CSR Intro Presentation Slides

11stst CSR Training Workshop for IndustriesCSR Training Workshop for Industries

Frank Müller (ASEP)Ralf Opierzynski (Fraunhofer IFF)

1st CSR Training for Industries, Hanoi, 2009

11stst Corporate Social Responsibility Training Workshop for IndustrieCorporate Social Responsibility Training Workshop for Industriess

–– Cost Cutting and Performance Improvement through CSR Cost Cutting and Performance Improvement through CSR ––

March 2009, Hanoi, VietnamMarch 2009, Hanoi, Vietnam

As part of the European Commission supported SME business develoAs part of the European Commission supported SME business development project on pment project on Empowering Asian Business Intermediaries through KnowledgeEmpowering Asian Business Intermediaries through Knowledge--based Networking based Networking

Focused on Sustainability Management (EMPASIA) Focused on Sustainability Management (EMPASIA)




CSR CSR –– Just a trend or a substantial change in doing business? Just a trend or a substantial change in doing business?

What is it?What is it?

What drives the development and wWhat drives the development and what do we want? hat do we want?

How can we do it?How can we do it?

Are there some tools to help us?Are there some tools to help us?




I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper and find the real

reasons for our being.

As we investigate this, we inevitably come to the conclusion that a group of people get together and exist as an institution that we call a company so that they

are able to accomplish something collectively that they could not accomplish separately –they make a contribution to society,

a phrase which sounds trite but is fundamental.

Dave Packard, Co-founder of Hewlett Packard Company in 1939

CSR CSR –– is it new? is it new?




Way of managing all our resources and its impact in an environmentally friendly, socially responsible and economically wise way (The triple Bottom Line)

• social handling of community,customer and stakeholderrelations

• focus on human rights andglobal environmental protection

SustainabilityManagement

CorporateSocialResponsibility

Approach to give a frame for businesses to express their commitment to society.

Support to voluntarily integrate social and environmental issues into all business activities beyond regulations

Internal perspective

• health and safety at work• management of human resources• responsible use of resources• adaptation to change (innovation)•…

External perspective

“Humanity has the ability to make development sustainable - to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs.”

What does CSR stand for?What does CSR stand for?

European framework, Green Paper on corporate social responsibility




Social Responsibility – working draft 4.1 ISO 26.000

responsibility of an organization for the impacts of its decisions and activities (products, services and processes ) on society and the environment, through transparent and ethical behavior that:

• contributes to sustainable development, health and the welfare of society; • takes into account the expectations of stakeholders; • is in compliance with applicable law and consistent with international norms of behavior; • is integrated throughout the organization and practiced in its relationships

(an organization’s activities within its sphere of influence).www.sustain-asia.org/pg/bookmarks/Frank/read/337/iso-draft-26000

Dow Jones Sustainability Index definition of CSR“a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments”

http://www.sustainability-index.com/




CSR encompasses not only what companies do with their profits, but also how they make them. It goes beyond philanthropy and compliance and

addresses how companies manage their economic, social, and environmental impacts, as well as their relationships in all key spheres of

influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm.

In order for corporate social responsibility programs to work, government and the private sector must construct a new understanding of the balance of

public and private responsibility and develop new governance and business models for creating social value.

Harvard CSR Initiative, 2004

Other CSR definitions Other CSR definitions -- exampleexample










The Future of CSR, How to Align Values for Profit, Canadian Manufacturers & Exporters, 2007, David Crawford

What drives the development, risks What drives the development, risks –– opportunities opportunities –– values?values?




KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide and documented the top ten motivators driving corporations to engage in CSR for competitive reasons.

