Diversity and inclusion

Chandran Nair appeared at the Diversity & Inclusion in Asia Conference on Tuesday 26 June 2007.

Business leaders have been challenged to “move beyond the rhetoric” at Asia’s largest conference on workplace diversity and inclusion by GIFT founder and chief executive Chandran Nair in his role as chairman of the opening session.

The second annual conference, run under the theme “Move Beyond the Rhetoric”, drew more than 200 business delegates and international speakers from fifteen countries, reflecting growing interest in Asia in this area. It ran on June 26 and 27 at the Hong Kong Cyberport.

Mr Nair was moderator of the first plenary session of the conference organised by Community Business, a leading corporate social responsibility organisation in Hong Kong. Its founder and chief executive, Shalini Mahtani, said: “In tight labour markets, particularly in Mainland China and India, diversity and inclusion is a key tool to attract and retain staff.”

Ms Mahtani said there had been a “dramatic and encouraging shift” in companies’ commitment and approach to diversity over the past two years in Asia.

But while Ms Mahtani pointed out that multinational corporations were “seeking to engage local leadership, assign significant funding and have full-time paid staff dedicated to addressing diversity”, the conference theme suggested there was more to do.

In his role as moderator of a plenary entitled, “The Leadership Challenge”, Mr Nair sought to provoke debate amongst a panel consisting of top management from some of the world’s largest companies: Dr Gary Dirks, group vice president and Asia regional president of BP; Karen McFadzen, Asia Pacific vice president of APAC Technical Services, Cisco; JoAnn Heffernan Heisen, corporate vice president and chief global diversity officer of Johnson & Johnson; Paul Masi, country head and chief executive of Merrill Lynch; and Tim Minges, business unit general manager, Asia Pacific, of PepsiCo Asia.

One of several probing questions he posed: “Why is it, do you think, that I am the only Asian national on this panel on diversity?”

The panellists set the tone for the conference, engaging on key issues in the diversity debate: gender, culture, and generational concerns. In particular they discussed issues surrounding “Generation Y” as well as the need to recognise other talent pools, such as people with disabilities.

It was suggested that diversity is still yet to be a business imperative in Asia, that there is “still a preponderance of white faces in management positions in Asia”, especially with multinationals. But the panel disagreed, pointing out that progress is being made with gender and culturally: more companies are creating women’s groups to promote women within their management structure; and businesses are more alert to local cultures.

Nevertheless, there is still much to be achieved in other areas: both the panel and the floor recognised corporations’ challenge in Asia, where the demand for people of managerial level with a global outlook far outstrips the supply. But while these Generation Y people are chased and feted far beyond their value – and at the same time are demanding and increasingly impatient with traditional corporate structures – many other pools of talent seem forgotten. Mr Nair pressed the panel to reflect on the gap between talk and reality with people with disabilities in the workplace.

Not everything involving Generation Y was negative, and the discussion touched on how such qualities as technological savvy and a global outlook might be harnessed to companies’ advantage.

Mr Nair prompted the panel to consider how the English language blocked many Asians from advancing. He found support for his assertion among the panel members, who said they recognised the growing importance of putonghua, and are looking for leaders who are multilingual.

The session discussion involved other issues, among them work-life balance and whether managers understand what this entails, the need to shake stereotypes in the diversity discourse, and whether business leaders truly understand what it means to address diversity in Asia.

Mr Nair’s closing remarks were characteristically challenging. He pushed people to think about the mainstreaming of thought, in particular how differing political positions in larger corporations in particular are taboo, and how this – at best – appeared to be at odds with the philosophy behind diversity.

Mr Nair’s role at the conference is one of many speaking engagements that continue to take him all over the world. He also advises corporations and governments on doing business in Asia and on leadership development, sustainability, and corporate social responsibility.

The craze for the biofuel buck will likely burn itself out before too long. But the destructive frenzy can leave irreparable losses unless businesses see the contradictions in this renewable energy, and pick the opportunities with great care

Renewable energy

Advocates of biofuels assume naively that because biomass has a carbon-neutral life cycle its use as fuel will ease climate change.

