“Successful businesses thrive in healthy communities*” *Barry Salzburg CEO Deloitte & Touche USA LLP

1. “Successful businesses thrive in healthy communities*”*Barry Salzburg CEO Deloitte & Touche USA LLP Presented to the The Business of Sport Conference Nick Jones Director, Sustainable Advantage Ltd

2. Today’s line up Defining the concepts Putting them into context – Tensions and opportunities Collaboration Building lasting partnerships

3. Sustainability, CSR & Social Investment Defined • World Business Council on Sustainable Development: • "Sustainable development involves the simultaneous pursuit of economic prosperity, environmental quality and social equity. Companies aiming for sustainability need to perform not against a single, financial bottom line but against the triple bottom line.“ • Corporate Social Responsibility: • Corporate Social Responsibility is the responsibility a business has to its employees, customers, shareholders and adhering to the law. • Social Investment • Investing assets and resources into supporting positive social change that will have benefits to the community and the business in terms of dealing with issues that are, or will be, holding the business and community back • Future-focussed companies interlink these concepts as they are increasingly seen as vital for future business success

4. Sustainability. The opportunity comes when all aspects interact Environmental Social Cultural Economic

5. Corporate social responsibility is of value in strengthening the business from the inside out • Staff satisfaction and loyalty • Customer loyalty and satisfaction • Strengthens supplier relationships • Creates values based connection and brand differentiation • “Happy staff, happy customers, happy shareholders” The Harvard Business Review “Service Profit Chain” March/April 1994 and enhanced in July 2000

6. Context – Tensions and Opportunities

7. The Community and Voluntary Sector

8. The broad context Statistics New Zealand QuickStats Non-profit institutions 2.6% of GDP in 2004 which equates to $3.64 billion 97,000 institutions in October 2005 Social services account for 23% of the value and 12 % of the institutions GDP proportion increases to 4.9% including voluntary labour 1,011,600 volunteers giving 270m hours plus 105,000 paid employees

9. Overall levels of support for the Community and Voluntary Sector shows links to relevance and connection Support is defined as donating goods or money to an appeal, ongoing donation/sponsorship, volunteering, other e.g. Purchase. Time period last 12 months Source: Nielsen Media Research Panorama Jan-Dec 2007/Nick Jones & Associates Ltd

10. Estimated Number % of Population of People 10+  10+ Personally Supported 2,717,000 75.4 Arts And Culture 447,000 12.4 Sports Clubs 881,000 24.4 Marae 299,000 8.3 Other Clubs/Community Organisations 964,000 26.7 Preschool 647,000 17.9 Primary And Secondary Education 1,038,000 28.8 Tertiary Education 230,000 6.4 Hospitals/ Rehabilitation 307,000 8.5 Hospice 706,000 19.6 Illness And Disease Prevention 666,000 18.5 Mental Health Services 340,000 9.4 Children's Health 713,000 19.8 Other Health Services 759,000 21.1 Children's Welfare 401,000 11.1 Family Support Services 416,000 11.5 Youth Services And Welfare 301,000 8.3 Services For The Elderly 395,000 11.0 Services For People With Disabilities 657,000 18.2 Disaster Relief 449,000 12.4 Child Sponsorship 454,000 12.6 Fair Trade Practices 255,000 7.1 Animal Welfare And Rights 530,000 14.7 Environmental 417,000 11.6 Religious Activities 679,000 18.8 Political Organisations 181,000 5.0 Support levels across the 25 sectors measured Ranking • Primary and secondary education • Other clubs and community organisations • Sports clubs • Other health services • Children’s health • Hospice • Religious activities • Illness and disease prevention • Services for people with disabilities • Preschool Source: Nielsen Media Research Panorama Jan-Dec 2007/Nick Jones & Associates Ltd

