st 513 session 1 introduction to csr

7/30/2019 ST 513 Session 1 Introduction to CSR

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ST513E

Session1 Part II

Presentation of the subject

1. Corporate Social Responsibility 2. CSR and Sustainable Development 3. CSR and Stakeholder Theory


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Origins of CSR (1)At the beginning of the century:

In Europe: paternalism of big business France:(Michelin, Godin, etc.)England and Germany: Cadburys and Krupp providedhousing, healthcare or education for workers

In theUSA:

philanthropy(from Carnegie and Rockefeller in the 1900sto Warren Buffet and the Bill and Melinda Gates Foundation)

the first ethical funds (religious communities)better compensation for workers at the factories

of Henry Ford (5$/day)

Section 1Corporate Social Responsibility


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Corporate Social Responsibility

Origins of CSR (2)From the 1950s:

Civil Rights Movement (emancipation of Blacks in the USA)

NGO activism (Greenpeace and Amnesty Intl

s boycottingcampaigns)

Regulations resulting from industrial catastrophes (Bhopal,Exxon Valdez)

Growing awareness of ecological issues (climate, biodiversity)

The social divide (precariousness, social exclusion)


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Sustainable Development (SD) and CSR are already integratedor are in the process of being integrated by a growing numberof companies of all sizes in different sectors in different countries

It is not only a fashionable phenomenon but in fact a profoundmovement which amplifies in the 1990s and continues to grow

The biggest and most advanced companies have put in placespecific structures, strategies, multi-annual plans of actionand reporting tools

These participate in specialized networksto exchange good

business practices throughout their supply chains which result ina ripple effect in the whole sector

The CSR Boom from the 1990s Onwards


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1. The Grameen Bank

2. Green Mountain Coffee Roasters

3. Timberland

4. Eziba

5. Canon

6. Danone

7. Lafarge

8. Ben & Jerrys

9. Toyota

10. Nike

10 Concrete Examples of CSR


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A financial institution to serve the worlds poor

Internationally recognized bank operating in 44,000 impoverishedvillages throughout Bangladeshand the developing world

The Bank provides low-interest personal loans, microenterpriseloans, scholarships and educational loans to predominantly womenin countries prone to poverty and natural disasters

Since 1976 it has lifted hundreds of thousands out of poverty,grown the Bangladeshi economy and achieved profitability

Because of its extraordinary positive impact,microfinance is now a global phenomenon

The Grameen Bank


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Stand up for justice by engaging in fair trade

and establish a powerful new role for business in society

The company is known for its fair trade programin an industrywhere most of the 250 million people dependent on coffee for theirlivelihood are poor because only 2% receive a fair price for beans

Fair trade is an international movement lead by nonprofits likeTransFairwhich works with corporations and supplier communities toestablish floor prices and to streamline practices to build economicindependence and empowerment in farmer communities

Individual relationshipswith shareholders, employees,

customers, vendors, and suppliers are very important; theyare treated with respect, dignity and compassion

Green Mountain Coffee Roasters


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Top brand thriving by integrating cause partnerships

Company values: humanity, humility, integrity and excellence

Idea that business can also be focused on activating higher levels ofresponsibility, engagement partnership and positive change

Community and otherstakeholder engagementare very important

Partnership with City Year, a potent national youth corpsThe purpose is to involveyouth in civic-service projects(cleaning of neighbourhoods, building of new parks and playgroundsand assistance to elderly citizens and children) that make aprofound difference both in urban and in rural communitiesacross America

Timberland


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Social and environmental values throughout company

operations from revenue models to sourcing

Eziba is an Internet and catalogue retailer ofdecorative artproducts that are made by poor people in developing countries(Rwanda, Botswana, Kenya, Afghanistan, Guatemala)

The betterment of societyis the highest corporate priority andthe lives of thousands of people have improved because of thecompanys commitment

Eziba managed to successfully root its business models in itscore values to obtain social as well as monetary profits

Strong ethicsled to commercial success which is recognizedby both Forbes and Time magazines (best of the web)

