Towards business responsibility

Conference „Sustainable Development and Small & Medium-Sized Enterprises“

Leipzig, Germany June 20th

Towards business responsibility

- MNEs & SMEs engagement to Corporate Social Responsibility (CSR)

Karen MurilloResearch Assistant / PhD Cand.

Chair of Environmental & Resource Management

TU Bergakademie Freiberg

TU Bergakademie Freiberg - Chair of Environmental & Resource ManagementTel.: +49 3731 392948 Fax: +49 3731 393239 Lessingstr. 45 09599 Freiberg, Germany

6/30/2009

Content

1. Sustainable development

2. Major drivers for Corporate Social Responsibility (CSR) in 2. Major drivers for Corporate Social Responsibility (CSR) in Multinational Enterprises (MNEs)

3. SMEs in the supply chain

4. CSR by SMEs

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Goods &

Amenity-service Base

Waste Sink

The relationship between theeconomy and the environment

The environment

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Goods & services

Households

Factors of production

Firms ECONOMY

Life-support Services

Resource Base

� DISSPERSEDMATERIAL

� MATERIAL� ENERGY

low entropy high entropy

� DISSPERSEDENERGY

The three dimensions of sustainable development

SUSTAINABILITY

INDUSTRYCIVIL

SOCIETYGOVERNMENTBUSINESSE

NV

IRO

NM

EN

T

SO

CIE

TY

EC

ON

OM

Y

Making the concept of sustainable development operational

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SUSTAINABILITY

INDUSTRYCIVIL

SOCIETYGOVERNMENTBUSINESS

Corporate Social Responsibility (CSR)

� CSR means balancing the

interests of a wider group of

stakeholders and strategically

managing the

interconnected social,

environmental and economic

impacts of business activities

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Corporate responsibility reporting trends

� 1992-2007: significant increase

in CR reporting from 27 to 2,500

reports per year.reports per year.

� Japan, UK, France, Germany,

USA and Netherlands are in the

lead.

� Utilities, Oil & Gas, Automotive,

Electronics and the Financial

sector are major reporters.

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Major drivers for corporate responsibility

reporting in MNEs (2008)

2005 2008

Ethical considerations 53% 69%

Economic considerations 74% 68%

Reputation or brand 27% 55%

World‘s largest 250 companies (Global Fortune 250)

Reputation or brand 27% 55%

Innovation and learning 53% 55%

Employee motivation 47% 52%

Risk management and risk redution 47% 35%

Strengthened supplier relationships 13% 32%

Access to capital 39% 29%

Cost savings 9% 17%

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Small and medium-sized enterprises

“The category of micro, small and medium-sized enterprises

(SMEs) is made up of enterprises which employ fewer than

250 persons and which have an annual turnover not

exceeding 50 million euro, and/or an annual balance sheet total not exceeding 43 million euro.“ total not exceeding 43 million euro.“

Article 2 of the Annex of Recommendation 2003/361/EC

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SMEs contribution to development

SMEs make up over 90% of businesses worldwide

SMEs account for 50-60% of employment, they tend to employmore labour-intensive production processes than large more labour-intensive production processes than large enterprises

� In Europe: 99% ; 65 million jobs

� In Asia-Pacific: 90% ; > 50% of the workforce

It is through the promotion of SMEs that the international comunity can make progress to halve poverty levels by2015.

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The role of SMEs in thesupply chain

� Globalisation has increased the

amount of Western purchasing from

SMEs in developing and transition

countries

� MNEs seek reliable domestic

suppliers for their supply chains

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� CSR is clearly affecting SMEs

through the supply chain

relationships

� CSR needs to be considered in terms

of its net effect on society

Silent corporate social responsibility…

"The fact that small businesses have a heightened

requirement for good, multi-skilled employees, strong

personal relationships and successful local engagement

means that small firms can be a good environment for

corporate social responsibility to flourish.“ Draper, S. (2000) Corporate Nirvana

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Draper, S. (2000) Corporate Nirvana

Examples of silent corporate social responsibility in SMEs:

� SMEs take a more long-term view of investment in an individual

locality

� Some family-owned companise show strong religious/philantthropic

approaches

� SMEs have close links to the local civil and cultural environment and

may be more aware of local risks and emerging issues than

internationally managed companies

Thank youThank you

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