Corporate Responsibility  Revision Lecture Birkbeck, May 13 2010 Toby Webb, Ethical Corporation Exam time and date: 7th Ju...
Lecture one: Introduction to CR - Definitions   <ul><ul><li>Drucker  was one of the first to explicitly address CSR, as on...
Lecture one: Introduction to CR - History <ul><ul><li>Scandals in the 1950s and 1960s over chemicals </li></ul></ul><ul><u...
Lecture one: Introduction to CR - Definitions <ul><ul><li>1990’s saw Nike emerge as a modern case study </li></ul></ul><ul...
  Significant MODERN global responsible business  initiatives - Some pros and cons <ul><ul><li>UN Global Compact / UN PRI ...
Lecture Two:  Greenwash, Communications and NGO engagement   <ul><li>CSR Beginner  one-way communication , lack of a dialo...
Lecture Two:  Greenwash, Communications and NGO engagement   <ul><li>The virtuous pyramid: </li></ul><ul><li>  </li></ul><...
Lecture Two:  Greenwash, Communications and NGO engagement   <ul><li>Hollender, J., Breen, B. (2010) “ The Responsibility ...
 
Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Huge proportion of spend on OECD country procurement from ...
Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Prahalad and Hart : </li></ul></ul><ul><ul><li>Target the ...
Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Hart suggests: focus on poor as  business partners  and  i...
Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Microcredit : 5.8 million borrowers, small loans averaging...
Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Companies all said for years employees are  number one dri...
Lecture Three: CR, Business Strategy and Innovation <ul><li>New opportunities  for products: Certification, Wind turbines,...
Lecture Three: CR, Business Strategy and Innovation Where we see the most progress: Niche brands : Innocent, Seventh Gener...
Lecture 4: Business, Human Rights and Supply Chain <ul><li>Universal Declaration on Human Rights </li></ul><ul><ul><li>“ A...
Labour-specific human rights <ul><li>International Labour Organisation conventions </li></ul><ul><ul><li>“ The UN speciali...
Why not just legislate? <ul><li>Core Coalition and others have called for international regulation of companies in relatio...
Process of international law <ul><li>There is no such thing as a global government </li></ul><ul><ul><li>Nearest equivalen...
Progress nonetheless  <ul><li>Operational  </li></ul><ul><ul><li>How companies address these issues in their own operation...
Enter John Ruggie <ul><li>Who he? </li></ul><ul><ul><li>Former UN Deputy Secretary-General  </li></ul></ul><ul><ul><li>Cur...
The state duty to protect <ul><li>Primary responsibility for human rights lies with states </li></ul><ul><li>States need t...
The corporate duty to respect <ul><li>“ The baseline responsibility of companies is to respect human rights.”  </li></ul><...
Access to remedies <ul><li>Strengthen existing frameworks </li></ul><ul><ul><li>For example, NCPs of the OECD Guidelines  ...
Lecture Five: Embedding CR CR staff need to know too much…
Lecture 5: Embedding CR But have too few resources
Lecture Five: Embedding CR Solutions? Collaboration But there are some obstacles to hurdle: Convincing the board and senio...
<ul><li>CSR Champions and champion networks (Doughty Center 2009)   </li></ul><ul><li>Emerging, play a strategic role, cau...
<ul><li>CSR Champions and champion networks (Doughty Center 2009)   </li></ul><ul><li>Emerging, play a strategic role, cau...
<ul><li>Key tips for success in CSR champions networks: </li></ul><ul><li>Must be business case </li></ul><ul><li>Medium t...
    <ul><li>How big are champions networks?  </li></ul><ul><li>80-500 depending on business, both full and part time </li>...
Lecture Six: Corporate Responsibility Reporting and Auditing <ul><li>An attempt by large companies to communicate about no...
    <ul><li>CSR reporting now including more hard data on performance (H&S and Climate Change) in biggest firms </li></ul>...
    What do academics say about reporting?   <ul><li>Adams and Frost  (2006) </li></ul><ul><li>Lack of research focus in a...
    What do academics say about reporting?   <ul><li>Morsing and Schultz  (2006) </li></ul><ul><li>Discuss risks of raisin...
Auditing and Verification of CSR / Sustainability reporting   <ul><li>Companies aware of scepticism and concerned about wh...
Lecture Seven: Business and Climate Change   McKinsey Scenarios: 1) No change in policy  = temp rise up to  7 degrees  / 1...
Companies  directly responsible  for at least  40%  of all global greenhouse gas emissions 2009 PWC CEO survey:  40% of CE...
Business and Govt action: <ul><li>Wal-Mart:  committed to being supplied 100% by renewable energy, creating zero waste and...
Business action: <ul><li>Tesco : £100 million climate technologies fund, pledged to cut energy usage per square foot by  5...
Business and Climate Change  Marks and Spencer: Achievements, commitments, opportunities   <ul><ul><li>Plan A  launched Ja...
