLDERS: Over 70% of CEOs surveyed by the World Economic Forum believe that mainstream investors will have an increased interest in corporate citizenship issues, according to a report released on 08 January.

3. HERBAL MEDICINE BOOM WIPING OUT PLANT SPECIES: The multimillion-pound boom in herbal medicine is threatening to wipe out up to a fifth of the plant species on which it depends, wrecking their natural habitats and jeopardising the health of millions of people in developing countries, according to a report in New Scientist newsletter.

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1. GLOBAL SURVEY FINDS ORDINARY PEOPLE FEEL “UNSAFE, POWERLESS AND GLOOMY” ABOUT FUTURE SECURITY AND PROSPERITY

Geneva, 8 January 2004 – A survey representing the thoughts of more than one billion people has found that half those questioned think global security is “poor” and that the next generation will live in a less safe world. The survey carried out exclusively for the World Economic Forum, by Gallup International in advance of the Forum’s Annual Meeting 2004 in Davos, Switzerland, (21-25 January) reveals an uncertain world. The results of the Voice of the People survey, based on almost 43,000 interviews from 51 countries, represent the views of more than 1.1 billion global citizens. The questions concern different aspects of prosperity and security. To view the graph of results, log on to: http://www.weforum.org/documents/dam04/Gallup_Graph_1.pdf

Among the findings: half of those interviewed (48%) across the world think the next generation will live in a less safe world. In Western Europe this figure rises to almost two-thirds (64%). But in West Asia (Afghanistan, India and Pakistan) – three countries with turbulent backgrounds, people are more optimistic about the next generation and here, half those questioned feel the world will be a safer place for them. The survey also found that people feel their country’s economic position is worse now than it was ten years ago.

To view the graph of results, log on to: http://www.weforum.org/documents/dam04/Gallup_Graph_2.pdf

The theme of the WEF”s Annual Meeting 2004 is “Partnering for Security and Prosperity” and leaders from all sectors of society, business, politics, religion, NGOs and civil society will discuss ways of improving the uncertain global climate.

WEF Co-Chief Executive Officer Jos? Mar?a Figueres said: “These findings paint a bleak picture indeed of how ordinary people see the future and their ability to affect events. Although there are signs of a changing environment both economically and in terms of security, it seems this is still extremely fragile and the people at large have yet to be persuaded that things are changing. It is clear that both security and prosperity are core concerns for people across the world. What is also interesting is that without security those questioned feel that prosperity is impossible to attain and that the two – prosperity and security – must go hand in hand to make the world a safer and more peaceful place.”

Interviewing was conducted in late November and December 2003 – mostly prior to the capture of Saddam Hussein. A summary of the main findings:

– Results from surveys consistently show that individuals feel they have little or no personal impact on the economic, political and social factors that affect daily life, expecting national and international actors to deliver the background stability required to look after and provide for their families.

– Uncertainty, lack of confidence and instability in one of these areas has an effect on all the other factors. For example, if people feel international and national security are poor, they will probably also feel gloomy about their economic circumstances, even if these are not objectively or directly linked.

– People feel that their country’s economic situation is worse now than ten years ago, although some think they personally have fared slightly better. Many countries, particularly those in the industrialized world, have ageing populations and there are genuine anxieties on all continents about people’s security in old age and retirement, particularly in South America, Japan and South Korea.

– In questions about the key factors of prosperity and security in the United States, people there are more upbeat in their ratings for both the current situation and the future than is the “average” global citizen. Almost half of those interviewed in the US (45%) say they and their family are more prosperous now than they were ten years ago. Turning to security issues, four out of ten Americans (40%) rated their national security as “good”, although the same assessment was only given to international security by one in four (24%).

– Recent poor economic performance in some regions, such as in South America or the emergent economies of Eastern and Central Europe and more specifically in certain countries such as Japan, has a disproportionately negative effect on most ratings whether they are allied to economic factors or not.

– The converse is also true, so countries where positive changes are perceived to have taken place recently on one front may assess other variables more positively. Consequently, Afghanistan is optimistic about most of the survey topics – those concerning both aspects of security and also economic assessments – a finding also borne out in Kosovo and Bosnia and Herzegovina. Similarly, both Kenya, which last year changed both its president and government after 24 years, and Georgia, where Shevardnadze was recently replaced after a disappointing presidency, have a generally positive outlook concerning most elements of economic performance and security.

– Elsewhere, gloom shrouds many countries on all continents. Twice as many people globally rate international security as “poor” (41%) than the proportion who consider it “good” (20%).

– National security is also rated “poor” on all continents and few countries expect this situation to improve in the foreseeable future.