Eziba


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The companys philosophy ofKyosei'l iv ing and w orking together

for the comm on good ' is at the centre of company operations

Canons aim: to contribute to the prosperity and happiness ofhumankindwhile remaining profitable

Environmental strategy for resource and energy conservation; social

and environmental initiatives across Europe, Africa and Asia

Humanitarian aid and disaster reliefpartnership with the RedCross (2004 tsunami, disasters in Peru, Bangladesh, China, Japan)

Supporting employees charitable activities

in the Netherlands, Canon employees carry outvolunteer work with children suffering long-term illnesses

Canon


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A global approach which combines economic, societal and

environmental objectives and reaches further than its factories

The companys key themes are climate change, biodiversity, people,water, packaging and agriculture

Grameen Danone Foods has been designed to provide children with

many of the key nutrients that are typically missing from their diet in ruralBangladesh; the project aims to create a small dividend of 1% / year

The danone.communities fundis also currently investing in two newsocial business enterprises:1001 Fontaines, which provides drinkingwater for people in rural areas ofCambodia, and Laiterie du Berger,

collecting milk from Peul herders in Senegal

Supporting employees charitable activitiesDanone employees support the Restos du Coeur

Danone


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The values of integrity, responsibility, courage and respect forothers permeate its operations in all places where it operates

Social developmentincluding respect forlocal communitiesandenvironmental protectionare important goals

Stakeholder collaboration(clients, suppliers, local communities,shareholders) regularly takes place

Lafarge Way:two-way development approach1. Multi-local (products are used where they are manufactured and

local actors are involved)2. Global (local and international partners work together for long-

term development)

Partnership with the WWF(biodiversity)

Social projects in collaboration with CARE (HIV/Aids);malaria assistance in Malawi

Lafarge


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Initiating innovative ways to improve the quality of life

of a broad community local, national, and international

Importance of"empowering Ben & Jerry's employees" to enable environmentaland social initiatives to be undertaken

The company uses Fairtrade productsand sources its ingredients fromproducers and suppliers who share its values in its supply chain strategy

Limiting damage to the environment: ecological footprint measurementincluding management of water, energy, waste, emissions and recycling

Vermont Dairy Farm Sustainability Project to reduce phosphorous run-off andnitrogen leaching in dairy operations, while maintaining economic viability

New product development: launch of new flavour, "One SweetWhirled" to raise awareness of global warming

Ben & Jerrys


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The company promises harmonious and sustainable development

of society and the earth through all its business activities

Increasing long-term corporate value by engaging in favorablerelationships withall the stakeholders including customers, business partners, local communitiesand employees; health and safety of employees is an important value

Investment in human resources and respect for diversity are important valuesgender diversity and issues women face in the workplace are addressed

Loops project which brings more disabled people in the loop throughemployment and by making society more aware of disabled peoples needs

The company invests a lot in research to produce the best eco-friendly cars

which will use alternative fuels and battery power (lower carbon emissions)

Toyota


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This global company wants to bring about systemic change

for workers within its supply chain, and in the industry

Several tools are in place to ensure that responsibilities towardsworkers down the supply chain are met (Workers in ContractFactories; MAV Management Audit Verification Tool, ESHEnvironment, Safety and Health...)

Gender equality the Nike Foundation hosted a symposium in Brazilwhich promoted the role of men in fostering gender equality

A global effort, in partnership with several governments, to putadolescent girls at the centre ofHIV/AIDS prevention strategieswas initiated

Nike


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What should ultimately be companies roles andresponsibilities?

Should companies be held responsible for activities

such as building schools and providing health care?

Should companies be forced to comply with internationalcodes and standards?

In todays globalized world, are companies truly committedto CSR or is it only a matter of public relations?

What can be done to forge greater cooperation betweencompanies and governments?

