Good CSR for value creation
F Rajesh Tiwari Publisher email@example.com
or the past few years, a growing movement has been pushing companies to become socially responsible and sustainable. According to a survey by the United Nations Global Compact and Accenture, “More than two thirds of chief executives (67%) believe that business is not doing enough to address global sustainability challenges.” Even Indian consumers are alive to concepts of CSR & Sustainability. In a consumer survey by Cone Communications, Indians are more likely than their global peers to believe companies have had a substantial positive impact on social and environmental issues (37% vs. 22% globally). With this background, the efforts of Government of India are laudable. By recently passing the company’s bill including mandatory CSR as a powerful tool, the policy makers have tried to establish culture of transparency, reliability and stability for the companies so Globally, there has been that shareholders and stakean accelerating public holders can begin to trust consciousness that simply their management. using traditional financial Most companies are now metrics are not adequate in the process of looking at their CSR and Sustainability investment criterion strategy. Nissan President and and institutions and CEO Carlos Ghosn has been individuals have become leading CSR of the company increasingly interested in by building a culture of rethe behavior and values sponsible business. As he says in the interview carried in this that are manifested by issue, “When we created the business entities. direct line of communication between the CSR officer and the CEO, we sent an extremely important signal that CSR is foremost in the minds of the leaders of the company. Everything we do has a social meaning—not only in terms of technology, but also what we are doing to support communities.” Good CSR has the potential to create several distinct forms of value for the company and several global corporations are reaping the benefits and hopefully Indian companies will not be left behind!
November 2013 | CSR Today | 1
Contents 14 cover story
november 2013 | vol. 0i | issue 02 Printer and Publisher: Rajesh Tiwari EDITORIAL Executive Editor: Sanjeev Verma Copy Editor: Tinu Joseph INDIAN CENTRE FOR CSR ADVISORY BOARD Pankaj Pachauri, Ted McFarland, Mag. Martin Neureiter, Chandir Gidwani, Lou Altman, Kingshuk Nag, Toby Webb, Anil Bajpai, Nikos Avlonas, Rajesh Tiwari, Satish Jha, Amit Chatterjee, Jitendra Bhargava, Namita Vikas, Dinesh N. Awasthi, Kapil Dev, Dr. Kamal Kant Dwivedi, Sanjiv Kaura CSR Today Advisroy Board Rajweer Kapoor, Alok Goel, Seema Tiwari PRODUCTION, CIRCULATION AND LOGISTICS Hardik C
14 “CSR is foremost in the minds of the leaders of the company” Corporate social responsibility (CSR) specialist Peter David Pedersen asked Nissan President and CEO Carlos Ghosn about Nissan’s approach to CSR issues and his views on the future of the company and global mobility
18 Architects of a Better World
The UN Global Compact-Accenture CEO Study on Sustainability 2013
24 Sustainability and innovation, how far have we come?
35 Mainstream Investors Look To Sustainability to Unlock Value
26 Owning Sustainability: The CSO vs. the CEO
38 15 ways to get your CEO on board with sustainability and corporate responsibility
28 Building an inclusive future 30 Discovering untapped Skills of the Country A new push to hire people with disabilities…
32 Core Competence: Tetra Pak’s Food for Development Office
sustainability capital 40 Visions of the Future: CSR,
Sustainable Business & Capitalism in 2020 A gaze into the crystal ball and an invitation to dialogue.
01 Publisher’s note 03 CSR News 43 Book Review
advertisers’ index: BHEL Inside Front Cover | PETRONET Inside Back Cover | ONGC Back Cover
HEAD OFFICE CSR Today Indian Centre for CSR, 601, 6th Floor, Technocity, Plot No. X4/5 A, TTC Industrial Area Mahape, Navi Mumbai- 400701 (India). Tel: +91 22 2778 8481 / 82 Fax: +91 22 2496 6803 Email: firstname.lastname@example.org Website: www.iccsr.org REGIONAL OFFICES NEW DELHI Regional Director: V Chopra Vice President: Bhanu Pratap Singh bangalore Priya MK MUMBAI Assistant Vice President: Chaitali Chatterjee Circulation: Dewang Mewati Printed, Published and Edited by Rajesh Tiwari on behalf of Indian Centre For Corporate Social Resposibility, Printed at Jayant Printery, 352/54, J.S.S. Road, Murlidhar Temple Compound, Near Thakurdwar Post Office, Mumbai 400 002 and Published from Indian Centre For Corporate Social Resposibility, 106/A, Nirman Kendra, Plot No.3, Dr. E. Morses Road, Mahalaxmi Estate, Mahalaxmi, Mumbai 400 011. Editor: Rajesh Tiwari Disclaimer The publisher, authors and contributors reserve their rights in regards to copyright of their work. No part of this work covered by the copyright may be reproduced or copied in any form or by any means without the written consent. The publisher, contributors, editors and related parties are not responsible in any way for the actions or results taken by any person, organisation or any party on basis of reading information, stories or contributions in this publication, website or related product. Reasonable care is taken to ensure that CSR Today articles and other information on the web site are up-to-date and accurate as possible, as of the time of publication, but no responsibility can be taken by CSR Today for any errors or omissions contained herein.
CSR News ICCSR launches first ever MS in CSR & Ethical Management
CSR to create 50,000 jobs
ndian Centre for CSR (ICCSR) in association with University of Applied Sciences Vienna has today formally launched its First Batch of Global Master of Sciences in CSR & Ethical Management, which is designed to put executive careers on the fast track and to teach working professionals how to generate fresh ideas on building sustainable business. With passing of New Company Bill, ICCSR was inundated with request to provide professionals who are trained in the field of CSR. Hence, it has collaborated with Star Rated University of Europe, University of Applied Sciences, Vienna to start one of its kind program taught by the Global Faculty. The program is uniquely designed to cater to Working Professionals as well as full time students who wish to pursue their dream of working for benefit of People, Planet & Society. In his welcome address, the director of University Dr. Helmut Holzinger, said, “We are embarking on new, cross-border ways in the international education as qualified CSR Manager. Rest assured that we are going to put much energy and effort into this seminal and hopefully sustainable education track and that we will support you together with ICCSR to the best of our ability in reaching your goals.” Specifically tailored to requirement of the day, the Program is anchored in the rigorous, CSR and sustainability management curriculum. The program also features the cutting-edge innovative curriculum, which is supported by University of Applied Sciences distinctive attitude towards quality education. Says, Mr. Rajesh Tiwari, Director General & CEO, ICCSR, “As company bill emphasizes the need for Creation of CSR committees to supervise and monitor CSR, Creation of CSR Division and appointment of Independent CSR Directors, companies will require a qualified CSR professional. Thus the need for such a world-class course can not be over emphasized.” Speaking about the composition of the students in the class, Martin Neureiter, Program Director said, “This class has unique mix of talent with many of them having excelled in their respective fields. I am sure these students will be the change agents and apply knowledge to address an actual company’s challenge of sustainability.”
ompulsory Corporate Social Responsibility is likely to increase the demand for professionals in this field by as much as 50 percent in the coming years and the industry is likely to see at least 50,000 more job opportunities in the CSR sector, experts say. Around 8,000 companies would fall under the Companies Act’s ambit and this in turn would open a host of new job opportunities for individuals looking to work in the social development field. At present, the CSR work of a company is mostly done by corporate communications team but with this law, many firms would have to build a strong team of around five-six people for the purpose. According to leading executive search firm GlobalHunt MD Sunil Goel, “the demand for CSR professionals will surge 50-60 percent and we may have to train fresh hands to fulfil this need of the industry”. According to experts, the social sector is already a popular option and has low entry barriers and going forward, a lot of people could explore CSR as a career option. “CSR should see a spurt in career opportunities. But the real growth would be in effective CSR management agencies which would require a combination of management and CSR experts,” Ashwajit Singh, Chairman and MD, IPE Global, a management consultancy company for development sector, said. November 2013 | CSR Today | 3
CSR | NEWS
Corporates should take CSR law positively: Nita Ambani
alling upon India Inc to take the new CSR law in a positive way, Reliance Foundation Chairperson Nita Ambani has said it should help in creating sustainable and self-reliant communities. Nita Ambani, whose husband Mukesh Ambani heads the country’s leading corporate house Reliance Industries group, was here to oversee relief work being undertaken by Reliance Foundation in areas ravaged by the Uttarakhand floods in June. “CSR (Corporate Social Responsibility) is a process that creates sustainable and self reliant communities by lending a hand to realise their aspirational goals,” Nita Ambani told PTI here. A well-known educationist and philanthropist, Nita said that everyone needs to be taken along for society’s sustainable growth and welfare. Asked about the historic CSR clause of the new Companies Act 2013, which mandates companies with significant size to mandatorily spend two per cent of profits
Nita Ambani, Reliance Foundation Chairperson
on social welfare schemes, she said: “I think it is an important step and should be taken in the positive spirit... “... because unless the society moves along taking everybody together, you cannot have a sustainable society.” Reliance Foundation is carrying out extensive relief and rehabilitation works in natural calamity-hit areas of Uttarakhand. It plans to cover about 25,000 people
(around 5,000 households) through its activities focused on providing livelihood in the state. The Foundation, which is pursuing activities in various states, is mainly working in areas like education, health and rural transformation. The CSR law has evoked mixed reactions among the corporate leaders, with some of them saying that the companies should not be forced to spend on social welfare and such activities should rather be undertaken on their own. Recently, billionaire industrialist and software czar Azim Premji also said that philanthropy cannot be forced upon and has to be spontaneous, while referring to the CSR spending provision in the Companies Act 2013. The two per cent CSR spending would be applicable to companies having turnover of Rs 1,000 crore or more, or those with net worth of Rs 500 crore and above, or entities having net profit of Rs 5 crore and more.
