Corporate Social Responsibility Presentation by: Peter Lampesis, Jr. USAID, Macedonia Diagrams are copyright © 2005 by Openworld, Inc.) Overview • Native American proverb • What is Corporate Social Responsibility? • Why CSR – the Starbucks example • CSR trends and impact on the 21st century business • Finding balance • Native American Proverb Proverbs are time-honored truths which condense the collected wisdom and experience of a people and their culture. To know a people, is to know their proverbs. Life is both giving and receiving. (Mohawk) The Soul Would Have no Rainbow if the Eyes had no Tears So what is corporate social responsibility? • Corporations have a responsibility to all of their stakeholders in all aspects of their business operations. • Businesses account for and measure the actual or potential economic, social and environmental impacts of their decisions. • CSR goes beyond simple philanthropy and is more about corporate behavior than it is about a company's charitable donation budget. • CSR is linked with the principles of Sustainable Development which argue that enterprises should be obliged to make decisions based not only on financial/economic factors (e.g. profits, ROI, dividend payments etc.) but also on the social, environmental and other consequences of their activities. http://en.wikipedia.org/wiki/Corporate% 5Fsocial%5Fresponsibility Why consider CSR? • 1) It's important to give back to the community, people, and environment from which we greatly benefit and profit. • BECAUSE you, as a company can gain a competitive and reputational advantage by demonstrating that you have the best interests of society at large as an integral part of your policy making. • Orlizty, Schmidt, and Rynes found a correlation between social/environmental performance and financial performance. – Example - Starbucks Snapshot of Starbucks • BUSINESS ENVY - captures $4 to $5 for a cup of coffee. Growth projections exceed 40,000 stores globally? • Starbucks formed a partnership with Conservation International (CI) in 1998 to encourage environmentally sound coffee-growing practices and to improve farmer livelihoods. The success of their first joint project in Chiapas, Mexico is serving as a model for new and future projects. http://www.starbucks.com/ Starbucks success and CSR • Invest in people and partners, promote diversity and empowerment – (learning from each other) • Training, education and benefits = loyalty, commitment and dedication • Leadership program • Integrate CSR – building brand loyalty – Community involvement – Reward volunteers – Invest in local schools, education programs, etc. • Environment – shrinking the environmental footprint – Recycling pays – Conservation and Organic (branding) http://www.starbucks.com/ CSR trends and the the impact on the 21st century business • Consumers are more socially aware and vote with their pocketbooks – 44% of British public believe it's very important that a co. shows a high degree of social responsibility when they buy the co's product. – 86% of consumers have a more pos image of a co. that is seen to be doing something that makes the world a better place. – Responsibilities to society, and env and labour practices are seen by the public to be more important than a co's economic contribution. • Corporations face severe punishment (criminal and/or financial) for bad behaviour (Enron and Arthur Andersen, Worldcom, Nike, Union Carbide (Bhopal) – 58% of general public across Europe feel that industry and commerce do not pay enough attention to their social and environmental responsibilities. A. D. Little Business Case for CSR CSR trends and the the impact on the 21st century business • The best people are seeking out responsible organizations. – 81% of young people have a strong belief in the power of responsible business practice to improve profitability over time. – Corp responsibility is increasingly the key factor in attracting and retaining a talented and diverse work force. • Employee volunteer and community involvement programs create differentiation and improves retention. – – – – Co's see an improvement in media coverage Large % of volunteers achieve promotions Absenteeism reduced Greatly improved customer satisfaction • Corporate responsibility is a key factor in helping companies access capital. – 86% of institutional investors x-cross Eur believe that social and env risk management will have a pos impact on a co's long term market value A. D. Little Business Case for CSR CSR trends and the the impact on the 21st century business • Corporate Responsibility opens opportunities to reduce present and future costs to the business and improve competitiveness, market position, and profitability. – Energy efficiency produces large paybacks – Greening the supply chain – Clean production (reduce emissions, recycle and reuse affluents – Carbon credits • CSR is not targeted for just the large companies – Large corporations are requiring their preferred suppliers to subscribe to CSR and best practices. A. D. Little Business Case for CSR Finding balance • Spend some time learning more about CSR • Determine what works best for your organization and culture and initiate and integrate a CSR component into your organization. • Balance the desire for profits with the needs of the community and the environment. • Invest in people. • Be a change agent. • Lead by example and others will follow. We will be known forever by the tracks we leave. (Dakota) http://www.dreamstime.com Consider your tracks wisely... http://www.dreamstime.com Choose to make a difference http://www.dreamstime.com