IILM Institute for Higher Education REPORT ON Sony Corporate Sustainability Report

POST GRADUATE PROGRAMME SUBMITTED BY Shweta Singh PG20102141 Batch- 10-12 Sec- G Subject: - (ES) SUBITTED TO Asst. Prof. Rakhi Singh

What is Sustainability?
Sustainability in business is about ensuring long-term business success while contributing toward economic and social development, a healthy environment and a stable society. 1) As part of their core principles, companies that are committed to sustainable business adopt high standards in areas that can include environmental protection, gender equity, working conditions, employee benefits, capacity development, community development and a set of transparent relationships between a companys management, its board, its shareholders and other stakeholders that fall under the term corporate governance. Implementation of sustainable business practices in Cambodia has been limited to date. According to recent World Bank research. 2) Barriers to implementing sustainable business practices include 1) Lack of awareness of the concept. 2) Production inefficiencies that are the result of implementing multiple codes of conduct (CoC) at the same time, 3) Lack of financial and technical resources to implement such practices (particularly true for SMEs), 4) Confusion that arises due to differences between the national labor code and CoCs, and 5) National regulations that impede CoC implementation

What are the benefits of Sustainability?

Companies that implement higher levels of environmental responsibility, employment and labor standards, community engagement and corporate governance help to create stronger and more vigorous economies, and sustainable long term business prospects and employment. Benefits of sustainability are apparent across all business sectors and scales of activity (from SMEs to large companies), and include: Better performance of the company Enhanced brand value, reputation and competitiveness Better access to finance and lower cost of capital Better labor relation and increased productivity Cost savings through more efficient resource use Revenue growth and increased market access Better risk management and enhanced license to operate Promoting sustainable export earnings and increasing the countrys competitive advantage

Sustainable Development in todays world:

The record on moving towards sustainability so far appears to have been quite poor and the vast majority of humanity still lack access to basics such as clean water, adequate sanitation, electricity and so on. And this is in the backdrop of an increasing amount of wealth in fewer hands. Given that previous international meetings on sustainable development seem to have had little effect on the world's majority, the Johannesburg Summit was considered by some to appear quite ambitious to say the least and many were skeptical as to whether anything of importance would even come of this summit. A broader agenda than the Rio Summit in 1992, the summit in Johannesburg also included a huge number of delegates representing nations, business interests and nonprofit environmental and development/citizen/social justice groups. Various key issues were addressed, including:

Poverty Water quality and availability Cleaner energy Health Good governance Technology Production and Consumption Oceans and Fisheries Tourism

These are just a sample and were all discussed in varying degrees. Other related issues such as globalization, women's rights were also discussed. Some understandably criticized the summit as over-ambitious to try and talk about so many issues. Yet, true or not, it shows that there is at least an apparent growing recognition that sustainable development (admittedly a somewhat overused word) means a myriad of inter-related issues, not something solely in the realms of

environmentalism, but also deep into economics (which governs how resources are used), and a variety of sociopolitical issues.

Outcome of the Summit

There were a number of outcomes in the summit's 'Plan of Action', on key areas (though many marred with controversy, or praise, depending who you heard it from!). Some of them include the following: Water and Sanitation:

Governments agreed to halve the number of people lacking clean drinking water and basic sanitation by 2015. This agreement was perhaps the most positive outcome of the Summit.

Energy: Governments agreed in principle to take action to help the poor gain access to affordable energy Yet, there were no specific targets on things like boosting renewable and "green" sources such as solar or wind power, just wording to "substantially increase" the global share of renewable energy.

Various Oil-Producing and Exporting Countries (OPEC) nations and the United States opposed targets while Europe and various environmental and development organizations wanted them. Definition of renewables also caused a stir because some wanted nuclear and hydro-electric power to be included in this definition while others did not. Environmental organizations in particular did not like the outcome.

Global Warming:

The agreement referred to the need to ratify the Kyoto Protocol, though various organizations and nations were hoping for more concrete plans. Russia and some other nations announced they would ratify the Kyoto Protocol. This was seen as positive, because earlier some had implied that they might not. Had they not, with the U.S. already rejecting the protocol, Kyoto might have headed for collapse.

Biodiversity and Natural Resources: Nations agreed that by 2010, the rate at which extinctions of rare plants and animals are occurring should be cut. There was commitment to restore fisheries to their maximum sustainable yields by 2015; To establish a representative network of marine protected areas by 2012; To improve developing countries' access to environmentally-sound alternatives to ozone depleting chemicals by 2010. While these were on the positive side, World Wildlife Fund, one of the world's leading conservation organizations felt the Summit didn't do enough. Trade/Global Economic Related Issues: This was a thorny issue for some because it was argued that the WSSD was seen mainly as a place to iron out World Trade Organization issues, and not really tackle sustainability. Some WTO wordage changed specified (or implied) that environment shouldn't be secondary to trade, which is a positive development. There was no new commitment or timetable to the E.U. and U.S. farm subsidies or the crisis in commodity prices.

