An introduction to CSR and Innovation, regulations and frameworks

1. 04-10-2010
Corporate Social Responsibility in the
Innovation Process.
The Danish Case, as a concept
Complimentary work for DEA
Phd. in Management and Marketing
Year: 2008-2010
Department of Management and Marketing
Universidade de Vigo, Spain
Author: JORGE OLIVEIRA TEIXEIRA
Director : PEDRO FIGUEROA DORREGO, Phd
2010/10/05
Contents
1. Introduction to CSR
2. Corporate Social Responsibility
3. Innovation
4. Corporate Social Responsibility and Innovation
5. The Danish Case in CSR and Innovation
6. Notes for future considerations
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2. Corporate Social Responsibility
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2. Corporate Social Responsibility
(one definition)
“An evolving concept, not universally accepted definition;
The way organizations integrate social, environmental and
economic concerns into their values, culture, decision-making,
strategy and operations, and thereby establish better practices
within the organization, create wealth and improve society”.
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2.1 Introduction to CSR
CSR
Voluntary
Collective
Agreements
Law
Regulated
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2.2 Relationship Between an organization
its stakehoders and society
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2.3 Corporate Social Responsibility activities
Stakeholder
dialogue
Communic
Employee
ation
Management
CSR
Visions and Customer
Innovation
values
Environm
Supplier
ental
Community
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2.4 Corporate Social Responsibility activities
• Why
• What
Communication • When
• Who
• Where
Stakeholder • Who are they
• Dialogue and inclusion
dialogue • Communication
Employee • Prevention
• Retention
activities • Integration
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2.4 Corporate Social Responsibility activities
• Pollution prevention
Environmental • Waste minimizing
activities • Reduction of energy, water, etc
Community • Community support
• Contribution and sponsorship
activities • Partnerships
• Risk assessment
Supplier • Guidelines
activities • Codes of Conduct
• Cooperation
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2.4 Corporate Social Responsibility activities
Customer • Demands from, and dialogue with
customers
activities • Product labels
• New process
CSR • New Products
• New Services
Innovation
• CSR Profile Business models
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2.5 Advantages of Business Driven
Social Responsibility
Lower cost trough
Better Environmental
reputation management and
New reduce energy
products consumption
RESPONSIBLE
BUSINESS
Greater More
Supplier Committed
relaiability Enhanced staff
Product
differentiation
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2.6 The Big picture
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2.7 The CSR Approach
Defensive Offensive
•Handle problems •Focus on request
Business •Handle Requests •Establish norms
•Avoid bad publicity •Stand out
•Go beyond sector
standards
Sector •Comply with sector
•Differentiate yourself
standards
from other business in
your sector
•Contribute to local
•Await agreements, community
Community collective agreements •Market yourself on the
or statutory requirements basis of your
contribution
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2.8 Cyclical Matrix of Corporate
Social responsibility
• Social • Ethics and
Accountability Human
and Social Resources
Investment
Community Workplace
Environment Marketplace
• Environment • Corporate
Protection governance
and and economic
Sustainability Responsibility
G.K Kanji and P.K. Chopra, 2010
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3. Innovation
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Key definition
An innovation is the implementation of a new or significantly
improved product (good or service), or process, a new
marketing method, or new organisational method inbusiness
practices, workplace organisation or external relations.
Innovation activities include all scientific, technological, organisational,
financial and commercial steps which actually lead, or are intend to
lead, to the implementation of innovations. Some of these activities
may be innovative in their own right, while others are not novel but
are necessary to implementation.
Oslo Manual 2005
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Types of Innovations
Types of
Innovations Product
Oslo Manual
2005 Process
Organization
Marketing
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3.1 Types of Innovations
represent technical advance so
significant that no increase in
scale, efficiency, or design can
make older technologies
competitive with the new
Radical & Incremental Technology
(Tushman & Anderson,1986)
to new customers and so-far un served
Sustaining and Disruptive markets Innovation can also be
Innovation characterized by its ability to either
strengthen a firm's existing
(Hockerts & Morsing, 2008) capabilities and market position or to
disrupt them by rendering competencies
obsolete or reaching out
User-driven Innovation
(Von Hippel, 2001)
introduced the notion of (lead) user-driven
innovation to describe the ability of user
communities to initiate and develop
exceedingly complex products sometimes
even without any specific manufacturer
involvement
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Elements of a system Innovation
Cotec, Model 1998
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The Innovation measurement Framework
Oslo Manual, 2005
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4. Corporate Social Responsibility
and Innovation
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The term corporate social innovation is increasingly taken up
by practitioners. Patrick Cescau CEO of Unilever for example
defines corporate social innovation as a way of "finding new
products and services that meet not only the functional needs
of consumers for tasty food or clean clothes but also their
wider aspirations as citizens."(cited in Webb, 2007).
