Corporate Social Responsibility

1. Corporate Social Responsibility

2. Corporate Social Responsibility • Ethics • Corporate Citizenship • Corporate accountability • Sustainability

3. CSR: Achieving commercial success in ways that honor ethical values and respect people, communities and the natural environment

4. CSR: Addressing the legal, ethical, commercial and other expectations society has for business and making decisions that fairly balance the claims of all key stakeholders

5. CSR includes issues related to: • Business ethics • Community investment • Environment • Governance • Human rights • Marketplace

6. Business Importance: • Improved Financial Performance • Reduced Operating Costs • Enhanced Brand Image and Reputation • Increased Sales and Customer Loyalty

7. Business Importance: (cont.) • Increased Productivity and Quality • Increased Ability to Attract and Retain Employees • Reduced Regulatory Oversight • Access to Capital

8. Key Developments: • Increased Stakeholder Activism • Proliferation of Codes, Standards, Indicators and Guidelines • More Sophisticated Shareholder Engagement • Accountability Throughout the ValueChain

9. Key Developments: (cont.) • Transparency and Reporting • Growing Government Interest and Action • Convergence of CSR and Governance Agendas • Growing investor Pressure and Market-Based Incentives

10. Key Developments:(cont.) • Advances in Information Technology • Pressure to Quantify CSR “Return of Investment”

11. External Standards: • AccountAbility • The Global Reporting Initiative • Social Accountability 8000 • United Nations Global Compact • Organization for Economic Cooperation and Development Guidelines for Multinational Enterprises

12. External Standards (cont.): • The Caux Round Table (CRT) • The Global Sullivan Principles • The Keidanren Charter for GoodCorporate Behavior • APEC Business Code of Conduct

13. Implementation Steps: • Mission, Vision, Values Statements • Cultural Values • Corporate Governance • Management Structures • Strategic Planning • General Accountability • CSR Reporting • Use of Influence

14. Leadership Examples: • Chiquita Brands International, Inc • Starbucks Coffee Co • B&Q • Novo Nordisk A/S

15. Interface, Inc “Our Goal: to be the first company that, by its deeds, shows the entire industrial world what sustainability is in all its dimensions: People, process, product, place, and profits—by 2020—and in doing so we will become restorative through the power of influence.”

16. Interface, Inc (cont.) “Our Vision: Interface will become the first name in commercial and institutional interiors worldwide through its commitment to people, process, product, place and profits. We will strive to create an organization wherein all people are accorded unconditional respect and dignity; one that allows each person to continuously learn and develop. We will focus on product (which includes service) through constant emphasis on process quality and engineering, which we will combine with careful attention to our customers’ needs so as always to deliver superior value to our customers, thereby maximizing all stakeholders’ satisfaction. We will honor the places where we do business by endeavoring to become the first name in industrial ecology, a corporation that cherishes nature and restores the environment. Interface will lead by example and validate by results, including profits, leaving the world a better place that when we began, and we will be restorative through the power of our influence in the world”

17. Business and Corporate Accountability

18. Business Importance: • Improved financial performance • Heightened public credibility • Reduced costs • Increased attractiveness to investors • Improved relationship with shareholders

19. “..more than 80% of investors would be willing to pay more for the shares of a well-governed company than for a poorly governed company with comparable financial performance.” (From a 2000 survey of 200 large institutional investors conducted by McKinsey & Co., the World Bank, and Institutional Investor’s regional institutes)

20. Business Importance (cont.): • Early identification of potential liabilities • Marketplace advantages • Improved overall management • Improved organizational effectiveness • Decreased risk of adverse publicity

21. Key Developments: • Growth of CSR • Increased demand for transparency • Growth in sustainable reporting • Greater government regulation • Increased shareholder activism • Proliferation of social and environmental reporting standards • Increased media attention

22. Implementation Steps: • Set objectives • Review company materials • Review management systems • Engage board of directors • Define and engage stakeholders • Develop formal internal and external communication mechanisms • Engage in continuous improvement

23. Green Product Design

24. Business Importance: • Decreased costs & increased profits • Decreased production time • Customer satisfaction • Customer retention • Recognition • Proactive preparation for regulation

25. Key Developments: • Take-back laws and extended product responsibility • Updates to existing regulations affecting product design • Industry/government voluntary initiatives • Industry/NGO collaboration • Restricted materials lists

26. Business Importance: • Decreased costs and increased profits • Decreased production time • Customer satisfaction • Customer retention • Recognition • Proactive preparation for regulation

