step 1: analysis
TRANSCRIPT
Corporate Social Responsibility
Class 3:CSR Management System
Syllabus developed by Jens Trummer
Reading:1. “Daimler 360, Facts on Sustainability”, 2010
For those interested in more detailed information:- “Designing a CSR Structure”, Business for Social Responsibility, 2002
- “CSR – An Implementation Guide for Business”, IISD
Agenda
CSR Management System
Class 3:
CSR Management System
CSR LAB
What is difference ?
and
2 Types of Business Models:
1. “Sustainable” Business Model= CSR???
2. Business Model with CSR Programs:
CSR Management
System
Stage 1:CSR non-
existent
Stage 4:Sustainability
Intrinsic business strategy/Activity:
Still CSR ??
Stage 3:Strategic CSR:
Strategycomplimenting business activity
Stage 2:CSR non-strategic:
- Philanthropy- Donations
- Volunteering, etc.
Evolution of CSR:
Ethical/Philanthropic
Good for BusinessCSR
COMPLIMENT
NOTCONTRADICT
CSR is a business strategy:
CSR Management
System
?
CSR Management System needs
“ Framework for‘Strategic’
‘Integration’ ”
TOOL to compliment core business activities
“Framework for Strategic Integration”
- ‘Theory of Practice’
- No ‘one size fits all’
- Not necessarily chronological
- Must be adaptive – Why?
CSR implementation on-going
Continuous adaptation to changing‘Driving Forces’
Corporations CSR
CSR ‘Drivers’:
2. Globalization
1. SocialExpectations
Class 1Class 1
Framework for Strategic Integration:
3 + 1=
3 Steps + 1 Continuous Action
Step 1 ???
Step 1: Analysis
1. CSR Audit → Gap Analysis
2. Stakeholder Process (See Class 2)- Stakeholder Analysis- Stakeholder Dialogue
3. CSR-SWOT
Step 1: Analysis
1. CSR Audit
“As-is Analysis”
Goal: Assess the whole picture
Basis for “Gap Analysis”
Step 1: Analysis
1. CSR Audit
- CSR definition - 4 key criteria ???
- Existing CSR policies, standards, values, Corporate Motivation Nalco
- Understand current CSR commitments, external standards used
- Structures: Current departments, functional areas, cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities
Step 1: Analysis
External Divers/Motivation
Re-active vs. Pro-activeNike, Gap, BP, Starbucks ??
What about Nestle???LINK
1. CSR Audit
Internal Drivers/Motivation
- Honest (‘self’-) analysis
- Philanthropic and /or(??) business incentives
Step 1: Analysis
Decisions made by Humans
1. CSR Audit
- CSR definition
- Existing CSR policies, standards, values, Motivation
- Understand current CSR commitments, external standards used
- Structures: Current departments, functional areas, cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities
Step 1: Analysis
1. CSR Audit
Which CSR programs …
… are not necessarily referred to as “CSR” ?
Step 1: Analysis
1. CSR Audit
- ISO 14001/EMAS
- Health and Safety (SA 8000)
ISO for CSR ???
Step 1: Analysis
ISO for CSR
ISO 26000: Launched November 1st, 2010 !Guidance standard on social responsibility
1. CSR AuditStep 1: Analysis
1. CSR Audit
- CSR definition
- Existing CSR policies, standards, values, Motivation
- Understand current CSR commitments, external standards used (e.g. ISO 14001, SA 8000)
- Structures: Current departments, functional areas, cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities
Step 1: Analysis
1. CSR Audit:
‘I I I’
Internal ‘Intelligence’ Investigation:
Step 1: Analysis
Which departments responsible for CSR issues ?
1. CSR Audit
‘CSR Departments’
- Communications/PR- Marketing
- Human Resources- (Senior) Management
Which department typically most reactive … or ‘slow’ on take-up ?
Step 1: Analysis
1. CSR Audit
- CSR definition
- Existing CSR policies, standards, values, Motivation
- Understand current CSR commitments, external standards used (e.g. ISO 14001, SA 8000, ISO for CSR ???)
- Structures: Current departments, functional areas, cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities
Step 1: Analysis
Which stakeholders almost all companies
irrespective of existing CSR strategy???