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4.1 The CSR innovation objective field
In a strategic CSR innovation process, business use their
core competences to develop new concepts, products, etc.
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4.2 CSR AND INNOVATION – What is it?
Literature bringing together CSR and innovation has emerged
gradually over the past decade. One interpretation of “social
innovation” can refer to improvements in the CSR process.
Examples could be improved social reporting tools or CSR
management systems.
Corporate Social Innovation
The term “corporate social innovation” was first introduced by
Rosabeth Moss Kanter (1999) who argues that firms should use
social issues as a learning laboratory for identifying unmet
needs and for developing solutions that create new markets.
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4.4 CSR AND INNOVATION – What is it ?
Social Entrepreneurship
According to Hockerts it describes “the discovery and sustainable
exploitation of opportunities to create public goods”.
This is usually done through the generation of disequilibria in market
and non-market environments. Social Entrepreneurship can in some
cases lead to the creation of social enterprises. These social ventures
are hybrid organizations exhibiting characteristics of both the for-profit
and not for profit sector.
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4.4 CSR AND INNOVATION – What is it ?
Eco-Innovation
The notion that sustainable development drives disruptive innovations
has come quite naturally to the sustainability debate (Hockerts,1999,
2003). Sustainability innovations (also called eco-innovations, eco-
design, eco-preneurship, or cleantechnology venturing) have been
proposed as a source for "environmentally benign growth" (Dyllick,
1994).
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4.5 Base of the Pyramid (BOP)
An important subtheme of corporate social innovation is the
focus on low-income markets. Prahalad and Hart (1999) talk in this
context of the potential of the bottom or base of the pyramid
(BOP). Ex: reverse innovation
The BOP premise is that by focusing on the unmet needs of low-
income populations firms can create profitable markets while also
helping the poor address some of their most urgent.
Prahalad’s most notable assumption is that BOP markets have to
pay a “poverty premium”(This means that many poor have to pay
more for products and services such as food, water,medication,
credit, or telecommunication, than their middle or upper class
compatriots.
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4.6 CSR and Innovation – How Does It Happen?
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5. The Danish Case in CSR and Innovation
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5.1 General Principles
UN GLOBAL COMPACT
General
UN PRI
principles
OCDE Guidelines
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5.2 Key Specific Principles
UN Environment Programe Financial Iniciative (UNEP FI)
The Equator Principles
Global Reporting Iniciative ( GRI)
Key specific
principles
Transparency International – Business Principles for
Countering Bribery ( BPCB)
Carbon Disclosure Project (CDP)
UN Caring for Climate
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5.3 The Danish model for CSR in innovation
Business
Process
CSR
Product
Customer
Contact
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5.4 Key Action Areas
Wants the marketing of The government wants to
Denmark for responsible underpin large
growth to help Danish business´CSR reports
business reap greater benefits
from their S R work
The state sector also has a
number of options for
The government wants aiding in disseminating
business to contribute S R through its own
actively to tacking global activities
climate challenges
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5.5 Clarification through 12 types of innovation
Type of Innovation Explanation CSR Example
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5.5a Clarification through 12 types of innovation
Type of Innovation Explanation CSR Example
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6. Notes for future considerations
• Greater attention to political accountability in the innovation process
• More informed consumers
• Global brands
• The noticeable increase of socially responsible brands
• New consumers trends
• Measure of Corporate Social Performance (CSP).