  <ul><li>Huge shifts in manufacturing to Asia in particular since the late 1980s </li></ul><ul><li>This includes environm...
  <ul><li>Anti-corruption enforcement will grow (DoJ / SEC / SFO stats for 2007/8) </li></ul><ul><li>Chinese and Asian lab...
Exam questions and indicative answers   <ul><ul><li>Which industry sectors are most active in global Corporate Social Resp...
Exam questions and indicative answers   <ul><ul><li>Should UK law be changed to ensure that UK companies can be sued in UK...
Exam questions and indicative answers   <ul><ul><li>Can voluntary approaches to cutting carbon emissions can be made to wo...
Exam questions and indicative answers   <ul><ul><li>Can voluntary approaches to cutting carbon emissions can be made to wo...
Exam questions and indicative answers   <ul><ul><li>Does using the Global Reporting Initiative (GRI) reporting guidelines ...
Exam questions and indicative answers   <ul><ul><li>Do CSR rankings mean that the companies included in the ranking are mo...
Exam questions and indicative answers   <ul><ul><li>Can CSR lead to real business innovation in large companies?  Illustra...
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Final revision lecture, birkbeck, may 13 2010

  1. 1. Corporate Responsibility Revision Lecture Birkbeck, May 13 2010 Toby Webb, Ethical Corporation Exam time and date: 7th June at 2.30 – 4.30pm
  2. 2. Lecture one: Introduction to CR - Definitions <ul><ul><li>Drucker was one of the first to explicitly address CSR, as one of the eight key areas for business objectives developed in his 1954 book, The Practice of Management </li></ul></ul><ul><ul><li>&quot;The social responsibility of business encompasses the economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time &quot;. ( Carroll , 1979) </li></ul></ul><ul><ul><li>“ There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game , which is to say, engage in open and free competition, without deception or fraud.” (Friedman 1970) </li></ul></ul>
  3. 3. Lecture one: Introduction to CR - History <ul><ul><li>Scandals in the 1950s and 1960s over chemicals </li></ul></ul><ul><ul><li>Increasing wealth in the 1960s in Europe e.g. Sweden </li></ul></ul><ul><ul><li>Late 1960s and early 1970s activism hits temporary peak. </li></ul></ul><ul><ul><li>Earth Day 1970, publication of the Limits to Growth report, Erlich's Population Bomb </li></ul></ul><ul><ul><li>1980s also saw inner city riots in the UK </li></ul></ul><ul><ul><li>1980s env. cases: Barclays, Bhopal, Exxon Valdez </li></ul></ul>
  4. 4. Lecture one: Introduction to CR - Definitions <ul><ul><li>1990’s saw Nike emerge as a modern case study </li></ul></ul><ul><ul><li>Shell and Brent Spar and Nigera (1995) </li></ul></ul><ul><ul><li>Body Shop values report (1995) </li></ul></ul><ul><ul><li>Late 1990’s No Logo, Seattle WTO riots </li></ul></ul><ul><ul><li>Jubilee 2000 Campaign on African debt </li></ul></ul><ul><ul><li>2002 Johannesburg Summit on Sustainable Development, </li></ul></ul><ul><ul><li>2001 scandal over HIV / Aids drugs distribution in Africa </li></ul></ul><ul><ul><li>2003/4 China’s economic explosion significant </li></ul></ul><ul><ul><li>Since 2003/4 CSR has become CR and SUSTAINABILITY </li></ul></ul>
  5. 5. Significant MODERN global responsible business initiatives - Some pros and cons <ul><ul><li>UN Global Compact / UN PRI – Get CEOs signed up, but lack real teeth – and bite! </li></ul></ul><ul><ul><li>GRI – Useful place to start, danger of reliance on box ticking </li></ul></ul><ul><ul><li>John Ruggie’s work – Likely to impact business lobbying on better governance in future </li></ul></ul><ul><ul><li>Carbon Disclosure Project – increased information for regulatory powers to use. May be more useful for legislation purposes than for carbon traders </li></ul></ul><ul><ul><li>EITI / Kimberly – Case studies of real success but hard to replicate in areas where issues are more complex </li></ul></ul><ul><ul><li>ISO 26,000 – very hard to standardise subjective issues for business! </li></ul></ul><ul><ul><li>Issue specific collaborations : Rainforest Alliance / Fair trade / cocoa / fish / timber / palm oil / soy / cotton / labour standards – incredibly influential in terms of policy and even tier 1 supplier concerns </li></ul></ul>
  6. 6. Lecture Two: Greenwash, Communications and NGO engagement   <ul><li>CSR Beginner one-way communication , lack of a dialogue with stakeholders which are even not clearly defined (business partners and clients). Lack of CSR strategy. </li></ul><ul><li>CSR Pretender two-way asymetrical communication model with reactive nature if there is a need one. A company tries to control its environment, image is very important. Stakeholders defined as: employees, clients and local community, their priorities are not clearly identified. (CSR Strategic philanthropy model ). </li></ul><ul><li>  </li></ul><ul><li>CSR Pioneer two-way symmetrical communication with particular stakeholder groups, constant dialogue based on stakeholder engagement, mutual benefits (Stakeholder CSR model). This communication model can lead to CSR innovation model within business and society as well as to a new Community PR model . ( Kuraszko, I. (2009) “Public relations and Corporate Social Responsibility” PHD Dissertation. University of Warsaw) </li></ul>
