Corporate sustainability abstract_en.02

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Integrating Social and Environmental problems in

business

October 2007

CORPORATE SUSTAINABILITY ABSTRACT EN.02

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYANTICIPATING A TRENDANTICIPATING A TREND

Companies are generally used to following trends, in many situations, addressing the latest challenges and reacting to market opportunity. Wherever they define their position, it ultimately depends on their appetite for risk , ability to innovate, investment strategy and their culture.

EARLY ADOPTERS

MAJORITY

“OLD WAY”

INNOVATORS

TIME

BENEFIT / RISK

INNOVATION AND MARKET DIRECTION NATURAL BENT

Slumping or phasing-out Companies, industrial Third World.

EARLYEARLYLATELATE

Majority of companies according to their investment strategy and innovation.

Big Companies, Multinationals, “Morning Star”, Market drive makers

Innovating and “Visionary” Companies

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYSOCIETY AND COMPANYSOCIETY AND COMPANY

Business as Divine Right. No duty for

neighborhood.

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MIDDLE AGE(COIN)

TRADEFINANCE

Awareness of Human and Civil Rights of workers.

INDUSTRIAL REVOLUTION(COKE)

ASSOCIATIONSUNIONS

Book-keeper principles. Progressive taxation of incomes as social justice.

COMPUTER AGE(BIT - INFORMATION)

CONSUMERISMADVERTISINGAUTHORITY

Social Responsibility of companies, Privacy, equal

opportunities, security.

TODAY ->(CO2 - ENVIRONMENT)

SOURCES LIMITED NATUREPROTECTING VS. WASTING

SOCIAL RESPONSIBILITY EVOLUTION OF COMPANIES DURING THE TIME

Environment protection.

Throughout the ages, every single society has adapted to its environment for survivability and prosperity. There exists a healthy consideration (and respect) for the total environment (people, animals, resources...)

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITY

The early 20th century – Corporate Social

Responsibility beginning.

1950 – Corporate Social Responsiveness: solving problems need

1980 – STAKEHOLDER theory

2000 – Corporate Social Performances 2000 – Corporate Sustainability

1990 – Rio's Conference.

1980 – World Conservation Strategy1970 – Environment debate

Social and environmental problems matching.

• TRIPLE BOTTOM LINE

• STAKEHOLDER ORIENTED ISSUE MANAGEMENT

The last 20 years, the issues of Corporate Social Responsibility (CSR) and Environmental issues have converged and joined.

SOCIETY AND COMPANYSOCIETY AND COMPANY

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYTRIPLE BOTTOM LINETRIPLE BOTTOM LINE

ECONOMICAL RESPONSIBILITY

LEGAL RESPONSIBILITY

ETHICAL RESPONSIBILITY

PHILANTHROPIC RESPONSIBILITY

EXPECTED

REQUIRED

REQUIRED

DESIDEREDInteraction between Business and Society cause a series of responsibility that we can sum up in this way, using a famous definition:

The “official” definition of CSR was given by the European Community in 2001, thanks to the growing interest in this problem:“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and the relations with stakeholders”

SOCIAL AND ENVIRONMENTAL SUBJECTS THAT CAN NOT BE DISJOINED FROM BUSINESS.

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYTRIPLE BOTTOM LINETRIPLE BOTTOM LINE

TRIPLE BOTTOM LINE defines Corporate Sustainability as business goal, in that it is definable as an investment characterized by a risk and return. The International Financial Community has endorsed these concepts, leaving it to the individual company to determine their own risk and reward measures based upon their own assessment:

Triple Bottom Line is a more complete and more productive estimate than a business condition.

SUSTAINABLE INDEX (Down Jones, FTS4good)

SOCIAL RESPONSIBLE INVESTMENT (SRI)

CARBON DISCLOSURE PROJECT (CDP)

http://www.sustainablebusiness.com/

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYBOOSTERBOOSTER

SOCIAL

ENVIRONMENTAL

TBL

Turning Corporate Social Responsibility into TBL, was enabled through merging of Environmental and Social concerns, which provided both of

these workstreams a terrific boost and a greater exposure.

ENVIRONMENTAL problems strike EVERYBODY.

Unlike mere Social problems that usually strike “the others”, “the poor ones” and “the unfortunate”, and can be traced to the actions or in-actions of Corporations which value the company reputation

Environmental issues strike all market segments that could result in a company crisis. As risk averse decision makers, the Environment

is becoming a major force in company risk profiles.

