This document provides an overview of a class on managing sustainable enterprise. [1] It discusses different perspectives on the social responsibility of business, from Adam Smith arguing that business acts in self-interest, to Milton Friedman arguing the sole responsibility is to increase profits. [2] It then covers definitions of corporate social responsibility and sustainable enterprise. [3] The document outlines principles of corporate citizenship and examples of CSR initiatives over the last ten years like the UN Global Compact.

1. Managing Sustainable Enterprise
GCSE 7508
Griffith Business School
Asia Pacific Centre for Sustainable Enterprise
January 2013
Jeremy Williams
jeremy.williams@griffith.edu.au
@jeremybwilliams
@TheGreenMBA
facebook.com/profjeremybwilliams
jeremybwilliams.net

2. Session 2:
The Responsibility of Business

3. A word or two from the forefather
of modern capitalism
• ‘It is not from the benevolence
of the butcher, the brewer, or
the baker that we expect our
dinner, but from their regard to
their own interest. We address
ourselves, not to their humanity
but to their self-love, and never
talk to them of our own
necessities but of their
advantages.’ Adam Smith
Wealth of Nations, 1776
3

9. The social responsibility of business …
• … is to increase its profits
Milton Friedman 9

10. ‘CSR is the voluntary
assumption by companies of
responsibilities beyond purely
economic and legal
responsibilities’.
(Piacentini et al, 2000)

11. • ‘Corporate social responsibility can be
defined as a principle stating that
corporations should be accountable for
the effects of any of their actions on their
community and environment’.
(Frederick et al, 1992)

12. • ‘Corporate social responsibility is
achieving commercial success in ways
that honour ethical values and respect
people, communities and the natural
environment’.
(Business for Social Responsibility, 2003)

15. Sustainable Enterprise Economy
‘An economy where any enterprise – corporate, social or individual
– aims to have as little impact on the environment as possible and is
mindful of its social impact. In an enterprise economy the spirit of
the community is geared to innovation, creativity, problem solving,
entrepreneurialism and enthusiasm for life. A sustainable enterprise
economy produces wealth, preserves the natural environment and
nurtures social capital.’
Malcolm McIntosh
Sustainable Enterprise and Sustainable Futures
in Suder, G.G.S. (ed) International Business Under Adversity:
A Role in Corporate Responsibility, Conflict Prevention and Peace (2008)
Asia Pacific Centre for Sustainable Enterprise, Griffith Business School

17. The social responsibility of business …
http://www.youtube.com/watch?v=k44WifxDSX4
17

18. The sceptics
• CSR is a mistake because it
distorts market forces and
increase firms‘costs
• They also challenge the
view that the world is
Professor David Henderson Professor Steve H. Hanke
Visiting Professor, facing worsening social Senior Fellow at the Cato
Westminster Business and environmental Institute and Professor of
School, UK; former Head of problems. Applied Economics at the
Economics & Statistics Johns Hopkins University
Department, OECD
View Prof Henderson’s paper at:
http://research.dnv.com/csr/PW_Tools/PWD/1/00/L/1-00-L-2001-01-0/lib2001/CSR_
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20. The triple bottom line
• “Is it progress if a cannibal uses a
fork?” – Stanislaw Lec
Elkington (1997) asks this
question in the context
of 21st century capitalism
as he ponders whether
holding corporations
accountable to a ‘triple
bottom-line’ of economic
prosperity,
environmental quality,
and social justice
constitutes progress.
John Elkington
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21. Transparency, accountability, reporting
• In practical terms, corporate accountability now amounts
to more than maximising shareholder profit
• For proactive and successful companies, it is about
maximising stakeholder value – a different goal with a
broader set of beneficiaries
• Inevitably, this involves the recognition of a triple bottom
line that focuses on people and the planet as well as
profit.
21

22. The transition from the industrial
economy to the sustainable economy
22

25. ‘Responsible’ business?
• BP and Shell issue CSR reports, but oil is to remain dominant
source of energy through to 2050
• BAE has announced it has a new range of environment-
friendly weapons, including ‘lead free’ bullets, rockets with
reduced toxins and grenades that produce less smoke
• BAT issues a Sustainability Report, but still contributes to the
premature death of millions of people
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27. The Four Basic Principles of Corporate Citizenship
Organisations should be able to:
1. Articulate their role, scope and purpose;
2. Understand their social and environmental impact
as well as their financial performance;
3. Be transparent and accountable;
4. Be in compliance.
Corporate Citizenship (1998 & 2003) McIntosh et al.

