Corporate responsibility implementation, strategy, regulation and trends presentation

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Information about Corporate responsibility implementation, strategy, regulation and trends...
Business & Mgmt

Published on March 7, 2014

Author: Tobiaswebb



Corporate responsibility implementation, strategy, regulation and trends presentation

(Applied)  Corporate   Responsibility  Module   Birkbeck,  University  of  London   Revision  Lecture  6  March  2014   MSc.  Class  2014   Lecturer:  Tobias  Webb  (  

Core  themes  of  the  course       1.  What  drives  sustainability,  poliLcs,  or  stakeholders,  or   both?   2.  The  balance  between  risk  and  opportunity   3.  The  role  of  regulaLon  vs.  voluntarism       4.  What  does  sustainable  business  strategy  look  like?     5.  How  companies  make  CR  ‘sLck’  inside  their  business   6.  Future  challenges:  what  are  these  and  how  can   companies  contribute  to  a  ‘beTer  world’  effecLvely     What  we  are  trying  to  avoid  today  

What  drives  sustainability,  poliLcs,  or   stakeholders,  or  both?     •  Complex  drivers:  Linked  with  economic   development,  more  obvious  links  between  big   business  and  ESG  impacts,  technology,  civil   society  concerns,  ESG  investors   •  Power  of  big  biz  concerns  not  new  but  gained   pace  post  WWII  in  Europe/USA   •  Links  with  economic  dev.  mean  less  tradiLonal   focus  in  Asia,  Africa,  Lat  Am  

What  drives  sustainability,  poliLcs,  or   stakeholders,  or  both?     •  Been  said  to  be  a  ‘le]  wing’  agenda  but  o]en   conservaLves  have  done  more  for  environment   whilst  le]ist  poliLcs  focuses  on  social  gains   •  Today  the  picture  is  very  mixed  and  fluid:  China  is   suddenly  concerned  about  both  green  energy   and  polluLon  and  social  unrest.     •  Culture  plays  the  strongest  role  everywhere  (US,   India,  S  Africa)     •  NGO  campaigners  &  media  have  played  key  role  

The  balance  between  risk  and   opportunity     •  CR  is  presented  mostly  as  opportunity   •  But  more  o]en  it  is  sLll  ‘opportunity  to  minimise   risk’     •  The  balance  IS  changing  as  leading  companies   build  it  into  strategy  and  middle  of  the  road   companies  evolve  risk  parameters  to  becoming   pro  acLve  (S.  engagement,  prevenLon,  policies   which  encourage  intrapreneurialism)   •  Social  opportunity  is  sLll  a  major  challenge  to   turn  into  mainstream  strategy,  but  companies  of   course  provide  social  benefits  every  day  anyhow  

•  •  •  •  •  The  balance  between  risk  and   opportunity    ntrepreneurialism  took  hold  a   BoTom  of  the  Pyramid  /  Social  E decade  ago.  Results  are  so  far  sLll  mixed     However:  Many  companies  invesLng  in  “pro-­‐poor”  products  as   future  bets.  Some  are  working  well  today:  Mpesa  in  Kenya,   Unilever’s  Lifebuoy  soap  in  India,  SAB  Miller,  SC  Johnson  in  Africa,   GrupoNueva,  Suez,  Endesa  in  LaLn  America.  Others  include:  P&G,   Danone,  Nestle,  Douwe  Egberts,  Lal  Teer  Seeds  (Bangladeshi  firm),   Tetra-­‐Laval  and  many  others   The  Circular  Economy  from  product  design  to  re-­‐use  increasingly   seen  as  significant  business  opportunity     So  is  adaptaLon  to  climate  change  and  its  impacts  in  energy,   industrial  companies,  flood  defences  etc     Investor  influence  far  more  focused  on  risk  management  than   opportunity  

The  role  of  regulaLon  vs  voluntarism         •  TradiLonal  le]  wing  criLque  of  CR  was  that  it   undermined  regulaLon     •  That  has  been  tempered  by  awareness  of  the  real   challenge:  enforcement  and  capacity  for  change   in  insLtuLons,  governments,  companies,  systems   (energy,  agriculture)     •  RegulaLon  IS  playing  an  increased  role  (reporLng,   disclosure,  environmental  enforcement  in  China)   but  voluntarism  sLll  rules  given  lack  of  agreed   global  rules  and  how  enforcement  of  them  would   work  

The  role  of  regulaLon  vs  voluntarism         •  Voluntarism  has  evolved  into  ‘so]  law’  whereby  NGOs  such  as   Greenpeace  campaign  and  push  groups  of  companies  to  create   standards  around  which  they  can  innovate  and  which  become  de   facto  rules  of  the  game  for  other  companies  and  parLcularly   suppliers     •  ‘CollaboraLve  Governance’  via  mechanisms  such  as  EITI  or  SAC   gaining  tracLon  a]er  10-­‐15  years  of  pressure  and  improving   performance     •  Do  they  mean  less  regulaLon?  Not  really:  Emerging  markets  are   volaLle  and  poliLcs  can  mean  things  change  quickly   •  Also  recogniLon  growing  that  environmental  standards  o]en  need   to  be  mandatory  and  enforced  to  have  real  tracLon  (climate   change,  chemicals  use)    

