2. Corporate Sustainability and ResponsibilityCSR 2.0
Lecturer: Amir Hossein RahdariCorporate Governance and Responsibility Development CentreCorporate Sustainability and Responsibility International
amir@cgiran.org
3. Outline
The ontological reasoning behind CSR-Macro view (why CSR has failed?)
CSR 2.0
CaseStudy:CocaCola,Patagonia,British-AmericanTobacco,BP, Ecovative,Enron,LehmenBrothers,Wal-Mart,Unilever,TOMShoes,AlittleWorld,BYD,Sainsbury,WTO,bhpbilliton,Puma,FujiXerox,,etc. Interface,Wholefood(ConsciousCapitalism)andBenandJerry’s
4. Has CSR failed as a Response???
ifeverycompanyontheplanetweretoadoptthebestenvironmentalpracticeofthe“leading”companies,theworldwouldstillbemovingtowardsuredegradationandcollapse. Paul Hawken
Ibelievethatthevastmajorityofcompaniesfailtobe“good”corporatecitizens.Mostsustainabilityandcorporateresponsibilityprogramsareaboutbeinglessbadratherthangood.Theyareaboutselectiveandcompartmentalized“programs”ratherthanholisticandsystemicchange. Jeffrey Hollender
5. CSR and Corporate Sustainability and Responsibility
CSR,thefullversionofwhatwehavetothat,isfocusedatthemicrolevel–supportingsocialorenvironmentalissuesthathappentoalignwithacompany’sstrategy,butwithoutnecessarilychangingthatstrategy–SystemicCSRfocusesonunderstandingtheinterconnectionsinthemacrolevelsystem(society,communities, economiesandecosystems)andchangingacompany’sstrategytooptimizetheoutcomesforthislargerhumanandecologicalsystem.
6. Goals of Sustainable Development
▪Economic Development
▪Social Inclusion
▪Environmental Integrity
7. CSR Has Failed: Almost all measures are going banana
JohanRockström -09
Planetary Boundaries:
Climate Change
Ocean Acidification
Stratospheric Ozone Depletion
Nitrogen Cycle-Phosphorous Cycle
Freshwater Use
Land Use
Biodiversity Loss
Atmospheric Aerosol Loading
Chemical Pollution
8.
9.
10.
11. Living
Planet Index
Global Ecological Footprint (1961-2003):
Ameasure of the
productive capacity of the biosphere
used to provide natural
resources and absorbwastes.
12.
13. Population
4 Population Scenarios for 2100
Current Fertility Scenario –28.6 B
High Fertility Scenario (2+1.5 children) –16.6 B
Medium Fertility Scenario (2 children) -10.8 B
Low Fertility Scenario (1 child) –6.8 B
20. Local CSR drivers
Driver
Root
Cultural Tradition
CSR often drawsstrongly on deep-rooted indigenous cultural traditions of philanthropy, business ethics and community embeddedness.
Political Reform
CSR cannotbe divorced from the socio-political policy reform process, which often drives business behavior towards integrating social and ethical issues.
Socio-economicpriorities
CSR is often directlyshaped by the socio-economic environment in which firms operate and the development priorities this create.
Governance Gaps
CSR is a way to plug “governance gaps” left by weak,corrupt or under-resourced government that fail to adequately provide various social services.
Crisis response
CSR responses can be catalyzedby economic, social, environmental, health-related or industrial crises.
21. Global CSR drivers
Driver
Root
Market access
CSR may be seen as an enabler for the companiesin one country or region trying to access markets in other parts of the world.
International standardization
CSR codes, guidelinesand standards are a key driver for companies wishing to operate as global players.
Investment incentives
CSR is given an incentive bythe trend of SRI.
Stakeholder activism
CSR is encouragedthrough the activism of stakeholders/pressure groups acting to address the perceived failure of the market and government policy.
Supplychain integrity
CSR among SMEsboosted by requirements from MNCs.
22. Has CSR failed as a Response???
CSRisfocusedatthemicrolevel–supportingsocialorenvironmentalissuesthathappentoalignwithacompany’sstrategy,butwithoutnecessarilychangingthatstrategy–SystemicCSRfocusesonunderstandingtheinterconnectionsinthemacrolevelsystem(society, communities,economiesandecosystems)andchangingacompany’sstrategytooptimizetheoutcomesforthislargerhumanandecologicalsystem.
