Free Zones, Social Responsibility & Strategic Advantage
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Free Zones have been incredibly successful at promoting trade, investment and economic growth. Free Zones of the Future will require all of this, but will increasingly be required to produce more inclusive growth. These slides are from a workshop on the subject delivered at the World Free Zones Annual Summit 2017 in Cartagena, Colombia. The workshop outlined how this emerging requirement can create strategic competitive advantage for those free zones that are able to grasp the opportunity Follow, engage, learn, perform LinkedIn Profile http://bit.ly/Wayne-Profile LinkedIn Author Page http://bit.ly/Wayne-LinkedIn YouTube Channel http://bit.ly/CSR-YouTube Strategic CSR Video Playlist: http://bit.ly/Strategic-CSR SlideShare http://bit.ly/Wayne-SlideShare CSR Training Institute on LinkedIn http://bit.ly/CSR-LinkedIn Twitter @Zingmore / https://twitter.com/ZINGmore Website http://www.csrtraininginstitute.com/
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Free Zones, Social Responsibility & Strategic Advantage
- 1. ©2017 CSR Training Institute Free Zones Social Responsibility & Sustainability Presented by Wayne Dunn Former Prof. of Practice in CSR, McGill University President & Founder CSR Training Institute info@csrtraininginstitute.com Creating strategic competitive advantage May 3rd, 2017 Cartagena de Indias Convention Centre Cartagena, Colombia
- 2. ©2017 CSR Training Institute Who/What is • Canadian based with global delivery (focus on Americas, Gulf Region and Africa) • Social Responsibility Partner: Free Zones of the Future • Trained hundreds of executives, leaders and practitioners in CSR Strategy and Practice • Focus on CSR strategy, Value Creation and Impact • Public programs and customized corporate and organizational programs • Consulting and strategic assignments • National/regional partnerships in Ghana, Greece, UAE, Zambia, East Africa, India • Upcoming programs in Dubai and globally • Newsletter & Updates http://bit.ly/CSR-SignUp Wayne Dunn • Founder & President of CSR Training Institute • Master of Science in Management, Stanford Business School • Stanford University Sloan Fellow • Former Professor of Practice in CSR, McGill University • Entrepreneur & Strategist • Social Responsibility Leader: Free Zones of the Future • 25+ years of practical CSR experience (40+ countries, every continent, public and private sector • Frequent speaker on strategy, economic development and sustainability at events worldwide • Numerous awards (1st private sector winner of World Bank Development Innovation Award, Stanford Case Study, etc.) • Advisor to corporations, governments, NGOs and international organizations worldwide • Consulted across industries, geographies and sectors on Strategy, CSR, Sustainability and Operations • CSR Awards Jury duty throughout MENA & Africa
- 3. ©2017 CSR Training Institute Agenda & Objective Agenda • Popular myths about CSR & Sustainability • Some key business and trade issues • Blue Ocean Strategy 101 • Creating competitive advantage with CSR & Sustainability • Strategy & tactics Objective • Understand changing world of CSR and Sustainability • Awareness of new issues and constraints facing regulators, investors and manufacturers • Understand how CSR & Sustainability can drive value for Free Zones, Investors and Stakeholders
- 4. ©2017 CSR Training Institute The Rules!!! • Stay curious and engaged • Think, don’t memorize • Create energy, the learning path will follow it • Ask questions (no dumb questions, just dumb people that hold back their questions) • All slides, videos and materials will be made available so no need to try and take extensive notes Think about strategy, efficiency and value – this will lead you to ask smarter questions and produce better results
- 5. ©2017 CSR Training Institute Caution: Language is ‘under development’ • Corporate Social Responsibility (CSR) • Sustainability • Corporate Citizenship • Corporate Responsibility • Social Responsibility • Environment, Social and Governance (ESG) • Shared Value • Social License • Social Impact • ???? And more….
