We consider it especially important to meet and exchange views with sustainability experts from different fields. Since 2005, we have been inviting experts from various parts of the world to collaborate with Henkel in further developing our strategy. We choose these experts on the basis of their knowledge of the challenges their countries face and their experience in corporate sustainability management. Overall, the expert dialogue helps us to adjust our alignment to sustainable development and social responsibility to reflect external expectations in the different regions, and to find the right answers – especially when it comes to developing appropriate solutions at the local level.
For the 2004 and 2005 Sustainability Reports, we asked experts from Brazil, China, Germany, Hungary, India, Italy, Mexico, Russia, and the USA to describe the challenges and priorities they see in their countries and regions. In 2007, we continued the regional dialogue with expert Dr. Allen White of the Tellus Institute in Boston, Massachusetts, USA. At our sustainability press conference in Düsseldorf in March 2007, Dr. White and Brad Caspar, President and Chief Executive Officer of our subsidiary The Dial Corporation, discussed current developments in the USA in the field of sustainability. In 2008, we invited John Elkington, founder and Chief Entrepreneur of the SustainAbility Agency, London, UK, to a workshop at our headquarters in Düsseldorf. In the context of his presentation, John Elkington described to Henkel sustainability experts the current challenges associated with the topic of sustainability. The panel also discussed risks and opportunities associated with intensified marketing communication of sustainability activities on brand and product level. In 2009, top managers from Henkel in Vienna, Austria, participated in a number of talks with scientists and economic experts. These discussions centered on the topic of establishing trust and security in economically difficult times. In a workshop held in December 2010, the company's new strategic alignment for sustainability was discussed with an international circle of experts.
Collectively, the experts' contributions present a balanced picture of the key issues in emerging economies and industrialized countries. It is clear that, while many of the challenges of sustainable development are similar everywhere, priorities and perspectives differ widely from region to region. Emerging economies, in particular, expect multinationals to contribute to the development of their countries. In industrialized countries, in contrast, maintaining competitiveness is increasingly becoming a key challenge. The table presents the results of our dialogue with the experts in condensed form and gives concrete examples of the varied expectations.
Based on the results of the dialogue, we have developed our Sustainability Reporting still further. The new reporting structure directly reflects the key areas identified in the dialogue and indicates the company's responses to the different regional and global challenges. This approach is intended to emphasize how seriously we take our corporate responsibilities and contribute to sustainable development.
Key Areas | Expectations in Industrialized Countries | Expectations in Emerging Economies |
Economic Development |
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Values and Management |
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Products and Marketing |
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Resource Efficiency and Climate Protection |
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Employees and Jobs |
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Social Commitment |
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The above table presents a summary of the results of the expert dialogue and offers specific examples of the regionally differing expectations.
Italian consumers are paying more and more attention to environmental issues and to product safety. But only a minority is willing to pay more for environmentally friendly products at this point. However, Henkel’s citizenship responsibilities provide the potential to differentiate itself and enhance its reputation. In Italy these entail in particular:
These responsibilities have to be translated into local activities. From an Italian perspective two factors appear to be particularly important:
All participants in the economy have to integrate sustainable development into their strategy as well as into their behavior in order to achieve this goal.
Since environmental problems cannot be solved without keeping economic progress in mind, industry’s resource and energy requirements need to be harmonized with the interests of environmental protection.
In recent years the human aspects of sustainable development have received increasing attention: the way and quality of life, consciousness, preservation of values, traditions, and health. Furthermore, maintenance of employment, as well as the respect for human rights and the democratic institutions are also important for sustainable development.
For Hungary the creation of jobs and the development of environmentally friendly industrial activity in the less developed regions are of particular relevance.
Without radical and definitive change of the present practices, economic development cannot be maintained for much longer. However, we can achieve the positive changes only over a longer transition period, and we have to accept a stepwise incremental progress, as long as the direction is right.
The process of transition into the sustainable stage of economy will certainly take some decades in Hungary – and will be directed and organized by the students of today. Therefore, all those who want to positively contribute to this process should support education at the school and university level, and research into environmentally friendly products and lifestyles for future generations.
After all, it is the thinking and behavior of people, as well as the development of their knowledge, that can make the most important difference in creating a sustainable society.
PDF-Download: Detailed version of the expert's statement.pdf
During the last two decades, China has experienced rapid economic growth and dramatic industrialization and urbanization. This has involved the massive use of limited resources and resulted in serious environmental damage. Due to three major challenges – the large population, shortage of resources and environmental pollution – pursuing economically, socially and environmentally sustainable development is the only solution.
Henkel’s direct investments in China strengthen the local capital market, bring advanced production technology, and provide high quality products, as well as creating employment opportunities at its facilities.
As a multinational corporation operating in China, Henkel could contribute to local sustainable development while fulfilling its corporate social responsibilities by:
Mexico today is undergoing an in-depth transition: Its economy is rapidly opening to the world and receiving large amounts of foreign direct investments. Mexico has made clear progress in environmental matters, though it is still necessary to fine tune the regulatory framework. Furthermore, Central and Northern Mexico urgently need to use their scarce water resources more rationally. However, several very serious social problems threaten Mexico: uncertainty in terms of public safety, unemployment, and the lack of a political consensus on the nation’s most important political reforms.
For its part, Henkel can make a very significant contribution to resolving these challenges, meeting Mexico’s diverse social and economic needs through its activities:
Trust takes years to build, but only a mistake or two to lose. This is especially true for companies with strong lines of personal and home care products, a business where competition is intense, alternatives are plentiful, and reputation is central to customer loyalty.
In the coming decade, such companies will be affected by a number of key issues that are prominent in the U.S. business context:
The United Nations Millennium Development Goals (MDG): Companies should be asked if what they produce – and how they produce – contributes to meeting these goals in both the domestic and global context.
Successful companies can exist only in successful and sustainable societies. Henkel´s products have the potential to transform local cultures by impacting life styles, aspirations and sustainability practices. Future success will depend on Henkel´s ability to innovate on products/services that make people’s lives easier, better and more beautiful, in a culturally sensitive and economically relevant fashion.
This translates into a number of strategic challenges, which are also Henkel´s biggest challenges:
How to be a good citizen and an active participant in society: The main challenge for a multinational corporation operating abroad may well be to responsibly exercise its rights and fulfill its duties. As a good citizen, a corporation is expected to be sustainable, competitive and profitable, and to promote through its activities the social, economic and environmental advancement of society where it operates.
In exercising its corporate rights, Henkel should assert its leadership by overcoming difficulties due to institutional conditions, as related to the stage of development of the specific country, in a lawful and ethical manner. In Brazil, this would entail focusing on:
In fulfilling its duties towards society, Henkel should develop a set of actions that contribute to the common good, while enhancing its corporate profile. For Brazil this could mean addressing.
Recognizing and utilizing social challenges as a motor for sustainable product innovations. Companies like Henkel will increasingly be judged by their European stakeholders in terms of their contribution to the achievement of global sustainability goals. We therefore see the following priorities:
Accepting national challenges as a way to gaining public confidence. Paving its difficult way to democracy and market economy, Russia is meeting certain social and environmental challenges that harbor threats to the whole of Russian society. Foreign companies operating in Russia therefore face a number of key sustainability issues:
Last updated: March 8, 2012