CSR: some questions


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International Networks:

TheGlobal Compact of the United Nations

TheWBCSD (World Business Council forSustainable Development) global

BSR (Business for Social Responsibility) USA

European Networks:

CSR Europe EU

BITC (Business in the Community) UK

FundacinEmp resa y Sociedad Spain

CSR Networks (1)


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French Networks:

ORSE (Observatory of the socialresponsibility of business)

Alliances for CSR

Ore (Environmental Aspects)

EPE (Enterprises for the Environment)

E&P (Enterprise and Personnel)

IMS Undertakings for the City(Institute of Solidarity Sponsorship, ex-IMH)

ADMICAL (Association for the Developmentof Sponsorship)

CSR Networks (2)


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Not one formal and agreed upon definition exists;the meaning of the concept raises several debates

For lack of a solid foundation, CSR is generally defined

with reference to Sustainable Development (SD) and

Stakeholder Theory (SHT)

The Social Responsibility of business is built upon three

dimensions:

Internal Social Dimension Social / Societal Dimension Environmental Dimension

Can CSR be defined?


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Working conditions: hygiene, health, security,ergonomics

Compensation policy: participation to the benefits,agreements between unions and management for fair

salaries for employees

Social dialogue in companies: annual interviews,consultation with internal stakeholders

Social climate in companies: less strikes, less

absenteeism, loyalty to company projects

Internal Social Dimension (1)


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Better management forecast for employeecompetencies:training, employability

Working hours: chosen part-time, distance working

Integration of precarious categories: disabled persons,minorities, marginalized persons

Principle of non-discrimination: age, gender, ethnicorigins or the contrary, positive discrimination fordisadvantaged categories (USA, South Africa)

Internal Social Dimension (2)


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Respect for human rights : refusing child labor,protection of indigenous peoples (e.g. Amazonia)

Implication in the life of local communities:donations,funds, urban rehabilitation, school support

External stakeholders: dialogue, taking intoconsideration their expectations

Participation in the fight against exclusion:poverty, illiteracy

Social / Societal Dimension (1)


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Social value addition to products and services:target the consumactors (consumers who act asconscious and responsible citizens when buying products)

Support for local economic development:

capital inflow, support to the third sector

Inter-organizational relations with other actors:associations, NGOs, partnerships

Planning and management of psycho-social effects

of restructuration:reconversion of sites,reclassifying of dismissed employees

Social / Societal Dimension (2)


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Eco-design: taking into consideration the ecological impact

of products and servicesduring theirlife cycle

Limitation of energy and primary resources

consumption:electricity, water, packaging

Recyclingof office supplies and used products

Fight against pollution:reduction of emissions into theatmosphere, water and soil

Prevention and preparation for industrial risks:realization of environmental impact studies

at each new operation site

Environmental Dimension (1)


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Rehabilitation of impacted sitesafter their exploitation:quarries, mine deposits, oil wells (extractive industries)

Programs to reduce the use of transportfor companyactivities related to logistics as well as for employees (car

sharing)

Protection of the biodiversity and the eco-systems of thesites in the countries where the company operates

Application of the precautionary principle in terms ofscientific and technological research

Environmental Dimension (2)


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The dramatic increase of CSR in the 1990s in management

science literature, as well as in business practice, is evidently

linked to the sustainable development movement

Definition of Sustainable Development:

Since the 1992 Earth Summit in Rio, a series of seven UNconferences followed on environment and development.They coined the most widely used definition of sustainabledevelopment as:

Development that meets the needs of the presentwithout compromising the ability of future generationsto meet their own needs

Section 2CSR and Sustainable Development


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This definition contains three key concepts:

1. The intergenerational dimension

2.Theconcept of "needs",in particular the essentialneeds of the worlds poor, to which overriding priority

should be given

3. Theidea of limitationsimposed by the state of technologyand social organization on the environment ability to meetpresent and future needs

CSR and Sustainable Development


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Emergence of Sustainable Development

Chronology

1972 : Stockholm Conference

1983 : Global Commission for the Environment and Development

1987 : Brundtland Report Our Common Future

1992 : Rio de Janeiro Conference

1997 : Kyoto Conference

2001 : Gteborg Summit (EU strategy)

2002 : Johannesburg Summit

2005 : Actual enforcement of the Kyoto Protocol

After 2012 : Quid ?


