KPMG China
Consumer Rights and Corporate Responsibility
May 4, 2011
Consumer International World Congress 2011
Corporate Social Responsibility
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
1
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
2
Trust in business has fallen dramatically since the early 1980s
Customer expectations and behaviour trends in regard to biodiversity preservation, social responsibility, fair trade. October 14, 2009. Retrieved from:
http://www.cosmethica-grasse.com/assets/files/MGutsatz.pdf
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
3
Trust towards business
CITIZENSHIP (environmental and
social performance)
GOVERNANCE (corporate ethics,
openness and transparency)
as two strong predictors of people’s trust,
respect and admiration for companies in
every nation involved in this study.
Positive correlation between CSR
and financial performance
Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility. 2009. Retrieved from:
http://cdn.volunteermatch.org/www/corporations/resources/BuildingReputation_BCCCC_09.pdf
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
4
Consumers’ concern in CSR
Are consumers really
interested in social
responsibility and is it
really changing
business behaviour?
•
Consumers generally become more aware and concerned
about various aspects of social responsibility of a business
organization
•
The growing level of knowledge and access to information
(internet) & magazines that popularize science, marketing,
arts…
•
There is an increasing cohesiveness of consumers against
irresponsible business
•
Informed consumers are more demanding
•
Teaching methods have changed : children today are not
asked to learn and accept but to deduct, to question and
understand
•
Some heated consumer concerns including: climate change,
fair trade, healthier and safe products, animal welfare, consumer
services, support and dispute resolution, consumer data protection
and privacy, education and awareness in the areas of product and
labeling
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
5
Positive correlation between CSR and consumer support
Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility. 2009.
Retrieved from: http://cdn.volunteermatch.org/www/corporations/resources/BuildingReputation_BCCCC_09.pdf
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
6
Global Sustainability
A CSR approach is essential to deliver sustainable development on a global level
Effectively integrate the environmental and social dimensions of sustainability into the
operations
CSR encourages more accountability in business practice, thus helping to define the
nature of the relationship between corporations and the rest of society
Sustainable
development
at a global level
Economic
Sustainability
Environmental
Sustainability
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
Social
Sustainability
7
Accountability
Consumer
perspective
•
CSR should be
regarded as a
continuum and can
be comparable
across firms and
industries
•
The use of CSR
tools to hold
accountability for the
CSR actions of the
company
•
Allows external
observers, e.g.
consumers, to
evaluate the
organization, and
CSR policy more
effectively
Business
perspective
•
The company is held
accountable for its
CSR actions
•
In order to obtain
accountability,
companies have to
communicate with
stakeholders and give
concrete evidence that
they are committed to
continual, long-term
improvement
Building reputation: Here, There and Everywhere-worldwide views on local impact of corporate responsibility. 2009. Retrieved from:
http://cdn.volunteermatch.org/www/corporations/resources/BuildingReputation_BCCCC_09.pdf
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
8
KPMG International Survey of CR Reporting 2008
- Corporate social responsibility reporting is on a rise
Top 100 companies in 10-16 countries
Global (Fortune) 250 companies
% of companies with
a separate CSR report
90
80
70
60
50
N100
G250
40
30
20
10
0
1993
1996
1999
2002
2005
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
2008
9
KPMG International Survey of CR Reporting 2008
- CSR report as a stand-alone report
The majority of the 250
biggest companies in
the world issued
separate reports on
Corporate Social
Responsibility: 79
percent compared to 52
percent in 2005
83 % produced a
separate report and/or
disclosed CSR
information in their
annual financial report.
The recent escalation in
CSR disclosures by
corporations worldwide
signals the significance
of CSR for sustainable
development.
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
10
KPMG International Survey of CR Reporting 2008
- What do companies see as value creation by CSR?
Drivers for corporate social responsibility
Ethical considerations
Economic considerations
Reputation/brand
Innovation & learning
Employee motivation
Risk management/risk reduction
Strengthened supplier relationships
Access to capital/increased shareholder value
Market position improvement
Improved relationships w ith governmental authorities
Cost saving
0
10
20
30
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
40
50
60
70
80
11
How is CSR reporting building consumer
confidence to support sustainable business
models?
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
12
“Apple is committed to ensuring the highest standards
of social responsibility throughout our supply base. The
companies we do business with must provide safe
working conditions, treat workers with dignity and
respect, and use environmentally responsible
manufacturing processes wherever Apple products are
made.”
Apple’s Supplier Responsibility
2010 Progress Report
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
13
“One of the most fundamental impacts NIKE, Inc.’s
business can have is to improve working conditions in
our global supply chain and the industry as a whole.”
Corporate Responsibility Report FY07-09
Nike,INC.
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
14
Growing trends for organizational commitment to sustainability
Sustainability: The 'Embracers' Seize Advantage. 2011. Retrieved from: http://www.bcg.com/documents/file71538.pdf
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
15
“Shared value holds the key to unlocking the next wave
of business innovation and growth. It will also
reconnect company success and community success in
ways that have been lost in an age of narrow
management approaches, short-term thinking, and
deepening divides among society’s institutions.”
Creating Shared Value, Harvard Business Review
Michael E.Porter and Mark R. Kramer, Feb 2011
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
16
Corporate Social Responsibility vs. Creating Shared Value
Creating Shared Value, Harvard Business Review
Michael E.Porter and Mark R. Kramer, Feb 2011
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
17
It’s time for companies to
take it very seriously…
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
18
18
What should your company do to address environmental,
social and governance issues?
What they say their companies actually do
What respondents say their companies should do
Fully embed these
issues into:
0
20
40
Performance gap,
percentage points
60
80
22
Strategy and
operations
72
Strategy and
operations of
subsidiaries
Investor-relations
strategy
Global supply-chain
management
27
65
20
47
59
32
Source: McKinsey, February-April 2007 survey of CEOs participating in UN Global Compact
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
19
Communication, communication…
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
20
Final Thoughts…
CSR should link employees,
consumers and investors better
to the company, by inspiring and
empowering them.
It is not philanthropy but
self-interested behaviour
to create economic value
by creating societal value.
It is about a business organization’s contribution to the world’s
development at large, and to better people of this generation and the next.
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
21
Diana Tsui
Director, Corporate Social Responsibility
diana.tsui@kpmg.com
© 2011 KPMG, a Hong Kong partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Hong Kong.
22