The document discusses trends in corporate social responsibility (CSR). It outlines 11 potential benefits of implementing a CSR approach, including better risk management, improved reputation, and enhanced innovation. It also discusses key trends in CSR, such as viewing it more systemically and the enabling role of government. Finally, it examines issues like measuring CSR impact and scaling up partnerships.
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The document discusses trends in corporate social responsibility (CSR). It outlines 11 potential benefits of implementing a CSR approach, including better risk management, improved reputation, and enhanced innovation. It also discusses key trends in CSR, such as viewing it more systemically and the enabling role of government. Finally, it examines issues like measuring CSR impact and scaling up partnerships.
The document discusses trends in corporate social responsibility (CSR). It outlines 11 potential benefits of implementing a CSR approach, including better risk management, improved reputation, and enhanced innovation. It also discusses key trends in CSR, such as viewing it more systemically and the enabling role of government. Finally, it examines issues like measuring CSR impact and scaling up partnerships.
Copyright:
Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online from Scribd
The document discusses trends in corporate social responsibility (CSR). It outlines 11 potential benefits of implementing a CSR approach, including better risk management, improved reputation, and enhanced innovation. It also discusses key trends in CSR, such as viewing it more systemically and the enabling role of government. Finally, it examines issues like measuring CSR impact and scaling up partnerships.
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TRENDS IN CSR
Lecture in Good Governance
& Responsible Citizenship January 2009 Potential benefits of implementing a CSR approach 1. Better anticipation and management of an ever-expanding spectrum of risk. Effectively managing governance, legal, social, environmental, economic and other risks can improve the security of supply and overall market stability. 2. Improved reputation management. Organizations that perform well with regard to CSR can build their reputation, while those that perform poorly can damage brand and company value when exposed. Potential benefits 3. Enhanced ability to recruit, develop and retain staff. This can be the direct result of pride in the company’s products & practices, or of introducing improved HR practices. 4. Improved innovation, competitiveness an market positioning. Drawing feedback from stakeholders can be a rich source of ideas for new products, processes and markets, resulting in competitive advantages. Potential benefits… 5. Enhanced operational efficiencies and cost savings. These flow from improved efficiencies identified thru a systematic approach to management that includes continuous improvement. 6. Improved ability to attract and build effective and efficient supply chain relationships. Larger firms can stimulate smaller firms with whom they do business to implement a CSR approach. (e.g. some apparel retailers require their suppliers to comply with worker codes and standards. Potential benefits… 7. Enhanced ability to address change. A firm with its “ear to the ground” thru regular stakeholder dialogue is in a better position to anticipate changes & trends. 8. More robust “social license” to operate in the community. Improved citizen and stakeholder understanding of the firm and its objectives and activities translates into improved stakeholder relations, which would in turn translate to enduring public, private and civil society alliances. Potential benefits… 9. Access to capital. When making decisions about where to place their money, investors are looking for indicators of effective CSR management. 10. Improved relations with regulators. In some areas, govts. have expedited approval processes for firms that have undertaken CSR activities. 11. A catalyst for responsible consumption. Changing unsustainable patterns of consumption is seen as an important driver to achieving sustainable development. Financial market opinion “There is a growing body of evidence that companies which manage environmental, social and governance risks most effectively tend to deliver better risk-adjusted financial performance than their industry peers.” –Jean Frijns, Chief Investment Officer, ABP, 2004 “The consideration of material social & environmental issues should be a part of every financial analyst’s normal work. Not only does this make sense from an investment risk perspective; institutional clients are increasingly asking for better integration in fund management.” – Thomas Albrecht, Dir. Of Research, Credit Suisse Asset Management, 2004 KEY TRENDS & ISSUES IN CSR 1. Viewing CSR in a broader and more systemic context. 2. The enabling role of government. 3. The relative efficacy of regulatory and voluntary approaches to CSR issues. 4. Exploring the linkages, and often inconsistencies, between a company’s CSR, corporate governance & public policy positions. 5. Developing a more strategic and integrated “value proposition” for CSR at the level of the firm. KEY TRENDS AND ISSUES… 6. The leadership role of CEOs and BODs. 7. The potential collective CEO action 8. The role of media as watchdog, endorser and multiplier. 