Toby Webb, Founder, Ethical Corporation and Stakeholder Intelligence

Lecturer, Corporate Responsibility, Birkbeck College, University of London

Toby.webb@stakeholderintel.com / tobywebb.blogspot.com

Companies integrating sustainability into business strategy: Case studies and conclusions November 2012

Marks & Spencer Plan A

Marks & Spencer Plan A (2007)

Goal: World's most sustainable major retailer

“Plan A”: 180 environmental/ethical commitments by 2015

Focus: Climate change, Waste, Natural resources, Health and being a Fair partner

Cost neutral/positive

Award winning

Growing customer trust

Now launching new products and campaigns: Energy, customer loyalty (Shwopping)

Unilever Sustainable Living Plan (2010)

Ten year journey towards sustainable growth with 50 targets

Aim to bring safe drinking water to 500 million people

2011: Increased the proportion of portfolio that meets highest nutritional standards from 22% in 2010 to 25% in 2011

Aim: Halve the greenhouse gas impact of products across the lifecycle by 2020

2020 aim: Source 100% of agricultural raw materials sustainably

Sustainably sourced raw materials increased from 14% in 2010 to 24% in 2011

Timberland and ‘Earthkeepers’

Timberland and ‘Earthkeepers’ (2007)

2007 looking "desperately" to try and grow the business

Developed successful "Earthkeeper" line of footwear and apparel

Designed with a core philosophy of environmental stewardship

Objective: "make our values valuable" : Mike Harrison, Chief Brand Officer

Earthkeepers product line is now 10% of sales

Gone from one boot in 2007 to entire line sold around the world:

Engaged heavily with customers online and using social media

Skanska and greener construction

Skanska and greener construction (2009)

Empire State building: Ambitious $500m renovation plan, paid for with savings from “deep green retrofit”

Skanska: 57% reduction in energy consumption. Reduction of 15-18% employee absenteeism

Renovation costs recouped in as little as five years

By 2015: Building’s owners say they are confident they will save $4.4m a year: A 38% reduction of energy use

Development business unit focusing on green: 10% of the company’s overall $17bn annual revenues, 1% deep green

Vodafone in Turkey

Vodafone and Turkish Farmers (2011)

Vodafone/ Accenture 2011 research: Mobile-based agri services could boost agricultural income by $34bn by 2020

Vodafone Farmers' Club offers special rates & info to farmers: Mobile tech to improve incomes & increase efficiency/sustainability

500,000 signed up to the Farmers' Club so far. Participating farmers have increased productivity by about €100m

SMS alerts with government information on:

New regulations and financial support

Weather forecasts

Market price quotes linked to location and production

Partnership with Sekerbank: Farmers pay mobile phone bills post-harvest, annually. Benefits to Vodafone: Customer loyalty, mass revenue streams

Siemens and Green Business Strategy

2011: Products and solutions in Environmental Portfolio generated revenue of €29.9 billion: 41% of total revenue

Objective: Grow annual revenue to €40 billion by 2014 –with new, innovative products and exceptional growth in fields like renewable energy. These include:

Combined cycle power plants and intelligent building technologies: far more energy-efficient than comparable solutions

Renewable energy systems and components: wind turbines, steam turbines for solar-thermal power plants. Environmental technologies for cleaner water and air

Conclusions 1: What does this mean for stakeholder engagement?

Employee engagement drives innovation

NGO partnerships bring ideas and credibility

Communities have increasing power & influence

Social media means no company escapes scrutiny

Big business want a long term vision from Governments: And policies and incentives that enable investment and longer term planning

Conclusions 2: What does this mean for financial returns?

London Business School and Harvard Business School research finds that:

Firms with better CSR performance face significantly lower capital constraints

Better stakeholder engagement and transparency around CSR performance, are important in further reducing capital constraints

That the relation is driven by both the social and the environmental dimension of CSR

"CORPORATE SOCIAL RESPONSIBILITY AND ACCESS TO FINANCE" Available at: http://ssrn.com/abstract=1847085

Conclusions 3: The takeaways…

CSR/Sustainability/Responsible business = Smarter business

Consumers want to trust brands, not products

Leading companies turning sustainability into opportunity all over the world: New products / motivated people / cost savings

It is early days! But 9 billion people means less resources and innovation will be essential: Sustainability = risk reduction

Corporate roles in changing inefficient systems will be vital: The winning companies recognise CSR is systems change

Further resources

The Smarter Business Blog: tobywebb.blogspot.com

Ethical Corporation: www.ethicalcorp.com

Eabis.org / Caseplace.org / Harvard Kennedy School CSR Initiative: http://www.hks.harvard.edu/m-rcbg/CSRI/

Doughty Centre for Corporate Responsibility: http://doughtycentre.info

MIT/Sloan Management Review: http://sloanreview.mit.edu/innovation-hubs/sustainability/

Stakeholder Intelligence: Training and Research: www.stakeholderintel.com