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Consumer Rights and Corporate Responsibility May 4, 2011 Consumer International World Congress 2011

Consumer Rights and Corporate Responsibility May 4, 2011 Consumer International World Congress 2011. KPMG China. Corporate Social Responsibility. Trust in business has fallen dramatically since the early 1980s.

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Consumer Rights and Corporate Responsibility May 4, 2011 Consumer International World Congress 2011

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  1. Consumer Rights and Corporate ResponsibilityMay 4, 2011Consumer International World Congress 2011 KPMG China Corporate Social Responsibility

  2. Trust in business has fallen dramatically since the early 1980s Customer expectations and behaviour trends in regard to biodiversity preservation, social responsibility, fair trade. October 14, 2009. Retrieved from: http://www.cosmethica-grasse.com/assets/files/MGutsatz.pdf

  3. Trust towards business • CITIZENSHIP (environmental and social performance) • GOVERNANCE (corporate ethics, openness and transparency) • as two strong predictors of people’s trust, respect and admiration for companies in every nation involved in this study. • Positive correlation between CSR and financial performance Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility. 2009. Retrieved from: http://cdn.volunteermatch.org/www/corporations/resources/BuildingReputation_BCCCC_09.pdf

  4. Consumers’ concern in CSR • Consumers generally become more aware and concerned about various aspects of social responsibility of a business organization • The growing level of knowledge and access to information (internet) & magazines that popularize science, marketing, arts… • There is an increasing cohesiveness of consumers against irresponsible business • Informed consumers are more demanding • Teaching methods have changed : children today are not asked to learn and accept but to deduct, to question and understand • Some heated consumer concerns including: climate change, fair trade, healthier and safe products, animal welfare, consumer services, support and dispute resolution, consumer data protection and privacy, education and awareness in the areas of product and labeling Are consumers really interested in social responsibility and is it really changing business behaviour?

  5. Positive correlation between CSR and consumer support Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility. 2009. Retrieved from: http://cdn.volunteermatch.org/www/corporations/resources/BuildingReputation_BCCCC_09.pdf

  6. Global Sustainability • A CSR approach is essential to deliver sustainable development on a global level • Effectively integrate the environmental and social dimensions of sustainability into the operations • CSR encourages more accountability in business practice, thus helping to define the nature of the relationship between corporations and the rest of society

  7. Accountability Consumer perspective Business perspective • CSR should be regarded as a continuum and can be comparable across firms and industries • The use of CSR tools to hold accountability for the CSR actions of the company • Allows external observers, e.g. consumers, to evaluate the organization, and CSR policy more effectively • The company is held accountable for its CSR actions • In order to obtain accountability, companies have to communicate with stakeholders and give concrete evidence that they are committed to continual, long-term improvement Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility. 2009. Retrieved from: http://cdn.volunteermatch.org/www/corporations/resources/BuildingReputation_BCCCC_09.pdf

  8. KPMG International Survey of CR Reporting 2008- Corporate social responsibility reporting is on a rise Top 100 companies in 10-16 countriesGlobal (Fortune) 250 companies % of companies with a separate CSR report

  9. KPMG International Survey of CR Reporting 2008- CSR report as a stand-alone report • The majority of the 250 biggest companies in the world issued separate reports on Corporate Social Responsibility: 79 percent compared to 52 percent in 2005 • 83 % produced a separate report and/or disclosed CSR information in their annual financial report. • The recent escalation in CSR disclosures by corporations worldwide signals the significance of CSR for sustainable development.

  10. KPMG International Survey of CR Reporting 2008 - What do companies see as value creation by CSR? Drivers for corporate social responsibility

  11. How is CSR reporting building consumer confidence to support sustainable business models?

  12. “Apple is committed to ensuring the highest standards of social responsibility throughout our supply base. The companies we do business with must provide safe working conditions, treat workers with dignity and respect, and use environmentally responsible manufacturing processes wherever Apple products are made.” Apple’s Supplier Responsibility 2010 Progress Report

  13. “One of the most fundamental impacts NIKE, Inc.’s business can have is to improve working conditions in our global supply chain and the industry as a whole.” Corporate Responsibility Report FY07-09 Nike,INC.

  14. Growing trends for organizational commitment to sustainability Sustainability: The 'Embracers' Seize Advantage. 2011. Retrieved from: http://www.bcg.com/documents/file71538.pdf

  15. “Shared value holds the key to unlocking the next wave of business innovation and growth. It will also reconnect company success and community success in ways that have been lost in an age of narrow management approaches, short-term thinking, and deepening divides among society’s institutions.” Creating Shared Value, Harvard Business Review Michael E.Porter and Mark R. Kramer, Feb 2011

  16. Corporate Social Responsibility vs. Creating Shared Value Creating Shared Value, Harvard Business Review Michael E.Porter and Mark R. Kramer, Feb 2011

  17. It’s time for companies to take it very seriously… 18

  18. 22 27 20 32 What should your company do to address environmental, social and governance issues? Performance gap, percentage points Fully embed these issues into: Source: McKinsey, February-April 2007 survey of CEOs participating in UN Global Compact

  19. Communication, communication…

  20. Final Thoughts… CSR should link employees, consumers and investors better to the company, by inspiring and empowering them. It is not philanthropy but self-interested behaviour to create economic value by creating societal value. It is about a business organization’s contribution to the world’s development at large, and to better people of this generation and the next.

  21. Diana Tsui Director, Corporate Social Responsibility diana.tsui@kpmg.com

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