ST513E Session1 – Part II Presentation of the subject

 1. Corporate Social Responsibility  2. CSR and Sustainable Development  3. CSR and Stakeholder Theory

Section 1 –
Corporate Social Responsibility

 Origins of CSR (1)
At the beginning of the century:  In Europe: paternalism of big business – France: (Michelin, Godin, etc.) – England and Germany: Cadbury‟s and Krupp provided housing, healthcare or education for workers In the USA: – philanthropy (from Carnegie and Rockefeller in the 1900‟s to Warren Buffet and the Bill and Melinda Gates Foundation) – the first ethical funds (religious communities) – better compensation for workers at the factories of Henry Ford (5$/day)

Corporate Social Responsibility

 Origins of CSR (2)
From the 1950‟s:      Civil Rights Movement (emancipation of Blacks in the USA) NGO activism (Greenpeace and Amnesty Intl‟s boycotting campaigns) Regulations resulting from industrial catastrophes (Bhopal, Exxon Valdez) Growing awareness of ecological issues (climate, biodiversity) The „social divide‟ (precariousness, social exclusion)

strategies. multi-annual plans of action and reporting tools  These participate in specialized networks to exchange „good business practices‟ throughout their supply chains which result in a ripple effect in the whole sector .The CSR Boom from the 1990‟s Onwards  Sustainable Development (SD) and CSR are already integrated or are in the process of being integrated by a growing number of companies of all sizes in different sectors in different countries  It is not only a fashionable phenomenon but in fact a profound movement which amplifies in the 1990s and continues to grow  The biggest and most advanced companies have put in place specific structures.

Nike .10 Concrete Examples of CSR 1. Toyota 10. Danone 7. Lafarge 8. Ben & Jerry‟s 9. Canon 6. Eziba 5. Green Mountain Coffee Roasters 3. Timberland 4. The Grameen Bank 2.

The Grameen Bank A financial institution to serve the world‟s poor  Internationally recognized bank operating in 44. microenterprise loans. grown the Bangladeshi economy and achieved profitability  Because of its extraordinary positive impact. scholarships and educational loans to predominantly women in countries prone to poverty and natural disasters  Since 1976 it has lifted hundreds of thousands out of poverty. microfinance is now a global phenomenon .000 impoverished villages throughout Bangladesh and the developing world  The Bank provides low-interest personal loans.

customers. vendors.Green Mountain Coffee Roasters Stand up for justice by engaging in fair trade and establish a powerful new role for business in society  The company is known for its fair trade program in an industry where most of the 250 million people dependent on coffee for their livelihood are poor because only 2% receive a fair price for beans  Fair trade is an international movement lead by nonprofits like TransFair which works with corporations and supplier communities to establish floor prices and to streamline practices to build economic independence and empowerment in farmer communities  Individual relationships with shareholders. dignity and compassion . they are treated with respect. and suppliers are very important. employees.

humility. building of new parks and playgrounds and assistance to elderly citizens and children) that make a profound difference both in urban and in rural communities across America .Timberland Top brand thriving by integrating cause partnerships Company values: humanity. engagement partnership and positive change  Community and other stakeholder engagement are very important  Partnership with City Year. integrity and excellence  Idea that business can also be focused on activating higher levels of responsibility. a potent national youth corps The purpose is to involve youth in civic-service projects (cleaning of neighbourhoods.

Eziba Social and environmental values throughout company operations – from revenue models to sourcing  Eziba is an Internet and catalogue retailer of decorative art products that are made by poor people in developing countries (Rwanda. Guatemala…)  The betterment of society is the highest corporate priority and the lives of thousands of people have improved because of the company‟s commitment  Eziba managed to successfully root its business models in its core values to obtain social as well as monetary profits  Strong ethics led to commercial success which is recognized by both Forbes and Time magazines („best of the web‟) . Afghanistan. Kenya. Botswana.

