Tag Archives: csr

What’s New in CSR?

Posted on 24 October, 2012 by | 1 Comment

Participants on a panel at the BCLC event.

Corporate social responsibility (CSR), or corporate citizenship, is not a new concept. The idea that businesses should be responsible and engaged members of their communities, both locally and globally, has been around for quite some time. However, the understanding of what that means in practice and what the larger significance of good corporate citizenship is has evolved over time. Today it is more important today than ever before.

Recently, I had a chance to participate in two great events that explored this topic in depth: CSR: Business Solutions for Emerging Markets conference organized by the Business Civic Leadership Center (BCLC) and Corporate Strategic Responsibility: What’s Next for CSR? organized by Partners for Democratic Change, together with the GE Foundation and the International Finance Corporation CommDev Office. They both attracted excellent speakers and active participants, asking key questions about what makes corporate citizenship successful and why it should be a key element of a company’s strategy.

These are the themes and new concepts that I took away:

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Building Sustainable Global Value Chains

Posted on 23 August, 2012 by | 1 Comment

Siemens is a leading supplier of technologies like wind turbines that help its customers reduce their environmental impact. (Photo: Wind Power Monthly)

As companies around the world strive to create sustainable value chains, they are paying increased attention to the operations and management practices of their suppliers, distributors, and partners. A recent joint research project of the American Society for Quality, the Corporate Responsibility Officers Association, and the Institute for Supply Management with Deloitte Consulting LLP took a closer look at what improves the effectiveness of sustainable value chains. The project gathered almost 1,000 responses from sustainable supply chain executives.

The responses measured how much a given management practice can increase an organization’s sustainable value chain effectiveness, as compared to respondents not adopting the practice. Not surprisingly, among the top 10 such management practices, the top five have to do with engagement, organizational culture, and incentives (percentages represent an increase in sustainable value chain effectiveness):

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2012 Global Corporate Citizenship Conference

Posted on 2 August, 2012 by | Comments Off

The U.S. Chamber of Commerce is hosting a corporate citizenship conference on October 10 and 11, 2012, in Washington, DC. The conference, sponsored by the Chamber’s Business Civic Leadership Center, will feature briefings on international development trends, regional development assessments, and U.S. government and multilateral initiatives and will provide many opportunities for companies, organizations, and individuals to network, share, and learn.

Literacy, nutrition, poverty, hygiene, corruption, violence, disease, pollution are not just social issues, they profoundly affect the business landscape. As companies increasingly cultivate business opportunities in emerging markets, they encounter these challenges and are developing strategies and innovations that are improving social, environmental, and governance conditions. Businesses are changing the way that they work with governments, development agencies, and key stakeholders; applying technology in new ways to old problems and re-framing problems to come up with new solutions.

The organizers are also accepting speaker proposals.

Find out more about the conference, register, and see video from last year’s conference here.

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Moving beyond CSR: Oil Companies and Economic Development

Posted on 4 June, 2012 by | Comments Off

Local business leaders at the Centro de Apoio Empresarial, Angola (Photo: Jornal de Angole/Jesus Silva)

How can multinational companies have a positive impact on developing countries? While the private sector’s traditional view has been similar to Milton Friedman’s argument that businesses do enough by providing goods and services to society, some companies are recognizing that they can increase their profits by engaging in development-focused business practices and investments. In particular, integrating local small and medium sized enterprises (SMEs) into corporate supply chains has both lasting economic growth impacts for developing nations and commercial benefits for corporations.

As mentioned before in this blog, multinational food and beverage companies like SABMiller and PepsiCo are already using local sourcing to cut down on costs and promote sustainable development. But how else is the business community becoming more “locally-conscious”?

The oil and extraction sector is also seeing the benefits of investing locally. Chevron has adopted the “local-content development” model into many of its world-wide operations. After 27-years of civil war ended in Angola, the government sought to revitalize its human capital by requiring oil companies to hire Angolans and source from locally run businesses. Yet local businesses lacked the necessary know-how to implement the activities the oil industry needed.

