Corporate Social Responsibility, business and society source of wealth

AFRECOMEnergie, Infrastructures et Développement DurableEnergy, Infrastructure & Sustainable Development

Chief Frederic Nguime Ekollo, CEO AfrecomDouala, Amcham - April 17, 2012efnguime@yahoo.frCell.: 77 09 70 00

Agenda

1. Why CSR?2. What is CSR?3.How to effectively deliver CSR ?4.The virtue matrix & the local content challenge in developping economies

AFRECOMEnergie, Infrastructures et Développement DurableEnergy, Infrastructure & Sustainable Development

1. Why CSR?

Corporate reputation is companie’s source wealth

Corporate reputations : strategic assets and sources of economic value

Profit, Sustainable development & Corporate social responsibility are integrated business challenges

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AFRECOMEnergie, Infrastructures et Développement DurableEnergy, Infrastructure & Sustainable Development

1. Why CSR?Corporate reputation is companie’s source of wealth

2010 Gulf of Mexico oil spill BP at World National Oil Companies Congress in London commented:

 “Everyone at BP is devastated, and we deeply regret what’s happened. Our hearts go out to those who have lost loved ones. And we are profoundly aware of our responsibilities to those people whose livelihoods and neighborhoods have suffered… I’d also like to make it clear this is not simply about fulfilling our legal obligations ….We feel a huge moral responsibility…. For many years BP has been a part of those communities. Thousands of our employees live in the region, as do thousands more of our retirees. And caring about the communities in which we operate is a core part of what BP is about. As challenging as it may seem in the current crisis, we intend to prove it here too.”

 

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1. Why CSR?Corporate reputation is companie’s source of wealth

1985 : Intel Corp’s new Pentium chip calculations limits

1995 : Motorola : cell phones and brain cancer. According to global business executives surveyed, Reputation recovery takes

approximately three and one-half years.

“Any assault on the reputation of a company is a crisis and reputations are built on how management responds to crises.”

Clarke Caywood, professor, Northwestern University. 

 

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1. Why CSR?Corporate reputation is companie’s source of wealth

Business values & corporate reputation

Vision & values first

Corporate reputation six categories 20 attributes

The Value cycle : from Shell, A better way to do business – External

affairs in the 21st century

 

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Corporate reputation

Profits & prospects

Financial valueSupportive stakeholders

Strategic initiatives

1. Why CSR?

Reputation management principles

Five principles

Distinctiveness

Focus

Consistency

Identity Transparency

Pillars of sustainabilityCSR intangle benefitsKey benefits & opportunitiesSlides 16 à 20 Present 1

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Fortune’s most admired companies have two things in common – They have performed well and their performance has been noted. Corporate reputation is a combination of both perception and reality.

Council of Public Remations Firms, US

1. Why CSR?

Key benefits & opportunities

Intangible benefits Improved image Sounder license to operate Increased credibility Consumer and employee loyalty and trust

Key benefits & opportunities Brand value & reputation Improvement s in human capital Revenue generation

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2. What is CSR? Sustainable Development : the basic paradigm

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Economic performance

Environmentalperformance

Social performance

Sustainability

Socio economic

Eco development

SocioEnvironmental

The 3 pillars of sustainability Source : Shell

2. What is CSR? CSR is generally understood to be the way a company achieves a balance or

integration of economic, environmental and social performances (imperatives) while at the same time addressing shareholder and stakeholders expectations . Canadian government

CSR as business contribution to the sustainable development goals. It is all

about how business takes account of its economic, social and environmental

impact in the way it operates; maximizing the benefits and minimizing the

downsides. UK Government

CSR is a concept whereby companies integrate social and environmental

concerns in their business operations and in their interaction with their

stakeholders on a voluntary basis. European Union

CSR as business commitment to contribute to sustainable Economic development, working with employees, their families, the local

community, and society at large to improve their quality of life - World Business

Council for Sustainable Development

CSR intangle benefitsKey benefits & opportunitiesSlides 16 à 20 Present 1

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AFRECOM3. How to effectively deliver

CSR?

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Developping local community

potential to bene-fit from impact ofan activity.

