What is it, and why should you care?
UGBA 178
Erik Kiewiet de Jonge
Roadmap for Today
 What is CSR?
 What are the trends driving CSR?
 What are the big challenges on the CSR front?
 What and where are the opportunities?
How would you define CSR?
Safe products?
Workplace
diversity?
Solving social
problems?
Environmental impact?
Philanthropy?
Employee treatment?
Risk
management?
Employee volunteerism?
Human rights?
Business ethics?
Sustainable development?
Corporate governance?
Transparent reporting?
PR?
Sponsorships?
Borrowed from presentation by Dr. Kellie McElhaney, Haas School of Business
The many definitions of CSR
A business approach that creates long-term shareholder value
by embracing opportunities and managing risks deriving from
economic, environmental and social developments.
Dow Jones Sustainability Index
A concept whereby companies integrate social and
environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis.
European Commission
Using the power of business to create a better world.
Net Impact
Borrowed from presentation by Dr. Kellie McElhaney, Haas School of Business
Think Strategically – A Better CSR Definition
Dr. Kellie McElhaney, Founder of the Center for
Responsible Business at Haas, defines strategic
CSR as :
“Strategic corporate social responsibility is a
business strategy that is embedded in day to day
business operations, supports core business
objectives, and leverages core competencies
to create business value and positive social
change.”
CSR Internationally
 CSR varies across countries due to societal norms,
legislative requirements, relations between business
and government and customer demands
 Generally speaking, CSR – as we know it – is strongest
and most present within the US and Europe
 More prevalent within companies based in developed
countries, though it is likely practiced across borders
Trends Driving CSR
Societal Drivers of CSR
Source: The McKinsey Quarterly , 2006
Trust and Credibility Down, CSR Up
Source: 2009 Edelman Trust Barometer
Us, the Millennial Generation, Care
 77% of recruits consider social commitment when
choosing an employer
 97% of “generation Yers” seek a job that “allows me
to have an impact on the world”
 How many of you seek to make an impact?
Source: 2006 Golin/Harris International survey
Source: Harris Interactive Poll
Ideas borrowed from presentation by Dr. Kellie McElhaney, Haas School of Business
Consumers Care
 Rise in consumer awareness
and preference
 Successful product lines and
brands showing returns:
 Clorox Greenworks
 Method
 Patagonia
 Fair trade coffee
Natural Marketing Institute, LOHAS
Trends Database 2008, Pre-Conference
Presentation
Socially Responsible Investing (SRI)
 SRI considers the financial and societal performance
of investments
 Currently $2.7 trillion of the $25.1 trillion under
management in the US (324% growth since 1995)
 Demonstrated competitive performance versus the
S&P 500 over the last two decades
 Though empirical evidence demonstrates a correlation
between CSR and financial performance, causation
has been difficult to prove
Source data from the Social Investment Forum’s 2007 Report on Socially Responsible Investing Trends
Non-Governmental Organizations (NGOs)
and Others
 Power and reach of NGOs increasing
 Environmental and social activism growing through
household name NGOs and emerging NGOs
 Greenpeace
 Environmental Defense Fund
 Fair Labor Association (FLA)
 World Wildlife Fund (WWF)
 Web 1.0 and Web 2.0
Challenges
Regulatory Restrictions
 Patchwork of international environmental and social
laws, protocals and treaties
 Kyoto Protocol, Copenhagen Climate Conference,
European Emissions Trading Scheme, RGGI, US Clean
Air and Clean Water Acts
 International Labor Organization, diverse working
standards
 Government incentives for green jobs, investments,
cleantech
Consumer Indifference (?)
 Bridging the gap between consumer statements and
actions – is price the only bottom line?
 Educating the consumer – why do your company’s CSR
efforts make your product better?
 Effectiveness versus goodness
 Changing behavior remains the largest consumer
challenge
(Perceived) Cost Challenges
 Overcoming the no-sum mindset: economic performance
versus environmental/social performance
 Are CSR efforts a cost center or revenue driver?
 Operational Improvements
 Regulatory compliance
 Stakeholder management
 Opportunity Costs
 Just Good Business
 Alignment with corporate strategy
 Responsible investment with positive NPVs
Critics and their arguments
 The Friedman Doctrine: the social responsibility of
business is to increase profits
 CSR is spending other peoples’ money
 CSR dilutes government actions to address large-scale
social and environmental challenges
 CSR is a sideshow to the core operations of a company
Opportunities
New Products, New Markets
Brand Equity
 Establish, rebuild and protect corporate brand
Professional Services
 Carbon Accounting
 CSR Strategy Consulting
 Carbon Finance
 Sustainability Marketing
 Management Consulting
Opportunities Continued…
Risk Mitigation
Continuous Innovation
 Address corporate “black
 Use CSR as a driver for
eyes”
 Engage stakeholders and
vocal critics; minimize brand
damage and customer loss
 Stay ahead of the curve –
regulations, societal
expectations, activists
 Reduce litigation (and the
threat of)
operational efficiency
 Anticipate consumer
demands
 Attract top talent
Questions and Comments
 If interested, take the UGBA 192 Strategic CSR class in
the fall and explore sustainability classes across
Berkeley