  7. 7. Lecture Two: Greenwash, Communications and NGO engagement   <ul><li>The virtuous pyramid: </li></ul><ul><li>  </li></ul><ul><li>CSR innovation . </li></ul><ul><li>A company understands its role in society </li></ul><ul><li>- and wants to develop opportunities </li></ul><ul><li>  </li></ul><ul><li>Stakeholder CSR model. </li></ul><ul><li>PR/CR is focused on building relationships </li></ul><ul><li>  </li></ul><ul><li>Strategic philanthropy model – the main purpose of CR/PR is building image </li></ul>
  8. 8. Lecture Two: Greenwash, Communications and NGO engagement   <ul><li>Hollender, J., Breen, B. (2010) “ The Responsibility Revolution ” (Jossey-Bass) (ps.109-11) </li></ul><ul><li>Four types of green pretenders: </li></ul><ul><li>The Shape Shifter : “Greens image without changing its essence”: BP and “Beyond Petroleum”. Clashed with: oil spills in Alaska, explosions in Texas and investments in Canadian Tar Sands </li></ul><ul><li>The Propagandist : “Blunts genuine bad news with fake good news”. Chevron and Ecuador. Company used ‘independent’ ex-CNN journalist to make real-looking ‘mockumentary’ presenting their side of the story </li></ul><ul><li>The Incrementalist : “Hypes narrow, eco-friendly efforts without changing core, eco-unfriendly business”. Clorox : Bought and produces some eco friendly products, but is mainly a bleach company promoting some products as if any stronger “would be banned in 12 states”. </li></ul><ul><li>The Double Talker : “Puts serious marketing and R&D into green, but profits from pollution and undermines progressive regulation”. General Electric : Launched Ecomagination, products and services that deliver sustainability improvements of at least 10%. $2.5 billion investment. But the company continues to try and weaken anti-smog rules for locomotives, fights mandatory CO2 cuts </li></ul>
  9. 10. Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Huge proportion of spend on OECD country procurement from </li></ul></ul><ul><ul><li>Government buying services, products… </li></ul></ul><ul><ul><li>Desire to cut carbon emissions in business = requirements for </li></ul></ul><ul><ul><li>large suppliers to demonstrate some progress. E.G: CDP, CRC </li></ul></ul><ul><ul><li>Denmark : All listed companies (1000 approx) must mention CSR in annual reports </li></ul></ul><ul><ul><li>Sweden : All Government-owned companies must use GRI framework for reporting </li></ul></ul><ul><ul><li>Taiwan : Financial Supervisory Commission says all listed firms must disclose progress on social responsibility </li></ul></ul><ul><ul><li>UK Carbon Reduction Commitment developing CO2 allowances for all UK firms spending more than £1,000,000 a year on electricity (2010, capped from 2013) </li></ul></ul>Sustainability concerns and procurement of services: Governmental drivers
  10. 11. Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Prahalad and Hart : </li></ul></ul><ul><ul><li>Target the 4 billion people living on less than $2 per day (1998) or 3.1 billion </li></ul></ul><ul><ul><li>living on less than $2.50 a day (Ethicalcorp 2009) </li></ul></ul><ul><ul><li>Later expanded by: </li></ul></ul><ul><ul><li>Prahalad (2004) “The Fortune at the Bottom of the Pyramid “ </li></ul></ul><ul><ul><li>Hart (2005) “Capitalism at the Crossroads” </li></ul></ul><ul><ul><li>Prahalad : </li></ul></ul><ul><ul><li>Stop thinking of the poor as victims </li></ul></ul><ul><ul><li>Start seeing them as resilient and creative entrepreneurs </li></ul></ul><ul><ul><li>As value-demanding consumers poor of today are middle-class of tomorrow </li></ul></ul><ul><ul><li>Considers poverty reducing benefits in capacity building </li></ul></ul><ul><ul><li>CSR: Innovation and opportunity, key writers: </li></ul></ul>
  11. 12. Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Hart suggests: focus on poor as business partners and innovators , rather </li></ul></ul><ul><ul><li>than just as potential producers or consumers. </li></ul></ul><ul><ul><li>Hart's Base of the Pyramid Protocol : business partnerships with income-poor </li></ul></ul><ul><ul><li>communities &quot;co-create businesses and markets that mutually benefit </li></ul></ul><ul><ul><li>the companies and the communities&quot;. </li></ul></ul><ul><ul><li>Adopted by the SC Johnson Company and Solae Company (subsidiary of DuPont) </li></ul></ul><ul><ul><li>Aneel Karnani (2007) says no fortune at the bottom of the pyramid! </li></ul></ul><ul><ul><li>Says for most multinational companies the market is actually very small. </li></ul></ul><ul><ul><li>Karnani suggests only way to alleviate poverty is to focus on the poor as producers , rather than as a market of consumers. </li></ul></ul><ul><ul><li>CSR: Innovation and opportunity, key writers: </li></ul></ul>
