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Corporate Social Responsibility and Business Sustainability: HR’S Leadership Role SHRM-Morris County Chapter – Brian J

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Corporate Social Responsibility and Business Sustainability: HR’S Leadership Role SHRM-Morris County Chapter – Brian J Corporate Social Responsibility and Business Sustainability: HR’s Leadership Role SHRM-Morris County Chapter – Brian J. Glade, SPHR, GPHR – February 11, 2009 ©SHRM 2009 CSR and Business Sustainability: Defining the Terms CSR • Used since the 1970s to denote ethical and socially responsible business behavior Sustainability/Business Sustainability • Dates back to 1987 World Commission on Environment and Development • Combines traditional CSR concept with longer-term renewable approach to business practices CSR-Business Sustainability • Today, the two terms are used interchangeably and are defined by World Council for Sustainable Business as: “Contributing to sustainable development by working to improve the quality of life for employees, their families, the local community and stakeholders up and down the supply chain” ©SHRM 2009 2 CSR and Business Sustainability: HR’s Leadership Role Today’s Agenda • Evolution of CSR/Business Sustainability • Triple Bottom Line • SHRM’s 2007 CSR Pilot Study • HR’s Leadership Role in CSR/Business Sustainability • Barack Obama: our “Green” President ©SHRM 2009 3 CSR/Sustainability Evolution: Early Pioneers Founded in 1978 with a social purpose Shares rewards with its employees and the community Sources ingredients from socially conscious suppliers. In 1992, first U.S. public company to sign onto the CERES Principles to protect the environment. ©SHRM 2009 4 CSR/Sustainability Evolution: Early Pioneers UK cosmetics company founded in 1976 with a commitment to sell products not tested on animals. Company went on to support environmental causes, HIV/AIDS awareness, human and animal rights, and campaigns against domestic violence. In the early 1990s, sponsored employee trips to work in orphanages in Romania, raising international awareness of the poor conditions of the facilities and the children’s health. ©SHRM 2009 5 CSR/Sustainability Evolution: Heavyweights Jump In Goals: Be supplied 100% by renewable energy, create zero waste, and see products that sustain natural resources and the environment. Increase the efficiency of its vehicle fleet by 25% by 2010 and by 50% by 2020. Reduce by 30% the amount of energy used in its stores by 2010. Reduce solid waste in its stores by 25% by 2010. It may invest $500 million in various sustainability projects. ©SHRM 2009 6 CSR/Sustainability Evolution: Heavyweights Jump In Launched Eco Options labeling initiative to identify 2,500 products that are environmentally friendly. Began replacing the incandescent bulbs in its lighting department displays with more eco-friendly CFL bulbs. Partnered with The Conservation Fund to offset all carbon emissions created by the company's Atlanta headquarters and a portion of emissions created by associates commuting to work and traveling on business. Will fund planting of thousands of trees in Atlanta as part of the program. ©SHRM 2009 7 CSR/Sustainability Gains Momentum 1960s-1970s: • Early CSR pioneers gain media attention and prestige • Civil rights activism grows • Ralph Nader leads a consumer awakening • Ecological devastation and Earth Day build environmental consciousness • Anti-Vietnam War movement empowers youth 1980s-1990s: • Heavyweights begin jumping on CSR bandwagon • Companies add environment, volunteerism to their responsibilities • Companies seek safer products following 1982 Tylenol poisonings • 1987 Bruntland Commission introduces “sustainable development” ©SHRM 2009 8 CSR/Sustainability Goes Mainstream 2000-Present: • CSR/Business Sustainability goes mainstream • Terrorist attacks on World Trade Center raise questions about our legacy • Scandals at Enron and others lead government to Sarbanes-Oxley Act • Global Warming threatens the planet and companies commit to action • Gas hits $4 a gallon, sparking calls to develop renewable energy sources ©SHRM 2009 9 Triple Bottom Line • People, Planet, Profit: > Term coined by John Elkington that expands criteria for organizational success to include social, environmental, and economic factors • People: > Fair and beneficial business practices towards labor and the community in which a corporation conducts its business • Planet: > Sustainable environmental practices • Profit: > Lasting economic impact by an organization on its economic environment, not just internal profit made by the company ©SHRM 2009 10 Stakeholder Interest Triple Bottom Line • Company responsibility should be to stakeholders, rather than to shareholders Stakeholder • Anyone who is influenced, either directly or indirectly, by the actions of the firm Objective • Business entity should promote stakeholder interests, instead of just maximizing