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Corporate Social Responsibility,
from whim to a matter of strategy
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Remember 2000?
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•Dow Jones 12000 and rising
•Unknown prosperity because of internet
•Fukuyama’s ‘End of history’
•Sustainability: for idealists and do gooders
•Corporate Social Responsibility (CSR): Esso’s
chairman ”it is none of our business”
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2010
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Copenhagen
Economic crisis
The state of the planet
The people on the planet
Dow Jones sustainability index
Buzz words: CSR, sustainability, People Planet Profit
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What about the planet and people in 2020?
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Is that your business?
Not my problem
Shouldn’t the government act?
Are things really that bad?
You abide the laws, rules and regulations, so what?
The correct questions?
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Wrong questions
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National Geographic March
2010: cattle farming and
wolves
“We have to realize that the
general U.S. population
wants wolves. That
population is also our
customers for beef. It’s not
a good idea to tell your
customers they don’t know
what they’re doing. So
instead of taking a hard line
and fighting to get
everything back to where it
was 50 years ago, we’re
trying things like…”
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It is your business because:
• Many stakeholders worry about the state of the planet
and the fate of its people
• ‘The business community has its own responsibility’
• They want you to act
• Their perceptions count
• You nor your company can change that, so…
Go with the flow
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How far should you go, what should you do?
• Not a thing?
• A bit more?
• A real effort?
• Be a front runner?
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How far you should go depends on:
• Who do you have to/want to make happy?
• Your risks (defensive reasons)
• Possible benefits (offensive reasons)
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Who do you want to make happy?
All your stakeholders, however
people are not the same:
• Environmentalists 3%
• Cultural creatives 30%
• Average 42%
• Laggards 25%
Difference per stakeholdergroup: clients, employees,
bankers, trade unionleaders, politicians, civil servants,
retailers, shareholders, suppliers,
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What may happen if you can’t make
them happy?
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Risks. Clients.
Philips suppliers programme:
• program from industry peers in
order to create a better impetus for
change within electronics sector
• helps create a sustainable supply
chain
• supply managers must select
suppliers and business partners in
accordance with these principles
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(2015: 50% of all products 10% above average
in packaging use, energy efficiency, waste,
life span)
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Risks. Employees.
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serious sustainability programme results in:
Higher employee loyalty
Less employee turnover
Easier recruitment of top quality people
90% of Belgians: employers should care about the environment
60% of Flemish take the environmental efforts of their potential employer into consideration
Novo Nordisk, 5 % drop in staff turnover, after launching CSR programme
Sears: 20% reduction in staff turnover since implementing CSR program
Canada: CSR important to employee morale 50%, loyalty 41%, retention 29%, recruitment of top employees 25% and
productivity 12% (Society for Human Resource Management)
Canada: 70% would consider changing jobs if their employers did not operate in a socially responsible manner
Aspen Institute: 26% of MBa students 2007 say the potential of making a contribution to society is important in job
selection compared to 15% in 2002
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Risks. Banks.
RABO AAA top 25 cooperative bank
• Discusses CSR efforts with clients
• Refused cattle transport
company
• Stopped business with mink
farms and non sustainable fishing
companies
• 2001: ‘treason’
• Profiting from sustainability
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Risks. Civil servants.
• Heavy rains caused collapse of
roof
• Years of discussions to rebuild
• Heavy rains caused collapse of
roof
• Reopening after a very short
period of time
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Risks. Retailers.
Albert Heijn pork choice:
• Standard
• Animal Protection, Better Life, one
star
• Animal Protection, Better Life, two
stars
• Animal Protection, Better Life,
three stars=biologic
• From 2011: No more standard
pork, only ‘Better life Pork’
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Risks. Retailers.
Walmart: ‘we only want to do
business with companies that
support our CO2 emission
targets’
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Risks. Shareholders.
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Vedanta Mining Company
Dongria Kondh tribe protests new mine
Actress Julie Christie supports claims
Scottish Universities Pension Fund sells shares
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Risks.
