Corporate Social Responsibility

CSR Management System

What is difference ?







and


Stage 1:
CSR
non-
existent
Stage 4:
Sustainability
Intrinsic
business
strategy/
Activity:
Still CSR ??
Stage 3:
Strategic CSR:
Strategy
complimenting
business activity
Stage 2:
CSR non-strategic:
- Philanthropy
- Donations
- Volunteering, etc.
Evolution of CSR:
Ethical/
Philanthropic
Good for Business
CSR
COMPLIMENT
NOT
CONTRADICT
CSR is a business strategy:
CSR
Management
System
?
CSR implementation on-going


Continuous adaptation to changing
Driving Forces
Corporations
CSR
CSR Drivers:
2. Globalization
1. Social
Expectations
Class 1 Class 1
Framework for Strategic Integration:

3 + 1
=
3 Steps + 1 Continuous Action

Step 1 ???
Step 1: Analysis

1. CSR Audit Gap Analysis

2. Stakeholder Process (See Class 2)
- Stakeholder Analysis
- Stakeholder Dialogue

3. CSR-SWOT

Step 1: Analysis

1. CSR Audit

As-is Analysis

Goal: Assess the whole picture

Basis for Gap Analysis

Step 1: Analysis

External Divers/Motivation

Re-active vs. Pro-active
Nike, Gap, BP, Starbucks ??

What about Nestle???
LINK
ISO for CSR



ISO 26000: Launched November 1
st
, 2010 !
Guidance standard on social responsibility
1. CSR Audit
Step 1: Analysis

1. CSR Audit:

I I I

Internal Intelligence Investigation:

Step 1: Analysis

Which departments responsible for
CSR issues ?
1. CSR Audit

CSR Departments

- Communications/PR
- Marketing
- Human Resources
- (Senior) Management

Which department typically most reactive
or slow on take-up ?

Step 1: Analysis

1. CSR Audit

How would you do an Audit
???

Step 1: Analysis

1. CSR Audit

How?
Method:

Internal:
1. Desk-top study: Document Analysis
2. Executive, Management & Staff Interviews

External:
3. Reputation surveys, benchmarking, CSR Reports (GRI,
AccountAbility Rating)

Step 1: Analysis

Step 1: Analysis

1. CSR Audit Gap Analysis

2. Stakeholder Process
- Identification of Issues
- Selection of Stakeholder
- Prioritization of Stakeholders
- Stakeholder Dialogue

3. CSR-SWOT
Stakeholder
Analysis

Step 1: Analysis

See Class 2!
2. Stakeholder Process
- Identification of Issues
- Selection of Stakeholder
- Prioritization of Stakeholders
- Stakeholder Dialogue
Stakeholder
Analysis

Step 1: Analysis

Significance:

More adaptive to External
Drivers (Social Expectations &
Globalization)
Corporations CSR
CSR Drivers:
2. Globalization
1. Social
Expectations
Shareholder
Model
drive management 1. Separation of responsibilities
between private & public sectors
2. Fiduciary Duty of Management
Board to Shareholders: Profit
Shareholder Model:
Inflexible to change
Stakeholder Model:
Adaptive to change
Class 1
Class 2
However:

Step 1: Analysis

Ethical/
Philanthropic
Good for Business
CSR
COMPLIMENT
NOT
CONTRADICT
CSR is a business strategy:
Summary:
Stakeholder Process: Good for business and Stakeholders
1. Stakeholder Analysis:
Step 1: Identification of Issues
Step 2: Selection of Stakeholders
Step 3: Prioritization (mapping)
2. Stakeholder Dialogue
Formulation of CSR Strategy
Stakeholder
Process
High Priority:
Manage Closely
Medium Priority:
Keep Satisfied
Medium Priority:
Keep Informed
Low Priority:
Monitor (Minimum effort)
P
o
w
e
r o
f S
t a
k
e
h
o
l d
e
r
Interest of Stakeholder
(e.g. Automotive industry product safety, climate change
Tobacco Industry )
Stakeholder Mapping
?
Can Stakeholder Approach
compliment business model?
Or too much focus on
Stakeholders distraction
of finding CSR programs that
compliment business
activities ???
Class 1
Class 2
Outsourcing
CSR:
Risking
hodgepodge of
un-coordinated
CSR activities
and
philanthropic
activities?

What do you
think?
Does Kramer & Porter Inside-
Out/Outside-In Model work better ??

