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Ethical Globalization and the New Business Diplomacy  
   
Mike Eskew  
Business for Social Responsibility  
8/1/06  
   
 
Mike Eskew, chairman and CEO, authored this article for the August issue of BSR Weekly. He discussed five ways that we can approach ethical globalization, which will allow all to benefit from sustainable global trade.  
 

During the past two decades, import volume has tripled in the United States, and the number of employed Americans has grown by 31 million. There's a reason for the correlation. Imports have led to competition. Competition has led to innovation. Innovation has created new products and industries.

Of course, globalism has consequences. In fact, there is no more pressing ethical issue today than preparing people for a world that is coming closer together through trade. Therefore, we must approach trade in a sustainable manner: making economic, social and environmental investments that enable people, communities and nations to benefit through global trade.

How can we approach sustainability, or "ethical globalization?" Let me suggest five ways:

Step up environmentally.
UPS operates more than 91,000 vehicles, 2,000 facilities and the world's ninth-largest airline. Our imprint is large, as is our responsibility to minimize it any way we can.

We operate hydrogen fuel cell, liquefied natural gas, compressed natural gas, electric and propane-powered trucks in the United States, Canada, Mexico, France, Germany and Brazil. Recently, our alternative fuel vehicles reached a major milestone, topping more than 100 million miles since the year 2000.

We believe there is great promise in fuel cell technologies. In the next year, we will add 50 hybrid electric vehicles to our fleet. This should produce a 35 percent fuel economy improvement over the vehicles they are replacing.

Share technology that helps the environment.
The presence of multinationals in developing countries tends to lead to stricter, not looser, environmental controls. Multinational companies tend to adopt the highest environmental standards worldwide to simplify management and create efficiencies of scale that help speed the spread of pollution-control technologies and cleaner energy.

As free markets expand and nations democratize, environmental activism also tends to increase. Look at China today. For the first time in its history, the Central Planning Committee has recognized the need to focus on environmental issues.

Spread corporate best practices in areas of worker safety, health and training.

Our 102,100 drivers worldwide log more than 2 billion miles a year, averaging less than one accident per million miles driven.

When UPS goes into other parts of the world, we bring that safety culture with us. Over the past five years, we have invested more than $180 million dollars in safety-related initiatives, worldwide-including enhanced training programs, new equipment and modifications to facilities.

Create a holistic strategy for improving the transportation infrastructure.

We must take into account how air-, ground- and water-based systems work together, and increase the integration of these different modes. The trend toward intermodal supply chains means that bottlenecks on one type of system can lead to bottlenecks elsewhere.

It will take money, which must be spent more strategically.

Manage supply chains smarter.
At UPS, we talk about "synchronized commerce," or coordinating the movement of goods, information and funds, which makes shipments speedier, more accurate and more responsive to customer timetables.

It's Rush Hour on the world's transportation systems. Statistics tell us it will only get worse as global commerce expands. So, whether we're in the public or private sectors we must take the necessary steps today to ensure a vibrant economy tomorrow.

Most business leaders today realize that long-term profitability is conditioned upon not just sound economics but also sound social and environmental policies. They know that accountability transcends national borders. In fact, I believe we've entered an era where business diplomacy trumps political diplomacy.

In the end, the greatest force that impacts the greatest number of lives internationally is business. We must embrace the responsibility that this entails.