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Organisations in Context (MANG6199):Corporate Social Responsibility (CSR)

Dr Denise BadenCSR session 11th October 2011

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Who am I?

Denise Baden

E-mail: [email protected]

Tel:(02380) 598966

Room 4025 Management building (2)

Background in social psychology, with a special interest in businessethics.

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Learning Objectives

Having successfully completed this unit you will be able to understand:

The changing nature of the business environment

the relevance of stakeholder theory and the role and importance of CSRin 21st Century organisations.

the changing role and expectations of business in society.

how CSR is being practiced in various organisations.

the strategic significance of CSR for business.

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Plan of Session

CSRdifferent approaches and definitions

Stakeholder model

Externalities

Sustainable Development

Cross-sector partnering

What is happening now future trends

Ian Gearing from National Grid how they are integrating CSR into theirbusiness practices

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What does CSR mean for you?

Take a couple of minutes to write it down

Discuss with a partner and come up with a commonstatement

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Are there any common themes?

Voluntary

Internalising managing externalities e.g.. pollution, calculate socialand economic cost of relocation or downsizing and include these in any

cost-benefit analyses.

Multi-stakeholder orientation

Alignment of social and economic responsibilities

Practices and values

Beyond philanthropy

Triple Bottom Line

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PhilanthropicResponsibilities

Be a good corporatecitizen: contributeresources to the

community; improvequality of life.

Ethical Responsibilities

Be Ethical, obligation to dowhat is right, just and fair.

Avoid harm

Legal Responsibilities:

Obey the law: Law is societyscodification of right & wrong. Play

by the rules of the game.

Economic Responsibilities

Be Profitable

CarrollsPyramid

of CSRource: Carroll (1991)

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What kinds of activities come under CSR?

Philanthropic activities

e.g. cause-related marketing, donations, employeevolunteering, sponsorship

Ethical Business practices

E.g. fair working conditions, responsible marketing, ethical

supply chain, responsible environmental practices, reducecarbon footprint

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Wider context of CSR

What is the role of business in society?

Legitimacyis a generalized perception or assumption

that the actions of an entity are desirable, proper, orappropriate within some socially constructed system ofnorms, values, beliefs, and definitions (Suchman,1995,)

Different countries have different perspectives

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Drivers for CSR

External

Sustainable development

Climate change, global warming

Globalisation

Diminished role of government, greater power of corporations

Growing gap between rich and poor

CSR is part of a larger transformation in the relationsbetween government, business and civil society

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Recent hot topics

Textile miles

Food miles

Excessive packaging

Pollution

Globalisation

Deforestation

Poverty

Fairtrade / labelling

Climate change

Corruption

27,312 miles in total

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Recent hot topics

The Independent (23/01/2007)

Textile miles

Food miles

Excessive packaging

Pollution

Globalisation

Deforestation

Poverty


Climate change

Corruption
http://video.google.co.uk/videosearch?q=csr&hl=en&emb=0

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MSC Napoli(BBC News, 23/01/2007)

Recent hot topics

Textile miles

Food miles

Excessive packaging

Pollution

Globalisation

Deforestation

Poverty


Climate change

Corruption

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Whose responsibility?

New rulers of the world (54 mins)

http://freedocumentaries.org/film.php?id=175

Pineapples: Luxury fruit at what price? (20 mins)

http://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-rica

The Dark Side of Chocolate (46 mins)

http://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolate
http://freedocumentaries.org/film.php?id=175http://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.cultureunplugged.com/documentary/watch-online/festival/play/4809/The-Dark-Side-of-Chocolatehttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://www.guardian.co.uk/environment/video/2010/oct/01/pineapple-trade-costa-ricahttp://freedocumentaries.org/film.php?id=175

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Whose responsibility

Sweatshops, hazardous working conditions, slave labour

Whose responsibility?

Government? Business? Consumers? If business is it thelocal suppliers or the MNCs?

What are the difficulties/arguments for assigningresponsibility to a particular group?

Discuss in your groups for a few minutes and be preparedto vote.

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Question?

What is the purpose of business?

In your groups see if you can come up with a consensus.

How has this changed over time?

How will it change?

Who should business managers be responsible to?