Step 1: Analysis

Arguments for CSR
Philanthropic: Clich, but basic truth!
Company Society
Relevance in strategic aspect of CSR:
Strategy should focus on compatibility, NOT on friction
Healthy Society needs well
functioning companies!!
(Jobs, taxes, goods & services)
Company needs:
Tangible Benefits:
Infrastructure, police, employees
& customers
Intangible Benefits:
Water, fresh air, facilitating
investment through functioning
government
Source: Strategy and Society, Porter & Kramer
Inside-Out:
Impact on Society
Outside-In:
Impact on Competitive Positioning
Class 1

Step 1: Analysis

Impact of Society on

Company
Impact of Company on

Society
CSR
How does this compares with Stakeholder Model ?
Step 1: Analysis

1. CSR Audit Gap Analysis

2. Stakeholder Process
- Stakeholder Analysis
- Stakeholder Dialogue

3. CSR-SWOT

Step 1: Analysis

And/or
Kramer & Porter:
Inside-Out/Outside-In Model
Step 1: Analysis

1. CSR Audit Gap Analysis

2. Stakeholder Process
- Stakeholder Analysis
- Stakeholder Dialogue

3. CSR-SWOT

Step 1: Analysis

And/or
Kramer & Porter:
Inside-Out/Outside-In Model
3. SWOT

CSR-SWOT Analysis:


- Putting it all together

- Linkage to next part

Step 1: Analysis

Framework for Strategic Integration:

Step 1: Analysis

Step 2 ???
2. CSR Strategy

Strategy to compliment business activity

CSR is Business Strategy
(see EU Definition !)

1st Step??

Step 2: CSR Strategy

Step 2: CSR Strategy

1. Policy formulation

2. CSR Structure

3. Staffing Plan

4. Budget

Step 2: CSR Strategy

1. Policy Formulation

- Priorities

- Core Values

- Formulation of Policy Statement

Step 2: CSR Strategy

1. Policy Formulation

- Formulation of Strategy

How long before public starts identifying
CSR strategy with company ?

Step 2: CSR Strategy

Step 2: CSR Strategy

1. Policy formulation

2. CSR Structure

3. Staffing Plan

4. Budget

Step 2: CSR Strategy

2. CSR Structure

Choose structural framework

- Size
- Corporate structure
- Sectors involved

... geographic locations, risk areas, commitment

- New or improved structure?

Step 2: CSR Strategy

What is important for an effective
Structure ?

Step 2: CSR Strategy

Cross-Functional

Step 2: CSR Strategy

Why so important in CSR ?
2. CSR Structure:

CSR is cross-functional:

- Environment
- Government
- Communities
- Employees
- Supply Chain
- Customers
- Shareholders
7 Stakeholder
Groups

Step 2: CSR Strategy

2003:
Embedding

Step 2: CSR Strategy

Stage 1:
CSR
non-
existent
Stage 4:
CSR
Intrinsic
business
strategy/
activity
??
Stage 3:
Strategic CSR:
Strategy
complimenting
business activity
Stage 2:
CSR non-strategic:
- Philanthropy
- Donations
- Volunteering, etc.
Evolution of CSR:
Classes
2 to 4
CSR
Sustainability
?
Framework for Strategic Integration

Integrating sustainability into companys:





at all levels of the organization
= Embedding
- Values
- Culture
- Operations
- Business decisions

Step 2: CSR Strategy

2. CSR Structure:

Mechanisms for involving functional areas, departments, etc.

Roles and responsibilities of each employee and/or group
(committee) involved with CSR efforts

(Board committee, executive committee, specific CSR
committee, etc.)

Step 2: CSR Strategy

Increasing level of CSR commitment
Source: Designing a CSR Structure, BSR
Step 2: CSR Strategy

1. Policy formulation

2. CSR Structure

3. Staffing Plan

4. Budget

Step 2: CSR Strategy

3. Staffing Plan

Identify CSR-specific staff roles and responsibilities at the
different levels.

Step 2: CSR Strategy


Step 2: CSR Strategy

Daimlers Corporate Governance Structure
How would you design Daimlers CSR
Structure?
Daimlers
Sustainability
Governance
Structure
(P. 16)

Step 2: CSR
Strategy

1. Key
Stakeholder
Groups
???
2. Cross-
Functionality
Daimlers
Sustainability
Governance
Structure
(P. 16)

Step 2: CSR
Strategy

1. Key
Stakeholder
Groups
Which ones??
2. Cross-
Functionality
Notice:
Integration
Core
Business
Activity
Centralized, de-centralized ?
Top-down, bottom-up ?

Step 2: CSR Strategy

Daimlers
Sustainability
Governance
Structure
(P. 16)
Step 2: CSR
Strategy
1. Key
Stakeholder
Groups
Which ones??
2. Cross-
Functionality
Notice:
Integration

Step 2: CSR Strategy

Daimlers Environmental Structure p.19
Life-cycle
Analysis
Bottom-up, Top-down ?
Daimlers CSR Structure


Hybrid

Step 2: CSR Strategy

Daimler:
Committed to CSR ?

