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CSR application support through aligned services

CSR application support through aligned services

Supporting SMEs and supply chains to switch to sustainable production processes by


implementing efficient ICT-based Sustainability Management and aligning viable business
support services

The 3rd Corporate Social Responsibility Workshop for Business Intermediaries and Service
Provider as part of the EU supported SME business development project

“EMPowering ASIAn Business Intermediaries through Knowledge-based Networking


focused on Sustainability Management” - EMP ASIA –

September 2009

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Background view and definitions

Sustainability “Humanity has the ability to make development sustainable - to ensure that it meets
Development the needs of the present without compromising the ability of future generations to meet
their needs.”

managing resources and its impact in an


Sustainability environmentally friendly, socially responsible and
Management economically wise way
(‘Triple Bottom Line’ concept – maximization of
economic, environmental and social performance)

Corporate Approach to give a frame for businesses to express their commitment to society,
society also
Social referred as an corporate approach for Sustainability Management which aims at
Responsibility voluntarily integration of social and environmental issues into all business activities
beyond regulations

European framework, Green Paper on corporate social responsibility

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services

Systematic integration of CSR into business operation

State of the art “EMPASIA”

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Consumer group CSR evaluation schema by ‘Stiftung Warentest’

¾ societal and scientific opinion-forming processes of responsible corporate behavior


¾ national/internat. conventions, standards and guidelines for responsible corporate behavior
¾ criteria used within the framework of consumer-oriented company surveys
¾ criteria used for socially responsible investment
¾ criteria used in environmental, social and sustainability reporting by companies

Social Issues / Employees The Environment


1. Guiding principles and corporate policy 1. Guiding principles and corporate policy
2. Management and measures 2. Management
3. Implementation 3. Measures and implementation
4. Reporting 4. Reporting
Social Issues / Production and Supplier Consumers and Society
1. Guiding principles and corporate policy 1. Willingness to provide information
2. Management and measures 2. Community involvement
3. Implementation
4. Reporting

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
CSR Audit by participants – Case Work March and June 09
Organisations by sector (35) Organisations by employees
6%
11% 29% 23%

11%
50%

11% 20%
22% 17%
Ohter Manufacturing Education less than 50 51 - 250 251 - 500
Autom otive Textile and Electronics 501 - 1000 more than 1000
garm ent 16%

47%

38%

Own CSR Cross-functional No organisational


Department Collaboration CSR structure

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Attitude and commitment on social issues

Social issues guiding principles and commitment

Avoid active or passive corruption and bribery in business

Complying with international minimum social standards (e.g. Code of Conduct)

Compliance with the OHS standards throughout the company is explicitly expressed

Promotion of equal opportunities for women and men is explicitly expressed

Promotion of training and further education is explicitly expressed

Promotion of health and safety at work is explicitly expressed

Internal statements on corporate responsibility are accessible

Public statements concerning responsibilities towards its employees

Detailed guidelines or principles on responsible treatment of the employees


0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

comprehensively largely

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Supply chain management - social issues

Supply chain management - social issues


Ensuring compliance of sub-contractors with minimum social standards

Preference is given to certified / audited sub-contractors (e.g. SA8000, BSCI)

Compliance with social standards is regularly surveyed

The company offers free advice and training for buyers and sub-contractors

The company offers free advice and training for employees at his production sites

Complying with the minimum social standards is a pre-requisite for every signed delivery contract

0% 5% 10% 15% 20%

comprehensively largely partially

Reporting on aspects of social compliance of business partners


No 54%

Yes 23%

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Environmental performance

Status of environmental protection

Motivation system in production and acquisition

Employees are actively involved (e.g. work groups)

Responsibility for environmental protection is integrated withinthe product development

Responsibility for environmental protection is allocated within the management

0% 5% 10% 15% 20% 25% 30%

comprehensively largely partially

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Monitoring / publishing of company data on material and energy consumption

Environmental performance measurement

Air emissions: carbon dioxide, nitrogen oxides, sulphur dioxide, dust

Energy: consumption data

W aste water: quantity and pollution (especially COD, heavy metals)

Other data: emissions, noise, production accidents, external complaints

W aste: total quantity, composition, hazardous waste

er: use in production / manufacture (industrial water), drinking water consumption

Materials: consumption of raw and process materials (absolute quantities)


0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

Data is collected from Data is collected from some Data is collected from a few
several areas and pub- areas and published areas and published
lished

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Market forces that drive organizations to address CSR

1. Economic considerations
2. Ethical considerations
3. Innovation and learning
4. Employee motivation
5. Risk management or risk reduction
6. Access to capital or increased shareholder value
7. Reputation or brand
8. Market position or share
9. Strengthened supplier relationships
10. Cost savings

KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide
and documented the top ten motivators driving corporations to engage in CSR for competitive reasons.