– In Germany, reunification seems to have led to a lack of confidence in the economy with gloomy ratings of the current economic status, considered less prosperous than ten years ago by three-quarters of respondents (77%), and a lack of confidence about any positive improvement in the future – almost seven out of ten (69%) think the next generation will be less prosperous. In Switzerland, once seen as an economic haven, two-thirds (65%) think they are less prosperous now than they were ten years ago and only slightly fewer (61%) think it will be even worse for the next generation.

– Elsewhere in Europe, many countries are also pessimistic about the economic conditions, but generally those in non-euro countries such as Denmark, Norway, England and Iceland are more positive in their assessments of the current situation and in their predictions for the future.

– Other regions have more positive moods – Africa is generally more upbeat than average, although security in old age and retirement in a continent ravaged by AIDS is a difficult concept for many.

– People in Japan are depressed about both economic and security factors, but respondents in other countries in the region are less so – Australia, New Zealand, Malaysia, Indonesia and Vietnam all give higher than average ratings to some of the factors examined in the survey.

– Many in all countries rate environmental security as poor and this is particularly true in Ukraine, the site of the Chernobyl accident, where seven out of ten (72%) rate environmental security as poor. This finding is echoed by more than six out of ten of their Russian neighbours (61%). In both countries more than half also expect the situation will be worse in ten years’ time.

Gallup International Secretary-General Meril James said: “This survey is unique, and one that we are particularly proud of. Capturing the views of more than 43,000 people worldwide – which represents the views of more than one billion people – is quite an achievement. True, it paints a gloomy picture, but it also shows the way forward; what issues the world population thinks need attention and what they expect of their leaders.”

For the full report and an executive survey, please log on to http://www.weforum.org/securitysurvey

E-mail: gallup.international@btinternet.com

Websites: http://www.gallup-international.com and http://www.voice-of-the-people.net

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2. WHY GLOBAL CORPORATE CITIZENSHIP MATTERS FOR SHAREHOLDERS: A SURVEY OF LEADING CEOs

Geneva, 8 January 2004 – Over 70% of CEOs surveyed by the World Economic Forum believe that mainstream investors will have an increased interest in corporate citizenship issues, according to a report released today.

Developed by the WEF’s Global Corporate Citizenship Initiative (GCCI) in partnership with the International Business Leaders Forum (IBLF), the report explores how chief executive officers (CEOs), chief financial officers (CFOs) and investor relations officers (IROs) communicate the strategic importance of the social and environmental aspects of their firm’s performance to investors. It examines how these companies are articulating both the business case and the “leadership” or “values” case for global corporate citizenship, highlighting some of the challenges of communicating often intangible but nevertheless quite relevant issues to owners.

WEF Managing Director Richard Samans says, “We see increased interest in the social and environmental aspects of corporate performance by pension funds, insurance companies and other shareholders. Investment analysts, trustees and portfolio managers appear to be taking these issues more seriously than they were just a few years ago. 2004 might just be the year corporate citizenship comes of age in the mainstream investment community.”

The report, “Values and Value: Communicating the Strategic Importance of Corporate Citizenship to Investors,” is based on CEO, CFO and IROs’ responses to a written survey and set of personal interviews, conducted primarily with executives in signatory companies of the WEF’s Global Corporate Citizenship Initiative. Although this initiative represents a small and self-selected group of companies, they offer perspectives from 14 different industry sectors with headquarters in as many different countries. Some of the key messages are reinforced by the findings of research conducted by SAM Sustainable Asset Management in 2003, covering over 1,000 companies, and the findings of several global, European and American surveys of institutional investors – each covering over 400 investors – which are listed in the footnotes.

Marilyn Carlson Nelson, Chair and Chief Executive Officer of Carlson Companies, USA, and a Co-Chair of the WEF’s Annual Meeting 2004, comments: “This Global Corporate Citizenship Initiative report provides interesting and encouraging insight into how the corporate community communicates the strategic importance of their corporate social responsibility (CSR) activities to the investment community, and the growing interest by investors in factoring a corporation’s CSR activities into investment decisions. This phenomenon has taken hold particularly in Europe and will, I believe, become of increasing importance to mainstream investors in the US and the rest of the world.”

Based on this analysis and the experiences recounted directly by many of the CEOs and CFOs questioned, the report makes note of a number of effective practices and offers a set of recommendations for those seeking to communicate the importance of corporate citizenship to shareholders and investors. The report comes as the WEF prepares for its Annual Meeting 2004 in Davos. Under the theme “Partnering for Prosperity and Security” the report will be used to inform and illuminate sessions on corporate citizenship at the Meeting.