  12. 13. Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Microcredit : 5.8 million borrowers, small loans averaging $120 (bopnetwork.org 2006) </li></ul></ul><ul><ul><li>ITC and e-Choupals : (village squares wired up) small farmers check market trading price of produce and sell it directly to ITC. </li></ul></ul><ul><ul><li>Farmers and ITC have increased their revenues, efficient communication between buyer and seller </li></ul></ul><ul><ul><li>( Microsoft and HP do similar work in countries such as India via rural communications centers: more philanthropic and political) </li></ul></ul><ul><ul><li>Hindustan lever : Shampoo that works well with cold water in small sachets </li></ul></ul><ul><ul><li>Further BOP examples: </li></ul></ul>
  13. 14. Lecture Three: CR, Business Strategy and Innovation <ul><ul><li>Companies all said for years employees are number one driver for CSR (KPMG 2004) </li></ul></ul><ul><ul><li>2006 Mori survey found 58% of employees in the UK thought the social and </li></ul></ul><ul><ul><li>environmental responsibilities of their organisation were important. </li></ul></ul><ul><ul><li>£50m is given to charities each year through the Give As You Earn scheme, the most popular of such initiatives </li></ul></ul><ul><ul><li>Analysis suggests employees' perceptions of corporate social responsibility have a major impact on organisational commitment . </li></ul></ul><ul><ul><li>(Brammer and Millington, University of Bath School of Management 2006) </li></ul></ul><ul><ul><li>CSR is cheaper than pay rises, may help in a recession... </li></ul></ul><ul><ul><li>Opportunity: Employees and CSR </li></ul></ul>
  14. 15. Lecture Three: CR, Business Strategy and Innovation <ul><li>New opportunities for products: Certification, Wind turbines, industrial technology (i.e. Unilever, Kraft, Mars, Cadbury, GE, Siemens, Toshiba) </li></ul><ul><li>Preferred partner for leading companies: Big firms expect more </li></ul><ul><li>Supporting diverse supplier base, develop loyal SME suppliers </li></ul><ul><li>Increased likelihood of government contracts: Over time… </li></ul><ul><li>Closer and more trusted relationships with customers, NGOs </li></ul><ul><ul><li>CR and modern business development : </li></ul></ul>
  15. 16. Lecture Three: CR, Business Strategy and Innovation Where we see the most progress: Niche brands : Innocent, Seventh Generation, Good Energy, Bullfrog Power, Triodos bank, Interface, Timberland, Body Shop etc Big Industrial companies : GE, Siemens, Toshiba, Nissan, Toyota, Intel Consumer brands : P&G, Unilever, Marks & Spencer, Cadbury, Tesco/Asda Reputationally vulnerable companies : Pharmaceuticals, heavy industry, extractive industry firms – Shell, BP, Exxon, BHP, Sakhalin Energy, Xtrata, and even some banks! <ul><ul><li>CR and modern business development : </li></ul></ul>
  16. 17. Lecture 4: Business, Human Rights and Supply Chain <ul><li>Universal Declaration on Human Rights </li></ul><ul><ul><li>“ All human beings are born free and equal in dignity and rights. They are endowed with reason and conscience and should act towards one another in a spirit of brotherhood” </li></ul></ul><ul><ul><li>Adopted by UNGA, 10 th Dec 1948 </li></ul></ul><ul><ul><li>Response to Holocaust </li></ul></ul><ul><li>Convention on the Rights of the Child </li></ul><ul><ul><li>“ the United Nations has proclaimed that childhood is entitled to special care and assistance…” </li></ul></ul><ul><ul><li>Adopted by UNGA, 20 th Nov 1989 </li></ul></ul>
  17. 18. Labour-specific human rights <ul><li>International Labour Organisation conventions </li></ul><ul><ul><li>“ The UN specialized agency which seeks the promotion of social justice and internationally recognized human and labour rights” </li></ul></ul><ul><li>Many of them, however, the ‘fundamental’ 8 cover: </li></ul><ul><ul><li>Freedom of Association </li></ul></ul><ul><ul><ul><li>87: Freedom of Association and Protection of the Right to Organise Convention, 1948. </li></ul></ul></ul><ul><ul><ul><li>98: Right to Organise and Collective Bargaining Convention, 1949  </li></ul></ul></ul><ul><ul><li>The Abolition of Forced Labour </li></ul></ul><ul><ul><ul><li>29: Forced Labour Convention, 1930 </li></ul></ul></ul><ul><ul><ul><li>05: Abolition of Forced Labour Convention, 1957  </li></ul></ul></ul><ul><ul><li>Equality </li></ul></ul><ul><ul><ul><li>100: Equal Remuneration Convention, 1951 </li></ul></ul></ul><ul><ul><ul><li>111: Discrimination (employment and Occupation) Convention, 1958   </li></ul></ul></ul><ul><ul><li>The Elimination of Child Labour </li></ul></ul><ul><ul><ul><li>138: Minimum Age Convention, 1973 </li></ul></ul></ul><ul><ul><ul><li>182: Worst Forms of Child Labour Convention, 1999 </li></ul></ul></ul>
