RESPONSIBLE MANAGEMENT
CSR, Sustainability and
Corporate Strategy
Dr. Nathalie Crutzen
Assistant Professor (HEC-Ulg)
Visiting Professor (ESC Rennes)
June 2012
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Agenda
1. Lecture: CSR and Corporate Strategy
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Context
What is a (Sustainable or CSR) Strategy?
How to develop such a Strategy?
Concrete examples
2. Stonyfield – A Case Study
3. Pre-assignments – Presentation of
students’videos
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Context
• Firms are acting and operating in a changing environment with
several megatrends which significantly shape the future of our
planet … but which will also be business generator
Urbanization
Demographic change
Climate change
Globalization
Multi-polar world
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Context
http://www.youtube.com/watch?v=x-9FaJPhFxQ
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Context
• The worldwide context is characterized by:
– New imperatives (Sustainable Development,
breakthrough technological innovations, multi-polar
globalization, hyper-competition, etc.)
– New expectations (employees, customers, etc.)
– New possibilities (Web  new technologies, new
communities, etc.)
• Strategists/Businessmen have to consider these contextual
factors in their strategic thinking and to propose new
business strategies/new business models/new ways of
doing business which are aligned with this context
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Context
• In this context, more and more firms develop “strategies”
related to CSR and Sustainable Development
– CEOs increasingly view managing sustainability as critical to
their company’s success (Kell & Lacy, 2010),
– 80% of Fortune Global 250 companies now disclose their
sustainability performance (Accenture Research)
– Over the next decade or so, sustainable development will
constitute one of the biggest opportunities in the history of
commerce (Hart, 1997)
• BUT:
– What is a business/corporate strategy?
– What is a “CSR” or a “sustainable” strategy?
– How can you elaborate such a strategy?
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What is Business Strategy?
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"Strategy is the direction and scope of an
organization over the long-term, which
achieves advantage for the organization
through its configuration of resources within a
challenging environment, to meet the needs of
markets and to fulfill stakeholders’
expectations“ (Johnson et al., 2010)
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Link between CSR and Business Strategy
Different levels of integration
http://www.youtube.com/watch?v=wk1CWuJStZY
1. Pure philanthropy  Strategic philanthropy
Examples:
- Toyota (volunteering time to clean beaches)
- Apple (computers to schools as a means of introducing its products
to young people)
2. Parallel CSR strategy , ideally strategic CSR
Example: Coca-Cola, ArcelorMittal, etc.
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When is a CSR initiative strategic?
• "A CSR strategy, policy, program, or process is strategic when
it yields substantial business related benefits to the
firm…by supporting core business activities and …
contributing to the firm's effectiveness in accomplishing its
mission“ (Crane-Matten-Spence, 2008)
• An alignment of social, environmental and economic
benefits is necessary for the strategic relevance of CSR
 Real positive impacts on the Society and on the
Business
 Long term potentialities
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7 dimensions of strategic CSR
Aligning economic, social, and environmental benefits
Stakeholders: Indentifying which SH are critical to the firm achieving its goals and
strategy. Choosing CSR projects which address their needs / interests.
Centrality: Will the action benefit the organization, society, the environment? Is it
a priority, in line with firm's mission and objectives?
Specificity: ability to capture firm-specific benefits and not just non-specific
public benefits.
Proactivity: ability to propose CSR policies which anticipate, environmental trends
in non-crisis conditions. "Planned change"
Voluntarism: discretionary decision making in absence of externally imposed
compliance requirements. "We want to" attitude
Visibility: the ability to gain internal and external recognition for CSR initiatives.
Value creation: the extent to which CSR programs create value for customers and
all stakeholders
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The issue of integration
• Environmental and social dimensions can be:
• EITHER integrated to core business strategy/activities
« Sustainable », « Sustainability » Strategy/ Activities
• OR established in parallel (decoupled strategies)
• Parallel « CSR strategy »
• Parallel organisation in the company (eg. Environmental
delegates, CSR department, etc.)
• Parallel measurements of non-economic aspects of
performance
Strategy/Activities which often tend to be closer to pure
marketing or philanthropic activities
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The issue of integration
• If not integrated,
• Not in line with the basic principles of Sustainable
Development (3Ps) and with a new vision of business,
a new emerging economic model (in relationship with
the context of Sustainable Development)
• Risk of « green/social washing »
• The economic relevance of societal activities is not
(fully) considered
• CSR requires involvement by conventional business
managers
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Link between CSR and Strategy
Different levels of integration
http://www.youtube.com/watch?v=wk1CWuJStZY
1. Pure philanthropy  Strategic philanthropy
Example: Toyota (volunteering time to clean beaches)  Apple
(computers to schools) or IBM (education)
2. Parallel CSR strategy , ideally strategic CSR
Example: Most companies today !!
