Corporate Social Responsibility and Business …...2009/02/11 · CSR/Sustainability Evolution:...
Transcript of Corporate Social Responsibility and Business …...2009/02/11 · CSR/Sustainability Evolution:...
©SHRM 2009
SHRM-Morris County Chapter – Brian J. Glade, SPHR, GPHR – February 11, 2009
Corporate Social Responsibility and Business Sustainability: HR’s Leadership Role
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CSR and Business Sustainability: Defining the Terms
CSR• Used since the 1970s to denote ethical and socially responsible
business behavior
Sustainability/Business Sustainability• Dates back to 1987 World Commission on Environment and
Development• Combines traditional CSR concept with longer-term renewable
approach to business practices
CSR-Business Sustainability• Today, the two terms are used interchangeably and are defined by
World Council for Sustainable Business as:
“Contributing to sustainable development by working to improve the quality of life for employees, their families, the local community and stakeholders up and down the supply chain”
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CSR and Business Sustainability: HR’s Leadership Role
Today’s Agenda
• Evolution of CSR/Business Sustainability• Triple Bottom Line• SHRM’s 2007 CSR Pilot Study• HR’s Leadership Role in CSR/Business Sustainability• Barack Obama: our “Green” President
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CSR/Sustainability Evolution: Early Pioneers
Founded in 1978 with a social purpose
Shares rewards with its employees and the community
Sources ingredients from socially conscious suppliers.
In 1992, first U.S. public company to sign onto the CERES Principles to protect the environment.
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CSR/Sustainability Evolution: Early Pioneers
UK cosmetics company founded in 1976 with a commitment to sell products not testedon animals.
Company went on to support environmental causes, HIV/AIDS awareness, human and animal rights, and campaigns against domestic violence.
In the early 1990s, sponsored employee trips to work in orphanages in Romania, raising international awareness of the poor conditions of the facilities and the children’s health.
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CSR/Sustainability Evolution: Heavyweights Jump In
Goals:
Be supplied 100% by renewable energy, create zero waste, and seeproducts that sustain natural resources and the environment.
Increase the efficiency of its vehicle fleet by 25% by 2010 and by 50% by 2020.
Reduce by 30% the amount of energy used in its stores by 2010.
Reduce solid waste in its stores by 25% by 2010.
It may invest $500 million in various sustainability projects.
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CSR/Sustainability Evolution: Heavyweights Jump In
Launched Eco Options labeling initiative to identify 2,500 products that are environmentally friendly.
Began replacing the incandescent bulbs in its lighting department displays with more eco-friendly CFL bulbs.
Partnered with The Conservation Fund to offset all carbon emissions created by the company's Atlanta headquarters and a portion of emissions created by associates commuting to work and traveling on business.
Will fund planting of thousands of trees in Atlanta as part of the program.
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CSR/Sustainability Gains Momentum
1960s-1970s:
• Early CSR pioneers gain media attention and prestige• Civil rights activism grows• Ralph Nader leads a consumer awakening• Ecological devastation and Earth Day build environmental
consciousness • Anti-Vietnam War movement empowers youth
1980s-1990s:
• Heavyweights begin jumping on CSR bandwagon• Companies add environment, volunteerism to their responsibilities• Companies seek safer products following 1982 Tylenol poisonings• 1987 Bruntland Commission introduces “sustainable development”
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CSR/Sustainability Goes Mainstream
2000-Present:
• CSR/Business Sustainability goes mainstream• Terrorist attacks on World Trade Center raise questions about our
legacy• Scandals at Enron and others lead government to Sarbanes-Oxley Act • Global Warming threatens the planet and companies commit to action• Gas hits $4 a gallon, sparking calls to develop renewable energy
sources
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Triple Bottom Line
• People, Planet, Profit:> Term coined by John Elkington that expands criteria for
organizational success to include social, environmental, and economic factors
• People:> Fair and beneficial business practices towards labor and the
community in which a corporation conducts its business
• Planet:> Sustainable environmental practices
• Profit:> Lasting economic impact by an organization on its economic
environment, not just internal profit made by the company
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Stakeholder Interest
Triple Bottom Line• Company responsibility should be to stakeholders, rather than to
shareholders
Stakeholder• Anyone who is influenced, either directly or indirectly, by the actions of
the firm
Objective• Business entity should promote stakeholder interests, instead of just
maximizing shareholder or owner profit
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Corporate Social Integration
Common Ground• TBL approach suggests companies and community groups find
common ground to benefit both
HBR Article• Harvard professor Michael Porter proposed business-society
sustainability framework focusing on integration, rather than opposition
New Thinking• According to Porter, NGOs, governments, and companies must start
thinking in terms of corporate social INTEGRATION
Progress• Companies are embracing CSR and NGOs that campaigned against
businesses are forming partnerships with them on CSR initiatives
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TBL Balancing Act
.