  18. 19. Why not just legislate? <ul><li>Core Coalition and others have called for international regulation of companies in relation to human rights </li></ul><ul><ul><li>Seems sensible? </li></ul></ul><ul><ul><li>Would provide clarity and uniformity </li></ul></ul><ul><ul><li>If it’s important, regulate. </li></ul></ul><ul><li>Ignores complexity of international law </li></ul><ul><ul><li>International regulation not a realistic option except in the long term </li></ul></ul>
  19. 20. Process of international law <ul><li>There is no such thing as a global government </li></ul><ul><ul><li>Nearest equivalent is UN </li></ul></ul><ul><ul><li>International law therefore not a realistic option </li></ul></ul><ul><li>UN Process </li></ul><ul><ul><li>Negotiation at UN level </li></ul></ul><ul><ul><li>Adoption of Convention at UNSC </li></ul></ul><ul><li>This is then the beginning of national processes </li></ul><ul><ul><li>Adoption of the UN Convention into national law </li></ul></ul><ul><ul><li>This then supposes the national law is rigorously implemented </li></ul></ul><ul><li>Look at International Criminal Court (ICC) </li></ul><ul><ul><li>Pressure since 1975 </li></ul></ul><ul><ul><li>Formally adopted 1988 </li></ul></ul><ul><ul><li>Final incorporation 1998 </li></ul></ul><ul><ul><li>Comes into operation 2002 </li></ul></ul><ul><ul><li>China, America and others still not party to it. </li></ul></ul>
  20. 21. Progress nonetheless <ul><li>Operational </li></ul><ul><ul><li>How companies address these issues in their own operations </li></ul></ul><ul><ul><li>Relatively straightforward </li></ul></ul><ul><ul><li>Many still fail to act, however </li></ul></ul><ul><li>Strategic </li></ul><ul><ul><li>More problematic </li></ul></ul><ul><ul><li>A ‘political’ issue </li></ul></ul>
  21. 22. Enter John Ruggie <ul><li>Who he? </li></ul><ul><ul><li>Former UN Deputy Secretary-General </li></ul></ul><ul><ul><li>Currently Professor of International Relations at KSG, Harvard </li></ul></ul><ul><ul><li>Comes from Realist background, and has huge insight into how things work </li></ul></ul><ul><li>The mandate </li></ul><ul><ul><li>UN Secretary-General’s Special Representative on Business and Human Rights </li></ul></ul><ul><ul><li>Mandate from 2005, extended last year for a further 3 years. </li></ul></ul><ul><li>Essentially: </li></ul><ul><ul><li>How can you govern business in relation to human rights issues given the global governance structures that we have? </li></ul></ul><ul><li>April 08 – 3-part approach proposed </li></ul>
  22. 23. The state duty to protect <ul><li>Primary responsibility for human rights lies with states </li></ul><ul><li>States need to encourage corporations, by </li></ul><ul><ul><li>Encouraging positive corporate culture </li></ul></ul><ul><ul><li>Align and cohere policies </li></ul></ul><ul><ul><li>Seeking and receiving greater support from international agencies </li></ul></ul>
  23. 24. The corporate duty to respect <ul><li>“ The baseline responsibility of companies is to respect human rights.” </li></ul><ul><li>Within its sphere of influence, a company should exercise leverage over “other actors that are causing harm.” </li></ul><ul><li>Suggests use of existing processes to exercise this duty to respect </li></ul><ul><ul><li>Due diligence procedures </li></ul></ul>
  24. 25. Access to remedies <ul><li>Strengthen existing frameworks </li></ul><ul><ul><li>For example, NCPs of the OECD Guidelines </li></ul></ul><ul><li>Companies should institute grievance mechanisms as part of their ‘duty to respect’ </li></ul><ul><li>Use of non-judicial approaches to dispute resolution and access to remedy </li></ul><ul><ul><li>Cf Gacaca process in Rwanda. </li></ul></ul>
  25. 26. Lecture Five: Embedding CR CR staff need to know too much…
  26. 27. Lecture 5: Embedding CR But have too few resources
  27. 28. Lecture Five: Embedding CR Solutions? Collaboration But there are some obstacles to hurdle: Convincing the board and senior management Working with a small budget Decentralising CR activity Measuring success SUCCESS: DESIGNING CR METRICS AND SELECTING TOOLS
  28. 29. <ul><li>CSR Champions and champion networks (Doughty Center 2009) </li></ul><ul><li>Emerging, play a strategic role, causing change and sustaining it long term </li></ul><ul><li>One of a number of tactics to embed CR </li></ul><ul><li>Advantages: work directly with staff, connect division and regions, propagate CR practices </li></ul><ul><li>Allow a 'credible two-way interface between global and local (CR) in international companies </li></ul>
