More than ever, sustainbility is becoming crucial for business.we analysed the main problematics for implementing CSR consideration within industrial companies.

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« Why are operations the most exposed to
Corporate Social Responsibility? »
John BRETEAU- Freddy COUCHY- Maxime BOUTOILLE
MS International Purchasing Management 2013

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Table of contents:
1. Introduction...................................................................................................... 2
2. Corporate Social Responsibility (CSR) ......................................................... 3
2.1 Definition of CSR.................................................................................. 3
2.2 CSR History ......................................................................................... 4
3. From a linear system to the product life cycle ............................................. 5
3.1 Operations’ impact on sustainable development ................................. 5
3.2 Raising awareness on sustainability .................................................... 6
3.3 Greenwashing, philanthropy and legal aspects ................................... 8
3.4 CSR and product life cycle................................................................... 8
4. From short-term constraints to mid/long term opportunities ................... 10
4.1 Curbs to implement CSR ................................................................... 10
4.2 CSR as source of differentiation ........................................................ 12
5. Examples from different companies............................................................ 13
5.1 Impact of CSR scandals on corporate image..................................... 13
5.1.1 Example 1 - Textile industry..................................................... 13
5.1.2 Example 2 - Sanitary and public Sector................................... 14
5.1.3 Example 3 - Retail Sector ........................................................ 14
5.1.4 Example 4 - Energy, environment and raw materials sectors.. 14
5.2 Current state of thought in our companies......................................... 15
5.2.1 Example 1 - L’Occitane de Provence....................................... 15
5.2.2 Example 2 - Bombardier .......................................................... 18
5.2.3 Example 3 - SEB...................................................................... 21
5.2.4 Example 4 - Patagonia............................................................. 23
6. Conclusion ..................................................................................................... 27
7. Appendix ........................................................................................................ 29
7.1 Webography .................................................................................. 29
7.2 Bibliography................................................................................... 29
7.3 Video documents........................................................................... 30

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1. Introduction
Since 2008 we are living through a major economic crisis, which increases the
pressure on our companies. Financial markets, rating agencies; shareholders
urge our companies to increase their short-term profitability. More and more, the
major challenges for our industrialists are to find new opportunities for savings
and to improve their profitability to meet investors’ expectations.
At the same time, we are confronted with an exponential increase of energy and
raw materials costs. The competition on the recruitment market and the difficulty
to keep the best talents has never been so high.
As the major sources of savings having already been worked, it is now
necessary to find new opportunities to save money to perpetuate the profitability
of our companies. Cost killing can no longer be the only way to create value.
Indeed the pressure of the NGOs (Non-Governmental-Organization) and their
destructive communication campaign against companies that they judge in
discrepancy with their principles, changed consumers preoccupations. Financial
and sanitary scandals added to a growth of unemployment and relocation in low
cost country lead consumers to change their priorities. They ask for more
traceability and transparency. Our company’s core management must rethink
what is good for business.
In this context we can no longer continue to ignore our environment and social
impact. CSR and sustainable purchasing begin to be a major issue for our
companies.
So, why are operations the most exposed to Corporate Social
Responsibility today?
In order to answer this problematic, we raised several research questions. How
can CSR components could become the main purpose in business instead of
being the adjustment variable for bigger profits? How the wider view of CSR can
influence operations management? Could something good for people and
environment be good for business?
We will focus on industries and manufacturing sectors which present a more
direct link between CSR and corporations.
In the first part, we are going to concentrate on what is CSR and where it comes
from. We will then describe the current state of thought in our companies
regarding CSR before analysing the opportunities it represents for the next
years. Finally, we will study and compare few examples of CSR initiatives.

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2. Corporate Social Responsibility (CSR) What does it mean?
2.1 Definition of CSR
The European Commission has previously defined Corporate Social
Responsibility (CSR) as “a concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with
their stakeholders on a voluntary basis”.
In other words, CSR is about how companies manage their economic, social
and environmental impacts in the way they operate in order to make profits and
minimize downsides for stakeholders. CSR goes beyond philanthropy and
compliance towards legal obligations. It encompasses not only what companies
do with their profits, but also how they make them.
So basically, we keep in mind that CSR is designed by five different
dimensions:
To ensure the comprehension of the following essay, we also need to define
what operations means.
Traditionally, in industrial business, we consider operations as the different jobs
or tasks that transform resources into desired goods or services to create and
deliver value to the customers.
In this particular case we are going to consider operations within the whole
supply chain from the supplier side (upstream logistics) to the customer side
(downstream logistics) and not only the transformation process (Operations
Management):
Source:
Operations, Logistics and Supply Chain Management by Christopher TOWNLEY
TRANSFORMATION
Adding
value
DOWNSTREAM
Outbound
logistics
Distribution
UPSTREAM
Inbound
logistics
Procurement
OPERATIONS
MANAGEMENT
SUPPLY
CHAIN

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2.2 History of CSR
The weight of history is important while speaking of CSR. In fact it all begins in
the mid-1700s in the UK with the Industrial Revolution. This period of crucial
changes saw the birth of a very strong link between industry, environment and
society. Indeed, massive use of machines, major technological progresses and
new business applications were all based on natural resources exploitation,
mainly coal and fossil fuels. And there were great output for people, they got
jobs, food production grew, life expectancy got longer and the population got
bigger.
During 20th century’s first decades, historical events proved that separation
between economic and social sphere was very thin. For example, the Wall
Street Crash of 1929 and the Great Depression caused unemployment, poverty,
as well as social and political instability. Many years later, during WW2, US’
massive war expenses doubled the economic growth rates, significantly
reducing the unemployment rate and eliminating the last effects from the
recession.
In the mid-1950s, manufacturers needed to foster the demand in order to
continually expand production and guarantee economic growth. Demand driven
theories and consumerism were born, helped by advertising and programmed
obsolescence. Corporations then enjoyed a free hand to operate and make
good money. Economic prosperity offered jobs and helped to restore optimism.
At that time, a major cultural change occurred in the US and the middle class
began a mass migration towards the
suburbs to live the American Dream.
People built new houses, had kids, bought cars, got loans, credit-cards… The
post-World War II economic expansion was the most prolific evidence that
American model was the best one. What was good for business was good for
people.
But, it seems that this model has reached its limits. An evidence of that is the
dozens of economic crisis that occurred during the last 40 years. Of course, we
can talk about economy (1973 oil crisis and stock market crash, 1987 Black
Monday, 2000’s energy crisis, 2008 automotive industry crisis, European
sovereign debt, subprime mortgage crisis, real estate bubbles…), but we cannot
ignore social and environmental issues (unemployment, poverty, world food
crisis, deforestation, high level of CO², clear water shortage, species
disappearing, conflicts, lower natural resources, increasing inequality …).
All those episodes have specificities (scale, length, mechanism…) and concern
different growth sectors but they all are the direct legacy of industrial revolution.
They all try to achieve the same goal, make higher profits for fewer people
using environmental and societal resources without regulation or regards. We
entered a vicious cycle which pace is getting quicker and quicker.
In fact, the economic sphere and components of CSR have always been
interacting for better or worse. From human development and health, to social
improvements and the impact on natural resources, public health, energy
consumption and sanitation, the effects were profound. But the impact on the
world’s conscience would not emerge until the early 1960s, 250 years after the
beginning of the Industrial era. It took time but we realise now that what is good
for business and profits is, very often, bad for society and environment.

