Corporate Social Responsibility

Corporate Social ResponsibilityEthicsCorporate CitizenshipCorporate accountabilitySustainability

CSR:Achieving commercial success in ways that honor ethical values and respect people, communities and the natural environment

CSR:Addressing the legal, ethical, commercial and other expectations society has for business and making decisions that fairly balance the claims of all key stakeholders

CSR includes issues related to:Business ethicsCommunity investmentEnvironmentGovernanceHuman rights Marketplace

Business Importance:Improved Financial PerformanceReduced Operating CostsEnhanced Brand Image and ReputationIncreased Sales and Customer Loyalty

Business Importance: (cont.)Increased Productivity and QualityIncreased Ability to Attract and Retain EmployeesReduced Regulatory OversightAccess to Capital

Key Developments:Increased Stakeholder ActivismProliferation of Codes, Standards, Indicators and GuidelinesMore Sophisticated Shareholder EngagementAccountability Throughout the Value Chain

Key Developments: (cont.)Transparency and ReportingGrowing Government Interest and ActionConvergence of CSR and Governance AgendasGrowing investor Pressure and Market-Based Incentives

Key Developments: (cont.)Advances in Information TechnologyPressure to Quantify CSR Return of Investment

External Standards:AccountAbilityThe Global Reporting InitiativeSocial Accountability 8000United Nations Global CompactOrganization for Economic Cooperation and Development Guidelines for Multinational Enterprises

External Standards (cont.):The Caux Round Table (CRT)The Global Sullivan PrinciplesThe Keidanren Charter for Good Corporate BehaviorAPEC Business Code of Conduct

Implementation Steps:Mission, Vision, Values StatementsCultural ValuesCorporate GovernanceManagement StructuresStrategic PlanningGeneral AccountabilityCSR ReportingUse of Influence

Leadership Examples:Chiquita Brands International, IncStarbucks Coffee CoB&QNovo Nordisk A/S

Interface, IncOur Goal: to be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions: People, process, product, place, and profitsby 2020and in doing so we will become restorative through the power of influence.

Interface, Inc (cont.)Our Vision: Interface will become the first name in commercial and institutional interiors worldwide through its commitment to people, process, product, place and profits. We will strive to create an organization wherein all people are accorded unconditional respect and dignity; one that allows each person to continuously learn and develop. We will focus on product (which includes service) through constant emphasis on process quality and engineering, which we will combine with careful attention to our customers needs so as always to deliver superior value to our customers, thereby maximizing all stakeholders satisfaction. We will honor the places where we do business by endeavoring to become the first name in industrial ecology, a corporation that cherishes nature and restores the environment. Interface will lead by example and validate by results, including profits, leaving the world a better place that when we began, and we will be restorative through the power of our influence in the world

Business and Corporate Accountability

Business Importance:Improved financial performanceHeightened public credibilityReduced costsIncreased attractiveness to investorsImproved relationship with shareholders

..more than 80% of investors would be willing to pay more for the shares of a well-governed company than for a poorly governed company with comparable financial performance.(From a 2000 survey of 200 large institutional investors conducted by McKinsey & Co., the World Bank, and Institutional Investors regional institutes)

Business Importance (cont.):Early identification of potential liabilitiesMarketplace advantagesImproved overall managementImproved organizational effectivenessDecreased risk of adverse publicity

Key Developments:Growth of CSRIncreased demand for transparencyGrowth in sustainable reportingGreater government regulationIncreased shareholder activismProliferation of social and environmental reporting standardsIncreased media attention

Implementation Steps:Set objectivesReview company materialsReview management systemsEngage board of directorsDefine and engage stakeholdersDevelop formal internal and external communication mechanismsEngage in continuous improvement

Green Product Design

Business Importance:Decreased costs & increased profitsDecreased production timeCustomer satisfactionCustomer retentionRecognitionProactive preparation for regulation

Key Developments:Take-back laws and extended product responsibilityUpdates to existing regulations affecting product designIndustry/government voluntary initiativesIndustry/NGO collaborationRestricted materials lists

Business Importance:Decreased costs and increased profitsDecreased production timeCustomer satisfactionCustomer retentionRecognitionProactive preparation for regulation

Key Developments:Take-back laws and extended product responsibilityUpdates to existing regulations affecting product designIndustry/government voluntary initiativesNew systems of commerceRestricted materials listAcademic programs

External Standards:Eco-labeling/enviromental certificationISO 14000Restrictions on use of hazardous materialsEU directive 94/62 on packaging and packaging wasteProduct-specific mandates ond voluntary efforts

Implementation Steps:Develop business strategies to capture value from lifecycle thinkingPractice full-cost accountingExplore reuse options for materials and productsDevelop markets for green-designed productsEstablish ground rules for product designPerform analysis during product design and development

Leadership Examples:Proctor & Gamble (P&G)VolvoElectrolux

Sustainable Business Practices

Sustainable Development:Meeting the needs of the present without compromising the ability of future generations to meet their own needs.(UN Commission on Environment and Development)