Canon The company‟s philosophy of Kyosei – 'living and working together for the common good' – is at the centre of company operations  Canon‟s aim: to contribute to the prosperity and happiness of humankind while remaining profitable  Environmental strategy for resource and energy conservation. disasters in Peru. social and environmental initiatives across Europe. Africa and Asia  Humanitarian aid and disaster relief – partnership with the Red Cross (2004 tsunami. China. Canon employees carry out volunteer work with children suffering long-term illnesses . Bangladesh. Japan)  Supporting employees‟ charitable activities – in the Netherlands.

societal and environmental objectives and reaches further than its factories  The company‟s key themes are climate change.communities fund is also currently investing in two new social business enterprises: 1001 Fontaines. people.Danone A global approach which combines economic. packaging and agriculture  Grameen Danone Foods has been designed to provide children with many of the key nutrients that are typically missing from their diet in rural Bangladesh. biodiversity. water. which provides drinking water for people in rural areas of Cambodia. collecting milk from Peul herders in Senegal  Supporting employees‟ charitable activities – Danone employees support the Restos du Coeur . and Laiterie du Berger. the project aims to create a small dividend of 1% / year  The danone.

suppliers. courage and respect for others permeate its operations in all places where it operates  Social development including respect for local communities and environmental protection are important goals  Stakeholder collaboration (clients. shareholders) regularly takes place  “Lafarge Way”: two-way development approach 1. malaria assistance in Malawi… . responsibility. local communities. Multi-local (products are used where they are manufactured and local actors are involved) 2.Lafarge The values of integrity. Global (local and international partners work together for longterm development)  Partnership with the WWF (biodiversity…)  Social projects in collaboration with CARE (HIV/Aids).

national. and international  Importance of "empowering Ben & Jerry's employees" to enable environmental and social initiatives to be undertaken  The company uses Fairtrade products and sources its ingredients from producers and suppliers who share its values in its supply chain strategy  Limiting damage to the environment: ecological footprint measurement including management of water. while maintaining economic viability  New product development: launch of new flavour. energy. emissions and recycling  Vermont Dairy Farm Sustainability Project to reduce phosphorous run-off and nitrogen leaching in dairy operations.Ben & Jerry‟s Initiating innovative ways to improve the quality of life of a broad community – local. "One Sweet Whirled" to raise awareness of global warming . waste.

local communities and employees. health and safety of employees is an important value  Investment in human resources and respect for diversity are important values – gender diversity and issues women face in the workplace are addressed  “Loops” project which brings more disabled people „in the loop‟ through employment and by making society more aware of disabled people‟s needs  The company invests a lot in research to produce the best eco-friendly cars which will use alternative fuels and battery power (lower carbon emissions) .Toyota The company promises harmonious and sustainable development of society and the earth through all its business activities  Increasing long-term corporate value by engaging in favorable relationships with all the stakeholders including customers. business partners.

.)  Gender equality – the Nike Foundation hosted a symposium in Brazil which promoted the role of men in fostering gender equality  A global effort. and in the industry  Several tools are in place to ensure that responsibilities towards workers down the supply chain are met (Workers in Contract Factories. in partnership with several governments..Nike This global company wants to bring about systemic change for workers within its supply chain. MAV – Management Audit Verification Tool. Safety and Health. ESH – Environment. to put adolescent girls at the centre of HIV/AIDS prevention strategies was initiated .

CSR: some questions  What should ultimately be companies‟ roles and responsibilities?  Should companies be held responsible for activities such as building schools and providing health care?  Should companies be forced to comply with international codes and standards?  In today‟s globalized world. are companies truly committed to CSR or is it only a matter of public relations?  What can be done to forge greater cooperation between companies and governments? .

CSR Networks (1) International Networks:  The Global Compact of the United Nations  The WBCSD (World Business Council for Sustainable Development) – global  BSR (Business for Social Responsibility) – USA European Networks:  CSR Europe – EU  BITC (Business in the Community) – UK  Fundación Empresa y Sociedad – Spain .

ex-IMH)  ADMICAL (Association for the Development of Sponsorship) .CSR Networks (2) French Networks:  ORSE (Observatory of the social responsibility of business)  Alliances for CSR  Orée (Environmental Aspects)  EPE (Enterprises for the Environment)  E&P (Enterprise and Personnel)  IMS – Undertakings for the City (Institute of Solidarity Sponsorship.