PHILANTHROPYSOCIAL INVESTMENT

STRATEGIC SOCIAL INVESTMENT

SOCIAL IMPACT MANAGEMENT

Communities recognise they benefit fairly from the revenues generated by the industry

Social impact is identified, planned and addressed as integral part of project management

Support for programs /projects related to corporate responsibilities.

Grants and Donations unrela- ted to operations or

business objectives.

Helpful Desirable Essential Critical

Valu

e to

Bus

ines

s &

So

ciet

yType

ofCSR

3. How to effectively deliver CSR?

AFRECOM3. How to effectively deliver

CSR?Rules for delivering social investment programs & projetcs Adopt a Strategic approach including policy, strategies, programmes & projects 3 main pillars of the approach

Stakeholder management Issues identification & management Strategic impact assessment

Projects/Programs Implementation on Strategic Social Investment Manage perceptions/expectations

Build Strategic MoUs with and put Delivery Responsibility to Communities

Tell me, I will forget

Show me, I may remember

Involve me, and I will care

Measuring & monitoring CSR activities performance

AFRECOM3. How to effectively deliver

CSR?

“When Prudential allowed people with AIDS to tap into the death benefits in their Life insurance policies to pay for medical expenses, the move generated by so much goodwill that competing insurers soon offered viatical settlements as well. Very quickly, corporate behaviour that had seemed radical became business as usual”

Source: Roger L. Martin in Harvard Business Review on CSR, « The virtue matrix: calculating the return on CSR »

AFRECOM3. How to effectively deliver

CSR?Twelve lessons learnt from successful CSR activities

1.Inclusiveness2.Be proactive3.Be honest4.Perception is reality5.Philanthropy only if required6.Philanthropy/ Social Investment projects cannot replace impact management.7.Stakeholder views are what count8. Know your audience:9.Face to face communications are the most effective method of communication10. Utilise existing communication hooks and materials (tools)11. Use people and resources across operations12. Encourage external stakeholders to take ownership

4. The virtue matrix & the local content challenge in develop-ping economies“In general, CSR in economicallyadvanced countries in generated by deep,solid foundations supporting relatively smaller strategic and structural frontiers.The civil foundations of countries with developing economies , by contrast, arerelatively shallow and weak, and their strategic and structural frontiers areCorrespondingly large”… “Nike, by running its Southeast Asian PlantAnd paying its workers in accordance to localCustoms and practices was accused of “averaging down” its level of CSR”.

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Frontier (Intrinsic)

Civil Foundation (instrumental)

Compliance

Source: Roger L. Martin in Harvard Business Review on CSR, « The virtue matrix: calculating the return on CSR »

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• Value Creation Value Added Knowledge retention Economic multiplier effect

• Economically Sound

Find an acceptable local content definition

• Equal or Better Quality Cost Delivery Safety & Environment

• Nurture not Subsidize

“What is the extra mile that you need to take?”

Key definition features Basic premises

Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation , the role of local content »

4. The virtue matrix & the local content challenge in developing economies

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Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation , the role of local content »

4. The virtue matrix & the local content challenge in developing economies

Technologytransfer

Research

technologyFocus onskills

Looking for technology transfer - Getting to the core will take time

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Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation , the role of local content »

4. The virtue matrix & the local content challenge in developing economies

Qualification Industrial policy Industry performance

Industry capacity

Technology qualification

Professional qualification

RegulationFinancing

Tax policy Foster SMEs

CompetitiveSustainable

HSE

Strategic issues

ChallengeMaximize local

content

Supplier development

Funding initiatives

Initiatives on competitiveness

The strategic approach

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Source: INSTOK, Willy Olsen in « Maximising benefits for the host nation, the role of local content »

4. The virtue matrix & the local content challenge in developing economies

Venezuela

Brazil

Nigeria

T&TLibya

Saudi

Canada

Norway

AzerbaijanAlgeria

TanzaniaEcuador

Bolivia

Ghana

UK

Mexico

Uganda

Kazakhstan

Russia

Iran

Australia

Timor Leste

Indonesia

PNGMalaysia

Old timers New initiatives

Local content policies in more and more countriesMany are looking for more benefits

Angola

HSE & RSE

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Dialogue with communities

Horizontal & vertical Partneship

Local content

Protection of environment (ecosystems & biodiversity)

Thank you