© CSR Asia 2014

Getting to Grips with CSR

Richard Welford, Chairman CSR Asia

www.csr-asia.com

• Giving away money• “Giving back”• Planting a few trees• PR photo opportunities• Feeling good• Apologizing for failures

What CSR is not…

What is CSR?

“ Responsibility of an organisation for the impacts of its decisionsand activities on society and the environment, throughtransparent and ethical behaviour that:

- Contributes to development, including health and welfare ofsociety;

- Takes into account the expectations of stakeholders;

- Is in compliance with applicable law and consistent withinternational norms of behaviour; and

- Is integrated throughout the organisation and practised in itsrelationships

“

ISO26000, Guidance on Social Responsibility

Why should you bother?

Social divide

Demand for transparency

Water scarcity Climate change Access to resources

Poverty Demand for transparencySupply chain pressures

TRUST + BRAND + REPUTATION = COMPETITIVENESS

Why do companies address CSR?

• Risk management– Problem solving approach

• Compliance driven – Stay out of trouble

• Competition driven – Don’t fall behind

• Crisis driven – Fix the damage

• Create value/profit– Competitive advantage

approach

• “Material topics [are those] that have a direct or indirect impact on an organisation’s ability to create, preserve or erode economic, environmental and social value for itself, its stakeholders and society at large” (GRI)

• Take into account views of external and internal stakeholders

• Share the process you used to determine which issues are material

Materiality is determining which issues are relevant and important to your business.

What should you focus on? Stakeholder engagement and materiality

Sustainability focused companies outperform their peers

Source: BloombergData by Eccles, Ioannou & Serafeim / Harvard Business School

Why do responsible firms perform better?

• Perceptions that are wrong…– Tighter constraints– Higher costs– Foregoing business opportunities

• Looking deeper at the facts….– Resource efficiency and cost savings– Attract (and keep) best talent– Establish reliable supply chains– Avoid risk related to boycotts and

community conflicts– Investment in the brand, reputation– Innovation and competitive advantage

The growth of international standards

• ISO26000 on social responsibility• United Nations Global Compact• Global Reporting Initiative• Industry specific initiatives• Multi-stakeholder initiatives

Future drivers

• Pressure from large customers for sustainable supply chains (extractives, forestry, agriculture, manufacturing)

• Pressure from other stakeholders (governments, non-governmental organisations, investors, etc.)

• Transparency and the social media• Pressure for disclosure (not just listed companies)• Regulatory risks and damage claims• Links between company competitiveness and country

competitiveness

The aims of CSR:Creating Shared Value

Company competitiveness

Economic and social

development

Shared Value Opportunity

Shared value leverages environmental and social opportunities that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions of the communities and countries where the company operates

Environmental, social and economic opportunities

Thank you

Richard Welfordrwelford@csr-asia.com