Public Policy, CSR & El Salvador

18 September 2003 CSR Practice - Private Sector Development Vice Presidency

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Public Policy, CSR & El Salvador

The World Bank Corporate Social Responsibility Practice

Presentation by

Nigel Twose, Manager

Foreign Investment Advisory Service


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Definition of CSR

“The commitment of business to contribute to sustainable economic development, working with

employees and their representatives, their families, the local community, and society at large to improve their quality of life, in ways that are both good for business

and good for development.”


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Business Drivers of CSR1) Global supply chains: CSR measures undertaken as a condition of contract between supplier and buyer.

2) National firm undertakes CSR activities unilaterally as a step to distinguish themselves in the marketplace: a reputable partner.

3) Industry sectors take CSR measures together: socially useful for their country, plus necessary for industry in the long term


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CSR Approach

CSR CYLE

Focus on financial viability and achievement of CSR

outcomes.

CSR implementation

Drivers: incentives & risks motivate companies to address

social and environmental impacts

Achievement/ progress on social and

environmental objectives

Reward: CSR achievements recognized;

market benefit or risk mitigation

obtained

A CSR-based approach relies on market-based drivers


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Industry Trends

64 66 68 70 72 74

Percentage of respondents reporting increased investment of resource

Staff increase

Budget increase

Increase in senior management (CEO,CFO, COO) time

MNE Investment in CSR: Increases Over Last 5 Years


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Industry Trends

0 10 20 30 40 50 60Percentage of sector that has taken relevant action

Choose one partnerover another

Withdraw from apartner

Choose one hostcountry over another

Withdraw from acountry

"CSR Issues Have Led Our Company To…"

Agribusiness Extractive Manufacturing


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Industry TrendsInfluence of CSR factors on new venture assessment,

relative to five years ago (% of respondents)

Much more influential

42%

More influential46%

Equal influence9%

Don't know/NA1%

Much less influential

1%

Less influential1%


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Industry Trends

0 5 10 15 20 25 30 35 40 45

Percentage of respondents identifying each type of government action

Better enforcement of CSR laws

Build partnerships w . private sector

Recognize or incentivize CSR

Reduce corruption

Provide CSR education

Host Government Actions sought by MNEs


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CSR & Public Policy

Legal and fiscal penalties and

rewards

Regulators and inspectorates

“Command and Control”

legislation

Mandating

Political Support Publicity and praiseEndorsing

DialogueStakeholder engagement

Combining resources

Partnering

Stimulating markets

Raising awareness

Funding support

Capacity building

Creating Incentives

“Enabling”legislationFacilitating

Public Sector RolesLegal and fiscal penalties and

rewards

Regulators and inspectorates

“Command and Control”

legislation

Mandating

Political Support Publicity and praiseEndorsing

DialogueStakeholder engagement

Combining resources

Partnering

Stimulating markets

Raising awareness

Funding support

Capacity building

Creating Incentives

“Enabling”legislationFacilitating

Public Sector Roles


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CSR Implementation Challenges

“Virtually all participants in this study noted that the absence of action by local governments presented a significant barrier.”


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Education-focused CSR

Assumptions: • A business perspective can contribute toward the enhancement of curriculum design

• A business perspective can help the education sector better focus on the skills and attitudes needed for El Salvador to compete in the global marketplace


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2) Categories for collaboration:

• Strengthening the education system;

• Strengthening local schools;

• Supporting teachers and students through special opportunities offered at the workplace.


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3) Business’ contribution optimized when:

• Private sector has a set of competencies that can help improve delivery.• Private sector designs support to build on these competencies.• Ministry of Education gives clear guidance on the ways firms can engage.• Ministry of Education supports move toward systemic, sector-wide approach.• Mechanisms are in place to support partnership-based approaches.

Documents

Public Policy, CSR & El Salvador