Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

CSR progress, leaders and laggards


Published on

Speech slides on CR and companies that get it, and don\’t, from Pontis Foundation Conference, Bratislava, May 2009

  • Be the first to comment

  • Be the first to like this

CSR progress, leaders and laggards

  1. 1. Ethics drivers, examples and outlook Pontis CR Conference, Bratislava, May 14 2009 Tobias Webb, Ethical Corporation Institute / Ethical Corporation magazine
  2. 2. Overview: CSR driven by PR concerns CFO's very influential today! <ul><ul><li>&quot;Ways in which environmental, social, and/or governance programs improve companies’ financial performance&quot; </li></ul></ul><ul><ul><li>1) Reputation and/or brand equity = 79% </li></ul></ul><ul><ul><li>2) For talented employees = 52% </li></ul></ul><ul><ul><li>3) Meeting society’s expectations = 43% </li></ul></ul><ul><ul><li>4) Improving efficiency = 39% </li></ul></ul><ul><ul><li>5) Growth opportunities = 35% </li></ul></ul><ul><ul><li>6) Risk management = 24% </li></ul></ul><ul><ul><li>7) Strengthening competitive position = 14% </li></ul></ul><ul><ul><li>8) Improving access to capital = 3% </li></ul></ul><ul><ul><li>(Source: McKinsey February 2009 CFO survey &quot;Where value comes from“ section) </li></ul></ul>
  3. 3. Anti-corruption Regulatory and enforcement changes <ul><ul><li>Foreign Corrupt Practices Act 1977 </li></ul></ul><ul><ul><li>OECD anti-bribery convention 1997 </li></ul></ul><ul><ul><li>Corruption fines cost Siemens 1.3 - 1.6 billion dollars so far </li></ul></ul><ul><ul><li>BAE Executives have been questioned in U.S. </li></ul></ul><ul><ul><li>BAE spent £3 million reacting to Woolf report, 60 ethics execs </li></ul></ul><ul><ul><li>Corruption still common: construction , extractives , telecoms </li></ul></ul>
  4. 4. What’s happening now in anti-corruption? US/UK: Enforcement growing <ul><ul><li>Enforcers get tough: more cases, bigger penalties ( Intel ) </li></ul></ul><ul><ul><li>Regulators work together: co-operation and convergence </li></ul></ul><ul><ul><li>Business comes clean: self-disclosure and plea-bargaining </li></ul></ul><ul><ul><li>Litigation spin-offs: coupling FCPA charges with other prosecutions </li></ul></ul><ul><ul><li>European companies vulnerable! ( MAN Group ) </li></ul></ul><ul><ul><li>Stronger risk-based business case! </li></ul></ul>
  5. 5. What’s happening now in anti-corruption? Ethics vs. Compliance <ul><li>Big companies including values-based ethics programme alongside rules-based system </li></ul><ul><li>Heavy on leadership, employee engagement and innovation </li></ul><ul><li>Internal policies strengthened on new anti-corruption rules </li></ul><ul><li>Training is still a big part of ethics budgets - up to 90%! </li></ul><ul><li>Source: 'Best practices in designing effective ethics programmes‘. Ethical Corporation Institute Report, April 2009. </li></ul>
  6. 6. CSR and reformed companies Companies that have learned: <ul><ul><li>Chiquita : Labour and environment </li></ul></ul><ul><ul><li>Unilever : Sourcing and entrepreneurship </li></ul></ul><ul><ul><li>Nike, IKEA, Timberland : Labour and environment </li></ul></ul><ul><ul><li>McDonald's : Sourcing and nutrition </li></ul></ul><ul><ul><li>Kraft : Sourcing and certification, Rainforest Alliance </li></ul></ul><ul><ul><li>Marks and Spencer : 100 targets on sustainability </li></ul></ul><ul><ul><li>Wal-Mart : Supplier scorecards, task forces on products </li></ul></ul>
  7. 7. CSR and reformed companies Some that struggle… <ul><ul><li>Nestle : Tokenistic approach, e.g. coffee </li></ul></ul><ul><ul><li>Coke : Poor on strategy, weak on climate change </li></ul></ul><ul><ul><li>Supermajor oil companies : Renewables/CCS </li></ul></ul><ul><ul><li>Construction industry : Still rife with corruption </li></ul></ul><ul><ul><li>Tesco : Weak on strategy, still reactive, lagging others </li></ul></ul><ul><ul><li>Banks: HSBC , (forestry), Barclays , (no head of CR!) </li></ul></ul><ul><ul><li>Virgin : Climate change financial product = 5000 airmiles… </li></ul></ul>
  8. 8. CSR and self regulation of companies Voluntary initiatives <ul><ul><li>Extractive Industries Transparency Initiative </li></ul></ul><ul><ul><li>Government and company led, weak on members </li></ul></ul><ul><ul><li>Kimberly Process </li></ul></ul><ul><ul><li>Effective on conflict diamonds, but political troubles… </li></ul></ul><ul><ul><li>Ethical Trading Initiative </li></ul></ul><ul><ul><li>Good on basic conditions, disagreements on wages </li></ul></ul><ul><ul><li>Business Social Compliance Initiative </li></ul></ul><ul><ul><li>Useful to get companies engaged, concerns about depth </li></ul></ul><ul><ul><li>UN Global Compact </li></ul></ul><ul><ul><li>A strong catalyst, no resources/remit for laggards </li></ul></ul><ul><ul><li>UN Principles for Responsible Investment </li></ul></ul><ul><ul><li>Wide take up, concerns about effectiveness </li></ul></ul><ul><ul><li>Global Reporting Initiative </li></ul></ul><ul><ul><li>- A useful toolkit, but not a standard, risks box ticking! </li></ul></ul>
  9. 9. The landscape going forward <ul><ul><li>Increasing legal/ regulatory pressures : </li></ul></ul><ul><ul><ul><li>Anti-corruption, </li></ul></ul></ul><ul><ul><ul><li>Maybe later on human rights </li></ul></ul></ul><ul><ul><ul><li>Financial regulation and social pressure on large companies! </li></ul></ul></ul><ul><ul><li>Expectations increasing: </li></ul></ul><ul><ul><ul><li>Increasingly impossible not to be engaged with communities </li></ul></ul></ul><ul><ul><ul><li>Governments realise their limitations, change procurement rules </li></ul></ul></ul><ul><ul><li>Consumer choices: </li></ul></ul><ul><ul><ul><li>Evidence that consumers increasingly interested, niche going mainstream </li></ul></ul></ul><ul><ul><li>Business-to-Business expectations: </li></ul></ul><ul><ul><ul><li>SD/CSR required as part of product/ service specifications </li></ul></ul></ul><ul><ul><ul><li>Technology will play a key role (both for low carbon and campaigners!) </li></ul></ul></ul>
  10. 10. Learning resources: <ul><ul><li>Ethical Corporation magazine </li></ul></ul><ul><ul><li>Ethical Corporation Institute research reports: </li></ul></ul><ul><ul><li> : Free daily and weekly news and analysis on business and climate change </li></ul></ul><ul><li>Contact me: [email_address] </li></ul>