Wockhardt Foundation Wins CSR Award At The Asian CSR Leadership Awards
ockhardt Foundation was awarded the “Best CSR in Healthcare” at the Asian CSR Leadership Awards held in Dubai on Sep 24, 2013. This Award is given to outstanding organizations who have played a meritorious role in Health care Development. Wockhardt Foundation has embarked on a path-breaking ambitious social growth programme of providing free, primary healthcare to the rural and remote parts of India through its “Mobile 1000” initiative. Today “Mobile 1000” has a Pan-India presence operating in 11 states of India. The Award was accepted by CEO, Dr. Huzaifa Khorakiwala who said - “This Award renews our commitment to bring large scale social impact and relieve the suffering of the poorest.” 4 | CSR Today | November 2013
Beside “Mobile 1000”, its other Programmes like Bio-Toilet, SHUDHU water purification tablets, The Word Peacekeeper Movements ,POSHAK malnutrition supplement, Khel Khel Mein, HIV/AIDS, have also started making significant impact. Wockhardt Foundation is governed by the 3 B’s - BIG, BEST, and BOLD. BIG is to implement programmes which have national scale, BEST is its programmes must measure upto the highest levels of quality implementation, and BOLD is to operate its social development programmes where the need and poverty is the most. It is a nation-wide team of more than 350 rapidly growing, strong, and sensitive Warriors who render full-time service to the Foundation that translates the motto of “where every smile counts” into reality.
CSR | NEWS
Mahindra Trust announces new Scholarships
he K.C. Mahindra Education Trust has announced the results of the F-14 K. C. Mahindra Scholarships for Post Graduate Studies Abroad. Three K.C. Mahindra Fellows will receive an interest free loan scholarship of Rs. 8 lakh each, while another 50 candidates will receive an interest free loan scholarship of Rs. 2 lakh each. The K.C. Mahindra Education Trust selects scholarship recipients based on their financial needs and academic achievements. This year, the trust received 664 applications from students who have obtained admission in several Ivy League universities both in the US and the UK. The three K.C. Mahindra Fellows – Ashrita Kotha, Gautam Chopra and Antariksh Bothale – hail from very diverse backgrounds and displayed remarkable grit and determination to rise above their challeng-
ing situations. They have secured admission into prestigious universities such as Oxford, Yale and Washington, epitomizing the Mahindra Group’s philosophy of Rise. “Since 1956 the KCMET realized the potential of the Indian student and decided that it was time to celebrate the cerebral. It has been the trust’s constant endeavour to look at people with humble beginnings and make them realize their aspirations, recognising that money must never come in the way of achieving the true potential of an individual. KCMET firmly believes that there is no greater denial than the denial of opportunity. Its avowed vision is to Enable, Provide and Catalyze. In that context, over the last six decades there has been nothing but happiness when some of India’s finest minds irrespective of caste, creed and colour achieve their aspirations.” said Anand Mahindra, Trustee of K C Mahindra Edu-
cation Trust and Chairman and Managing Director, Mahindra & Mahindra Ltd. The applicants will be pursuing their post graduation in a number of subjects ranging from Computer Science, Engineering, MBA, Law and Economics, in various universities including Harvard, Stanford and Georgia Institute of Technology in the USA, as well as the University of Cambridge and Oxford University in the UK. The K.C. Mahindra Scholarship for Post Graduate Studies Abroad was the first scholarship to be set up at the K.C. Mahindra Education Trust in 1956 by the founder of the Trust, Mr. K.C. Mahindra. He along with his brother, Mr. J.C. Mahindra, also established the Mahindra Group in 1945. Since inception, the Trust has provided 1,123 scholarships to Indian students pursuing their post-graduate studies abroad.
ICICI Bank opens training academy as part of CSR activities
CICI Bank has opened a skill training academy in Jaipur as part of its Corporate Social Responsibility (CSR) efforts, to provide vocational training to youth from economically weaker section of the society. “The vocational training course will provide sustainable livelihood opportunities to the beneficiaries,” ICICI Bank Managing Director and Chief Executive Chanda Kochhar said in Jaipur. “The launch marks the next step in our strategy to promote inclusive growth in India, will train 5,000 youth at nine training centres across the country in the first year of operation,” she said, adding, the academy aims to train 15,000 youth across the country by 2016. The courses offered will include selling skills, office administration and web design for graduates; and electrical & home appliance repair, refrigeration & air-conditioning repair, and diesel generator & pump repair for Class X passouts, Kochhar said, adding that the courses will be of about 12 weeks duration. She said the bank is
already close to the target of spending 2 per cent of average profits on activities relating to CSR that has been mandated in the new Companies’ law. “We are very close to this target as we have been expanding to new initiatives over time. The formal reporting on the per cent of profit used for CSR would be started from next year,” she said. part from Jaipur, Kochhar said, the skill development centres would be set up in Coimbatore, Chennai, Hyderabad, etc through the ICICI Foundation. The bank is setting up residential centres in Jaipur, Sangli and Coimbatore and non-residential centres in Bangalore, Chennai, Hyderabad, Jaipur and Pune. The bank is also exploring the possibility of a centre in eastern India, Kochhar said. “In the last five years, we have significantly expanded our efforts with a sharp focus on four key areas that are essential enablers for widespread participation in economic opportunities in the country education, healthcare, skill development for sustainable livelihoods and financial inclusion,” she said. November 2013 | CSR Today | 5
CSR | NEWS
TCS Recognized Among Global Leaders in 2013 DJSI
ata Consultancy Services (TCS) (BSE: 532540, NSE: TCS), a leading IT services, consulting, and business solutions organization, today announced further global recognition of its corporate sustainability practices, being ranked in the 90th percentile of the 2013 Dow Jones Sustainability World Index (DJSI World). The DJSI analyses the top 10 percent of global organizations leading the field in sustainability, specifically assessing their economic, environmental and social business performance. “DJSI is an internationally recognized indicator of sustainability for all stakeholders. TCS’ inclusion in the DJSI highlights our company’s commitment towards sustainability,” said Dr. Joy Deshmukh Ranadive, Global Head, Corporate Social Responsibility, Tata Consultancy Services. Established in 1999, as the first ever family of global sustainability benchmarks, the Dow Jones Sustainability Indices (DJSI) have become a reference point in Sustainability Investing. Launched jointly between S&P Dow Jones Indices
Fullerton India Bags Awards for Rural Development & Sustainable Leadership
and RobecoSAM, DJSI World tracks the performance of the top 10% of the 2500 largest companies in the S&P Global Broad Market IndexSM that lead the field in terms of sustainability. These 2500 companies represent the eligible universe for the DJSI World and are assessed using the Corporate Sustainability Assessment on an annual basis. “Sustainability is the cornerstone of business culture in TCS. We are delighted to receive this global recognition from DJSI,” said Ajoy Mukherjee, Global Head and VP of Human Resources, Tata Consultancy Services. The DJSI annual review is based on a thorough analysis of corporate economic, environmental and social performance. The review assesses issues such as corporate governance, risk management, branding, climate-change mitigation, supply-chain standards and labor practices. It accounts for general as well as industryspecific sustainability criteria for each of the 57 sectors defined according to the Industry Classification Benchmark.
