Tag Archives: corporate citizenship

Lessons from Goldman Sachs

Posted on 30 March, 2012 by | Comments Off

Goldman Sachs headquarters in Manhattan. (Photo: Bloomberg)

Two weeks ago Greg Smith’s public resignation from Goldman Sachs via an op-ed in the New York Times went viral, sparking controversy over how Goldman Sachs does business. In the op-ed, Smith named a toxic business environment as the primary reason for his departure. Whether deserved or not, Smith’s criticism of his former employer and the international reaction to Smith’s op-ed revealed two important truths for the international business community:

Good business practices are more than the pursuit of profit.

Corporate citizenship refers to a company’s responsibility to its surrounding community, including both society and the environment. Companies that incorporate environmental and social concerns into their business plans are better able to adapt to local contexts, promote their brand, and develop connections with their clientele.

One way for businesses to engage in corporate citizenship is through Corporate Social Responsibility (CSR) programs. Examples of CSR programs include providing daycare options for employees, raising awareness about informal employment in a business’ a supply chain, or training employees in environmental policies.

Corporate citizenship goes beyond CSR, however; it entails that businesses are responsible to their communities in all of their business practices. For example, Beraca Sabara Quimicos e Ingredientes Ltda., a family owned chemical business in Brazil, seeks to mitigate human rights and labor issues—which are common in many regions of Brazil—through educating local communities, building trusted relationships, and explaining why traditionally accepted unfair labor practices can be harmful. When a business invests in its community, a community is more likely to invest in the business.

Good corporate governance strengthens businesses internally, and translates into stronger market economies.

Good corporate governance ensures transparency, accountability, and responsibility in business, and is a major focus of CIPE’s work with business associations across the globe. Regardless of local context, a company that makes their operating procedures transparent and holds themselves accountable is better positioned to make informed decisions. The importance of good business practices applies to everyone, from big business to micro-enterprises, and across regions, from Latin America to Eurasia to the Middle East.

Transparency and access to information – the key principles of good corporate governance – not only allow businesses to operate more smoothly from the inside, but also promote the development of legal and institutional structures that support free and fair market-oriented societies.

Around the world millions of people are employed (or unemployed) in business environments ridden by corruption, nepotism, and discrimination. With all of the new corporate citizenship, CSR, and corporate governance strategies available to 21st century businesses, the environment in which we do business does not have to be a toxic one.

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A new world of empowered consumers

Posted on 21 October, 2011 by | Comments Off

Image source: http://technorati.com

Responsible consumerism has been an important trend in developed countries for quite a while but it is also increasingly gaining strength in key emerging markets. As economies grow and consumer choices increase, people ask more and more questions about where the products they buy come from, how they were manufactured, and what impact they have. But how significant is this trend?  

Earlier this month, Cone Communications and Echo Research released a report on the importance of corporate responsibility to consumers around the world that provides some interesting insights.

The findings came from a survey conducted among ten thousand consumers in the United States, Canada, Brazil, the United Kingdom, Germany, France, Russia, China, India and Japan – countries that comprise about half the world’s population. In those countries:

  • 93% of consumers say companies must go beyond legal compliance to operate responsibly;
  • 94% say companies must analyze and evolve their business practices to make their impact as positive as possible; and
  • 94% are likely to switch brands to one that supports a cause if both brands are similar in price and quality.

Consumers are looking for impact and expect companies to explain and substantiate their efforts:

  • 59% of consumers credit companies with helping to educate them on important issues;
  • 56% say they have been inspired to support a new issue by information provided by a company that champions it;
  • 36% have researched a company’s business practices or support of issues;
  • 93% say they would boycott a company for irresponsibility, and 56% say they already have.

As far as issues that consumers believe are important for companies to address, economic development was tied with environment for the top spot (96% of respondents). Asked to choose just one issue, surveyed consumers clearly chose economic development (34% of respondents).

 “Supporting all issues is expected of any responsible company today – but it’s not necessarily differentiating. Consumers are looking for a company to stand for something,” explains Alison DaSilva, executive VP of Cone Communications. “Companies who frame their efforts within the larger macro issue of economic development will be most compelling and relevant to consumers. Many issues, from poverty, to women’s rights, to education, may be approached in a way that stimulates people, communities and economies.”

