A presentation providing an overview of drivers, trends and actions in business sustainability / corporate responsibility in emerging markets: China, India, Brazil and South Africa, and some conclusions.
1. Emerging markets & business sustainability
Toby Webb, Founder/Chairman, Ethical Corporation,
CEO and Founder, Stakeholder Intelligence
2. Background
Founded Ethical Corporation 2001
80+ CR management conferences world-wide
8000 articles & lots of reports
Interview 800+ executives per year: Reports, articles,
conferences
3000 Corp customers globally, expert analysts around globe
Lecturer, Corporate Responsibility, Birkbeck College (London)
Co-chaired independent working group on CSR for UK
Government 2006-8 for David Cameron / Oliver Letwin
Founder/CEO of Stakeholder Intelligence: Bespoke company
training & contract research. 30 experts round the world: China,
SA, Brazil, Russia etc
3.
4. China & sustainable business
Key difference: Often about Government vs. People rather than
Campaigners vs. Corporations
In accidents and scandals, Government increasingly takes the blame
Often attempts to deflect, sometimes onto Western companies
Western firms subscribe to ‘local guy stitch up’. Despite systemic
problems, Western managers excape censure and a local guy goes to jail
Suits Chinese government: Let blogosphere hammer foreign brands
as pressure release, but does not affect FDI
Emerging middle class way more powerful than Government realised
Major crackdown beginning on freer speech across board just
announced
‘Soccer Mom’s and emergent middle class professionals are the game-
changer: Recent examples in Dalian, high street rail crash demonstrating
powers
HSBC/Climate Group research: 57% of Chinese surveyed believe
climate biggest issue they worry about today (2010)
65,000 serious incidents of social unrest in 2005: Then records stopped…
5.
6. Brazil & sustainable business
Very advanced CR/SD culture: 7 companies in the Dow Jones
Sustainability World Index. China and India = 1 company each
Long tradition of private philanthropy: big biz. large scale social projects
2009 Greenpeace ‘Slaughtering the Amazon’ report changed the game
Showed cattle farming major cause of deforestation in Amazon: Result:
three of Brazil‟s top supermarkets – Pão de Azucar, Wal-Mart and Carrefour
- banned beef products.
Four biggest meat producers – JBS-Friboi, Bertin, Minerva and Marfrig –
adopted new environmental standards.
McDonald’s, Timberland, others also pushed by GP on leather, soy
chicken feed and other Amazon issues from 2006 to 2010
1,352 company members of leading CR organisation: Ethos Institute,
NGO pressure vital in Brazil. Business rarely reacts on SD unless profits
are threatened
Deeply capitalist country: Instinctive mistrust of state intervention.
Bottom line driven corporate responsibility
7.
8. India & sustainable business
Culture counts: Hinduism calls on its adherents to “give to all, be
they recluses and Brahmins [priests] or wretched, needy beggars”
220 million of India‟s 1.2 billion under poverty level: Millions of
others close to it
Massive and systemic public sector/business corruption
challenges
Tata: 28 companies, £50 billion revenues. Deep culture of
philanthropy since foundation. Birlas, Bajaj families similar ethos
“Bottom of the Pyramid” coined by CK Pralahad, for India, now
global. Prime example: ITC’s e-Choupal project for rural poor
highly successful and profitable
India‟s share of the USD 2.2 trillion market for low carbon goods
and services in 2020 could be as much as USD 135 billion +
10.5 million green jobs. Fastest growing, according to HSBC
Ongoing Maoist violent insurgency much bigger than known in
West. Land disputes said to play significant role in recruitment
9. India & sustainable business
India now fifth in the world in terms of wind energy production
Hindustan Unilever: 2002 campaign RE soap usage. Reduced
size and cost of Lifebuoy soap brand. Significant reduction in
diarrhoeal disease. Led to a 20% upsurge in localised sales
Chotukool refrigerator world‟s lowest-priced model:(£48)
Tablet computer now sold at $45/35 to students and others
Mahindra World City project: Residential, business facilities in
“environmentally and socially sustainable way” Still open to
debate as to effectiveness
Vedanta and other mining firms increasingly controversial:
People vs. Land vs. Resources + corruption + oligarchs =
Protest and action = Corporate Risk
Vigorous debate about mandatory CR „laws‟ and transparency
10.
11. South Africa & sustainable business
South African companies trying to confront apartheid legacies
that government has yet to resolve
Africa's largest and most industrialised economy as well as the
12th largest emitter of greenhouse gases globally
Heart of the economy is a small core, accounts for 10-15% of the
population. 85% of the population in abject poverty
Grip of Trade Unions presents major challenges: ie removing poor
teachers: Leads to deeply uneducated public sector: Deeply
corrupt and protected
Corporate giving has been rising: 24% year on year to 5.1bn
rand ($690m) for 2008-09
Business understands the need to balance green, economic and
social, Government only interested in economic and social
Corporate responsibility efforts directed towards taking over, or
propping up failing and under-capacitated government
service infrastructure
12. South Africa & sustainable business
New black elite created by Black Economic Empowerment
Forced some government-owned companies, such as power utility
Eskom, to hire foreign non-whites to meet these racial targets
Mining companies improved their environmental, social and
governance performance. Also confronted government over
HIV/Aids: one in three mine workers infected
Anglo-American lead way with "Zimele" scheme, SAB Miller
helping SMEs get on their feet
Middle and upper classes tiny: so less pressure outside
government on business
Companies find unique business cases: Massmart’s employees
made clear that they saw nothing unethical in stealing as long as
the company did not make any investment in its local
communities
Some are innovating profitably: Woolworths, third largest food
retailer now sells about $140m worth of organic and free range
products.
13. Emerging Markets: 10 Key lessons
1 Corporate responsibility and sustainability issues are VASTLY different
around the world (Even in Europe)
2 Global principles with local implementation, combined with „red line‟ areas
of ethics (ie bribes) and overall targets, are only way large companies can
operate successfully and sustainably
3 The world is a lot more left wing than the UK and USA!
4 Governments are much less predictable on sustainability issues: ie
reporting requirments
5 Institutions as we know them often do not exist
6 Stakeholders are less predictable issues can escalate very quickly
7 Culture counts, more than anything: Local knowledge essential
8 Agendas are mixed: But skills, education and jobs are always Number
One
9 The greener agenda is understood and often consumers are less
sceptical than in West
10 Get ready for a bumpy road ahead: Global business = Global
complexity!
14. Further resources:
Ethicalcorp.blogspot.com (Toby Webb‟s Smarter Business Blog)
Slideshare.net/tobiaswebb (Lots of presentations)
www.ethicalcorp.com (Search for „Country Briefings‟)
Contact me:
Toby.Webb@ethicalcorp.com
Twitter: tobiaswebb76
+44 (0) 7912 770277