Corporate Social Responsibility – Good Practices and Local Government

1. Corporate Social Responsibility – Good Practices and Local Government Academy of Partner Cities’ Civil Society August 21st, Ustron Marcin Grabowski, Ph.D. Jagiellonian University

2. Presentation Plan • CSR – short characteristic - shareholders • Approaches to CSR • Consumer’s approach to CSR; • CEOs’ approach to CSR • CSR in Germany, UK, China, UAE, US • Benefits to business • Public sector roles • UN Global Compact • CSR institutions in Poland • Good practices

4. Approaches to CSR • business works with community to better themselves; • philanthropy – common approach, but less valuable for the community; • inclusion of CRS strategy into business strategy of a company

5. Approaches to CSR • creation of shared value (CRV) – corporate success and social welfare are interdependent • business needs a healthy, educated workforce, sustainable resources, adept government • Michael Porter, Strategy and Society: Competitive Advantage and CSR (Harvard Business Review)

6. Three schools of thought

8. Consumers can spend more…

9. Employees would work for CSR companies…

10. Respondents would sacrifice for social responsible firm…

11. Does your workplace employs any social responsible practice?

12. Top-scoring brands on the CSR perception index

13. How to be socially responsible?

14. How to be socially responsible?

15. CSR in the World

16. CEO Attitudes • 93% of CEOs believe that sustainability issues will be critical to the futuresuccess of their business. • 72% of CEOs cite “brand, trust and reputation” as one of the top threefactors driving them to take action on sustainability issues. Revenue growthand cost reduction is second with 44%. • 72% of CEOs see education as the global development issue most critical toaddress for the future success of their business. Climate change is secondwith 66%. • 58% of CEOs identify consumers as the most important stakeholder groupthat will impact the way they manage societal expectations. Employees weresecond with 45%.

17. CEO Attitudes • 91% of CEOs report that their company will employ new technologies(e.g., renewable energy, energy efficiency, information and communicationtechnologies) to address sustainability issues over the next five years. • 96% of CEOs believe that sustainability issues should be fully integrated intothe strategy and operations of a company (up from 72% in 2007). • 49% of CEOs cite complexity of implementation across functions as the mostsignificant barrier to implementing an integrated, company-wide approach tosustainability. Competing strategic priorities is second with 48%.

18. CEO Attitudes • 88% of CEOs believe that they should be integrating sustainability throughtheir supply chain. Only 54% believe that this has been achieved within theircompany. An almost identical performance gap is seen for subsidiaries. • 86% of CEOs see “accurate valuation by investors of sustainability in longterminvestments” as important to reaching a tipping point in sustainability. • 64% of CEOs see the most important role of the UN Global Compact assharing examples of best and emerging practices on sustainability. Guidanceon implementation is second with 51%.

19. CEO Attitudes

20. CEO Attitudes

21. CEO Attitudes

22. CEO Attitudes

23. CEO Attitudes

24. Germany • Strong traditions of environment and workplace/health safety; • weak culture of community involvement; • 7% of German citizens trust multinational corporations; • Social contract in Germany – state-centred social system provides everything; • Changes in the public debate about CSR;

25. Germany Driving forces and motivations: • Multinational corporations leading the way; • International standards are widely accepted and integrated into company policy; • The state plays a large role as legislator and enabler/networking agent; • Business relationships with stakeholders are influenced by the state (little collaboration of business and civil society); Issues of prominence: • Climate change/environment; • Corporate governance; • Education.

26. United Kingdom • Business role in the society is widely understood; • CSR is widespread and accepted; • Most companies – CSR strategies; • Bigger companies – comprehensive approach, smaller – philanthropy; • Business-NGO partnerships – widespread;

27. United Kingdom Driving forces and motivations: • NGO pressures and partnerships; Issues of prominence: • Climate change; • Employability; • Poverty reduction; • Education.

28. China • Rising awareness of CSR; • Aligned with government policy of „harmonious society” and „new socialist countryside”; • Support from organizations promoting CSR in China; • Importance for competitive advantages and brand building on the international stage;

29. China Driving forces and motivations: • Opportunity for competitive advantage domestically and internationally; • Government policies; • National disaster (2008 earthquake); Issues of prominence: • Environment,(water, pollution, urbanization); • Rising income inequality; • Education.

30. United Arab Emirates • Traditional culture of charity and collectivism; • Individuals and companies should contribute to social welfare and safe working conditions; • Very limited stakeholder engagement; • Concept of CSR not well known;

31. United Arab Emirates Driving forces and motivations: • Islamic culture; • International business; Issues of prominence: • Unequal welfare distribution; • Population growth; • Environmental damage; • Poor labour practices (low wages).