Lupin gets ISRS Certification
upin Limited announced that the Company has received certification for International Sustainability Rating Standard, 8th edition (ISRS) from DNV, a global provider of services for managing risk, helping customers to safely and responsibly improve their business performance. The certification was received after audits were conducted at three of the company’s manufacturing facilities in India. Lupin is the first pharmaceutical company globally to have received this ISRS 8th edition. ISRS is a world leading system to assess, improve and demonstrate the health of an organization’s business processes. Using ISRS ensures operations are safe and sustainable and helps improve and demonstrate safety, environmental, and sustained business operations / performance. Commenting on the certification, Mr. Rajendra B. Chunodkar, Executive Vice President, Lupin said, “This certification bears testimony to Lupin’s commitment towards adopting best practices in Environment, Health and Safety for Lupin’s global manufacturing operations in our mission to remain best‐in‐class in the Industry.
6 | CSR Today | November 2013
ullerton India has been conferred the CSR Award for Rural Development and Sustainable Leadership at the Asian Leadership Awards, held in Dubai on 24th September 13’. The award was bestowed, recognising Fullerton India’s Rural Livelihood Advancement initiative and its large impact on rural households across India. The event attracts Asia’s leading business visionaries across all industry sectors, and honours their achievements in contributing towards the region’s economic development. Fullerton India has won a string of awards for its CSR initiatives across various platforms and has a rich history of rural development initiatives initiated across India. Adding another feather in its cap with this esteemed win, the company continues to reinforce its commitment towards social and economic development. Enthused over winning the Sustainable Leadership award, Mr Ravi Shankar, Executive Vice President Marketing & Rural Business stated, “It is indeed a great honour to receive this award. Among all the things I have done in my career, this Livelihood Advancement initiative that I have been involved in at Fullerton India, has been the most satisfying. It gives me immense happiness to know that I have been able to build a sustainable model with my team to make a sustainable impact on the lives of rural households. The Livelihood Advancement programme of Fullerton India continues to change the quality of lives of people helping them to create more sustainable livelihoods.”
CSR | NEWS
India Green IT/Sustainability spending to reach USD 29.2 bn
ndia’s spending on green IT and sustainability initiatives will reach USD 29.2 billion in 2013, according to Gartner, Inc. In the Gartner report “Hype Cycle for Green IT and Sustainability in India, 2013,” analysts said while businesses and investors in India are slowly waking up to green and sustainability issues, policymakers in the government are clearly pushing for changes that will likely set the tone for green and sustainable, low-carbon economic growth in the country in the coming years. “Many Indian organizations still lack the strategic focus that comes with a clear understanding of the core issues and key technologies that bring about real change in the vision for sustainability and green IT in an organization,” said Ganesh Ramamoorthy, Research Director at Gartner. “Therefore, policy initiatives and regulatory measures from the Indian government will be the key drivers for implementation of some of the technologies (such as advanced metering infrastructure, carbon capture and sequestration, intelligent transportation system, and solar energy technology) necessary to usher in low-carbon sustainable growth.”
“A few leading organizations in the country are beginning to implement green IT and sustainability solutions and incorporate them into business operations. However, this is through a piecemeal approach that relies more on the hype surrounding the solutions than on the real benefit of the solution to the organization’s sustainability and green IT vision,” said Ramamoorthy. “However, the unique challenges faced by India, such as an unreliable power infrastructure, a growing urban-rural divide and increasing population migration to urban areas, will also provide businesses there with the opportunity to innovate and test new cost-effective approaches and green technology solutions that may then be adapted elsewhere — in other developing, or even developed nations.” In the 2013 Hype Cycle for Green IT and Sustainability in India, Gartner has included six new technology areas and profiled 41 technologies in all. The new technologies added to this year’s Hype Cycle include hybrid electric vehicles, microgrids, machineto-machine communication services, liquefied natural gas, biomass electricity and wind power generation.
Cathay Pacific makes it to DJSI
athay Pacific Airways announced that it has been included on the Dow Jones Sustainability Indices (DJSI) for the first time. The DJSI, recognised as global sustainability benchmark, tracks the stock performance of the world’s leading companies in terms of economic, environmental and social criteria. The indices serve as benchmarks for investors who integrate sustainability considerations into their portfolios. Membership of the DJSI is by invitation only and is based on both company market capitalisation and overall performance scores. “In the benchmarking scorecard produced for DJSI, the airline was assessed on a wide range of criteria ranging from brand management and anti-trust policies to risk management, fleet management and corporate philanthropy,’’ it said. In the Environmental Dimension, Cathay Pacific rated well above the industry average for its environmental policy/management system and environmental reporting, it added.
CIL gives Rs. 50 crore to cyclone victims
oal India Limited has contributed Rs 50 crore for the rehabilitation of Cyclone Phalin affected victims in Odisha. R Mohan Das, Director (P&IR), handed over the cheque to Sriprakash Jaiswal, Minister of Coal, in the presence of S K Srivastava, Secretary, Coal. CIL has donated this fund for the Chief Ministers Relief fund of Odisha under its CSR policy for the relief and rehabilitation activities in the cyclone affected areas of Odisha. Even though the mining area of Mahanadi Coalfields Limited were not directly in the path of the storm, yet MCL as the biggest corporate in the State of Odisha constituted a Relief Task Force. Two medical teams were kept in readiness at Talcher in the district of Angul to be deputed at the behest of the State Administration. The workers of Mahanadi Coalfields Limited weathered
the strong winds and incessant rains up to 180 mm in 24 hours and proved their mettle as well as their solidarity towards the state and nation by continuing to produce coal and bounced back to normalcy in the quickest of time to ensure un-interrupted power supply to the nation. Coal India Limited has been a responsible corporate citizen and has been actively contributing for the welfare and betterment of society at large. Recently, CIL contributed Rs 16.50 crores for construction of Trauma Center at Leh (JandK). During the natural calamity in Uttarakhand PSUs under Ministry of Coal have contributed more than Rs 125 crores (Rs. 92.5 crore towards Chief Minister’s Relief fund and 33.5 crore to the Prime Minister’s National Relief fund) towards relief work in Uttarakhand. November 2013 | CSR Today | 7
CSR | NEWS
GAIL releases third Sustainability Report themed “Energising Tomorrow Responsibly”
. C. Tripathi, Chairman and Managing Director, GAIL (India) Limited, released the company’s Sustainability Report for the year 2012-13 on the theme “Energising Tomorrow Responsibly” in the presence of R.D. Goyal, Director (Projects), Prabhat Singh, Director (Marketing), S. Venkatraman, Director (Business Development), P. K. Jain, Director (Finance) and other senior officials of the company. This is the third Sustainability Report that has been brought out by the company and retains the pattern of stakeholder-centric reporting used in the earlier reports. Speaking on the occasion, B C Tripathi said “GAIL’s journey of touching lives and continually improving operating processes is encapsulated in the 3rd edition of the disclosure report on sustainable development befittingly titled – Energising Tomorrow Responsibly. “GAIL is the only PSU in the Oil & Gas sector to become one of the founding
ability Reporting and the Oil & Gas Sector Supplement (OGSS). The disclosures are in line with the requirements of the application level ‘A+’ and address 73 core and 25 additional GRI performance indicators. It is a Type 2 Moderate level assured report including data verification at different sites of GAIL includCMD and Board of Directors at the release of Sustainability ing its Gas Processing Units, Report themed “Energising Tomorrow Responsibly” Petrochemical plant, Natural Gas compressor stations, LPG members of the GRI (Global Reporting pumping/receiving stations, CorpoInitiative) Focal Point India’s Sustainrate Office and some regional pipeline ability and Transparency Consortium,” he offices, GAIL Training Institute. The added. GAIL has produced a stakeholder- report is available on the GAIL website centric report reflecting on strategies www.gailonline.com. and actions towards analyzing impacts With this, GAIL has been able to align and working towards creating a “positive the release of its Sustainability Report on stakeholder value”. the same day as its Annual General MeetThe report has been developed on the ing (AGM) which is a rare feat among basis of GRI G3.1 guidelines on Sustainlarge Corporates of India.
Tata Power successfully completes training programme for women in Odisha
n line with its commitment to provide sustainable livelihood for the communities around its areas of operation and projects, Tata Power, India’s largest integrated power utility, successfully completed a training programme for women. The tailoring training was conducted for a period of six months and students learned machine operations, cutting, and stitching of dress materials such as petticoats, blouses, frocks, salwar suits, pillow covers, bed sheets and others. The programme was attended by more than 30 students who belonged to Mundali and nearby villages. The objective of this programme was to motivate the village women and girls to be entrepreneurs and be self-sufficient by using their specialised skills of stitching clothes and supporting their family members financially. Purusottam Thakur, head (Odisha projects), Tata Power, said “Pro-
8 | CSR Today | November 2013
grammes such as these help in encouraging womenfolk who work hard and strive to support their families financially. It motivates them to continue learning and become self-sustaining entrepreneurs in the future. We take pride in conducting these training programmes which help our communities to be self-sufficient and will continue organising such initiatives in the future as well.” The students were felicitated at a ceremony where the chief guest for the occasion was Sudarshan Parida, OAS (SB-I), sub-collector of Cuttack. He appreciated the efforts of the Tata Power team in this area for women empowerment and economic development of local people through various CSR initiatives. The students were given certificates on the successful completion of the training at the ceremony, in the presence of senior officials from Tata Power.