CSR is generally defined with reference to Sustainable Development (SD) and Stakeholder Theory (SHT)  The Social Responsibility of business is built upon three dimensions:  Internal Social Dimension  Social / Societal Dimension  Environmental Dimension . the meaning of the concept raises several debates  For lack of a solid foundation.Can CSR be defined?  Not one formal and agreed upon definition exists.

loyalty to company projects… . agreements between unions and management for fair salaries for employees…  Social dialogue in companies: annual interviews. health.Internal Social Dimension (1)  Working conditions: hygiene. consultation with internal stakeholders…  Social climate in companies: less strikes. ergonomics…  Compensation policy: participation to the benefits. security. less absenteeism.

South Africa)… . gender.Internal Social Dimension (2)  Better management forecast for employee competencies: training. distance working…  Integration of precarious categories: disabled persons. ethnic origins – or the contrary. employability…  Working hours: chosen part-time. minorities. marginalized persons…  Principle of non-discrimination: age. positive discrimination for disadvantaged categories (USA.

Amazonia…)  Implication in the life of local communities: donations. illiteracy… . urban rehabilitation. protection of indigenous peoples (e. taking into consideration their expectations…  Participation in the fight against exclusion: poverty.Social / Societal Dimension (1)  Respect for human rights : refusing child labor. school support…  External stakeholders: dialogue. funds.g.

partnerships…  Planning and management of psycho-social effects of restructuration: reconversion of sites. NGOs. support to the third sector…  Inter-organizational relations with other actors: associations. reclassifying of dismissed employees… .Social / Societal Dimension (2)  « Social » value addition to products and services: target the « consum‟actors » (consumers who act as conscious and responsible citizens when buying products)  Support for local economic development: capital inflow.

packaging…  Recycling of office supplies and used products…  Fight against pollution: reduction of emissions into the atmosphere.Environmental Dimension (1)  Eco-design: taking into consideration the ecological impact of products and services during their life cycle…  Limitation of energy and primary resources consumption: electricity. water. water and soil…  Prevention and preparation for industrial risks: realization of environmental impact studies at each new operation site… .

Environmental Dimension (2)  Rehabilitation of impacted sites after their exploitation: quarries. oil wells… (extractive industries)  Programs to reduce the use of transport for company activities related to logistics as well as for employees (car sharing)…  Protection of the biodiversity and the eco-systems of the sites in the countries where the company operates…  Application of the precautionary principle in terms of scientific and technological research… . mine deposits.

as well as in business practice. is evidently linked to the sustainable development movement  Definition of Sustainable Development:  Since the 1992 Earth Summit in Rio.Section 2 – CSR and Sustainable Development  The dramatic increase of CSR in the 1990s in management science literature. a series of seven UN conferences followed on environment and development. They coined the most widely used definition of sustainable development as: “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs” .

in particular the essential needs of the world‟s poor. The idea of limitations imposed by the state of technology and social organization on the environment ability to meet present and future needs . to which overriding priority should be given 3. The concept of "needs".CSR and Sustainable Development  This definition contains three key concepts: 1. The intergenerational dimension 2.

Emergence of Sustainable Development Chronology  1972 : Stockholm Conference  1983 : Global Commission for the Environment and Development  1987 : Brundtland Report « Our Common Future »  1992 : Rio de Janeiro Conference  1997 : Kyoto Conference  2001 : Göteborg Summit (EU strategy)  2002 : Johannesburg Summit  2005 : Actual enforcement of the Kyoto Protocol  After 2012 : Quid ? .

Sustainable Development A ternary concept Long term economic performance Profit Dynamics of Progress People Social Cohesion Planet Respect for the environment « Triple P » .