1. CSR Audit
How would you do an Audit ???
Step 1: Analysis
1. CSR Audit
How?Method:
Internal:1. Desk-top study: Document Analysis2. Executive, Management & Staff Interviews
External:3. Reputation surveys, benchmarking, CSR Reports (GRI, AccountAbility Rating)
Step 1: Analysis
Step 1: Analysis
1. CSR Audit → Gap Analysis
2. Stakeholder Process- Stakeholder Analysis … Components ???- Stakeholder Dialogue
3. CSR-SWOT
Step 1: Analysis
Step 1: Analysis
1. CSR Audit → Gap Analysis
2. Stakeholder Process- Identification of Issues- Selection of Stakeholder- Prioritization of Stakeholders- Stakeholder Dialogue
3. CSR-SWOT
Stakeholder Analysis
Step 1: Analysis
See Class 2!
2. Stakeholder Process- Identification of Issues- Selection of Stakeholder- Prioritization of Stakeholders- Stakeholder Dialogue
Stakeholder Analysis
Step 1: Analysis
Significance:
More adaptive to External Drivers (Social Expectations &
Globalization)
Corporations CSR
CSR ‘Drivers’:
2. Globalization
1. SocialExpectations
Shareholder Model
drive management1. Separation of responsibilities between private & public sectors
2. Fiduciary Duty of Management Board to Shareholders: Profit
Shareholder Model:Inflexible to change
Stakeholder Model:Adaptive to change
Class 1
Class 2
However:
Step 1: Analysis
Ethical/Philanthropic
Good for BusinessCSR
COMPLIMENT
NOTCONTRADICT
CSR is a business strategy:
Summary:Stakeholder Process: Good for business and Stakeholders
1. Stakeholder Analysis:
Step 1: Identification of Issues
Step 2: Selection of Stakeholders
Step 3: Prioritization (mapping)
2. Stakeholder Dialogue
Formulation of CSR Strategy
Stakeholder Process
High Priority:
Manage Closely
Medium Priority:
Keep Satisfied
Medium Priority:
Keep Informed
Low Priority:
Monitor (Minimum effort)
Pow
er o
f Sta
keho
lder
Interest of Stakeholder(e.g. Automotive industry – product safety, climate change
Tobacco Industry – … )
Stakeholder Mapping
?
Can Stakeholder Approach compliment business model?
Or too much focus on Stakeholders → distractionof finding CSR programs that compliment business activities ???
Class 1Class 2
‘Outsourcing’ CSR:
Risking ‘hodgepodge’ of un-coordinated CSR activities
and philanthropic
activities?
What do you think?
Does Kramer & Porter Inside-Out/Outside-In Model work
better ??
Step 1: Analysis
Arguments for CSR
Philanthropic: Cliché, but basic truth!
Company Society
Relevance in strategic aspect of CSR:Strategy should focus on compatibility, NOT on friction
Healthy Society needs well functioning companies!!
(Jobs, taxes, goods & services)
Company needs:
Tangible Benefits:Infrastructure, police, employees
& customers
Intangible Benefits:Water, fresh air, facilitating
investment through functioning government
Source: “Strategy and Society”, Porter & Kramer
Inside-Out:Impact on Society
Outside-In:Impact on “Competitive Positioning”
Class 1
Step 1: Analysis
Impact of Society on
CompanyImpact of Company on
Society
CSR
How does this compares with Stakeholder Model ?
Step 1: Analysis
High Priority:
Manage Closely
Medium Priority:
Keep Satisfied
Medium Priority:
Keep Informed
Low Priority:
Monitor (Minimum effort)Pow
er o
f Sta
keho
lder
Interest of Stakeholder
Automotive industry – product safety, climate changeNike, BP, Tobacco Industry – …
Stakeholder MappingClass 2
Both ways?
