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Defining Social Investment and CSR
Executive Seminar on Social Investment and Corporate Social Responsibility (CSR)
Port au Prince, Haiti
October 22, 2002
A History of Creating Innovative Partnerships
www. waynedunn. com
info@waynedunn.com
Wayne Dunn
Hugh Wilkinson
A History of Creating Innovative Partnerships
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Presentation Outline & Objectives
Define CSR and social investment;
Discuss rationale and driving forces for CSR and social investment;
Develop understanding of relevance of CSR to Haitian business community;
Review some examples of CSR/SI activities;
Questions and discussion.
A History of Creating Innovative Partnerships
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What is CSR?
Corporate Social Responsibility (CSR)
is a concept whereby companies integrate
social and environmental concerns into
their business mission and operations, and
in their interactions with stakeholders.
A History of Creating Innovative Partnerships
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What is CSR?
CSR is not, per se, about ―charity‖ or
―philanthropy‖
A key dimension of CSR is about private
companies recognizing that being good
corporate citizens is ‗good for business‘.
A History of Creating Innovative Partnerships
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CSR is about the commitment by business to:
CSR is about companies having a “Triple Bottom Line”
• Make a profit, prosper financially, and contribute to
economic development
…but also, to:
• Behave ethically and contribute to social development
by improving the quality of life of the workforce and their
families, as well of the local community and society at
large
A History of Creating Innovative Partnerships
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CSR & “The Triple bottom line”
Financial
Responsibility
Environmental
Responsibility
Corporate Social Responsibility
(Sustainable Development)
Social
Responsibility
WBCSD
Diagram
A History of Creating Innovative Partnerships
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Triple Bottom Line
VALUES Environmental
Financial
Social
VALUE
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Why focus on social performance?
“In a transparent, globalized world, economic performance, environmental performance and social performance hang together. Business is realizing that it has become an integral part of society and now has wide-ranging responsibilities… shareholder value and social responsibility support each other‖ Göran Lindahl, President and CEO Asea Brown Boveri (ABB) ―Our commitment to community development ―represent(s) an added cost, but is an essential investment in our future…(and) should help us to achieve greater profitability‖. Jay Taylor CEO Placer Dome
―Social responsibility is a matter of hard-headed business logic‖ John Browne, CEO BP-Amoco
A History of Creating Innovative Partnerships
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CSR: not just for the big firms
Companies big and small
can make significant
contributions to social
development
And: CSR does not
necessarily require a
financial investment.
A History of Creating Innovative Partnerships
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“By working together to mobilize sustainable investment in the Least Developed Countries, government, business and civil society give hope and opportunity to the world’s poorest”
Kofi Annan
UN Global Compact Secretary-General
CSR is a Global Phenomena
A History of Creating Innovative Partnerships
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CSR is about Working in Partnership
A History of Creating Innovative Partnerships
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CSR Is:
Companies working in
partnership with communities
and others to address problems;
Companies promoting good values to their
employees, suppliers, customers, partners;
Companies investing in social and economic
development.
Companies being good corporate citizens;
Civil Society
Gov’t
&
Donors
Companies
A History of Creating Innovative Partnerships
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Beyond Beads and Trinkets
A History of Creating Innovative Partnerships
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Beyond Beads ‗n‘ Trinkets
A new model for doing business:
To create business value and ―corporate sustainability‖, companies must work with other stakeholders (government, civil society, donors)
to create meaningful development value.
• Rural Development
• Community Health
• Enterprise Development
• Microfinance
• Infrastructure Support
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Why is CSR happening?
Globalized world is demanding more of business.
Global media – The CNNization of the world – remote local issues direct to television screens
Proliferation of NGOs – direct, well organized and financed support to communities
Internet and other communications innovations – direct communications from remote projects to worldwide audience
Global Democratization – increased attention to local issues
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Social Development
Social Development
Projects
NGOs IFIs Donors
Communities
Private
companies
Governments
A History of Creating Innovative Partnerships
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The Business Case: CSR Driving Forces
Pressure: a response to
external forces (i.e.— NGOs,
governments, customers,
shareholders and
communities); and to internal
forces (i.e.- employees)
Values: The core beliefs of the
company
Strategy: Enhancement of an
organization‘s long-term
business goals.
Ford Foundation
Diagram
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Pressure: Governments
Governments – both North and South - are
increasingly demanding social and
environmental accountability from foreign
investors, and from domestic enterprises.
“Beyond beads and trinkets”
A History of Creating Innovative Partnerships
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Pressure: NGOs, Communities
How would you like these people showing
up at your annual meeting?
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Pressure: Shareholders
‗Socially conscious‘ shareholders
Social Investment Funds (Socially responsible
investment refers to making investment decisions
based on a company‘s social and environmental
practices and on their corporate values and ethics).
The Financial Markets
– Dow Jones Sustainability Index
– FTSE Sustainability Index
A History of Creating Innovative Partnerships
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What is “Social Investment”?
Socially responsible investment, which refers to incorporating investment decisions with social and environmental concerns
… different from:
Socially directed investment, which is aimed at companies participating in specific social development projects.