28. ‘Corporate citizenship, like individual citizenship, is
an idea which has both practical and ethical
dimensions. A key feature of citizenship is that it
involves a mutually reinforcing relationship between
individuals and communities’.
Corporate Citizenship
McIntosh, Leipziger, Jones and Coleman (1998)

29. ‘Citizenship is defined as the rights and duties of a
member of a country. Companies, as independent
legal entities, are members of countries and can be
thought of corporate citizens with legal rights and
duties. All companies, therefore, are corporate
citizens, but their citizenship performance varies just
as it does for an individual citizen. But citizenship is
more than a legal term, it is a political term – ‘active
commitment, responsibility, making a difference’
(Drucker 1993).
Perspectives on Corporate Citizenship
Andriof and McIntosh (2001)

30. http://www.flickr.com/photos/wolframburner

31. http://www.flickr.com/photos/wolframburner

33. Examples of CSR initiatives over last ten years
Ethical workplace management systems certification (SA8000)
Sustainability management systems assurance (AA1000S)
Learning platforms based on international conventions on
human rights, labour standards, environmental protection and
corruption (UN Global Compact)
Standardisation of reporting on corporate financial, social and
environmental reporting (Global Reporting Initiative)

34. The UN Global Compact
www.unglobalcompact.org.au
The Global Compact asks companies to embrace,
support and enact, within their sphere of influence, a set
of core values in the areas of human rights, labour
standards, the environment, and anti-corruption

35. Human Rights
Companies are asked to:
1. Support and respect the protection of internationally
proclaimed human rights; and
2. Make sure they are not complicit in human rights
abuses

36. Labour
Companies are urged to:
3. Uphold freedom of association and recognise the right
to collective bargaining.
4. Make sure they are not employing forced or compulsory
labour.
5. Refrain from employing child labour.
6. Eliminate discrimination in their hiring and firing policies.

37. Environment
Companies are asked to:
7. Support a precautionary approach to environmental
challenges.
8. Undertake initiatives to promote greater
environmental responsibility.
9. Encourage the development and diffusion of
environmentally friendly technologies.

38. Anti-Corruption
10. Businesses should work against all forms of
corruption, including extortion and bribery.

39. The Global Compact’s ten principles in the areas of
human rights, labour, the environment and anti-
corruption enjoy universal consensus and are derived
from:
The Universal Declaration of Human Rights
The International Labour Organization's Declaration on Fundam
The Rio Declaration on Environment and Development
The United Nations Convention Against Corruption

40. ‘The Global Compact has explicitly adopted a learning
approach to inducing corporate change, as opposed
to a regulatory approach; and it comprises a network
form of organization, as opposed to the traditional
hierarchic/ bureaucratic form’.
John Ruggie - UN & Harvard (2000)

41. • The leader in the quest to develop internationally
accepted standards for triple bottom line reporting is the
Global Reporting Initiative (GRI)
http://www.globalreporting.org/
• 1st draft of reporting guidelines (G1) was piloted by 21
companies during 1999-2000; 2nd version of the
guidelines (G2) was released in 2002; Version 3 (G3) came
out in 2006
• Since this time, more than 1500 companies worldwide
have used the guidelines, making it the de facto global
standard for reporting
41

42. Example: Casio
Joined Global Compact in 2010

43. Case Study:
“The good, the bad, and the ugly”
43

44. • Which companies
have a bad record?
• Which
are
• Which companies plain
have a good record? ugly?
44

45. Consider, the evolution of CSR
• A company that views CSR to be of key strategic
importance
• A company that had reputational problems is trying to
rehabilitate itself
• A company that has little or no interest in CSR
45

46. Some discussion points …
• The affordability of CSR in a highly competitive environment
• Can companies afford not to commit to CSR?
• Is there ‘good CSR’ and ‘bad CSR’?
• Is the sustainable enterprise a special case?
46

47. Prepare a 10 minute presentation
providing an example (and critique) of each
Go ahead…
make my
day!
47