CSR & sustainability

1. CSR & sustainability • Motto: “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibility’ (Josiah Charles Stamp) • Corporate & research agendas – different, even divergent • CSR & sustainability – reduced budgets bec. Not considered core business (perceived as cost, rather than investment) • To be assessed: CSR impact on business (added value, ROI)

2. Social economy & social performance • Emotional impact of CSR serves trust capital, equity brand and developed affinity with target audiences • Social performance of sustainable brands that streamline reputation as “the new business DNA” or “age of responsibility” (Visser, 2011)’

3. KPIs of social performance • Ensured endorsement of quality & safety regulations throughout entire supply chain • Minimised interventions carrying a negative ecologic footprint • Supporting initiatives for improving community-based quality of life & livelihood • Compliance with integrity, honesty, transparency standards • Promoting equal treatment

4. CPI as means to gain customer loyalty • Internal & external customers (Stakeholders) – more demanding & more likely to resonate to more subtle persuasion means such as CSR & sustainability programs than to classical marketing techniques (Klintman, 2013) • Innovative, ingenious way for companies to develop customer retention: loyal consumers convert to sponsors of charity or environmental protection – • They are doing much more than merely buying products or services – legitimised consumption, nothing to feel guilty about

5. CSR positioning • At the crossroad between economic sociology, marketing, corporate communications, advertising, PR & HRM • How visible, attractive & credible are commercial brands? • CSR reports as means of understanding the social world inside the organisation, its identification with corporate citizenship, mission, vision, values, strategies of brand differentiation & positioning • How much is a good name worth, in the corporate world? How much money does it bring?

6. Romanian CSR & sustainability landscape • Heterogeneous, eclectic • Implementation of ecological standards – at incipient level • Program selection – usually decided from headquarters level • CSR actions imply participation of various partners to formal and informal associative structures • Participation is a determining factor for CSR, as well as employer branding (free will, free choice, still mostly non-imposed

7. CSR consultation • Proportion of group members that take part in consultation and resolution stages =indicator of the democratic group leadership & civic engagement (Adler & Goggin, 2005) • Ostrom (1990): collective action = to manage to get a critical mass of members involved in the common good, despite their tendency to refrain from participation and exclusively see to their private interests

8. Dilemma of collective action • People tend to benefit from / exploit public property and resources, colonise them for their own good • Oblivious to the fact that they do not own them and should compensate the depletion they produce • Otherwise, future generations will suffer – their inheritance will be caused by predecessors’ greed and ignorance

9. CSR and tragedy of the commons (Hardin) • CSR seeks to prevent / counter-act the situation in which a number of social actors, each one in rational pursuit of his / her own interest, end up involuntarily depleting or destroying a limited shared resource

10. Tragedy of the commons • Factors that attenuate the tendency to dodge off responsibility: • Perceived effectiveness of one’s contribution • Group heterogeneity • Strength of social networks • Cultural norms that stimulate participation

11. Why corporations focus on well-being & responsibility? • Customers become more knowledgeable and selective • Free market transparency: abundant information available • Competitiveness: multiple competitive offers to choose from, most often standardized bec. of accelerated transfer (ideas on enhanced service & products travel fast)

12. Impact of CSR – risk mngm, equity inducer • CSR - intensely researched as pro-social behaviour and altruism, as well as marketing tool for promoting the brand image of a good corporate citizen (Williams & Aguilera, 2008) • Sustainable brands are expected to form the new wave of high affinity and equity inducers • CSR role in avoidance of incidents that are potentially devastating for corporate reputations or image crises such as corruption scandals or environmental hazards and pollution

13. CSR growing popularity • Longitudinal study on Google: 24.200.000 results in November 2015, 18.600.000 results in November 2011, compared to only 3.850.000 results three years ago (in October 2008) with search word: CSR • When compassion meets profit: CSR is good for corporate reputation, but also for profitability figures • CSR becoming more of a necessity than a fashion, more of a rule than an exception

