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Wharton Global Alumni Forum:International Corporate Social Responsibility
Professor Diana C. Robertson
Beijing, ChinaJune 13, 2009
Agenda
What is Corporate Social Responsibility (CSR)?
What’s the case for (and against) CSR?
Debate: Global standards of CSRWhat can we learn about best
practices of CSR in China?What’s the future of CSR?
What is CSR?
A firm’s efforts to further a social objective, also known as corporate citizenship, triple bottom line, sustainability
Normative and business cases for CSR
Philanthropy Stakeholder model Strategic model –creating value
A Stakeholder Map
Company
Mass media
Special interestGroups
Privatesector
Politicalparties
InternationalOrganizations
Pressuregroups
Localcommunities
NGOs
Customers
Professionals
Employees
Governments
Suppliers
Corporatemanagement
Shareholders
• Slide Compliments of Klaus Leisinger, Novartis Foundation 8
Page 9
What is the Business Case for CSR?
Building reputation
Attracting customers
Attracting and retaining employees
Attracting investors
Page 10
What is the Business Case against CSR?
Milton Friedman’s argument that the “business of business is business”
The firm exists to benefit shareholders
CSR does not contribute to the bottom line
Page 11
What Is the Evidence?
“A simple compilation of the findings [from 127 empirical studies over the past 30 years] suggests that there is a positive association, and certainly very little evidence of a negative association, between a company’s social performance and its financial performance.”
Margolis, Joshua D., and James P. Walsh, Misery Loves Companies, Administrative Science Quarterly June 2003
Debate: Should firms adopt global CSR standards?
PRO
Yes, firms should adopt global standards --and here is what they are.
CON
No, firms should not adopt global standards--only country standards—and here is why.
UN Global Compact
A strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption
6200 participants, including over 4700 businesses in 120 countries around the world
1147 participants in Asia (20+ countries)
201 participants in China (7 in FT 500)
United Nations Millennium Development Goals
An overarching framework to measure progress in reducing global poverty
Growing Inclusive Markets Initiative: Launched in 2006 Promote the private
sector as a resource for investment and innovation to achieve the MDGs
CSR in Singapore, Turkey, and Ethiopia
Field research on the meaning and nature of CSR in three very different economies
Singapore -Enlightened self-interest model
Turkey-PhilanthropyEthiopia-Partnerships with NGOs
My conclusion: CSR looks very different and should be tailored to a country’s economic and social needs.
CSR – Best Practices
“Golden Bee CSR China Roll” sustainability awards (China WTO Tribune magazine)
A total of 60 companies including: Lenovo Haier Pepsi Eaton Novartis Sony
Unilever Hope Schools
Donated money and resources to help set up 18 “Hope Schools” in rural China.
Funded tuition fees for promising college students
McDonald’s
Disaster relief – Sichuan Earthquake 30,000+ food deliveries
Monetary donation to relief effort
Lenovo
Hope through Entrepreneurship
Bottom of the Pyramid (BOP) Investments: exploring new products and new business models that bridge the digital divide
Haier – Environment Sustainability
The only representative from Asia to be invited to the 7th meeting of the parties to Montreal Protocol
Award-Winning, Environmentally-Friendly Products
Minsheng Bank
China Poverty Reduction
SA 8000 accreditation
Awards: 2006: “2005 Contribution Award for Poverty
Reduction” and the title of “Most Respected Enterprises in China” and the award of Top 100 Excellent Enterprises in China’s enterprise social responsibility survey
2007: nominated for the “2006 China Charity Award”
2008: “2007 Special Award for China Poverty Reduction” issued by China Foundation for Poverty Alleviation .
Industrial and Commercial Bank of China
Green Credit PolicyServing the Community
People's Award for Social Responsibility
2008 Best Corporate Citizen
What Can We Learn about Best Practices in CSR?
Ideally integrated with the core business
Compensation and control systems must be aligned with CSR
Should include specific objectives, timetables, and metrics to track progress
Leadership is key CSR is motivating and contagious