Biodiversity program created by Sakhalin in 2007, to ensure that there was zero impact on the local environment due to the extraction of oil and gas in the IslandProtection of animal species: special programs for the preservation of gray whales and eaglesProtection to indigenous people resident in the island, supporting cultural activities Committee composed by Sakhalin and representatives from the indigenous people to access and monitor the operations the company in the island
WORKFORCE:Focus on employees and their well beingthe improvement of working conditions (incl. health and safety at work) and job satisfactiona good balance between work and private life offering equal opportunities and diversity at workproviding training and staff development (incl. career planning)ENVIRONMENT:CSR activities in the field of the protection of the environment focus on designing environmentally friendly products or production processes an efficient use of ressources the reduction of waste and pollution MARKET: Market-oriented CSR activities target, on the one hand, the customers and, on the other hand, business partners and/or suppliers. Respective initiatives include: activities to improve the quality or safety of products provision of voluntary services to the clients fair pricing ethical advertisingSOCIETY:CSR activities targeted at the society may refer to social and/or labour market integration at community level improvement of the local infrastructure Sakhalinisapplying CSR in the environmentfield
Firms can strategically engage in socially responsible activities to increase profits. Given that the firm's stakeholders may value the firm's social efforts, the firm can obtain additional benefits from these activities, including: enhancing the firm's reputation and the ability to generate profits by differentiating its product, the ability to attract more highly qualified personnel or the ability to extract a premium for its products.
Companies have a duty to actsustainable and responsibleat a local level. Today, CSR has become a norm for everybigcompany and all makeit part of their business. For a number of them, itis an evidence of theirinvolvement in the society, and theircorporatewebsiteproveit.At a smallerscale, small-medium sizedcompanies, CSRis more likely to be a «need-to-have »because of a highinvolvement of the local community in theireverydayactivity (employees, customers, authorities…).But itcanalsobe a way to differentiate.In both cases, CSR mustmakesensefrom a business point of view.
Communicate about CSR isoften a controversial dimensionsinceitcanbeinterpreted in differentways. Whenyou do not communcate, itisconsidered as a disregard of the social, economic and environmental issues the world has to face. Or, on the contrary, itis a sign of pure intention from the company to contributewithoutanyneed to have a nicewindow to show.Whenyou do communicate on your CSR, itmightbeseen as a commonthingcompaniesneed to show; but itmayalsobe the onlyway to make people sensitive about important issues.
However, itis important to thinkbeyond the law to reallymake a differencelocally. Whatever the reason for the company, there are severalreasonsthatjustify communication about CSR:Educate, as in PacitaJuan’sexample. Educate people about harvesting, about organic cultures to offer the customer an added value for the product. It is relevant when the corporate culture is of a ‘family type’Make sensitive the general public about important issues that touches the society (environmentalconcers, child labour and its impact on local familiessurvival…)Be a role model for othercompanies in terms of best practices, ethical and sociallyresponsible business. Ethos Institute shows a greatexample of companiesthatcanmake the whole society change by showingitis possible to makeyour business growwhilefightingagainst corruption. In all cases, to reallymake a difference and contributelocally, the companyneeds to adopt a GLOCAL approach in its CSR and consider the local needsbefore the global concerns. Wouldit affect the local environment if weact on global issues?
Avoid a CSR warbetweencompanies the aimis not to do itbecauseeveryonedoesitCompanies must apply the right CSR actions:they must consider the local communitiesneedsbefore global interest to contributelocally. Doesitmakesense to developenvironmental actions when the local population lacks of basic needs?
Therefore, to be actively involved in the local communities development it would be necessary to find the optimal solution that will led to a “win-win” situation for all the actors involved. Detailed deep dives analyses of the both the companies and the local actors values, beliefs and expectations are required (e.g;: use the concepts of Trompenaars Seven Dimensions of culture, Company type of Corporate culture, …) to recognize and respect and also to be able to reconcile them.The chosen CSR action forms and management structure to deal with have to be fully integrated into this reconciliation too. They will be the concrete steps of the stages Realize and Root. A post implementation program is also necessary to be able to measure and control the progress and the evolution of the project = ensure sustainability
What we saw should be the ‘right’ process to follow but it is really constraining and sometimes CSR concept is used out of its own DNA.Indeed, CSR can sometimes be used as a trendy concept to enhance a company’s reputation. However, even if the companies use this concept wrongly we can consider that something “good” has been done and by cumulating all theses “right actions” maybe the situation will improve = virtuous circle of hypocrisy. However, the real philosophy of the CSR should be to make sensitive companies so they can definitely improve their impacts and defend sustainable corporate governance principles. Moreover, CSR should not be taken into account as a “trendy and meaningless” concept because getting involved requires prior information search to avoid backwards and side effects. For instance, if a company gives financial subsidies to local communities, it can be seen as dumping or CSR can just be a way to push the local issues away: for instance, you stop employing young people in India (Nike) but you don’t offer them another solution! So you need to go further when you choose your CSR act = reconciliation must be based on a deep assessment of the context.Finally, the real question is: is CSR enough to face out society’s challenges? We know that mass consumption (our current business model) is not compatible with the future energy scarcity. So what are the possible solutions?Rely on eco-efficiency to save the environment but it should kill the industry = unbearable possibility. Find an alternative business model : Ellen Mac Arthur concept of “circular economy”Is this model reliable and credible? Is it more a comprise than a reconciliation? A necessary lose-lose situation in certain way!How CSR can evolve to be part of this “circular economy”?