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Current business strategies on Sustainability

Sustainability strategy "safeguard" - reducing and managing risks

¾ Sustainability-induced problems and challenges


e.g. climate change, poverty etc. are tackled by the political system, markets or the public
¾ Risks could affect the financial, managerial or reputation of corporations
¾ Goal - securing the existing markets and the position in the markets

Sustainability strategy "credibility" - enhancing credibility and reputation

¾ Credibility and reputation is a valuable non-tangible asset (also for situation of crisis)
¾ Prevention of conflicts with authorities and stakeholders
¾ Attraction of suitable employees and satisfaction of customers
¾ Defensive focus (communication with stakeholders) e.g. MNCs or industries like chemicals,
pharmaceuticals, military, oil, automotive
¾ Offensive focus (sustainable products and services), e.g. food, textile, finance
¾ Good corporate citizenship is a sound investment

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Current business strategies on Sustainability
Sustainability strategy "efficiency" - enhancing productivity and efficiency
¾ Enhancing eco or socio efficiency of business processes
¾ Cost reduction through resource efficiency
¾ Productivity improvements through work conditions and job satisfaction
Sustainability strategy "innovation" - differentiating in the market
¾ Creation of sustainable products and services with unique selling point
¾ Increase of sales through environmentally and socially friendly product innovations
¾ Advantages through Sustainability in production, consumption or disposal phase
¾ Requires strong communicated
¾ e.g. organic food, textiles – healthy; car sharing - easy, green energy – less risky, fair trade

Sustainability strategy "transformation" – developing markets and society


¾ Transformation / creation of new markets transforming human needs and consumption pattern
¾ Requires institutional changes within human needs, politics or institutional framework
¾ Proactive lobbying participation in political committees, standard creation etc

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Selected general barriers for sustainable production pattern in SMEs

Knowledge basis
¾ Awareness on sustainability and technology solutions
¾ Understanding on interrelation of environmental, social and economic factors
¾ Know how on advanced management approaches, methods and tools for business
applications

Business management and technologies, especially ICT


¾ Availability and localisation of technologies and service infrastructures
¾ Adaptation of advanced business management practices and technologies,
¾ Support of applications and service

Resources and finances


¾ Limited financial resources or limited access to finance opportunities
¾ Limited internal HR capacities
¾ Limited access to specialised support services

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Adaptation of advanced business management – key areas and approaches

¾ Strategic business management – CSR


CSR – holistic and strategic management approach to lead towards environmental-friendly and
socially advanced businesses, Integration of environmental and social factors meaningful into all
business practices
¾ Operational business management – Resource Management
process management approaches to enable effective planning and efficient use of environmental
related resources (Process Monitoring & Controlling and Enterprise Resource Planning)
¾ Performance evaluation – Environmental Cost Accounting and Investment Appraisal
activity based, physical and monetary accounting for impact and opportunity quantification enables
fundamental decision support through quantification of environmentally related costs and
investment opportunities (e.g. technology evaluation)
¾ Communication and business culture which contribute to organisational learning
Cross-functional methods, e.g. Continuous Improvement Processes, Knowledge Management,
Stakeholder Relationships Management

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Selected advanced ICT for business management
Examples for SM approach Function Link
advanced ICT
Open Bravo, Resource Indicator based process monitoring http://forge.openbravo.com,
SoFi Management, CSR, from manufacturing process to supply www.pe-international.com/sofi
Environmental Cost chains and Enterprise Resource
Accounting Planning

Redmine Environmental Workflow management for continuous www.redmine.org/


Management, CSR improvement processes
Umberto Resource Material and energy flow analysis, www.umberto.de/en
Management, process simulation
Environmental
Investment Appraisal

Drupal, Stakeholder Internal / external communication, http://acquia.com/products-


SugarCRM Relationship stakeholder involvement (CRM) services/acquia-drupal ,
Management www.sugarcrm.com

E-Front, Elgg Knowledge web 2.0 e-learning and knowledge www.efrontlearning.net


Management, e- management for businesses, Internal / http://community.elgg.org
Learning for business external communication

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Selected requirements for successful adaptation of business management

¾ Customer and stakeholder orientation


¾ Enhancing creativity and know-how of employees
¾ Enhancing organizational learning
¾ Systematic comprehensive and targeted communication
¾ Creating transparency and managerial awareness of business processes
Both, transparency and awareness depend on the ability of companies
(particularly SMEs) to collect, process, and analyze respective data

