Corporate Responsibility Rhetoric or Reality

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Corporate ResponsibilityRhetoric or Reality

• IEMA North West Regional Meeting

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• What is Corporate Responsibility?
• What are its origins?
• Why is it relevant to business?
• Corporate Responsibility in practice

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What is corporate responsibility?

• A business approach that creates shareholder
  value by embracing opportunities and managing
  risks deriving from economic, environmental and
  social developments
• Adapted from DJSI

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Definitions

• Sustainable Development is development that meets
  the needs of the present without compromising the
  ability of future generations to meet their own
  needs
• Corporate Responsibility is the business
  contribution to sustainable development
• Corporate Responsibility is not philanthropy
• Corporate responsibility has many names which are
  used interchangeably by corporates
• Corporate Social Responsibility (CSR)
• Corporate Sustainability
• Corporate Sustainable Development
• Corporate Citizenship

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CR covers a wide variety of issues

• Environmental
• Climate change
• Emissions/Discharges
• Waste
• Materials consumption
• Water Use
• Energy use
• Soil Depletion/Ag practices
• Land Use
• Biodiversity
• Mono-culture farming

• Social
• Human Health
• Workplace Conditions
• Human Rights
• Employee HS
• Access to Healthcare
• Community Impact
• Capacity Building
• Diversity
• Work/Life Balance
• Privacy

• Economic
• Financial Performance
• Investments capital/RD
• Executive/employee compensation
• Taxes paid
• Government subsidies
• Bribery/corruption
• Intellectual property/patents

Cross-Cutting

• Corporate governance
• Business ethics
• Business models
• Public policy

• GMO
• Product selection
• Supply chain
• Stakeholder engagement

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Only selected issues will be key to any company

• Environmental
• Climate change
• Emissions/Discharges
• Waste
• Materials consumption
• Water Use
• Energy use
• Soil Depletion/Ag practices
• Land Use
• Biodiversity
• Mono-culture farming

• Social
• Human Health
• Workplace Conditions
• Human Rights
• Employee HS
• Access to Healthcare
• Community Impact
• Capacity Building
• Diversity
• Work/Life Balance
• Privacy

• Economic
• Financial Performance
• Investments capital/RD
• Executive/employee compensation
• Taxes paid
• Government subsidies
• Bribery/corruption
• Intellectual property/patents

Cross-Cutting

• Corporate governance
• Business ethics
• Business models
• Public policy

• GMO
• Product selection
• Supply chain
• Stakeholder engagement

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Only selected issues will be key to any company

• Environmental
• Climate change
• Emissions/Discharges
• Waste
• Materials consumption
• Water Use
• Energy use
• Soil Depletion/Ag practices
• Land Use
• Biodiversity
• Mono-culture farming

• Social
• Human Health
• Workplace Conditions
• Human Rights
• Employee HS
• Access to Healthcare
• Community Impact
• Capacity Building
• Diversity
• Work/Life Balance
• Privacy

• Economic
• Financial Performance
• Investments capital/RD
• Executive/employee compensation
• Taxes paid
• Government subsidies
• Bribery/corruption
• Intellectual property/patents

Cross-Cutting

• Corporate governance
• Business ethics
• Business models
• Public policy

• GMO
• Product selection
• Supply chain
• Stakeholder engagement

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Only selected issues will be key to any company

• Environmental
• Climate change
• Emissions/Discharges
• Waste
• Materials consumption
• Water Use
• Energy use
• Soil Depletion/Ag practices
• Land Use
• Biodiversity
• Mono-culture farming

• Social
• Human Health
• Workplace Conditions
• Human Rights
• Employee HS
• Access to Healthcare
• Community Impact
• Capacity Building
• Diversity
• Work/Life Balance
• Privacy

• Economic
• Financial Performance
• Investments capital/RD
• Executive/employee compensation
• Taxes paid
• Government subsidies
• Bribery/corruption
• Intellectual property/patents

Cross-Cutting

• Corporate governance
• Business ethics
• Business models
• Public policy

• GMO
• Product selection
• Supply chain
• Stakeholder engagement

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The Big Squeeze
Enterprise Pressure
Societal Pressure

Shareholder value Quarterly earnings targets
cost cutting Take-over threats Opportunity
costs Globalisation
Rising expectations Triple bottom
line Stakeholder accountability Codes of
conduct Corporate Scandals
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Changes in societal expectations
The social responsibility of business is to
increase its profits. Milton Friedman
1970
Where should sustainability leadership come from?
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Companies
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NGOs
2001
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Governments
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International agencies
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Other
Source GlobeScan Survey of Experts, Environics
International 2001
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CR has gone mainstream
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Corporate Responsibility History in column
inches Source SustainAbility
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Growing the value we bring to society and
reducing our environmental imprint are business
strategies to grow shareholder value
Gary M. Pfeiffer Chief Financial Officer, DuPont
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Business case evidence
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CR is a business attitude that delivers value
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CR dilemmas in action
Alternative A
Alternative B
Cost 10M Simple Safe Negligible
Environmental Impact (BPEO)
Cost 40M Complex (Drilling, Disposing, ) 6
times higher risk of fatalities Negligible
Environmental Impact
Brent Spar
Deepwater Disposal
Re-Use
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Stakeholder Identification
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A true CR leader?

• Values included respect, integrity,
  communication
• Board oversight of CSR
• 40 of managers or above from minorities or women
• 6 environmental awards in 2000
• North-South divide promoted SD in India
• Had produced a CR report

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An integrated approach is key
Excellence in operational performance generates
financial returns, but enduring growth depends on
something more on being a responsible citizen
in the world and earning the continuing support
of customers, shareholders, local communities and
other stakeholders. At BP, environmental and
social responsibility is interwoven with
operational and financial responsibility
treated with the same discipline, rigour and
attention to detail. Lord Browne Environmental
Social Report 2002
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Achieving Integration
The topic is integrated into all relevant
management decisions
Finance
Annual publishing of targets and external
verification
Environment
Level of understanding
Initiate activities such as reporting and
stakeholder dialogue
Definition of (proactive) strategy
Review by external consultants
Social
SWOT analysis
Recognition of the need for a strategy change
Impulse from company stakeholders
Time
Source Novo Nordisk
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The future of reporting

• Operational and Financial Review Reporting on
  issues that are material to financial performance
• Global Reporting Initiative Standardisation of
  guidelines
• Time consuming Many valuable CR professionals
  spend their time preparing reports and answering
  questionnaires, not managing performance
• Reporting and management systems need to be
  combined to ensure increased efficiency and
  effectiveness

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SustManage Overview
HR E,HS Finance Facilities Manufacturing Performa
nce Corporate Reporting Business Administration
Report Analysis Key Metrics Web Based Monitor
Target Highly Customisable

• SustManage will
• Translate Strategic Intent into Practical
  Management
• Provide consistent delivery of CR
• Increase Financial Value
• Productivity
• Risk Management
• Resource Management
• Brand Reputation
• Operationalise Corporate Responsibility

Management Systems
Montage Software
SUSTMANAGE
Values Vision Policies Targets
People
Develop Teams Raise Awareness Understand
Culture Build Capacity
Corporate Objectives
Current CR Situation
SustManage Added Value
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oliver.vanheel_at_enviros.com www.enviros.com