Step 1: Analysis
1. CSR Audit → Gap Analysis
2. Stakeholder Process - Stakeholder Analysis - Stakeholder Dialogue
3. CSR-SWOT
Step 1: Analysis
And/orKramer & Porter:
Inside-Out/Outside-In Model
Step 1: Analysis
1. CSR Audit → Gap Analysis
2. Stakeholder Process - Stakeholder Analysis - Stakeholder Dialogue
3. CSR-SWOT
Step 1: Analysis
And/orKramer & Porter:
Inside-Out/Outside-In Model
3. SWOT
CSR-SWOT Analysis:
- Putting it all together
- Linkage to next part
Step 1: Analysis
Framework for Strategic Integration:
Step 1: Analysis
… Step 2 ???
2. CSR Strategy
Strategy to compliment business activity
… CSR is Business Strategy(see EU Definition !)
1st Step??
Step 2: CSR Strategy
Step 2: CSR Strategy
1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget
Step 2: CSR Strategy
1. Policy Formulation
- Priorities
- Core Values
- Formulation of Policy Statement
Step 2: CSR Strategy
1. Policy Formulation
- Formulation of Strategy
How long before public starts identifying CSR strategy with company ?
Step 2: CSR Strategy
Step 2: CSR Strategy
1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget
Step 2: CSR Strategy
2. CSR Structure
Choose structural framework
- Size- Corporate structure
- Sectors involved
... geographic locations, risk areas, commitment
- New or improved structure?
Step 2: CSR Strategy
What is important for an effectiveStructure ?
Step 2: CSR Strategy
‘Cross-Functional’
Step 2: CSR Strategy
Why so important in CSR ?
2. CSR Structure:
CSR is cross-functional:
- Environment- Government- Communities- Employees
- Supply Chain- Customers
- Shareholders
7 StakeholderGroups
Step 2: CSR Strategy
2003: ‘Embedding’
Step 2: CSR Strategy
Stage 1:CSR non-
existent
Stage 4:‘CSR’
Intrinsicbusiness strategy/activity
??
Stage 3:Strategic CSR:
Strategycomplimentingbusiness activity
Stage 2:CSR non-strategic:
- Philanthropy- Donations
- Volunteering, etc.
Evolution of CSR:
Classes 2 to 4
CSR Sustainability?
Framework for Strategic Integration
Integrating sustainability into company’s:
… at all levels of the organization
= ‘Embedding’
- Values - Culture
- Operations- Business decisions
Step 2: CSR Strategy
2. CSR Structure:
Mechanisms for involving functional areas, departments, etc.
Roles and responsibilities of each employee and/or group (committee) involved with CSR efforts
(Board committee, executive committee, specific CSR committee, etc.)
Step 2: CSR Strategy
Increasing level of CSR commitmentSource: Designing a CSR Structure, BSR
Step 2: CSR Strategy
1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget
Step 2: CSR Strategy
3. Staffing Plan
Identify CSR-specific staff roles and responsibilities at the different levels.
Step 2: CSR Strategy
Step 2: CSR StrategyDaimler’s Corporate Governance Structure
How would you design Daimler’s CSR Structure?
Daimler’s Sustainability Governance
Structure(P. 16)
Step 2: CSR Strategy
1. KeyStakeholder
Groups
???2. Cross-
Functionality
Daimler’s Sustainability Governance
Structure(P. 16)
Step 2: CSR Strategy
1. KeyStakeholder
Groups
Which ones??
2. Cross-Functionality
Notice:‘Integration’
CoreBusinessActivity
Centralized, de-centralized ?Top-down, bottom-up ?
Step 2: CSR Strategy
Daimler’s Sustainability Governance
Structure(P. 16)
Step 2: CSR Strategy
1. KeyStakeholder
Groups
Which ones??
2. Cross-Functionality
Notice:‘Integration’
Step 2: CSR Strategy Daimler’s Environmental Structure p.19
Life-cycleAnalysis
Bottom-up, Top-down ?
Daimler’s CSR Structure
‘Hybrid’
Step 2: CSR Strategy
Daimler:Committed to CSR ?
Step 2: CSR Strategy
Daimler’s Sustainability Governance
Structure(P. 16)
Step 2: CSR Strategy
1. KeyStakeholder
Groups
Which ones??
2. Cross-Functionality
Notice:‘Integration’
Daimler’s CSR StructureWhere is Daimler (Page 16)?Step 2: CSR Strategy
Increasing level of CSR commitment
Step 6: Daimler’s CSR StructureWhere is Daimler (Page 13)?