1. Economic considerations1. Economic considerations

2. Ethical considerations2. Ethical considerations

3. Innovation and learning3. Innovation and learning

4. Employee motivation4. Employee motivation

5. Risk management or risk reduction5. Risk management or risk reduction

6. Access to capital or increased shareholder value6. Access to capital or increased shareholder value

7. Reputation or brand7. Reputation or brand

8. Market position or share8. Market position or share

9. Strengthened supplier relationships9. Strengthened supplier relationships

10. Cost savings10. Cost savings

Market forces that are driving the need for organizations to addMarket forces that are driving the need for organizations to address CSRress CSR




Company - CSR Driver

0% 10% 20% 30% 40% 50% 60% 70% 80%

Improving Business Performance

Social concerns relating to products or service

Environmental concerns relating to products or service

Legal- or regulatory obligations

Differentiation opportunities

Information demand by stakeholders

Philanthropy

Competitive pressure

Attraction of new investors or customers

Community pressure

Why is your company interested in applying CSR? EU project EMIT CSR, Malaysia




Which areas are covered by CSR? Which areas are covered by CSR? –– ISO 26.000, GRIISO 26.000, GRI

Guideline Social Responsibility – working draft 4.1 ISO 26.000 Reporting Framework for sustainability reporting, Global Reporting Initiative




Which areas are covered by CSR? Consumer group Stiftung WarentesWhich areas are covered by CSR? Consumer group Stiftung Warentestt

The Environment1. Guiding principles and corporate policy2. Management3. Measures and implementation4. Reporting

Consumers and Society1. Willingness to provide information 2. Community involvement

Social Issues / Employees1. Guiding principles and corporate policy2. Management and measures3. Implementation4. Reporting

Social Issues / Production and Supplier1. Guiding principles and corporate policy2. Management and measures3. Implementation4. Reporting




Workplace Data %

Score Marketplace

Data %

Score

Management and Governance Stakeholder engagement C

Company structure and governance A Supplier standards - -

Financial stability and risk management A Investor relations A

Transparency and reporting practice A Consumer relations A

Planning processes A International Links A

Performance measurement and monitoring A Domestic Sourcing A

Codes of conduct and enforcement - - Islamic Financing A

Corruption and bribery policies and enforcement - - Joint Ventures & Partnerships - -

Management and Governance Score 84.4 A Marketplace Score 83.9 A

Employment Environment Data Score

Employee practice and engagement - - Environmental policy - -

Health and safety management - - Environmental management systems - -

Human capital development including: - A Performance measurement and monitoring - -

Graduate Recruitment Environmental reporting - -

Graduate Training Environment Score - -

Graduate Sponsorship/Scholarship Programmes

Worker satisfaction monitoring B Community Data Score

Remuneration policies - - Community and charity including:- A

Knowledge management - - Adopt-a-charity

Tolerance and diversity in the workplace - - Contributions in kind

Employment Score 64.3 C Employee volunteering schemes -

Adopt-a-school -

Accreditation Key subjects sponsorships

Awards, acknowledgements A Contribution type and quantum B

Accreditation to international standards A Human Rights policies - -

Membership/Signatory of international bodies A Rakyat Policies A

Accreditation Score 100 A Halal Accreditation A

Media monitoring and reporting A

Workplace Score 74.0 B Community Score 81.3 A

Which areas are covered by CSR? Which areas are covered by CSR? -- Consulting Firm OWW, MalaysiaConsulting Firm OWW, Malaysia




OPI

Input

Output

energy

water

materials chemicalsraw materials

products

waste

semi productsvolume

rate

number

cost

waste water

e-powerfuel

rejectsscrapsludgehouseholdother

legalrequirements

qualification &training

air quality law

MPI safety

waste water law

complaintsaccidents

maintenance costsdowntime

number ofincidents

number

number ofoffences

number

EPI

OPI

Input

Output

energy

water

materials chemicalsraw materials

products

waste

semi productsvolume

rate

number

cost

volume

rate

number

cost

waste water

e-powerfuel

rejectsscrapsludgehouseholdother

legalrequirements

qualification &training

air quality law

MPI safety

waste water law

complaintsaccidents

maintenance costsdowntime

number ofincidents

number

number ofoffences

number

EPI

Social Aspects(SA8000 indicators)

Efficiency

Holistic view:

Maintenance

Ecological Aspects(ISO 14000 indicators)