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Initial
Supplier
Companies
Production
Transformation
3. From a linear system to the product life cycle
3.1 Operations’ impact on sustainable development
A generally accepted idea is that the supply chain is a linear system that goes
from the initial supplier to the final consumer. This chain is composed by
echelons that have their own operations running through a supplier side, a
transformation process and a customer side as describe in the introduction.
Please find below a schematic representation:
Source: « The Story of Stuff » by Anne Leonard
Let’s have a closer look at what happens in the real world:
The initial supplier is basically our planet. Raw materials extraction
and natural resources exploitation exceed, in most cases, rates
of natural replenishment. As a consequence we kind of destroy the
ecosystem while creating shortages. Developed countries used
more resources than their natural share and are forced to go overseas to take
advantage of third world resources increasing inequality between nations.
Indeed, people in poor countries are struggling to benefit from the richness of
their land.
Companies then use energy and synthetic chemicals to
transform raw materials. There are many sources of energy
but most of them are unfriendly with environment. And there’s
more, chemicals used in production haven’t been tested so we
don’t know the real impact on health and environment. The problem is that
chemicals are persistent so we still find them in finished goods and wastes
which could be toxic for humans (brominated flame retardants in pillows or
Pyralène in Rhône river for example). Also, delocalized production plants
encourage rural exodus as it happened in our countries 250 years ago.
Communities, cultural specificities and know how get wasted. They will soon
have no other choice than to work in factories in dangerous conditions for
ridiculous wages.
Between each echelon there is multimodal transportation which
implies different stock keeping units and packaging. Once
again, we consume natural resources here, mainly oil and
wood increasing carbon footprint.
Initial
Supplier
Company 1 :
Production
/Transformation
Distribution
Final
customer
Company 2 :
Production
/Transformation
Disposal
/Recycling
Supplier
side
Customer
side
Customer
side
Customer
side
Supplier
side
Supplier
side
SUPPLY
CHAIN
Flow of
materials
Flow of
information
Flow of
materials

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Distribution
Customers
Disposal
/Recycling
Distribution aims to sell goods as quick as possible. Do you
remember consumerism? We foster the demand by lowering
price, planned obsolescence and perceived obsolescence to sell more and
maintain a good inventory rotation. To keep prices low, wages of distribution
employees are very poor which creates a kind of poverty and inequality in our
own counties.
Consumption is a finality today. From the mid 50’s to now, it has
become a social act. It gives us consistency and value. So we
shop, we use, we trash and replace faster than ever. Consumers are the engine
of the whole system as they keep the materials flowing.
Most of the time, customers put their waste into garbages so
they can be dug or burnt. They both pollute land, air and water
(incineration release toxics like dioxin for example).
Recycling helps by reducing the amount of non-recovered waste and creating
alternative raw materials. Though recycling and waste sorting have one big
advantage, it helps people to become aware of their own excessive
consumption. But it’s not enough because it doesn’t concern the full supply
chain including production wastes than are several times bigger than domestic
garbage. We don’t get to the core of the problem.
What we illustrate here is that each echelon is interacting with the real through
society, economy and environment which are according to Edward Barbier the
three main constituents of sustainability.
But we also put the stress of the fact that operations are allowed by these three
elements. Could you imagine any production without human labour or raw
materials? Could you imagine any transportation without oil? Could you imagine
any sales without any customers?
This is where sustainability deeply impacts supply chain. Sustainable
development is an integral part of the supply chain and all along the way
operations are bumping against the limit.
3.2 Raising awareness on sustainability
Sustainability awareness is at the confluence of several tendencies. First, the
ecologist movement emerged in the early 70’s with the oil crisis. Note to
mention that Greenpeace and WWF were founded at that time followed ten
years later by PETA. Associations or unofficial groups were first concerned by
environment or animal protection and quickly understood that they also have to
win the communication war using mass media and new technology.
Then, there is the international community and NGO which added the notion of
protection of the man kind and people all over the world from the 80’s
(Bruntland Report, 2nd Earth Summit Rio de Janeiro, Kyoto Protocol, Davos
Economic Forum and so on). Of course, the Tchernobyl catastrophe was a king
of trigger or accelerator for all those movements.
Last but not least, the alternative movements have great importance in the way
they are revelators of underlying thought in our society. Organic food is a good
example. From an alternative movement, it became a real way of consuming
and living today for million people. In a different way, Anonymous the

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“hacktivist” group is interesting because it puts forward the idea of a neutral
presence which prevent from abuses and inequality. A new virtual robin hood
somehow.
Those elements explain partly the awake of consciousness but they do not
integrate the core of the problem: the consumers and therefore the industrials.
As consumption grows, satisfaction and perceived quality of life decline in US
households. American people use their free time to consume forgetting family,
education or leisure.
Added to that, people start to perceive the « big picture ». New technologies
allow communities to get more information, facts, figures or images about the
supply chain and its impact we described earlier. So far they were thinking that
social, economic or environmental crisis was the result of a punctual operation
failure (oil spill for example) but they now understand that it is structural. Indeed,
even when the whole system does well, impacts on sustainability components
are negative. Furthermore, people begin to be aware that if this system
continues running, it’s because there is a demand in our developed countries
for ephemeral products. In fact, they are maintaining the whole thing and
without us, corporations are in danger. It’s like cutting off the
branch you're sitting on.
In the same time people also discover that there is a cost for everything which is
today externalised. It means that all real costs of production aren’t captured in
the selling price.
Let’s take a LCD monitor for example. Metal for electronics components could
be from South Africa, petrol from Middle East, plastics from China and the
whole thing assembled in Korea. Consider now the cost of transportation,
inventory and retail, are you sure this monitor really worth 74€? So if we don’t
pay the real price, who pays?
Population of third world pay for the loss of natural resources, industrial pay for
increasing health problem of future generations and pollution, distributors pay
for the loss of wealth and insurance coverage of their employees on so on.
These contributions are not recorded in accounts book because they are not
valorised in real production cost. The true cost of production is much higher
than selling price so are we ready to pay for it? The truth is we are already
paying for it in a non-financial way.
Still, the good thing is there is a lot to do like saving species and forest,
encourage, clean production and labour rights, make fair trade, promote
recycling and conscious consuming. We can put direct pressure on industrials
or take back on government to do so. Remember that politicians should protect
people interest instead of financial interests.

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3.3 Greenwashing, philanthropy and legal aspects
Let’s go back to the basics,the aim of economic responsibility is to provide
goods for consumers and to gain profit out of it. As we just say, the society
started to sanction businesses for their idea of maximizing profits upon all other
aspects like society and environment. In this context, governments legislated
ground rules according to which businesses must operate. These rules
indicated companies how to comply with regulations and to fulfil legal
obligations. It’s a necessary step even if being in line with the law does not
immediately mean being socially responsible.
Industrials’ first response to social and political pressure or requirements was
communication. Marketing is used to promote the perception that an
organization's aims and policies are environmentally friendly. Whether it is to
increase profits or gain political support, Greenwashing is used to manipulate
popular opinion. As usual, there were abuses and several companies were
prosecuted for having provided misleading environmental claims. For example,
McDonald's changed the colour of their logos from yellow and red to yellow and
green to clarify their responsibility for the preservation of natural resources.
The Advertising Standards Authority in the UK upheld several complaints
against major car manufacturers including Suzuki, SEAT, Toyota and Lexus
who made erroneous claims about their vehicles. Still, corporations can
communicate agreements like the UN Global Compact that became a reference
on the market even if we can discuss on the real implication of such labels.
The second response is philanthropy. Corporate Philanthropy basically refers to
the idea of giving back financially to society some of the value it has created
thanks to society’s inputs. The wealthiest support the less fortunate. By itself,
philanthropy or charity does not necessarily mean that a company develops a
strategy to assess its impact and improve its overall performance towards
society. The thing is: it happens at the end of the chain and does not impact
operations. It is exactly like household recycling. It is a part of the answer but is
not involved upstream enough to really make a change and treat the core of the
problem.
Those responses or initiatives could be positive but, the prerequisite of all that is
a good financial health of companies. After many years of crisis, all those good
intentions are gone, so are thousands of jobs. Financial crisis almost killed
philanthropy but it revealed CSR as essential and strategic approach.
3.4 CSR and product life cycle
One of the most popular concepts was
developed by Archie Carroll and is known as
the pyramid of CSR. It suggests that CSR is
composed by four different kinds of social
responsibilities.
The first characteristic is the economy. As we
said before being profitable is the foundation
up which all others characteristics rest. Long-
term perspective of economic gain may not
necessarily be short-term profits but mayCSR Pyramid according to (Carroll 1991)