23. Radical Views
‘Companies still thinking about the environment as a social responsibility rather than a business imperative are living in the dark ages.’ Carter RobertsDifferent views
Sustainability: give as much as you take Label War
24. Label WarCorporate Social ResponsibilityBusiness EthicsCorporate GovernanceCorporate PhilanthropyCorporate SustainabilityStakeholder EngagementCorporate CitizenshipSocial EntrepreneurshipEnvironmental ManagementBusiness and Human RightsCorporate AccountabilityOccupational Health and Safety
32. Our Ability to Respond
It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities. Josiah Charles Stamp
34. CSR 1.0: Ages and Stages of CSR
Defensive CSR: Risk and Compliance (Age of Greed)
Charitable CSR (Age of Philanthropy)
Promotional CSR (Age of Marketing): PR
Strategic CSR (Age of Management): codes and standards, compliance -Strategic
Transformative CSR (Age of Responsibility)
35. CSR 1.0and 2.0: Ages and Stages of CSR
Defensive
Charitable
Promotional
Strategic
Transformational
36. CSR 1.0: Ages and Stages of CSR
BusinessAge
Stage of CSR
MO
Key Enabler
Stakeholder Target
Greed
Defensive
Ad hoc interventions
Investments
Shareholders, governments and employees
Philanthropy
Charitable
Donations
Projects
Communities
Marketing
Promotional
PR
Media
GeneralPublic
Management
Strategic
ManagementSystems
Codes
Shareholders% NGOs/CSOs
Responsibility
Systemic
Business Models
Products
Regulators and customers
37. The Age of Greed
Earth provides enough to satisfy every man’s need, but notevery man’s greed. Mahatma Gandhi
38. The Age of GreedGreed
Old English-grædig-hunger and eagerness
Avarice –old French (avere) –to crave or long for
Greek –philagyros-money-loving
Deutsch-habsüchtig – to have a sickness or disease
39. Defensive CSR
0
10
20
30
40
50
60
70
80
90
Jan
Apr
Jun
Aug
Oct
Nov
DECEnron 2001Stock price
Dollar
40. The Age of Philanthropy
I resolved to stop accumulating and begin the infinitely more serious and difficult task of wise distribution. Andrew Carnegie
I believe it is my duty to make money and still more money and to use the money I make for the good of my fellow man, according to the dictates of my conscience. John D. Rockefeller Sr.
42. Carneigie’s Principles of WealthPrinciple of Charity:
Wealthy should give to the needy. The Stewardship Principle:
Hold money in trust.
Caveat: Only Business people that.
43. Charitable CSR
Standard Oil
Price fixing
Cleveland Massacre
4 month
23/26 competitors
How companies make money not just how they give it away?
44. The Age of Marketing
You can’t get there from here by any mechanism that depends on support from institutions that benefit from the status quo. Paul Hawken
46. The Age of Management
Increasingly, we think in terms of a “triple bottom line”, focusing on economic prosperity, environmental quality, and –the element which business has tended to overlook –social justice. John Elkington
47. Strategic CSR
▪Integration of CSR into Core business without changing the strategy
▪Coca Cola –Water management (Core)
▪Codes and Standards
▪Blue washing
48. CSR Has Failed: Incremental CSR
▪ ISO 90001; ISO 14001; ISO 26000
▪ Kaizen philosophy
49. CSR Has Failed: Peripheral CSR
▪MNCs are the most .
▪SMEs are not active in CSR.
▪HarmReduction
▪AFocusonHarmReduction, publishedon6November2013, covershowwe'reworkingtoaddressthepublichealthimpactofourproducts.
▪Source:www.bat.com
50. CSR Has Failed: Uneconomic CSR
▪Vice fund (outperform)
▪Fair trade
▪Vermont Organic Produce
▪Eco-efficiency (cost reduction)
52. Web 1.0 vs. CSR1.0
▪1996 –45 m users
▪250,000 sites
▪Brochures
▪One-way communication
▪Netscape (innovative) vs. Microsoft (standardization)
▪Philanathro-capitalism
▪How the rich can save the world.
▪Body shop
▪Ben & Jerry’s
53. Web 2.0 vs. CSR 2.0
▪Web 2.0
▪Collective intelligence
▪Collaborative networks
▪User participation
▪Social media
▪Knowledge syndication
▪Beta testing
▪New philosophy
▪CSR 2.0
▪Global commons
▪Innovative partnership
▪Stakeholder involvement
▪Stakeholder panels
▪Real-time reporting
▪Social enterprise
▪New business model
58. The Principle of Creativity
Creativity represents a miraculous coming together of the uninhibited energy of the child with its apparent opposite and enemy, the sense of order imposed on the disciplined adult intelligence. Norman Podhoretz
62. The Principle of Scalability
Green technology –going green –is bigger that the Internet. It could be the biggest economic opportunity of the 21stcentury. John Doerr
64. The Principle of Responsiveness
As our planet’s life-support system begins to fail and our very survival as a species is brought into question, remember that our children and grand children will ask not what our generation said, but what it did. HRH The Prince of Wales
65. Responsiveness
2.6 B not have proper sanitation
Every$1spentonwaterandsanitationgeneratesreturnsof$8insavedtime,increasedproductivityandreducedhealthcosts.