Which areas are covered by CSR? Which areas are covered by CSR? –– Enterprise Performance Indicator SystemsEnterprise Performance Indicator Systems




• Management Standards– Environmental Management

• ISO 14000 Family (International Organization for Standardization)• ECO-Management and Audit Scheme EMAS (European Union)

– Quality Management • ISO 9000 Family (International Organization for Standardization)• EFQM model for Business Excellence (European Foundation for Quality

Management)

• Workplace Standards– SA8000 (Social Accountability International)– ILO-OSH-2001 (International Labor Organization)– OHSAS 18001 (various worldwide Standardization Bodies)

Which areas are covered by CSR? Which areas are covered by CSR? –– StandardsStandards




• Reporting Standards- GRI - www.globalreporting.orgwww.globalreporting.org

• Social Standards– ISO 26000 forthcoming 2008 (International

Organization for Standardization)– AA1000 (AccountAbility)– TransFair– Fair Trade Labeling Organization– Business Social Compliance Initiative

• Industrial Standards– Textile

• Code of Labour practices for the apparel industry including sportswear

• RUGMARK• Purewear• European Eco-Label• Green Cotton• LamuLamu• ÖkoTex Standard 100Plus




Information and Networking Information and Networking –– www.sustainwww.sustain--asia.orgasia.org




CSR CSR –– making profit with a clear conscience!making profit with a clear conscience!

Involves every aspect of an organization, like

• Governance

• Environmental sustainability

• Risk management

• Workplace issues

• Cultural norms

• Local laws and customs

….











Making use of data and information




What gets measured gets managed?

What gets evaluated gets managed?

What gets systematic controlled will improve?

“If You Don’t Measure itYou Can’t Manage it….”




Identification of Success Factors for Sustainability ManagementIdentification of Success Factors for Sustainability Management

Company strategy business success with high customer satisfaction, environmental impact, employees satisfaction

Long & short-term goals market share, turnover, production costs and efficiency

Interrelated factors production, sales, storage, quality, delivery time, qualification

Side restrictions customer requirements, demands, market developments, compliancerequirements etc.

OE 3OE 1 OE 2

OE 1.3 OE 1.X OE 2.1 OE 2.X




market share

Goals strategic level

Goals operative level

strategic level

operative level

1.1 2.1

1.1.1 1.1.2

OU 1 OU 2 OU 3

flexibility

profit

time

quality

social

1.1.1 1.1.2 1.1.X

OU 2.1

costs

time

flexibility

social

OU 1.1 OU 2.x

environ.

costs

flexibility

time

Strategy

Success Factors and Goal System DerivationSuccess Factors and Goal System Derivation

Development of a company specific goal system and quantification




Company - CSR Objectives (qualitatively)

0% 10% 20% 30% 40% 50% 60% 70% 80%

Strengthening of the corporate culture

Enhance employee commitment

Establish a continous improvement process

Enhance innovation potential and creativity

Create / adapt company wide values system

Internal and external information provision

Issue- and risk management

Enhance internal and external communication tool

Enabling company- / industry wide comparable performance assessments

Input on strategy formulation and assessment

What will be the objective of the CSR activities with respect to your company?




Assessment Plan Goal system for the companySpecific CSR FrameStakeholder engagement

Assessment Procedure Defined procedure (reporting cycles, assessment meetings)Responsibilities / competencesStandard key performance indicatorsChange management plan for improvementsCommunication planReview procedure

Types Monitoring, benchmarking, audit / internal/externalContent KPIs, benchmarks, goal achievement, improvement monitoringStructure Specific definition, graphics, resultsReporting Publication, frequency, work flow

Assessment Reports

Development of a CSR Performance Assessment SystemsDevelopment of a CSR Performance Assessment Systems




ExternalStakeholder

Area 1 Area 2 Area n

Closed Loop

Department 1 Department 2 Department nMaterial FlowMaterial Flow

CompanyIn

form

atio

n f

low

Info

rmat

ion

flo

w

Business management and decision makingBusiness management and decision making

GovernmentCommunity Investors Customer, Supplier Etc.

