Corporate Social Responsibility: Bringing it Down to Earth for Home Builders

Corporate Social Responsibility:Bringing it Down to Earth

for Home Builders

Presentation to the

London Home Builders’ Association

Agenda

• A bit of business history.• Why does CSR matter to home

builders?• The Environment—a good news

CSR story that few understand.

CSR is About Business & Society- after 2,500 years, it is still being debated

“Treating people with respect will gain one wide acceptance and improve the business.”

-Tao Zhu Gong, 500 B.C.

“A business that makes nothing but money is a poor kind of business.”

-Henry Ford, 1863-1947

"Ethics is the new competitive environment"

- Peter Robinson, CEO, Mountain Equipment Co-op

Early CSR

• In 1895, George Cadbury, a Quaker, bought 120 acres and started building houses for his workers.

• The village of Bourneville grew to include more than 300 houses - and the Cadbury chocolate factory.

• Education and medical care were provided for workers and their families.

A bit of history

A bit of history

Why did Cadbury do this?

Because it worked for his company, for his employees and for the community – the “triple bottom-line” that CSR is focused on today.

The idea that a successful business has responsibilities to the community, to

employees and to society is not new.

What’s changed is the public’s trust that businesses operate this way, and their

tolerance if companies don’t.

So what happened?

Bhopal, India 1984

Exxon Valdez, 1989

Consumer Activism

Rich Crooks

How do you treat your workers?

Are yourproducts

responsible?

What’s the real impact?

• Mistrust and cynicism towards big business• Greater public scrutiny & NIMBYism• Calls for action and more regulation by

governments• Lawsuits and interventions by public

interest groups, boycotts and demonstrations.

• A business environment where public opposition to business activities has become the norm.

Corporate Social Responsibility

By the late 1980s, large multinational companies began to look for ways to

proactively respond to public mistrust, in order to retain control of their businesses.

This process became known as Corporate Social Responsibility

So What is CSR?

• Say what you stand for (values/commitments)• Acknowledge your duty of care to others

(employees, customers, society, environment, etc)• Accept transparency (let others see how you do

things)• Be accountable and truthful (“own” your actions)• Embrace continuous improvement (strive to become

better at everything you do)

CSR is not about being “nice”

"Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do, or because people are

forcing us to do it... but because it is good

for our business" - Niall Fitzerald, Former CEO, Unilever

Does CSR Apply to Builders

Builder

Economy

Employees

Environment

Community

?

CSR Principle #1

Operating your business profitably is socially responsible.

Creating jobs, economic activity and capital goods provides enormous social benefits.

All other CSR actions must be consistent with profitable business operation.

What are the Industry’s Key Issues?

1) Consumer satisfaction and trust.

2) Communities that fail to see that responsible growth is essential and positive.

3) Environmental protection.

4) Regulation and government-imposed costs.

5) Shortage of skilled people.

CHBA Member Builder’sStatement of Business Values and

Commitments

1) Responsibility to customers

2) Community involvement and investment

3) Environmental commitment

4) Business practices and performance

5) Human resource development

6) Workplace health and safety

What are the Potential Business Benefits of Effective CSR Programs?

• Easier to attract and keep good employees.• Encourages more loyal and productive staff.• Invites less government intervention.• Reduces credit risk from external events.• Less likely to provoke public opposition.• Creates more satisfied customers.• Builds and protects business reputation.• Improves business opportunities.• Delivers better profitability.• Improves business sustainability. • Supports public “license to operate”

Most builders already operate in many ways that are consistent with CSR principles.

Builders often do this instinctively, because they want to “do the right thing”. They don’t

see it as “CSR”.

And they don’t get credit for it.

The Good News

BUT . . .

• CSR is not about “public relations”.• Public relations = “spin”, and spin

doesn’t work anymore.• CSR is about “public relationships”.• The “walk” needs to come before the

“talk”.• We will be judged on our performance

CHBA Builders’ Guide to CSR

• It will explain the business case for CSR – why it matters and what the benefits can be.

• It will provide case study examples of what other builders are doing successfully.

• It will provide specific self-assessment tools to assist builders in developing their own plans and actions.

The Environment Where Do We Stand as an Industry?

• If you listen to our critics: environmentalists, anti-growth advocates, some media and too many of our politicians, WE ARE THE PROBLEM.

• If you look at the facts, we have achieved a lot and are environmental leaders.

Energy Use Trends 1990 - 2004(end use/all forms)

Source: Natural Resources Canada

10%

30% 31%

35%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Housing Industry Transportation Comm/Instit. Buildings

Key Trends 1990 - 2004

Source: Canadian Council of Ministers of the Environment

10%

25%

4%

-12%

-15% -10% -5% 0% 5% 10% 15% 20% 25% 30%

Total Energy Use

Number ofHouseholds

House size

Energy Intensity

Climate Change Emission Trends 1990 - 2005

Electricity Generation

Transportation

Manufacturing Sector

ICI Sector

Residential Sector-10%

0%

10%

20%

30%

40%

50%

Source: Environment Canada

“Green” Industry Trends

• Explosive growth.• Renewable energy = 20%/year• $66 billion on 2007.• Wind energy = 17%/year• Solar electric = 46%/year• Clean energy R&D investment = 75%/year• Many of these developments will deliver new

technology and products for the home building industry. We need to be ready.

“Change is inevitable- except from a vending machine.”

-Robert C. Gallagher, Chairman (Ret.), Associated Banc-Corp.

“Management is doing things right;leadership is doing the right things.”

-Peter F. Drucker

Questions? Discussion?