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Tonight
Projects & teams
Current Events…abound
Continuing to Unbundle CSR
Systems & Frameworks of CSR
Key learnings
And the Teams Are….
Brown Forman Melissa, Joe
Del Monte Daniel, Sarah
Dow Nicholas, Roni, [Cristin]
Driscolls David, Yang-Yang
eBay Jeff, Iris
Fulcrum Michael P., Steven
Grizzlies Academy Adrian, Michael T., Michael
A. HP (enviro. phil.)
Pedro, Jason Grupo Nueva
Lorin, Margo
And the Teams Are….
Intel (education) Hans, Akif
Levi Strauss Shirin, Brooke
Lori Bonn Design Jennifer, Wiam
OSH Emily, Matt
Wells Fargo Theresa, Elizabeth S.
William Sonoma (energy) Annabelle, Elizabeth L.
Within 24 Hours….
Introduce team to liaison (send resumes, excitement with project, etc.)
Set scoping meeting/ call
Begin to refine scope Shape, change, enhance, elevate, whittle Assert control of scope, liaison approves
Current Events 10 Companies Urge U.S. Congress to Establish Climate Change
LegislationAccording to The New York Times, 10 companies and four environmental organizations have come together to form the U.S. Climate Action Partnership (USCAP) that calls on the U.S. Congress to set clear caps on greenhouse gas emissions and a reduction of such gases by up to 15 percent in the next 15 years
Companies include: Alcoa Inc., BP, Caterpillar, Inc., Duke Energy Corp., Du Pont, Florida Power & Light Co., General Electric Co., Lehman Brothers, PG&E Corp., and PNM Resources, Inc.
Environmental groups include: Environmental Defense, the Natural Resources Defense Council, the Pew Center of Global Climate Change and the World Resources Institute
USCAP developed a set of principles, rather than model legislation, that seeks a cap-and-trade system and a gradual reduction of carbon dioxide emissions-- "Call for Action" www.us-cap.org/ClimateReport.pdf
Current Events
List of Best U.S. Companies for LGBT Employees Unveiled by U.S. equality group Human Rights Campaign (HRC)
According to 365Gay.com, 142 companies earned a perfect score this year, compared to 101 in 2006.
Companies earn points for the kinds of benefits they offer LGBT employees as well as how inclusive their anti-discrimination policy is.
The full list is available at www.hrc.org/placestowork
Current Events
Marks & Spencer Unveils U.S. $395 Million Environmental Strategy
Includes goals under five categories: climate change, waste, raw materials, fair trade and healthy living
Specific goals include: stop sending waste to landfills; making U.K. and Irish operations carbon neutral by 2012; sourcing only recycled or Forest Stewardship Council-certified wood, free-range poultry and Marine Stewardship Council-certified fish; and tripling organic food sales
M&S chief executive Stuart Rose says, "We believe a responsible business can be a profitable business. We are calling this 'Plan A' because there is no 'Plan B.”
Internal & External CSR
Supply Chain
Environment
Transparency
Human Rights
Stakeholder Engagement
Privacy
Marketplace
Community Involvement/ Investment
GovernanceMission, Vision, Values
Ethics
Diversity
Health & Wellness
Dependent Care
Downsizing & Layoffs
Privacy (employee)
Work Life Balance
Job Satisfaction
Compensation/ Benefits
Philanthropy
Socio-political Issues
Reporting
Accountability
RESPONSIBILITYINCREASING
IN IMPORTANCE
RESPONSIBILITYINCREASING
IN IMPORTANCE
GOVERNMENTS
GOVERNMENTS
MARKET/ GROWTH OPPORTUNITIES
MARKET/ GROWTH OPPORTUNITIES
CONSUMERS CONSUMERS
COMPETITIONCOMPETITION
INVESTORS/ANALYSTSINVESTORS/ANALYSTS EMPLOYEESEMPLOYEES
Drivers for CSR
SOCIAL AND ENVIRONMENTAL
NON-GOVERNMENTAL
ORGANIZATIONS (NGOs)
SOCIAL AND ENVIRONMENTAL
NON-GOVERNMENTAL
ORGANIZATIONS (NGOs)
The Virtue MatrixDepicts the forces that generate CSR
FRONTIER(Intrinsic)
Strategic Structural
Choice Compliance
CIVIL FOUNDATION(instrumental)
+ society, + shareholders + society, - shareholders
Roger Martin, HBR, 2002
Is the Social Contract Evolving? Intensifying pressure of social & environmental
expectations Growing complexity of forces and increasing speed with
which they change
Ability of activists to mobilize public opinion
An emerging set of socio-political trends on public agenda
Expecting all businesses to be more Innovative
Ever-more-powerful stakeholders wielding wide influence.