Sustainability
Profits
People
Planet
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Age of Corporate Accountability
Andy Savitz• Author of book, Triple Bottom Line, compares corporate focus in 1950s
and 1970s to today’s Age of Corporate Accountability
1950s Focus• Make money• Provide philanthropy
1970s Focus• Money, philanthropy ++• Protect the environment• Products
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Age of Corporate Accountability
Today’s Focus• Money, philanthropy, environment, protect products ++• Promote diversity• Protect workers• Prevent child labor• Foster public health• Ensure human rights• Provide technology• Oppose corrupt regimes• Patrol supply chain• Engage stakeholders• Measure and report benchmarks
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CEOs are CSR Fans
79% of CEOs in 2006 said sustainability was vital to profitability—up from 69% in 2005.--Sustaining Value through People, 2006, PricewaterhouseCoopers
Companies active in CSR in 2008 had annual profit and share price growth of 16% and 45% -- vs. 7%and 12% for weak CSR firms--Economist Intelligence Unit survey of 1,200global C-suite executives, 2008
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GE Ecomagination
‘Green is Green’—Jeff Immelt, GE CEO
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SHRM 2007 CSR Pilot StudyParticipation in CSR Activities
.
81%
91%89%
95%
9%11%
15%19%
9%11%
5%
85%89%
91%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
United States (n =405)
Australia (n = 273) India (n = 160) China (n = 98) Canada (n = 1084) Mexico (n = 109) Brazil (n = 152)
Yes No
©SHRM 2009 1919%14%14%6%16%8%15%Positive financial
bottom line
26%19%12%7%15%10%15%Increased workforce productivity
19%26%17%13%22%15%17%Competitive advantage
25%24%25%17%18%18%19%Increased recruitment of top employees
23%32%29%12%16%24%24%Increased employee retention
59%40%44%37%35%38%39%Position as an employer of choice
66%45%41%61%56%44%42%Increased brand recognition
60%48%45%51%40%36%45%Increased consumerconfidence
59%55%41%28%43%44%48%Increased employee loyalty
68%61%50%26%58%63%61%Improved employee morale
81%67%76%67%67%65%74%Stronger public image
Brazil(n = 135)
Mexico(n = 88)
Canada(n = 844)
China(n = 82)
India(n =134)
Australia(n = 214)
UnitedStates
(n = 309)
SHRM 2007 CSR Pilot StudyEmployment Branding: Positive CSR Outcomes
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Corporate Culture: Promoting Ethical Behavior
SHRM 2007 CSR Pilot Study
35%25%13%16%19%10%9%A report dedicated exclusively to CSR is issued
64%64%47%27%35%57%34%
Efforts are included in organization’s annual report
75%64%59%51%53%56%55%Efforts are included in organization’s mission statement
72%69%65%63%55%59%57%Efforts are part of organization’s goals
79%69%65%67%61%73%69%
Efforts are covered in organization’s newsletters/other publications
Brazil(n = 126)
Mexico(n = 67)
Canada(n = 632)
China(n = 63)
India(n = 74)
Australia(n = 168)
United States
(n = 211)
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SHRM 2007 CSR Pilot Study
41%49%89%
Health & safety considerations
Environmental considerationsContribution to societyBrazil
(n = 148)
41%46%75%
Public relations strategyEnvironmental considerationsContribution to societyMexico
(n = 112)
40%51%71%
Environmental considerationsPublic relations strategyContribution to societyCanada
(n = 1,138)
36%52%71%
Competitive advantagePublic relations strategyContribution to societyChina
(n = 114)
40%43%77%
Environmental considerationsPublic relations strategyContribution to society
India(n = 163)
36%50%70%
Environmental considerationsPublic relations strategyContribution to society
Australia(n = 284)
33%53%70%
Employee activismPublic relations strategyContribution to societyUnited States
(n = 429)
321
Corporate Culture: Top 3 CSR Drivers
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SHRM 2007 CSR Pilot StudyCorporate Strategy: 2 Select CSR Practices
S
32%19%8%10%13%9%7%Track sources of global raw materials
73%53%22%19%39%17%15%Monitor global fair labor standards
48%27%32%31%31%32%25%Cause marketing /branding
70%37%38%22%39%36%27%Partner with environmentally friendly companies
65%42%53%23%39%50%34%Monitor the impact of business on the environment
25%20%19%--22%12%39%Partner with woman-or minority owned companies
62%26%54%35%38%52%47%Consider the overall social impact of business decisions
73%45%58%26%57%51%66%
Support community through company-sponsored volunteer projects
30%61%51%69%70%68%77%Donate/collect money for natural disasters
74%76%90%64%60%84%88%Donate/collect money for local charities
Brazil(n = 149)
Mexico(n = 113)
Canada(n =1,106)
China(n = 108)
India(n =161)
Australia(n = 266)
UnitedStates
(n = 420)
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Transparency: Publicizing CSR Activities
SHRM 2007 CSR Pilot Study
35%25%13%16%19%10%9%A report dedicated exclusively to CSR is issued
64%64%47%27%35%57%34%
Efforts are included in organization’s annual report
75%64%59%51%53%56%55%Efforts are included in organization’s mission statement
72%69%65%63%55%59%57%Efforts are part of organization’s goals
79%69%65%67%61%73%69%
Efforts are covered in organization’s newsletters/other publications
Brazil(n = 126)
Mexico(n = 67)
