Corporate Social Responsibility

1. Corporate Social Responsibility • Bedrifters Samfunnsansvar Bakenforliggende faktorer Hva er CSR Hvorfor jobbe med CSR Dilemmaer knyttet til CSR Hvordan jobber bedriftene i dag med CSR Eli Bleie Munkelien 11.02.03

2. Role of business – traditional view “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game” Milton Friedman (1963) 2003: • Role of business is still business, BUT…

3. Today: Changed business climate More is expected from business! Why: • globalisation • CNN-society • weaker governments, stronger companies

5. Foreign activities in Norwegian companies • 1 of 3 invest more abroad than in Norway • 4 of 5 have 50% of sales abroad • 1 of 3 employs more people abroad than in Norway 90 % 80 % 76,3 % 70 % 64,7 % 60 % 55,2 % 50 % 40 % 32,6 % 30,3 % 30 % 20 % 10 % 0 % Share Share of Share of Employees Share Share R&D of total sale abroad Total Sale from Norway of investments abroad abroad (n=40) abroad (n=70) (n=70) (n=48) (n=60)

6. Sustainable development is the societal goal of meeting the needs of the current generation without compromising the ability of future generations to meet their needs.The Rio Declaration 1992 Sustainable development Corporate Social Responsibility: Companies’ contribution to sustainable development, beyond legal compliance socially, environmentally and economically. Source: DTI, 2002

7. Economic performance Sustain- ability Environmentalperformance Socialperformance Definition of CSR • In brief: • CSR involves increased efforts to align corporate goals with those of society • CSR implies profitability being judged by a longer time frame • Human Rights • Labor Rights • Environmental concern • Corporate Governance • Product responsibility • Supply-chain management • Stakeholders • Corporate governance

9. Why do CSR? • Ethical and moral imperative • Business case argumentation

10. Values Values are like fingerprints. Nobody's are the same, but you leave 'em all over everything you do. - Elvis Presley

11. Values

12. CSR Business Case arguments CSR initiatives will: • Increase employee loyalty • Increase attractiveness as employer • Improve operational risk management • Strengthen brand • Reduce capital costs • Reduce operating costs

13. Employees and motivation • Between 25-50 % of graduates say they will not consider working for companies that they believe to be unethical (Sunday Times May 7th 2000) • MORI research throughout the 1990s consistently found that the vast majority of people believed that a company that supports the community is a good company to work for • Only 3% of companies believe they have enough talent to reach their objectives in five years (McKinsey, Study: "The War for Talent", 1998) • Bain & Co found that those companies that have the highest employee retention also have the greatest customer retention

14. CSR initiatives increase attractiveness

15. Reputation and brand

16. Corporate watchgroups

17. Are customers aware? • 2 out of 3 citizens expects companies to create social changes • 50% of population pays attention to social responsibilities of companies • 1in 5 rewarded / punished corporate behaviour past year Millenium Poll (25.000 interview, 23 countries on 6 continents)

18. CSR initiatives enhance brand

19. All PR is good PR?

22. Millennium Poll 1999 Monitor 2001

23. Investor behaviour Legislation Analysts concern Political concern Corporate strategy Corporate actions Corporate profits Public concern Non-market consequences Market consequences The dynamics of CSR License to produce License to grow License to operate License to sell

24. ‘Voice of society’ (changing expectations of stakeholders regarding business, increased customer interest, action groups etc.) Industry peer pressure Regulations CSR Demands for increased disclosure and transparency (e.g. reporting) Supply chain responsibility or pressure New and emerging issues (such as environmental change) First mover (adopter) advantage and more competitive labour markets Growing investor pressure and finance conditions (e.g. loans, green mutual funds etc.) What drives companies to be socially responsible? Source: Warwick Business School

27. Stakeholders’ growing importance Local community NGOs Company Shareholders Own employees Customers Authorities Investors Suppliers/ business partners -identification -dialogue -partnerships

28. Company responsibility, but how far? Employees Partners Society • SHE • Employee satisfaction • Responsible downsizing • Workforce diversity • Training Environment Local community Product stewardship Poverty alleviation?? • HR-performance of supplier (“Guilt by association”) • Supply chain management

29. Responsibility for products’ effects

30. Responsibility for production process

31. Walking the talk or only talking the talk? Blue-Wash

36. -CSR as integral part of business process -Reporting -Stakeholder focus -Responsibility at home/3rd world -Philanthropy -Pro Bono/employee volunteering -Gift matching programs -Cause-related marketing -Partnerships with not-for profit organisations -Public Education Programs -HR/Labour rights -Supply Chain monitoring -SA 8000 -Community investment -Corruption -Aids -Digital Divide -HR/Labour rights -Development and CSR