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Chosun Ilbo CSR Conference Seoul April 10 2013 Presentation
1. What is CSR and how is it connected with
Ethics and Governance?
Toby Webb, Founder, Ethical Corporation and
Stakeholder Intelligence. Lecturer, Corporate
Responsibility, Birkbeck, University of London
Chosun Ilbo CSR Conference, Seoul, April 10th 2013
Toby.Webb@stakeholderintel.com
2. What is CSR today?
• CSR is about how you run
your business when no-
one is watching
• It covers: Ethics, Integrity,
Products, Services,
Consumers, Investors,
Anti-corruption,
Suppliers, Tax payments,
Market Ethics,
Employees, Civil society
and the Environment…
3. CSR today = Sustainable Business
• Sustainable business does
not happen without
strategy
• Strategy does not happen
without Governance
• Governance does not
happen without Ethics
• Ethics do not happen
without Stakeholder
Engagement
Paul Polman, Unilever CEO
4. Who are some of the leaders?
Unilever Sustainable Living Plan - 10 Marks and Spencer Launched Plan A in
year journey towards sustainable growth January 2007, setting out 100
(2010) commitments to achieve in 5 years
Applies right across the value chain
Now extended Plan A to 180
commitments to achieve by 2015
Responsibility for own direct operations
Also for suppliers, distributors and how Ultimate goal of becoming the world's
consumers use Unilever brands most sustainable major retailer
Underpinning Plan are around 60 targets
5.
6. Who are some of the leaders?
General Electric - Eco-Innovation as business 2011 - Siemens reorganised operations into
strategy four core business units:
Ecomagination business unit mainstream Energy - efficiency in energy production and
focus on business innovation and sustainable distribution, including oil, gas and renewables
industrial products
Healthcare - supplying technology (medical
$2.3 billion invested in “Ecomagination” imaging equipment and healthcare IT)
products in 2011
Industry - providing software and technology
Reduced GHG emissions 30% since 2004 services
Reduced wastewater by 45% since 2006 Infrastructure and cities - sustainable
technologies (smart grid equipment and rail
vehicles)
7. How about an Asia-based company?
Golden Agri Resources – A model for
sustainable palm oil
• 2010 - announced ground-breaking
deal with The Forest Trust to help
prepare for Roundtable on
Sustainable Palm Oil (RSPO)
certification by December 2015
• Engagement with local NGOs for
monitoring of sustainable agriculture
implementation
• Working with Greenpeace and “No deforestation” commitment:
international NGOs Now extended to pulp & paper
• Won back business from Nestle and Sister company APP in Feb 2013
Unilever: Share price went up!
8. Why do they choose to lead?
Unilever • Securing supply
Marks and Spencer • Customer trust
General Electric • Low carbon future
Siemens • Urbanisation trends
Golden Agri Resources • Market access
9. How do they engage with stakeholders?
• Dialogue with civil society
• Consulting experts on
agriculture, trust,
urbanisation, climate
change, energy futures
• By using guidance and
standards
• Listening to their
employees ISO 26000 Guidance ‘Standard’
• Watching trends emerge
10. Key guidance for CSR and Sustainability
• ISO 26000
• Dow Jones
Sustainability Indexes
• FTSE4Good Index
• Global Reporting
Initiative Guidelines
• OECD Guidelines
• UN Global Compact BUT: Guidance not the whole
solution: You must study your
own Risk and Opportunities
11. • Ten year journey towards sustainable growth with 50 tough targets
• Aim to bring safe drinking water to 500 million people
• 2011: Increased 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 up from 24% in 2011 to 36% in 2012
13. 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:
14. Siemens and Green Business Strategy
• 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
15. How do these examples link to stakeholder
engagement?
• Employee engagement drives innovation and ideas
• NGO partnerships bring science, experience 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: So must lead by example
17. How do CSR and Sustainability improve Business?
• Consumers want to trust brands, not products
• Leading companies turning sustainability into opportunity all
over the world: New products / motivated people / cost
savings
• 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
• CSR and Sustainability = Smarter business
19. Do other companies make money from CSR and sustainability?
London Business School & Harvard Business School research:
• 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
20. Five ways ethics and governance are linked to CSR and Sustainability
1. CSR and Sustainability cannot exist without Business Ethics
2. Business Ethics cannot exist without good Corporate
Governance. Ethics always begins and ends with leaders
3. Good Corporate Governance is now seen by international
investors as part of good management by boards
4. Poor Corporate Governance is priced into share valuations
by analysts and large international investors
5. Good Corporate Governance begins with Rule Compliance
21. Why Transparency Matters
• Compliance with international
best practice in Governance and
behaviour expectations = The first
step to building investor and
stakeholder trust – That’s true for
Korea too!
• BUT: Compliance alone is not
enough!
• Transparency is an under-valued
method of building trust, both
from Markets
Lack of transparency affects trust
22. Why Transparency Matters
• Responsible ownership is
about being accountable
to shareholders
• That’s true for businesses
in Korea too…
$18 Trillion in International Investor Assets
• Fact: Investors reward
better managed
(governed) companies!
23. Conclusion: Eight Key Steps to Global Ethical Governance
1. Adopt best practice in International Corporate
Governance
2. Go beyond Compliance: Develop and integrate Ethics
3. Lead from the top of the company on Ethics
4. Use Ethics to build strategy in CSR and Sustainability
5. Engage employees, partners, suppliers and civil
society in strategy and policy development
6. Use engagement to drive innovation in Governance,
Practice, Product and Service Innovation across your
business
7. Embed ethics, CSR and Sustainability into your
business every day
8. Never forget: Ethics, Governance and CSR are how
smart business will be done in the 21st Century