What  does  sustainable  business   strategy  look  like?       •  ‘Strategy’,  like  ‘Purpose’  is  both  misunderstood  &   misused.  Lots  of  tacLcs  get  sold  as  strategy   •  It’s  clearly  used  with  regard  to  CR  when  you  can  see  a   company  build  CR/Sustainability  into  both  how  they   work  every  day  (few  accidents  or  polluLon  incidents)   and  into  their  mainstream  products  and  services     •  It’s  very  hard  to  do:  The  old  paradigm  sLll  dominates  in   most  cases.  The  new  paradigm  of  stakeholder   engagement/listening,  tailored  products  and  services,   the  circular  economy,  ‘good’  lobbying  and   contribuLons  to  capacity  building  is  a  complex   management  challenge  

What  does  sustainable  business   strategy  look  like?       •  Commonly  companies  promote  community  work,   philanthropy  and  basic  partnerships  as  ‘strategy’  but   usually  these  are  not  parLcularly  strategic     •  Companies  closer  than  most  include  M&S,  Nike,   Siemens,  GE,  Patagonia,  Interface,  VF  Corp   (Timberland),  Vodafone,  SAB  Miller,  Unilever,  Nestle   and  others  (see  DJSI  for  a  longer  list)     •  Unilever’s  “Sustainable  Living  Plan”,  Nestle’s  “Shared   Value”,  BMW’s  new  i3  car,  Siemen’s  investments  in   urbanisaLon  and  green  tech  are  good  examples.   Other’s  include  Interface’s  enLre  business  focus,  and   even  Wal-­‐Mart’s  supply  chain  work    

How  companies  make  CR  ‘sLck’  inside   their  business     and  retenLon  are  key   •  Employee  moLvaLon,  aTracLon   •  •  •  •  drivers  of  corporate  responsibility  in  companies   Yet  HR  departments  are  less  prominent  in  the  pracLce  than   they  should  be.  This  is  a  major  challenge  –  how  and  when   to  integrate  targets  and  KPIs  into  performance  reviews  and   incenLves   Companies  someLmes  use  green  teams,  CSR  champions   networks  and  internal  volunteers  to  drive  interest  and   awareness   Comms  technology  use  and  training  beyond  Lck  boxes  also   drives  awareness  of  the  dilemmas   Two  way  engagement  and  ‘outside  in’  viewpoints  are  seen   as  essenLal  in  understanding  awareness.  Further  reading.  

Future  challenges:  what  are  these  and  how  can   companies  contribute  to  a  ‘beTer  world’  effecLvely       •  Clearly  sustainability  ‘numbers’  /  predicLons  are  heading  in  the   wrong  direcLon  globally   •  Water  shortages,  climate  change,  flood  risk,  deforestaLon,  working   condiLons  and  pay,  tax,  social  conflict  etc  are  all  major  worries  for   CEOs  as  well  as  civil  society   •  But  in  some  cases  big  ‘problems’  are  created  because  we  now  know   so  much  more  than  before   •  Conflicts  and  wars  are  down,  some  serious  diseases  are  being   tackled.  Some  numbers  ARE  genng  beTer.  Some  reading  here   •  Companies  are  part  of  the  soluLon.  As  their  power  has  grown,   some  negaLve  numbers  have  declined.  BUT:   •  Companies  have  significant  negaLve  impacts  “NegaLve   externaliLes”  which  have  o]en  not  been  managed  well  or   understood  

•  •  •  •  Future  challenges:  what  are  these  and  how  can   companies  contribute  to  a  ‘beTer  world’  effecLvely       These  are  now  understood  more  and  more,  as  is  the   power  of  company  /  money  influence  of  companies  on   poliLcians  (US,  UK)   One  result  is  a  significant  trust  deficit  for  companies   (see  Edelman  2014)   Another  is  companies  understanding  the  limitaLons  of   tradiLonal  philanthropy/community  and  aTempLng  to   rebadge  CR  as  ‘Shared  Value’   A  more  interesLng  development  is  an  understanding   that  Governments  are  o]en  weak,  lack  capacity  and   can  get  stuck  in  poliLcal  deadlock  for  decades   (Bangladesh)    

Future  challenges:  what  are  these  and  how  can   companies  contribute  to  a  ‘beTer  world’  effecLvely       •  This  means  that  companies  must  move  beyond  their  own  direct   operaLons  and  even  that  of  their  suppliers  to  think  about  having  in   impact  within  their    ‘sphere  of  influence’  ie  where  they  can  make  a   difference  as  a  group  to  systemic  pracLces  (Kimberly  Process,  Fair   Labor  AssociaLon,  RSPO,  previous  examples)   •  Finally,  some  are  starLng  to  grasp  that  insLtuLonal  weakness  needs   addressing  via  company  funding  and  support,  usually  via  NGOs  and   with  transparency.  One  recent  example  being  the   Bangladesh  Accord  2013   •  Long  term  trends  and  their  impact  on  Governance  are  now   increasingly  front  of  mind  for  CEOs  of  large  companies   •  Reports  such  as  the  FutureState2030  are  raising  awareness,   alongside  the  UN  Global  Compact  and  WBCSD  

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