Indiaâ€™s First MS Pro in CSR & gram Manag Ethical ement
Master of Science (MS) in CSR and Ethical Management for Full Time Students & for Working Professionals (Distance Learning)
Academic Year 2013-2014 Catch-up Program Commencing on 2nd Jan 2014 (Only 15 students will be admitted)
Indian Centre for CSR & University of Applied Sciences bfi Vienna, Austria
ndian Centre for Corporate Social Responsibility (ICCSR) is a Not for Profit Global Advisory and Training Organization engaged in the Business of promoting Corporate Social Responsibility (CSR) in India and Globally. ICCSR is offering in association with University of Applied Sciences (UAS), Vienna a Master of Science (MS) program in CSR & Ethical Management, from the ICCSR - Global Center for CSR Knowledge campus located at Mumbai. CSR aims at Sustainable Development, which revolves around the four pillars of CSR: the work place, which revolves around the Employees; Market Place, which means the customers; the Society in general; and the Environment in particular. Businesses worldwide are increasingly measured by Social Returns along with Financial returns. Many Corporate social responsibility (CSR) practitioners in India still have misplaced notion of thinking that Philanthropy and Charities make good CSR. When used well, CSR mitigates Business Risk and ensures a healthy survival of the Corporation. The New Comanyâ€™s Bill 2013 makes it mandatory for Indian companies to spend 2% of their profits for CSR related activities. The bill also emphasizes the need for the following:
• Creation of CSR Division • Appointment of Independent CSR Directors • Creation of CSR committees to supervise and monitor CSR activity of the organization Increasingly corporate executives must find new ways to address economic, social and environmental effects of doing business while balancing conflicting demands on their attention, time & resources. Today’s business environment depends on defining a robust & proper CSR strategy and imbibing the same in the corporate strategy of the corporation. This program helps you define priority, integrate social responsibility throughout your business, and build social & business values and ethics. You will strengthen your ability to define and implement powerful CSR Strategy that strengthen the position of the firm, its reputation, brand image, valuation and its way of doing business for enduring success.
MS PROGRAM IN BRIEF Academic Title: Master of Science in CSR & Ethical Management Full Time
The MS program is a One year program. The students will be awarded Post Graduate Diploma (PGD) in “CSR & Ethical Management” from Indian Centre for CSR upon successful completion of 11 months in Navi Mumbai campus. This (PGD) is recognized by the University of Applied Sciences Vienna. The MS degree award is subject to submission of a thesis, successful completion of 2 modules and answering the examinations at the Vienna campus. Students typically need 15 days for this based on their skills & knowledge. The MS Program is also available for working professionals and is equivalent in content and rigour to the full time MS program. It Is available in following formats:
Distance Learning The Distance Learning program is designed for working executives whose busy schedules do not permit them to pursue a fulltime program. The Distance learning format includes classes on 10 working days at the beginning of first three quarters at the ICCSR India campus, followed by 15 days study to complete 2 modules, submission of thesis and examinations at the UAS Campus at Vienna. Digital content / learning support is provided to supplement classroom learning. This program is best suited for candidates who reside outside Mumbai or the residents of Mumbai, who are not able to attend classes every weekend.
Program Highlights • The content of the program is international, reflecting the increasing trend towards the transnational nature of CSR & environmental issues faced by the corporate sector. • The course will be conducted at our centre in Mumbai & University of Applied Sciences, Vienna • Candidates pursuing the MS program from any of the three formats – full time, weekend or distance learning all are awarded the same MS program in CSR and Ethical Management.
Career Opportunities With government making CSR mandatory for all companies, there are huge employment opportunities for passing out graduates in small & large corporations. This being a global program, students passing out can expect jobs in MNCs & world bodies such as United Nation, OECD, European Union and other International trade and Industry bodies.
Program Objectives The MS program is designed to help full time students and working professionals fully integrate social responsibility with the business objective of the organization they work for. CSR is integral to long-term business success.
What You Can Expect • • • • •
Global Degree Global faculty Global Environment Global Facilities Global Exposure
The Course of Study The Study includes class room lectures, digital content, recent case studies and group discussions. The assessment would examine your understanding of how successful businesses develop pertinent and effective CSR strategy which is integrated with long-term needs of the business. The uniqueness of this first of its kind program in India are reflected in our exhaustive curriculum as: • • • • • • • • • • • • • • • • •
Introduction to the concept of Corporate Responsibilities. Methods, terminology and tools of CSR management Process identification & analysis Environment analysis Project management in CSR- Problem matrix and stakeholders Ethics & Business , Ethics & human nature - human rights & anti - discrimination Stakeholder identification and engagement Business Ethics, Corporate Governance, Compliance and Values CSR from an agency perspective, CSR Communication, Stakeholder Communication, Global developments in CSR, Management Models, Strategic Management, Value Chain Management, CSR in SMEs, Global Strategy for Sustainable Development Respectful Branding, Cleaner Production, SME strategy to corporate strategy Norm & Standards, CSR in India / Europe/US, Legal Aspects of CSR CSR from NGO perspective, CSR in Multinational Environment HR in CSR, Reporting standards, Global compliance Stakeholder Communication & Investor Relations Moderation –conflict management, Management approach in CSR IT Solutions for CSR, Ethics Management
Who Is Right for the Program This program is designed primarily for middle level and upper middle level executives who direct corporate social responsibility programs at large and established companies. Senior executives who have profit-and-loss responsibilities can also benefit from this program. ICCSR encourages Individuals or teams from companies representing a variety of industries to apply for this course.
Admission A Full time Candidate and working professional should have completed graduation with minimum 55% marks aggregate. Admission to Working professional Program is highly competitive and based on professional achievement and organizational responsibility. The executive should have a minimum of five years experience having worked in public or private corporations or in development sector.
Program Fee Program fee for Full Time students: Rs. 5,00,000/- includes admission fee, tuition fee, case and study material. Program fee for Working Professionals (Distance Learning): Rs. 4,00,000/- includes admission fee, tuition fee, case and study material. Talk to our office to know more about how to pay your fees in 2 interest free installments.
Financial Assistance Limited numbers of scholarships are available and applicants having outstanding academic record, relevant work experience can apply for tuition remission, scholarships or assistantships that are offered to students who meet the criteria. Educational loan is available from HDFC bank and other banks.
Placement Assistance ICCSR is in talks with many companies and there is dearth of CSR trained professionals and hence all full time candidates are expected to get promising careers in PSUs, Corporations and all over, since MS degree is valid all over. All the students passing out of program will be given internship and placement assistance.
Application Process Our Admissions Committee takes great care to choose individuals with exceptional character as well as relevant academic and extracurricular strengths. Candidates seeking admissions to the program for full time and working professionals need to submit their Application forms along with credentials to support their candidature. All candidates are required to email the scanned copies of their Photograph, Degree certificates, Marksheets, a half to one page Essay, CV in case they have work experience, along with the filled up Application Form. You can also courier the same or hand deliver to our Office at Mahape. Working professionals are required to send in a copy of their updated CV demonstrating their work experience of at least five years and add 2 references from their current or past work place. You may also include a letter from your employer should they sponsor your MS program. The Admissions Committee will strive to revert back within 72 hours after receiving the completed application form with all supporting documents.
Meet the Program Faculty
The MS Program on Corporate Social Responsibility and Ethical management is developed and taught by a core faculty of practitioners and thought leaders in the area of CSR. The reputed global faculty includes: Martin Neureiter, Course Director Founder, CEO - CSR Company, Chair - Implementation Task Group, ISO 26000, Scientific head of PG education at University of Applied Sciences Vienna for CSR, lectures at the St. Gallen Management Institute, Switzerland and coaches at CEO level. Besides authoring several books on CSR, he advises companies worldwide such as SAP, National Bank of Abu Dhabi, Vivacell Mobile phone and others. He is the Program Director, MS Program in CSR and Ethical Management.
consulting firm and within months was appointed Managing Director of its India practice.