Consumers also clearly indicated that they consider the need for corporate responsibility to go beyond philanthropy. Thirty-one percent said that the single most important way a company should address social and environmental issues is to change the way it operates. 

At the same time, country-level findings show that there is no one-fit-all approach. Instead, to be successful companies have to customize their corporate citizenship strategies based on where they operate. That means that while consumers expect all companies to have a broad corporate responsibility vision guided by core principles, they also expect particular initiatives to be tailored to local needs based on an in-depth understanding of local markets.

In today’s interconnected world, consumers have access to research and information once accessible to few. In this new world, companies can only build their reputation and their business through being transparent and engaged with consumers wherever they are – in other words through being good corporate citizens.

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Corporate citizenship beyond philanthropy

Posted on 14 July, 2011 by | Comments Off


Participants in the DFI corporate citizenship workshop [Photo: ADFIAP]

Development banks, or development financing institutions (DFIs), are set up by governments with the goal of providing credit to higher risk investment in the areas where commercial loans are otherwise hard to obtain such as long-term infrastructure projects or loans to SMEs. Due to their unique mandate, DFIs are supposed to operate according to the dual bottom line: achieving both financial sustainability and developmental impact. It often is a difficult balancing act that requires good governance structures and corporate citizenship principles to guide sound decision-making on lending.

The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP), currently consisting of 127 member-institutions in 44 countries, has been the focal point of all development banks and other institutions engaged in the financing of development in the Asia-Pacific region since 1976. Over the past several years CIPE has worked with ADFIAP on implementing corporate governance programs among its members. In a recent workshop, CIPE and ADFIAP expanded their cooperation to strengthen good corporate citizenship practices in DFIs in Asia-Pacific region and beyond (ADFIAP now serves as the secretariat of the World Federation of DFIs).

Corporate citizenship is often narrowly understood as philanthropy. The CIPE-ADFIAP international workshop on institutionalizing responsible corporate citizenship in financial institutions, which took place July 4-8 in Manila, Philippines and brought together nearly 30 DFI representatives from 10 countries, strove to re-define this limited perception. ADFIAP’s responsible corporate citizenship framework outlines four key elements of responsible citizenship:

  • Governance and ethics: fairness, accountability and transparency, corporate culture and values;
  • People: equal opportunity and access, occupational health and safety;
  • Environment: environmental management system and due diligence, green finance;
  • Contribution to development: enterprise development, community investment.

During the workshop the participants – from Brunei through Tanzania to Vietnam – discussed their understanding of corporate citizenship, exchanged best practices and together made a business case for DFIs to be responsible as a necessary extension of their core mission.  

DFIs in countries around the world have a great potential to become trailblazers of the banking industry’s responsible citizenship, showing that a financial institution can do good while doing well. DFIs participating at the workshops shared examples of their corporate citizenship programs ranging from education and environmental protection efforts to community development. By focusing on how to use their core competencies to further benefit the communities they operate in and serve, DFIs can provide guidance and inspiration for other banks. Equally important is the multiplier effect that their responsible lending can have on borrowers and their countries’ institutional environment as a whole. As one of the participants put it, DFI focus on good corporate citizenship is much needed because it can put pressure on civil society and governments to demand better governance.  

As next steps, ADFIAP will conduct similar country workshops this summer and fall in India, Malaysia, Thailand, and Vietnam to further explore practical approaches to corporate citizenship in DFIs and place them within local contexts. Stay tuned for updates!

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Posted in Asia, Global

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When doing good is good for business

Posted on 21 April, 2011 by | 3 Comments

Case Foundation CEO Jean Case participates in a Pro Bono Service panel at the 2008 CECP Corporate Philanthropy Summit. (Photo: Case Foundation via Flickr)

When most people hear the term Corporate Social Responsibility (CSR), they usually picture cheesy, Orwellian subway ads by oil companies or glossy brochures with pictures of African children and their new soccer balls. Corporate volunteerism is a recent trend that belies the image those ads present.