Demands, RequirementsPerformance, ReportingInternalStakeholder

Management

Employees

Owner

Performance,Reporting

Demands,Requirements




Refinery UtilitiesOffice & Administration

Fire & Safety Department Maintanance Training

Center Academy Educational Lab Hospital

Crude Distillation Unit

Power Plant Fire GroundTransportation & heavy Equipment

Housing Housing Basic Science Lab Zaal

Wax Plant Water & Gas Supply Fire Brigade Mechanic Class Room Class Room

General Tachnical Lab

Laboratory

QC Lab Boiler Plant Electric & Instrument

Proses Implementation Lab

Emergency Care Unit

CivilExploration Production Lab

Radiography Room

Logistics Chemist

Insinerator

PPT MigasLevel 1

Level 2

Level 3

Operational Monitoring and Assessment Cycles








Are there some tools to help us?Are there some tools to help us?




0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%

Internal communication

Process monitoring with indicators

Internal documentation

Process / business assessment based on indicators

External reports communication

In-house gap analysis

Benchmarking

Representation and analysis of material flows

Simulation of processes

Definition of CSR orientated objectives

Preparation of material and energy balances

ICT for business managementICT for business management

EC project EMIT CSR, Malaysia




0%5%10%15%20%25%30%35%

in use / food in use / textile in use / general

Preparation of material and energy balances

In-house gap analysis

Representation and analysis of material flows

Simulation of processes

Process monitoring with indicator

Process/business assessment based on indicator

Internal documentation

External documentation/communication

recycling or waste exchange

IT systems used to support controlling and management tasks and IT systems used to support controlling and management tasks and real benefit (or benefit from future use)real benefit (or benefit from future use)

Process and performance monitoring in a large number of companies is inadequate to needs! ?

EC project Asia ITC FORCE, Thailand




Indicator Management Process Management




www.modiconsult.comwww.modiconsult.com




Combining tools and services for industriesCombining tools and services for industries




Specific objectives:

• To develop a portfolio of efficient ICT-based sustainability management tools and solutions tailored to the local conditions in Southeast Asia and needs of local SMEs across various industrial sectors

• To stimulate and facilitate an uptake of ICT-based sustainability management methods and tools in significant number of regional SMEs and to improve their competitiveness and local environment situation

• To establish a service infrastructure for fostering sustainability management culture and capacity

• To encourage uptake of sustainability management tools and practices on national/regional level through active dissemination and promotion activities

Transition of SMEs and supply chain networks in Southeast Asiatowards sustainable production processes through an active uptake of ICT

solutions for sustainability management – ICT4SM




Setting up company specific controlling systems for continuous monitoring and assessment




What are the benefits?Creation of transparencyInstalling a systematic process of monitoring & reporting as well as evaluating & improving important business aspects in a continuous wayImproving decision making through an holistic view Support and integration of different management systems (EMS, Quality, OHS etc.)Efficient data management (collection and use!)...

ConsequencesCost and recource savingImproved management proceduresCompliance and business enhancementChange of attitude towards learning organisations




• Green Productivity Project (GPP I / II)(Indonesia, Thailand, Philippines, Vietnam / 1999 - 2005)

• Training on Cleaner Production Technology (CPT I / II / III / IV)(Indonesia, Thailand, Philippines, Vietnam / 2000 - 2004)

• Web Based Training: Life Cycle Oriented Plant Management(LCPM) / Vietnam, Indonesia, Thailand / 2001 - 2005)

• Information Technology and Communication in the Field of Sustainable Environmental Protection for Resource Intensive Enterprises (ASIA IT&C FORCE)(Thailand / 2002 - 2004)

Combining tools and services for industries Combining tools and services for industries -- selected project references Iselected project references I




• Technology Partnership and Training Cooperation in European Management Information Systems to Enhance theCompetitiveness of Thai SMEs (SPF TEAMS SME; Thailand / 2006 – 2007, www.teams-sme.de)