A History of Creating Innovative Partnerships
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Pressure: Consumers, Customers
CSR = Business Value
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Business Value
Improved competitive advantage
Enhanced Brand equity / corporate image
Reputational Capital (with customers,
financiers, business community, and with
the public.
In global economy, brand image and
reputation are among a company’s most
valued assets.
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Improved financial performance
The Hill and Knowlton's Corporate Reputation
Watch 2002 survey targeted executives in Europe
and North America and found that good corporate
reputation is becoming an essential tool to
increase sales, profitability and competitiveness.
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Supply Chain and CSR
Companies increasingly sourcing raw
materials, inputs for their products from
‗socially responsible‘ suppliers
Example: A Haitian manufacturer gains a
competitive advantage with its overseas buyers
because of its socially responsible practices.
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CSR: The Development Case
– Poverty Alleviation
– Community Health
– Rural Development
– Environmental Issues
– Local Capacity
Development
– Infrastructure Support
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Some Results
Industry leadership
Brand equity/ corporate
image enhanced
Increased employee
satisfaction, loyalty,
Increased sales and
customer and loyalty
Greater opportunity for
growth
Access to/and cost of
capital
Stronger institutions
Economic development
Greater political stability
Community health
Rural development
Education and literacy
Sustainable development
and poverty alleviation
Good values create VALUE ($$$)
Business Results Development Results
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Quotes from the World Summit
UN Secretary General Kofi Annan ―lasting and
effective answers can only be found if business –
working together with other actors including
government and civil society– is fully engaged ‖
Prime Minister Chretien (Canada) ―Building
creative and innovative partnerships to promote
sustainable development is a defining theme of
our global agenda‖
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Some Examples
Placer Dome Care Project
Poverty alleviation
Community health
Capacity development
HIV/AIDs
Eldorado Gold - Kisladag
Poverty alleviation
Environmental rehabilitation
Rural development
Capacity development
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Placer Dome Care Project
Original objective – mitigate the social and economic
impacts of retrenchment and assist 70% of family units
to become economically active
Innovative rural development and HIV/AIDS program,
delivered at community level across 3.5 million sq km
of southern Africa
– Extensive involvement of women and families
– Pioneered new 13 step process with extensive counseling,
training and support. (Process is being copied by other
development programs in the region)
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Placer Dome Care Project
HIV/AIDS program won
prestigious Development
Innovation Award at World
Bank Development
Marketplace
– Over 2,400 development
projects from 122 countries
CSR can create real
development value
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Eldorado Gold - Kisladag Project
Strategic approach to use mining project to facilitate sustainable rural development
– Development of agriculture related industries and infrastructure;
– Increased involvement of women;
– Improved grazing and land management (reduce desertification)
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CSR Partnerships
Preceding examples all involved partnerships Care Project – Southern Africa (CIDA Inc., World Bank)
Kisladag - Turkey (CIDA Inc.)
Developmental impacts (health, poverty, etc.) increased through collaboration between private sector and ODA agencies such as CIDA.
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CSR in Venezuela
In 1999, Statoil Venezuela entered into a project in partnership with the local office of the United Nations Development Programme, the local chapter of Amnesty International, and a branch of the Venezuelan judiciary to train judges around the country.
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Banking and CSR
Support for Micro finance
Promoting private sector by lending to small
enterprises is considered a social responsibility as
well as a commercial opportunity.
– Unibank (Haiti)
– Grameen Bank (Worldwide)
– Citibank initiatives (Worldwide)
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CSR in Chile
Pollos Ariztía, a large chicken producer near Santiago.
Company president Manuel Ariztía has taken a lead role in improving education including professional teacher development.
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CSR and Columbia
Holcim's Columbian subsidiary, Cementos Boyacá, has
developed a project to help to improve the living standards
of rural communities within the area of influence of the
cement-manufacturing facility in Nobsa.
About 90 girls and boys, selected with the agreement of
their parents, come from farming and mining communities
in which Cementos Boyacá is active. The center's aim is
to educate and train the youth of the region so that they
are not forced to leave it.
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CSR and Social Investment: Some Key terms
Good Corporate citizenship
Social Entrepreneurship
Sustainability
Community relations
Business Integrity and CSR
Credibility
A History of Creating Innovative Partnerships
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CSR/SI Information Resources
See list of CSR websites, resources (handout)
A History of Creating Innovative Partnerships
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Summary
CSR can and does create bottom line business
value, as well as development value Win-Win!
CSR = sustainability for business (growth & profit)
CSR/ODA/community partnerships = sustainable
development for the environment, for social and
economic development, and for poverty alleviation
A History of Creating Innovative Partnerships
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Wayne Dunn & Associates
Global leader in CSR and sustainable development
Assessment of CSR and sustainable development initiatives
Increasing value from existing CSR investments
Strategic CSR plans, strategies and partnerships
Design and management of socially directed investments and projects
Development and implementation of CSR communication strategies
A History of Creating Innovative Partnerships
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A History of Creating Innovative Partnerships
Wayne Dunn & Associates Ltd 2457 Bakerview Road
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