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Creating Value via Corporate Social Responsibility. Bradley Googins, Philip Mirvis, Mary Jo Hatch. Traditional View. Global Executives On Role Of Business. Which of the following statements best describes the role that large corporations should play in society.

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slide1

Creating Value via

Corporate Social Responsibility

Bradley Googins, Philip Mirvis, Mary Jo Hatch

global executives on role of business
Global Executives On Role Of Business

Which of the following statements best describes the role

that large corporations should play in society

Focus solely on providing highest

possible returns to investors while

obeying all laws and regulations

Generate high returns to investors

but balance with contributing to the

broader public good

Source Dec 2005 McKinsey Quarterly survey of 4,238 global business executives

what is the meaning of csr
What is the meaning of CSR?

Source: Fleishman Hillard/National Consumers League study,

“Rethinking Corporate Social Responsibility”

societal views of large corporations

60-70%

Expectations

Trust

10-20%

Societal Views of Large Corporations

Around the world...

Sources: GlobeScan, Wirthlin, Edelman

expectations are high for business
Expectations are high for Business

Companies “Held Completely Responsible for,” Average of 25 Countries

slide8

2t. I am going to read a list of things some people say should be part of the responsibilities of large companies. For each one, please tell me to what extent you think companies should be held responsible. In answering, please use a scale of 1 to 5, where 1 is “Not held responsible,” 3 is “Held partially responsible,” and 5 is “Held completely responsible.” What about…?

slide10

Brands feel the impact as activists target customers Financial Times

Brands feel the impact as activists target customers Financial Times

CSR from OUTSIDE IN

slide12

Success in tomorrow’s markets means working with stakeholders to understand, predict, and shape our future environment and ways of living. Tackling important problems together will require teamwork and respect.”

Jeff Immelt

Current CEO,

General Electric

business and society risk and opportunities

Climate Change

Digital Divide,

Youth Unemployment,

Corruption

Nationalization

Access to Medicine

Access to Credit

Piracy

Cheap Labor/Sourcing,

Obesity/Consumerism,

Environmental Damage,

Bribery

Base of the Pyramid,

Micro-Finance,

Eco-Effectiveness

CSR Partnerships

Business And Society: Risk And Opportunities

SOCIETY

Risk

Opportunity

BUSINESSS

Risk

Opportunity

Source: Beyond Good Company

slide16

Revolutionary Renewal

Strategic activities contribute both to repairing and also to building society and environment

Sustainable Enterprise

All functions and actions are sustainable in economic, social and environmental terms

Benefit to Society

Social Responsibility

Society and environmental initiatives are integral to strategy – “do good”

Compliance & Disclosure

“Do no harm”Act within legal and ethical codes of conduct

Zone of Mutual Benefit

Benefit to Business

slide19

CSR creates financial value along 4 dimensions

Growth

  • Novo Nordisk: Earned market leadership in China with market share above 70%

New markets

New products

New customers/ market share

  • Verizon: Increased sales by $6 million, with potential growth of a new market of over $600 million

Innovation

Reputation / differentiation

Return on capital

  • Dow: Invested $1 billion over 10 years to reduce its energy consumption and improve its efficiency and has saved $7 billion in last 5 years

Operational efficiency

Workforce efficiency

Reputation/price premium

Risk management

Regulatory risk

License to operate

  • Nestlé: Earned $4.5 billion in 2007 through the sales of PPP (Popularly Positioned Products)

Supply chain/security of supply

Reputational risk

  • IBM: Improved global leadership skills, employee retention and commitment to IBM, new knowledge and skill contribution to IBM

Management quality

Leadership development

Adaptability

Long-term strategic view

Source: Mirvis/McKinsey Study

slide20
Although many companies create value from ESG, very few assess the financial value creation and even fewer communicate that to the markets

5

Creating value

Assessing value

Communicating value

Percent of companies interviewed = 100%

ESG program

-40%

-10%

Maximizing value from ESG

Established metrics to monitor program

-40%

-5%

Converting ESG metrics to financial value

Communicate ESG value to CFOs, investors

Source: BCCCC/McKinsey Study

slide23

J&J Partnership with the American Association of Colleges of Nursing

  • Linking Johnson & Johnson with:
    • Caring, Education, and Hospitals
  • Key Drivers
    • Standing behind products and services
    • Vision for the futures
    • Supporting good causes
    • Meeting needs

23