The Corruption Footprint

Context
Sustainable development is frequently reduced to the “environmental” dimension. UNO repeated many times the 5
pillars: environment, social, economic, culture and governance. The fight against corruption has been introduced as
the 10th principle of the Global Compact initiative. It encourages companies to integrate in their strategy and best
practices all the elements of sustainable development.
We all know that corruption do not contribute to a wealthy economic system. It increases the fair price of goods and
services, free trade is falsed, it enriches only those with poor value system, it costs a lot to the citizens of the entire
world.

What’s at stake?
Every CEO can integrate in the core value system a “corruption” dimension, e.g. as the Global Compact 10th principle.
But how to assess the achievement of such a critical goal?
We realize that the present indicators are, more or less, as follows:
➡ Percentage of executives people who have been trained to the fight against active or passive corruption
➡ Ethics committee participants and meeting frequency
➡ Business partners audit or reviews
➡ …

Proposal
Ecophanie suggests to add the present indicator as a new tool: the corruption footprint, whose objective is to provide a
management tool and to contribute to the reflexion of executives.

How to use it?

Temporality: this indicator must be computed each year after consolidation process.
Ci = turnover at corporate level in the “i” country (where invoices are sent)
N = corporate figure of equivalent full-time people with work contract at unlimited duration
P = number of countries where the corporation sends invoices
Ti = corruption index for the « i » country, issued from Transparency International index.
i
=
P

Corruption Footprint = ∑
Ci
*(1-Ti/10)

i
=
1





























.
N

Details
The Ci turnover concerns only what is really invoiced in the country “i”.
N: we use the number of equivalent full-time people with work contract at unlimited duration, because it is much easier
for benchmarking reason. The “full-time” notion can vary in each country. You can adopt the rule of your headquarters.

Do you really need to print it ? June 2010

Examples (completely fictitious, of course)

Transparency 2009 Footprint

index turnover contribution
by country
Denmark 9,3 10 000 € 700 €
Japan 7,3 2 000 € 540 €
USA 7,3 25 000 € 6 750 €
Spain 6,5 12 000 € 4 200 €
Botswana 5,8 4 000 € 1 680 €
Malta 5,8 2 500 € 1 050 €
South Korea 5,6 5 600 € 2 464 €
Mauritius 5,5 500 € 225 €
Oman 5,5 6 000 € 2 700 €
China 3,6 18 000 € 11 520 €
31 829 €
31829
2009 _____________
# equivalent full time employes worldwide 500 500
Corruption footprint 64 €

Available strategies (the virtuous circle?)

If you want to reduce your corruption footprint, you can use the 3 factors:
1. To increase the number of people with work contract without duration limit (it reduces the need for corruption, or
illegal work)
2. To reduce the turnover in the countries with poor corruption index
3. To increase to the turnover in countries with a better corruption index

Tool reliability
The turnover is supposed to be reliable as it’s audited by third party, like chartered accountants.
The number of people with work contracts without duration limit ought to be a reliable data too.

Rules
The corruption footprint is not a trademark, nor a copyright. It’s purpose is only to contribute to the fight against
corruption.
This tool is only an add-on to the Global Compact anti corruption guidelines which are the most comprehensive ones
presently.

Yves GARENNE

Do you really need to print it ? June 2010