The Company as a key factor in its teritory
The companyas a key actorin its territoryFabiana Leal, Camille LeDu, MarynneLemasson, AuréliaLonchamp, HocineMaïz, Aurore Pak, ClairePerron
2Introduction Thecompany as a key actor in its territory: how can your company work on its social responsibility and contribute to local development ? Focuson Corporate Social Responsibility (CSR)concept and its direct implications
3 The Company is a key actor (passive) Aim of a company : generate economic activity for survival We see: inputs & outputs but we should also see transactions Positive & negative impacts over its stakeholders and environment (territory and outside) even if it is « notSource: BMW voluntary » = passive implication
4The Company has to be anactive actor Increase of societal challenges has made ‘being active’ a « must-have »: Acting beyond the law Involve stakeholders and business operations Philanthropy/charity might have led to scandals (money to cover evil actions) Need to combine both and to show responsibility
5CSR can be the solution CSR: "A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” Think global, act local Concept which appeared in the 1930s and now supported by international organisation 3 pillars : Economic – Environmental –Social
6CSR and local communities Some companies involve in several project : CSR strategy Canon involves in different fields and one is Local FOCUS Source: Canon
7CSR actions towards localcommunities Action can take different forms: Corporate giving, Social sponsoring, Corporate citizenship, … It requires an organisational structure: Local grants systems, Corporation foundation, public-private partnerships, … Challenge: which CSR is adapted to each company?
8BEING PART OF THELOCAL ENVIRONMENTCSR at the heart of the business: the example ofPacita Juan (Philippines)
9General background Pacita Juan’s company: Small-sized company, 17 years old Coffee production Context: Coffee production down, bad quality (local farmers paid too low) Will to promote local products Challenge:Conciliate quality, local production & sustainable business model
10Concrete actions Going organic Educating the local farmers Offering a 10% premium to farmers Diversification of her business
11The other businesses ECHO: market place for farmer wives (artisan) + free advice BINALO: re-using banana leaves from local producers LeBistroVert: restaurant promoting local ingredients Key words: educating, sustainability, core business, local root
12CSR as a competitiveadvantage Stakeholders involvment way to differentiate: Going organic = cost savings Lower priced coffee to end-user Building trust: long-term, sustainable relation with producers By telling people: awareness and positive word-of-mouth
13Return On Investment Not philanthropy must have business sense (short-term concrete returns) Good ROI because of the good quality of the product $20.000 to shift from former to organic production: secured investment Strong system – financial stability : did not suffer from the 2008 financial crisis Profitable company diversification
14Non-financial returns PJ gave hope to local people Encouraging people Virtuous circle : employees are feeling well better efficiency at work = win/win situation
15Key points PacitaJuan sells an experience more than a product: added value When CSR is fully part of the business: non financial returns are significantly important and measurable (part of the business) Yet: must be linked to the core business
17GOING OUT OF THE CORECOMPETENCESAn added value for the company: the example ofSakhalin Energy (Russia)
18About Sakhalin CSR in a transnational company : Sakhalin Belongs to Gazprom Oil and gas production Sakhalin Island Sakhalin CSR Strategy: Objectives: no net loss of biodiversity Concrete actions (animals, people…)
19Corporate philanthropy tocontribute to localdevelopment Corporate philanthropy is concerned with the improvement of the competitive context; benefiting both the company and society while CSR should preferrably be linked up to the core business of the company Companies use philanthropy to gain significant advantage (reputation, social capital, business development)
20Philanthropy approaches2 different ways: Supporting community foundations Donate technical or management advice
21CSR fields of application Market Fields of Workforce Environment application Society
22Being responsible and havingpositive financial performance Studyfrom Business and Society Review (1999) better performance of companies that are involved in ethics codes Study from University of Southwestern Louisiana (1996) publicity about unethical corporate behaviour lowers stock prices
24AN OBLIGED PROCESS INTODAY’S MARKET PLACECSR, a business and a duty
25Image building, undoubtedly CSR: « must have » or « need-to-have » Big companies : rule to have CSR SME: CSR inseparable from daily businessA competitive advantage Attracts potential employees Lowers turnover rate Added value for customers (facilitates BDP) ‘Feel-good factor’ for all the stakeholders Factor of differentiation
26Communication: not a luxury, buta necessityWHY TO COMMUNICATE? No communication: Sincerity or no CSR commitment at all? Do communicate: Show-off, risk of green washing, or duty to make sensitive?
27A need to communicateGO BEYOND THE LAW: free to act or react Educate Make sensitive Show the example Promote local resources and competencies Need to adopt a GLOCAL approach
28CSR today Different CSR actions for different companies, in different areas Different uses of CSR for different purposes : Competitive advantage : concrete financial vs. non financial elements Ethical and socially-conscious Reconciliation of interests as the key
30Reconciliation with localcommunities Assess core capacities of the company Assess interests of the stakeholders within the local community Recognize and Respect Perform Reconciliaton of interests to find the optimal form of CSR (win-win situation) Realise and Root the CSR practices : implement and make it sustainable
31ConclusionThe ‘right’ CSR process should follow thisscheme, however: Loss of CSR initial essence: creation of a trend Virtuous circle of hypocrisy, but how to make it relevant and sustainable? Moreover, CSR can have backwards so need close assessments Is CSR enough to face our society’s challenges?
The companyas a key actorin its territory….Fabiana Leal, Camille Le Du,Marynne Lemasson, AuréliaLonchamp, Hocine Maïz,Aurore Pak, Claire Perron