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Life
end
FORWARD
LOGISTICS
CUSTOMER
LIFE CYCLE
REVERSE
LOGISTICS
Loop
closed
Change
of
ownership
SUPPLIER
Product / Process design
Transformation / Manufacturing
Packaging
Distribution
Usage
Maintenance
Integrated
logistics support
Asset recovery
Revalorisation
Reuse
Remanufacture
Recycle
Sort
Collect
provide a valuable asset for future profitability. This concerns both intangibles
(reputation, technology, know-how, etc.) and tangibles assets (financial
resources, buildings and equipment, etc.).
The second level is the legal level. Companies must obey the law which is
society’s codification of right or wrong.
Then there’s the ethical responsibility that goes beyond compliance with the law
and regulations. It represents values, norms and expectations from
stakeholders, like consumers, employees and shareholders. This introduced the
notion of voluntariness because it is the expression of the effort by which the
firm complies with ethical standards, as opposed to purely economic or legal
imperatives. Let’s give the stakeholders theory a quick focus. Stakeholders are
affected by business and could have legitimate claims on it they do not reject
profitability as a corporate purpose. Organisations which do not include their
stakeholders’ concerns within their strategy challenge their long-term survival.
Indeed, organisations should not pay attention to their stakeholders merely
because it is profitable.
Finally, there’s philanthropic responsibility which means for the company to be a
good “corporate citizen”. Contributing to arts, education and the community and,
therefore, endorse human welfare or goodwill is highly desired and prized but
actually less important than the other three categories of social responsibility.
So, CSR is all about how we can integrate these dimensions into the way we do
business. It’s a structural and necessary change which implies a new
modelisation of the system. Linear system and its traditional cost orientation
(costs + margin = sales price) have to be redesigned. A more dynamic loop of
operations is now emerging and the product life cycle is a good representation
of it:
Source: Operations, Logistics and Supply Chain Management, Christopher TOWNLEY

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As a full cycle, it gives an overall perspective of the system. It also invites the
environment into core business issues, promotes efficiency, innovation,
engages all stakeholders and provides information about all inputs/outputs to
and from the environment. All this allow a long term vision of the product life
cycle,
its cost and social impact in the whole loop.
We can then anticipate and consider two approaches:
• Process orientated costing approaches. Considering this wider view of
operations, we now need to take into account all the components of the
value chain in our analysis. This means both primary activities
(Logistics, Operations management, Marketing, Sales and Services)
and support activities (Human Resources, R&D, Procurement, etc.).
• Customer orientated value approaches permits to create more value
with fewer inputs. It’s an opportunity to benefit from new business
opportunities. We consider value analysis based and functions.
Analyzing TCO, companies can sell products and added services as a
bundle.
To make the long story short, we use less resources to produce more value,
limiting wastes, failures and promoting innovation.
Nonetheless, there are still problems in measuring CSR and sustainable
performance, and it proves particularly complex to clearly define the causality
between economic success and responsible behavior. We need to redesign
methods, create some new tools and find new indicators.
However, the Global Reporting Initiative gives us some basics indicators which
allow us to check the fulfilment of the CSR programs. But we can always do
better and try to cover more problematics than the GRI do.
4. From short-term constraints to mid/long term opportunities
4.1 Curbs to implement CSR
Considering all these elements, we can then wonder why not all companies
completely changed their strategy and take into account CSR consideration.
Actually, there are curbs to CSR deployment:
• The complexity and variety of the subject: it implies the entire company
(HR, Management, Supply Chain, Marketing, R&D)
• Costs: necessity to have funds to put in place this new organization.
• A lack of time: Implement CSR policy requires a lot of time while profits
are mid/long term. Especially during crisis period because smallest
firms can’t afford to spend time on it.
• A lack of clarity: heterogeneous definitions make the understanding
difficult and blur the meaning.
• Skepticism: Convince and make people adhere to this change may be
a very hard task
• This is not a legal obligation. Some countries are putting in place some
rules to encourage companies to have CSR actions, but it’s clearly not
enough. For example, in France the Grenelle 2 Law demand to French
companies to have extra financial report that describe all the CSR
actions they did during the year. Companies must prove their progress

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from one year to another but there is no objective due. And the same
with the ISO 26000 norm which is open to interpretation.
But the one question that all General Managers have to ask themselves is: Can
I really wait to implement CSR?
Companies must take into account the connexion between competitive
advantage and social issue. Indeed, as the figure below illustrates, there is
benefit/risk interdependence between the company productivity and its
environment.
The connection between competitive advantage and social issue
Source: How to reinvent capitalism and unleash a wave of innovation and growth, HBR.
Michael E. Porter and Mark R. Kramer
There is no choice but to take in to account all those elements in a company
strategy in order to remain or become a sustainable, competitive, responsible
company.
The costs of CSR implementation may be high, no CSR implementation would
cost higher. Indeed, on the one hand the firm would be less and less
competitive and on the other hand it would have to pay the social invoice
(solidarity taxes, ecological taxes, bad corporate image, etc.). Companies would
have to pay far too much to stay in their comfort zone.
It is necessary to change companies’ short term state of mind to a long term
way of thinking.
4.2 CSR as source of differentiation
In addition to the connection between competitive advantage and social issue,
customers’ expectations must be taken into account.
Indeed, our companies need to bring more transparency in their strategy and to
align their business plan to what customers really need. Customers are
confronted with the crisis due to the increase of bankrupts and downsizing
plans. They begin to understand the impact of their choices when they are

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buying something and then ask for more traceability and more social
responsibility.
The key to create value is to find the compromise between social responsibility
and pure business considerations. That’s why CSR must be taken as an
investment on the future.
A Convergence of Interests
Source: The Competitive Advantage of Corporate Philanthropy, HBR, Michael E. Porter and Mark
R. Kramer
According to Mr Porter “we have to pass from what is good for business is good
for society to what is good for society, then is good for business!”
The Return On Investment (ROI) can be easily understood when you think
about CSR as an opportunity to develop competitive advantage following these
different axes:
• Innovation: Social and environmental issues encourage corporations
to find innovating solutions and create differentiation on the market.
• Competitiveness / efficiency: Reducing corporations’ carbon footprint
helps to become more competitive. Energy saving, reducing
manufacturing overhead cost, direct and indirect costs… Long term
reflection with the notion of Total Cost of Ownership.
• Motivation: CSR allows employees, suppliers and customers to be
more concerned / implicated within the product life cycle. It gives them
a part of responsibility which can be rewarding.
• Attractiveness: Be more attractive for new talents and keep its best
talents in your company. Be attractive for investors. Be attractive for
supplier by developing Supplier Relationship Management
• Reputation: brand or corporate image, don’t forget that we spend 30
years to build a reputation, 30 minutes to destroy. On the other hand,
this is a good marketing lever. Impact of new way of communication
like social network. We can know everything from everyone! NGOs
actions can lead to ruin a corporate image.

