Metropolia Business School International Project Week (IPW) 2013
Dr Denise Dollimore
University of Hertfordshire, UK
Following this session students will have knowledge
and understanding of:
 Sustainability in relation to ethics and corporate
social responsibility – the ‘triple bottom line’
 The business case for CSR and environmentally
sustainable business practices
 The notion of customer capitalism
CSR initiatives of organizations are usually directed at improving
the organization’s triple bottom line, a reference to 3 types of
performance metrics; economic, social and environmental.
Through the triple bottom line, Elkington (1994; 1997) promoted
the idea that businesses have other goals in addition to that of
adding economic value.
‘three pillars’ of
‘people, planet profit’
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Triple bottom line (TBL) reporting emerging as increasingly
important way for organizations to make results of their CSR
strategies apparent to stakeholders and for stakeholders to
hold organizations accountable for their impact on society.
Use of these and the reporting frameworks and metrics
developed by Global Reporting Initiative promotes greater
transparency and facilitates benchmarking CSR efforts across
organizations and industries.
Novo Nordisk, insulin manufacturer based in Denmark,
manages its business using the TBL business principle. The
company’s strategy is underpinned by ‘The Novo Nordisk Way’*
– 10 statements that encapsulate its principles. (see p.35)
*Can you identify the three pillars here?
The term sustainability used in variety of ways:
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More often, a focused meaning, concerned with relationship to
its environment and its use of natural resources (land, water, air,
plants, animals, mineral, fossil fuels)
In many organizations now synonymous with CSR; replacing CSR
in the business lexicon. Sustainability and TBL reporting seen as
one and the same.
‘A complex term, but often stresses the long-term viability of
both the environment and the corporation’ (King & Lawley 2013)
Sustainable business practices are those that meet
the needs of the present without compromising the
ability to meet the needs of the future
An organization’s environmental sustainability
strategy consists of its deliberate actions to protect
the environment, provide for the longevity of natural
resources, maintain ecological support systems for
future generations and guard against ultimate
endangerment of the planet
*Thompson et al (2013)
The moral case for environmentally sustainable
business practices:
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‘It’s the right thing to do’ (utilitarian approach)
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Business has a duty to be good a corporate citizen
(Starbucks/Google p6-7)
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In return for its ‘licence to operate’, business has a
moral obligation to operate honourably, provide
good working conditions and be a good
environmental steward (BP p.10).
The exercise of CSR and environmental responsibility
is good for business:
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Leads to increased buyer patronage
Reduces risk of reputation-damaging incidents
Lowers costs & enhances employee recruiting and
workforce retention
Generates opportunity for revenue enhancement
Are in the long term interests of shareholder
*Thompson et al (2013)
In summary:
Socially responsible strategies that create value
for customers and lower costs can improve
organization profits and shareholder value at the
same time that they address other stakeholder
interests.
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Review of 135 studies show a positive, but small,
correlation between good corporate behaviour and good
financial success; only 2% of studies showed harm to
shareholder interests (Margolis et al 2008)
Unilever is third largest consumer goods company in the
world with over 400 brands, 173,000 employees and total
revenue of €51.32bn in 2012. Unilever products are used by 2
billion consumers every day in over 190 countries (Unilever
website)
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Launched ‘Sustainability Living Plan’ in 2010
Winner of MT’s ‘Britain most admired company’ 2010
CEO Paul Polman has transformed Unilever into world’s most
innovative corporations. Did away with earnings guidance and
quarterly reporting (HBR Interview 2012).
2011 launched plan to double revenue by 2020 while halving
company’s environmental impact.
Is it possible to mange the paradox of profits vs responsibility?
The Co-operative Group, a member-owned organization with
retail and financial operations in Uk, invests 4% of its profit in
local communities and encourages employees to carry out
voluntary work. Reduced carbon footprint by 15% and the
amount of packaging used in stores by 9% in 2010. A leading
supporter of the fair-trade movement (Thompson et al, 2013).
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Declared Europe’s most sustainable bank by Financial Times,
winning the Grocer magazine’s Green retailer of the Year
Award as well as increasing profits by 14%.
Reported this week that Co-op Bank in financial trouble - but
because of takeover of Britannia building Society in 2009?
Are Virtuous firms built to last?... What do you think?
*Crane, Matten and Spence (2007)
Last word for Roger Martin:
“I firmly believe that if more companies made customers the
top priority, the quality of corporate decision making would
improve because thinking about the customer forces you to
focus on improving your operations and the products and
services you provide, rather than spinning lines to
shareholders”
What do you think?
Are we now living in the age of customer-driven capitalism?
Or is it better described as stakeholder capitalism?
…is there a difference?
Crane, Matten and Spence. 2007. Corporate Social Responsibility
Elkington, J. 1994. ‘Towards the suitable corporation: Win win win business
strategies for sustainable development California Mangement Review Vol. 36, No 2,
1994 , p. 90-100
Elkington, J. 1997.Cannibals With Forks: The Triple Bottom Line of 21st Century
Business. Gabriola Island, BC/Stony Creek, CT: New Society Publisher
Harvard Business Review. 2012. ‘Unilever CEO Paul Polman: Captain Planet’. HBR
Interview. HBR June 2012 pp.113-118.
King and Lawley. 2013. Organizational Behaviour. Oxford
MT. 2010 ‘A bumpy ride that’s far from over’ by Andrew Saunders in Management
Today December 2010
Martin, R. 2010. The Age of Customer Capitalism. HBR
Margolis and Elfenbein. 2008, ‘Doing well by doing good: don’t count on it’ HBR,
86(1):19-20
Thompson, Strickland, Gamble Peteraf, Janes & Sutton. 2013 Crafting and Executing
Strategy . McGraw Hill.
Unilever 2013. http://www.unilever.com