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Shareholder v Stakeholder theory

Concept of business social responsibility has long history

1970s and 1980s - Milton Friedman declared that the onlypurpose of business is to increase its profits, and that anyexpenditure on social causes is theft from the shareholders.

1984 Freeman proposes Stakeholder theory business isresponsible to a wide range of stakeholders, not just itsshareholders.

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FriedmansShareholder Model

The Manager

Shareholders

The Board

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Discussion

What objections can you think of to theshareholder view of the firm?

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Counter-Arguments

Many challenge the supremacy given to shareholders rights

"Whom and what is a business for? (Handy 2002)

The purpose of a business is not just to make a profit, but instead tomake a profit so that it can do something more or better. To assumethat profit is the only goal is to mistake the means for the end. Theidea that those who provide the financial backing are the company'srightful owners is outdated. Today, the value of a company is

determined largely by its intellectual property, brands, patents, andskills of its workforce.

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Ghoshal (2006) challenges Friedmans assertion thatmanagers job is to maximise shareholder value.

Shareholders have no ownership rights on the assets of the

company, which are owned by the company itself as a legal personThe notion of actual ownership of the company is simply notcompatible with the responsibility avoidance of limited liability

If value creation is achieved by combining the resources of bothemployees and shareholders, why should the value distributionfavour only the latter?

Many theorists argue that employees should be treated as avalue rather than a cost.

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Stakeholder view ofthe firm

Corporations are not just managed in the interests of theirstockholders alone, there is a whole range of groups, orstakeholders that have a legitimate interest in the

corporation as well.

A stakeholder in an organization is any group orindividual who can affect or is affected by the achievement

of the organizations objectives.(Edward Freeman, 1984).

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Stakeholder Model

The Manager

The Board

ShareholdersCommunities

Governments

OtherManagers

EmployeesCompetitors

Customers

Suppliers

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Stakeholder Management

Key tool for ethical management

The first step is a Stakeholder Analysis is to assess the Influenceand Importance of each individual Stakeholder.

Influence is defined as the extent to which a stakeholder is able toaffect the organisation. Influence is a measure of the power of thestakeholder.

Importance/legitimacy is defined as the extent to which astakeholders problems, needs and interests are affected by the

organisations activities.

Primary Stakeholders are both important and influential,Secondary stakeholders are either important or influential.

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Class Exercise

In your groups, draw up a list of your companysstakeholders.

Distinguish between primary and secondary

Which ones have most power?

Which ones have most legitimacy?

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How Business is affected by its environment

CSR how business affects environment.

externalities

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Many see CSR as being about a companytaking responsibility for its externalities

externality of an economic transactionis an impact on a party that is notdirectly involved in the transaction.

What are the some externalities?

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CSR: taking responsibility for externalities

Externalities: consequences of production born by society

Global warming has been ranked as the #1 externality of all economic activity inthe magnitude of potential harms and yet remains unmitigated.

Systemic Risk e.g. risks to the overall economy arising from the risks which the

banking system takes, i.e. the private costs of banking failure may be smaller thanthe social costs (regulation)

Pollution by industries harming plants, animals, and humans.

Over-fishing:example of a common property resource, sometimes referred to asthe Tragedy of the Commons

A business may purposely under fund one part of their business, e.g. pensionfunds, in order to push the costs onto someone else, creating an externality. Herethe cost is that of providing minimum social welfare or retirement income.

The cost of the storing nuclear waste for 1,000 years is not included in the cost ofthe electricity the nuclear plant produces. The third party here is the next severalhundred generations.
http://en.wikipedia.org/wiki/Global_warminghttp://en.wikipedia.org/wiki/Global_warminghttp://en.wikipedia.org/wiki/Global_warminghttp://en.wikipedia.org/wiki/Global_warming

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GROUP exercise

What are the externalities of your organisation?

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Figure 6.3 Corporate social responsibility pyramidSource:After Carroll 1991

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Table 6.1 Stakeholder responsibility matrixSource:After Carroll 1991

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Table 6.2 An application of the stakeholder responsibility matrix to a small clothingmanufacturer

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Group exercise

Each group should choose the organisation they are doingfor their assignment and consider what the main social andenvironmental impacts of their business practices?