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• Legitimacy: Bring legitimacy to the stakeholders and the politics.
• Anticipation: Anticipate regulation and new law. Being proactive
rather than reactive.
Despite the undeniable short term constraints, to have CSR program is not a
choice. Indeed this is the only way to have a sustainable development and to be
protected and prepared to future issues. We will see hereafter the impact to
don’t have a good CSR strategy. Even the major companies’ can lost their
competitive advantage and destroy their corporate image if they don’t take care
about environment and societal considerations.
5. Examples from different companies
5.1 Impact of CSR scandals on corporate image
5.1.1 Textile industry
Child labour scandal in Pakistan: One of the most important scandals in term
of CSR is certainly the 1996 child labour scandal in Pakistan. Further to the
discovery of this photo showing a Pakistani child
making balls for Nike, the world has discovered the
true labour conditions in Nike “factories”. As a
consequence, students and consumers started to
boycott Nike products. Associations and NGOs’
pointed the procurement strategy in emerging
markets that did not respect human rights and did
not take into account the labour conditions to
increase profitability. The company suffered a
considerable loss of reputation because of the non-compliance with the
Convention of the International Labour Organization (ILO), especially about
child labour, workers treatment and working time (three times longer than in
developed countries).
Journalists have greatly contributed to highlight the responsibility of the
company. In her book "No Logo" Canadian author and Social activist Naomi
Klein criticizes Nike so violently that the firm had to officially answer on every
accusation. In his movie “The big one” American filmmaker Michael Moore
denounces labour conditions in Southeast Asian Nike factories. During a
meeting with Nike CEO Phil Knight, he challenged him to personally visit one of
these factories and got him to admit that he'd never visited Nike's Indonesian
factories. Nike was confronted with a major management issue concerning its
extended supply. Later on, in an official announcement, Phil Knight declared
that the minimum age of footwear factory workers in Indonesia would be raised
to 18 years of age.
Sanding Jeans: Created in 1995, “Ethique sur l’étiquette” (ESE) including
associations for international solidarity, local authorities, labor unions and
consumers movements launched a communication
campaign to alert and to ask major brands as Levi's
and H&M to ban the dangerous practice of
sandblasting jeans. A technique used to give jeans a
used look which is highly dangerous to workers.
After this campaign, the brands Levi’s, Promod,
Armani and Casino promised to eliminate
sandblasting from their supply line by replacing it by

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sustainable processes that permit to obtain the same effect. This kind of action
force companies to find solution to respect workers health even if there is added
costs. But the cost of inaction would be higher due to the risk of incurring grave
financial loss or corporate image degradation.
5.1.2 Sanitary and public Sector
In 2011, “le Nouvel Observateur” (French newspaper) revealed that during
decades, millions of disposable bottles and teats put at the disposal of the
moms and their babies in the French hospitals were sterilized with a highly
carcinogenic gas (ethylene oxide) despite the legislation. This sanitary scandal
had an extremely strong echo in France due to the concerned population and to
the scale of the scandal.
During the investigation Le Nouvel Obs
get the URS (User Requirement
Specifications) used by the AP-HP’s (Assistance Publique – Hôpitaux de Paris)
central purchasing agency that worked for a lot of French hospitals. Two
companies, “Cair” and “Beldico” awarded the tender and both used the same
sterilization process by using ethylene oxide.
This scandal highlighted the necessity for purchasing team to better manage
their portfolio, to better know their suppliers and the suppliers of their suppliers
as well. Cost killing increases risk. We have to redefine what is really important
when purchasing something and develop risk management.
5.1.3 Retail Sector
In Germany the practices of the textile lowcost brand Kik, a subsidiary of the
giant of distribution Tengelmann, was accused of paying miserable salaries to
his sellers (5€ per hour), of collaborating with subcontractors making children
work in Bangladesh, and even to have display stands in a swastika shape.
The reaction of the German consumers was immediate. According to a survey
realized with 1 043 persons, 13.5 % of the consumers would have boycotted the
brand after the revelations made by the public channel ARD.
Social consideration has to be a major issue for company, this example show
us that the consequences of non-respect of work force could lead to major
corporate image degradation.
5.1.4 Energy, environment, raw materials sectors
The energy and raw material extraction sectors are closely linked with the
environment, for which many associations such as anti-globalists, Green Peace,
“statement mast” and others fight malpractice in this area fiercely.
For example, the association "La déclaration de Berne" publishes regularly the
list of worst companies that do not respect people and the environment. The
company submitted are subject to votes on several criteria and in 2011 the
company “Anglo gold”, which is specialized in gold mining was ranked 1st.
For 30Kg of gold, 1000 tons of stone were moved and treated with cianure then
stored on soils, which in turn contaminated the soil and all the farmers and local
people (from the DVD “The corporate social responsibility collection research”).
These few scandal examples help to demonstrate the pressure that NGOs and
consumers associations can put onto companies. They become very vigilant
and push companies to correct their actions in terms of societal and
environmental aspects. We cannot ignore their capacity to influence consumers
and ruin a corporate image. We live in huge network and a flow of information
has never been so fast and easy.

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5.2 Current state of thought in our companies
We will now introduce three examples of companies that have integrated
sustainable development into their operations management. We will show how
CSR is available specifically in their organization and operations. In order to
verify the degree of importance of sustainable development for the company we
will focus on items such as:
• a dedicated website to CSR
• a dedicated governance and performance indicators
• operations and processes related to environmental protection.
5.2.1 Example 1 - L’Occitane de Provence
As first example let’s have a look at L’Occitane de Provence, a French
brand that produces and commercializes cosmetics based on natural
ingredients. What is interesting with this company it’s that it built a truly
efficient and proactive organisation focused on social and environment
considerations by upgrading little by little their processes.
L’Occitane is a socially responsible company created in 1976 by Olivier
Baussan who was very concerned about the future of the planet. He gave to his
company his values and decided to use only recyclable materials to limit the
impact of its actions and products on the environment.
From the very beginning, L’Occitane has been taking into account the well-
being of its employees and supporting sustainable development programs: “At
L'Occitane we always encourage our people to follow their dreams and many of
our employees volunteer to work on life-changing projects in communities far
and wide” says Olivier Baussan.
Continual improvement and CSR consideration are a philosophy: “Respect and
continual progress have been an integral part of our daily actions, make
products that are even more natural, sensorial and respectful of Nature”.
L’Occitane developed a Life cycle Analysis
approach to reduce its social and environment
footprint, from the design of products to the sale of
products in stores, and includes accommodating
workers with disabilities, responsible purchasing
procedures, environmental impact studies, and the
choice of transport solutions to deliver products to
points of sale.
During the past two years, L’Occitane has
undertaken to accelerate its environmental policy.
To ensure coherence on actions and to deliver an
efficient CSR strategy, the company putted in
place a CSR Governance including three distinct
levels:
• CSR steering committee which defines objectives and monitors the
progress of CSR projects.
• CSR department which is in charge of CSR projects at a Group level
and awareness-raising programs for employees.