32. United States • Tradition of philanthropic giving; • Need to business participation – government services decreased; • Most important aspect – proper approach towards workers; • Preference to voluntary standards; • Increasing presence in companies’ strategies and policies;

33. United States Driving forces and motivations: • Corporate traditions and values; • Risk management; • Employees and consumers; • Opportunity for profits through differentiation; • Non-profit pressure and partnerships; • Expectation of future regulations; Issues of prominence: • Education; • Caring for workers (and retirees); • Health care; • Environment.

34. Benefits to business • Human Resources – recruitment process and employers; • CSR companies make more on human capital; • Learning and innovation – to be environmentally or socially friendly; • Risk management – avoidance of unlawful and improper actions in corporate culture;

35. Benefits to business • Brand differentiation – on a competitive market being perceived as CSR business is really valuable (PR benefits, social response at cheaper cost); • License to operate – limited intervention of government; • Ethical consumerism – we want to be perceived as ethical (bigger awareness of CSR) 

36. Public Sector Roles

37. Public Sector Roles • Setting up a special agency to encourage CSR and monitor CSR activities in private and public sectors; • clarifying expectations of business with regard to CSR and developing ways of measuring their responses to these expectations; • Leading by examples, e.g. through procurement and raising investors’ awareness;

38. Public Sector Roles • Eliminating bribery and corruption, as well as encouraging transparency in relations between local government and business; • Providing tax benefits and other mechanisms so CSR is seen by companies as benefit rather than the cost (e.g. tax exemptions for companies that build social capital by working with local communities as part of their core business);

39. Public Sector Roles • Creating a vision and strategy for CSR, and allowing business to work with the government towards this strategy; • Focusing particularly on the gaps in the current CSR agenda – particularly, how to work with SMEs and how CSR can be made to work in countries with poor information and lack of capital

41. CSR in Poland and CEEC- needs • Counteracting social exclusion; • Educating the public (social education); • Promoting entrepreneurial attitudes; • Quality workplaces;

42. Activities of a local government • Review of responsible business initiatives implemented in CEEC countries by both the largest enterprises and the SMEs; • Identification of internal and external barriers limiting the effectiveness of these initiatives; • Dialogue with organisations and enterprises which develop social responsibility programmes;

43. Activities of a local government • Promotion of responsible business rules among enterprises by cooperation with employers’ organisations, trade unions and academia representatives; • Support for social promotion campaigns, competitions, rewards, courses and other activities in this area; • Education on social responsibility and adjusting research and educational priorities to the needs of the labour market and developmental ambitions of the society;

44. Activities of a local government • Promotion of knowledge among representatives of the local government about different forms of cooperation with business as a part of social responsibility programmes; • Creation of a forum for exchanging experiences in CSR implementation – e.g. web-based centre of knowledge and excellence on CSR.

45. UN Global Compact • Initiated in 2000; • Encompassed more than 3000 companies in 100 countries, as well as 700 civil society organizations; • Corporations should include Global Compact rules into management system, strategy, publish its results in yearly report, publicly support and promote Global Compact Initiative; • In Poland – city of Płock

46. UN Global Compact Cities - benefits • Being a part of important social and economic initiative world-wide; • Strengthening positive image of the city, interested in the most important problems and challenges of the world (sustainable development); • Enlarging opportunities of city’s development, by inclusion of social dimension into its vision, strategy, practice; • Cooperation with other UN Global Compact cities, companies, NGOs; • Cooperation with UN agendas (ILO, UNHCHR), UNED, UNDP, UNIDO);

47. UN Global Compact Cities Cities interested in membership of the Global Compact Cities Programme should contact the international secretariat in Melburne (Australia), email: administrator@citiesprogramme.org They should: • Send to the address of UN Secretary General a letter expressing their will to participate signed by the mayor (or other high representative of the city); • Organize a local secretariat (designate certain office); • Organize workshop for representatives of public and private sectors, as well as civil society to identify ventures most important to all the sectors; • Pay entrance fee.

48. CSR Institutions in Poland • Responsible Business’ Forum – public benefit organization; • the oldest and the biggest CSR organization in Poland; • Mission – dissemination of CSR approach in Poland; • www.odpowiedzialnybiznes.pl

49. CSR Insitutions in Poland • Institute for Responsible Business; • Social entrepreneurship; • Independent think-tank – practical approach; • Support for local initiatives – social portal; • www.iob.org.pl

50. CSR Institutions in Poland • CSR Centre Foundation; • Independent think-tank (2007); • Research, education, promotion of CSR activities; • Advisory, seminars; • www.centrumcsr.pl