  29. 30. <ul><li>CSR Champions and champion networks (Doughty Center 2009) </li></ul><ul><li>Emerging, play a strategic role, causing change and sustaining it long term </li></ul><ul><li>One of a number of tactics to embed CR </li></ul><ul><li>Advantages: work directly with staff, connect division and regions, propagate CR practices </li></ul><ul><li>Allow a 'credible two-way interface between global and local (CR) in international companies </li></ul>
  30. 31. <ul><li>Key tips for success in CSR champions networks: </li></ul><ul><li>Must be business case </li></ul><ul><li>Medium term at least: 3-5 year plans </li></ul><ul><li>Must seek two way info flows </li></ul><ul><li>Look for innovative ideas </li></ul><ul><li>Must be adaptable </li></ul><ul><li>Key benefits: </li></ul><ul><li>Horizontal ownership of CR </li></ul><ul><li>Identify leaders and clarify roles </li></ul><ul><li>Localised / staff motivating </li></ul><ul><li>Builds CR profile / efficient channelling of resources </li></ul>
  31. 32.   <ul><li>How big are champions networks? </li></ul><ul><li>80-500 depending on business, both full and part time </li></ul><ul><li>Use of ICT vital: intranets, email, but also in induction packs </li></ul><ul><li>Data gathering important, along with conference calls </li></ul><ul><li>Cases include: Reed, Alliance Boots, Accenture, PwC </li></ul>
  32. 33. Lecture Six: Corporate Responsibility Reporting and Auditing <ul><li>An attempt by large companies to communicate about non-financial impacts on society </li></ul><ul><li>Began in printed form as self produced reports, continues to be more 'push' than 'pull‘. Now both print and online form </li></ul><ul><li>Companies seek to promote themselves to media, employees, stakeholders. All say shareholders not interested! </li></ul>
  33. 34.   <ul><li>CSR reporting now including more hard data on performance (H&S and Climate Change) in biggest firms </li></ul><ul><li>Scepticism: NGOs and many others cynical. Honesty in reporting improving slowly </li></ul><ul><li>Tools growing in use: </li></ul><ul><li>Global Reporting Initiative (900 firms, 2006) </li></ul><ul><li>Global Compact (2000-3000, 2008) </li></ul><ul><li>Impact on quality debatable! Companies not innovating quickly. Communications a major issue! </li></ul><ul><ul><li>How is reporting changing? </li></ul></ul>
  34. 35.   What do academics say about reporting? <ul><li>Adams and Frost (2006) </li></ul><ul><li>Lack of research focus in academia on link to strategy </li></ul><ul><li>Companies make general disclosures: 71% of Aus. reporters give no data on performance! </li></ul><ul><li>41 % of UK firms fail to offer targets in reporting… </li></ul><ul><li>Case study approach shows lack of consistency in approaches: due to difference in firms , making comparison difficult </li></ul>
  35. 36.   What do academics say about reporting? <ul><li>Morsing and Schultz (2006) </li></ul><ul><li>Discuss risks of raising head above public parapet </li></ul><ul><li>Stakeholder expectations a moving target: need for reporting to evolve </li></ul><ul><li>Increasingly sophisticated approaches needed </li></ul><ul><li>Suggest three models exist: </li></ul><ul><li>Information strategy / Response strategy / Involvement strategy </li></ul>
  36. 37. Auditing and Verification of CSR / Sustainability reporting <ul><li>Companies aware of scepticism and concerned about who reads reports </li></ul><ul><li>Many moving towards stakeholder panels and statements </li></ul><ul><li>E.G (Shell, BP, Imperial Tobacco, Guardian) </li></ul><ul><li>Kolk (2006): Large variation in how it is done, many subjective statements </li></ul><ul><li>Concludes assurance/verification is not wholly convincing or reliable </li></ul>
  37. 38. Lecture Seven: Business and Climate Change McKinsey Scenarios: 1) No change in policy = temp rise up to 7 degrees / 1-2 billion people overwhelmed / 4 billion people at risk / Floods and water shortages / Total ice cap melt / Amazon may die 2) Developed nations lead the way, spend $350 bn per year by 2030 = sea levels rise / low level islands threatened / hunger increases slower than scenario 1 / Canada and Northern Europe become more productive / Major increase in extreme weather events 3) Global action , spend is $565 bn per year by 2030 = World warms only 2 degrees / hotter areas suffer on crop yields / some ice at poles remains / increase in bad weather and floods, but manageable / tropical disease spread is significant, but limited
  38. 39. Companies directly responsible for at least 40% of all global greenhouse gas emissions 2009 PWC CEO survey: 40% of CEOs were not concerned about climate change . 7% of CEO’s extremely concerned. 42% extremely concerned about economic downturn UN/Trucost study says if biggest companies held accountable for environmental costs, 1/3 of profits would be lost Total corporate environmental damage cost estimated at $2.2 trillion in 2008 Three billion cars expected on the roads by 2050. Prius sales represent 6.4% of Toyota’s total annual sales in 2009