What are the positive impacts?What are the negative impacts? It may be helpful to list

your organisations negative externalities, and who theyimpact.

Which stakeholders are negatively impacted, and howcan you address these impacts?

How can you increase positive impact?

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How well can you manage your stakeholders?

Have a go at an online activity that requires you to balancestakeholders interests.

Note down the percentage of approval you get from yourstakeholders, and the average approval rating.

Make a note of your results - highest score gets a prize.

http://www.btplc.com/Responsiblebusiness/Ourstory/Interactivegames/BetterBusinessDilemmas/flash/index.htm

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Reasons to consider stakeholders

Why would a company choose to address these issues?

Why might you personally as a manager want to?

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Drivers for CSR(from business)

Reputation risk: long term advantage reduce risk ofincidents

Shareholders e.g. ethical investments, pensionsFTSE4Good, DJSI

Customers: ethical market, ethical customers, avoidboycotts, supply chain pressure.

Motivated employees, intrinsic motivation.

Legitimacy preserve status quo (society aspect)

Moral Capital
http://news.bbc.co.uk/2/hi/uk_news/england/tyne/7854745.stmhttp://news.bbc.co.uk/2/hi/uk_news/england/tyne/7854745.stm

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Brand Value

Brand Value $71 million

Book Value $14 million

Market value $106 million

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The Research Findings (Orlitzky et al)

Bidirectional causality between CSP and CFP confirms the GoodManagement Theory (Virtuous Cycle of CSP/CFP)

CSP increases managerial competencies, organisationalknowledge of the market and non-market environment,organisational responsive capabilities and thus organisationalefficiency

CSP helps the firm build a positive reputation and goodwill withstakeholders

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CFP operationalisationsand association with CSP

Market based (i.e. stock market performance, market share growth) =medium CSP association

Accounting based (i.e. return on equity, earnings) = high CSPassociation

Perceptual measures of success = very high

Disclosures = Medium

Reputation Indexes = very high

Social audits = high

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Criticisms of justifying CSR by

reference to the business case

How can you measure intangible assets?

How can you quantify risk?

What time frame are you using?

What about the moral (normative) argument?

Notion of sufficient profit

Different business organisational forms credit unions, socialenterprises, co-operatives.

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Drivers for CSRfrom Society

Backlash against Shareholder model of firm

Problem of externalities

Growing gap between rich and poor

Globalisation

Diminished role of government, greater power of corporations

Sustainable development

Climate change, global warming

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Understanding sustainabledevelopment

Development that meets the needs of the present withoutcompromising the ability of future generations to meet their

own needs (Brundtland Commission, 1987).

Global warming and carbon management
http://en.wikipedia.org/wiki/Global_warminghttp://en.wikipedia.org/wiki/Global_warming

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If everyone in the world were to consume natural resources and generate

CO2 at the rate we do in the UK, we'd need three planets to support us.

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Challenge 1 Populationgrowth and demographicchange

Resource efficiency

Understanding sustainable developmentThe external drivers for change

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Resource efficiencyChallenge 2 Economicgrowth and energy

challenge

Carbon dependency


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challenge

Carbon dependency


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challenge

Carbon dependency

Challenge 3 Legislationand economic incentive

Behavioural science


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The Sustainability Spectrum

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Some examples

Interface carpets

video of Ray Anderson
http://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspxhttp://www.interfaceglobal.com/Sustainability/Our-Journey.aspx

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CSR and NGOs

Earth Summit of 1992 called on governments, businessand NGOs to work together to find ways of minimizing the

environmental and social costs of economic growth.

1996, WWF-International launched a partnership with UnileverCorporation - led to The Marine Stewardship Council

The Fairtrade Foundation worked with British companies todevelop codes of practice.

In 1998 British Petroleum allied itself with the Environmental

Defense Fund.

Form of civil regulation
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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CSR and NGOs

Business Responsibility for Sustainable Development (2000) Utting

highlights risk of business capture NGOs need to maintain distance tokeep up pressure.

Changing the Game Leading corporations switch from defense tooffense in solving global problems (2006) Kramer & Kania

argues that MNCs should go on offensive to tackle social problems andform partnerships with NGOs.