Toby Webbs Chairman, Ethical Corporation Faculty - Birkbeck, University of London, CSR Advisor to British Government advising the Prime Minister
Rajesh Tiwari DG & CEO - Indian Centre for CSR formerly Group Director at Reliance, Global CSR expert, Founder Tikona Digital. He is an alumnus of University of Hull.
Dr. Panagiotis Panagiotakopoulos Specialises in Ecolabel Strategies, extensive teaching at Democritus University of Thrace and National Technical University, Athens.
Christian Katholnigg Holding a university degree in economics, he has been consulting clients in the field of CSR and management systems for more than a decade and is an expert and auditor for EMAS, ISO 14001; OHSAS 18000 or SA 8000. A proven expert in green building and a Certified Management Consultant, he is also an accredited member to the CSR Consultants Group of the Austrian Chamber of Commerce (WKO).
Satish Jha Chairman, ECCO Electronics Satish Jha brings two decades of international business experience gained at Fortune 100 companies such as HoffmanLa Roche, Caremark, boutique firms like James Martin & Co, META Group and mid size institutions such as Adventist Healthcare on the one hand, and a successful social and early investor experience, on the other. Starting out as a global head of information management shortly after completing his MBA, he moved on to lead the healthcare and pharmaceutical practice of a
Irene Daskalakis International CSR Consulting, Global Sustainability Expert & trainer, alumnus of George Washington University, DC & Athens University of Economics & Business
Karin Huber Karin is holding a degree in communication and psychology from University of Vienna, Austria as well as an academic degree in CSR-Management. Being an expert on CSR strategy development and stakeholder communication she consults clients from all kinds of industries and organisations. Karin lectures CSR and CSR-Communication at several Universities.
Detailed biographies of the faculty is available on our website: www.iccsr.com
Contact: Dean of MS program: Brahma Prakash Tripathi Tel: +91 22 2778 8481 / 82 Or Fax: +91 22 2496 6803 Email your queries to email@example.com Mobile: +91 99301 73352 For further assistance, contact: ICCSR - Global Center for CSR Knowledge Campus office at: Address: 601, 6th Floor, Technocity, Plot No. X4/5 A, TTC Industrial Area Mahape, Navi Mumbai- 400701 (India)
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Carlos Ghosn | President and CEO, Nissan Motor Co., Ltd.
â€œCSR is foremost in the minds of the
leaders of the companyâ€? 14 | CSR Today | November 2013
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Nissan has performed well coming out of the financial crisis that started in 2008 and is charting a bold course to the future of zeroemission mobility with the Nissan LEAF, the first affordable, massmarketed, 100%-electric car. But the earthquake that shook eastern Japan on March 11, 2011, has presented the company with a new set of challenges to overcome, as well as the opportunity to reconsider the nature of the company as it again confronts crisis. Corporate social responsibility (CSR) specialist Peter David Pedersen asked Nissan President and CEO Carlos Ghosn about Nissan’s approach to CSR issues and his views on the future of the company and global mobility. Peter David Pedersen: The massive earthquake and tsunami on March 11 brought deep change to the Japanese economy and business environment. In a time of crisis, do you see corporate social responsibility taking on greater importance or new meaning for corporations? Carlos Ghosn: We face a shifting risk envi-
ronment at all times, not just at times of major disasters. No company, no matter how far back its tradition goes, can stay the same and survive in a state of constantly changing risk. Managing risk flexibly and effectively is a key to long-term success. For Nissan, risk management—which has crisis response as a major component—is always a key part of fulfilling our corporate responsibility to society. The role of CSR does not change when we face a disaster on the scale of the March 11 earthquake and tsunami, but it does stand out in sharper relief in times of crisis. Pedersen: You recently reorganized the way Nissan manages CSR issues, setting up a direct line of communication between the CSR officer and you
as CEO. Why have you restructured at this time? Is there something in the business climate that makes such a change imperative for Nissan? Ghosn: I think this is a normal evolution,
although it has been accelerated by our experiencing two major crises in recent years—first the financial crisis that started in 2008 and, second, the 2011 earthquake. When events of this magnitude happen, suddenly the values that were considered obvious in society become less obvious and people question the values of corporations. People both within and outside Nissan revisit fundamental questions about the purpose of the company: What is its reason for being? What is it working for? What relative weight does it place on its values? When we created the direct line of communication between the CSR officer and the CEO, we sent an extremely important signal that CSR is foremost in the minds of the leaders of the company. Everything we do has a social meaning—not only in terms of technology, but also what we are doing to support communities. And it’s not sufficient just to do it; we give meaning by communicating our actions to people so that
Peter David Pedersen Chief Executive, E-Square Inc. Chief executive of E-Square Inc., a sustainability consultancy in Tokyo, Japan. Has extensive experience working with Japanese multinational corporations on sustainability and CSR issues, in particular facilitating vision and strategy building. Is also a much sought-after moderator of stakeholder dialogues.
November 2013 | CSR Today | 15
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Everything we do as a company has meaning in light of CSR, and now the CSR team can make direct suggestions about what new priorities and new actions we need, confident that they are being heard at the top level of the company.” they understand their importance and the reasons why we are pursuing those actions. I am not micromanaging Nissan’s CSR activities, but I am paying attention to Nissan’s CSR priorities, resources and content. This direct link from the CSR group to my office ensures swift action. There is no unnecessary debate about our decisions. We need no arbitration once a policy is set; we just have to take action. This is why repositioning CSR in the company—clarifying our priorities—was important. Everything we do as a company has meaning in light of CSR, and now the CSR team can make direct suggestions about what new priorities and new actions we need, confident that they are being heard at the top level of the company. Pedersen: Does this mean Nissan has staked out a new leadership role in the area of CSR? Ghosn: It is not for us to say whether we are
leading or innovating in this field. Whether Nissan is ahead of the game or below average is something for people outside our organization to decide. We are starting from what we feel society needs and what we are capable of doing, and we are taking the ini-
16 | CSR Today | November 2013
tiative in that direction. If we find ourselves in a leadership position as a result, that’s great. But CSR is not a competition. That being said, we are working very hard to be a leader in certain areas that are often defined as CSR-oriented for their eco-awareness. We have set a course toward zero-emission mobility and sustainable mobility for all. Nissan is a business. We develop our technologies and products in order to develop our company and to meet the demands expressed—or yet to be expressed—by society. In the case of zero-emission mobility, we believe this demand is coming. The signs are evident. Customers aren’t saying, “I want to buy an electric car”; they are saying, “I want something different” or “I want something compatible with the environment.” The need exists, and it’s a good need. Environment-compatible products will be beneficial for Nissan because consumers want them, and they will be beneficial to society as a whole. We are developing the technology in order to make them an affordable, mass-marketable, zero-emission reality. Pedersen: This reality is already here in the form of the Nissan LEAF. It’s ex-
citing to see that you’re advancing the Nissan LEAF not as a green niche product, but as a global strategy vehicle. Ghosn: The Nissan LEAF is our flagship
eco-car. It’s a true game-changer. This initiative is not purely socially driven, of course. We need to justify our investment with a return on our money. But we are not blind to the fact that we are achieving something positive by promoting this technology and product. In a way, we are in a sweet spot with the Nissan LEAF. We are bringing to market a product that consumers will want while doing something good for the planet. We are not going to see an immediate transformation. But looking at the industry five or 10 years down the road, we will see the return of the mass-marketed, popular electric car. This will be a major new chapter in automotive history. Pedersen: You’re initially rolling out the Nissan LEAF in Japan, the United States and Europe. But Nissan isn’t focused solely on these industrialized markets. This new chapter will be more global in nature, right? Ghosn: This is another facet of sustain-
ability and another key part of Nissan’s
cover | story CSR approach: our drive for mobility for all. As people in the world’s growth markets become more affluent, they reach out for the mobility that only cars can give them. Nissan is ready to meet their demand with affordable options and global growth models—vehicles that compete in important segments all around the world. If all this mobility depends on fossil fuels, though, we will face growing concerns. Will we have enough oil? What will happen to oil prices? What kind of emissions will increasing mobility produce? But when zero-emission cars are a mass-marketable part of reality, and not niche products, they will breathe new life into the idea of sustainability. What we are doing with the Nissan LEAF, as well as with our highly efficient PURE DRIVE gasoline-powered cars, is displaying options. We are showing people around the globe that low- and zero-emission mobility for all is within reach. We are pointing the way toward solutions that may help us avoid potential ecological crises in the future. Pedersen: To return to the theme of crisis, particularly the March 11 disaster in eastern Japan, do you see Nissan engaging in the creation of zero-emission infrastructure or encouraging new forms of mobility as rebuilding takes place? Ghosn: I don’t think we’ll see a specific re-
gion of Japan implementing special efforts toward this sort of goal. But every crisis brings transformation. The earthquake, tsunami and nuclear crisis will be no exception. It’s too early to predict what kind of transformation will occur or how deeply it will affect Japan, but some interesting signs are already appearing. In one of the communities most affected by the earthquake, one form of aid that residents asked us for in particular was electric cars because no gasoline was available in the region. We made available a number of Nissan LEAFs, which people told us were a great help. I don’t think there is any doubt that Japan will shift its energy policy. We’re going to see
When we created the direct line of com-munication between the CSR officer and the CEO, we sent an extremely important signal that CSR is foremost in the minds of the leaders of the company” moves in terms of nuclear power, in terms of electric vehicles. A great many changes are happening. The crisis is opening people’s eyes to the need to transform Japan’s society and energy systems, and the course of this transformation will become clearer as the lessons of March 11 are digested and adapted by Japanese society. Japan is now sending a strong message of resilience. Nissan, too, has put all its plants back online, including our Iwaki Plant, which was hit hard by the quake. Overcoming crisis like this, ensuring that our people have a place to work and a way to contribute