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• CSR Commissions focused on a specific theme: Ingredients, Eco-
packaging and Suppliers, Clean Premises and Factory, Transport,
Stores, People with Disabilities, Well-Being in the Workplace,
Community.
“Two key conditions must be met to guarantee the coherence, durability
and effectiveness of an ambitious Sustainable Development policy: the
commitment of the Management and the involvement of all employees.
The L'Occitane CSR model is therefore based on these two pillars.”
Katia MiChieletto, Sustainable Development Manager.
! A social responsibility:
The Group considers the development of human resources as key to its growth,
it allows each person to express his/her potential and professional aspirations:
5% of payroll was spent on training for those working at the L’Occitane
industrial site (the legal obligation is 0.9% of payroll).
“The first social body that a company must be seen as responsible
towards is its employees. This responsibility is illustrated not only
through the importance attached to the development of human
resources, but also to improving working conditions” Marc FIORI,
Human Resources Director.
To improve the well-being of their employees, L’Occitane invested in the
working place by improving acoustic and visual comfort and optimized balance
between professional and private life by putting in place a child day care
service. Some side activities are available on site like fitness and yoga courses.
To reduce individual car trip (costs for employees and carbon footprint), the
group putted in place a free bus service and encourage carpooling and public
transportation.
“Ever since its creation, L’OCCITANE has had strong values, including
respect and openness towards others. Respect for employees and being
open to diversity, and particularly to people with disabilities, are
important aspects of the Human Resources policy. This policy is further
strengthened by the actions carried out by «Mission Handicap»,
overseen by the CSR Department”
Aurélie URICHER, Mission Handicap
Manager
In 2006, the L'Occitane Foundation was founded with three primary missions:
• Support organizations in the field of sensory handicaps, in France and
abroad. Give a better quality of life to the people affected by sensory
deficiencies.
• To safeguard the "knowledge of nature" in Provence.
• Support projects of economic development led by women in developing
societies.
! Responsible purchasing
Encouraging local producers and find best formula and ingredients to reduce
the utilization of non-ecological product like palm oil is a part of their internal
policy. Purchasing department works in close collaboration with R&D to find
suppliers that can supply alternatives to toxic products (No phthalates in

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fragrances since 2005, gradual withdrawal of parabens, usage of plant oils
rather than mineral oils and limited use of silicones).
“We support local producers and we choose, when possible, certified,
organic and/or PDO productions. We give preference to small,
integrated production networks we work with all organizations at a
regional level to help preserve endangered crops or to revive long
forgotten cultivations.”
Maud Reboul, Sustainable ingredients manager
A sustainable ingredients policy has been put in place.
“We try to limit environmental impact from the start of the creative
process to the end of our products' lifetime, and this resolve is reflected
in various choices that are made with regard to product formulation.”
Jean-louis PIERRISNARD, now uses pure alcohol derived from plants.
Scientific director, L'occitane
! Eco design
L’Occitane has developed Eco-design focused guidelines on reducing
(packaging weight), recycling (select materials that can be sorted for recycling),
reusing (use recycling materials) and monitoring (suppliers ecological
performance and certification)
“As part of our focus on eco-design, we use all modern analysis tools, as
well as tools to measure the environmental impact of packaging.
Reduce, reuse and recycle are the three key factors that we must
always have in mind to stop unnecessary exploitation of the
environment” Philippe de BRUGIERE, Packaging Design Manager
International Production and CSR.
The Group is investing to develop eco-design, they built an eco-design checklist
to ensure that all components of a new product has been correctly selected by
its recyclability features. A packaging guideline has been put in place. Training
in packaging eco-design was launch in 2010 including all teams involved in
packaging development in order to develop and maintain the level of knowledge
and their involvement.
When one speaks about eco-design one thinks about product development but
l’Occitane goes further. It applies this concept to its stores by reducing energy
consumption, by using environmentally-friendly materials to build the store and
by organizing waste collection service.
“With the aim of limiting the environmental impact of our retail
operations, environmental factors are taken into account from the design
and fitting of our points of sale, particularly with regard to controlling
energy consumption. For every functioning point of sale, waste
management and energy-saving techniques are the main environmental
considerations.” Emmanuel de COURCEL, General Director, Europe.
! Logistic
L’Occitane is working on an action plan to improve its logistic by reducing air
transport and by developing the transport mix. A carbon reduction action plan,
linked to downstream logistics, was put in place in 2009 and continued in 2010.

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As we already said, CSR is an opportunity to develop competitive advantage if
you invest for the future. L’Occitane is a perfect illustration of this principle.
5.2.2 Example 2 - Bombardier
The Canadian multinational company, specialized in the manufacture of
planes and trains, has fully integrated the concept of CSR. Because it
has a direct impact on the environment through carbon footprint we
wanted to know their value in terms of sustainable development.
A Board of directors who monitors CSR issues, including environmental,
occupational health and safety matters through its Human Resources and
Compensation Committee, pilots CSR approach.
A cross-functional committee consisting of broad representation from across its
organization leads CSR governance at Bombardier. Responsible for overseeing
sustainability performance and compliance, the central CSR committee
develops corporate social responsibility guidelines and initiatives. It also aligns
and oversees the various CSR projects developed by the group and its
business units.

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In 2010 they developed a process and strategy to mobilize all parties involved.
It is a fundamental approach. They’ve done an inventory of their stakeholders
and done a matrix. This matrix allows Bombardier to act on each stakeholder
requirements through time.
Having clarified their position regarding the different stakeholders, Bombardier
was able to priorise the corporate social responsibility issues with the greatest
positive potential impact on its company.
! Bombardier Operations and CSR
The objective is to achieve carbon-neutral operations through four points:
• Continuously decreasing the amount of natural resources such as water,
energy and raw materials used in their production processes
• Switching to recyclable materials as possible
• Eliminating the use of restricted substances
• Developing a strategy to Deliver a "Zerotic waste" performance
! Eco-conception
Bombardier begins the process of designing its equipment with an eco-design
team. From 60 to 80% of the environmental impact is determined at the
conception. The company optimizes the environmental impact and avoids waste
throughout the products life cycle (design, supply chain management,
manufacturing, operations, end of life, recycled products).
They design for environment on 6 main axes:
• applying a lifecycle perspective
• maximizing recyclability and recoverability
• eliminating hazardous substances
• ensuring transparent communication
• investing in technologies
• involving suppliers