Mars
• $ 100.000.000
investment in sustainable
supply chain cocao
• Prevents burning rain
forest
• Improves quality cocoa
trees
• Better quality of life
farmers
Target: all Mars cocoa
sustainable in 2020
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Mars, a first result
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Risks.
GM
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Risks industry level
“A vegetarian in a Hummer is better for the
environment than a meat eater in a
Toyota Prius”
???
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Risks industry level
The supply chain:
• Climate change for 51% caused by livestock (WWI,Washington)
• Meat: perceptions about the industry, livestock farming,
animal transport…
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Risks: pet food
industry
• Poultry: slaughterhouses,
free range chickens….
• Unilever Europe: 475
million free range eggs
• Unilever: PT Smart palm
oil plantation…
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Risks pet food industry
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Risks: pet food industry
• Fish: overfishing, sea bottoms, extra catch, fish farms,
pollution, mangrove forests…
• Mars: Whiskas-Sheba Europe MSC fish (The Guardian)
• Corn: toxins
• Origins, control…
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Risks pet food industry
• Carbon footprint meat
• Diminishing demand
• Carbon footprint pets:
Twice a 4 by 4 for dogs?
Vale, University of Wellington)
• Paul McCartney in EP
(R&B
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Risks
Company level:
• Waste: packaging, transport, energy. Pollution, noise…
• Working conditions, equality
• Suppliers: office equipment, transportation,
• Transparency
• Stakeholder discussions
• Safety measures
• Integrity
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Possible benefits:
• Reputation is a leg up for doing business
• Your whole company benefits from a good reputation
• CSR is one of the most important factors in reputation
• CSR results in cost savings
• It may boost your sales, the more so if you aim at
environmentalists and cultural creatives
• Motivates employees
• Improves internal and external contacts
• Leadership
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Possible benefits:
10 years ago
• sustainability for do
gooders and idealists
• well meant nonsophisticated products
• low quality, simple
packagings and
presentation
Today
• a good CSR reputation
stands for quality, ‘up to
standard’, sexy
• Whole Foods Markets
• Hybrid cars
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Novus headquarters
• largest array of solar panels in Missouri
(5,000 square feet);
• 100% of energy purchased through
renewable energy credits;
• 30% of materials from recycled content,
(countertops from recycled milk jugs
plus scrap aluminum, fitness center
floor from recycled tires);
• under-floor air distribution system for
high energy efficiency;
• saving thousands of gallons of water by
special landscaping
• plant “canopy” for natural shading;
• storm water system to reduce runoff;
• skylights and floor-to-ceiling windows to
maximize use of natural light;
• preferred parking for low emission and
fuel efficient vehicles.
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Canidae Woodward Oklahoma
• wind energy
• 34 towers
• up to 50 Mw
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Cardinal Pet Care
•Azusa plant 100 % solar
powered
•White cool roof temperature
reduction
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How far you go is a strategic choice, because:
• It influences all aspects of your business
• It is a long term approach
• It decides where your business will be in 2020
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How far you go:
DSM, Shell, AKZO Nobel, TNT, ING: green bonuses for
board members
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Other examples:
•Guide dog programme: Purina Brazil
•PetPartners: Purina USA
•Animal shelters: Purina USA
•Can recycling through Recycle Bank
•Energy from renewable sources
•Environmental certification ISO 14001
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Planning:
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Prioritise-concentrate; maximise impact
Use existing know how (proven checklists)
Formulate/implement targets
Do not forget the nice things (people’s business!)
Be transparent
Stakeholders dialogue (also with NGO’s)
Communicate
Prove what you say
Right tone of voice
Have patience
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Some tips:
• involve your employees
• formulate precise sustainability targets
• use sustainability-related criteria in a decisionmaking process like capital expenditure budgetting
• join forces, look for partners (horizontal, vertical)
• up to 75% of consumers prefer green products
• up to 20% of consumers prepared to pay slightly
more
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So what will your answer be when your
stakeholders ask you about your CSR programme?
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Questions?
j.hoijtink@hoijtinkadvies.nl