• Aplication to SME
• Public concern about Corporate Social Responsibility
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Q&A
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Thank you for your attention
Jorge Oliveira Teixeira
jorgeteixeira@accelperiberia.com
www.accelperiberia.com
www.linkedin.com/in/jorgeoliveirateixeira
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Appendix 1
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Appendix 2
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Appendix 3
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Appendix 4
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Appendix 5
• KEY ACTION AREA 1: PROPAGATING BUSINESS-DRIVEN SOCIAL
RESPONSiBILITY
• The Government wants to:
• encourage Danish companies and investors to continue and develop their
commitment and CSR work
• make it mandatory for large business to report on CSR in the management’s review
of the annual report
• make it mandatory for institutional investors and unit trust to report on CSR in the
management’s review of the annual report
• set up to the Social Responsibility Council charged with making recommendations
for the Government, the corporate sector and associations
• establish a new social responsibility communication portal
(www.samfundsansvar.dk)
• organize international conference “Danish Business innovating for World
Challenges” to identify innovation areas for Danish business
• set up a knowledge network among organizations, researchers and advisors on
businesses-driven social responsibility and responsible supplier management
• advise business though Danish representations in other countries
• work to ensure a transparent market that promotes social responsibility
considerations in consumer purchasing. The Government will launch a study of
consumers‘ role in CSR
• prepare a biennial progress report on Danish businesses’ observance of and
commitment to Global Compact and PRI, first time in 2010
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Appendix 6
• KEY ACTION AREA 2: PROMOTING BUSINESSES’ SOCIAL RESPONSIBILITY THROUGH
GOVERNMENT ACTIVITIES
• The Government wants to:
• ensure that, in the future, joint state supply contracts will systematically embed requirements for
social responsibility as articulated in the conventions that provide the foundation for the UN Global
Compact
• ensure that all state procurement officers can access the guidelines for embedding social
responsibility
• open up dialogue with local authorities and regions with a view to disseminating experience in
embedding social responsibility in their areas
• make it mandatory for state-owned public limited companies to report to CSR in the management‘s
review for the annual report
• ensure that all major state-owned public limited companies accede to the UN Global Compact
• ensure that the Vækstfonden accedes to the UN principles for responsible investment (PRI)
• ensure that the Eksport Kredit Fonden (EKF) accedes to the UN Global Compact
• continue its work for embedding social responsible in Danish development work
• ensure that the Industrialiseringsfonden for udviklingslande (IFU) and the Investment Fund for
Central and Eastern Europe (Iø) accede to the UN Global Compact
• organize conferences on businesses‘ social responsibility in developing countries jointly with
Danish representations outside Denmark, local players and businesses
• ensure that the regional trade and industry development system contributes to propagating
business-driven social responsibility
• strive to ensure that international investment banks embed social responsibility in their business
and investment strategies
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Appendix 7
• KEY ACTION AREA 3: CORPORATE SECTOR‘S CLIMATE RESPONSiBILITY
• The Government wants to:
• encourage businesses to include sections of climate responsibility in their reports on CSR
in the management‘s review of the annual report (see the mandatory requirement in key
action area 1)
• jointly with Confederation of Danish industries develop the Climate Compass - a web-
based climate tool aimed at helping businesses prepare climate accounts and climate
strategies
• initiate four partnerships on climate responsibility in relations to investors, in the retail
sector, the construction sector and the maritime sector
• KEY ACTION AREA 4: MARKETING DENMARK FOR RESPONSIBLE GROWTH
• The Government wants the marketing of Denmark for responsible growth to help Danish
businesses reap greater benefits from their social responsibility work.
• The Government wants to:
• promote Danish tools and competences in the area of corporate social responsibility
• head up a 2010 international summit on international standards for social responsibility in
Copenhagen (ISO 26000)
• organize an international conference on responsible investments aimed at creating the
basics for better targeted and usability oriented research
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Credits
• Draft international Standard ISO/DIS 26000
• Oslo Manual, Guidelines for Collecting and interpreting
Innovation Data
• Action Plan for Corporate Social Responsibility,
The Danish Government, May 2006
• Modelling The Firm in its Markets and Organizational Environment:
methodologies for Studying Corporate Social Respnsibility, Gopal K.
kanji and Parvesh K. Chopra, Total Quality Management.
• Project People & Profit, The Danish Commerce and Companies
Agency
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