Capitalising on convergence (2007) Austin et al.

how businesses and NGOs are beginning to look alike.

S
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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WWF Starting Point
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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http://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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Activity:Effective partnering

In groups, discuss what would make a good partnership foryour business:

Pick a target partner organisation e.g. NGO

Where is value added? Is it the same for both parties? For each of the3 areas write down where value is created from each partnersperspective:

Social value

Environmental value

Commercial value
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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Snapshot of current

CSR/Sustainabilityactivity
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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Some examples

Tesco Ireland introduce carbon labelling (Sept 2008)

Speaking at the Environment Ireland Conference, Tesco CEO TonyKeohane said the labels would describe the carbon emissions involvedin the entire life cycle of the product, including disposal.

The label on own-brand concentrated orange juice will explain that ittook 260g of carbon dioxide equivalent per 250ml serving to make,compared to 360g for 100 per cent pure-squeezed orange juice. Thelabel will explain that this is "because more energy is required to chilland transport 100 per cent pure juice than concentrated juice".

Detergent packaging will carry advice explaining that washing clothesat 30 degrees instead of 40 degrees can save 160g of CO2 per wash.
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspx

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Some examples

HP wins packaging challenge

HP introduced an innovative design for a model of its Pavilion

Notebook that reduces product packaging by 97%, consequently cuttingthe number of trucks needed to deliver the computers by one-quarter.The new design replaces conventional protective shipping materials andboxes with a messenger bag made completely of recycled components,and was named the winner ofWalmartsHome Entertainment

Design Challenge.
http://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.interfaceglobal.com/Newsroom/Ecometrics.aspxhttp://www.hp.com/http://www.walmartstores.com/http://www.hp.com/go/walmartchallengehttp://www.hp.com/go/walmartchallengehttp://www.hp.com/go/walmartchallengehttp://www.hp.com/go/walmartchallengehttp://www.walmartstores.com/http://www.hp.com/

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Some examples

Nokia earned the top ranking in Greenpeace Internationals newestedition of the Guide to Greener Electronics, released this week. Scoring7 out of a perfect 10 points, the companys rise in the rankings was duemostly to its improved take-back programme for recycling electronicsin India. Samsungfollowed with 5.3 points, scoring well on the guidescriteria for tackling hazardous chemicals and e-waste.
http://www.nokia.com/http://www.greenpeace.org/internationalhttp://www.greenpeace.org/international/campaigns/toxics/electronics/how-the-companies-line-uphttp://www.samsung.com/http://www.samsung.com/http://www.greenpeace.org/international/campaigns/toxics/electronics/how-the-companies-line-uphttp://www.greenpeace.org/internationalhttp://www.nokia.com/

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Some examples

Companies join Eco-Patent Commons

Bosch, DuPont, and Xerox have joined the Eco-Patent Commons, aneffort to put new technologies in the public domain sponsored by the

World Business Council for Sustainable Development. Each companyhas pledge to publicly provide the patent for their environmentally-friendly technologies, which include Xeroxs method for quicklyremoving hazardous waste from water and soil, DuPonts technology toconvert non-recyclable plastics into fertilizer, and Boschs automotive

technologies that reduce fuel consumption and emissions.
http://www.bosch.us/http://www.dupont.com/http://www.xerox.com/http://www.wbcsd.org/web/epchttp://www.wbcsd.org/http://www.wbcsd.org/http://www.wbcsd.org/web/epchttp://www.wbcsd.org/web/epchttp://www.wbcsd.org/web/epchttp://www.xerox.com/http://www.dupont.com/http://www.bosch.us/

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Some examples

Asian carmakers behind on CO2 goals

Overall, most car manufacturers are failing to live up to EU targets forimproving fuel efficiency in the automotive industry, says a reportfrom the European Federation for Transport andEnvironment. Several companies, however, like Germanys BMW,performed better than expected, lowering average fuel consumption ofnew cars by over 7%. Others, particularly Asian carmakers includingMazda, Nissan, and Suzuki lagged behind competitors, and will needto cut CO2 emissions by up to 25% to meet the EUs proposed goals by