Board of Management
Sustainability Board
Step 2: CSR Strategy
Increasing level of CSR commitment
Daimler’s CSR Structure
Centralized or de-centralized ?Step 2: CSR Strategy
?
Sustainability Office
Daimler’s CSR StructureStep 2: CSR Strategy
Mobile’s CSR StructureStep 2: CSR Strategy
Step 2: CSR Strategy - Subsidiary of KBC (Belgium, Flemish)- Required CSR in 2005
- Communications Intern tasked
2006: Allocated budget: New CSR Policy:
1. Professional Business Ethics2. Employees and their families3. Attitude to the environment
4. Care for the community (“CSR-led sponsorship”)
What evolutionary stage of CSR– strategic, non-strategic?
Step 2: CSR Strategy
How to manage CSR?
2007: CSR Expert Task Force (ETF):1. Head of External Communications2. Head of Retail Segment Marketing
3. Head of PSB Retail Segment4. Head of Human Resources
5. Head of Legal6. Head of Public Affairs
7. Head of Marketing Communications (with an advisory vote power)8. CSR Officer
9. CSR Manager
Main focus area of ETF ?
Step 2: CSR Strategy
2007: CSR Expert Task Force (ETF):
Main focus areas:
- Risk Management & Compliance- PR, Communications & Marketing
Step 2: CSR Strategy
2007: CSR Expert Task Force (ETF)
ETF =CSR Manger
+Problem ?
2008: Country Team Sustainability Committee (CTSC)
CTSC =CSR Manger
+
2008: Country Team Sustainability Committee (CTSC) :
1. CEO of ČSOB Pojišťovna2. PSB and Direct Banking Business Senior executive director
3. Corporate banking Senior executive director4. Corporate Office Director
5. External Communication Director
6. CSR Manager
Step 2: CSR Strategy
Step 2: CSR Strategy
CSR Expert Task Force
1. Identifies risks, proposes strategies
2. Votes on general budget components(Budget: 0.5% net profit)
Country Team Sustainability Committee (CTSC)
3. Votes on specific programs
Implementation by CSR Team
CSRManager
Step 2: CSR Strategy
1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget
Step 2: CSR Strategy
4. Budget
Assess budget structure and size …
Typically, CSR Budget in EE Companies what percentage of net profit?
More effective if tied with PR Budget!
Step 2: CSR Strategy
Framework for Strategic Integration:
Step 1: AnalysisStep 2: Strategy
… Step 3 ???
Step 3: ImplementationGoal: Long-Term Integration
Embedding CSR management system into processes and programs
Step 3: Implementation
2003: ‘Embedding’
Step 2: CSR Strategy
Stage 1:CSR non-
existent
Stage 4:‘CSR’
Intrinsicbusiness strategy/activity
??
Stage 3:Strategic CSR:
Strategycomplimentingbusiness activity
Stage 2:CSR non-strategic:
- Philanthropy- Donations
- Volunteering, etc.
Evolution of CSR:
Classes 2 to 4
CSR Sustainability?
Reporting & Monitoring
Communication Management Tool
See Class 4
Framework for Strategic Integration:
3 + 1
=
3 Steps + 1 Continuous Action ?
Building Senior Vision & Support
Especially ifRe-active … (or not ‘-active’):
- Get clear CSR Mandate- Educate Board, CEO and employees
- Build Board & CEO level support- Strengthen company-wide support
Continuous: Building Senior Vision & Support
Building Senior Vision & Support
… it’s all about (internal) communication!
- Workshops-Training
- Personal Contact- Etc.
Gradual Process, building on success.
Continuous: Building Senior Vision & Support
Step 3: Implementation
1. Monitoring & Reporting
Step 2: CSR Strategy
1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget
Step 1: Analysis
1. CSR Audit
2. Stakeholder Process- Stakeholder Analysis(Identification, Selection and Prioritization)- Stakeholder Dialogue
ORKramer & PorterInside-Out/Outside-In Model
3. SWOT
Framework for Strategic Integration
Building Senior Vision and Support