Canada(n = 632)
China(n = 63)
India(n = 74)
Australia(n = 168)
United States
(n = 211)
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Role of HR in CSR and SustainabilityHR must take the lead
SHRM Pilot Study• 2/3 of U.S. HR professionals directly involved in CSR, but only 13%
mainly responsible for creating strategy -- Only 23% charged with implementing strategy
2007 BusinessWeek Survey• Executives interviewed said leadership should be by HR on CSR social
programs (64%), but 50% thought Operations should lead environmental programs
Leadership Void• A holistic approach to business sustainability is missing at most
organizations and HR needs to fill this leadership void
Logical Leadership Role• HR is already heavily involved in developing employment policies that
overlap social issues
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CSR as Recruitment-Retention Tool
HR and CSR• Research shows that CSR can be a potent recruitment and retention
tool–areas of HR responsibility
2008 Grant Thornton Survey• Recruitment and retention was main driver for CSR programs at 65% of
U.S. privately held companies surveyed
2007 Cone Consumer Survey• 77% of U.S. consumers surveyed said they would take into account a
company’s environmental reputation when considering it for employment
2008 SHRM Green Workplace Survey• 61% of respondents were “very likely” or “likely” to stay at their current
organizations because of their CSR programs.
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Role of HR in CSR/Business SustainabilityGlobal Reporting Initiative
HR owns or shares 24 of 79 GRI indicators including:
• Diversity• Benefits• Job security/loss• Labor issues• Health and wellness• Work-life balance• Pay equity• Workplace conditions• Human rights
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Role of HR in CSR/Business SustainabilityHR Sweet Spot
Andy Savitz• Author of influential book describes how sustainability is the “sweet
spot” where business and society interests overlap
HR-Sustainability• Savitz also describes how the intersection of a company’s HR function
with its sustainability “sweet spot” can drive bottom line results
Activism• HR should be an organization’s natural CSR “sweet spot,” but it
requires activism and commitment
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Role of HR in CSR/Business Sustainability
HR Attributes for Success• Respect• Ability to collaborate• Persuasiveness• Ability to think outside the box• Ability to measure• Passion
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Our Green President
Barack Obama promises to be our “greenest” President since Teddy Roosevelt
His election and the need to stimulate our economy should raise the profile of CSR significantly over next four years
This provides a great opportunity for HR professionals to show their strategic value in a critical area for our country
The economic stimulus package being considered by Congress includes up to $20 billion in renewable energy tax cuts
The President’s goal is to double the production of renewable energy resources in the next three years
He believes these renewable energy projects will create nearly a half million new jobs
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CSR and the Downturn
Will CSR be Cut?• Key factor: Strength of company’s commitment to CSR in the downturn will depend on whether CSR is considered a critical part of the business
• Strategic connection: Companies that don’t see a strategic connection between CSR and their bottom line are more likely to cut CSR programs
• Recent survey: 43% of companies in poll by Business for Social Responsibility expect 2009 CSR budgets to go unchanged -- 31% expect a decrease
• Cutting: Ford Motors will reduce 2009 funding for corporate philanthropy by 40%, and Citigroup has reduced its CSR staff along with job cuts across the company
• Maintaining: General Electric, Intel, PricewaterhouseCoopers, and Wal-Mart are sustaining or expanding their CSR commitments in 2009
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CSR and the Downturn – Recent Quotes
Jeff Immelt, Chairman and CEO of GE:“When we come out of this fog, this notion that companies need to stand for something --- they need to be accountable for more than just the money they earn –is going to be profound.”
Craig Barrett, Chairman Intel Corporation:“You can’t save your way out of recession… We look at our CSR activities in pretty much the same way: you can’t just do them in good times and then just forget about them in bad times and expect to get any results.”
Howard Schultz, CEO of Starbuck’s:“Now is the time to invest, truly and authentically, in our people, in our corporate responsibility and in our communities. The argument – and opportunity – for companies to do this has never been more compelling.”
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Our Green Future
“In the future, a company’s carbon statement will be as prominent as its financial statement.”
Ian Pearson in 2007Former UK Minister of State for
Climate Change and the Environment
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Further Information
Society for Human Resource Managementwww.shrm.org
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