11. The crossover between support types highlights a core group of 439,000 people who volunteer and donate in both ways Donated goods/money to an appeal 1.7 1 million Volunteered 1.22 million 249,000 only volunteer 586,000 only donated goods/money 378,000 315,000 only made a direct donation/sponsorship 439,000 152,000 306,000 Source: Nielsen Media Research Panorama Jan-Dec 2007/Nick Jones & Associates Ltd Direct donation/sponsorship 1.21 million

12. The Business Sector

13. Factors impacting on New Zealand businesses Global credit crunch ECONOMIC Overseas employment opportunities Centralised decisions Inflation and recession Shareholders Technology Customers Business Immigration Health and wellbeing CULTURAL SOCIAL Current/future employees Legislation The wider Community Pressure groups Political influences Business ethics ENVIRONMENTAL Climate change

14. The Community“Consumers who Care”

15. The Consumer who Cares is impacting on business and across society today My levels of optimism, aspirations and attitudes to change How I see businesses role in making a difference to society and the environment Health and wellbeing personally and in society How much I care and what I do about it IS DEFINING YOUR MARKET TODAY My personal action in supporting non-profit and community organisations Financial control and how I use that My sense of safety and security I make active choices in purchasing of products and services (purchasing, paying more for or avoidance) Levels of trust and assurance Views on fairness and equity in society and cultural values

16. The “Consumers who Care” are a significant market who buy from and support businesses that are socially and environmentally responsible • Baby Boomers approx. 750,000 • Generation X approx. 840,000 • Generation Y approx. 900,000 • Interested in Rugby Union 1.7 million Consumer who Cares = 1.9 million+ Source: Nielsen Media Research Panorama Jan-Jun 2007/Nick Jones & Associates Ltd

17. Segment CSR Community Purchasing Active Leaders Strong support Strong support High est levels on average Strong with slight environmental Everyday Achievers Strong support Strong support skew Pragmatic Optimists Str ong support Average support Regular but not frequent Independent & Aware Strong support Average support Regular but not frequent Mo re social than environmental Informed Consumers Highest levels on average Below average orientation Concerned Explorers Below average Below average Occasional Starting Out Below average Below average Very occasional Change Averse Lowest levels Below average Minimal Toughing it Out Below average Lowest levels Minimal The marketplace segmented by CSR and sustainability behaviour and attitudesSource: Nielsen Media Research Panorama (Jan-Dec 2007) Nick Jones & Associates Ltd Notes CSR: Personal views and attitudes towards corporate social responsibility including environmental responsibility Community: Personal support for community and voluntary sector including donating, volunteering , etc. Purchasing: Personal purchasing and avoidance of goods and services that do (or in the case of avoidance do not) support social and environmental causes Source: Nielsen Media Research Panorama (Jan-Dec 2007) Nick Jones & Associates Ltd

18. Unique segmentation includes major aspects of consumers sustainability behaviour Source: Nielsen Media Research Panorama (Jan-Dec 2007) Nick Jones & Associates Ltd

19. Business and community must take account of expectations, needs, beliefs and priorities as they vary significantly between these segments • The Engaged Segment • Independent and Aware • Finding it difficult to get a work life balance • Interested in packaging and sampling at the supermarket • Environmentally aware • Sense of optimism but feel they get a raw deal • Often feel lonely but spend time with friends too • Spend too much on alcohol • The Explorer Segment • Concerned Explorers • Concerns over trust • Believe environment is being managed OK and NZ is off track • Sense of quality and cost relationship but on a tight budget • Life is getting harder • Some physical activity but other struggles around weight and health The Trailblazer segment Active Leaders • Buying organics and environmentally friendly products • Open to change • Active themselves and in the community • Open minded • Don’t feel lonely or eat takeaways • Financially comfortable • See beyond money and fashion • NZ products appeal Index base is 15+ and index of >110 or <90 Source: Nielsen Media Research Panorama (Jan-Dec 2007) Nick Jones & Associates Ltd

20. Collaboration

21. The crossover between the communities in our lives creates the opportunity for collaboration Work Personal/ Family Place Values and beliefs behaviour NB This is a conceptual map for illustration only

