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Corporate Social Responsibility

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Corporate Social Responsibility

  1. 1. Corporate Social Responsibility THE RENEWED ERA Sondra Lintelmann-Dellaripa Director Corporate and Foundation Relations Connecticut Children's Medical Center Robert Nolan Corporate Relations Officer Connecticut Children’s Medical Center April 3 rd , 2005 AFP Conference
  2. 2. Corporate Social Responsibility The Renewed Era <ul><li>Old Model/New Model </li></ul><ul><li>Corporate Social Responsibility defined </li></ul><ul><li>Corporations renewed interest and the outcomes they are looking to achieve </li></ul><ul><li>Indicators of CSR </li></ul><ul><li>Who is actively engaged in CSR relationships </li></ul><ul><li>What do we as non profits have to offer </li></ul><ul><li>What will make us attractive as a partner </li></ul><ul><li>Risks </li></ul><ul><li>What will we need to be prepared </li></ul><ul><li>Discussion </li></ul>
  3. 3. “ The business of business is to make money for its shareholders” Milton Friedman, Economist Do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not. Interview of Milton Friedman with John McClaughry, contributing editor of Business and Society Review, on the topic of corporate social responsibility .
  4. 4. Old Corporate Philanthropy Model <ul><li>Focus on the nonprofit needs and its mission </li></ul><ul><li>Focus on tax benefit to company </li></ul><ul><li>Little relation to the business of business: Making money for shareholders </li></ul><ul><li>Competing for executives, and by default, company’s attention </li></ul>
  5. 5. New Corporate Philanthropy Model <ul><li>More along lines of a ‘business transaction’ </li></ul><ul><ul><li>NPO’s provide value added transaction </li></ul></ul><ul><ul><li>Corp pays price above actual cost of doing business </li></ul></ul><ul><ul><li>NPO’s must be able to perform more effectively and efficiently than company can </li></ul></ul><ul><li>Company is looking for ways NPO can support the company’s bottom line. </li></ul><ul><li>It’s about the company; It’s about making money for the shareholders </li></ul>
  6. 6. Triple Bottom Line <ul><li>Companies measuring their success by traditional method: the good old fashioned FINANCIAL bottom line </li></ul><ul><li>SOCIAL bottom line </li></ul><ul><li>ENVIRONMENTAL bottom line </li></ul><ul><li>Annual report includes or has addendum: Social Report </li></ul>
  7. 7. <ul><li>&quot;‘……there is no shortage of differing opinions about what businesses should do in various situations and about what constitutes ethical behavior “ </li></ul><ul><li>A. Coskun Samli - Author ‘Social Responsibility in Marketing: A Proactive and Profitable Marketing Management Strategy.’ </li></ul>Corporate Social Responsibility – What is it?
  8. 8. Corporate Social Responsibility – What is it? <ul><li>At its heart, CSR sounds a lot like the definition of strategic corporate philanthropy that we've been using for many years </li></ul><ul><li>Corporate Social Responsibility embraces two main concepts not found in traditional strategic philanthropy: Accountability & Transparency. </li></ul>
  9. 9. <ul><li>Corporate Social Responsibility is the alignment of business operations with social values </li></ul><ul><li>More than just ‘supporting’ a cause </li></ul><ul><li>Many of the changes a corporation implements in conducting its social responsibility strategy are internal changes in operations, products and materials. </li></ul>Corporate Social Responsibility – What is it?
  10. 10. <ul><li>Corporate Social Responsibility consists of integrating the interests of stakeholders-all those affected by the company’s conduct-into the company’s business policies and actions </li></ul><ul><li>Goal is to positively impact society while achieving business success </li></ul>Corporate Social Responsibility - What is it?