To address this capacity deficit, Chevron cooperated with other oil companies, NGOs, and the Angolan Ministry of Petroleum to help build develop local talent. The Centro de Apoio Empresarial, an enterprise development center, was established with the goal of creating a functioning and sustainable market of local SMES to meet the needs of the oil industry by improving the capacity of Angolan enterprises to serve as suppliers.  This socio-economic initiative not only helped build the local economy by creating more than 3,000 jobs for Angolans, it also helped oil companies sustain and expand their operations in the country.  Similarly, Total is aggressively building local-talent in Yemen and Nigeria as a way of sustainably enhancing skills and building industrial capacity in its operating countries. Total set up its own training centers in both nations, focusing on gas technologies and hands-on practical training. Leading international oil companies, therefore, are deliberately investing in local talent as part of a corporate strategy to expand their businesses and thus increase profits.

While skeptics see such social investments purely as a CSR/good advertising scheme for companies to increase sales, leading multinationals are challenging this notion. As more oil-rich nations, such as Brazil and Ghana, implement local content legislations, multinational companies will be legally required to integrate local employees and SMEs into their supply chains. As opposed to seeing this as a challenge, the private sector should view this as an opportunity for them to have a life-changing impact on the local economy by enhancing local talent and also improving their own bottom line over the long term.

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The power of purpose

Posted on 25 May, 2012 by | 1 Comment

What are some of the key reasons why employees choose a particular company and what determines how long they stay? There are some obvious answers like compensation, benefits, growth opportunities, or flexible schedule. But another factor is becoming more and more prominent: purpose. According to a new report by global brand consultancy Calling Brands, corporate purpose – a deeper role that goes beyond satisfying commercial and operational goals and demonstrates exactly why a business is valuable to all its stakeholders – is emerging as a powerful driver of employee attraction, retention, and productivity.

The report is based on interviews with HR and Communications chiefs from large multinational companies and a survey or over 4,000 workers in Germany, the UK, and the U.S. This research found that after pay and benefits purpose is the most important factor for employees when considering who to work for and it is a very significant driver of discretionary effort and loyalty. It ranks ahead of other traditionally valued factors such as level of responsibility in a job and even career progression. To that effect, 65% of respondents claimed that purpose would motivate them to go the ‘extra mile’ in their jobs and nearly two-thirds (64%) felt more loyal toward businesses that aim to do more than simply create shareholder value.

These findings are on some level very intuitive. After all, who doesn’t want to see the value of their work mean more than just a paycheck? Purpose is a company’s ambition and commitment to make a difference in the world that provides this much-needed motivation. Demonstrating how strong this desire is helps drive home a crucial point for businesses.

When a good employee leaves, it takes time and resources to find a replacement, it disrupts company operations, and translates into losses to both the immediate bottom line and longer-term business potential. Since employees increasingly seek the alignment between their personal values and the values of the business they work for, purpose translates into a real competitive advantage because it helps companies attract and retain top talent while avoiding the costs of personnel turnover.  That is why companies should consider it as one of the core elements of their strategy and operations.

Calling Brands experts conclude, “People want to work for a good business (…) all it needs is for employers to start making the argument – and act on it. (…) This is not an HR issue: this is a Board issue.” That is the message that every employer must take to heart.

Corporate purpose is closely intertwined with good corporate citizenship, or CSR. Consequently, the business case for purpose demonstrated by the Calling Brands study complements the related argument that corporate citizenship is not just good business, it is a good business strategy. Especially in the global context, being a good corporate citizen can lead a business to prosperity and at the same time help build better societies, protect human rights, and facilitate economic development.

As such, corporate citizenship – and purpose – must go beyond philanthropy and extend to broader socio-economic management that affects how a company works in an interconnected ecosystem of countries where it operates. What that means in practice and how companies can become CSR 2.0 leaders was the topic of today’s conversation hosted by Business Civic Leadership Center’s Executive Director Stephen Jordan with Katherine Pickus, Vice President of the Abbott Fund and Vice President of Global Citizenship Policy of Abbott Laboratories. Testifying to the importance of having a corporate purpose and the value of employees devoted to that purpose, Pickus noted, “CSR is about more than philanthropy, it’s about tapping into the value that the business brings. (…) We get our best ideas from people embedded in the business who are thinking about corporate citizenship in an innovative way.”

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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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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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