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! Innovation for environment:
To prepare the future and in order to have product responsibility, Bombardier
begun some research of cleaner alternatives on fuels and power source. In their
Aerospace group, they are involved in research projects on sustainable biofuel
alternatives. In 2011, Alaska Airlines inaugurated biofuel-powered passenger
service on a Horizon Air Q400 between Seattle and Portland, Oregon
! Suppliers:
Bombardier works closely with its world class suppliers and sends a charter of
good conduct to 245 major suppliers. Bombardier’ direct suppliers also develop
the CSR from there. They encourage their suppliers to continuous improvement
and have established a recognition program for suppliers that are publicly
recognized through the presentation of several awards such as:
• For aerospace :
o BASE Awards (Bombardier Achieving Supplier Excellence)
o CSR Awards
• For transportation :
o Sustainability Supplier Awards
o Improvement Supplier Award
Bombardier has engaged a value based approach with their supplier (SOFE)
and a TCO (Total Cost of Ownership) approach and participate directly to the
CSR. They work collaboratively with suppliers to:
• Improve productivity and quality
• remove non-value activities from our supply chain
• integrate processes
• Implement Lean technical
• TCO workshop (case study)
Bombardier’ Buyers improve their procurement skills integrating CSR at
European Institute of Purchasing Management (IMET) France.
Bombardier participates in the development of its supply chain improvement in
Quebec through projects such as the “MATCH project”, with the aim to
perpetuate its CSR initiatives.
Basis (Bombardier Aerospace Supplier Improvement System) was fully
Deployed across all Aerospace Production Sites in 2011. These websites are
tracking the quality and delivery performance of every supplier of aircraft-related
materials. Sharing the data with suppliers enables fruitful discussions around
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! A Social company:
The website is very comprehensive and detailed on that particular point:
“At the community level, we're determined to live up to our multi-faceted
role and responsibilities as an employer, provider of mobility solutions,
neighbor and visitor as the case may be. Our goal is to make a positive
contribution everywhere we do business. This starts in the communities
where we operate and ripples outwards from there”.
Bombardier has developed a 3E approach based on Environment,
Entrepreneurship and Eligibility. All the employees of Bombardier participate in
this program because they appreciate these values. It seems that when
employees are directly interesting in some important ethics value they are more
efficient. In 2011 they created an Employee Volunteering committee.
To sum up, Bombardier takes CSR as a competitive advantage and allows
them to innovate for the future in order to respect environment.
The notion of extended supply chain and consideration of stakeholders is
embedded in their DNA. Objectives and reports are presented to quantify their
progress in corporate social responsibility.

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5.2.3 Example 3 - SEB
Groupe SEB is today the world leader in Small Household Equipment.
This company is interesting to study because its products are part of
our daily lives. Its position in the sustainable development needs to be
known.
Groupe SEB, a leader on its markets, choose to put CSR into its values:
“Our position as world leader in the small household equipment market
brings with it responsibilities with respect to the local and global
ecosystem in which we live: consumers, employees, shareholders,
public authorities, customers, suppliers, local communities in which our
sites are established, etc.
To ensure our development, we must of course create economic value
through our product innovations, but also create shared value for all our
stakeholders”.
As the previous examples, Groupe SEB created a CSR governance to pilot with
efficiency all CSR projects:
“In 2004 Group SEB created a Steering committee: sustainable
development in charge to standardize, orientate and give impetus to a
collective, participatory process in this area. They are height members
representing the main important unit of the company; their role is both to
make proposals and to serve as sustainable development
"ambassadors" to the Group’s external teams and partners.”
SEB manages the entire products life circle, in regards of all operations:
SEB 'S Product's Life Cycle
One of the major CSR challenges is to reduce the environmental footprint of
products. SEB is constantly innovating to reduce its energy consumption,
making them even more recyclable and repairable.

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! Eco-conception
This stage is crucial for SEB, the company thinks about how it can make
products without spending a lot of energy. In regards of this main objective,
SEB respect ISO certifications:
“SEB Has two goals:
• Certified Sites: SEB Group is Advancing towards ISO 14001
certification, the international standard management.
• Cutting Waste and Emissions
“82.8% of SEB Group's non-hazardous waste is recycled thanks to sorting
areas and raising employees awareness; 7.4 and goes into energy production.
Hazardous waste (Which must be sensitive waste processed in Specialized
facilities) is APPROBATION, sorted, picked up by Specialized companies, and
destroyed in approved centers.of resources to finished product Manufactured “
You can see the results of their efforts, they reduced energy consumption:
! Water waste
To achieve these objectives of reducing water waste, they try to use alternative
operations:
“The preparation of aluminium discs for coating falling on the
manufacturing of stoves and pans. The Group has begun to replace this
operation by a chemical mechanical treatment that requires only a little
water and abrasive. This process also more economic, ecological and
applied to a wider variety of aluminium”
! Eco-logistics: SEB group minimizes Carbon foot print
Like all companies, the reducing of carbon footprint is an obsession so SEB
created a logistic committee which pilots all aspect and use indicators:
“Concerned to limit the environmental impact of transportation generated
by the manufacture and sale of products Groupe SEB has Strengthened
eco-logistics strategy in 2008 Which AIMS at Reducing CO 2 emissions.
An Eco-Logistics Committee Which Brings together 25 leaders of logistics
flows of the Group has-beens, established to coordinate and monitor the
process. In late 2009, was first transportation carbon footprint and the
Calculated Group Aimed to make it more reliable using a more precise
calculation method, and with larger scope (Worldwide, Including new
acquisitions). This new studies Estimated CO 2 Emissions Relating to the
transportation of products, raw materials and components in 2011 at year
average total 250.325 tons of CO 2 equivalent. They Have Decreased
therefore Compared with 2010 (-6%), In Spite of the organic growth of the
Group and Its turnover”

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To reduce emission, Group SEB uses levers through:
• Using optimum loading rate of transport units (lorries or sea-going
containers)
• Using alternatives transport (rail, waterway),
• Sending ecological demands on their freight transportation providers.
! Sustainable Purchasing
Purchasing represents around 70% of its turnover so the Group is vigilant and
wants that suppliers respect their commitments to ethical, social and
environmental concerns. At the end of 2011, the group made purchasing
responsible charters and buyers’ Code of Ethics according to Global Compact
and CECED principles, environmental and labour rights statement.
! Supplier Tracability Management:
To avoid CSR problems, especially dangerous raw material used during its
operations and supply chain, Seb bought the services of EcoMundo, which is
specialized in conformance to regulations concerning chemical substances.
Almost 850 of Groupe SEB's suppliers are able to access an Internet portal, and
check their eco-statements.
5.2.4 Example 4 - Patagonia
PATAGONIA was made by Yvon CHOUINARD,
specialized in designing outdoor clothing and gear for
climbers. They make organic cotton clothing, sportswear,
travel clothing, technical Regulator.
The textile industry is often pointed at, so it’s interesting to put this company as
an example to understand how they use CSR approach as a competitive
advantage.
At the beginning, PATAGONIA was made with values about respect
environment:
“Build the best product, cause no unnecessary harm, use business to
inspire and implement solutions to the environmental crisis.
Our values reflect those of a business started by a band of climbers and
surfers, and the minimalist style they promoted. The approach we take
towards product design demonstrates a bias for simplicity and utility.
For us at Patagonia, a love of wild and beautiful places demands
participation in the fight to save them, and to help reverse the steep
decline in the overall environmental health of our planet. We donate our
time, services and at least 1% for our sales to hundreds of grassroots
environmental groups all over the world who work to help reverse the
tide”
Patagonia ensures that products are made under safe, fair, legal and humane
working conditions Throughout the Supply Chain.