9. Measuring the impact & effectiveness of CSR & partnerships. 10. Scaling-up the impact of partnerships. 1. Viewing CSR in a broader and more systemic context CSR is most usefully understood not merely in terms of what individual companies choose to do, or are able to do, but as a systemic expression of the broader context and governance frameworks in which business operates, and the various market, public policy, and stakeholder drivers that shape this context. (CSR needs to be seen in the context of Government, NGO, and media accountability and transparency). 2. Enabling role of government CSR initiatives reflect voluntary actions done by companies to compensate for governance gaps at the local, national, and international level. These gaps may result from inadequate governance structures and institutions, weak or underresourced public capacity, lack of political will, bad governance, etc.) Institutions such as the WB group and Intl. Business Leaders’ Forum are studying the role of government in creating an enabling environment for CSR. 3. Relative efficacy of regulatory and voluntary approaches to CSR issues Public financing and procurement structures are good examples of initiatives that are voluntary in that they are not a blanket legal requirement for all enterprises. They are mandatory for any company wanting to get access to public finance and government contracts. Another is the integration of social and environmental criteria into the membership requirements of certain business networks, multistakeholder coalitions, and even trade and industry associations. 4. Exploring linkages, and inconsistencies bet. a company’s CSR, corporate governance, and public policy positions CSR in some companies remains firmly inside a PR or philanthropy silo, and all too often sits at odds with positions that the company takes on its lobbying, political donations, public policy issues, and other govt. relations activities. 5. Developing a more strategic and integrated “value proposition” for CSR at the level of the firm There is a need to support further empirical research on the causal links between good ethical, social and environmental performance& good financial performance or shareholder value. There is a need to understand the linkage bet. CSR & the following corporate value drivers: 1. Integrated risk management 2. Intangible assests: innovation, reputation, alliances, and intellectual capital 3. New market or business opportunities or serving underserved or emerging mkts. 6. Leadership role of CEOs and BODs
The leadership of CEOs and their
willingness to speak out in public or complex business issues such as international trade devt. assistance, poverty, HIV/AIDS, climate change, human rights, multilateralism, role of UN, agricultural subsidies, and social and environmental impacts of trade policies, IPR, and new technologies. 7. Potential of collective CEO action Collective business leadership can occur on a geographic or industry sector basis, or around specific social, ethical or environmental challenges, such as corruption, etc. The CEO-led alliances are referred to variously as business leadership coalitions, public purpose business coalitions, and CEO leadership networks. 8. Role of the financial sector in redefining risk, opportunity and fiduciary responsibility The financial sector (includes the institutional investors, stock exchanges, insurers, bankers, and rating agencies) is seen as one of the key potential ‘game changers’ in shifting CSR from a marginal to more mainstream business issue. If mandated by govt. regulations, guidelines or incentives, the financial sector could have a major impact in the coming decade. Fiduciary - relating to the relationship between a trustee and the person or body for whom the trustee acts. 9. Role of media as watchdog, endorser and multiplier The media was seen as a key driver in ensuring greater corporate accountability – serving as public watchdog by investigating & reporting on examples of bad corporate behavior, or exposing inconsistencies between corporate statements and actions. It can also have a multiplier effect on raising public awareness about CSR issues. 10. Measuring the impact and effectiveness of CSR & Partnerships Performance measurement was seen as necessary for ensuring greater accountability and transparency with external stakeholders, as well as making a sound ‘business case’ for CSR internally. One challenge associated with the drive to develop measures & standards for CSR is the rapid and confusing growth in different measurement systems, standards, and codes. 11. Scaling-up the impact of partnerships Scaling-up means creating rules that apply to many organizations. The most common enablers to change markets and scale-up beneficial impacts of partnerships or individual CSR activities: 1. Government actions (govt. incentives, regulatory instruments) 2. Corporate value or supply chains (leads to greater scale and sustainability for their CSR activities and partnerships across borders) Most common enablers… 3. Collective corporate action thru business leadership coalitions focused on a specific CSR issue, industry sector or geography. 4. Market mechanisms such as social and environmental certification and labelling systems, emissions and environmental trading schemes, and stock exchange listing requirements.
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