Sustainable Development Essential Principles  Responsibility towards future generations  Solidarity with poor countries  Responsible management of resources  Participation of social actors  Precaution: evaluating a priori the risks for man and the natural environment .

the Millennium Ecosystem Assessment. the situation would continue to degrade during several more centuries. but the emissions are not even stabilized. the Stern Report. the Pentagon Report…  Climate change is a reality which is caused by human activity ─ Origin: industrial revolution ─ Acceleration during the 20th century ─ Scenarios going from +2°C to +6°C in 2100  The Greenhouse Effect ─ If the gas emissions stopped today. they are still in progress… ─ +2°C on average  what regional variations? Higher distances according to geographic areas… .The preservation of the biosphere: A major stake (1)  All the important international reports proclaim the same message : Inter-Governmental Panel on Climate Change (IPCC) Reports. United Nations Environment Program (UNEP) Reports.

storms.) ─ Rising of the sea level caused by the expansion of water. etc. India. of the Antarctic and Greenland… ─ Quasi complete disappearance of the primary tropical rain forests… ─ Advancement of desertification in China. floods. Europe (Spain)… ─ Destruction of most of the ecosystems and impoverishment of biodiversity… ─ Sixth massive extinction of the animal species in the history of evolution… . Sub-Saharan Africa. the melting of glaciers.The preservation of the biosphere: A major stake (2)  Some of the forecasted consequences of global warming for the next centuries (non exhaustive list): ─ An increase of the frequency and intensity of events linked to extreme weather conditions (hurricanes.

the Netherlands. hunger riots… ─ Conflicts between countries over resources (fuel). malaria.The preservation of the biosphere: A major stake (3)  The foreseeable consequences of global warming for the next centuries: ─ Large zones will become uninhabitable : Bangladesh. anarchy and global disorder… . Shanghai. searching for food and water ─ Planetary increase of new viruses and pandemics associated with bird flue. Florida… as will important nerve centers of the planet such as New York. London… ─ Climate refugees by the millions. geopolitical tensions. dengue fever… ─ Food shortages.

BRICS. In 2008 the price per barrel reached $150…  Demographic growth : according to current estimations.Other Major Stakes  Globalization and its socially ambivalent consequences : ● the phenomenon causes serious external inequalities between countries (developed countries. the earth will have 9 billion inhabitants in 2050 – will it be possible to respond to their needs? . LDCs) and internal inequalities in each country (very rich people versus the have-nots and the « working poor ») ● it also brings about the constitution of a middle class in some parts of the developing world…  The « Peak Oil » phenomenon : the fuel production will reach its maximum (around 2015?) before declining progressively  tendency to an increasing and more volatile price of the barrel of crude oil.

Section 3 – CSR and Stakeholder Theory  Stakeholder Theory occupies a central place in CSR research  The management of stakeholder relations has become an important part for all companies engaging in CSR  Origin (in the academic sphere): Edward Freeman‟s book Strategic Management: A Stakeholder Approach (1984)  Definition: « All individuals or groups which can affect or may be affected by the realization of the objectives of an organization » .

suppliers. NGOs. environmental associations. sub-contractors.Identification of Stakeholders Typologie des stakeholders Typology of reference (ou parties prenantes) Institutional investors. the media. insurance companies. future generations… More a stake than an actor… The natural environment . civil society. managers… Employees. partners. banks. unions… Clients. (competitors)… Shareholders Internal stakeholders Operations partners Social Community Public sector. business leaders. collaborators.

Identification of stakeholders Traditional mapping (a) Investors Clients Employees Environment Company X Media Competitors Activists Suppliers Communities Can affect or may be affected by .

Identification of stakeholders Traditional mapping (b) Employees Local Communities Investors Supply Chain Company Y Customers Partners & Alliances The State Regulatory Authorities Unions Can affect or may be affected by .

A Holistic Vision of Management Human Dimension Technical Dimension Environmental Dimension Economic Dimension The Dimensions of Company Management Financial Dimension Cultural Dimension Organizational Dimension Social Dimension .