CSR Management System Evolution: Strategic Integration Framework

1. Corporate Social Responsibility Class 3: CSR Management System Syllabus developed by Jens Trummer

2. Agenda CSR Management System Reading: 1. “Daimler 360, Facts on Sustainability”, 2010 For those interested in more detailed information: - “Designing a CSR Structure”, Business for Social Responsibility, 2002 - “CSR – An Implementation Guide for Business”, IISD

3. Class 3: CSR Management System CSR LAB

4. What is difference ? and

5. 2 Types of Business Models: 1. “Sustainable” Business Model = CSR??? 2. Business Model with CSR Programs: CSR Management System

6. Evolution of CSR: Stage 3: Strategic CSR: Strategy complimentingbusiness activity CSR Management System Stage 4: Sustainability Intrinsic business strategy/ Activity: Still CSR ?? Stage 1: CSR non-existent Stage 2: CSR non-strategic: - Philanthropy - Donations - Volunteering, etc. ?

7. CSR Management System needs “ Framework for ‘Strategic’ ‘Integration’ ” TOOL to compliment corebusiness activities

8. “Framework for Strategic Integration” - ‘Theory of Practice’ - No ‘one size fits all’ - Not necessarily chronological - Must be adaptive – Why?

9. CSR implementation on-going Continuous adaptation to changing ‘Driving Forces’ Class 1 Class 1

10. Framework for Strategic Integration: 3 + 1 = 3 Steps + 1 Continuous Action Step 1 ???

11. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis 2. Stakeholder Process (See Class 2) - Stakeholder Analysis - Stakeholder Dialogue 3. CSR-SWOT

12. Step 1: Analysis 1. CSR Audit “As-is Analysis” Goal: Assess the whole picture Basis for “Gap Analysis”

13. Step 1: Analysis 1. CSR Audit - CSR definition - 4 key criteria ??? - Existing CSR policies, standards, values, Corporate Motivation Nalco - Understand current CSR commitments, external standards used - Structures: Current departments, functional areas, cross-functionality - CSR issues currently being addressed - Stakeholder Overview of current stakeholder ‘dialogue’ - Current CSR programs and activities

14. External Divers/Motivation Re-active vs. Pro-active Nike, Gap, BP, Starbucks ?? What about Nestle??? LINK

15. Step 1: Analysis 1. CSR Audit Internal Drivers/Motivation - Honest (‘self’-) analysis - Philanthropic and /or(??) business incentives

16. Step 1: Analysis 1. CSR Audit - CSR definition - Existing CSR policies, standards, values, Motivation - Understand current CSR commitments, external standards used - Structures: Current departments, functional areas, cross-functionality - CSR issues currently being addressed - Stakeholder Overview of current stakeholder ‘dialogue’ - Current CSR programs and activities

17. Step 1: Analysis 1. CSR Audit Which CSR programs … … are not necessarily referred to as “CSR” ?

18. Step 1: Analysis 1. CSR Audit - ISO 14001/EMAS - Health and Safety (SA 8000) ISO for CSR ???

19. Step 1: Analysis 1. CSR Audit ISO for CSR ISO 26000: Launched November 1st, 2010 ! Guidance standard on social responsibility

20. Step 1: Analysis 1. CSR Audit - CSR definition - Existing CSR policies, standards, values, Motivation - Understand current CSR commitments, external standards used (e.g. ISO 14001, SA 8000) - Structures: Current departments, functional areas, cross-functionality - CSR issues currently being addressed - Stakeholder Overview of current stakeholder ‘dialogue’ - Current CSR programs and activities

21. Step 1: Analysis 1. CSR Audit: ‘I I I’ Internal ‘Intelligence’ Investigation: Which departments responsible for CSR issues ?

22. Step 1: Analysis 1. CSR Audit ‘CSR Departments’ - Communications/PR - Marketing - Human Resources - (Senior) Management Which department typically most reactive … or ‘slow’ on take-up ?

23. Step 1: Analysis 1. CSR Audit - CSR definition - Existing CSR policies, standards, values, Motivation - Understand current CSR commitments, external standards used (e.g. ISO 14001, SA 8000, ISO for CSR ???) - Structures: Current departments, functional areas, cross-functionality - CSR issues currently being addressed - Stakeholder Overview of current stakeholder ‘dialogue’ - Current CSR programs and activities Which stakeholders almost all companies irrespective of existing CSR strategy???

