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!

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