Business Importance:Access to capitalNew Market developmentAsset retentionBrand image and customer retentionInnovation

Key Developments:Increase in sustainability reportsGrowth of markets concerned with sustainable products and servicesStrategic partnershipsFinancial markets Government-Industry partnership initiatives

Sustainable goals and indicatorsMilestonesAre we moving towards our destination or heading in the opposite way

Economic VitalityGoal: An economy that is competitive, diverse, and attractive to business; that maintains and expands assets and capital; that provides a variety of entry-, middle-, and high-level jobs; and that promotes the well-being of a community and its workforce

Economic Vitality IndicatorsPer capital Income:Why do we care?Economic well-being one of three axes of sustainability Disposable income a measure of economic well beingHaving the option to make choices a good thing

UnemploymentWhy do we care?Unemployment affects individual and indicates the health of the economyCommunities with high unemployment have increased crime, domestic violence, substance abuseLess tax revenue available as resource against social problems

Productivity of LaborWhy do we care?Measures the value of output relative to the resources used to produce it.Higher incomes and living standardsMore or resources available for reinvestment in growth and the ability to remain competitive

4. Share of Households Below Poverty LineWhy do we care?High poverty rates impose costs on welfare systems and slow economic growth of communityPoverty usually occurs along with poor health, decreased economic opportunity, higher crime ratesreduce quality of life

Energy EfficiencyWhy do we care?Measures the output of our economy relative to the amount of energy used.Major input into productive activity and consumptionMore efficiency, lower environmental cost

EquityGoal: A more equitable distribution of the positive and negative products of civilization in the community. This includes fair access to healthy environments, good healthcare, quality education, governmental decision-making, economic opportunity, and natural and cultural amenities

6. Why do we care?A society in which everyone feels a welcome and equal participant, where people take ownership, will be more sustainable better able to grow, evolve, adapt

Racial disparities in Infant MortalityWhy do we care?High infant mortality is sign that pregnant women and newborns are not receiving adequate nutrition and medical careRacial disparity shows inequity in access to careInfant health care crucial to lifelong mental health and physical development

Strong Community, Culture, RecreationGoal: Create or enhance within communities a positive sense of local identity and individual belonging, which promotes respect among neighbors, increases everyones feelings of safety and security, and provides abundant cultural and recreational opportunities

Newspaper CirculationWhy do we care?Reading newspaper fosters community awareness and encourages people to take ownership and engage with their communityNewspapers provide information to enable people to get involved with local decision-making and disputes

Crime RateWhy do we care?Crime is indicator of deeper social and economic issues.Increase crime rate may result from decrease in job opportunity, economic stagnation, inadequate education, or inadequate policing.

10. Open SpaceWhy do we care? Protects natural environment by providing habitat for wildlife.Absorbs rainfall, minimizing risk of floods and sedimentation of waterwaysProvides recreation on land and waterProtecting space while it is still relatively inexpensive, ensures room for parks and natural areas against development

Quality EducationGoal: A quality, lifelong education equally accessible to all, whereby individuals learn to be critical thinkers and engaged citizens with an understanding of and respect for the systems that support civilization (social, economic, environmental); and which provides students with the knowledge and skills necessary for employment and personal fulfillment.

High School Graduation RatesWhy do we care?Demands for highly skilled, trained, educated employees has steadily increasedHigh school education minimum in the labor marketRequirement for accessing various forms of higher education and trainingUseful measure of what will be availabe to young people later in life

Student/Teacher RatioWhy do we care?Used to assess potential for student/teacher interaction and communicationReasonable proxy for establishing average class size and student-teacher interaction

Standardized Test ScoresWhy do we care?Performance on test provides understanding of how many students are acquiring basic skills in reading, math, writing.Indication of whether students are being educated well enough to meet needs.

Higher EducationWhy do we care?Strong education systems create large educated labor easing location of high tech industriesStrong education systems help to prevent emigration of students from region

Good GovernmentGoal: A community system of governing that is efficient, effective, trustworthy, and responsible to citizens and their needs; and that actively promotes good citizenship and effective

Voter TurnoutWhy do we care?Basic measure of how many of us are exercising the right to self-governmentIndicator of collective awareness of community government

Decent HousingGoal: A variety of desirable housing options for a community members, at every income level

Affordability of Rental HousingWhy do we care?An essential element in the well-being of community members and economic successLack of affordable housing hinders economic growth, making it difficult for firms to maintain labor forceHigh cost of housing hinders economic growth

Home Prices vs. IncomeWhy do we care?Homeownership offers degrtee of security through financial equityEstablishes residents as long-term stakeholders in the communityHomeowners more likely to invest in physical improvements and social programs to cohere the community

Trends in New HousingWhy do we care?Indicator sheds light on where new housing is being built urban, suburban, rural- to monitor suburban sprawl considered a significant threat to sustainabilityMonitor range of community housing choices and prices