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYSET ROUTESET ROUTE

BUSINESS ACTIVITY

SOCIAL CONSENT MARKET RULES AND

CONSTRAINTS

CORPORATESUSTAINABILITY

A company has the important social duty to mitigate its imminent environmental risk, according to the company culture and responsibility.

Global warming is upon us, whatever the reason is and whatever the solution to resolve it, just like the (more or less effective) connected projects, based on a “Carbon Free” philosophy.

A leading company must be at the forefront of change, responsible for its decisions, both in terms of market and of social approval.

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Politicians standing for present establishment

Present ruling business class

Mistrusting the new

Holding out against changes

Increasing among people of environmental and social awareness

and responsibility

Worsening of the environmental situation and increased pressure to

correct the problem

Expecting new political and business powers to replace the “old ones”

New business opportunities given by technological development and

new backgrounds

DENYING THE OBVIOUS

DENYING THE OBVIOUS

MAKING LIGHT OF PROBLEMS

MAKING LIGHT OF PROBLEMS

DELAYING SOLUTIONSDELAYING

SOLUTIONSCRISIS

SITUATIONSOLVING

EMERGENCY… …

TODAY

SET ROUTESET ROUTE

EVOLUTION OF GLOBAL BUSINESS POLITICAL COMPARISON WITH RESPECT TO ENERGY AND ENVIRONMENT

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It would be a great mistake to ignore this problem, the risk is I am resisting the pressure to act and by doing so relinquishing interesting visibility / market areas.

Every leader company in its business sector, has the right and obligation to establish a corporate position on the Environment and to set out an EFFECTIVE STRATEGY.

A strategy made by outward Communication (Clients, Providers, Opinion Leader etc), inward Communication (Employees, controlling and controlled companies etc) and Action (reduction of energy waste, generating energy from renewable sources; new less social impact products / services; territorial projects for a natural and sustainable development etc).

Return on Investment will be immediate and in the shortest amount of time it will be able to recoup the initial investment and to show positive effects on P&L.

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MACROSTRATEGYMACROSTRATEGY

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYPAY-BACKPAY-BACK

SOCIAL

ENVIRONMENTAL

BUSINESSPURPOSE

STRATEGY

Reduction of supplying direct expenses.

Reduction of waste.

Reduction of risk - even from an insurance point of view.

Increase of company visibility.

New market areas to enter.

Competitive asset on competitors.

New assets from capital market.

Higher sense of belonging and motivation of personnel (increase of productivity and retention of talent).

Visibility in big corporations (personal gain for management).

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CORPORATECORPORATESUSTAINABILITYSUSTAINABILITY

BUSINESSRETURN

According to the current aged and outdated thinking, Corporate Sustainability is viewed as an exclusive course of action for large corporations - big companies “spending some money on social causes in return for good publicity”. Adding

BUSINESS PURPOSE and STRATEGY to these ACTIONS, creates a course for quick return on investment.

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CORPORATE SUSTAINABILITYCORPORATE SUSTAINABILITYLHYRA’S PROPOSALLHYRA’S PROPOSAL

CUSTOMERCUSTOMER

SUSTAINABILITY CONSULTINGSUSTAINABILITY CONSULTINGEV

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Sharing Knowledge of environmental and social problems, of global and depth of their consequences on the whole company frame-work.

Obtaining in the shortest time a "company assessment of risk and opportunities" concerning a specific business area. Testing if complete or not, with actions and /or corrective actions the company can implement to achieve desired results.

Obtaining an accurate and constant analysis on the area trend (in Italy and abroad) and about instances that could have some effects on company business.

Watching out on traditional business so as to avoid negative effects from surrounding context and to turn shared experience in one business to boost sales or margins in others.

Encouraging the creation of an internal company frame-work to use these abilities as a new strategic opportunity for a competitive advantage.

CHANGE MGTCHANGE MGT

KNOWLEDGE SHARINGKNOWLEDGE SHARING

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LHYRA srlVia Mario Savini, 15

00136 [email protected]

We help you to understand why your current business models will not be effective and rewarded

in the same way in the future.Together we will find innovative solutions to flip it

upside down.

October 2007

Do not hesitate to address any question to [email protected]

http://www.lhyra.it/

mailto:[email protected]