27. Key Developments: • Take-back laws and extended product responsibility • Updates to existing regulationsaffecting product design • Industry/government voluntary initiatives • New systems of commerce • Restricted materials list • Academic programs

28. External Standards: • Eco-labeling/enviromental certification • ISO 14000 • Restrictions on use of hazardous materials • EU directive 94/62 on packaging and packaging waste • Product-specific mandates ond voluntary efforts

29. Implementation Steps: • Develop business strategies to capture value from lifecycle thinking • Practice full-cost accounting • Explore reuse options for materials and products • Develop markets for green-designed products • Establish ground rules for product design • Perform analysis during product design and development

30. Leadership Examples: • Proctor & Gamble (P&G) • Volvo • Electrolux

31. Sustainable Business Practices

32. Sustainable Development: “Meeting the needs of the present without compromising the ability of future generations to meet their own needs.” (UN Commission on Environment and Development)

33. Business Importance: • Access to capital • New Market development • Asset retention • Brand image and customer retention • Innovation

34. Key Developments: • Increase in sustainability reports • Growth of markets concerned with sustainable products and services • Strategic partnerships • Financial markets • Government-Industry partnership initiatives

35. Sustainable goals and indicators • Milestones • Are we moving towards our destination or heading in the opposite way

36. Economic Vitality Goal:An economy that is competitive, diverse, and attractive to business; that maintains and expands assets and capital; that provides a variety of entry-, middle-, and high-level jobs; and that promotes the well-being of a community and its workforce

37. Economic Vitality Indicators • Per capital Income: Why do we care? • Economic well-being one of three axes of sustainability • Disposable income a measure of economic well being • Having the option to make choices a good thing

38. Unemployment Why do we care? • Unemployment affects individual and indicates the health of the economy • Communities with high unemployment have increased crime, domestic violence, substance abuse • Less tax revenue available as resource against social problems

39. Productivity of Labor Why do we care? • Measures the value of output relative to the resources used to produce it. • Higher incomes and living standards • More or resources available for reinvestment in growth and the ability to remain competitive

40. 4. Share of Households Below Poverty Line Why do we care? • High poverty rates impose costs on welfare systems and slow economic growth of community • Poverty usually occurs along with poor health, decreased economic opportunity, higher crime rates…reduce quality of life

41. Energy Efficiency Why do we care? • Measures the output of our economy relative to the amount of energy used. • Major input into productive activity and consumption • More efficiency, lower environmental cost

42. Equity Goal:A more equitable distribution of the positive and negative products of civilization in the community. This includes fair access to healthy environments, good healthcare, quality education, governmental decision-making, economic opportunity, and natural and cultural amenities

43. 6. Why do we care? • A society in which everyone feels a welcome and equal participant, where people take ownership, will be more sustainable – better able to grow, evolve, adapt

44. Racial disparities in Infant Mortality Why do we care? • High infant mortality is sign that pregnant women and newborns are not receiving adequate nutrition and medical care • Racial disparity shows inequity in access to care • Infant health care crucial to lifelong mental health and physical development

45. Strong Community, Culture, Recreation Goal: Create or enhance within communities a positive sense of local identity and individual belonging, which promotes respect among neighbors, increases everyone’s feelings of safety and security, and provides abundant cultural and recreational opportunities

46. Newspaper Circulation Why do we care? • Reading newspaper fosters community awareness and encourages people to take ownership and engage with their community • Newspapers provide information to enable people to get involved with local decision-making and disputes

47. Crime Rate Why do we care? • Crime is indicator of deeper social and economic issues. • Increase crime rate may result from decrease in job opportunity, economic stagnation, inadequate education, or inadequate policing.

48. 10.Open Space Why do we care? • Protects natural environment by providing habitat for wildlife. • Absorbs rainfall, minimizing risk of floods and sedimentation of waterways • Provides recreation on land and water • Protecting space while it is still relatively inexpensive, ensures room for parks and natural areas against development

49. Quality Education Goal: A quality, lifelong education equally accessible to all, whereby individuals learn to be critical thinkers and engaged citizens with an understanding of and respect for the systems that support civilization (social, economic, environmental); and which provides students with the knowledge and skills necessary for employment and personal fulfillment.

50. High School Graduation Rates Why do we care? • Demands for highly skilled, trained, educated employees has steadily increased • High school education minimum in the labor market • Requirement for accessing various forms of higher education and training • Useful measure of what will be availabe to young people later in life