Corporate responsibility implementation, strategy, regulation and trends presentation

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

2. 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

3. 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

4. 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

5. 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

6. •
•
•
•
•
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

7. 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

8. 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)

9. 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

10. 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

11. 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.

12. 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

13. •
•
•
•
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)

14. 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