to the economy as Japan recovers, is one way we fulfill our responsibility to society. When I first came to Nissan in 1999, the crisis we faced was internal. We needed to put our house in order. Over time we made that house strong enough to weather external storms like the financial crisis of recent years and the natural disaster of 2011. But a company is only as strong as the society around it. We recognize the need to take the initiative, for instance, by helping disaster victims. At Nissan we support the people and society around us. This is our CSR. Copyright: Nissan November 2013 | CSR Today | 17
Architects of a Better
World The UN Global Compact-Accenture CEO Study on Sustainability 2013
18 | CSR Today | November 2013
cover | story
n the world’s largest CEO study on sustainability to date, more than 1,000 top executives from 27 industries across 103 countries assess the past, present and future of sustainable business; discuss a new
global architecture to unlock the full potential of business in contributing to global priorities; and reveal how leading companies
are adopting innovative strategies to combine impact and value creation. The global economy is not on track, say CEOs—and business is not doing enough The global economy is on the wrong track, and business is not playing its part in forging a sustainable future. This is the strong view from our study of more than 1,000 CEOs across the world: just 32% believe that the global economy is on track to meet the demands of a growing population within global environmental and resource constraints, and a clear majority—67%—do not believe that business is doing enough to address global sustainability challenges. During the first CEO Study in 2007, business leaders appeared to be beginning to align core strategy, operations and supply chains with active efforts to improve performance on social and environmental impacts. In 2010, our conversations suggested that a new era was in sight: a summit of achievement in which sustainability— the active management of social, environmental and governance issues as a part of core business—would be embedded into companies worldwide. CEOs saw the global economy progressing towards a “peak”, where markets would be aligned with the requirements of sustainable development,
and sustainability leadership would be incentivized and rewarded. But three years later, in 2013, our survey of 1,000 global CEOs, from 27 industries across 103 countries, supported by indepth interviews with more than 75 CEOs globally—the largest study to date—reveals that business efforts on sustainability may have reached a plateau. It is clear that the corporate sustainability movement is broadening, with a deeper awareness and commitment evident in every quarter of the world, but many business leaders express doubts about the pace of change and the scale of their impact. Far from continuing to a new peak of achievement, many companies have become stuck on their ascent, unable to scale sustainability at the pace required to address global challenges and achieve business success. To build upon individual pockets of real innovation, as companies large and small find new ways to combine sustainability impact with value creation, CEOs now call for a global architecture that can enable business to scale sustainability efforts from individual, incremental achievement toward new structures and systems that can tap into the evident commitment of business leaders around the world and unlock
the full potential of business in contributing to the world’s most pressing challenges.
Sustainability is firmly on the CEO agenda, but CEOs express a sense of frustrated ambition Some 63% of CEOs expect sustainability to transform their industry within five years—and 76% believe that embedding sustainability into core business will drive revenue growth and new opportunities. But underlying our in-depth conversations with CEOs is a sense of frustrated ambition. Business leaders see sustainability reshaping their business environment and are committed to reorienting their companies to take advantage as they scale up their contribution to global priorities. But even as they make progress in embedding sustainability through their business, it is becoming increasingly apparent that they are constrained by market expectations, and are struggling to quantify and capture the business value of sustainability. In 2010, CEOs questioned as part of our study expressed a bullishness that, with action on the part of business, investors, governments and other stakeholders, markets would begin to align with sustainNovember 2013 | CSR Today | 19
cover | story able development priorities. As sustainability became an ever-greater factor in determining success, CEOs were confident that business could lead the way in tackling sustainability challenges. This year’s study exposes a more cautious perspective. CEOs remain convinced that sustainability will transform their industries; that leadership can bring competitive advantage; and that sustainability can be a route to new waves of growth and innovation. But beneath this commitment, frustration is clearly evident: business leaders are in many cases unable to locate and quantify the business value of sustainability; are struggling to deliver the business case for action at scale; and see market failure hindering business efforts to tackle global challenges. CEOs see business caught in a cycle of “pilot paralysis”—individual, small-scale projects, programs and business units with an incremental impact on sustainability metrics—and while they see a role for business in promoting sustainable development, their responsibilities to the more traditional fundamentals of business success, and to the expectations of markets and stakeholders, are preventing greater scale, speed and impact.
CEOs are committed to taking action on sustainability – but may be restricted by the economic climate In many cases, business leaders feel that given the structures, incentives and demands of the market, they have taken their companies as far as they can. While a few leading companies are deepening and intensifying their commitments on sustainability, others are growing skeptical that addressing global sustainability challenges will ever become critical to their business success within current economic systems and markets. In our 2010 study, 93% of CEOs reported that sustainability would be “important” or “very important” to the future success of their business. This year, our survey of 1,000 CEOs shows an apparently similar story: once again, 93% of CEOs regard sustainability as key to success. But beneath the headline, an important—and surprising—shift emerges. In 2010, 54% 20 | CSR Today | November 2013
Business leaders see a plateau effect in sustainability—and are struggling to make the business case for action
of CEOs reported that sustainability would be “very important” to the future success of their business; in 2013, this figure falls to 45%. This drop is striking in the context of intensifying global challenges: a decline in the perceived importance of sustainability among global business leaders is not encouraging for those working to align business with sustainable development. Additionally, there appears to be a refocusing—perhaps understandable in the current economic climate—among global business on short-term issues close to home. Nearly two-thirds of responding CEOs, 64%, selected “growth and employment” among their top priorities to address for the future success of their business, a reflection of the economic priorities foremost in the minds of many business leaders. Other challenges closely related to core business are also uppermost in the minds of executives: education (40%) and energy (39%) make up the top three, followed by those issues more closely tied to social and environmental development. This year, 29% of CEOs regard climate change as one of the most important sustainability challenges for the success of their business, while 18% report health to be a priority, 16% include poverty eradication among their top three issues, and 14% regard water and sanitation as an important issue for their business to address.
Amid prolonged economic pressures and multi-speed recoveries, this skepticism in the influence of sustainability, and the refocusing on short-term priorities, may translate into a slackening of individual efforts to embed sustainability into core business— and a collective plateau in the impact of business on global challenges. Business, CEOs believe, is not leading on sustainability in the way that was predicted three years ago. And our data suggests a disconnect between CEOs’ perceptions of global progress and their opinion of their efforts and achievements: fully 76% of CEOs are satisfied with the speed and effectiveness of execution on their own company’s sustainability strategy, and nearly twothirds believe that they are doing enough to address sustainability challenges. CEOs clearly recognize the scale of the global challenge—but may not yet see the urgency or the incentive for their own businesses to do more and to have a greater impact. This disconnect suggests that a gap persists between the approach to sustainability of the majority of companies globally—an approach centered on philanthropy, compliance, mitigation and the license to operate—and the approach being adopted by leading companies, focused on innovation, growth and new sources of value. When asked about the barriers to further progress in embedding sustainability into their organizations, CEOs see one factor rising more than any other over the past decade: the lack of a link between sustainability and business value. In 2007, just 18% reported a failure to trace such a link; in 2010, this rose to 30%, and this year more than a third—37%—report that the lack of a clear link to business value is a critical factor in deterring them from taking faster action on sustainability. Our conversations suggest a complex and rocky journey as companies seek to identify and quantify the business value of sustainability: those companies at the very
cover | story beginning of the journey are finding it hard to make the link to value for their business, seeing sustainability instead as a primarily philanthropic or charitable enterprise. As companies mature, the opportunities for value appear boundless: if they can engage consumers, communicate with investors and forge better relationships with governments, the reward for leadership on sustainability will be lucrative. But as companies adopt a genuinely leading position on sustainability, going beyond the demands of external stakeholders to adopt sustainability as a core element in their strategies and positioning for advantage, they once again encounter significant challenges in forging links to quantifiable business value. Despite the search for new conceptions of value—“shared value” for example—CEOs are clear that action must be justified against traditional measures of success. The more adept companies become at measuring and tracking their own sustainability performance, the more their frustration grows at an apparent inability to tie performance improvements and industry leadership to the fundamentals of business value beyond incremental gains. Signals from consumers are mixed, they discover; investor interest is patchy. During our last study in 2010, many of these companies appeared to be heading toward the peak; now, beyond a few leading companies that have struck out alone, they find themselves on a plateau, often unable to see the path to the summit.