“CEOs should be prepared to take the lead in socioeconomic debates that could alter the structure of their industries and the rule of engagement in the long run.” – McKinsey Quarterly1
Increased Sophistication & Reach of NGOs
http://www.themeatrix1.com/
http://www.thedetroitproject.com/ads/default.htm
Where Are Consumers on CSR? Americans are sending a message to business that good corporate
citizenship is a “must have” critical to business success in good times and bad. The leading brands in the GolinHarris CCI raise the bar on their performance as expectations rise.
An overwhelming two-thirds of Americans interviewed said: "’Doing well by doing good’ is a savvy business strategy. Good corporate
citizenship should be approached as an investment, asset and competitive advantage for business that contributes to the company's success.” (67%)
“Business should invest significantly more money, time, attention and resources in corporate citizenship than it does today.” (68%)
“Corporate citizenship should be considered an essential, high priority compared to other priorities companies face and manage in running a profitable, competitive and successful business.” (68%)
Reputation & HR Significant Drivers
BrandWho says social responsibility
is a big influence in their impressions of companies?
49%
Product PurchaseWho considers corporate citizenship when buying a
company’s product?
Product BoycottsHow many people would boycott a
product if they learned about negative citizenship practices?
79%
76%Employee Recruitment
Who considers social commitment when
choosing an employer?
77%
Intangibles Increasingly Affecting Shareholder Value
100%1% 1%1%3%3%3%
4%
6%22%
22%
34%
0%
20%
40%
60%
80%
100%
120%
Actual Financial
Performance
Innovation Community/ Culture
Famil-iarity
Shareholder Value
Explained
Historical Growth
Human Capital
Corporate Reputation
Expected Financial
Performance
Leader-ship
Aware-ness
JVs/ Alliances
Financial Non-Financial2004
Perc
en
tag
e Im
pact
Reputation & Trust MatterReputations are fragile
Johnson & Johnson Ranks No. 1 in National Corporate Reputation Survey for Seventh Consecutive Year
A strong one can go a long way
& can even earn a company a place at the policy table
Reputation & Consumer Trust
•Reputation is widely regarded as companies #1 intangible asset
•The % of a company’s value derived from intangible assets rose from 17% in 1981 to 71% in 1998
•In a 2006 KRC Research survey, 80% of global business executives surveyed believe that companies with strong CSR track records recover their reputations faster post-crisis than those with weaker records
“The general consensus was that most of the value firms received from CSR was in maintaining their reputations and proactively building a reservoir to protect against an unforeseen event.”