• European-Malaysian Alliance and Capacity Building ofMalaysian Intermediary Institutions in European MIS to Enhance Corporate Social Responsibility in Export OrientedMalaysian SMEs (EMIT CSR (Malaysia / 2007 – 2008, www.emit-csr.de)

• Empowering Asian Business Intermediaries throughKnowledge-based Networking focused on SustainabilityManagement (EMP-ASIA; Thailand, Vietnam / 2007 – 2009, www.empasia.org)

Selected Project References Asia IISelected Project References Asia II




Reduction of heating time by 50% - consequently reduction of gas consumption by 50% and increase of productivity; annual savings for all lines: 3.445 mil. pesos

Implementation of measures for preventive maintenance, cleaning of the boiler

Unusually high energy consumption in peanut pretreatment (heating of peanuts in a water bath on gas basis [LPG])

Increase of product output by 10% on average (various product groups); clear reduction of employee illness and accident rate (difficult to estimate financially)

Installation of a new ventilation systemHigh employee dissatisfaction in individual production areas (difficult work conditions caused by climate)

Savings thus far: approx. 100,000 pesos (for all lines); reduction of the downtimes (indirect savings: 91,000 pesos)

Selection of an alternative spare part for vibration damping

Long downtimes on the production lines (esp. peanut line 2)

Savings thus far: 395,000 pesos

Consistent and sorted separation of different waste fraction

High disposal costs

Savings Potential / ImpactMeasureIdentified Potential

Totel savings per year: US$ 180,000 (March 2005)

EPA Project Results EPA Project Results -- JBC Food Corporation, JBC Food Corporation, CaloocanCaloocan, Philippines, Philippines




Annual saving: 401,760,000 Rupiah, payout time based on investment costs: approximately 4 years

Installation of new piping at the end of 2003

High losses in the distribution of drinking water (leaks in pipe system)

Savings thus far: approximately 96,000,000 Rupiah

Installation of special equipment (load shading system) in September 2004

High failure rates in the “power plant”

Savings thus far (minus investment): 256,000 Rupiah

Successive replacement of the old filter press segments

Obsolete filter presses in the “wax plant”

Savings Potential / ImpactMeasureIdentified Potential

Totel savings per year: US$ 220,000 (March 2005)

EPA Project Results EPA Project Results -- PusdiklatPusdiklat MigasMigas, , CepuCepu, Indonesia, Indonesia




12 Information workshops16 Local case studiesDevelopment of training materials 12 Training seminars Computer-based training 5 Training of Trainers (TOT)

Goals

Activities

CSM-Centre for Sustainability Management, GermanyASEP- Asian Society for Environmental ProtectionTEI-Thailand Environment Institute

DurationTarget region Indonesia, Philippines, Indonesia, Philippines, ThailandThailand, Vietnam, Vietnam 10/ 2003 - 10/ 2007

Know how transfer and dissemination of EMA Adaptation of EMA methods to the specific needs of South-East Asian companiesPromotion of sustainable business development by showing economical and ecological savings Strengthening of capability and institution building

Main project partner

www.environmentalwww.environmental--accounting.orgaccounting.org

Environmental Management Accounting for SME in SouthEnvironmental Management Accounting for SME in South--East Asia East Asia




What can we offer?Individual IT based performance controlling solutions for businesses based on EPA /EPI methodology for businesses (any size: micro, SME, big sized, supply chains)

- Business performance management (e.g.KPI management)- Compliance management & reporting (Environmental – e.g. Proper, OHS)- CSR monitoring & reporting- Continuous improvement process

Systems implementation & qualification of industriesBuilding up and interlinking business support infrastructureDevelopment and operation of service provider models

Changing direction of businesses towards Sustainability ManagemeChanging direction of businesses towards Sustainability Managementnt

Individual company implementation and support projectsIndividual company implementation and support projects

Branch solutionsBranch solutions

Qualification and institution buildingQualification and institution building

Development and operation of service on demand solutionsDevelopment and operation of service on demand solutions




• www.sustain-asia.org

Documents

CSR Intro Presentation Slides