Typically, biofuels require more energy to produce than they contain, leaving no net environmental benefit. A growing chorus details grave consequences of unsustainable production.

Without strict and universal codes of control and enforcement, producing and purchasing biofuels will leave critical net losses in existing carbon sinks and eco-systems.

Biofuels will also release CO2 and methane. Nor is there certainty that expanded bio-fuels production will benefit growers or protect social fabrics in fragile communities.

What makes the race to biofuels so volatile is a high-octane mix of scale of demand, driving profit incentives, and a distortion to the urgency of climate change.

Counting the negatives

A recent UN report, "Sustainable Bio-energy: A Framework for Decision Makers", says: “Where crops are grown for energy purposes the use of large-scale cropping could lead to significant biodiversity loss, soil erosion, and nutrient leaching. Even varied crops could have negative impacts if they replace wild forests or grasslands.”

This is happening now. The report suggests that 98% of Indonesia’s natural rainforests will be degraded or gone by 2022. Five years ago, the forecast was 2032.

Since then, Indonesia and Malaysia – which make 83% of the world’s palm oil, a key bio-fuel – have cleared primary forests to meet Europe’s requirement that bio-fuels make up 10% of all fuel used in the union by 2020.

Though this means better prices, traditional users suffer: Malaysians are going without for the first time. Like many countries relying on palm oil’s great versatility for food products and cooking, Malaysia cannot compete with the purchasing power of markets that want it for fuel.

A critical balance is at stake: food prices and production must be secure from fuel production. Transport demand for another key biofuel, ethanol, has driven up the price of food staples it is made from: in Mexico maize is 6% more expensive, and soy costs 13% more than last year.

This publication has argued that biofuels in China, too, are problematic.

Now, US President Bush has turned on an oil dime to Brazil, the world’s largest producer of ethanol, to ease America’s reliance on fossil fuels.

According to the WorldWatch Institute in 2006, Brazil and the US produce 70% of all ethanol for biofuels. Brazil grows 37% (from sugarcane) and the US 33% (from corn).

In 2006, Brazil’s exports to the US grew six-fold in just a year, and, as Ethical Corporation reported in June, look like they “could grow exponentially”.

Sao Paulo has a germ of an idea. The Brazilian state requires sugarcane farmers set aside a percentage of their land as natural reserve: this can be applied to all bio-fuel production.

Global certification mooted

Other attempts to regulate production include at least one European research project to develop a global certification system for a sustainable bio-energy trade.

Last year, the EU adopted its biofuels strategy, but NGOs had serious reservations.

They believed it failed to ensure the environmental integrity of the agricultural raw material. And there is now a "round table" on palm-oil supply chain issues.

But these efforts are fragmented. Universal certification is needed immediately. Asia must get involved. Even now, farmers in Asia, South America, and Africa say fuel planters are stealing their land.

Not only are virgin forests and the biodiversity they contain under threat, but also water catchments: biofuel crops strain already tight freshwater supplies; stripped of trees, these areas will suffer incalculable losses.

Lacking a global biofuel sustainability certification architecture it is vital companies in the supply-and-demand frenzy fully understand these issues. These include both agribusiness and plantation companies and buyers, most of whom are still western.

They must not promote net environmental loss. They need clear guidelines for buying bio-fuels from developing countries. Climate change makes it an ethical issue. Stringent in-house sustainability criteria are vital.

This means:

- virgin forest areas are off limits, for production or as product sources. In the oil industry BP shareholders voted in 2004 for a no-go zone policy for sensitive areas

- using already acquired large land banks more efficiently

- innovating technologically for more efficient production

- being vigilant against exploiting illegal land. Chief executives can claim the moral high ground, especially in growing their business. The potential to exploit loose, lax laws is greater in developing nations, where investment in bio-fuel plants has risen sharply recently

- adopting organic practices as far as possible. Pesticides, herbicides and fertilisers, all carbon intense, can damage extensively at such scales.

Tellingly, the UN report concludes that bio-fuels are more effective when used for heating and power, not transport.