From CSR to Sustainable Business - What are companies doing, and why

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A presentation given to 400 business students and professors in Guadalajara, Mexico on September 19 2013. It covers: CSR definitions, trends now and in the future, company case studies, the business …

A presentation given to 400 business students and professors in Guadalajara, Mexico on September 19 2013. It covers: CSR definitions, trends now and in the future, company case studies, the business case for CSR and sustainability and the issues of the future. Looks at Marks & Spencer, Unilever, Siemens, General Electric company

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  • 1. From  CSR  to  Sustainable  Business:   What  are  companies  doing,  and  why     Toby  Webb,  Founder,  Ethical  Corpora7on  and  Stakeholder   Intelligence.  Lecturer,  Corporate  Responsibility,  Birkbeck,   University  of  London     Tecnológico  de  Monterrey,  Mexico,  September  2013     Tobias.Webb@stakeholderintel.com     Tobiaswebb.blogspot.com  
  • 2. What  is  CSR  today?   •  CSR  IS  NOT  PHILANTHROPY     •  Ethics  *  Integrity  *  Products  *   Services  *  Consumers  *  Investors   *  An7-­‐corrup7on  *  Suppliers  *   Tax  payments  *  Market  Ethics  *   Employees  *  Civil  society  *   Poli7cs  and  the  Environment… and  more…   •  CSR  is  not  about  how  you  give   your  money  away   •  It  is  about  how  you  make  it   •  “CSR  is  about  how  you  run  your   business  when  no-­‐one  is   watching”  
  • 3. What  are  the  CSR  trends  today?   •  More  compliance     •  BeWer  governance   •  Improved  trust     •  Cost  reduc7on   •  Co-­‐ope77on    
  • 4. What  are  the  (addi?onal)  trends   tomorrow?   •  Resource  constraints   (popula7on,  materials,   climate  change)   •  Licence  to  Operate   •  Collabora7on  for   systems  change     •  Ins7tu7onal,  trade  and   poli7cal  improvements   •  Impact  measurement  
  • 5. Who  are  some  of  the  leaders?   •  Unilever  -­‐  Ten  year  journey   towards  sustainable  growth  –  The   Sustainable  Living  Plan   •  Applies  right  across  the  value   chain   •  Responsibility  for  own  direct   opera?ons  (social/enviro)   •  Also  for  suppliers,  distributors   and  how  consumers  use  Unilever   brands   •  Underpinning  the  Plan  are  around   60  very  tough  business  targets  
  • 6.                 So  what  do  they  actually  want  to  do?     •  Bring  safe  drinking  water  to  500  million  people   •  Increase  propor7on  of  product  por^olio  that  meets  highest   nutri?onal  standards  (22%  in  2010  to  25%  in  2011)   •  Halve  the  greenhouse  gas  impact  of  products  across  the   lifecycle  by  2020   •  2020:  Source  100%  of  agricultural  raw  materials  sustainably   (36%  in  2012)  
  • 7. Business  Benefits  of  Sustainability                  
  • 8. Marks  &  Spencer   •  Launched  Plan  A  in  2007.   100  commitments  to   achieve  in  5  years     •  Now  extended  Plan  A  to   180  commitments  to   achieve  by  2015.   •  139  achieved  so  far   •  Ul7mate  goal  of  becoming   the  world's  most   sustainable  major  retailer   •  Sustainability  work  has   driven  profits  as  well  as  cut   costs     •  2012:  £135m  NET  BENEFIT   (29%  increase  year  on  year)    
  • 9. Launched  in  2007:  “Ten  years  of  incrementalism  leading  to  transforma?on”  
  • 10. Who  are  some  of  the  leaders?   •  General  Electric:  Eco-­‐ Innova7on  as  business   strategy   •  Ecomagina?on:   Mainstream  focus  on   business  innova7on  and   sustainable  industrial   products         •  $2.3  billion  invested  in   “Ecomagina7on”  products   in  2011   •  Reduced  GHG  emissions   30%  since  2004   •  Reduced  wastewater  by     45%  since  2006  
  • 11. Who  are  some  of  the  leaders?   2011  -­‐  Siemens  reorganised   opera7ons  into  four  core   business  units:     •  Energy  -­‐  efficiency  in  energy   produc7on  and  distribu7on,   including  oil,  gas  and   renewables   •  Healthcare  -­‐  supplying   technology  (medical   imaging  equipment  and   healthcare  IT)     •  Industry  -­‐  providing   sojware  and  technology   services     •  Infrastructure  and  ci?es  -­‐   sustainable  technologies   (smart  grid  equipment  and   rail  vehicles)    