2012.
http://www.transportenvironment.org/News/2008/8/BMW-leaps-ahead-on-new-car-CO2-emissions-others-still-stallinghttp://www.transportenvironment.org/index.phphttp://www.transportenvironment.org/index.phphttp://www.bmw.com/http://www.mazda.com/http://www.nissan-global.com/http://www.globalsuzuki.com/http://www.globalsuzuki.com/http://www.nissan-global.com/http://www.mazda.com/http://www.bmw.com/http://www.transportenvironment.org/index.phphttp://www.transportenvironment.org/index.phphttp://www.transportenvironment.org/News/2008/8/BMW-leaps-ahead-on-new-car-CO2-emissions-others-still-stalling

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Some examples

Citis coal funding under fire

Rainforest Action Networkis plastering CitibankATM machineswith protest stickers to highlight the banks funding of coal-fired powerplants. The environmental activists are using the stickers, which bear

the slogan we fund global warming and show black smoke pouringfrom the two is in Citi, to deface the banks ATMs. The group is alsotargeting Bank of America.

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Some examples

IPADE, a local NGO, and Friends of the Earth Argentina havefiled complaints with the governments of Argentina and theNetherlands against Shell saying it has violated the OECD Guidelinesfor Multinational Enterprises standards of responsible businessconduct.

The groups, backed by the National Environmental Authority ofArgentina, say Shell has failed to provide environmental impactassessments, has withheld information about impacts and accidents, isextracting 18 million litres of water per hour from a local river without a

permit, maintains undeclared high pressure petroleum containers, hasvisible petrol leaks and illegally stores toxic waste.

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Some examples from SMEs

Rapanui Clothing Ltd are manufacturers of organic, fair-trade

Fashion Wear, which is manufactured in factories powered by

renewable energy.

http://www.the-sbp.co.uk/UploadedFiles/Rapanui.pdf
http://www.the-sbp.co.uk/UploadedFiles/Rapanui.pdfhttp://www.the-sbp.co.uk/UploadedFiles/Rapanui.pdfhttp://www.the-sbp.co.uk/UploadedFiles/Rapanui.pdfhttp://www.the-sbp.co.uk/UploadedFiles/Rapanui.pdf

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Carbon Footprints

Carbon Footprints and advice:

Supply chain emissions focus of new project

UK government initiative to analyze supplier emissionsto help create more sustainable supply chains.

Public government organizations are studying thecarbon footprints within each of their supply chains.

2,000 suppliers were asked to submit their informationlast year.
http://campaigns.direct.gov.uk/actonco2/http://campaigns.direct.gov.uk/actonco2/

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Carbon Trading

Overview of carbon trading

UK: Climate Change Bill, became law

Carbon calculating software is coming on the market. Personal Carbon Trading

Miliband plans carbon trading 'credit cards' foreveryone
http://www.youtube.com/watch?v=y7veRksc_Ykhttp://www.youtube.com/watch?v=y7veRksc_Yk

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What does the future hold?

Trend towards moving from CSR to sustainable development.

Will carbon become the new currency?

How far will the role of business in society change? Does the risein CSR and SD mean just a fad or a new model for business?

Will capitalism survive?

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CSR and SD at Crossroads

Recent Defra Report raises doubts that the small steps approach willbe sufficient: the widening gulf between the cumulative impact of these

behavioural changes and the scale of the challenges we confront isopenly acknowledged.

Unfortunately, it is now beyond serious dispute that a proportionalresponse to climate change will entail fundamental shifts in both policy

and lifestyles in the very short term. (WWF)

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It is no use saying, We

are doing our best. Youhave got to succeed indoing what is necessary.

(Winston Churchill)

What would this mean for business?

Organisations are bequeathed with legitimacy to the extent in which theiractivities are congruent with the goals of the superordinate system(Parsons, 1960).