22. Distance and alignment Putting distance between ourselves and an issue either intentionally or unintentionally The distance between aligned values and compromise in the workplace The business creating strategic drift (distance) away from its employees and customers values The distance between intention and action Alignment of values creates/supports trust in relationships which is HUGE for brands The alignment of thinking in the commercial world, the government and community on connectedness (whatever that looks like for people)

23. Collaborative modelsBased on Thomas Kilman Conflict Resolution Models INNOVATION Compete Collaboration Value of the issue Compromise Avoid/nothing happens Accommodate Value of the relationship

24. Building Lasting Partnerships

25. "Don't oppose forces, use them." Buckminster Fuller American philosopher, architect, and inventor

26. “The consumer increasingly connects markets and meaning – and thus there will be a day when all entrepreneurs have to take social and environmental concerns into their core business strategies if they want to attract and keep consumers and stay in business.” Pamela Hartigan, Schwab Foundation for Social Entrepreneurship

27. Taking a strategic approach is best for all partiesHarvard Business Review “Strategy and Society” Michael E. Porter and Mark R. Kramer • Four prevailing justifications: Moral obligation, sustainability, license to operate and reputation • Potential approaches: • Support generic social issues not specific to the business • Focus on issues impacting the community and the business e.g. “vulnerable consumers” • Strategic alignments that leverage mutual capabilities between partners

28. Business relevance relates to all aspects of management of a “good’ business • Recruitment and retention • Health • Skills development • Work/Life Balance • Family-friendly • Accessing new markets • Service and product development • PR and marketing • Cost effective

29. The human side: “Giving” adds to our quality of life Cohesive communities, organisational development, participation, people-centredness John Raeburn, 2007: People-centred Community Development Altruism is hard wired in our brains and creates a pleasurable experience. National Institute of Health in the US reported in May 2007 in The Washington Post Employees who are empowered to “give” will have an even greater sense of health and wellbeing EEO and JRA/Unlimited “Best Places to Work” prove results of the business benefits of empowerment programmes

30. “Giving time” beats stressSource: ICM/CSV and Barclays PLC September 2004 48% who have volunteered for two years or more say volunteering makes them less depressed 63% of 25-34 year olds say volunteering helps them feel less stressed 31% of 18-24 year olds say they have taken less time off works since volunteering

31. Resonant leadership. Can we apply this to community and business partnerships as well? • In Resonant Leadership*, authors Richard Boyatzis and Annie McKee talk about the need for leaders to renew themselves and nurture mindfulness, hope, and compassion in their lives. • What role can community and business partnerships play? • They can help define who the business is • They can help define what they stand for • They can provide a new “lens” on the marketplace • They can lead innovation *Harvard Business School Press. RESONANT LEADERSHIP: Renewing Yourself and Connecting with Others Through Mindfulness, Hope, and Compassion, by Richard Boyatzis and Annie McKee.

32. Developmental triggers for business: How can you help?Boston College Centre for Corporate Citizenship

33. Making it work. Reflect on who you are and what you need and what you can offer? What does the business need? What do you stand for? Be specific on what you need and why – impacts and outcomes Jointly define the reciprocity in the partnership What's in it for them? How can you help meet the businesses needs How will you know its worked?

34. The Partnering Initiative model for developmenthttp://thepartneringinitiative.org/mainpages/rb/pc/

35. Building healthy businesses and healthy communities- Some things to consider • Put yourself in your partners shoes. What's going on in their world? • Tensions and opportunities • Needs and beliefs • Interests and relevance • Are the values and priorities aligned? • Encourage people to get involved: employees, community and consumers • Ensure understanding using consistent and simple commonly used language not terminology • Give people easy options e.g. collaborative approaches on complex issues. • Educate, empower and inspire – go on a journey of rewarding discovery

36. For more information on the Consumer who Cares research and/or CSR strategy and partnership please email nick.jones@hayesknight.co.nz