Hence, modern business management depends on availability and efficiency of


corresponding systems for data processing system (so-called advanced ICT)

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Barriers and reasons for insufficient level of ICT adoption

Poor service of support While basic infrastructures and ICT equipment are accessible in Thailand,
infrastructures result in limited service and support infrastructures are underdeveloped.
business access and low application
levels

Most advanced ICT products are ICT firms used to target large enterprises (budget, HR to run state-of-the-art
designed for larger firms, not SMEs ICT). These products are often too expensive and too complex for SME users.
Limited ICT literacy of SME owners Many SME owners are unfamiliar with operating a computer, skeptical of the
hinders their ability to choose concrete benefits for the core business, and share the stereotype that
advanced ICT is only for larger companies.

Limited ICT literacy of employees in Even if SME owners have a strategic understanding of why they should adopt
SMEs hinders ICT adoption ICT, their staff is often poorly trained. Training costs both time and money –
resources that SMEs usually lack.

Adopting ICT is not a technical ICT is a difficult task for companies of all sizes, whether they are in developed
challenge or developing countries. The main challenge is, it must go along with
organizational and structural changes in companies.

Lack of financing options limits SME IT budgets are usually small or nonexistent. In addition, adopting ICT is not a
ability to purchase ICT one-time cost because there are ongoing costs of maintaining and upgrading
hardware and software, and human capacity building.

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Combining tools and services on demand

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Project proposition:
Transition of SMEs and supply chain networks
towards sustainable production processes through an active uptake of ICT solutions
for sustainability management – ICT4SM
Objectives

1. To develop a portfolio of efficient ICT-based sustainability management tools and


solutions tailored to the local conditions and needs of local SMEs across various industrial
sectors
2. To stimulate and facilitate an uptake of ICT-based sustainability management methods
and tools in significant number of SMEs and to improve their competitiveness
3. To establish a service infrastructure for fostering sustainability management culture and
capacity
4. To encourage uptake of sustainability management tools and practices through active
dissemination and promotion activities

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Main Activity Result Purpose
Set up ICT Accessible, localized, cost-efficient Overcoming technological barriers for ICT and
Toolbox ICT for introducing SM practices in SM adoption
SMEs and supply chains

Set up service Locally accepted, affordable on Overcoming individual adoption barriers


infrastructure demand service support through qualification; create capacities to
infrastructures for advanced ICT implement necessary organizational and
and SM technical changes.
Set up services Local self-sustainable service Ensuring access, acceptance and impact of
network supporting adoption of both ICT and SM by combining SaaS, business
ICT-enabled SM approaches consulting, ongoing qualification, interlinking
with solutions providers.
Implementation Verification of services through Improving competence levels of local SMEs
and operation of radical improvements of business and business intermediaries on advanced ICT
services efficiency and environmental and SM methodologies to enable the switch to
standards in XXX SMEs sustainable more sustainable production.
Scaling up of Breakthrough of ICT-based SM in Broad uptake of SM in both countries, realizing
service targeted SME sectors and local the envisaged switch to more sustainable
supply chains production.

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Results of ICT4SM

As such, the project expects:

1. to provide sufficient access to localized, cost effective, state-of-the-art web-based ICT for SM;

2. to build self-sustainable SME support infrastructures of aligned training, consulting and


technology provider organizations which provide cost effective, highly accepted services
ranging from Software-as-a-Service to management and technology consulting;

3. to significantly improve knowledge, skills and competences of the target groups in applying
advanced ICT and methodologies of SM, thus enabling a wide uptake of SM practices;

4. to radically improve production efficiency and environment-friendly business practices in


significant numbers of SMEs across sectors and supply chains.

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Potential areas ICT4SM applications

1. Individual applications
2. Industry cluster (individual applications, benchmarking)
3. Supply chains (individual applications, supply chain systems)
4. National reporting and audit frameworks (automated government reporting)
5. Stock exchange (enlargement of financial audit and reporting)
6. Integrated solutions

Müller, Opierzynski
CSR Training for Industries, 2009
CSR application support through aligned services
Discussion on consequences

¾ Development priorities are focusing on enhancing sustainable development.


¾ National and international financial support programs are in place.
¾ Barriers for switching to sustainable production pattern are known.
¾ Know how and technologies are available?

¾ What are the requirements for a broad uptake of sustainable production pattern in Vietnamese
industries?
¾ Which sectors should be focused on?

Müller, Opierzynski
CSR Training for Industries, 2009