  11. 11. Corporate Social Responsibility - What is it? <ul><li>Corporate Social responsibility most often </li></ul><ul><li>encompasses a comprehensive set of: </li></ul><ul><li>Policies </li></ul><ul><li>Practices </li></ul><ul><li>Programs </li></ul><ul><li>That are integrated throughout the company into: </li></ul><ul><li>Business Operations </li></ul><ul><li>Decision making processes </li></ul><ul><li>Supply chain relationships </li></ul><ul><li>And includes responsibility for: </li></ul><ul><li>Present activities </li></ul><ul><li>Past actions </li></ul><ul><li>Future impact </li></ul>
  12. 12. In a study done by Boston College and the US Chamber of Commerce, leading-edge corporations indicate CSR has several features:   Very Important Important Operating with ethical business practices 87% 11% Treating employees well 85% 14% Making a profit, paying taxes, and providing jobs 82% 13% Providing safe and reliable products/services 81% 17% Having a good environmental record 57% 33% Working to improve conditions in the community 50% 34%
  13. 13. The Renewed Interest in Corporate Social Responsibility <ul><li>Consumers, and more importantly investors, increasingly want to know what's inside a company </li></ul><ul><li>Differentiators in the marketplace - price, quality, service, brand – AND reputation. </li></ul><ul><li>Reputation- the guardian of brand </li></ul><ul><li>CSR- the guardian of reputation </li></ul>
  14. 14. <ul><li>CSR is no longer a collateral concern but central to business success. </li></ul><ul><li>Some of the drivers: </li></ul><ul><ul><ul><ul><ul><li>The shrinking role of government </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Demands for greater disclosure </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Increased customer interest </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Growing investor pressure </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Competitive labor markets </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Supplier relations </li></ul></ul></ul></ul></ul>The Renewed Interest in Corporate Social Responsibility
  15. 15. Outcomes through Corporate Social Responsibility <ul><li>INTERNAL </li></ul><ul><li>Reduced Operating Costs </li></ul><ul><li>Increased Ability to Attract and Retain Employees </li></ul><ul><li>Decision Making Based on Corporate Code of Ethics </li></ul><ul><li>Increased Productivity and Quality </li></ul><ul><li>EXTERNAL </li></ul><ul><li>Improved Financial Performance </li></ul><ul><li>Enhanced Brand Image and Reputation </li></ul><ul><li>Increased Sales and Customer Loyalty </li></ul><ul><li>Reduced Regulatory Oversight </li></ul><ul><li>Access to Capital </li></ul>
  16. 16. How can we be sure….. <ul><li>Investment by companies in CSR has remained constant or increased in recent year </li></ul><ul><li>The scope and scale of corporate social responsibility is bigger than expected. Small and medium sized businesses are quite active in the corporate social responsibility arena. </li></ul><ul><li>More companies are creating departments and hiring directors of Corporate Social Responsibility </li></ul><ul><li>Dow Jones has an index of socially responsible companies </li></ul>Corporate responsibility is simply living our values — everyday, everywhere we operate .- Jeffrey M. Zalla, Corporate Responsibility Officer, Chiquita Brands International
  17. 17. <ul><li>Procter & Gamble has been heralded as the most consistent performer in the 100 Best Corporate Citizens </li></ul><ul><li>Fannie Mae </li></ul><ul><li>Intel </li></ul><ul><li>Avon Products </li></ul><ul><li>Herman Miller </li></ul><ul><li>Timberland </li></ul><ul><li>Cisco Systems </li></ul><ul><li>Southwest Airlines </li></ul><ul><li>ATT </li></ul><ul><li>Starbucks </li></ul><ul><li>Merck </li></ul>Who are the top dogs in CSR today?
  18. 18. What about SME’s? <ul><li>SMEs make up around 98% of the number of businesses in the US today </li></ul><ul><li>A thriving SME sector is one of the strongest features of a healthy economy. </li></ul><ul><li>Socially Responsible SME’s are simply good business for big business: a matter of controlling their supply chain risks </li></ul><ul><li>Small companies can reduce their costs by managing their environmental impact. </li></ul><ul><li>They can retain their best staff </li></ul><ul><li>They can sell more </li></ul>
  19. 19. CSR and the Non-Profit Sector <ul><li>What do we have to offer? </li></ul><ul><li>Pressure is on the corporate sector to have corporate accountability and transparency, good CSR </li></ul><ul><li>Corporations main experience is to create shareholder value and stay in business </li></ul><ul><li>Have neither the experience nor the expertise to confront world problems </li></ul>