  • 12. Siemens  and  Green  Business  Strategy   •  2011:  Products  and   solu7ons  in   Environmental  Por^olio   generated  revenue  of   €29.9  billion:  41%  of  total   revenue   •  Objec7ve:  Grow  annual   revenue  to  €40  billion  by   2014  –with  new,   innova7ve  products  and   excep7onal  growth  in   fields  like  renewable   energy  
  • 13. Why  do  they  choose  to  lead?   Unilever       Marks  and  Spencer         General  Electric       Siemens         •  Securing  supply   •  Customer  trust   •  Low  carbon  future     •  Urbanisa?on       (These  are  not  the  only  reasons!)  
  • 14. Why  do  they  engage  “stakeholders”?   •  Employee  engagement  drives  innova7on  and  ideas   •  NGO  partnerships  bring  science,  experience,  and  credibility   •  Communi?es  have  increasing  power  &  influence   •  Social  media  means  no  company  escapes  scru7ny   •  Big  business  want  a  long  term  vision  from  Governments:   And  policies  and  incen7ves  that  enable  investment  and   longer  term  planning:  So  must  lead  by  example  
  • 15. How  do  they  engage  with   stakeholders?   •  Dialogue  with  civil  society   •  Consul?ng  experts  on   agriculture,  trust,  ethics.   urbanisa7on,  climate   change,  energy  futures   •  By  using  guidance  and   standards     •  Listening  to  their   employees   •  Watching  trends  emerge                   ISO  26000  Guidance  ‘Standard’  
  • 16. How  do  CSR  and  Sustainability  improve  Business?   •  Consumers  want  to  trust  brands,  not  all  the  product  detail   •  Leading  companies  are  turning  sustainability  into   opportunity  all  over  the  world:  Water,  Telecoms,   Commodi7es,  Retail,  Mining,  Construc7on…   •  9  billion  people  means  less  resources.  Innova7on  will  be   essen7al.  The  Circular  Economy  will  be  vitally  important.   •  Corporate  roles  in  changing  inefficient  systems  will  be  vital:   The  winning  companies  recognise  CSR  is  systems  change     •  CSR  and  Sustainability  =  Smarter  business  
  • 17.                          Harvard  Business  School   Professor  Robert  Eccles,   Harvard  Business  School  
  • 18. Is  CSR/sustainability  profitable?     London  Business  School  &  Harvard  Business  School  research:       •  Firms  with  beWer  CSR  performance  face  significantly  lower   capital  constraints   •  BeWer  stakeholder  engagement  and  transparency  around  CSR   performance,  are  important  in  further  reducing  capital   constraints     •  That  the  rela7on  is  driven  by  both  the  social  and  the   environmental  dimension  of  CSR   "CORPORATE  SOCIAL  RESPONSIBILITY  AND  ACCESS  TO  FINANCE"  Available  at:  hGp://ssrn.com/abstract=1847085  
  • 19. CEOs  agree  with  all  this…   UN  Global  Compact  and   Accenture  CEO  study  2013:     ü 75  CEOs  1-­‐to-­‐1s   ü 1,000  CEO  responses   ü 103  countries     ü 27  industry  sectors     Found  two  clear  CEO   priori?es  for  the  future:         One:  “The  need  for   governments  to  intervene  to   align  global  markets   allowing  companies  to   compete  effec7vely  to  drive   sustainability”     Two:  “To  move  beyond   incremental  change  to   transforma7on  that  delivers   both  sustainability   leadership  and  value   crea7on”    
  • 20. In  conclusion…   •  CSR  today  =  Sustainable   Business  tomorrow.    BUT:   •  Sustainable  business  does   not  happen  without   Strategy   •  Strategy  does  not  happen   without  good  Governance   •  Good  governance  does  not   happen  without  Ethics   •  Ethics  do  not  happen   without  Stakeholder   Engagement     •  My  final  point:  Successful   sustainable  business  is   based  on  both  ethics  and   open  and  con7nuous   engagement  with  society  
  • 21. Thank you! Tobiaswebb.blogspot.com