Healthy PeopleGoal: The highest opportunity for community members to be healthy, with access to high-quality health care and minimized exposure to health risks

Life ExpectancyWhy do we care?Reflects the health and well-being of community population and relative access to resources that help keep people alive.Longer lives can adversely impact the environment and requires responsible sustaiinable decision making

Infectious DiseasesWhy do I care?Need control to counter catastrophic effect on public health, social institutions, the economySocial cohesion diminished if poor or minorities suffer more from infectious disease than middle class whites

AsthmaWhy do we care?Common respiratory condition often triggered by environmental conditions as ozone concentrations, care exhaust, dust mites, roaches, rats, mice, tobacco smoke.More a problem for low-income families and children unable to avoid such conditionsAsthma linked to other sustainability issues of poverty and environmental health

Occupational Safety and HealthWhy do we care?Key fundamental rights that reflect values and define social aspects of sustainabilityAs basic right, problems impose economic costs on affected households and communityInjuries raise insurance rates, cost of doing business, cost of goods and services

Efficient Transportation and Land UseGoal: A choice of efficient, convenient, safe, and affordable transportation and land use options, providing access to jobs, shopping, recreational centers, schools, airports, and rail centers

Need for Road and Bridge RepairsWhy do we care?Accumulated road and bridge repairs is indicator of whether the communitys economy, heavily dependent on transportation, is being sustained.Increase in repairs suggests heading for physical and economic bottlenecks and a constraint on the ability of freight and people to move through the community

Vehicle Miles Traveled Per CapitaWhy do we care?VMT is a measure of transportation system development increase imposes costs, including time lost from traffic congestionEconomic competition compromised by delayed workers, consumers, goodsVehicles significant source of pollution

Workplace Transportation OptionsWhy do we care?Tracks location of new office complexes according to accessibility to public transit and personal vehicleLocation of development of major employment centers today is key to steering land use patterns tomorrow

Natural and Ecological IntegrityGoal: Preserve and restore communitys ecosystems and the full complement of species that chare the community.

Loss of Freshwater Wetlands.Why do we care?One of the key components of environmental sustainability and acts as natural filter for ground water supply, reducing the need for expensive investments in water purificationNatural flood protectionHabitat for migrating birds and other wildlifeIncubators for sport and commercial fisheries

Nesting Water Bird PopulationsWhy do we care?Birds at the top of the food chain and indicators of general health of the ecosystem they inhabitBecause reproductive systems sensitive to concontamination, good indicators of pollutionAquatic ecosystems filter pollution and sediments

River HealthWhy do we care?Level of dissolved oxygen (DO) in the river systems is widely-used indicator of water quality and ability of rivers to support aquatic and human life.Measure of how well community is sustaining natural systems in face of development.

Marine Water QualityWhy do we care?Quality of shellfish habitat way to track overall quality of coastal ecosystemsShare of shellfish habitat deemed safe for harvesting by public officials is simple indicator of water quality and ecosystem health

Protected Natural ResourcesGoal: Maintain the community natural resource base

Total Energy ConsumptionWhy do we care?Changes in energy price or supply have direct impact on all sectors of the economy.Energy production and consumption create pollution in form of greenhouse gases, toxins, and radioactive waste.Fossil fuels are non-renewable and therefore, our energy system is likely unsustainable.

FarmlandWhy do we care?Farmland recharges our groundwater, provides habitat for wildlife, protects soil

Ocean and Bay Beach ClosingsWhy do we care?Highly visible events that can drive away potential visitors and reduce revenues generated by coastal tourism.Closings usually due to storm water runoff, elevated levels of bacteria or floating debris, failures in sewage collection and treatment systems resulting in unsustainable conditions for community health and economy.

Preserved and Developed LandWhy do we care?Rapid urbanization cuts into open space needed for recreation, agriculture species habitatMaintaining a balance among conflicting land uses is key element of sustainability

Minimal Pollution and WasteGoal: Minimize the generation and accumulation of pollution and waste; maximize the use of efficient, clean, and sustainable energy sources; and increase consumer choices for ecologically friendly products.

Greenhouse Gas EmissionsWhy do we care?US is the largest emitter of greenhouse gases, 23% contribution from 5% of its population

35. Drinking Water QualityWhy do we care?A community that cannot provide water to its citizens, due to either natural or human contamination, cannot be sustained.

Solid WasteWhy do we care?Buried or burned solid waste can lead to ground water pollution, poor air quality, land contamination, and other forms of environmental degradation.Political and social battles over where to locate and how to pay for waste disposal facilities have been historically contentious

Air PollutionWhy do we care?This indicator shows the number of days on which ground level ozone, particulate matter, or carbon monoxide was measured to be at unhealthy levels somewhere in the community.Many health problems are associated with poor indoor air quality, which is often not measured in any systematic way.