The perception that CSR is only for public relations has grown in part by the notion that social responsibility will always be a superficial, secondary concern so long as a firm’s bottom line trumps concerns of community engagement. In the last decade, as CSR has matured from strict philanthropy to more integrated and thoughtful approaches, companies’ concern for the social and physical environment in which they operate is no longer detached from profit margins.

Enter international corporate volunteerism, showcased last week at CDC Development Solutions’ International Corporate Volunteerism Workshop. There are many different models for corporations to follow, but most involve groups of 6-10 employees traveling together to a developing country to tackle a specific problem or project (infrastructure, IT, supply-chain, management, etc.) for a local nonprofit, business or association.

In these cases, employee skill-development is one of the central takeaways as crops of engineers or marketers who’ve likely never met but work on similar issues for the same company, come together as part of one team focused on the same goal. Multinationals with subsidiaries all over the world also benefit from knowledge exchange through corporate volunteering—not only from North to South but from South to South—as volunteer group members from local offices contribute to projects in their own countries.

As Intel has shown, donating laptops to needy students around the world doesn’t just provide local benefits, it yields tangible research and development outputs as well. This is so because as the next generation of Kenyans learn to incorporate the internet into their education, Intel workers get a first-hand glimpse of how its technology is employed in new markets. Volunteers gain fresh insights into user preferences and can then transmit them back to improve marketing and project design.

For a company like Dow Corning—a leading silicones supplier with 25,000 customers worldwide—it isn’t always easy to see who buys and uses goods containing your products. Through its citizen service corps, employees are able to overcome this knowledge gap. Innovations gleaned through Dow Corning’s volunteer program have already led to the development of several new products.

As multinationals look to expand into emerging and developing economies throughout the world, corporate volunteerism offers an undeniable opportunity for cutting edge market research. Rather than sitting in an office in corporate headquarters, employees are out in the field learning about ways to introduce and refine their products in markets whose dynamics have long been unknown, all the while doing good for communities and NGOs along the way.

Companies striving to do good while also doing well may have stumbled upon a promising model in corporate volunteerism. As it expands into a more pervasive and established CSR tool, corporate volunteering should make sure it doesn’t lose its vision along the way.

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A call to action for business in developing economies

Posted on 1 February, 2011 by | Comments Off

In attempting to get to the heart of what makes an economy tick, economists notoriously overlook the political and social ramifications of market-oriented growth and development.

Why would anyone oppose jobs and prosperity? Who could possibly be against the freedom to choose how to make one’s living? While there are plenty of contradictory voices screaming back, both advocates and adversaries of market-oriented growth and development tend to downplay the full spectrum of political and social ramifications associated with a thriving private sector. Cultures may change, families may be uprooted, and communities may be overrun – yet all the same can happen to authoritarianism, political marginalization, and gender-based hierarchy.

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Greed not good enough anymore

Posted on 19 January, 2011 by | Comments Off

The private equity firms that provided inspiration for the cutthroat fictional investor Gordon Gekko from the film Wall Street have since grown a heart. The Carlyle Group, born the same year (1987) Gekko first appeared on screen to declare “Greed is good,” recently released its inaugural Corporate Citizenship Report, the first of its kind from a large private equity firm. The report is just one component of Carlyle’s larger initiative to incorporate environmental, social, and governance (ESG) metrics into its core business strategy. For Carlyle, currently the world’s second largest private equity firm, greed is not good enough.

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Walking the walk, not just talking the talk, of corporate citizenship

Posted on 1 December, 2010 by | Comments Off

With all the buzz on corporate social responsibility, or corporate citizenship, it’s easy to lose track of the real world examples of companies engaging in responsible business practices in their everyday activities. Even as companies pledge their adherence to such principles by signing agreements such as the United Nations Global Compact (UNCG), good corporate citizenship extends beyond statements and declarations. It requires firms to make their commitment to social responsibility an integral part of corporate strategy.

This Economic Reform Feature Service article shows how six firms of different sizes and from different sectors use one tool, the SA8000 global social accountability standard for decent working conditions, in applying corporate citizenship principles to their everyday practices.

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Posted in Global, Latin America and the Caribbean, South Asia

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