shareholder or owner profit ©SHRM 2009 11 Corporate Social Integration Common Ground • TBL approach suggests companies and community groups find common ground to benefit both HBR Article • Harvard professor Michael Porter proposed business-society sustainability framework focusing on integration, rather than opposition New Thinking • According to Porter, NGOs, governments, and companies must start thinking in terms of corporate social INTEGRATION Progress • Companies are embracing CSR and NGOs that campaigned against businesses are forming partnerships with them on CSR initiatives ©SHRM 2009 12 TBL Balancing Act Sustainability . People Profits Planet ©SHRM 2009 13 Age of Corporate Accountability Andy Savitz • Author of book, Triple Bottom Line, compares corporate focus in 1950s and 1970s to today’s Age of Corporate Accountability 1950s Focus • Make money • Provide philanthropy 1970s Focus • Money, philanthropy ++ • Protect the environment • Products ©SHRM 2009 14 Age of Corporate Accountability Today’s Focus • Money, philanthropy, environment, protect products ++ • Promote diversity • Protect workers • Prevent child labor • Foster public health • Ensure human rights • Provide technology • Oppose corrupt regimes • Patrol supply chain • Engage stakeholders • Measure and report benchmarks ©SHRM 2009 15 CEOs are CSR Fans 79% of CEOs in 2006 said sustainability was vital to profitability— up from 69% in 2005. --Sustaining Value through People, 2006, PricewaterhouseCoopers Companies active in CSR in 2008 had annual profit and share price growth of 16% and 45% -- vs. 7% and 12% for weak CSR firms --Economist Intelligence Unit survey of 1,200 global C-suite executives, 2008 ©SHRM 2009 16 GE Ecomagination ‘Green is Green’—Jeff Immelt, GE CEO ©SHRM 2009 17 SHRM 2007 CSR Pilot Study Participation in CSR Activities Yes No 100% 95% 91% 91% 89% 89% 90% 85% 81% 80% 70% . 60% 50% 40% 30% 19% 20% 15% 11% 11% 9% 9% 10% 5% 0% United States (n = Australia (n = 273) India (n = 160) China (n = 98) Canada (n = 1084) Mexico (n = 109) Brazil (n = 152) 405) ©SHRM 2009 18 SHRM 2007 CSR Pilot Study Employment Branding: Positive CSR Outcomes United States Australia India China Canada Mexico Brazil (n = 309) (n = 214) (n =134) (n = 82) (n = 844) (n = 88) (n = 135) Stronger public image 74% 65% 67% 67% 76% 67% 81% Improved employee 61% 63% 58% 26% 50% 61% 68% morale Increased employee 48% 44% 43% 28% 41% 55% 59% loyalty Increased consumer 45% 36% 40% 51% 45% 48% 60% confidence Increased brand 42% 44% 56% 61% 41% 45% 66% recognition Position as an 39% 38% 35% 37% 44% 40% 59% employer of choice Increased employee 24% 24% 16% 12% 29% 32% 23% retention Increased recruitment 19% 18% 18% 17% 25% 24% 25% of top employees Competitive 17% 15% 22% 13% 17% 26% 19% advantage Increased workforce 15% 10% 15% 7% 12% 19% 26% productivity Positive financial 15% 8% 16% 6% 14% 14% 19% bottom line ©SHRM 2009 19 SHRM 2007 CSR Pilot Study Corporate Culture: Promoting Ethical Behavior United States Australia India China Canada Mexico Brazil (n = 211) (n = 168) (n = 74) (n = 63) (n = 632) (n = 67) (n = 126) Efforts are covered in organization’s newsletters/other 69% 73% 61% 67% 65% 69% 79% publications Efforts are part of 57% 59% 55% 63% 65% 69% 72% organization’s goals Efforts are included in organization’s 55% 56% 53% 51% 59% 64% 75% mission statement Efforts are included in organization’s 34% 57% 35% 27% 47% 64% 64% annual report A report dedicated exclusively to CSR 9% 10% 19% 16% 13% 25% 35% is issued ©SHRM 2009 20 SHRM 2007 CSR Pilot Study Corporate Culture: Top 3 CSR Drivers 1 2 3 Contribution to society Public relations strategy Employee activism United States (n = 429) 70% 53% 33% Environmental Contribution to society Public relations strategy considerations Australia (n = 284) 70% 50% 36% Environmental Contribution to society Public relations strategy considerations India (n = 163) 77% 43% 40% Contribution to society Public relations strategy Competitive advantage China (n = 114) 71% 52% 36% Environmental Contribution to society Public relations strategy considerations Canada (n = 1,138) 71% 51% 40% Environmental Contribution to society considerations Public relations strategy Mexico (n = 112) 75% 46% 41% Environmental Health & safety Contribution to society considerations considerations Brazil (n = 148) 89% 49% 41% ©SHRM 2009 21 SSHRM 2007 CSR Pilot Study Corporate Strategy: 2 Select CSR Practices United China States Australia India (n = Canada Mexico Brazil (n = 420) (n = 266) (n =161) 108) (n =1,106) (n = 113) (n = 149) Donate/collect money 88% 84% 60% 64% 90% 76% 74% for local charities Donate/collect money 77% 68% 70% 69% 51% 61% 30% for natural disasters Support community through company- 66% 51% 57% 26% 58% 45% 73% sponsored volunteer projects Consider the overall social impact of 47% 52% 38% 35% 54% 26% 62% business decisions Partner with woman- or minority owned 39% 12% 22% -- 19% 20% 25%
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