Private sector and civil society relations

Civil Engagement COP meeting, 7 May 2007,Cyprus, Karolina Mzyk,

BRC

2 2

Try to learn from, and work with, each other

Co-creating business relationships

Convergence Between the Corporate Sector and the Civil Society

Realize to coexist

1

2

3

4

Different attitude toward liberalization and Globalization

Source: Harvard Business Review February 2007

3 3

Private sector and CSR : context

Changing consumers expectations: more accountability and transparency

• Growing power of companies, scandals Reaction from business: gradually from tensions to engagement and cooperation with stakeholders, birth of CSR (PR, code of conducts, social reporting) Convergence: competencies and interest

• From philanthropy to core business • Solving development problems thru market solutions: bottom of the pyramid

model Trends not homogenous – Western market concept and lead Eastern Europe main drivers: EU Integration, companies that seek leverage from Western markets Future : CSR as fad?

4 4

CSR Trends in the World-continued

The Increase of Companies in the FTSE4Good Series since 2001

Source: FTSE4Good Index Series –Five Year Review

5 5

Growth of Business Participation in the GC

(source GC Office)

4242

2755

735

206420 421

426505

2329

1824

1089

668

248

0

500

1000

1500

2000

2500

3000

2000 2001 2002 2003 2004 2005 2006

Per Year Cumulative

UN Global Compact – the largest CSR initiative in the world

- All participants (as of May 4, 2007): 4739

- Business participants: 3143 (108 Businesses Ranked in FT Global 500)

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UN Global Compact: progress

UN CSR initiativeVoluntary, no policing, self- interest 2 objectives: companies mainstreaming the principles and working in support of MDGs 80 local GC networks, including Eastern Europe : Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Hungary, Lithuania, Northern Cyprus, Macedonia, Moldova, Poland, Russian Federation, Turkey, Ukraine Business – led and multistakeholder Accountability: COPs, local stakeholder activism Activities: advocacy, training/learning, policy dialogue, partnerships Main space for UN-private sector partnerships

7 7

How Companies and NGOs Find Common Ground

Convergence Area Examples

Pooling knowledge, competencies, and relationships to build new operating standards and co-regulatory schemes

Sectoral initiatives ISO 26000

Leveraging each other’s credibility and social networks to create access to markets and brand value

Creating professional development norms and management roles to facilitate coordination between the two sectors

Fair trade labeling

Source: Harvard Business Review February 2007

UN Global Compact Responsible Investment Initiative UN GC Management Board : NGO present

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Case 1: Exploring the Links Between International Business and Poverty Reduction: A Case Study of Unilever in Indonesia

Objective

- Improve understanding among the wider business community, government, civil-society organizations, and academics about the relationship between an multinational business and poverty

Participants

- Oxfam and Unilever Indonesia

Lessons learned

Both understood the limitations and opportunities that determine what companies can and cannot be expected to do to contribute to poverty reduction

Case study can be found on http://www.oxfam.org.uk/what_we_do/issues/livelihoods/unilever.htm

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Case 2. The contribution of MNCs to the Millennium Development Goals Objective

Measuring the contribution of the private sector to achieving the Millennium Development Goals

Participants

- Six multinationals measured: ABN AMRO, Akzo Nobel, BHP Billiton, Heineken TNT and Royal Philips Electronics

- Project commissioner: NCDO, The Netherlands

- Project manager: Dutch Sustainability Research, The Netherlands

Measuring the multinationals

- Dutch Sustainability Research (DSR) collected and analyzed public and corporate information of the test participants and allocated scores within the MDG framework.

Positive contributions but limited comparability

-All six participating companies contributed positively to the MDGs through business activities.

- Comparability between companies is limited due to sectoral differences

-http://www.dsresearch.nl/dsr/static/pdf/dsnl_mdgreport2006.pdf

1010

Case 4: Toyota with Eastern Europe NGOs Environmental NGOs

Objective

To support projects committed to capacity building for the next-generation for environmental conservation, and to seeking solutions of environmental issues by NGOs under the theme of “Environmental Technology and Human Resource Development Contributing to Environment Revitalization and Conservation”

Projects

-“Our Nature, Our Future” – Mobilizing Youth and Building Capacity for Nature Conservation by Green Balkans Federation of Nature Conservation NGOs in Bulgaria

- “The Green Pack”, an Environment Awareness Activities Program that targets Junior High School Students and Teachers in East European countries by Regional Environmental Center for Central and Eastern Europe in Hungary.

1111

Ethical Tea Partnership 1997 Began work in 1997 as the Tea Sourcing Partnership. In September 2004, changed the name to the Ethical Tea Partnership.An organization with global reach.19 members of the Ethical Tea Partnership.

The Council for Responsible Jewelry Practices (CRJP)

2005 A global body established with the mission of “reinforcing confidence in the diamond and gold supply chain.”

Max Havelaar 2005 The first fair trade label for a non-food commodity: cotton.

Fair Trade Foundation in UK 2005 50 Fairtrade certified cotton producer groups in India, Mali, Senegal and Cameroon (as of November 2005)The UK launch of fair-trade certified cotton

Fair trade labeling – growing markets

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Future trends

Business working with wide range of partners on sustainability solutions •Partnerships based on core business, innovative hybrid models with new

products and services for lower income consumers Public private partnerships for public service delivery – more infrastructure and capital intensive Social enterprises

1313

Multistakeholder partnerships in the UN

Types of partnerships: Philanthropy, CSR (linked to core business), commercial partnerships Partnerships more complex, multi-party Roles for UN: development expertise, broker, facilitator, catalyst

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UN and business How to engage -- available tools

Rules of engagement with the private sector: Development impact Do we work with all? Is private sector a source of easy cash ? Monitoring and screening Do we work with companies who are not members of the GC?Assessing readiness and cost-benefit of a partnership Risk management

Tools: BRSP/BDP new strategy for working with the private sector Formal rule of engagement MOUs, CSA

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Thank You!

1616

Supporting slides

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Samples of CSR Initiatives

ISO 26000 (will be published in 2008)

A guidance standard for social responsibility that could relate to CSR reporting

OECD Guidelines for Multinational Enterprises (revised in 2000)Recommendations covering nine areas of business conduct addressed by governments to multinational enterprises.

UN Global Compact (issues in 1999)

Challenged business leaders to join the international initiative that would bring companies together with UN agencies labour and civil society to support universal environmental and social principles

Global Reporting Initiative (GRI) (1999)

A multi-stakeholder process which seeks to refine a set of common globally applicable CSR and sustainability reporting guidelinesInternational Business Leaders Forum (IBLF) (set up in 1990)

An international not-for-profit organization in response to the emerging challenges of economic growth and change in the global economy.

Business in the Community (set up in 1982)

A membership of companies with the leadership to translate corporate values and commitments into mainstream management practice