- 6. ©2017 CSR Training Institute Corporate Social Responsibility & Sustainability Myths • CSR is charity, philanthropy and do good stuff • CSR is a cost, not a value driver • CSR is something extra done when budgets allow • CSR is not part of core business activities • Sustainability is a cost to business • Smart business will minimize sustainability and CSR to maximize profits
- 7. ©2017 CSR Training Institute The world changed • Isolated world gave more power and influence to large institutions (government, business, etc.) • More focus on local issues, standards and expectations • Globalized inter-connected world • Emerging global standards and norms • Increased democratization of power and influence • Anywhere is everywhere CSR & Sustainability aren’t optional
- 8. ©2017 CSR Training Institute Financing & Investing Changed • Impacts beyond financial returns • Social and environmental performance key to financial performance • Some investors still see financial, social and environmental returns as a trade-off (but number is shrinking) • 84% of millennials are interested in sustainable investing. • Assets utilizing sustainable investing criteria have grown 76 percent in 2014-15 to $6.57 trillion* * Morgan Stanley Institute for Sustainable Investing
- 9. ©2017 CSR Training Institute Increasing mandatory and voluntary compliance • ICMI - International Cyanide Management Institute (ICMI) • Conflict Free Gold Standard • Voluntary Principles on Security and Human Rights • EITI • CDP • ISO26000 • Global Compact • Global Reporting Initiative • Voluntary Principles • ICMM • Ghana CSR Policy • IFC • Equator Principles • ILO • Accountability • Many, many more
- 10. ©2017 CSR Training Institute Echo Chamber of Social Media
- 12. ©2017 CSR Training Institute Increasing societal expectations and influence 0 50 100 150 200 250 300 1975 1980 1985 1990 1995 2000 2005 2010 2015 SocietalExpectations&Influence Applies to organizations of all types, but especially business *directionally indicative data derived from SWAG analysis And especially to state owned businesses
- 13. ©2017 CSR Training Institute Evolution of CSR & Sustainability • Business response to these global changes took time and is still evolving • Some businesses are still resisting and waiting for something magical to happen
- 14. ©2017 CSR Training Institute Business’ Response Evolved over time (and still evolving) • Beads and trinkets • Throw money at problems and issues • Philanthropy, Charity & disconnect • Zero Sum CSR • Strategic CSR – value proposition alignment
- 15. ©2017 CSR Training Institute Government’s World Changed Too • GDP growth alone is not enough • Trade and investment are not the complete answer • MDGs & SDGs • Trade, investment and GDP must drive prosperity and SDG progress
- 16. ©2017 CSR Training Institute Social value & sustainability imperative applies across industries, sectors and geography
- 17. ©2017 CSR Training Institute So, why is this important • Global business and trade exists in this emerging paradigm • Free Zone customers, investors and stakeholders are learning how to adapt and thrive in it • Helping stakeholders to solve their problems is smart business
- 18. ©2017 CSR Training Institute Part of Apple’s Response
- 19. ©2017 CSR Training Institute Global Businesses have a Energy Impact Imperative • More renewable, less carbon • Their investors and markets are judging them on their performance • Over 10% of Fortune 500 have committed to 100% Renewable Energy • Making it easy for them makes your Free Zone more attractive • Apple • Bank of America • BMW • BT Group • Elion Resources Group • Facebook • Formula E • General Motors • Goldman Sachs • Google • H&M • IKEA Group • Infosys. • J. Safra Sarasin • Johnson & Johnson • KPN • Mars Incorporated • Nestlé • NIKE Inc. • Philips • Procter & Gamble • RELX Group • Salesforce • Starbucks • Steelcase • Swiss Re • Unilever • Voya Financial • Walmart • YOOX Group Some of the 10%
- 20. ©2017 CSR Training Institute Global Businesses have a Supply Chain Responsibility Imperative • Supply chain logistics key to business success • Growing supply chain risk issues • Social impacts • Human rights • Labour practices • Environmental impacts • And energy, sustainability and carbon • Can you help your investors/customers with supply chain risk management?
- 21. ©2017 CSR Training Institute Global Businesses have a Water Management Imperative • Water use efficiency reduces costs • And enhances brand and marketability And saving my at the same time • AB InBev: Beverages • Abbott: Pharmaceuticals • Coca-Cola: Beverages • Gap: Consumer Goods • General Electric: Everything! • IBM: Technology • Kraft: Foods • Pepsi: Beverages • SABMiller: Beverages • Sodexo: Food & facilities
- 22. ©2017 CSR Training Institute Global Businesses have a Community Engagement Imperative • Social licence is an issue for ALL Businesses • Making it easy for them makes your Free Zone more attractive • What are your Free Zone’s social license issues? • Can you facilitate social license for tenants and investors?
