Post on 19-Dec-2015
Novartis Foundation for Sustainable Development
Stretching the Limits of Corporate Responsibility
Notre Dame Conference onPeace and Commerce
November 12 - 14, 2006
Klaus M. Leisinger
Novartis Foundation for Sustainable Development
Environics, 2002/04 – 20 industrial and industrializing countries surveyed
Trust Distrust
Multinational companies
National governments
Trade unions
Large domestic companies
Press and media
Religious organizations
NGOs 65
Trust in institutions to operate in best interest of society
29
58 37
52 46
49 47
46 48
45 53
42 51
Novartis Foundation for Sustainable Development
Ways and Means to bring a Corporate Responsibility Philosophy “down to earth”
Institutional Level
Use structural and organizational means to leave no doubtabout corporate insistence for morally acceptable behavior
Personnel Level
You can still govern with bad laws and good civil servants – with bad civil servants, however, even the best laws do not make a difference.
Otto von Bismarck (1884)
Novartis Foundation for Sustainable Development
The Global Compact as the CSR frameworkThe Global Compact asks companies to embrace, support and enact, within their sphere of
influence, a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption:
Human Rights• Principle 1 : Businesses should support and respect the
protection of internationally proclaimed human rights; and• Principle 2 : Make sure that they are not complicit in
human rights abuses.
Labour Standards• Principle 3 : Businesses should uphold the freedom of
association and the effective recognition of the right to collective bargaining;
• Principle 4 : The elimination of all forms of forced and compulsory labour;
• Principle 5 : The effective abolition of child labour; and• Principle 6 : The elimination of discrimination in respect of
employment and occupation.
Environment• Principle 7 : Businesses should support a precautionary
approach to environmental challenges;• Principle 8 : Undertake initiatives to promote greater
environmental responsibility; and• Principle 9 : Encourage the development and diffusion of
environmentally friendly technologies
Anti-Corruption• Principle 10 : Businesses should work against all forms of
corruption, including extortion and bribery.
Organisational Change
Actions, Projects
Communication on Progress
Leadership committee to embrace and enact
Novartis Foundation for Sustainable Development
Corporate Citizenship “homework”
• Reflect on corporate status quo, consult internally and externally;
• Define the scope and limits set by your corporate citizenship “philosophy” and communicate, communicate, communicate;
• Implement management procedures (e.g. target setting, performance appraisals, compliance monitoring, etc.);
• External verification by independent auditors;
• Reporting about successes, failures and dilemmas
Novartis Foundation for Sustainable Development
The hierarchy of corporate responsibilities
Obey all laws;adhere to regulations;
offer healthy working placesminimize emissions; be profitable
be successful in R&D; make profitablestrategic decisions
Corporatecitizenship
beyond legal duties(wise strategic decisions)
Corporatephilanthropy
Desired(can)
Expected(ought to)
Essentials(must)
Corporate responsibility excellence
Good management Practices
Novartis Foundation for Sustainable Development
Measuring Misery
• About 2.5 billion people live on less than 2 US$ a day.
• The 20 richest percent of the world’s population receive 85% of the global
income, the poorest 20 percent only 1.4%.
• Average life expectancy in the poorest countries of Africa is less than 45
years.
• Every Year more than 500’000 women die in pregnancy and childbirth – one
every minute
• 14 million children die every year due to preventable diseases – 26 every
minute
Novartis Foundation for Sustainable Development
There is a plausible “business case”
Applied corporate social responsibility is likely to
Reduce friction with society and hence reduce legal, financial and reputation risks
Engender employees’ motivation and identification
Enhance the attraction of the corporation (ethical investment)
Preserve corporate freedom
Provide new competitive edge in modern societies
Novartis Foundation for Sustainable Development
Trespassing traditional limits
Good for the company
Bad for society
=A case for better (national and
international) law as well as corporate responsibility
Good for the company
Good for Society
=
The Business Case for Corporate Responsibility
Bad for the company
Bad for Society
=
A Question of IQ
Good for Society
No benefit for the company
=
The Case for reputation capital
Novartis Foundation for Sustainable Development
BUT…
…there are limits to what companies will do - how can we stretch
them?
“market failure” and “failing states”
Economic, Social and Cultural Rights Invest beyond the “business case” in support of the
Millennium Development Goals
and, according to sectorial specificities, more
Novartis Foundation for Sustainable Development
There is a plausible “business case”
Applied corporate social responsibility is likely to
Reduce friction with society and hence reduce legal, financial and reputation risks
Engender employees’ motivation and identification
Enhance the attraction of the corporation (ethical investment)
Preserve corporate freedom
Provide new competitive edge in modern societies