14. CSR reporting standards • Many companies introduce compliance programs and deliver trainings to their staff on ethics, professional conduct standards including integrity, honesty, ownership and fair play • Internationally acknowledged standards: • ISO 14000 – environment management audit systems, • ISO 26000 – CSR guide • SA 8000 – decent work conditions standard

15. Transparency in CSR policies - components • Code of ethical conduct – creation & promotion by internal & external communication • CSR and sustainability reports, based on rigorous in-house and independent (externalised) auditing procedures • Evaluating the impact of CSR programs on the targeted beneficiaries

16. Responsibilities of CSR role • Evans & Davis (2011) – 4 sets of attributes: • Discretionary attributes: to invest volunteering time or other resources for civic projects • Legal attributes: zero tolerance to discrimination, equality of treatment, compliance with national laws and organizational regulations, reporting all fraudulent and illegal actions to appropriate authorities • Economic attributes: coming up with cost reduction & revenue maximization solutions - financial and sustainability objectives • Ethical attributes: refraining from deceptive or manipulative practices, publicly disclosing any conflicts-of-interest

17. CSR theoretical models • Citizen-Consumers and Evolution: Reducing Environmental Harm through Our Social Motivation Mikael Klintman (2013). Palgrave Macmillan: London • Social identity theory - interplay between solidarity and competition, as a factor important to regulating behaviour (Stets & Burke, 2000)

18. Environmental behavior theories • Theory of Reasoned Action, Theory of Planned Behavior(Ajzen& Fishbein): the “subjective norm” - what people think that others will think about a certain action that they perform • Motivation-Opportunity-Ability Model (Ölander & Thøgersen, 1995) - significance of (socially based) opportunity for practices such as (infra)structural opportunities

19. Responsibility, Liability, Guilt Guilt: • Responsibility for a crime or for doing something bad or wrong • A bad feeling caused by knowing or thinking that you have done something bad or wrong • The fact of having committed a breach of conduct especially violating law and involving a penalty • feelings of culpability & self-reproach especially for imagined offenses or from a sense of inadequacy (Oxford Dictionary)

20. Responsibility, Liability, Guilt Responsibility: • The state of being the person who caused something to happen • A duty or task that you are required or expected to do • Something that you should do because it is morally right, legally required, etc. • Personal quality of being committed, reliable, trustworthy (Merriam Webster Dictionary)

21. Responsibility, Liability, Guilt Liability: • The state of being legally responsible for something : the state of being liable for something • Something (such as the payment of money) for which a person or business is legally responsible (pecuniary obligation, debt) • One that acts as a disadvantage: drawback, shortcoming (Oxford Dictionary)

22. Responsibility, Liability, Accountability Accountability: an obligation or willingness to accept responsibility or to account for one's actions <public officials lacking accountability> Esp. negative – lack of... lack of accountability has corroded public respect for business and political leaders Required or expected to justify actions or decisions; responsible: Parents cannot be held accountable for their children’s actions (Oxford Dictionary)

23. Free choice vs. external imposing • where do we draw the line? • Is the state legitimised to protect us against ourselves? • Is it useful? • Ec: Car speed to be limited by default (factory settings) to 150 km/h? Pros & cons • Under-regulation, de-regulation & over-regulation – hidden traps

24. World’s Most Ethical CompaniesFTSE4Good Ethical Index • Measured dimensions: • Corporate governance, innovation power, management style, quality assurance, query processing systems, reputation management and corporate citizenship • Consultation mechanisms in CSR: • At Henkel – Ways to support projects voted by team members as most worthy: financial & material donations (mostly own products & services), paid days off to attend to projects, technical consultancy. Alumni network (ex-employees, including retirees) – call for action to get involved in volunteering

25. Sustainability & Wellbeing • Bandarage, A. (2013). Sustainability and Wellbeing: the Middle Path to Environment, Society and Economy. New York: Palgrave-Macmillan • We stand at a critical moment in Earth’s history, a time when humanity must choose its future. • As the world becomes increasingly interdependent and fragile, the future at once holds great peril and great promise.