Nothing changed in terms of aid, or debt relief. Oxfam, for example, described this as a wasted opportunity, only offering crumbs for the poor. AllAfrica.com reports that "Several African delegates are known to be angry at the way that the World Trade Organization's Doha agreements have dominated much of the discussion - and particularly at attempts to give the WTO resolutions primacy over the WSSD's own agreed positions. Africans also blame rich countries for the failure to make progress on the ending of agricultural subsidies to their own producers, seen as restricting developing countries' access to markets." Attempts to link women's rights and health services to human rights was opposed by some nations and religious groups. There was agreement that recognition that access to healthcare be consistent with human rights, and "cultural and religious values".

Health:

Various groups criticized the U.S., the Vatican and some developing countries that tried to oppose this stronger linkage due to issues around women's rights, abortion issues, etc. Countries agreed to phase out, by 2020, the use and production of chemicals that harm human health and the environment.

Corporate Accountability:

There was recognition that corporate accountability must be increased. Environment News Service commented that the U.S. attempted to "circumvent efforts to develop new, binding international rules on environmentally irresponsible corporate behavior" and wanted it to apply only to existing international agreements. However, country delegates in the end rejected this and "conference delegates prevented the United States from evading a commitment to corporate accountability for environmental crimes." The World Development Movement (WDM) were disappointed on the overall outcome of the summit but on corporate accountability commented that, "The only glimmer of hope is that for the first time proper regulation of multinational companies has been placed on the agenda. The NGOs and developing countries that have achieved this in the face of fierce opposition from rich governments deserve massive credit. But it will be a long struggle to get a binding, enforceable agreement."

There were various other issues that had been discussed as well. In a lot of cases, there were only agreements to do something, without any specific targets or action plans. It is easy for any nation, or organization or business to say they support something, but as various organizations have argued, this summit became an arena for nations and businesses to say they will do things, while often avoiding actual obligations. In addition, because the sanitation agreement was the only really concrete agreement, development and citizen groups saw the summit as a failure. Various organizations, some leaders and delegates from developing countries were critical on numerous aspects of the world system, especially on the agendas and interests of the richer nations. The World Development Movement, for example, felt the summit was a failure for the world's majority, and that "much of the failure can

be attributed to the two major world powers - the US for active obstruction and the EU for pursuing the politics of self-interest." The following from AllAfrica.com raises the issue that on the whole all the effort spent on reinforcing past commitments meant little substance in implementation issues or efforts towards new commitments:

Sony's Environmental Vision

Sony recognizes the importance of preserving the natural environment that sustains life on earth for future generations and helps humanity to attain the dream of a healthy and happy life. Sony is committed to achieving this goal by seeking to combine ongoing innovation in environmental technology with environmentally sound business practices. Sony DADC Group's Environmental Policy We are committed to minimizing the impact of our operation on the environment and strive to achieve a zero environmental footprint as our ultimate goal. We will also put our efforts into preserving the environment including the observance of all relevant compliance and the continuous improvement in our environmental performance. We keep educating all employees about their impact on the environment and review with them the policy, targets and our environmental performance on a regular basis.

About Sony CSR

Sony first issued an environmental report in 1994. In 2003, Sony enhanced the information related to corporate social responsibility (CSR) and changed the name of the report to CSR report. Sony has released the CSR report on its website since 2008, disclosing its key CSR activities, comprehensive information related to its business operations and important topics of interest to stakeholders in full detail. A PDF file of the websites content will be also available soon. Sony also issues an abridged version of the report in printed form, CSR Report Executive Summary, which highlights Sonys key CSR activities. You can request the printed version or download the PDF file of the report from Sonys website.

Sony's basic philosophy in regards to corporate social responsibility (CSR) is set forth in the Sony Group Code of Conduct and is summarized as follows. It is the core corporate responsibility of Sony Group to the society to pursue its corporate value enhancement through innovation and sound business practice. Sony Group recognizes that its business activities have direct and indirect impact on the societies in which it operates, and therefore sound business practice requires that business decisions give due consideration to the interests of its stakeholders including shareholders, customers, employees, suppliers, business partners, local communities and other organizations. The Sony Group will endeavor to conduct its business accordingly. In line with this basic view, Sony conducts CSR activities with a focus on sustainability in two areas. First, Sony endeavors to ensure the sustainability of its business operations. To this end, Sony has established effective systems for corporate governance and compliance to ensure sound business practices. At the same time, it promotes efforts to ensure the quality and environmental soundness of its products and services over the entire supply chain and value chain including its operations. Sony also believes in the importance of fostering diverse and lively workplaces and employees with a high level of social awareness. Recognizing fully that its business activities affect both society and the environment in direct and indirect ways, Sony takes steps to minimize that impact to the best of its ability. Second, Sony strives to contribute to the realization of a sustainable society. With the aim of addressing the issues facing global society today and realizing a sustainable global environment-which includes ensuring biodiversity-Sony aims to create value by developing products and services and advancing innovation, as well as to promote initiatives that draw on the capabilities of employees. Here, it is important to maintain a global perspective and to work in partnership with Sony's various stakeholders.

