Responsible Electronics 2013: Mark Kramer Keynote
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Responsible Electronics 2013: Mark Kramer Keynote

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Presentations from the EICC conference Responsible Electronics 2013, Oct 1-3 in California.

Presentations from the EICC conference Responsible Electronics 2013, Oct 1-3 in California.

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  • Corporate thinking about social issues has evolved considerably over the years. Ten or twenty years ago, companies didn’t pay much attention to the social consequences of their activities – downplaying any responsibility and often considering corporate philanthropy as an expression of the CEO’s personal values.Over the years, companies began to acknowledge a sense of responsibility for the social impact in their value chain, spending money to address them with the goal of protecting or improving the companies reputation. More recently, companies have fully acepted responsibility for their social impact, sepnding money to fix them and using their corporate capabilities to help solve problems. What Porter and I are suggesting, hwoever, is an even newer development in which companies see social issues not as a cost but as an opportunity to grow their business, reduce costs, differentiate their competutive positioning by addressing social problems – even problems that are outside the company’s value chain – problems that the company didn’t cause or contribute to, but where it can spot opportunties.

Responsible Electronics 2013: Mark Kramer Keynote Responsible Electronics 2013: Mark Kramer Keynote Presentation Transcript

  • The Electronic Industry Citizenship Coalition Welcomes you to Sponsored by Exhibitors
  • Boston | Geneva | San Francisco | Seattle | Washington FSG.ORG Analysis prepared for: Creating Shared Value September 30, 2013
  • FSG.ORG 3 © 2013 FSG Economist: “Top trend in 2012” Forbes: One of three “megatrends for 2012” The Shared Value Concept Is Gaining Global Momentum
  • © 2011 FSG4 FSG.ORG Seoul, 2011 Corporate Thinking Has Evolved Over the Past Decade - Let’s minimize the problem and throw some money at it to show we’re contributing - CSR & Philanthropy is about corporate reputation “It is a problem” - We need to add costs to fix the problem - We need to report transparently on our results - We can use our core business capabilities to find solutions “Let‟s solve the problem” “It is not a problem” - Let’s ignore or understate the problem - Let’s minimize our responsibility - Philanthropy is about personal values - We can lower costs, grow revenues, or differentiate our value proposition by addressing social problems - Even social problems we don’t usually affect pose opportunities “It‟s an opportunity to create shared value”
  • © 2010 FSG5 FSG.ORG • The long-term competitiveness of companies depends on social conditions − An educated and skilled workforce − Safe working conditions − Sustainable use of natural resources − A flourishing local economy • Business has an essential role to play in solving social problems − Only companies can create prosperity that funds government and civil society − Companies can create solutions to many social problems in ways that governments and NGOs cannot − Competitions fuels innovation and efficiency − For-profit models are the most scalable and sustainable − Businesses can overcome constraints that limit their growth The “externalities” we have ignored have substantial internal effects Societal and Corporate Success are Inextricably Linked
  • FSG.ORG 6 © 2013 FSG Companies Create Shared Value by Leveraging Core Assets to Address Social Needs In Ways That Create Opportunities for Business Growth Social Needs Corporate Assets and Expertise Business Opportunities / Constraints Shared Value Shared Value creates tangible business value and enhances competitiveness, and does not just ensure compliance or protect/enhance business reputation
  • FSG.ORG 7 © 2013 FSG While Each Component of The Portfolio Serves a Different Purpose, Shared Value Investments Maximize Social and Business Impact Business Impact SocialImpact Traditional Community Engagement • For society: Additional resources for good causes • For business: Goodwill, license to operate, employee engagement, Strategic CSR / Sustainability • For society: Better resources for company related causes • For business: Reputation uplift; compliance with sustainability standards Shared Value • For society: Targeted problem solving at scale • For business: New revenues, lowered costs, increased growth potential
  • FSG.ORG 8 © 2012 FSG Companies Across the Globe Are Creating Shared Value Enabling Local Cluster Development Redefining Productivity in the Value Chain Reconceiving Products and Markets Three ways of creating shared value
  • © 2010 FSG9 FSG.ORG CSV Investment Walmart is reducing transportation costs and helping sustain the livelihoods of small-scale farmers in the US and emerging markets by working to source produce for its stores locally and by providing training and support to farmers near store locations. Source: Company websites and reports, news articles Social Goals • Increase income of small and medium farm suppliers by 10 – 15% • Reduce waste and carbon emissions • Provide low-cost, healthy food for Walmart customers – goal is to sell $1B in locally-grown produce by 2015 Business Goals • Reduce transportation costs –in the US Walmart has already cut 100 million miles from delivery routes saving the company $200M in fuel costs • Reduce food waste - goal of 15% in emerging markets and 10% in US by 2015 Redefining Productivity in the Value Chain2 Redefining productivity in the value chain
