Business revolution? Challenges and opportunities

of CSR management

Róbert Braun, Ph.D.Managing Director

Braun & Partners Bulgaria

30 October 2008

The biggest business challenge of the 21st century: integrating social values of stakeholders into business operations.

Background

• Important changes in structure of society in the 20th century

• New social role of companies (Milton Friedman)

- stakeholder theories

- reputational crises

- environmental challenges

Corporate Social Responsibility What is it?

20th century: marketing-

oriented company

21st century:

responsibility-oriented

company

UNDP CSR baseline studyCSR Engagement - Bulgaria

37,0%

70,4%

51,9%

85,2%

100,0% 100,0%

51,9%

29,6%

44,4%

14,8%

0,0% 0,0%11,1%

0,0% 3,7% 0,0% 0,0% 0,0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Strategy StakeholderEngagement

Governance PerformanceManagement

PublicDisclosure

Assurance

Dimensions

n=27

No / little evidence On the way Good practice and beyond

CSR poll – international results

n=3000

Companies do not only have to care about their shareholders/owners but also have to consider the interests of their other stakeholders, such as employees, local communities, customers, civil organizations, and

the environment.

58,1%

48,3%

46,4%

50,9%

22,7%

21,1%

34,2%

26,0%

15,0%

18,8%

11,0%

15,0%

4%

7%

6%

4%

0%

2%

2%

2%2%

3%

0%

0%BG

HU

PL

ALL

Agree completely Somehow agree Neither agree, nor disagreeSomehow disagree Disagree completely No answer

CSR poll – international results

The majority of companies in my country do not only care about their shareholders/owners but they consider the interests of their other

stakeholders, such as employees, local communities, customers, civil organizations, and the environment.

n=3000

7,7%

9,6%

6,6%

7,9%

10,9%

13,2%

20,8%

15,0%

31,9%

30,2%

26,3%

29,5%

28,8%

18,5%

26,2%

24,5%

20,5%

18,9%

10,0%

16,5%

9,6%

10,0%

6,6%

0,2%BG

HU

PL

ALL

Agree completely Somehow agree Neither agree, nor disagreeSomehow disagree Disagree completely No answer

Is it important for you to buy the products / services of socially and environmentally responsible companies?

29,4%32,2%

18,7%15,9%

4,0%

0%

10%

20%

30%

40%

It would be veryimportant for meto be a customer

of a companywhich is recognised

as socially andenvironmentally

responsible.

It would beimportant for meto be a customer

of a companywhich is recognised

as socially andenvironmentally

responsible.

Beyond otheraspects, the

environmental andsocial performanceof the companiessometimes could

be a furtherconsideration.

It is not importantfor me to buy froma socially and / orenvironmentally

responsiblecompany.

No answer

CSR poll in Bulgaria

n=1000

Accountability Rating Bulgaria

• The top45 companies of Kapital100 + the five largest financial institutions were accessed by international methodology, developed by AccountAbility and csrnetwork

• Global 100 list is published in Fortune, local lists for the largest companies are published in Bulgaria, Greece, Hungary, Russia, South Africa and Turkey.

• The four dimension of the evaluation:– Integration of social, environmental and broader economic

issues into business strategy– Management systems and governance for social,

environmental and economic issues– Identification and engagement of stakeholders– Impact of company on environment, society and marketplace

The four domains of evaluation

Integration of social, environmental and broader economic

issues into business strategy

Identification and engagement

of stakeholders

Impact of company on environment, society and marketplace

Management systems and

governance for social,

environmental and economic issues

Responsibility-oriented company where we are

• Beginning of the road (even in the UK)

• Only the biggest companies are on the way of transformation

• There are only rudimentary management instruments

• Content (environment, organic products) is still more important than form (processes, breaks and counterweights; management systems)

Not the name, the change is important.

Why CSR/accountability matters stakeholder perceptions

Reputation management

- changing stakeholder expectations

- changing social/cultural environment

- „revolutionary milieu”

Soft revolution

What is soft revolution? effective CSR

Reputation managementC(S)RAccountabilitySustainabilityTransparency

SocialBranding

Responsibility-oriented (post)modern company

Thank you for your attention.

Contact

bulgaria@braunpartners.hu

http://bg.braunpartners.hu

http://accountabilityrating.eu