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Presentation for the AmCham Business Ethics and Sustainability Conference, 12 November 2012, Sofia. Updated
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Toby Webb, Founder, Ethical Corporation and Stakeholder Intelligence
Lecturer, Corporate Responsibility, Birkbeck College, University of London
[email protected] / tobywebb.blogspot.com
Companies integrating sustainability into business strategy: Case studies and conclusions November 2012
Marks & Spencer Plan A
Marks & Spencer Plan A (2007)
Goal: World's most sustainable major retailer
“Plan A”: 180 environmental/ethical commitments by 2015
Focus: Climate change, Waste, Natural resources, Health and being a Fair partner
Cost neutral/positive
Award winning
Growing customer trust
Now launching new products and campaigns: Energy, customer loyalty (Shwopping)
Unilever Sustainable Living Plan (2010)
Ten year journey towards sustainable growth with 50 targets
Aim to bring safe drinking water to 500 million people
2011: Increased the proportion of portfolio that meets highest nutritional standards from 22% in 2010 to 25% in 2011
Aim: Halve the greenhouse gas impact of products across the lifecycle by 2020
2020 aim: Source 100% of agricultural raw materials sustainably
Sustainably sourced raw materials increased from 14% in 2010 to 24% in 2011
Timberland and ‘Earthkeepers’
Timberland and ‘Earthkeepers’ (2007)
2007 looking "desperately" to try and grow the business
Developed successful "Earthkeeper" line of footwear and apparel
Designed with a core philosophy of environmental stewardship
Objective: "make our values valuable" : Mike Harrison, Chief Brand Officer
Earthkeepers product line is now 10% of sales
Gone from one boot in 2007 to entire line sold around the world:
Engaged heavily with customers online and using social media
Skanska and greener construction
Skanska and greener construction (2009)
Empire State building: Ambitious $500m renovation plan, paid for with savings from “deep green retrofit”
Skanska: 57% reduction in energy consumption. Reduction of 15-18% employee absenteeism
Renovation costs recouped in as little as five years
By 2015: Building’s owners say they are confident they will save $4.4m a year: A 38% reduction of energy use
Development business unit focusing on green: 10% of the company’s overall $17bn annual revenues, 1% deep green
Vodafone in Turkey
Vodafone and Turkish Farmers (2011)
Vodafone/ Accenture 2011 research: Mobile-based agri services could boost agricultural income by $34bn by 2020
Vodafone Farmers' Club offers special rates & info to farmers: Mobile tech to improve incomes & increase efficiency/sustainability
500,000 signed up to the Farmers' Club so far. Participating farmers have increased productivity by about €100m
SMS alerts with government information on:
New regulations and financial support
Weather forecasts
Market price quotes linked to location and production
Partnership with Sekerbank: Farmers pay mobile phone bills post-harvest, annually. Benefits to Vodafone: Customer loyalty, mass revenue streams
Siemens and Green Business Strategy
2011: Products and solutions in Environmental Portfolio generated revenue of €29.9 billion: 41% of total revenue
Objective: Grow annual revenue to €40 billion by 2014 –with new, innovative products and exceptional growth in fields like renewable energy. These include:
Combined cycle power plants and intelligent building technologies: far more energy-efficient than comparable solutions
Renewable energy systems and components: wind turbines, steam turbines for solar-thermal power plants. Environmental technologies for cleaner water and air
Conclusions 1: What does this mean for stakeholder engagement?
Employee engagement drives innovation
NGO partnerships bring ideas and credibility
Communities have increasing power & influence
Social media means no company escapes scrutiny
Big business want a long term vision from Governments: And policies and incentives that enable investment and longer term planning
Conclusions 2: What does this mean for financial returns?
London Business School and Harvard Business School research finds that:
Firms with better CSR performance face significantly lower capital constraints
Better stakeholder engagement and transparency around CSR performance, are important in further reducing capital constraints
That the relation is driven by both the social and the environmental dimension of CSR
"CORPORATE SOCIAL RESPONSIBILITY AND ACCESS TO FINANCE" Available at: http://ssrn.com/abstract=1847085
Conclusions 3: The takeaways…
CSR/Sustainability/Responsible business = Smarter business
Consumers want to trust brands, not products
Leading companies turning sustainability into opportunity all over the world: New products / motivated people / cost savings
It is early days! But 9 billion people means less resources and innovation will be essential: Sustainability = risk reduction
Corporate roles in changing inefficient systems will be vital: The winning companies recognise CSR is systems change
Further resources
The Smarter Business Blog: tobywebb.blogspot.com
Ethical Corporation: www.ethicalcorp.com
Eabis.org / Caseplace.org / Harvard Kennedy School CSR Initiative: http://www.hks.harvard.edu/m-rcbg/CSRI/
Doughty Centre for Corporate Responsibility: http://doughtycentre.info
MIT/Sloan Management Review: http://sloanreview.mit.edu/innovation-hubs/sustainability/
Stakeholder Intelligence: Training and Research: www.stakeholderintel.com