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! CSR governance
To be sure that all these values are respected, they created a CSR Governance
through a CSR Director. This director can check all points regarding sourcing,
plants, and supervised all projects which are directly connected in CSR:
“The director of SER fully participates with our Sourcing and Quality
departments in the decision to place products with a new factory. The
director of SER has full veto power over choice of a new factory.
CSR staff screens all new factories for social and environmental
compliance with local law and union contracts (if applicable), the
Patagonia Code of Conduct and the more detailed Code of Conduct
Benchmarks document. Where standards vary, we adopt the one most
beneficial to the employees. We also assess the factory’s CSR
management systems, and train management in our Code of Conduct
and other program requirements.
The pre-screening is accomplished by either the CSR staff or a
reputable third-party monitoring firm. This step entails a full social audit,
including a payroll analysis and interviews with line workers in the local
language. We will not do business with factories where we find child or
forced labor, abuse, harassment and discrimination or other practices for
which we have zero tolerance. An audit often reveals less serious
variances with our Code of Conduct. A factory must agree to remediate
all findings before we place our first order”.
! Operations and CSR
In 2010 PATAGONIA launched an audit to analyse its supply chain CSR
performance:
“In 2010 we audited 90 percent of our supply chain for social and
environmental concerns. This included subcontractors of our primary
cut-and-sew facilities. We either perform a social audit ourselves, hire a
third party monitoring firm, or (to reduce audit fatigue in factories)
collaborate with another brand or obtain recent audit reports from a
credible source on the Fair Factories Clearinghouse database (see
below) or the factory itself. Patagonia pays for all social audits that we
schedule directly”.
If they detect some problems regarding their suppliers, a solution must be find
very quickly:
“All audit findings must be remediated in a timely manner. When an audit
reveals problems that require in-depth analysis we hire a local
consultant to discern the root cause of the problem and then decide
whether to pursue a higher level of engagement with the factory in a
long-term continuous improvement program to create and monitor a
solution”
Patagonia uses a continuous improvement in its plants and help suppliers to be
better in sustainable development:

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“SCSR staff scores factories on performance to help Patagonia and our
suppliers see where they are on the corporate responsibility journey -
from implementing basic practices to demonstrating leadership. The
internal scoring system is based on existing Fair Labor Association and
Sustainable Apparel Coalition tools. It educates suppliers and sets brand
expectations for continuous, long-term improvement of social
performance”
They approve suppliers by evaluating performance in four key areas: quality,
traceability, environmental health and safety, and social responsibility.
Patagonia is a member of many social and environment associations like:
Fair Labour association,International Labor Organization, etc.
Through a “blue DESIGN Concept” used by Patagonia, we can see that CSR
represents a real competitive advantage by minimizing waste, reducing natural
resource conception, and developing innovation. This concept forces
PATAGONIA to focus on all its operations aspects:
“Nous travaillons sous l’égide de la norme indépendante bluesign®
depuis 2000, ce qui nous permet d’évaluer et de réduire notre
consommation de ressources naturelles et de sélectionner nos matières
premières, telles que les teintures et les produits de finition utilisés dans
notre chaîne d’approvisionnement. Bluesign® technologies, dont le
siège est en Suisse, vérifie l’utilisation d’énergie, d’eau et de produits
chimiques de ses membres et les aide à réaliser des améliorations
environnementales permanentes et de long terme.
Les membres de bluesign® s’engagent à établir des systèmes de
gestion permettant d’optimiser leurs performances dans cinq domaines
essentiels du processus de production : productivité des ressources,
sécurité du consommateur, émissions atmosphériques, pollution des
eaux, et hygiène et sécurité professionnelles. Ses membres font
régulièrement état de leurs progrès et, pour maintenir ce statut, doivent
atteindre certains objectifs en matière d’amélioration.
Bluesign® technologies conduit régulièrement des audits. De plus,
bluesign® technologies aide les sites de production à mettre en place un
système de gestion des matières premières basé sur la notion de « flux
entrants » (input streams). Il s’agit notamment de classer les produits
chimiques en trois catégories : bleu, produit d’usage sûr ; gris,
manipulation spéciale exigée ; et noir, interdit en vertu de la norme.
Bluesign® technologies aide les sites de production à éliminer l’usage
des produits « noirs » et à trouver des produits alternatifs équivalents.
Bluesign® est une norme rigoureuse mais déjà à l’automne 2012, les
tissus approuvés par bluesign® constituent 23 pour cent des tissus
utilisés dans les produits Patagonia. Les progrès que nous avons pu
réaliser nous incitent à travailler avec d’autres fournisseurs du secteur
des sports de plein air et d’encourager un plus grand nombre de
fabricants de textiles de premier plan à adopter la norme bluesign®.
Notre objectif, avec nos fournisseurs, est d’avoir tous les tissus
Patagonia approuvés par bluesign d’ici à 2015.

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! Energy consumption
PATAGONIA tries to use CSR in all aspect of their contact with the community
and environment and search ways to reduce their energy consumption of their
buildings and plants
Patagonia takes a holistic approach to all aspects of their business and they
decided to product their own energy:
“Our Reno Service Center was built in 1996 at a cost of $ 19 million. We
built power plant our Own and really acting for the environment:
Over the 30-year life of our solar electric system, we save about 5.669
barrels of oil, acid rain Reduce Emissions by 20.945 lbs., Reduce Smog
Emissions by 10.053 lbs. Reduce greenhouse gas emissions and by
Almost 4 million lbs. In addition, we trim dependence on fossil fuels”
! Social responsibility
PATAGONIA respects the rules of the international labor organization and
wants the same from its suppliers:
« Notre Code de Conduite donne les lignes directrices de notre politique
: travail forcé, travail des enfants, harcèlement, abus ou mauvais
traitement, non-discrimination, santé et sécurité, liberté d’association et
de négociation collective, salaires et avantages, horaires de travail,
paiement des heures supplémentaires, droits des femmes, des
handicapés, des minorités ethniques et des vétérans Américains,
normes environnementales, de qualité, de sous-traitance et de
conformité avec les législations en vigueur ».
Since 1985, PATAGONIA spent 1% of its turnover for the environment respect:
“We've awarded over $46 million in cash and in-kind donations to
domestic and international grassroots environmental groups making a
difference in their local communities. In 2002, founder of Patagonia,
Yvon Chouinard, and Craig Mathews, owner of Blue Ribbon Flies,
created a non-profit corporation to encourage other businesses to do the
same”
They invest in a lot of programs regarding community environment, carbon
footprint, and customer pedagogy by “teaching” them to buy only what they
need. This practise is opposite to the usual business way.
They developed a new “Common Threads Initiative” which is a partnership
between them and their customers to keep their clothing out of the landfill. It's
guided by four R's: reduce, repair, reuse, and recycle.

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6. Conclusion
Through this study, we discovered that corporate social responsibility is more
topical than ever.
We are still bumping up against the limits. Scandals highlighted irresponsible
behaviour due to ignorance, complacency, and lack of vigilance from some
companies. Human, social and environmental impacts are massive.
Pressure on corporations is getting higher thanks to humanitarian organisms
and consumer’s associations that act globally for environmental protection and
respect of human rights. And pressure is even more gruelling because of
natural resources (oil, gas, water, copper, iron…) that are becoming
considerably scarcer.
The reduction of carbon footprint and energy consumption is now becoming a
major issue for the majority of companies. They are beginning to understand
that if they want to continue operating successfully, they must change their
behaviour towards sustainable development. Companies must take respect the
three pillars of sustainable development: social, economic and environmental.
Companies must take into account the different groups of stakeholders in their
operations and generally speaking in their global strategies.
According to Michael Porter, "what is good for business is good for society"
radically change and becomes "what is good for society is good for business."
Globalization plays significant role in the good performance of CSR for
business. In a globalized trade, the company is linked to an extended supply
chain, which includes a series of related suppliers. It’s the reason why
operations are really exposed of CSR risks.
During our research we saw that CSR concept was superficially used (green
washing) by company trough developing adhoc communications via
humanitarian campaigns. Those groups are communication and media oriented
but, very often, they haven’t got a real responsible behaviour through their
operations (purchasing, manufacturing, logistics, distribution…).
It is obvious, many companies do not visualize opportunities of a good
sustainable development practise and they often associate this approach like a
cost.
According to Porter and Kramer, CSR management, brings a real competitive
advantage, because this approach will bring leaders to reconsider their main
operations (procurement / processing / distribution) as L’Occitane or Patagonia.
The CSR is a source of innovation, of differentiation and cost optimization
approach in respecting the environment. Actually, it is a source of competitive
advantage.
Operations are actually a great opportunity of optimization in a sustainable
development approach. Indeed, the proper management of operations give
company to act on waste, limit carbon footprint, minimize risks (through
logistics, transportation of raw material and finish good) and develop
employees’ well-being to comfort them for maximizing productivity.
The four companies presented earlier show their interest of a CSR approach,
and they do not hesitate to affirm their values to their partners with a conduct
chart and they exposed an annual report (Dow Jones rate and annuals reports).
Still, the deployment of a CSR approach must be initiated by the top
management and it must have the backing of all stakeholders including
politicians.

