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A presentation given to 400 business students and professors in Guadalajara, Mexico on September 19 2013. It covers: CSR definitions, trends now and in the future, company case studies, the business case for CSR and sustainability and the issues of the future. Looks at Marks & Spencer, Unilever, Siemens, General Electric company
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From CSR to Sustainable Business: What are companies doing, and why
Toby Webb, Founder, Ethical Corpora7on and Stakeholder Intelligence. Lecturer, Corporate Responsibility, Birkbeck,
University of London
Tecnológico de Monterrey, Mexico, September 2013
Tobias.Webb@stakeholderintel.com
Tobiaswebb.blogspot.com
What is CSR today?
• CSR IS NOT PHILANTHROPY • Ethics * Integrity * Products *
Services * Consumers * Investors * An7-‐corrup7on * Suppliers * Tax payments * Market Ethics * Employees * Civil society * Poli7cs and the Environment…and more…
• CSR is not about how you give your money away
• It is about how you make it • “CSR is about how you run your
business when no-‐one is watching”
What are the CSR trends today?
• More compliance
• BeWer governance
• Improved trust
• Cost reduc7on
• Co-‐ope77on
What are the (addi?onal) trends tomorrow?
• Resource constraints (popula7on, materials, climate change)
• Licence to Operate • Collabora7on for systems change
• Ins7tu7onal, trade and poli7cal improvements
• Impact measurement
Who are some of the leaders? • Unilever -‐ Ten year journey
towards sustainable growth – The Sustainable Living Plan
• Applies right across the value chain
• Responsibility for own direct opera?ons (social/enviro)
• Also for suppliers, distributors and how consumers use Unilever brands
• Underpinning the Plan are around 60 very tough business targets
So what do they actually want to do?
• Bring safe drinking water to 500 million people
• Increase propor7on of product por^olio that meets highest nutri?onal standards (22% in 2010 to 25% in 2011)
• Halve the greenhouse gas impact of products across the lifecycle by 2020
• 2020: Source 100% of agricultural raw materials sustainably (36% in 2012)
Business Benefits of Sustainability
Marks & Spencer
• Launched Plan A in 2007. 100 commitments to achieve in 5 years
• Now extended Plan A to 180 commitments to achieve by 2015.
• 139 achieved so far
• Ul7mate goal of becoming the world's most sustainable major retailer
• Sustainability work has driven profits as well as cut costs
• 2012: £135m NET BENEFIT (29% increase year on year)
Launched in 2007: “Ten years of incrementalism leading to transforma?on”
Who are some of the leaders?
• General Electric: Eco-‐Innova7on as business strategy
• Ecomagina?on: Mainstream focus on business innova7on and sustainable industrial products
• $2.3 billion invested in “Ecomagina7on” products in 2011
• Reduced GHG emissions 30% since 2004
• Reduced wastewater by 45% since 2006
Who are some of the leaders?
2011 -‐ Siemens reorganised opera7ons into four core business units: • Energy -‐ efficiency in energy
produc7on and distribu7on, including oil, gas and renewables
• Healthcare -‐ supplying technology (medical imaging equipment and healthcare IT)
• Industry -‐ providing
sojware and technology services
• Infrastructure and ci?es -‐ sustainable technologies (smart grid equipment and rail vehicles)
Siemens and Green Business Strategy
• 2011: Products and solu7ons in Environmental Por^olio generated revenue of €29.9 billion: 41% of total revenue
• Objec7ve: Grow annual revenue to €40 billion by 2014 –with new, innova7ve products and excep7onal growth in fields like renewable energy
Why do they choose to lead?
Unilever Marks and Spencer General Electric Siemens
• Securing supply
• Customer trust
• Low carbon future
• Urbanisa?on
(These are not the only reasons!)
Why do they engage “stakeholders”?
• Employee engagement drives innova7on and ideas
• NGO partnerships bring science, experience, and credibility
• Communi?es have increasing power & influence
• Social media means no company escapes scru7ny
• Big business want a long term vision from Governments: And policies and incen7ves that enable investment and longer term planning: So must lead by example
How do they engage with stakeholders?
• Dialogue with civil society • Consul?ng experts on
agriculture, trust, ethics. urbanisa7on, climate change, energy futures
• By using guidance and standards
• Listening to their employees
• Watching trends emerge
ISO 26000 Guidance ‘Standard’
How do CSR and Sustainability improve Business?
• Consumers want to trust brands, not all the product detail
• Leading companies are turning sustainability into opportunity all over the world: Water, Telecoms, Commodi7es, Retail, Mining, Construc7on…
• 9 billion people means less resources. Innova7on will be essen7al. The Circular Economy will be vitally important.
• Corporate roles in changing inefficient systems will be vital: The winning companies recognise CSR is systems change
• CSR and Sustainability = Smarter business
Harvard Business School
Professor Robert Eccles, Harvard Business School
Is CSR/sustainability profitable? London Business School & Harvard Business School research: • Firms with beWer CSR performance face significantly lower
capital constraints
• BeWer stakeholder engagement and transparency around CSR performance, are important in further reducing capital constraints
• That the rela7on is driven by both the social and the environmental dimension of CSR
"CORPORATE SOCIAL RESPONSIBILITY AND ACCESS TO FINANCE" Available at: hGp://ssrn.com/abstract=1847085
CEOs agree with all this…
UN Global Compact and Accenture CEO study 2013: ü 75 CEOs 1-‐to-‐1s ü 1,000 CEO responses ü 103 countries ü 27 industry sectors Found two clear CEO priori?es for the future:
One: “The need for governments to intervene to align global markets allowing companies to compete effec7vely to drive sustainability” Two: “To move beyond incremental change to transforma7on that delivers both sustainability leadership and value crea7on”
In conclusion…
• CSR today = Sustainable Business tomorrow. BUT:
• Sustainable business does not happen without Strategy
• Strategy does not happen without good Governance
• Good governance does not happen without Ethics
• Ethics do not happen without Stakeholder Engagement
• My final point: Successful sustainable business is based on both ethics and open and con7nuous engagement with society
Thank you!
Tobiaswebb.blogspot.com
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