  39. 40. Business and Govt action: <ul><li>Wal-Mart: committed to being supplied 100% by renewable energy, creating zero waste and selling environmentally-friendly products </li></ul><ul><li>BT : 80% carbon emissions reduction target by 2020 </li></ul><ul><li>ArcelorMittal , Corus and ThyssenKrupp : 1 billion Euro research project on gas recycling and CCS in EU </li></ul><ul><li>Interface: Aiming to be environmentally neutral by 2020. 60% achieved </li></ul><ul><li>South Korea: South Korea Green Growth Plan : $84bn five-year programme to develop green industry as growth engine for entire Korean economy </li></ul>
  40. 41. Business action: <ul><li>Tesco : £100 million climate technologies fund, pledged to cut energy usage per square foot by 50% by 2010, compared to 2000 levels </li></ul><ul><li>Iberdrola : World’s largest provider of renewable energy: 44GW of renewable assets at different stages of development, 95% of it wind power </li></ul><ul><li>Shell: Includes cost of carbon emissions when budgeting for all new projects </li></ul><ul><li>Unilever : Reduced CO2 emissions in manufacturing operations by more than 30% in a decade </li></ul><ul><li>Lafarge : 20% cut in net emissions per tonne of cement worldwide and a 10% cut in absolute emissions in industrialized countries by 2010, from 1990 levels </li></ul>
  41. 42. Business and Climate Change Marks and Spencer: Achievements, commitments, opportunities <ul><ul><li>Plan A launched January 2007 </li></ul></ul><ul><ul><li>Stores 10% more energy efficient. Logistics 20% more fuel efficient </li></ul></ul><ul><ul><li>Reduced food packaging by 16% and food carrier bag usage by 83%. Saved £50 million in 2009 </li></ul></ul><ul><ul><li>2010: 80 new commitments . Complement the existing 100 which will still be delivered by 2012 (45 already achieved). </li></ul></ul><ul><ul><li>Build Plan A into every one of the 2.7 billion individual M&S products sold each year by 2020 ( 50% of products by 2015 ) </li></ul></ul><ul><ul><li>Help 1 million M&S customers develop their own personal Plan A by 2015 and 3 million by 2020. </li></ul></ul><ul><ul><li>£100,000 prize (Your Green Idea) for the best customer idea to help green M&S </li></ul></ul><ul><ul><li>Offering employees free loft insulation </li></ul></ul>
  42. 43.   <ul><li>Huge shifts in manufacturing to Asia in particular since the late 1980s </li></ul><ul><li>This includes environmental impacts: e.g. waste paper to china, 'recycling' of electronics to Africa </li></ul><ul><li>Also includes huge shift in carbon intensity to Asia. We have outsourced our emissions </li></ul><ul><li>New global risks have emerged for companies: Chevron in Ecuador, Trafigura in C'ote D'ivoire, emissions generated in low cost countries complete with political instability </li></ul><ul><li>Post Kyoto negotiations underway in 2009 mean greater pressure on smaller economies on carbon emissions, GHG’s, forestry. More focus on ‘EcoSystem Services’ </li></ul>Lecture eight: CR and Globalisation Offshoring emissions, waste and environmental impact
  43. 44.   <ul><li>Anti-corruption enforcement will grow (DoJ / SEC / SFO stats for 2007/8) </li></ul><ul><li>Chinese and Asian labour laws may tighten up  </li></ul><ul><li>Recession ethical supply chain investment cuts by companies  </li></ul><ul><li>Human rights will grow in importance (Ruggie) </li></ul><ul><li>Role of business in development will grow (Bottom of Pyramid strategies, EU lobbying) </li></ul><ul><li>Consumer, NGO and political suspicions of big business increased by recent events in banking, financial and corporate scandals (Banks, Satyam, Madoff) </li></ul>Lecture eight: CSR and Globalisation The outlook
  44. 45. Exam questions and indicative answers <ul><ul><li>Which industry sectors are most active in global Corporate Social Responsibility (CSR) and why? One answer to this question would be as follows: The industries most active are those that are most vulnerable to public pressure and poor reputations. This is because companies seeking to maintain political favour, companies deeply concerned about their reputation with both consumers and employees, companies in high impact sectors such as natural resources (oil, gas and mining) spend most on CSR usually companies who are most vulnerable to upcoming changes in law, such as those emitting a lot of CO2. </li></ul></ul>