26. Sustainable global society • To move forward, we must recognize that in the midst of a magnificent diversity of cultures and life forms we are one human family and one Earth community with a common destiny. • Sustainable global society founded on respect for nature, universal human rights (coupled with shared responsibilities), economic justice, and a culture of peace Preamble, THE EARTH CHARTER (2000)

27. UN Outlook • Sustainability stands inseparable from human well-being • United Nations working definition of sustainability: sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

28. Unsustainable market approach Source: Bandarage (2013, p.7))

29. Conventional approach to SD (sustainable development)

30. Ecological approach to SD (sustainable development)

31. Biggest threats to environmental health • Climate change, stratospheric ozone, land use change, freshwater use, • Biological diversity (unprecedented extinction rate for plants and animals: biodiversity extinction rate of more than 100 extinctions per million species), • Ocean acidification, nitrogen, and phosphorus inputs to the biosphere and oceans, aerosol loading, and chemical pollution

32. Worrisome projections • Heat-trapping greenhouse gas (GHG) emissions are projected to increase 50 percent by 2050 due primarily to a 70 percent growth in energy-related CO2 emissions. • According to the OECD Environmental Outlook, the “global energy mix” in 2050 will not be significantly different from today: 85 percent from fossil energy (coal, oil, and natural gas); just over 10 percent from renewable energy, including biofuels; and 5 percent from nuclear energy

33. Worrisome projections (2) • Average global temperature is predicted to rise by 3–6°C by the end of the century, exceeding the internationally agreed goal of limiting it to 2°C above preindustrial levels. • Conclusion of National Oceanic and Atmospheric Administration (NOAA) & NASA research: owing to global warming, we are likely to see more extreme events: • severe drought, torrential rain, and violent storms earthquakes, • tsunamis, and volcanic eruptions in the coming years

34. Population relocation due to climate and geologic change • Threatened island nations, such as the Maldives (Indian Ocean) and Inoui indigenous (Alaska) • Necessary strategy for resettlement of climate refugees • Estimated number of refugees could rise as high as 1 billion people by 2050 (United Nations International Organization for Migration) • Bangladesh, referred to as the “ground zero of climate change,” is already experiencing severe flooding, destruction of agricultural land, and massive displacement of people

35. Other concerns • World’s poor without access to resources will continue to suffer the most from climate impacts • While the tropical rainforests now cover just 2 percent of the Earth’s land surface, they are home to two-thirds of all the living species on the planet. • Human activities—principally agriculture, logging, extraction of resources, construction, and tourism—have greatly aggravated nature’s normal extinction rate of rainforests • According to the Rainforest Action Network, if the current alarming rate of destruction continues, “half our remaining rainforests will be gone by the year 2025, and by 2060 there will be no rainforests remaining”.

36. Threats to bio-diversity • International Union for Conservation of Nature (IUCN): Red List of Threatened Species, 19,817 out of 63,837 plant and animal species assessed were threatened with extinction: • 41% of amphibians • 33% of reef building corals • 25% of mammals • 13% of birds • 30% of conifers • About one-third of global freshwater biodiversity has already been extinguished

37. Tipping Point • “unprecedented loss of species comparable to the great mass extinctions of prehistory • Most sensitive ecosystems — most damaged ones: • the Amazon rainforest, freshwater lakes, rivers, and coral reefs—we’re approaching a tipping point, after which they may never recover • There is virtual unanimity among scientists that we have entered a period of mass extinction not seen since the age of dinosaurs 65 million years ago, only that this extinction is taking place at a much faster rate

38. Livelihood, crisis & pollution • Unsustainable nitrogen outputs exacerbate ecological and social problems such as: • Global warming • Endangered biodiversity • Food and water security • Health • The increasing volatility and collapse of financial markets in recent years have aggravated fear and uncertainty about livelihood across regions and wider groups of people. • Major detrimental influence on resource depletion (contrary to assumptions that economic slow-down decreases pollution risks

39. Time, immediacy and urgency • e.g. harmful influence: use of agrochemicals and biotechnology led by agribusiness corporations • Contamination of water and soil • Too late to act? It’s all a question of time – time commodification: wasted, spent, invested • Some economists and social analysts have predicted that the vast majority of the 8 billion or so people expected to inhabit the earth in the first quarter of this century will be neither producers nor consumers.