Key findings from this in-depth survey of CEOs include:

1. Signs of change in the financial sector: In a limited, but interesting number of cases, during 2003 some of the world’s major institutional investors started to flex their muscles on issues related not only to improved corporate governance and ethics, but also broader issues of corporate citizenship. At the same time, the Socially Responsible Investment (SRI) movement, while still representing a tiny percentage of global funds under management, continues to grow in terms of size, sophistication, geographic scope and influence.

2. Obstacles to overcome: The survey identified five interrelated types of obstacles to mainstream investors showing more interest in how corporations address the risks and opportunities related to corporate citizenship: – Problems of definition of corporate citizenship / corporate social responsibility – Problems of making and measuring the business case – Problems with quality and quantity of information – Problems of skills and competence in managing and measuring CSR – Problems of time horizon for measured impact on business performance

3. Four golden rules: The CEOs, CFOs and IROs identified four “rules” for communicating the importance of corporate citizenship to investors:

1) Frame corporate purpose, principles and values with clarity – Even when speaking to investors, corporate citizenship needs to be about more than simply “making a business case” that links it directly to bottom line benefits.. It should also be a statement about what the company stands for and would stand by, even if this sometimes incurs costs or results in a lost business opportunity.

2) Emphasize the social contribution of core business – At the same time, business leaders need to be less defensive about their core role in society. They need to be able to demonstrate the societal contribution made by their economic multipliers such as employment and income generation, technology transfer, training, supply chain development, innovation and wealth creation.

3) Present a credible and measurable business case for corporate citizenship – Each board of directors and executive team needs to be able to define, explain and ultimately measure the ethical, social and environmental risks and opportunities faced by its company and industry sector including both intangibles and their impact on reputation as well as the measurable.

4) Ensure consistency and coherence of message – A major cause of distrust, among investors as well as other stakeholders, is inconsistent messages and incoherent policies from business. Corporate leaders need to apply a similar rigour and analysis to their social and environmental reports as they do to their annual report. They need to ensure that their social and environmental commitments extend to all aspects of the company, from the boardroom to the mailroom, from public policy positions to pension fund options, and from headquarter functions to far-flung operations.

“Focusing on the rapidly growing interest of investors in corporate citizenship as a feature of sound risk management and a benchmark to quality and customer acceptance, this latest report from WEF and IBLF collaboration demonstrates even further that CSR has migrated from the philanthropy arena to mainstream and strategic corporate practice for the most successful companies in the financial marketplace,” said Robert Davies, CEO of the International Business Leaders Forum.

Companies contributing to the report on Corporate Citizenship included: ABB, Abbott, Accenture, Anglo American Plc, Arthur D. Little, Artoc, Ayala Corporation, Carlson Companies Inc., The Coca-Cola Company, Codelco, Deloitte Touche Tohmatsu, Deutsche Bank, DHL, Diageo plc, Infosys Technologies, ING Group, Lafarge, Merck & Co. Inc., Nestl? SA, Pakistan State Oil Company, Phillips-Van Heusen Corporation, Rio Tinto Plc, RWE Thames Water, Siemens AG, Statoil ASA, Timberland.

Between them, the companies do business in 14 sectors: banking; clothing and footwear; conglomerates; construction; electronics; food and beverage; insurance; logistics and transportation; mining and metals; oil and gas; pharmaceuticals; professional services; travel and tourism; utilities. The companies are headquartered in 14 countries: Belgium; Chile; Egypt; France; Germany; India; the Netherlands; Norway; Pakistan; the Philippines; South Africa; Switzerland; UK; USA.

Launched in July 2001, the WEF’s Global Corporate Citizenship Initiative (GCCI) is working to increase business engagement in corporate citizenship. Believing that companies can gain from sharing experience and best practice in corporate citizenship as well as exploring common areas of interest, the GCCI is collaborating with companies to advance the agenda of corporate citizenship on a global as well as regional level. Using the Forum’s Annual, Regional and Governors’ Meetings as platforms, initiative members exert thought leadership and expand the market for enlightened corporate citizenship in cooperation with experts and other organizations around the globe that specialize in corporate responsibility. Today, more than 40 companies representing a variety of regions and sectors are engaged in the initiative.