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Closed loop processes

Cradle to grave:

Responsibility to monitor every aspect of a product or programme throughits entire life cycle; from design or acquisition to disposal (aka life cycleassessment)

Cradle to cradle:

seeks to create production techniques that waste free: all material inputsand outputs are seen either as technical or biological nutrients. Technicalnutrients can be recycled or reused with no loss of quality and biologicalnutrients composted or consumed. By contrast cradle to grave refers to acompany taking responsibility for the disposal of goods it has produced,but not necessarily putting products constituent components back intoservice.

http://emf.s3.amazonaws.com/toolkit/The%20big%20idea.mp4

Ellen Macarthur introduces idea of the circular economy (8-9 mins)

Product stewardship
http://emf.s3.amazonaws.com/toolkit/The%20big%20idea.mp4http://emf.s3.amazonaws.com/toolkit/The%20big%20idea.mp4

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Examples

http://www.youtube.com/watch?v=IPQ9x_Y2of4

Description of closed loop plus example of interface 6:15

http://www.youtube.com/watch?v=VO-oO7uULcc William McDonough gives a must see presentation showing that if design

is an indication of intention then we have only the worst of intentions forhumanity, life and the planet. 9:55

http://www.youtube.com/watch?v=hDOHExtc7WY

Example of Nike using closed loop 5:23
http://www.youtube.com/watch?v=IPQ9x_Y2of4http://www.youtube.com/watch?v=VO-oO7uULcchttp://www.youtube.com/watch?v=hDOHExtc7WYhttp://www.youtube.com/watch?v=hDOHExtc7WYhttp://www.youtube.com/watch?v=VO-oO7uULcchttp://www.youtube.com/watch?v=VO-oO7uULcchttp://www.youtube.com/watch?v=VO-oO7uULcchttp://www.youtube.com/watch?v=IPQ9x_Y2of4

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Environmental change toolkits

CERES Principles 21st century corporation: the CERES roadmap forsustainability; (on BB/books)

Certification e.g. ISO14001

The Natural Step: 7 step sustainability framework promoting

sustainable organisations with Swedens Natural Step (on BB/books) Elimination of waste

Elimination of harmful emissions

Use only renewable energy

Adopt closed loop processes

Use of resource-efficient transportation

Energising all stakeholders around the vision

Redesign of commerce so that a service is sold that allows the company to retainownership of the product to maximise resource productivity

D i i f t t

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Designing a performance management systemthat supports ethical conduct

Assuming people focus on behaviour that is rewarded, dont just reward results andoutcomes, reward how - how were those results achieved?

Translate organisational values into metrics, for which employees are held accountable

E.g. American Express tied its performance appraisal system directly to its values andcodes of conduct e.g. employees rate their managers in terms of items like:

Treats others with respect is fair and objective

Actively listens and incorporates input from others

Acts with integrity

Inspires the trust of the team, is reliable and consistent

Talks openly and honestly

These ratings are used in promotion and compensation decisions, so hard to get ahead ifyou dont score highly

In addition American express provides training for managers to gain these skills

More informal methods also work well e.g. simple praise

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The Balanced Scorecard

Kaplan & Norton's (192) four steps form the BalancedScorecard design process:

1. Translating the vision into operational goals;

2. Communicating the vision and link it to individualperformance;

3. Business planning; index setting

4. Feedback and learning, and adjusting the strategyaccordingly.

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Using the balanced scorecard to integrate

sustainability goals International Post CorporationResponsibility for climate change,

carbon management and emissions is clearly defined for almost allparticipating posts, with many also having individual energy andcarbon metrics in senior manager performance appraisals andperformance-related pay schemes.

Akzo Nobel uses the Dow Jones Sustainability Index as theirbenchmark of sustainability performance for the purpose of rewardingsenior managers.

SC Johnson link executive pay to a robust measure of how wellproduct executives are doing at greening their product lines andpackaging.

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Linking remuneration to CSR goals

What kinds of metrics can be used to measure non-financialperformance?

Potential for unintended consequences

E.g. gaming, misrepresentation

Solutions?

Read:

Reward: Linking sustainability to pay, WBCSD, 2010

Sustainable remuneration: a guide for linking sustainable goals(BB/books)
http://issuu.com/duon/docs/remuneratierapport

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Reading List

Corporate Social Responsibility: Readings and Cases in aGlobal Context. Edited by Andrew Crane, Dirk Matten,Laura Spence. Routledge, 2008. In library under HD60

CRA

Blackboard lots of articles/links, relating to the coursecontent. Read 2+ articles.

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Learning Log

How has the session on CSR affected your Personalobjectives and career plan and aspirations?

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Documents