Transcript of "Chosun Ilbo CSR Conference Seoul April 10 2013 Presentation"
What is CSR and how is it connected with Ethics and Governance? Toby Webb, Founder, Ethical Corporation and Stakeholder Intelligence. Lecturer, Corporate Responsibility, Birkbeck, University of London Chosun Ilbo CSR Conference, Seoul, April 10th 2013 Toby.Webb@stakeholderintel.com
What is CSR today?• CSR is about how you run your business when no- one is watching• It covers: Ethics, Integrity, Products, Services, Consumers, Investors, Anti-corruption, Suppliers, Tax payments, Market Ethics, Employees, Civil society and the Environment…
CSR today = Sustainable Business• Sustainable business does not happen without strategy• Strategy does not happen without Governance• Governance does not happen without Ethics• Ethics do not happen without Stakeholder Engagement Paul Polman, Unilever CEO
Who are some of the leaders?Unilever Sustainable Living Plan - 10 Marks and Spencer Launched Plan A inyear journey towards sustainable growth January 2007, setting out 100(2010) commitments to achieve in 5 yearsApplies right across the value chain Now extended Plan A to 180 commitments to achieve by 2015Responsibility for own direct operationsAlso for suppliers, distributors and how Ultimate goal of becoming the worldsconsumers use Unilever brands most sustainable major retailerUnderpinning Plan are around 60 targets
Who are some of the leaders?General Electric - Eco-Innovation as business 2011 - Siemens reorganised operations intostrategy four core business units:Ecomagination business unit mainstream Energy - efficiency in energy production andfocus on business innovation and sustainable distribution, including oil, gas and renewablesindustrial products Healthcare - supplying technology (medical$2.3 billion invested in “Ecomagination” imaging equipment and healthcare IT)products in 2011 Industry - providing software and technologyReduced GHG emissions 30% since 2004 servicesReduced wastewater by 45% since 2006 Infrastructure and cities - sustainable technologies (smart grid equipment and rail vehicles)
How about an Asia-based company?Golden Agri Resources – A model forsustainable palm oil• 2010 - announced ground-breaking deal with The Forest Trust to help prepare for Roundtable on Sustainable Palm Oil (RSPO) certification by December 2015• Engagement with local NGOs for monitoring of sustainable agriculture implementation• Working with Greenpeace and “No deforestation” commitment: international NGOs Now extended to pulp & paper• Won back business from Nestle and Sister company APP in Feb 2013 Unilever: Share price went up!
Why do they choose to lead?Unilever • Securing supplyMarks and Spencer • Customer trustGeneral Electric • Low carbon futureSiemens • Urbanisation trendsGolden Agri Resources • Market access
How do they engage with stakeholders?• Dialogue with civil society• Consulting experts on agriculture, trust, urbanisation, climate change, energy futures• By using guidance and standards• Listening to their employees ISO 26000 Guidance ‘Standard’• Watching trends emerge
Key guidance for CSR and Sustainability• ISO 26000• Dow Jones Sustainability Indexes• FTSE4Good Index• Global Reporting Initiative Guidelines• OECD Guidelines• UN Global Compact BUT: Guidance not the whole solution: You must study your own Risk and Opportunities
• Ten year journey towards sustainable growth with 50 tough targets• Aim to bring safe drinking water to 500 million people• 2011: Increased proportion of portfolio that meets highest nutritional standards from 22% in 2010 to 25% in 2011• Aim: Halve the greenhouse gas impact of products across the lifecycle by 2020• 2020 aim: Source 100% of agricultural raw materials sustainably• Sustainably sourced raw materials up from 24% in 2011 to 36% in 2012
Unilever: Business Benefits of Sustainability Total sales 2008-2012 up 26% from 40bn Euros to 51bn
Siemens and Green Business Strategy • 2011: Products and solutions in Environmental Portfolio generated revenue of €29.9 billion: 41% of total revenue • Objective: Grow annual revenue to €40 billion by 2014 –with new, innovative products and exceptional growth in fields like renewable energy. These include:
Siemens and Green Business Strategy • Combined cycle power plants and intelligent building technologies: far more energy-efficient than comparable solutions • Renewable energy systems and components: wind turbines, steam turbines for solar-thermal power plants. Environmental technologies for cleaner water and air
How do these examples link to stakeholder engagement?• Employee engagement drives innovation and ideas• NGO partnerships bring science, experience credibility• Communities have increasing power & influence• Social media means no company escapes scrutiny• Big business want a long term vision from Governments: And policies and incentives that enable investment and longer term planning: So must lead by example
Social Media means no escape from the public eye
How do CSR and Sustainability improve Business?• Consumers want to trust brands, not products• Leading companies turning sustainability into opportunity all over the world: New products / motivated people / cost savings• 9 billion people means less resources and innovation will be essential: Sustainability = risk reduction• Corporate roles in changing inefficient systems will be vital: The winning companies recognise CSR is systems change• CSR and Sustainability = Smarter business
Harvard Business SchoolProfessor Robert Eccles,Harvard Business School
Do other companies make money from CSR and sustainability?London Business School & Harvard Business School research:• Firms with better CSR performance face significantly lower capital constraints• Better stakeholder engagement and transparency around CSR performance, are important in further reducing capital constraints• That the relation is driven by both the social and the environmental dimension of CSR"CORPORATE SOCIAL RESPONSIBILITY AND ACCESS TO FINANCE" Available at: http://ssrn.com/abstract=1847085
Five ways ethics and governance are linked to CSR and Sustainability1. CSR and Sustainability cannot exist without Business Ethics2. Business Ethics cannot exist without good Corporate Governance. Ethics always begins and ends with leaders3. Good Corporate Governance is now seen by international investors as part of good management by boards4. Poor Corporate Governance is priced into share valuations by analysts and large international investors5. Good Corporate Governance begins with Rule Compliance
Why Transparency Matters• Compliance with international best practice in Governance and behaviour expectations = The first step to building investor and stakeholder trust – That’s true for Korea too!• BUT: Compliance alone is not enough!• Transparency is an under-valued method of building trust, both from Markets Lack of transparency affects trust
Why Transparency Matters• Responsible ownership is about being accountable to shareholders• That’s true for businesses in Korea too… $18 Trillion in International Investor Assets• Fact: Investors reward better managed (governed) companies!
Conclusion: Eight Key Steps to Global Ethical Governance 1. Adopt best practice in International Corporate Governance 2. Go beyond Compliance: Develop and integrate Ethics 3. Lead from the top of the company on Ethics 4. Use Ethics to build strategy in CSR and Sustainability 5. Engage employees, partners, suppliers and civil society in strategy and policy development 6. Use engagement to drive innovation in Governance, Practice, Product and Service Innovation across your business 7. Embed ethics, CSR and Sustainability into your business every day 8. Never forget: Ethics, Governance and CSR are how smart business will be done in the 21st Century