- 23. ©2017 CSR Training Institute Global Businesses have a Local Content Imperative • Locally sourced goods and services can enhance brand and reduce costs • Key objective of many global firms • Huge impact on SDG performance • Making it easy for them makes your Free Zone more attractive • Economy of scale potential?
- 24. ©2017 CSR Training Institute Global Businesses are experiencing Circular Economy Pressures • Rapidly growing issue for business • Making it easy for them makes your Free Zone more attractive • Economies of scale? • Complementary tenants? Click for video
- 25. ©2017 CSR Training Institute Ikea’s business case for sustainability
- 26. ©2017 CSR Training Institute Global Businesses have a CSR & Sustainability Imperative Making it easy for them makes your Free Zone more attractive
- 27. ©2017 CSR Training Institute Business is an engine to create value CSR should be too Is your Free Zone helping to fuel success for your investors, tenants and stakeholders?
- 28. ©2017 CSR Training Institute Red Ocean | Blue Ocean Strategy • See book, blog, HBR article & more by W. Chan Kim and Renée Mauborgne
- 29. ©2017 CSR Training Institute Some strategy questions • What are your competitive advantages as a Free Zone? • What problems can you solve for your customers? • Current problems • Future problems (remember CSR and Sustainability pressures will continue to increase) • What makes your zone more attractive? • Today • Over the next decade and beyond • Can you offer unique value? • Can you integrate complementary tenants? • Can you integrate economy of scale advantages with sustainability issues to create competitive advantage?
- 30. ©2017 CSR Training Institute Value Propositions • Value propositions go beyond tax rates and holidays • Create value propositions that meet customers and stakeholders needs in valuable and unique ways • Ways that your competition will struggle to meet • How does improved social responsibility and sustainability benefit your government/regulator? Strategic value propositions can create sustainable competitive advantage
- 31. ©2017 CSR Training Institute Does your strategic competitive advantage include CSR and Sustainability?
- 32. ©2017 CSR Training Institute Free Zones of the Future • Will continue logistics, tax and regulatory advantages • Will integrate social responsibility and sustainability to create value for • Investors • Tenants • Governments • Stakeholders And drive the success of their Free Zone in the process
- 33. ©2017 CSR Training Institute Corporate Social Responsibility & Sustainability Myths • CSR is charity, philanthropy and do good stuff • CSR is a cost, not a value driver • CSR is something extra done when budgets allow • CSR is not part of core business activities • Sustainability is a cost to business • Smart business will minimize sustainability and CSR to maximize profits
- 34. ©2017 CSR Training Institute Review and Summary Agenda • Popular myths about CSR & Sustainability • Some key business and trade issues • Blue Ocean Strategy 101 • Creating competitive advantage with CSR & Sustainability • Strategy & tactics Objective • Understand changing world of CSR and Sustainability • Awareness of new issues and constraints facing regulators, investors and manufacturers • Understand how CSR & Sustainability can drive value for Free Zones, Investors and Stakeholders
- 35. ©2017 CSR Training Institute Thank you for listening Questions & Follow-up Wayne Dunn President & Founder, CSR Training Institute Former Professor of Practice in CSR, McGill University wayne@csrtraininginstitute.com www.csrtraininginstitute.com WhatsApp +1.250.701.6088 Follow, engage, learn, perform YouTube Channel http://bit.ly/CSR-YouTube Strategic CSR Video Playlist: http://bit.ly/Strategic-CSR SlideShare http://bit.ly/Wayne-SlideShare CSR Training Institute on LinkedIn http://bit.ly/CSR-LinkedIn LinkedIn Author Page http://bit.ly/Wayne-LinkedIn LinkedIn Profile http://bit.ly/Wayne-Profile Twitter @Zingmore / https://twitter.com/ZINGmore Website http://www.csrtraininginstitute.com/