CEOs call for a global architecture to unlock the full potential of business In this year’s study, 84% of CEOs believe that business should lead efforts to define and deliver new goals on global priority issues. Unlocking the potential of the private sector, CEOs believe, demands a step change in ambition and action: companies can have more impact on global challenges not simply individually through new products, services and business models, but collectively through innovating new systems, markets and structures. At the heart of this transformation will be a new commitment
to collaboration, as businesses look beyond the firm to forge new systems that can establish a global architecture. To move beyond the plateau and enable business to lead the way to the peak, CEOs see two essential elements on the agenda for action. First, CEOs call for active intervention by governments and policymakers, in collaboration with business, to align public policy with sustainability at global, national and local levels, including hard measures on regulation, standards and taxation. In parallel, business leaders point to the need to learn from those companies already leading the way, harnessing sustainability as an opportunity for innovation and growth, delivering business value and sustainability impact at scale.
The agenda for action: CEOs call for government intervention to align public policy with sustainability There is strong and vocal support among CEOs for governments to play a leading role in shaping the landscape for sustainability at global, national and local levels: 83% of CEOs see an increase in efforts by governments and policymakers to provide an enabling environment for the private sector as integral to advancing sustainability. Some 85% of CEOs demand clearer policy and market signals to support green growth,
and, in the context of the discussions on the United Nations post-2015 development agenda, 81% of executives emphasize the need for governments to set a policy framework for “economic development within the planetary boundaries of environmental and resource constraints” for the global economy. Business leaders believe that only with greater government intervention—at global, national and local levels—can sustainability move from sporadic incremental advances to a collective and transformative impact. This unequivocal call for greater government intervention in the market, from 1,000 CEOs in the largest study of its kind ever conducted, may mark a watershed in the progression of corporate sustainability. The transition toward companies promoting sustainability through the business case promised a new era of market solutions to global challenges, but in the face of limited progress business leaders are beginning to express doubts over the potential for greater scale and speed without active government intervention. From our discussions, it is clear that CEOs have not lost faith in the role of business; far from it. Rather, we see a strong recognition that market rules need to be shaped to create a level playing field and a race to the top that rewards sustainability performance.
The agenda for action: Seven steps to sustainability and success Leading companies are not waiting for policymakers to act. Our conversations with CEOs suggest that in the absence of government intervention, some are beginning to harness the potential of sustainability: moving from a reactive approach of responding to societal expectations and regulatory demands, leading companies are now driving sustainability as an engine for innovation and growth. The advances of these leading companies, and their adoption of large-scale, collaborative projects targeted directly at value creation through addressing the priorities of global sustainable development, are beginning to demonstrate how business impact can be scaled beyond incremental advances and efficiency gains. November 2013 | CSR Today | 21
cover | story This year, the Global Compact and Accenture study team set out to investigate the links between CEOs’ attitudes and the performance of their companies against traditional business performance metrics and sustainability leadership indicators. To our knowledge, this is the first time that this has been undertaken with a CEO-level group. While extensive work has been done on the correlations between a commitment to sustainability and traditional metrics of business performance,4 the CEO Study presents a unique opportunity to examine how business leaders’ beliefs, attitudes and behaviors influence their strategies and investments, as well as set the trajectory of their companies in driving advantage through sustainability. An examination of survey responses from those companies covered by this year’s study and by Accenture’s long-term High-Performance Business research program produces the early indications of a potentially striking conclusion. CEOs of companies that combine externally-recognized sustainability leadership with marketleading business performance, as measured by traditional metrics including revenue growth, profitability and shareholder returns, approach sustainability in markedly different ways to those who are failing to achieve this distinction—with different motivations, different influencers and different areas prioritized for investment, innovation and action.
Transformational Leaders are approaching sustainability differently, providing a model for greater impact and value creation Together with the insights from our indepth conversations with CEOs, our findings may begin to lay the foundations of a deeper understanding of how companies can drive sustainability to competitive advantage. At its heart is a different approach, moving beyond reactive, incremental responses to external pressures and toward a new understanding of sustainability as an opportunity for innovation, competitive advantage, differentiation and growth. 22 | CSR Today | November 2013
study is the emergence of a two-speed world in sustainability, between those companies still reacting to external expectations on sustainability and focusing on incremental mitigation, and those that see sustainability through the lens of growth and differentiation. For leading companies, many CEOs told us that the urgency of global challenges provides an opportunity to differentiate their products and services; to access new market segments; and to grow into new regions, countries and areas where their products can meet a pressing need. 3. Value & performance “What gets measured gets managed.”
Leading CEOs are already uncovering strategies for sustainability that allow them to deliver both value creation for their companies and impact on global challenges; they are not waiting for others to act, but are actively creating real value for consumers, investors and society. From our research, CEOs see seven key themes that can guide their own thinking and actions, as well as transforming their companies’ strategies, business models, value chains and industries in order to achieve sustainability leadership and high performance. 1. Realism & context Understanding the scale of the challenge—and the opportunity.
Throughout our interviews, it was clear that companies taking the most ambitious action on sustainability were also the most realistic about the scale of the challenge— and are more likely to admit that business is not doing enough. Understanding the challenge also allows these companies to appreciate the opportunity for future growth in providing solutions to sustainability issues and to target strategies to achieve it. 2. Growth & differentiation Turning sustainability to advantage and value creation.
One of the clearest insights from this year’s
From carbon emissions to water footprints, tracking environmental measures is now commonplace across industries. Our research suggests that, for companies seeking to go beyond incremental change and tackle global sustainability issues, the challenge is two-fold: not just to measure and manage metrics of reduction and mitigation, but also to quantify the value of sustainability initiatives and more sustainable business models to the company, and to track their impact on the communities in which they operate. 4. Technology & innovation New models for success.
Our data suggests that leading companies are turning to innovation and technology. Environmental and resource constraints, and growing social pressures, are acting as a stimulus for innovation. From investment in renewables, to intelligent infrastructure enabled by machine-tomachine communications technology, to new closed-loop business models, leading companies are securing business advantage through innovative R&D and the deployment of technologies ranging from cloud computing to analytics. 5. Partnerships & collaboration New challenges, new solutions.
We have seen a growing confidence from CEOs over the last decade that business can provide solutions to tackle global challenges. This year, in the context of intensifying
cover | story pressures and flagging efforts, CEOs more readily acknowledge the role of collaboration and partnerships in meeting their ambitions on sustainability. Business can lead the way, they believe, and can maximize companies’ impact through close partnerships with governments, policymakers, industry peers, consumers and NGOs.
pact, but recognize a need to play a part in collaborative solutions with governments and other stakeholders. Business leaders’ advocacy and public commitment will be integral to further progress.
6. Engagement & dialogue Broadening the conversation.
In our 2010 study of CEOs participating in the Global Compact, we investigated individual companies’ progress in integrating sustainability into core business and turning environmental, social and governance issues to business advantage. As we approach the target year of the Millennium Development Goals in 2015 and turn our attention toward the leading role that business can play in defining and delivering the post-2015 development agenda, CEOs believe that we should judge progress by a different standard. While we can celebrate the individual achievements of sustainability leaders pushing the boundaries of what is possible within current structures, markets and industry models, there is a growing recognition that even the success currently achieved by the most advanced companies is happening within an unsustainable system. As business leaders across the world come together this year to set out an architecture to align business action with global priorities, there is a clear and unequivocal call for greater ambition, greater speed and greater impact. CEOs see the Global Compact at the center of this architecture. The Global Compact now comprises nearly 8,000 companies and 4,000 civil society organizations, making it the largest corporate sustainability initiative in the world today. But numbers tell only a part of the story. Through the Global Compact, issue platforms have taken shape on women’s empowerment, children’s rights, climate and energy, water management, and anti-corruption; its Women’s Empowerment Principles and Caring for Climate initiatives, for example, are the world’s largest business platforms for action on these issues. In this year’s survey, the Global Compact’s role in collecting and sharing good practice examples, developing tools and guidance
Business leaders are increasingly conscious of the need to establish a constructive, twoway dialogue with consumers and local communities; regulators and policy makers; investors and shareholders; employees and labor unions. Rather than simply acting and then communicating, CEOs are actively engaging stakeholders to negotiate the role of their business in addressing global challenges. 7. Advocacy & leadership Shaping future systems.