  20. 20. CSR and the Non-Profit Sector <ul><li>Non-profit organizations can capture the momentum of this new perspective on Corporate Social Responsibility by becoming a resource for companies </li></ul>“ The value of creating practical partnerships and dialogue between business, government, and organizations cannot be underestimated” - WBCSD, 2002
  21. 21. <ul><li>Positioning ourselves as a resource, integrates our services and brand into the evolving CSR arena which translates into an increase in corporate partnerships, corporate donor loyalty and community support. </li></ul>CSR and the Non-Profit Sector
  22. 22. Non Profit Assets for CSR Alliances <ul><li>Powerful missions </li></ul><ul><li>Strong public presence </li></ul><ul><li>Access to customers and markets </li></ul><ul><li>Access to other businesses </li></ul><ul><li>Relationships with community and other influential leaders </li></ul><ul><li>Organizational expertise </li></ul><ul><li>Volunteer opportunities </li></ul><ul><li>Access to potential employees </li></ul><ul><li>Established programs and projects </li></ul><ul><li>Facilities </li></ul><ul><li>Products </li></ul>
  23. 23. Corporate/NPO Alliance Continuum <ul><li>Alliances can be classified from least to most intensive. </li></ul><ul><ul><ul><li>Corporate support for employee participation in NPO activities </li></ul></ul></ul><ul><ul><ul><li>Corporate contributions and gifts to NPO programs and activities </li></ul></ul></ul><ul><ul><ul><li>Corporate support for targeted NPO projects </li></ul></ul></ul><ul><ul><ul><li>NPO-corporate marketing affiliations </li></ul></ul></ul><ul><ul><ul><li>NPO certification of corporate business practices </li></ul></ul></ul><ul><ul><ul><li>Cause awareness and education alliances </li></ul></ul></ul><ul><ul><ul><li>NPO-corporate cause management alliances </li></ul></ul></ul>
  24. 24. Each level provides more direct and concrete benefit to the corporation’s CSR strategy and to the non profit’s mission. Chart created by Bradley K. Googins, Ph.D. Executive Director The Center for Corporate Citizenship at Boston College Corporate/NPO Alliance Continuum
  25. 25. Alliance Examples “ Corporate citizenship is not a luxury – but it is up to individual companies to decide how to be socially engaged.” P.B. Watts Chairman - Royal Dutch/Shell Group
  26. 26. Alliance Examples <ul><li>Engage core business operating resources and competencies </li></ul><ul><li>Are part of a company’s ongoing strategy </li></ul><ul><li>Are seen as contributing economic benefit to the company </li></ul><ul><li>Have a positive impact on NPO core constituent and mission advancement </li></ul>
  27. 27. <ul><li>Philanthropy: </li></ul><ul><ul><ul><li>Travelers </li></ul></ul></ul><ul><ul><ul><li>The Hartford </li></ul></ul></ul><ul><li>Strategic philanthropy </li></ul><ul><ul><ul><li>Dunkin Donuts </li></ul></ul></ul><ul><ul><ul><li>LEGO </li></ul></ul></ul><ul><li>Integration </li></ul><ul><ul><ul><li>AETNA “Easy Breathing” program </li></ul></ul></ul>Alliance Examples
  28. 28. Components for Integration <ul><li>Having a specific project or objective for collaboration </li></ul><ul><li>Strong commitment of high level executives </li></ul><ul><li>Cross sectional involvement within both partner organizations </li></ul><ul><li>Assignment to committed managers </li></ul><ul><li>Development and use of scorecards/metrics </li></ul><ul><li>Willingness to make core cause performance improvements part of managerial review </li></ul><ul><li>Ability to get supply chain/constituents involvement </li></ul>
  29. 29. Companies look for: <ul><li>Credibility as serious, knowledgeable, responsible organization </li></ul><ul><li>Experience in dealing with private companies and knowing how private enterprises operate </li></ul><ul><li>Ability to provide experience that will improve corporate outcomes </li></ul><ul><li>Capacity to maintain balance </li></ul><ul><li>Straight talk from the NPO on what they can and cannot bring to the alliance </li></ul><ul><li>Ability of NPO to provide real value to the company through sound recommendations </li></ul>
  30. 30. Potential Risks <ul><li>Over reliance on corporate sector may distract NPO from core mission toward popular concerns </li></ul><ul><li>Business influence/commercial pressure may lead NPO to undermine central mission </li></ul><ul><li>Crowd out of smaller NPO’s </li></ul>
  31. 31. What will we need to participate <ul><li>Information and education on CSR </li></ul><ul><li>Experienced leaders and staff </li></ul><ul><li>Dialogue </li></ul><ul><li>Strategy and mechanisms </li></ul><ul><li>Common Guidelines </li></ul>
  32. 32. Business and society are interdependent and we must ensure, through mutual understanding and responsible behavior, that the role of business in building a better future is recognized and encouraged. - WBCSD, 2002

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