Corporate social responsibility

agenda.

• Famous quotes about responsibility • What is CSR?• Why is CSR important?• The case against CSR• Benefits of CSR• Four dimension of CSR• Top 5 Reasons Your Business Should Be Socially

Responsible• CSR Reporting • Case Study Starbucks.

Famous quotes about responsibility

"Corporate social responsibility is a hard-edged business decision. Not because it is a nice thing to do or because people are forcing us

to do it... because it is good for our business“Niall Fitzgerald

Former CEO, Unilever

”It takes 20 years to build a reputation and five minutes to ruin it.”

Warren BuffettBerkshire Hathaway

Also known as:

What is CSR?

•‘Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large’.

– – World Business Council For Sustainable Development

Why is CSR important?• Customers and clients are influenced by a company's reputation in

social and environmental areas. • Win new business• Attract, retain and maintain a happy workforce and be an Employer

of Choice• Social performance increasingly influences investors decisions, as

the ethical investment market grows evermore quickly. • CSR enables the strategic management of internal and external

risks in social as well as environmental areas. • Social and environmental responsibility has been demonstrated to

reduce operating costs. • Differentiate yourself from your competitors• Generate innovation and learning and enhance your influence• Generate positive publicity and media opportunities due to media

interest in ethical business activities

In 1970 Economist, Milton Friedman says:

“The social responsibility of business is to increase its profits.”

“What does it mean to say that "business" has responsibilities? Only people can have responsibilities.”

“…in a free society there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

The case against CSR

Benefits of CSR• An 11-year Harvard University study found

that"stakeholder-balanced" companies showed four times the growth rate and eight times the employment growth when compared to companies that are shareholder-only focused

Benefits of CSR• Costco (COST) is known for taking care of its

employees. It pays them well, better than industry peers. As such, Costco employees have a reputation for being friendly, motivated, and knowledgeable -- thus making your shopping experience better and compelling you to return there the next time you need to go shopping.

Benefits of CSR

• “88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.”

- Better Business Journey, UK Small Business Consortium

Four dimension of CSRCSR (Carrol, 1979) Firms have responsibilities to societies including economic, legal, ethical and

discretionary (or philanthropic).

CSR has changed in the last 10 years

2000 2013..

CSR was a moral issue

“We want to do the right thing; we want

to invest in theCommunity”

CSR is an Strategic / profit

issue

“Ignoring CSR potentially damages shareholders.

Embracing it creates value”

Top 5 Reasons Your Business Should Be Socially Responsible

1. Employees demand their company to be socially responsible

2. Consumers expect better business practices (and will pay for it)

3. It creates competitive immunity (and makes your business more sustainable in the long-term)

4. Capitalism is evolving, and society is, too5. It is a moral imperative

1. Employees demand their company to be socially responsible

• 10 years ago, it was considered good if a company simply did not harm the environment. However, times have changed, and now employees demand that their company do more than simply not be bad. They need to do good, too. According to Forbes:

• 32% of employees would seriously consider leaving their job if their company gave no / little money to charity;

• 65% would seriously consider leaving their job if their company harmed the environment;

• 83% would seriously consider leaving their job if their employer used child labor in sweatshop factories.

• Furthermore, a landmark international Corporate Social Responsibility (CSR) study of human resource practitioners conducted by the Society for Human Resource Management (SHRM), reveals that CSR practices are seen as important to employee morale (50%), loyalty (41%), retention (29%), recruitment of top employees (25%) and productivity (12%).

2. Consumers expect better business practices (and will pay for it)

• Just under a year ago, a study was published showing that the average consumer will drive an extra 11 minutes to buy a product that supported a cause. Since then, more data has been released supporting the fact that consumers will adjust buying behavior from average companies to socially responsible companies. According to the same article by Forbes:

• More than 88% of consumers think companies should try to achieve their business goals while improving society and the environment;

• 83% of consumers think companies should support charities and nonprofits with financial donations.

• The important consideration is that consumers know that the corporation is making donations out of its own pocketbook, not asking for donations by its consumers. In fact, 35% of consumers dislike being asked to donate money at the checkout counter.

3. It creates competitive immunity (and makes your business more sustainable in the long-term)

• According to the Harvard Business Review, “Strategy… is about choosing a unique position – doing things differently from competitors… These principles apply to a company’s relationship to society as readily as to its relationship to its customers and rivals”. Furthermore “CSR can be much more than a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage.”

• In addition to helping companies differentiate themselves in an already crowded marketplace, social responsibility also inspires innovation within corporations thereby developing longer-term immunity and business sustainability.

4. Capitalism is evolving, and society is, too

• As the market evolves to support these for-benefit enterprises, early-movers and leaders have the most to gain from this shifting system. In other words, the sooner companies shift to being socially responsible, the more successful they will be in the future.

• Even investors are pulling away from companies that don’t do go. This was recently evidenced when investment firms and stockbrokers pulled money away from BP due to its operations in Alaska.

5. It is a moral imperative

• According to Michael E. Porter and Mark R. Kramer at the Harvard Business Review, “When a well-run business applies its vast resources, expertise, and management talent to problems that it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philanthropic organization.“

• Since businesses have the greatest potential to improve the health of our planet and citizens, as they become prosperous, they have a moral obligation to improve the conditions of a system that has helped them succeed.

CSR Reporting • Companies are now starting to report on their Corporate Social Responsibility

initiatives in greater numbers.

• 86 of the Standard and Poor's S&P 100 companies now have corporate sustainability websites, compared to 58 in mid-2005, an increase of 48 percent;

• 49 of the leading U.S. companies produced a sustainability report in 2007, an increase of 26 percent from 39 in 2005

• In an attempt to define standards and make these reports cross-comparable, the Global Reporting Initiative has come up with a sustainability reporting framework. According to Wikipedia:

• The GRI Guidelines are the most common framework used in the world for reporting. More than 1000 organizations from 60 countries use the Guidelines to produce their sustainability reports.

Reporting Formats:The ‘Triple Bottom Line’

People

Profit

Planet

This means expanding the traditional reporting framework to take into account performance in terms of:

Top 5 companies by region

Top 50 companies globally

Book on CSR

Prof. Philip Kotler

conclusion

• CSR is the heart and soul of modern corporations and is an important standard for corporate governance.

• The relationship between the corporation and society is inseparable, in that society needs corporations for products and corporations needs society for profits.

• CSR is an indispensable mechanism for both increased corporate accountability, profitability and environmental sustainability.

Thank you.