Creation of a New Corporate Competitiveness: Social Marketing

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent

Competitiveness: Social Marketing and Utilizing Human Resources

Seoul, KoreaNovember 2011

Russ HageySenior Partner

Worldwide Chief Talent Officer

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 2Korea Presentation FINAL (2)SFR

Companies need to step up to their social responsibilities

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 3Korea Presentation FINAL (2)SFR

Sustainable profitable growth;

old concept,new normal

Four messages

Employees will lead; skeptical

consumers, follow

It’s abad time to be an

opera house

New leadershipfor new

challenges

1 2 3 4

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 4Korea Presentation FINAL (2)SFR

Set youragenda beforeGreenpeacesets it for you

Build fromthe businesscase closestto home

Tackle yourvalue chain;see what’sleft over

Drive theold businessin a new way

There are a lot of buzzwords…

closed loopsgreening SUSTAINABLE DEVELOPMENT

sustainability lifecyclecivic entrepreneurship

waste reductioniso 14001triple-bottom-line takeback

voluntary regulation environmental management

from cradle to cradle urban reinvestment systems thinking

ecodesign design for environmentCLEAN TECHNOLOGY

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 5Korea Presentation FINAL (2)SFR

stakeholder managementbrownfield redevelopment

Restorative enterprisepollution prevention eco-efficiency

pollution preventioneco-effectiveness cradle-to-cradle

corporate social responsibilityFULL COST ACCOUNTING

industrial ecology green design INCLUSIVE CAPITALISM

GREENWASHING radical transactivenessleapfrog technology

ecodesign design for environmentCLEAN TECHNOLOGY

Our definition of corporate responsibility

“…the way a company integrates

social, environmental and

economic sustainability concerns

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 6Korea Presentation FINAL (2)SFR

economic sustainability concerns

into its strategy, operations and

interactions with stakeholders”

Why should companies care?

CustomersCosts Employees

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 7Korea Presentation FINAL (2)SFR

Customers care...but

don’t act on it

Opportunities for major cost

savings

Competitive advantage with

passionate employees

So how about cost…

REDUCE ELIMINATE DECREASE

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 8Korea Presentation FINAL (2)SFR

$2.4M

REDUCE ENERGY

ELIMINATE WASTE

DECREASE COST

Consumers appear inconsistent

~60% of consumers say they wantto buy more sustainable products

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 9Korea Presentation FINAL (2)SFR

<10% consumers purchase

carbon offsets

Only ~1% of UK households on Green Tariffs

~ 3% of U.S. coffee retail sales

are fairtrade

Actually they are mostly skeptical

<20% of consumers will consistently pay a premium for socially responsible goods

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 10Korea Presentation FINAL (2)SFR

“I don’t

believe product

claims about

being socially

responsible”

40% of respondents

“Insufficient

connection

between

product and

social benefit”

35% of respondents

“These

products should

exist anyway....

I shouldn’t have

to pay extra”

40% of respondents

Employees can be a powerful business case

“We’re doing this because

our employees want to.

“Sustainability will be a

key reason that the

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 11Korea Presentation FINAL (2)SFR

our employees want to.

They want to apply their

expertise to improve

society. It’s a

competitive advantage

for us.”

Kathy Pickus,

VP Abbott Fund

key reason that the

millennial generation

choose to work at

Campbell’s.”

Denise Morrison,

Campbell’s CEO

Profile of employee survey

Who did we ask

• 1,450 responses

• Range of industries & company sizes

• Predominantly developed world

• ~40% women

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 12Korea Presentation FINAL (2)SFR

What did we ask

• Importance of sustainability

• Influence on job decisions

• Involvement in related activities

• High priority issues

• Employee segments

Vast majority of employees valueemployer sustainability

80

100%

Respondents

Very

important 80

100%

Respondents

43%

25%

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 13Korea Presentation FINAL (2)SFR

0

20

40

60

Importance to

all employees

Important

UnimportantVery unimportant 0

20

40

60

Under 30 Over 30

43%

INCLUDES IN JOB SELECTION CRITERIA

53%

7%

VALUES EMPLOYER SUSTAINABILITY

100%

24%

The ‘Sustainability Enthusiast’

Sustainability

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 14Korea Presentation FINAL (2)SFR

REJECTS INDUSTRIES

13%37%

73%

ACCEPTS SALARY REDUCTION

10% cut accepted

5% cut accepted

SustainabilityEnthusiast

Enthusiasts Non-Enthusiasts

Companies greatly benefit from the passionof Enthusiasts

Invest extra time to support activities

IMPACT SCORE(10: max)

8.2

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 15Korea Presentation FINAL (2)SFR

Recommend company products/services

Recommend workplaceto friends

8.4

8.6

Employees’ priorities will change the agenda

Eliminating child labor

Sourcing green energy

Fixing domestic pollution

Ending corruption

Reducing overseas pollution

High importanceLow importance

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 16Korea Presentation FINAL (2)SFR

Offering healthy foods

Avoiding offensive ads

Planting trees

Setting up schools

Sponsoring the opera

Providing child care

Ending corruption

Paying fair wage/price

Core business

Harm and injustice

Developing world

"...we need a different approach to business,"...we need a different approach to business,

New leadership

Paul Polman

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 17Korea Presentation FINAL (2)SFR

approach to business,a new model led by a

generation of leaders with the mindset and the courage to tackle the challenges of

the future."

approach to business,a new model led by a

generation of leaders with the mindset and the courage to tackle the challenges of

the future."

Paul PolmanCEO, Unilever

Mindset of the sustainable leader

Multi year not (just) short term

Practical and idealistic

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 18Korea Presentation FINAL (2)SFR

Global and local

Holistic not siloed

Collaborativenot combative

7 week rural community

assignments

6 day global leadership

quests to Kenya

Key is to be proactive at developing these skills

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 19Korea Presentation FINAL (2)SFR

4 week community-

driven economic

development projects

Up to 6 months

working for an NGO

Sustainable profitable growth;

old concept,new normal

Four messages

Employees will lead; skeptical

consumers, follow

It’s abad time to be an

opera house

New leadershipfor new

challenges

1 2 3 4

This information is confidential and was prepared by Bain & Company solely for the use of our client; it is not to be relied on by any 3rd party without Bain's prior written consent 20Korea Presentation FINAL (2)SFR

Set youragenda beforeGreenpeacesets it for you

Build fromthe businesscase closestto home

Tackle yourvalue chain;see what’sleft over

Drive theold businessin a new way