Step 2: CSR Strategy

Daimlers
Sustainability
Governance
Structure
(P. 16)
Step 2: CSR
Strategy
1. Key
Stakeholder
Groups
Which ones??
2. Cross-
Functionality
Notice:
Integration
Daimlers CSR Structure
Where is Daimler (Page 16)?

Step 2: CSR Strategy

Increasing level of CSR commitment
Step 6: Daimlers CSR Structure
Where is Daimler (Page 13)?
Board of Management
Sustainability Board

Step 2: CSR Strategy

Increasing level of CSR commitment
Daimlers CSR Structure
Centralized or de-centralized ?
Step 2: CSR Strategy

?
Sustainability Office
Daimlers CSR Structure Step 2: CSR Strategy
Mobiles CSR Structure

Step 2: CSR Strategy


Step 2: CSR Strategy

- Subsidiary of KBC (Belgium, Flemish)
- Required CSR in 2005
- Communications Intern tasked
2006: Allocated budget: New CSR Policy:

1. Professional Business Ethics
2. Employees and their families
3. Attitude to the environment
4. Care for the community (CSR-led sponsorship)

What evolutionary stage of CSR
strategic, non-strategic?

Step 2: CSR Strategy

How to manage CSR?
2007: CSR Expert Task Force (ETF):
1. Head of External Communications
2. Head of Retail Segment Marketing
3. Head of PSB Retail Segment
4. Head of Human Resources
5. Head of Legal
6. Head of Public Affairs
7. Head of Marketing Communications (with an advisory vote power)
8. CSR Officer
9. CSR Manager

Main focus area of ETF ?

Step 2: CSR Strategy

2007: CSR Expert Task Force (ETF):

Main focus areas:

- Risk Management & Compliance
- PR, Communications & Marketing

Step 2: CSR Strategy

2007: CSR Expert Task Force (ETF)
ETF =
CSR Manger
+
Problem ?
2008: Country Team Sustainability
Committee (CTSC)
CTSC =
CSR Manger
+
2008: Country Team Sustainability
Committee (CTSC) :
1. CEO of SOB Pojiovna
2. PSB and Direct Banking Business Senior executive director
3. Corporate banking Senior executive director
4. Corporate Office Director
5. External Communication Director

6. CSR Manager

Step 2: CSR Strategy


Step 2: CSR Strategy

CSR Expert Task Force
1. Identifies
risks, proposes
strategies
2. Votes on
general
budget
components
(Budget: 0.5% net profit)
Country Team Sustainability Committee (CTSC)
3. Votes on
specific
programs
Implementation by CSR Team
CSR
Manager
Step 2: CSR Strategy

1. Policy formulation

2. CSR Structure

3. Staffing Plan

4. Budget

Step 2: CSR Strategy

4. Budget

Assess budget structure and size

Typically, CSR Budget in EE Companies
what percentage of net profit?

More effective if tied with PR Budget!

Step 2: CSR Strategy

Framework for Strategic Integration:

Step 1: Analysis
Step 2: Strategy

Step 3 ???
Step 3: Implementation

Goal: Long-Term Integration

Embedding CSR management system into processes and programs

Step 3: Implementation

2003:
Embedding
Step 2: CSR Strategy
Stage 1:
CSR
non-
existent
Stage 4:
CSR
Intrinsic
business
strategy/
activity
??
Stage 3:
Strategic CSR:
Strategy
complimenting
business activity
Stage 2:
CSR non-strategic:
- Philanthropy
- Donations
- Volunteering, etc.
Evolution of CSR:
Classes
2 to 4
CSR
Sustainability
?
Reporting & Monitoring

Communication Management Tool
See Class 4
Framework for Strategic Integration:

3 + 1

=

3 Steps + 1 Continuous Action ?
Building Senior Vision & Support

Especially if
Re-active (or not -active):

- Get clear CSR Mandate
- Educate Board, CEO and employees
- Build Board & CEO level support
- Strengthen company-wide support

Continuous: Building Senior Vision & Support

Building Senior Vision & Support

its all about (internal) communication!

- Workshops
-Training
- Personal Contact
- Etc.

Gradual Process, building on success.

Continuous: Building Senior Vision & Support

Step 3:
Implementation

1. Monitoring &
Reporting
Step 2: CSR Strategy

1. Policy formulation

2. CSR Structure

3. Staffing Plan

4. Budget
Step 1: Analysis

1. CSR Audit

2. Stakeholder Process
- Stakeholder Analysis
(Identification, Selection and
Prioritization)
- Stakeholder Dialogue
OR
Kramer & Porter
Inside-Out/Outside-In
Model

3. SWOT
Framework for Strategic Integration
Building Senior Vision and Support