  45. 46. Exam questions and indicative answers <ul><ul><li>Should UK law be changed to ensure that UK companies can be sued in UK courts for alleged malpractice or complicity in human rights abuses overseas? In your answer, provide examples to illustrate your response. One answer to this question would be as follows: No, because that would mean that anyone could sue a UK company in a UK court for alleged abuses or complicity. This would attract many spurious law suits designed to persuade UK firms to settle out of court, as with the Alien Tort Claims act in the UK. There is also a serious question of who would investigate these abuses and pay for the investigations. This would also mean the undermining of legal institutions in other, usually emerging economies. NGOs such as the CORE campaign argue that this is the best way to ensure corporate accountability for human rights. </li></ul></ul>
  46. 47. Exam questions and indicative answers <ul><ul><li>Can voluntary approaches to cutting carbon emissions can be made to work effectively? Use examples to illustrate your answer. One answer to this question would be as follows: They can, but only to a certain degree. It can depend on what you mean by 'work'. Emissions trading can have an impact if the carbon price is high enough. Emissions trading currently only applies to very large polluters. There are plans to expand this in the UK in 2010 but it will likely only have a limited impact. Voluntary approaches to improving corporate environmental performance have been shown to have limited impact. Changes in the law have driven much more change (WEE directive, REACH etc). This is not to say voluntary efforts do not drive change (Responsible Care in chemicals). But voluntarism has definite limits for corporate environmentalism, not least the free rider problem in voluntary schemes. </li></ul></ul>
  47. 48. Exam questions and indicative answers <ul><ul><li>Can voluntary approaches to cutting carbon emissions can be made to work effectively? Use examples to illustrate your answer. One answer to this question would be as follows: They can, but only to a certain degree. It can depend on what you mean by 'work'. Emissions trading can have an impact if the carbon price is high enough. Emissions trading currently only applies to very large polluters. There are plans to expand this in the UK in 2010 but it will likely only have a limited impact. Voluntary approaches to improving corporate environmental performance have been shown to have limited impact. Changes in the law have driven much more change (WEE directive, REACH etc). This is not to say voluntary efforts do not drive change (Responsible Care in chemicals). But voluntarism has definite limits for corporate environmentalism, not least the free rider problem in voluntary schemes. </li></ul></ul>
  48. 49. Exam questions and indicative answers <ul><ul><li>Does using the Global Reporting Initiative (GRI) reporting guidelines mean that companies who do so are better at CSR? One answer to this question would be as follows: While the GRI is a comprehensive list of indicators that companies can report against, critics claim that it encourages box ticking. Some of the best companies at CSR do not use it, but report on indicators developed internally, rather than taking a cookie cutter approach. While GRI provides useful guidance, over-usage can lead to the guidelines driving the report, rather than the report being about the specific issues inherent in the business. However, many of the companies that use GRI to a good extent are among the best at CSR according to some commentators. But this does not mean companies that don't make much use, if any, of them must be bad at CSR reporting. </li></ul></ul>
  49. 50. Exam questions and indicative answers <ul><ul><li>Do CSR rankings mean that the companies included in the ranking are more ethical than those that are not? Use examples to illustrate your answer. One answer to this question would be as follows: No. Rankings are a bit of a myth. It is true that companies who are included in the rankings tend to be those that are active on CSR. However, trying to compare an oil firm with a consumer goods firm is pointless. This is because they are two very different industries. Indicators are not standardised. Social and environmental impacts are very different. How would one take what is essentially a subjective area (social performance) and credibly compare companies in different industries with differing operations?   </li></ul></ul>
  50. 51. Exam questions and indicative answers <ul><ul><li>Can CSR lead to real business innovation in large companies? Illustrate you answer using examples. One answer to this question would be as follows: Yes, it definitely can. Examples include bottom of the pyramid business strategies and employee, NGO and stakeholder engagement as early warning systems and places to spot innovation. Examples might be: British Gas seeking customer loyalty by encouraging energy efficiency, which saves customers money; Micro-finance: An industry based entirely on the day to day needs of poor people in emerging economies; Employee engagement: companies who engage employees in CSR have more satisfied and motivated workers   </li></ul></ul>

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