24. Step 1: Analysis 1. CSR Audit How would you do an Audit ???

25. Step 1: Analysis 1. CSR Audit How? Method: Internal: 1. Desk-top study: Document Analysis 2. Executive, Management & Staff Interviews External: 3. Reputation surveys, benchmarking, CSR Reports (GRI, AccountAbility Rating)

26. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis 2. Stakeholder Process - Stakeholder Analysis … Components ??? - Stakeholder Dialogue 3. CSR-SWOT

27. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis 2. Stakeholder Process - Identification of Issues - Selection of Stakeholder - Prioritization of Stakeholders - Stakeholder Dialogue 3. CSR-SWOT See Class 2! Stakeholder Analysis

28. Step 1: Analysis 2. Stakeholder Process - Identification of Issues - Selection of Stakeholder - Prioritization of Stakeholders - Stakeholder Dialogue Stakeholder Analysis Significance: More adaptive to External Drivers (Social Expectations & Globalization) Class 2

29. Step 1: Analysis ‘Outsourcing’ CSR: Risking ‘hodgepodge’ of un-coordinated CSR activities and philanthropic activities? What do you think? However: Class 2

30. Step 1: Analysis Does Kramer & Porter Inside-Out/Outside-In Model work better ?? Class 1 Inside-Out: Impact on Society Outside-In: Impact on “Competitive Positioning” Source: “Strategy and Society”, Porter & Kramer

31. Step 1: Analysis CSR Impact of Society on Company Impact of Company on Society How does this compares with Stakeholder Model ?

32. Step 1: Analysis Class 2 Both ways?

33. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis 2. Stakeholder Process - Stakeholder Analysis - Stakeholder Dialogue 3. CSR-SWOT And/or Kramer & Porter: Inside-Out/Outside-In Model

34. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis 2. Stakeholder Process - Stakeholder Analysis - Stakeholder Dialogue 3. CSR-SWOT And/or Kramer & Porter: Inside-Out/Outside-In Model

35. Step 1: Analysis 3. SWOT CSR-SWOT Analysis: - Putting it all together - Linkage to next part

36. Framework for Strategic Integration: Step 1: Analysis … Step 2 ???

37. Step 2: CSR Strategy 2. CSR Strategy Strategy to compliment business activity … CSR is Business Strategy (see EU Definition !) 1st Step??

38. Step 2: CSR Strategy Step 2: CSR Strategy 1. Policy formulation 2. CSR Structure 3. Staffing Plan 4. Budget

39. Step 2: CSR Strategy 1. Policy Formulation - Priorities - Core Values - Formulation of Policy Statement

40. Step 2: CSR Strategy 1. Policy Formulation - Formulation of Strategy How long before public starts identifying CSR strategy with company ?

41. Step 2: CSR Strategy Step 2: CSR Strategy 1. Policy formulation 2. CSR Structure 3. Staffing Plan 4. Budget

42. Step 2: CSR Strategy 2. CSR Structure Choose structural framework - Size - Corporate structure - Sectors involved ... geographic locations, risk areas, commitment - New or improved structure?

43. Step 2: CSR Strategy What is important for an effective Structure ?

44. Step 2: CSR Strategy ‘Cross-Functional’ Why so important in CSR ?

45. Step 2: CSR Strategy 2. CSR Structure: CSR is cross-functional: - Environment - Government - Communities - Employees - Supply Chain - Customers - Shareholders 7 Stakeholder Groups

46. Step 2: CSR Strategy 2003: ‘Embedding’

47. Step 2: CSR Strategy Framework for Strategic Integration Integrating sustainability into company’s: … at all levels of the organization - Values - Culture - Operations - Business decisions = ‘Embedding’

48. Step 2: CSR Strategy 2. CSR Structure: Mechanisms for involving functional areas, departments, etc. Roles and responsibilities of each employee and/or group (committee) involved with CSR efforts (Board committee, executive committee, specific CSR committee, etc.)

49. Increasing level of CSR commitment Source: Designing a CSR Structure, BSR