3. Integrated CSR strategy – “Sustainable Strategy”
Real integration of all three pillars of Sustainable Development in
the core corporate strategy in order to create “share value”
http://www.youtube.com/watch?v=z2oS3zk8VA4&feature=related
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Business Strategies for a
Sustainable Development
• A “Sustainable” Strategy is a Corporate Strategy which creates,
develops and maintains sustainable business value (in LT vision)
in integrating social, environmental and economic dimensions
• Different from some (common) usages of « CSR Strategy »
– Pure philanthropic activities, not related to core business
– “Greening” (of business activities, products)
– « Green/Social Washing » – Pure marketing activities
– Or social firms’ strategy (Social Economy – Non-Profit)
http://www.youtube.com/watch?v=55dZIC_m-yo&feature=relmfu
• Strong relationship with Innovation/Creativity
– New products or services (e.g. « sustainable » products)
– New processes: new ways of producing, distributing, selling
– New consumers (e.g. social communities)
http://www.youtube.com/watch?v=GfC1BnHKrIg
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Examples
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BOP Strategies
• “Making profits by "serving" the poor class of 4 bn. consumers
through disruptive innovations” - products / services produced
at a lower cost, with fewer capabilities, adapted to target
• These innovations can improve social and economic conditions
http://www.youtube.com/watch?v=CPnx6gLcfK4&feature=related
• Examples
Tata India automobiles
http://www.youtube.com/watch?v=3WB87eo_obU
Grameen-Danone in Bangladesh
Vodafone and Safaricom: M-Pesa – Mobile Phone Payment
solution in Kenya
http://www.youtube.com/watch?v=B6m3xb6T5kk
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Michelin’s Innovative Business
Model
http://www.escpeurope.eu/fr/programmes-escpeurope/executive-mba/emba-faculty-videos/emmanuelzilberberg-the-michelin-paradigm-shift/
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Stonyfield Farm
Arena reading
 Could you present briefly the company?
 What is/are the company’s mission/values?
 Does it integrate social and environmental issues to
economic ones? Are they linked/aligned to their
business strategy?
How to develop a CSR or a
Sustainable Strategy ?
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Phase 1: Diagnosis and Strategy formulation
Where we
are
CSR
Phase 2 (Session 5):
Implementation
External guidelines
Internal codes of conduct
Leadership
Culture
Governance structures
Risk management
HR management
Where we
want to
be
Values
Mission statement
Strategic Goals
Objectives
Phase 3 (Session 5):
Performance Management
Measuring
sustainable
performance: CSR
accounting and
reporting
Are we
there?
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How to develop business strategies
for Sustainable Development?
Adam Werbach
http://www.youtube.com/watch?v=K_usAROt9
bc&feature=related
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How to develop a sustainability strategy
Adam Werbach, CEO of Saatchi & Saatchi advertising
• Pillars
–
–
–
–
Social
Environmental
Cultural
Economic
• KSFs
– Transparency
– Engagement – “PSP”
– Networks (with
experts)
Some other examples of CSR
strategies
• Solvay and Rhodia: Creation of a giant in the field of
Chemistry
http://www.youtube.com/embed/zNUxkUMYObk
(4.30)
• Wal-Mart
http://www.youtube.com/watch?v=P_zgtlW2TWY&lr=1
• Coca-Cola
http://www.youtube.com/watch?v=VoOL2KfDuAA&f
eature=related
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Some Belgian players on the new
clean energy markets
Belgian Offshore Wind Farms
“Belwind” windfarm
with 46 km off the coast the furthest
offshore wind farm in the world
largest renewable power plant of Belgium
Will provide 175.000 households in
Belgium with green power, thus avoiding
270,000 tonnes of CO2 per year
C-power:
First wind farm in the world located
around 30 km offshore and at a depth of
27 m.
Belgian knowhow:
IMDC and Technum (Tractebel
Engineering) - DEME group –
www.deme.be
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Some Belgian players on the new
clean energy markets
Zero-emission hybrid bus: first in the world
Belgian bus manufacturer Van Hool and six
partners.
First passenger transport vehicle equipped
with a hybrid propulsion system.
Engine contains a fuel cell which converts
the hydrogen into electricity and the
vehicles use braking energy to recharge
their batteries.
The Belgian company SolviCore supplied
Van Hool with the fuel cell thanks to the
expertise of its two Belgian parent
companies (Solvay and Umicore).
www.vanhool.be
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Conclusion
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• It is essential to link , ideally to incorporate, CSR issues to
corporate strategy
http://www.youtube.com/watch?v=yOMCDRQB0CY&feature=related
• In the past, “philanthropy = CSR”
• Today, more and more firms try to link CSR to their core strategy
(really impacts on the Society and on the Business)
– Strategic philanthropy
– CSR strategy which contribute to core business
• Nevertheless, few firms have a real “sustainable strategy” which
include a clear sustainable and LT vision in integrating
simultaneously environmental, social and economic challenges in
their core business
• Firms have a major role to play !
But, in parallel, need for changes in lifestyles/individual
consumption patterns !!
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