2,000childrendieeveryyearfromdiarrheacausedbyunsafewaterandpoorsanitation.
66. The Principle of Glocality
We must ensure that the global market is embedded in a broadly shared values and practices that reflect global social needs, and that all the world’s people share the benefits of globalization. Kofi Annan
68. The Principle of Circularity
In economics, they talk about “end of life” as if something has just lost its value and it’s just fallen off a cliff somewhere. We don’t talk about end of life, so that’s a fundamental difference. William McDonough
Right now, the world runs on consuming and discarding. We’re saying that we’re taking responsibility for our products from birth ‘til birth. YvonChouinard
69. Circularity: Cradle-to-cradleFonebak
Mobile 9 month in UK
Source: http://www.c2ccertified.org/products/scorecard/citop_zero
Fuji Xerox 98.5% zero waste (Thailand, Japan and Malaysia) -Circular Economy
Interface Floor (Mission Zero)
Puma environmental profit and loss account
70. Definition: Corporate Sustainability and Responsibility
CSRisthewayinwhichbusinessconsistentlycreatesharedvalueinsocietythrougheconomicdevelopment,goodgovernance,stakeholderresponsivenessandenvironmentalimprovement.
CSRisanintegratedapproachbybusinessthatbuilds,ratherthanerodesordestroys,economic,social,humanandnaturalcapital. Creative destruction and creative reconstruction
71. CSR 2.0 DNA Model: Inclusive Definition
DNA Code
Goal
Key indicator
Value Creation
Economic Development
Capital investment
Beneficialproducts
Inclusive Business
Good Governance
Institutional effectiveness
Leadership
Transparency
Ethical Conduct
Societal Contribution
Stakeholder orientation
Philanthropy
Fair labour practices
Supplychange integrity
Environmental Integrity
Sustainable ecosystem
Ecosystem protection
Renewable resources
Zero-waste production
72. Responsibility: Take away
Responsibilityisthegatewaytoachievement.Andachievementisthepathtogrowth.Beingresponsibleforsomethingmeansthatweareentrustedwithrealizingitspotential,turningitspromiseintoreality. Wearethemagiciansofmanifestation,readytoprovetoourselvesandtootherswhatcanhappenwhenweputourmindstoit,ifwefocusourenergiesandconcentrateourefforts. Dofewthingsbutdothemwellisthemaximofresponsibility.
Beingresponsiblealsodoesnotmeandoingitallourselves. Responsibilityisaformofsharing,awayofrecognizingthatwe’reallinthistogether.‘Soleresponsibility’isanoxymoron.
73. Case Study: Interface Carpet 1994 (1995-2020) Mount Sustainability 2020 Mission Zero (business model) Zero impact-Zero footprint
74. The Age of Responsibility
Thefirstindustrialrevolutionisflawed.Itisnotworking.Itisunsustainable.Itisamistakeandwemustmoveontoanotherandbetterindustrialrevolutionandgetitrightthistime.
For nearly 11 years, now, we have been on this mission; we call it, “climbing Mt. Sustainability”, a mountain higher than Everest, to meet at that point at the top that symbolizes zero footprint—zero environmental impact. Sustainable: taking nothing, doing no harm. Ray Anderson
75. Impact Assessment (Paul and Anne Erhlick) First Industrial Revolution:
Extractive
Take-make-waste
Labor productivity
Carbon intensiveSecond Industrial Revolution:
Renewable
Cyclical
Waste-free
Resource Productivity
Carbon free
77. Interface Changes
▪75% reduction in water usage
▪20% renewable product parts
▪27% renewable energy use
▪74000 T carpet from landfills
(Reverse-logistic and closing the loop)
▪1995-2020
▪82% net greenhouse emissions
▪Two-third sale increase
▪2X profit
▪60% fossil fuel reduction per unit of production
78. Takeaways: Testing Fit for the Future ▪Admission–Guilty
▪Plunder of Earth
▪Mission Zero 2020 ▪Ambition–Setting Goals BHAG (Big Hairy Audacious Goal) Conscious Capitalism
79.
80. Gazillion Thanks
Lecturer: Amir Hossein RahdariCorporate Governance and Responsibility Development CentreCorporate Sustainability and Responsibility International
amir@cgiran.org