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Applying a CSR approach requires rethinking completely company's operations,
it must constantly ask question about each action that could have
consequences on social, environmental and economic aspect. That’s why CSR
approach must be dynamic (through the time) and requires compromises.
The outcome of CSR approach performance is crucial, economic indicators and
objectives must be established and results must be shown to both stake and
shareholders, providing the achieved benefits.
Theory is good but we know that it’s not that easy to associate short term profits
and long term development. Howard Bowen, already proposed in 1953 in his
book "the responsibility of businessman" four mechanisms to "force" the
companies to begin a responsible approach:
• competition
• public-regulations
• consumer cooperatives organization
• auto-regulation
As a logical follow-up, Michael Porter has developed the concept of CSR
(Corporate Social Responsibility) and now speaks CSV (Shared Value
Creation). According to him, capitalism must be reformed and integrate a
broader View of its Integrating business model by all of society in what he calls
the Creation of Shared Value (CSV). This CSV is based on a review of the
business model of the company by following three axes:
• Redesign products and services
• Reconsider its value chain of Creation
• Developing clusters
Porter said that CSR concept was too focused on compliance and subject to
regulation. Benefits must be shared between the company and all its
stakeholders.
So definitely, and according to Porter’s point of view, operations are the critical
points to conduct a responsible approach. A company must analyse all its value
chain from the design operation product to the end life product operation, and
control each operation in order to respect environment and avoid CSR risk.
Our essay about CSR lets us discover 250 years of effective industrial era.
Today, we pay far too much to stay in our comfort zone and we need to get out
of this vicious cycle. We need to change the whole system and head towards a
new era. We need to conduct a critical analysis.
CSV could be the solution but the change has to be profound and companies
really need to think about the compatibility of ethics and business and
capitalism in order to respect the planet.
We already have many subjects of reflexion. We can adapt the end of economic
growth (long term development instead of short-term profits), deal with
environment destruction or live without fossil fuels and promote alternative
energy. We can also be ambitious and try to stabilize world population, consider
renewable resources like a budget that we cannot exceed. We need to cope
with the rate of natural replenishment, promoting design to cost and consume to
energy (lean production and reduce waste of people and resources). We should
“Think global act local”.
Finally, we have to keep in mind that human race created this situation so we
should be able to put it to an end.

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7. Appendix
7.1 Bibliography
« Strategy and Society: The Link between Competitive Advantage and
Corporate Social Responsibility », HBR, by Michael E. Porter and Mark R.
Kramer
« The Competitive Advantage of Corporate Philanthropy », HBR, by Michael E.
Porter and Mark R. Kramer
« Decoding the DNA of the Toyota Production System », HBR, by Steven Spear
and H. Kent Bowen
« The Path to Corporate Responsibility », HBR, by Simon Zadek
« La Responsabilité Sociétale des Entreprises » Rapport de la Mission confiée
à Sophie de Menthon par Monsieur Xavier Bertrand Ministre du Travail, de
l’Emploi et de la Santé - Septembre 2011
« Corporate social responsibility and stakeholder approach: a conceptual review
» par Nada K. Kakabadse (Int. J. Business Governance and Ethics, Vol. 1, No.
4, 2005)
« Corporate Social Responsibility: Concept and current Overview in Automotive
Industry within Europe, America and Asia » par Christina Ehlert (Munich
Business School - Seminar International Management)
La RSE, la responsabilité sociale des entreprises, théories et pratiques, par
François Lépineux, Jean-Jacques Rosé, Carole Bonanni, Sarah Hudson
(édition Dunod)
7.2 Webography
http://mhcinternational.com/articles/definition-of-csr
http://www.mallenbaker.net/csr/definition.php
http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-
responsibility/index_en.htm
http://www.unglobalcompact.org/aboutthegc/thetenprinciples/index.html
http://www.iisd.org/business/issues/sr.aspx
http://www.nolannorton.com/files/brochures/NNC_Brochure_How_Corporate_Social_Re
sponsibility_Leads_To_Value_Creation_In_Times_Of_Economic_Downturn.pdf
http://www.institutrse.com/bibliotheque-irse-management/notes-d-analyse-de-l-irse-
management/la-rse-contribue-t-elle-a-la-performance-de-lentreprise-les-termes-du-
debat-et-de-la-demonstration.html
http://www.rccsr.com/admin/upload/201078161252.pdf
http://www.fsg.org/KnowledgeExchange/Blogs/CreatingSharedValue/PostID/66.aspx
http://www.developpement-durable.gouv.fr/Responsabilite-societale-des.html
http://www.reportingcsr.org/_france-p-203.html
http://en.wikipedia.org/wiki/Corporate_social_responsibility
http://www.techsangam.com/2012/02/16/differences-between-csr-and-csv-creating-
shared-value/
http://en.wikipedia.org/wiki/Sustainability
http://www.michelin.com/corporate/FR/le-groupe/mobilite-durable
http://www.unglobalcompact.org/system/attachments/14159/original/brochure_RSE_20
11_EN.PDF?1329409592
http://www.petcore.org/content/l%E2%80%99occitane-eco-design-global-process

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http://fondation.loccitane.com/Default.aspx?c=1&l=2&a=4919&s=166
http://www.fsg.org/KnowledgeExchange/Blogs/CreatingSharedValue/PostID/66.aspx
http://archives-­‐lepost.huffingtonpost.fr/article/2009/03/20/1464332_la-­‐rse-­‐facteur-­‐
de-­‐changement-­‐de-­‐discrimination-­‐ou-­‐de-­‐competitivite.html
http://fr.loccitane.com/l'occitane-en-provence-france-produits-de-beaut%C3%A9--
parfumerie-et-soins-du-visage-naturels,74,1,23069,224897.htm
http://www.Bombardier.com/
http://www.patagonia.com/eu/frFR/home
http://www.seb.fr/
7.3 Video documents
« The Story of Stuff » by Anne Leonard
Michael PORTER interview on CSR – Harvard Business Review :
http://www.waterhealth.com/sites/default/files/Harvard_Buiness_Review_Share
d_Value.pdf
La responsabilité sociale des entreprises, un film de Rafael Gutierrez ,
collection Recherches ( 2011)
Réseau Alliances - Qu'est-ce que la RSE :
http://www.youtube.com/watch?v=dYgQ9HXT_3g
What is Stakeholder Theory? - R. Edward freeman:
http://www.youtube.com/watch?v=bIRUaLcvPe8
Prêt à jeter ou l'obsolescence programmée – Arte 2011:
http://www.youtube.com/watch?v=XMfz8Cbyxl0