- John Peluza, Univ of Calgary CSR as Reputation Insurance
Shifts in Power
Country/CompanyGDP/Revenues ($ bil) Global 500 Rank
1. United States $7,783 N/A2. EEU 6,685 N/A3. Japan 4,812 N/A...
20. General Motors 176 121. Thailand 166 N/A22. Wal-Mart 166 223. Hong Kong 164 N/A24. Exxon 163 325. Ford Motor Company 162 4
Operational Responsibilities: Risk
Fair employee treatment Not harming the environment Health & safety products & services Goods & services at lowest prices Responsible supply chain Same high standards wherever operate Increasing global stability
Citizenship Responsibilities: Opportunity
Helping reduce the rich-poor gap Reducing human rights abuses Solving social problems Preventing spread of disease Encouraging employee volunteerism Supporting progressive government
policies
Operational v. Citizenship Responsibilities
Operational
Responsibilities
Risk Management/
Reputation Protection
Public will punish poor performers
Citizenship
Responsibilities
Differentiation
Opportunity/ Reputation Enhancer
Public will reward exceeders (but not as likely)
Companies Are Doing a Good Job Building a Better Society
“Agree” vs “Disagree,” by Region* and North* vs South, 2005
Shifting From Defensive to Offensive CSR
“Offensive CSR can distinguish a company’s reputation but cannot protect it; defensive CSR can protect a reputation but cannot distinguish it. Both are necessary to succeed in today’s business climate.”1
- Mark Kramer & John Kania, Changing the Game
BP: “Beyond Petroleum”Citigroup: Commits $100m to microfinanceGap: PRODUCT (RED)Interface: “Mission Zero”Stonyfield Farm: “Bid With Your Lid” Timberland: Partnership with City Year
Changing the Game
Risk Mitigation
Value Creation
Mitigate long term business risks
Improved Business Performance
Employee Relations
Competitive Advantage & Market Positioning
Build Stakeholder Trust
Reputation “Insurance”
Investor Relations
The Landscape of the Business Case for CSR
Stages of CSR: Plot Selves
Defensive Company faced with pain, criticism, reacts defensively
Compliance Cost of doing business, do just as much as need to
Managerial Moves CSR to core business managers & functions
Strategic Realigns strategy to use CSR as competitive advantage
Civil Need to involve all in sector, collective action
Stages of CSR
Civil
Strategic
Managerial
Compliance
Defensive
Current Trend
Historical FocusRisk Mitigation
Value Creation
SweetSpot
Implementing CSR
Make business case (relevance) Engage stakeholders (internal & external) Map potential vulnerabilities/ risks Develop CSR strategy Align with organizational culture/ change Monitor, measure, report Communicate to ALL stakeholder groups
Designing a CSR Structure: Big Picture
Build Senior Vision & Support Examine Current CSR Systems &
Activities Design a CSR Structure Implement CSR Management
Systems
Designing a CSR Structure: Nine Steps
Understand Drivers (internal & external) Identify Key CSR Issues Identify & Evaluate Stakeholders Identify Current Functions Supporting CSR Analyze Current CSR Systems, Culture Design CSR Structure Develop Effective Staffing Plan Create Cross-Functional System Match Budget to Best Framework
A CSR Continuum
Level of engagement Low High
Importance to mission Peripheral Strategic
Magnitude of resources Small Big
Scope of activities Narrow Broad
Interaction level Simple Intensive
Managerial complexity Infrequent Complex
Strategic value Modest Major
EXAMPLES ACTIONS: DonationGrants
Event sponsorshipCause-related
marketingEmployee
volunteerism
Joint-advocacyJoint-actionDeep partnershipsFinancing principles
Philanthropic Transactional IntegrativeGrowth stage:
Adapted from The Collaboration Challenge, James E. Austin
WO
RL
D
Transform multiple industries.
IND
US
TR
Y
Transform an industry. Take responsibility for our full impact (social, environmental, economic).
Take responsibility for adjacent industries.
Take responsibility for global conditions (climate change, global inter-dependence, etc.).
Be a beacon to others. Develop codes of conduct for the industry.
Build strong coalitions to effect and enforce them.
CO
MM
UN
ITY
Be a good neighbor. Innovate and demonstrate restorative business practices.
Influence the industry indirectly, by example.
Give something back.
Support local communities (corporate philan., direct programs, employee matching & volunt’ring.)
Reduce waste, consumption and emissions.
CO
MP
AN
Y
Run a good business.
Provide access to tools/ product.
Disaster relief.
COMPANY COMMUNITY INDUSTRY WORLD
CSR Landscape: Plot Goal
Build Stakeholder Trust
“an early awareness of the concerns of NGOs and stakeholders enables companies to join and shape the debate before it turns against them – or at least to prepare themselves for turbulence ahead.”
– McKinsey Quarterly1
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