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Sustainable Development

A ternary concept

Dynamics

of Progress

Respect for theenvironmentSocialCohesion

Long term economicperformance

Profit

PlanetPeople

Triple P


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Sustainable Development

Essential Principles

Precaution: evaluating apriori the risks for man andthe natural environment

Solidarity with poor countries

Participation of social actors

Responsibility towards future generations

Responsible management ofresources


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All the important international reports proclaim the samemessage :Inter-Governmental Panel on Climate Change (IPCC)Reports,the Stern Report, United Nations Environment Program(UNEP) Reports, the Millennium Ecosystem Assessment, thePentagon Report

Climate change is a reality which is caused by humanactivity Origin: industrial revolution

Acceleration during the 20th century Scenarios going from +2C to +6C in 2100

The Greenhouse Effect

If the gas emissions stopped today, the situation would continue

to degrade during several more centuries; but the emissions arenot even stabilized, they are still in progress

+2C on average what regional variations?Higher distances according to geographic areas

The preservation of the biosphere:

A major stake (1)


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Some of the forecasted consequences of global warming forthe next centuries (non exhaustive list):

An increase of the frequency and intensity of events linked to

extreme weather conditions(hurricanes, storms, floods, etc.)

Rising of the sea level caused by the expansion of water, themelting of glaciers, of the Antarctic and Greenland

Quasi complete disappearance of the primary tropical rain

forests

Advancement ofdesertification in China, India, Sub-SaharanAfrica, Europe (Spain)

Destruction of most of the ecosystems and impoverishment of

biodiversity

Sixthmassiveextinction of the animal speciesin the history of evolution


A major stake (2)


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The foreseeable consequences of global warming for thenext centuries:

Largezones will become uninhabitable : Bangladesh, theNetherlands, Florida as will important nerve centers of the

planet such as New York, Shanghai, London

Climate refugees by the millions, searching for food and water

Planetary increase of new viruses and pandemics associatedwith bird flue, malaria, dengue fever

Food shortages, hunger riots

Conflicts between countries over resources (fuel),geopolitical tensions, anarchy and global disorder


A major stake (3)


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Globalization and its socially ambivalent consequences : the phenomenon causes serious external inequalitiesbetween countries (developed countries, BRICS, LDCs) andinternal inequalities in each country (very rich people versusthe have-nots and the working poor) it also brings about the constitution of a middle class in some

parts of the developing world

The Peak Oil phenomenon : the fuel production will reach

its maximum (around 2015?) before declining progressively tendency to an increasing and more volatile price of the barrelof crude oil. In 2008 the price per barrel reached $150

Demographic growth :accordingtocurrent estimations,the earth will have 9 billion inhabitants in 2050will it be possible to respond to their needs?

Other Major Stakes


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Stakeholder Theory occupies a central place in CSR research

The management of stakeholder relations has become an

important part for all companies engaging in CSR

Origin (in the academic sphere):

Edward Freemans bookStrategic Management: A Stakeholder App roach(1984)

Definition:

All individuals or groups which can affect

or may be affected by the realization ofthe objectives of an organization

Section 3CSR and Stakeholder Theory


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Typologie des stakeholders

(ou parties prenantes)

Shareholders Institutional investors, businessleaders, managers

Internal stakeholdersEmployees, collaborators,

partners, unions

Operations partnersClients, suppliers, sub-contractors,

insurance companies, banks,(competitors)

Social Community

Public sector, the media, NGOs,

environmental associations, civil

society, future generations

The natural environment More a stake than an actor

Identification of Stakeholders

Typology of reference


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Company X

Investors

Employees

Media

Activists

CommunitiesSuppliers

Competitors

Environment

Clients

Can affect or may

be affected by

Identification of stakeholders

Traditional mapping (a)


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Company Y

Employees

Investors

Customers

Unions

Regulatory

Authorities

Partners

& Alliances

Local

Communities

Supply Chain

The State

Identification of stakeholders

Traditional mapping (b)

Can affect or may

be affected by


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TheDimensions of

CompanyManagement

EnvironmentalDimension

FinancialDimension

SocialDimension

OrganizationalDimension

CulturalDimension

EconomicDimension

HumanDimension

A Holistic Vision of Management

TechnicalDimension

st 513 session 1 introduction to csr

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