40. Global population stabilisation • "It is now clear that we face a deepening global climate crisis that requires us to act boldly, quickly, and wisely” (Al Gore, An Inconvenient Truth) • Current downward global trends in fertility is expected to converge to below-replacement levels by 2100 and a faster global population stabilization than earlier is expected. • Even with population stablization, large proportions of the world’s people, both young and the old, are likely to be surplus populations – redundant for world economy

41. On social disparities & despair • Loss of means of survival by increasing numbers of people including the well educated reflects a structural, macro-level problem. • Jobless economy (Jeremy Rifkin) • According to a 2008 United Nations University study, 85 percent of all global assets belonged to the richest 10 percent of the global population

42. On social disparities & despair • Credit Suisse Research Institute in October 2010, the richest 0.5 percent of the global adult population held 35.6 percent of the world’s wealth • 2011 United Nations estimates, 1.44 billion people still live on less than US$1.25 a day with close to one-third of the world’s population experiencing “multidimensional poverty”: • Closed horizon of opportunities – limited access to health, social services, education, basic amenities & living standard – income - livelihood means

43. Global market consolidation • Privatization and market-de-regulation that should support free competition ultimately leads to global market consolidation – extension of Big Four market model – corporate neo-oligarchy • E.g.: In the food sector, today, four companies—ADM, Bunge, Cargill, and Louis Dreyfus—account for 75 to 90 percent of the global grain trade; • Four other firms—Monsanto Dupont, Syngenta, and Limagrain—account for over 50 percent of global seed sales; • Six corporations—DuPont, Monsanto, Syngenta, Dow, Bayer, and BASF—control 75 percent of the agrochemicals market

44. Corporate neo-oligarchy • Also valid for pharma, car production, retail, oil&gas industries. • This dependency on major suppliers enhances permanent food crisis, inequalities and social unrest – protest, terrorism, migratory flows – refugees

45. Militarism & environment destruction • Energy consumption by the US Department of Defense (DOD) for 2009 was 932 trillion Btu, (British thermal unit- standard measurement stating amount of energy in fuel) • Equivalent to the energy consumed by Nigeria’s population of more than 140 million • Militarism - “exterminist mode of production.” (E.P. Thompson)

46. Militarism • Economist Joseph Stiglitz and Harvard public finance expert Linda Bilmes reveal that the war in Iraq cost the US “$720 million per day, $500,000 per minute—enough to provide homes for nearly 6500 families, or health care for 423,529 children in just one day • Contrary to nuclear dis-arming protocols, some 31,000 nuclear warheads deployed or in reserve in the stockpiles of just eight countries: Russia, the United States, France, the United Kingdom, China, India, Israel, and Pakistan.

47. Domination paradigm • Paradigm - “A set of assumptions, concepts, values, and practices that constitutes a way of viewing reality” • Paradigms guide social action – ascending throughout global modern history • Based on dualistic thinking: „us against them”, win-lose. • Competition as the only form of inter-dependency

48. Minimalist self-sufficiency & humankind history • Evolutionary biologists and cultural anthropologists agree that humanity has spent much of its history, perhaps as much as 80 percent of its 40 000 years history as Homo sapiens, as foragers – hunters-gatherers • No surplus accumulation • Settled agricultural societies—the Neolithic Revolution—some 10,000 years ago

49. Surplus accumulation • With the advancement of technology (for example, irrigation infrastructure) and social surplus, larger populations could be maintained. • Social hierarchies emerged as social life became more complex • Leading to racial, class and gender inequality

50. Great transformation & neo-marxism • The Great Transformation, Karl Polyani warned of excessive commoditization which relegates human society to being “an accessory of the economic system” • British environmentalist Jonathon Porritt - “Capitalism as if the World Matters”, there is an “extraordinary mismatch between the power of multinationals and their contributions to global employment.”