Sony Group Support for Recovery Efforts in the Wake of the Great East Japan Earthquake Working with Employees Sony offers its deepest sympathy to all who were affected by the Great East Japan Earthquake, which struck on March 11, 2011. While certainly affected by the disaster, Sony was fortunate to have been able to continue its operations, enabling Sony to support Japan's relief efforts immediately following the disaster and ongoing medium- and long- term recovery initiatives.

Risk management
Each Sony Group business unit, subsidiary or affiliated company, and corporate division is expected to review and assess business risks on a regular basis, and to detect, communicate, evaluate and respond to risk in their particular business areas. In addition, Sony Corporation's Corporate Executive Officers have the authority and responsibility to establish and maintain systems for identifying and controlling risks with the potential to cause losses or reputational damage to the Sony Group in the areas for which they are responsible. The Corporate Executive Officer in charge of

Compliance is tasked with promoting and managing the establishment and maintenance of such risk management systems through the coordinated activities of the Group Risk, Compliance, Internal Audit and other relevant groups. As part of this effort, a network of Regional Risk Officers has been established to identify and work with designated "risk" contacts at each business unit, subsidiary or affiliated company, guide and confirm appropriate Enterprise Risk Management initiatives at the local and operational level, and share best practices. Encouraging Awareness Recognizing the importance of raising employee consciousness with regard to the effective promotion of CSR, Sony offers a variety of educational programs based on a three-level approach, whereby employees are encouraged first to learn about CSR, second to participate in CSR activities and third to incorporate CSR into their day-todayswork. Sony provides employees with essential training to facilitate the sharing of information, disseminates pertinent news and stages the CSR Forum, featuring lectures by invited experts, film showings and other activities designed to enhance awareness of each individual's obligations to society.

CSR in procurement

Procurement , activities education and training:

Sony is committed to undertaking procurement activities based on fair business practices, transparency and equal opportunity. Sony's procurement agents are not permitted to form personal ties or relationships based on potential personal gain with any Supplier.

In Japan, procurement division in the electronics business provides e-learning programs designed to ensure a thorough understanding of the company's handbook, "Working Principles for Procurement Personnel." The content of these programs is translated into English and Chinese to help train overseas procurement agents, thereby ensuring the highest ethical standards on a global basis. Training programs employing case studies illustrating acceptable and prohibited behaviors and other approaches are used to enhance the business capabilities of newly appointed procurement agents.

Basic Approach to CSR in the Supply Chain

In addition to the quality of the products it delivers to consumers, Sony also ensures appropriate standards throughout its production processes from such standpoints as the environment, human rights and labor conditions. As a part of policy for product quality, Sony views appropriates standards in environment, human rights and labor condition this as a vital issue in relation to its CSR activities. In particular, as supply chains have expanded to include developing countries, this interest has broadened to encompass not only the company's own production lines, but also those of the

companies that supply it with parts and materials and the companies to which it subcontracts work.

Participation in the Electronic Industry Citizenship Coalition (EICC)

The EICC formulated a basic code of conduct based on industry best practices and is working to develop the tools and Web-based system, as well as the skills development programs for suppliers, necessary to create a framework for ensuring the code is upheld. As of June 2010, the EICC consisted of 48 participating companies from Europe, the Americas and Asia. Members include manufacturers, OEM companies. In cooperation with the Global e-Sustainability Initiative (GeSI) Supply Chain Working Group, consisting mainly of the European telecoms sector and other electronics industry organizations, the EICC is currently promoting social responsibility across the global supply chain.

Stakeholder Engagement and Partnership For Sony, engaging and working together with various stakeholders is vital for pursuing CSR activities. Sony not only promotes engagement with stakeholders in implementing its CSR activities but also encourages the participation of multiple stakeholder groups in the planning of those activities, thereby contributing to the creation of a global framework.

Launch of the Eco-Patent Commons

On January 15, 2008, Sony joined forces with IBM (USA), Nokia (Finland), Pitney Bowes (USA) and the World Business Council for Sustainable Development (WBCSD) to launch the Eco-Patent Commons. This portfolio of patents for environmental technologies released by founding and participating members is available on a dedicated website hosted by the WBCSD. As of July 2011, 13 companies in a wide range of industries had released more than 100 patents. The patents that make up the portfolio include patents that address environmental issues, as well as patents covering innovative manufacturing and business processes.

Enhancing management skill

Given the astonishing pace of change in the operating environment, Sony believes structure is essential to the training of employees, which provides the necessary support for employees with such diverse backgrounds. To this end, Sony is stepping up efforts to enhance the management skills by offering a variety of training programs targeting Management - level employees around the world For all management - level employees, Sony provides mandatory t raining programs that focus on effecting a change in each Individuals percept ion of the responsibilities of management, as well as orientations by in-house instructors on Management styles and positionspecific training. Sony also t rains experienced employees to serve as tutors, not only to provide support for new recruits, but also to engender early awareness of the importance of fostering new talent ,thus Creating a tutor system that is charged with enhancing the skills of future management