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Chosun Ilbo CSR Conference Seoul April 10 2013 Presentation
The document discusses the connection between corporate social responsibility (CSR), ethics, and governance, emphasizing that sustainable business practices require a strategic framework rooted in ethical governance. It highlights examples of leaders like Unilever and Siemens who have integrated sustainability into their operations, demonstrating the benefits of stakeholder engagement and transparency in building trust. Ultimately, it outlines key steps for achieving ethical governance and the critical role of CSR in fostering innovative and responsible business practices in the 21st century.
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Chosun Ilbo CSR Conference Seoul April 10 2013 Presentation
- 1. What is CSRand how is it connected with Ethics and Governance? Toby Webb, Founder, Ethical Corporation and Stakeholder Intelligence. Lecturer, Corporate Responsibility, Birkbeck, University of London Chosun Ilbo CSR Conference, Seoul, April 10th 2013 [email protected]
- 2. What is CSRtoday? • CSR is about how you run your business when no- one is watching • It covers: Ethics, Integrity, Products, Services, Consumers, Investors, Anti-corruption, Suppliers, Tax payments, Market Ethics, Employees, Civil society and the Environment…
- 3. CSR today =Sustainable Business • Sustainable business does not happen without strategy • Strategy does not happen without Governance • Governance does not happen without Ethics • Ethics do not happen without Stakeholder Engagement Paul Polman, Unilever CEO
- 4. Who are someof the leaders? Unilever Sustainable Living Plan - 10 Marks and Spencer Launched Plan A in year journey towards sustainable growth January 2007, setting out 100 (2010) commitments to achieve in 5 years Applies right across the value chain Now extended Plan A to 180 commitments to achieve by 2015 Responsibility for own direct operations Also for suppliers, distributors and how Ultimate goal of becoming the world's consumers use Unilever brands most sustainable major retailer Underpinning Plan are around 60 targets
- 6. Who are someof the leaders? General Electric - Eco-Innovation as business 2011 - Siemens reorganised operations into strategy four core business units: Ecomagination business unit mainstream Energy - efficiency in energy production and focus on business innovation and sustainable distribution, including oil, gas and renewables industrial products Healthcare - supplying technology (medical $2.3 billion invested in “Ecomagination” imaging equipment and healthcare IT) products in 2011 Industry - providing software and technology Reduced GHG emissions 30% since 2004 services Reduced wastewater by 45% since 2006 Infrastructure and cities - sustainable technologies (smart grid equipment and rail vehicles)
- 7. How about anAsia-based company? Golden Agri Resources – A model for sustainable palm oil • 2010 - announced ground-breaking deal with The Forest Trust to help prepare for Roundtable on Sustainable Palm Oil (RSPO) certification by December 2015 • Engagement with local NGOs for monitoring of sustainable agriculture implementation • Working with Greenpeace and “No deforestation” commitment: international NGOs Now extended to pulp & paper • Won back business from Nestle and Sister company APP in Feb 2013 Unilever: Share price went up!
- 8. Why do theychoose to lead? Unilever • Securing supply Marks and Spencer • Customer trust General Electric • Low carbon future Siemens • Urbanisation trends Golden Agri Resources • Market access
- 9. How do theyengage with stakeholders? • Dialogue with civil society • Consulting experts on agriculture, trust, urbanisation, climate change, energy futures • By using guidance and standards • Listening to their employees ISO 26000 Guidance ‘Standard’ • Watching trends emerge
- 10. Key guidance forCSR and Sustainability • ISO 26000 • Dow Jones Sustainability Indexes • FTSE4Good Index • Global Reporting Initiative Guidelines • OECD Guidelines • UN Global Compact BUT: Guidance not the whole solution: You must study your own Risk and Opportunities
- 11. • Ten yearjourney towards sustainable growth with 50 tough targets • Aim to bring safe drinking water to 500 million people • 2011: Increased proportion of portfolio that meets highest nutritional standards from 22% in 2010 to 25% in 2011 • Aim: Halve the greenhouse gas impact of products across the lifecycle by 2020 • 2020 aim: Source 100% of agricultural raw materials sustainably • Sustainably sourced raw materials up from 24% in 2011 to 36% in 2012
- 12. Unilever: Business Benefitsof Sustainability Total sales 2008-2012 up 26% from 40bn Euros to 51bn
- 13. Siemens and GreenBusiness Strategy • 2011: Products and solutions in Environmental Portfolio generated revenue of €29.9 billion: 41% of total revenue • Objective: Grow annual revenue to €40 billion by 2014 –with new, innovative products and exceptional growth in fields like renewable energy. These include:
- 14. Siemens and GreenBusiness Strategy • Combined cycle power plants and intelligent building technologies: far more energy-efficient than comparable solutions • Renewable energy systems and components: wind turbines, steam turbines for solar-thermal power plants. Environmental technologies for cleaner water and air
- 15. How do theseexamples link to stakeholder engagement? • Employee engagement drives innovation and ideas • NGO partnerships bring science, experience credibility • Communities have increasing power & influence • Social media means no company escapes scrutiny • Big business want a long term vision from Governments: And policies and incentives that enable investment and longer term planning: So must lead by example
- 16. Social Media meansno escape from the public eye
- 17. How do CSRand Sustainability improve Business? • Consumers want to trust brands, not products • Leading companies turning sustainability into opportunity all over the world: New products / motivated people / cost savings • 9 billion people means less resources and innovation will be essential: Sustainability = risk reduction • Corporate roles in changing inefficient systems will be vital: The winning companies recognise CSR is systems change • CSR and Sustainability = Smarter business
- 18. Harvard Business School ProfessorRobert Eccles, Harvard Business School
- 19. Do other companiesmake money from CSR and sustainability? London Business School & Harvard Business School research: • Firms with better CSR performance face significantly lower capital constraints • Better stakeholder engagement and transparency around CSR performance, are important in further reducing capital constraints • That the relation is driven by both the social and the environmental dimension of CSR "CORPORATE SOCIAL RESPONSIBILITY AND ACCESS TO FINANCE" Available at: http://ssrn.com/abstract=1847085
- 20. Five ways ethicsand governance are linked to CSR and Sustainability 1. CSR and Sustainability cannot exist without Business Ethics 2. Business Ethics cannot exist without good Corporate Governance. Ethics always begins and ends with leaders 3. Good Corporate Governance is now seen by international investors as part of good management by boards 4. Poor Corporate Governance is priced into share valuations by analysts and large international investors 5. Good Corporate Governance begins with Rule Compliance
- 21. Why Transparency Matters • Compliance with international best practice in Governance and behaviour expectations = The first step to building investor and stakeholder trust – That’s true for Korea too! • BUT: Compliance alone is not enough! • Transparency is an under-valued method of building trust, both from Markets Lack of transparency affects trust
- 22. Why Transparency Matters •Responsible ownership is about being accountable to shareholders • That’s true for businesses in Korea too… $18 Trillion in International Investor Assets • Fact: Investors reward better managed (governed) companies!
- 23. Conclusion: Eight KeySteps to Global Ethical Governance 1. Adopt best practice in International Corporate Governance 2. Go beyond Compliance: Develop and integrate Ethics 3. Lead from the top of the company on Ethics 4. Use Ethics to build strategy in CSR and Sustainability 5. Engage employees, partners, suppliers and civil society in strategy and policy development 6. Use engagement to drive innovation in Governance, Practice, Product and Service Innovation across your business 7. Embed ethics, CSR and Sustainability into your business every day 8. Never forget: Ethics, Governance and CSR are how smart business will be done in the 21st Century
- 24.