  • FSG.ORG Mars “Vision for Change” Strategy A Revitalized Cocoa Sector in Côte d’Ivoire Priority Goal: Improve Farmer Income Improve Environmental Management of Cocoa Growing Areas Invigorate Rural Communities Vision Strategies • Increase farm productivity • Promote tax/broad sector reform • Improve quality • Promote certification • Improve access to market information • Promote crop diversification • Develop and promote environmentally friendly intensification methods • Monitor environmental impacts of intensification and diversification • Validate optimal agroforestry systems • Reclaim fallow cocoa growing areas • Conserve remaining forests • Expand availability of rural services • Ensure responsible child labor practices • Improve rural infrastructure • Research rural migration issues Economic Environmental Social Building a reliable supply of cocoa for Mars and improving farmer livelihoods Goals
  • © 2010 FSG11 FSG.ORG CSV Changing ‘What‟s Good for Business is Good for Society‟ to „What‟s Good for Society is Good for Business‟ Philanthropy/CSR 1.Create social benefit by redistributing some of the value created by business Creating Shared Value 1.Create social and business benefit by “increasing the size of the pie” 2. Doing good is integral to a risk management strategy 2. Doing good is integral to a successful innovation strategy 3. Businesses help solve social problems because it is their responsibility to ‘give back’ 3. Businesses help solve social problems because it part of their purpose and competitive advantage 4. All profit is equal 4. Profit that is good for society is more sustainable
  • FSG.ORG 12 © 2013 FSG The Electronics Industry Can Take a Portfolio Approach to Engaging with Its Supply Chain Traditional Community Engagement Strategic CSR / Sustainability Shared Value Social and Business Value Support community engagement activities Facilities have strong disaster preparation plans in place Basic medical care and mental health services are available to staff Workers see employment in the electronics industry as a long-term career and limit turnover World-class health and wellness programs reduce absenteeism and boost productivity Natural resource consumption is optimized to reduce operational costs Labor is responsibly sourced, especially with student workers and labor agencies Environmental impact is minimized Excessive working hours are eliminated
  • © 2013 FSG FSG.ORG The Conditions Are In Place for the Electronics Industry To Serve As a Model In Addressing Supply Chain Issues Reactive to consumer pressure No industry-led coalitions that include the entire supply chain Unstable customer-supplier relationship Opportunity to be proactive EICC engages the entire supply chain and can establish a common agenda Stable customer-supplier relationships Apparel Industry Electronics Industry Small, poorly managed factories Well-managed factories and operations
  • © 2013 FSG FSG.ORG EICC Leaders Highlighted Four Guiding Principles to Guide the New Strategic Direction 1BE PROACTIVE, NOT REACTIVE 2CREATE TANGIBLE BUSINESS VALUE 4IMPROVE FOCUS AND RESULTS ORIENTATION3IMPROVE EXTERNAL COLLABORATION
  • © 2013 FSG FSG.ORG EICC Can Evolve Its Vision to Focus on Creating Business and Social Value EICC supports the development of a best practice value chain that other industries will want to replicate by:  Developing a common agenda across the entire supply chain  Driving measureable improvement in social and environmental issues in the electronics supply chain  Creating measurable economic value for businesses through sustained value chain investments Vision for the EICC’s Strategic Direction
  • © 2013 FSG FSG.ORG Does This Strategic Direction Framework Capture EICC’s Key Areas of Activity Going Forward? Update Code and hold members accountable Provide structure & support for audits Share audit results & improve efficiency Support capacity building through tools & training Assess internal data on emerging risks Monitor external trends in issues Engage stakeholders Establish criteria for prioritization Measurable improvements in S&E conditions in the supply chain Early warning system for emerging issues Common baseline for S&E performance; improvements at individual supplier levels Solve Issues in the Value Chain Learn from Emerging Risks Establish Standards & Accountability Areas of Activity Goals Engage in differentiat- ed activities Develop shared measures Incorporate a platform for collaboration Set a common agenda
  • © 2010 FSG17 FSG.ORG • There is an opportunity to transform thinking and practice about the role of the corporation in society • Shared value gives rise to far broader approaches to economic value creation • Shared value thinking will drive the next wave of innovation, productivity enhancement, and economic growth • Businesses acting as businesses, not as charitable givers, are arguably the most powerful force for addressing many of the pressing issues facing our society • A transformation of business practice around shared value will give purpose to the corporation and legitimize business again The Purpose of Business
  • The Electronic Industry Citizenship Coalition Welcomes you to Sponsored by Exhibitors