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DEVELOPMENT: 'MDG Scan' to Benchmark Private Contribution
By Mattias Creffier
BRUSSELS, Feb 27, 2007 (IPS) - Does the presence of Heineken beer in Sierra
Leone contribute to reduction of child mortality? And to what extent does
the chemicals company Akzo Nobel contribute to prevent environmental
damage?
The Dutch have set up an 'MDG Scan' to keep the score on what
multinational companies do towards realisation of the Millennium
Development Goals (MDGs).
In September 2000, the United Nations member countries made a commitment
to reaching eight MDGs by 2015, such as halving the proportion of people
suffering extreme poverty and hunger, achieving universal primary
education, and promoting gender equality and the empowerment of women.
The Dutch Commission on Sustainable Research (NCDO) has now financed the
MDG Scan as a tool to raise awareness of the MDGs in the private sector.
The scan allows for detailed comparisons between companies within the same
sector and evaluation of the progress of a company over time.
"The quantitative approach will make the discussion on private sector
contribution to the MDGs less speculative and anecdotal," the NCDO states.
It wants to benchmark sufficient companies to be able to launch an index
and a 'Millennium Development Fund' with stocks of companies with the best
MDG performance.
The MDG Scan, financed by the NCDO, was developed by Dutch Sustainability
Research (DSR), an independent research organisation that advises
institutional clients on socially responsible investments. It split the
eight MDGs, which originally apply to governments, into 77 measurable and
comparable indicators relevant to multinational companies with significant
activity in middle or low income countries.
The score for the first MDG on halving the number of people living in
extreme poverty by 2015, depends on stimulating community development by
measures such as promoting local entrepreneurship and providing essential
products and services, provision of employment and salaries, stimulating
local agricultural production, and fighting malnutrition.
The second MDG on universal primary education depends on company
guidelines and programmes, its efforts to combat child labour, and
promoting private education.
The scores for each indicator are weighted and aggregated to a score
between 0 and 100 for each MDG. At this stage, the scan does not add up
the scores for each of the eight MDGs to a final score on all MDGs. "It is
questionable if high performance on one of the MDGs should compensate for
a relatively low performance on another," says DSR director Ronald
Lubberts.
Moreover, each industry can contribute to the MDGs in a different way. "A
pharmaceutical company can diminish child mortality, stimulate maternal
health and can halt the spread of HIV and AIDS solely by the nature of its
products and services," Lubberts said. "A mining company cannot, but it
can contribute to local community development in remote areas by improving
local medical care and education opportunities."
Six multinational companies have so far passed the MDG Scan: ABN Amro
(banking), Heineken (beer brewer), Philips (electronics), Akzo Nobel
(chemicals), BHP Billiton (mining) and TNT (logistics). The results
indicate that all six companies contribute positively to each one of the
eight Millennium goals.
The MDG scan takes into account positive as well as negative contributions
to the MDGs. But judged by the number of indicators, the MDG Scan
currently stresses indicators that measure positive contributions.
Generally speaking, companies get more chances to win than to lose points.
However, the indicators that measure negative contributions are weighted
substantially in order to outweigh positive indicators. Companies receive
scores for negative contributions if evidence is found that the company is
involved in a controversy related to the MDGs. BHP Billiton for instance
had points deducted because of its involvement in controversies related to
its impact on the environment.
"The negative indicator in this model has been kept simple," Lubberts told
IPS. "This version is meant to gain experience and needs some
fine-tuning."
Lubberts says more companies need to be assessed with the MDG Scan before
the results of a benchmark can be properly interpreted. Only when several
beer brewers have gone through the evaluation process, will it become
clear if Heineken's score of 44 on MDG3 (gender) should be qualified as
"average" or "good".
"The MDG Scan rightly focuses on the positive impact companies can have,"
says Johan Verburg, expert in sustainable entrepreneurship with the Dutch
Oxfam-Novib. "This probably will never be a tool to uncover the dark side
of private companies."
According to Oxfam-Novib too little attention is paid to the role
international companies play in tax matters and corruption.
"First and foremost, MDGs are structural and long-term goals for
governments, who need to levy taxes to finance these efforts. Companies
are constantly looking for ways to pay as little tax as possible.
Sometimes they optimise profits by shifting them from a local branch to
the seat of the mother company. In this way, locally produced extra value
gets lost."
The United Nations Development and the Global Compact, the UN's voluntary
corporate responsibility initiative, have already shown interest in the
MDG Scan.
The MDG Scan will be made available online later this year as a
self-assessment tool in a slightly modified version. "Companies and
stakeholders have asked us to attribute more weight to performance
indicators that measure real impact results," Lubberts said. "That is
important to them from a communications perspective".
(END)
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