To view the report, please visit http://www.weforum.org/corporatecitizenship or http://www.iblf.org

For further information on the Global Corporate Citizenship Initiative, the report and the initiative’s CEO Statement, please contact Caroline Bergrem, Project Manager GCCI, at caroline.bergrem@weforum.org

The WEF is an independent international organization committed to “improving the state of the world”. The Forum provides a collaborative framework for the world’s leaders to address global issues, engaging particularly its corporate members in global citizenship. Incorporated as a foundation, and based in Geneva, Switzerland, the non-profit WEF claims to “impartialàand tied to no political, partisan or national interests.” The Forum has NGO consultative status with the Economic and Social Council of the United Nations. (http://www.weforum.org)

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3. HERBAL MEDICINE BOOM WIPING OUT PLANT SPECIES

The multimillion-pound boom in herbal medicine is threatening to wipe out up to a fifth of the plant species on which it depends, wrecking their natural habitats and jeopardising the health of millions of people in developing countries. And yet, according to the NewScientist.com newsletter, 8 January 2004, the herbal medicines industry has been accused of doing nothing about it.

Most people around the globe use herbal medicine for everyday healthcare, with as many as 80 per cent relying on it in some countries. It is also becoming very popular due to the growth of spas and herbal treatment centres in the travel & tourism industry. But two-thirds of the 50,000 medicinal plants in use are still harvested from the wild, and research to be published later in 2004 suggests that between 4000 and 10,000 of them may now be endangered.

A study by Alan Hamilton, a plant specialist from the global environment network WWF, will point out that the market for herbal remedies in North America and Europe has been expanding by about 10 per cent a year for the last decade and the world market is now thought to be worth at least ú11 billion. Many of the plants are harvested by poor communities in India and China whose livelihoods will suffer if the plants die out.

“It’s an extremely serious problem,” Hamilton told New Scientist. He is a member of the World Conservation Union’s Medicinal Plants Specialist Group, and has drawn his estimates of the number of species at risk from expert analyses of the IUCN’s Red List of threatened plants. His study is due to be published in Biodiversity and Conservation.

Hamilton has also helped compile a report, Herbal Harvests with a Future, which is due to be unveiled next week by the conservation group Plantlife International. “With demand and commercialisation growing fast, the future of the wild plants which have helped most of humanity for centuries is now more uncertain than it has ever been,” says the group’s Martin Harper.

One species highlighted by Plantlife as being under threat is tetu lakha (Nothatodytes foetida), a small tree found in rainforests in south India and Sri Lanka and used for anti-cancer drugs in Europe. Others include a saw-wort known as costus or kusta (Saussurea lappa) from India whose root is used for chronic skin disorders, and the tendrilled fritillary (Fritillaria cirrhosa) from Sichuan, China, used to treat respiratory infections.

Although the crisis has been looming for years, Plantlife accuses the herbal medicine industry of failing to ensure the sustainability of its supplies. It has established that 11 of 16 herbal companies in the UK, for instance, harvest all the plants they sell from the wild, and the remaining five grow only a small proportion.

A leading UK natural skin care company, The Body Shop International, accepts that it does not grow its own medicinal plants, but insists that it is environmentally aware. “The protection of flora and fauna is an integral part of The Body Shop approach to products. We do not source materials derived from endangered and threatened species,” says a company spokeswoman in London.

But Plantlife says awareness of the environmental problems among companies in general is limited and sometimes vague. “Given the scale of the threat, this is alarming,” Harper warns. “It is time for the industry to join forces with environmental organisations to ensure that herbal harvests have a sustainable future.”

Another leading international expert on medicinal plants, Gerard Bodeker from Green College, Oxford, thinks that the assessments of the crisis by Hamilton and Plantlife are conservative. Most of the processes involved in supplying the growing market for herbal remedies are “the result of unsustainable and often destructive practices driven by poverty”, he says.

The industry is characterised by changing health fads which keep favouring different plants, so there is little incentive to sustainably produce particular species, he argues. “They are eating their own nest. They are not replacing what they take.”

The market for African cherry (Prunus africana), the bark of which is popular in Europe as a treatment for prostate enlargement, has collapsed because too many trees have been destroyed. In the past the trees, which grow in Africa’s mountain regions, survived because traditionally less than half of their bark was harvested.

But according to a recent study by Kristine Stewart, from consultants Keith and Schnars in Florida, growing commercial pressures have led to whole forests being stripped or felled. Exports of dried bark halved between 1997 and 2000 and the main exporter, Plantecam, had to close its extraction factory in Cameroon (Journal of Ethnopharmacology, vol 89, p 3).

In its report, Plantlife urges the industry to invest in cultivation. It also proposes the introduction of a kite mark to identify products that have been sustainably harvested. “There is a complete lack of awareness and lack of education amongst consumers,” Bodeker says. Although those that use herbal medicines might be expected to be more environmentally aware than most, that does not seem to be the case. “They don’t make the links,” he adds.

The UK’s largest association of herbal practitioners, the National Institute of Medical Herbalists, is very concerned. “We all need to work together to address this issue and to put pressure on suppliers,” the institute’s Trudy Norris says.

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