A presentation providing an overview of drivers, trends and actions in business sustainability / corporate responsibility in emerging markets: China, India, Brazil and South Africa, and some conclusions.

1. Emerging markets & business sustainability
Toby Webb, Founder/Chairman, Ethical Corporation,
CEO and Founder, Stakeholder Intelligence

2. Background
 Founded Ethical Corporation 2001
 80+ CR management conferences world-wide
 8000 articles & lots of reports
 Interview 800+ executives per year: Reports, articles,
conferences
 3000 Corp customers globally, expert analysts around globe
 Lecturer, Corporate Responsibility, Birkbeck College (London)
 Co-chaired independent working group on CSR for UK
Government 2006-8 for David Cameron / Oliver Letwin
 Founder/CEO of Stakeholder Intelligence: Bespoke company
training & contract research. 30 experts round the world: China,
SA, Brazil, Russia etc

4. China & sustainable business
 Key difference: Often about Government vs. People rather than
Campaigners vs. Corporations
 In accidents and scandals, Government increasingly takes the blame
 Often attempts to deflect, sometimes onto Western companies
 Western firms subscribe to ‘local guy stitch up’. Despite systemic
problems, Western managers excape censure and a local guy goes to jail
 Suits Chinese government: Let blogosphere hammer foreign brands
as pressure release, but does not affect FDI
 Emerging middle class way more powerful than Government realised
 Major crackdown beginning on freer speech across board just
announced
 ‘Soccer Mom’s and emergent middle class professionals are the game-
changer: Recent examples in Dalian, high street rail crash demonstrating
powers
 HSBC/Climate Group research: 57% of Chinese surveyed believe
climate biggest issue they worry about today (2010)
 65,000 serious incidents of social unrest in 2005: Then records stopped…

6. Brazil & sustainable business
 Very advanced CR/SD culture: 7 companies in the Dow Jones
Sustainability World Index. China and India = 1 company each
 Long tradition of private philanthropy: big biz. large scale social projects
 2009 Greenpeace ‘Slaughtering the Amazon’ report changed the game
 Showed cattle farming major cause of deforestation in Amazon: Result:
three of Brazil‟s top supermarkets – Pão de Azucar, Wal-Mart and Carrefour
- banned beef products.
 Four biggest meat producers – JBS-Friboi, Bertin, Minerva and Marfrig –
adopted new environmental standards.
 McDonald’s, Timberland, others also pushed by GP on leather, soy
chicken feed and other Amazon issues from 2006 to 2010
 1,352 company members of leading CR organisation: Ethos Institute,
 NGO pressure vital in Brazil. Business rarely reacts on SD unless profits
are threatened
 Deeply capitalist country: Instinctive mistrust of state intervention.
Bottom line driven corporate responsibility

8. India & sustainable business
 Culture counts: Hinduism calls on its adherents to “give to all, be
they recluses and Brahmins [priests] or wretched, needy beggars”
 220 million of India‟s 1.2 billion under poverty level: Millions of
others close to it
 Massive and systemic public sector/business corruption
challenges
 Tata: 28 companies, £50 billion revenues. Deep culture of
philanthropy since foundation. Birlas, Bajaj families similar ethos
 “Bottom of the Pyramid” coined by CK Pralahad, for India, now
global. Prime example: ITC’s e-Choupal project for rural poor
highly successful and profitable
 India‟s share of the USD 2.2 trillion market for low carbon goods
and services in 2020 could be as much as USD 135 billion +
10.5 million green jobs. Fastest growing, according to HSBC
 Ongoing Maoist violent insurgency much bigger than known in
West. Land disputes said to play significant role in recruitment

9. India & sustainable business
 India now fifth in the world in terms of wind energy production
 Hindustan Unilever: 2002 campaign RE soap usage. Reduced
size and cost of Lifebuoy soap brand. Significant reduction in
diarrhoeal disease. Led to a 20% upsurge in localised sales
 Chotukool refrigerator world‟s lowest-priced model:(£48)
 Tablet computer now sold at $45/35 to students and others
 Mahindra World City project: Residential, business facilities in
“environmentally and socially sustainable way” Still open to
debate as to effectiveness
 Vedanta and other mining firms increasingly controversial:
People vs. Land vs. Resources + corruption + oligarchs =
Protest and action = Corporate Risk
 Vigorous debate about mandatory CR „laws‟ and transparency

11. South Africa & sustainable business
 South African companies trying to confront apartheid legacies
that government has yet to resolve
 Africa's largest and most industrialised economy as well as the
12th largest emitter of greenhouse gases globally
 Heart of the economy is a small core, accounts for 10-15% of the
population. 85% of the population in abject poverty
 Grip of Trade Unions presents major challenges: ie removing poor
teachers: Leads to deeply uneducated public sector: Deeply
corrupt and protected
 Corporate giving has been rising: 24% year on year to 5.1bn
rand ($690m) for 2008-09
 Business understands the need to balance green, economic and
social, Government only interested in economic and social
 Corporate responsibility efforts directed towards taking over, or
propping up failing and under-capacitated government
service infrastructure

12. South Africa & sustainable business
 New black elite created by Black Economic Empowerment
 Forced some government-owned companies, such as power utility
Eskom, to hire foreign non-whites to meet these racial targets
 Mining companies improved their environmental, social and
governance performance. Also confronted government over
HIV/Aids: one in three mine workers infected
 Anglo-American lead way with "Zimele" scheme, SAB Miller
helping SMEs get on their feet
 Middle and upper classes tiny: so less pressure outside
government on business
 Companies find unique business cases: Massmart’s employees
made clear that they saw nothing unethical in stealing as long as
the company did not make any investment in its local
communities
 Some are innovating profitably: Woolworths, third largest food
retailer now sells about $140m worth of organic and free range
products.

13. Emerging Markets: 10 Key lessons
1 Corporate responsibility and sustainability issues are VASTLY different
around the world (Even in Europe)
2 Global principles with local implementation, combined with „red line‟ areas
of ethics (ie bribes) and overall targets, are only way large companies can
operate successfully and sustainably
3 The world is a lot more left wing than the UK and USA!
4 Governments are much less predictable on sustainability issues: ie
reporting requirments
5 Institutions as we know them often do not exist
6 Stakeholders are less predictable issues can escalate very quickly
7 Culture counts, more than anything: Local knowledge essential
8 Agendas are mixed: But skills, education and jobs are always Number
One
9 The greener agenda is understood and often consumers are less
sceptical than in West
10 Get ready for a bumpy road ahead: Global business = Global
complexity!

14. Further resources:
 Ethicalcorp.blogspot.com (Toby Webb‟s Smarter Business Blog)
 Slideshare.net/tobiaswebb (Lots of presentations)
 www.ethicalcorp.com (Search for „Country Briefings‟)
 Contact me:
 Toby.Webb@ethicalcorp.com
 Twitter: tobiaswebb76
 +44 (0) 7912 770277