Leading CEOs are clear that business efforts are not sufficient to set the global economy on track—but believe strongly that business should lead the way toward defining and delivering a sustainable global economy, not least through the post-2015 development agenda. They are realistic that individually they can only have so much im-
Architects of a better world: Aligning business action with global priorities
materials, and establishing platforms for collective action are the most powerful actions called for by CEOs, signifying a recognition that to accelerate progress and achieve greater impact, companies will have to learn from others within and across industries and actively collaborate “on the ground.” CEOs are unequivocal in their belief that the global economy is not on the right track—and that business is not doing enough to address global sustainability challenges. They see their companies stuck on a plateau of good intentions, uncertain of the way to the summit. But among sustainability leaders, we can see the beginnings of a collaborative, systems approach to sustainability, focused on the impact business can make. These companies are seizing opportunities at speed through building skills, measuring value and performance, and improving the dialogue with consumers, investors and governments. In the innovations of these leaders, we can see the seeds of a new approach to sustainability, with pockets of real innovation beyond the four walls of the firm: collaborating within and across industries and sectors, and working closely with stakeholders to develop the beginnings of transformational change that can unlock the full potential of business in contributing to global priorities. November 2013 | CSR Today | 23
Sustainability and innovation, how far have we come? A majority of companies (52%) display a surprising ability to maintain commitment to sustainability objectives despite the fi- nancial crisis. by toby webb
’ve been pondering this question since yesterday when I attended the CocaCola Enterprises / Economist Intelligence Unit conference on sustainable innovation in London. From the presentations, and in general, there seems to be innovation, depending on how you define it, in the following areas: • Recycling (Coca-Cola, Umicore) • Services (Zipcar) • Product design for closed loops (PET plant plastics, electronics) • Energy efficiency (lights) • Transport ((hybrid/electric cars, integrated urban mobility schemes) • Power generation (solar and wind mainly, some nuclear) • Agricultural technologies (Urban food growth, drip irrigation etc) • Materials (new lightweight and more efficient, recylable • Consumer behaviours (for Coke, this is around selling more varied and lower calorie products and encouraging recycling) (One other point of note is that the Goldman Sachs speaker (GS Sustain) suggested that increasingly asset owners are
24 | CSR Today | November 2013
asking fund managers to be UN Principles for Responsible Investment initiative signatories. He didn’t elaborate and the evidence appeared to be rather anecdotal, as it often is on this question. Even if that is the case, it’s not clear that PRI signatories are changing much in their mainstream portfolios, from what I have heard from responsible investment experts) I left the conference in two minds. On the one hand it was good to hear CEOs, MDs and board members of large companies discussing real business models based on sustainability thinking. On the other hand, all the examples were fairly well known and established. I had hoped to hear about some new examples. But as someone who has organised and run more than 100 conferences, I know how hard that can be, so don’t wish to appear overly critical. I taped a podcast interview for Ethical Corporation with Coke’s European president, Hubert Patricot, and will post a link to it soon. His speech from the conference is here. Coke and the Economist Intelligence Unit have also put out a short report some current thinking on sustainability strategy
(a broad church, that term). Take a look at it here.
Some of its key findings include: Sustainability remains a strong focus for companies despite financial obstacles:
A majority of companies (52%) display a surprising ability to maintain commitment to sustainability objectives despite the financial crisis. Although business executives most frequently identify financial challenges (44%) as the leading obstacle to the implementation of their company’s sustainability strategy, nearly half (49%) recognise sustainability as a source of competitive advantage. The gradually improving macroeconomic environment may further ease financial constraints. Top executive involvement is key to implementing a sustainability strategy:
Senior leadership engagement is identified as the leading success factor in implementation of sustainability initiatives (44%). There are concrete steps to make this hap-
Sustainability | Column pen. Some companies are linking management compensation to meeting their sustainability targets. Others are reshaping their functional structure to align their sustainability initiatives with their business development. This makes sense as sustainability is shifting from a single department to one that spans several functions. Indeed, successful businesses are often building linkages outside of the companyâ€™s bounds: this requires the guidance and buy-in of senior executives. Better reporting is a crucial starting point.
At present under a third (31%) of respondents include environmental metrics in their financial reporting and still fewer (26%) have all departments report on their sustainability endeavours. For companies to identify the most relevant issues for their businesses and plan how best to direct their investments, senior executives need access to meaningful data. Thorough reporting can be useful externally to engage stakeholders and internally when building a solid business case. Some leading companies have managed to link sustainability, innovation and competitive advantage.
Although, cutting costs while delivering sustainability objectives are the most popular sustainability initiatives. Two-thirds of companies are engaged in waste reduction and recycling, while more than half (54%) have embarked on energy efficiency and carbon reduction initiatives. These initiatives do not change the underlying business model but they do realise operational greater efficiencies. While some companies have managed to link sustainability, innovation and competitive advantage, others remain focussed on the brand implications of their sustainability strategy. Businesses successfully engaging with NGOs or universities are more likely to embark on ambitious sustainability endeavours.
These include investing in renewable energy (47%) and pursuing sustainable sourc-
Although, cutting costs while delivering sustainability objectives are the most popular sustainability initiatives. Two-thirds of companies are engaged in waste reduction and recycling, while more than half (54%) have embarked on energy efficiency and carbon reduction initiatives. ing (49%) while the average is only 33% in each of these areas for companies less effectively connected to these sorts of civil society organisations. Drawing in a wider network of stakeholders tends to go handin-hand with successfully implementing a sustainability strategy. Almost a third (27%) of respondents are seeking to innovate through partnerships with NGOs.
contributing to their sustainability innovations with more than four in ten (41%) using data analytics to design more sustainable products. Crucially technology is opening up opportunities to collaborate more closely with suppliers and engage customers with a companyâ€™s sustainability goals. About the author Toby Webb is the founder and chairman of Ethi-
New technology platforms are playing an important role in developing more sustainable business models.
cal Corporation and Member Advisory Board Indian
More than four in ten respondents (41%) are harnessing technology to generate new ideas and platforms as part of their sustainability objectives. This can mean tapping into industry insights and customer feedback or tracking resources through the product lifecycle. Indeed, over three-fifths (61%) of respondents say technology is
companies and other clients. He teaches Corporate
Centre for CSR. Toby is also co-founder of Stakeholder Intelligence Ltd. SI provides training, facilitation, advice and contract research on sustainability to large Responsibility at Birkbeck College, part of the University of London, on the MSc. Corporate Governance & Ethics and on the Strategic Human Resource Management MSc. From 2006-8 Webb co-chaired the UK Conservative Partyâ€™s Working Group on Corporate Responsibility, which outlined CR policy, some of which the current UK Government is now implementing. November 2013 | CSR Today | 25
Owning Sustainability: The CSO vs. the CEO Is sustainability best centralized or decentralized?
ellen weinreb managing director, weinreb group, executive search placing sustainability professionals. government is now implementing.
ast Fall, the Weinreb Group published CSO Back Story, identifying 29 Chief Sustainability Officers with that exact title working in the U.S. for publicly traded companies. Of the 29, we highlighted five CSOs (from SAP, EMC, AT&T, UPS and Dupont) whose perspectives included the value their role brings to their company’s longterm strategy. In each of their cases, the CSO “owns” sustainability. But what happens when a chief sustainability officer doesn’t exist? Who should rightfully own sustainability at companies? Accenture’s recently released white paper The Chief Executive Officer’s Perspective makes the argument that sustainability could be owned by leadership in general 26 | CSR Today | November 2013
without making it any one executive’s core responsibility, compellingEnvironmental Leader to ask Are Chief Sustainability Officers on their Way Out? In September 2011, I wrote a similarly titled article but with a different perspective, wondering whether CSOs are Everywhere, But Are Their Days Numbered?
Owning Sustainability: The CEO Perspective There are some CEOs who say that they own sustainability. After all, they are ultimately accountable for a company’s performance. Coca-Cola CEO Muhtar Kent has often emphasized that as CEO, sustainability is part of his job.
“I wish companies were at the stage where everyone was inherently willing to own and operationalize sustainability strategy, but for now I don’t think that’s the norm.”
Sustainability | Column “I have not appointed another one and never will. That’s me,” he told Forbes in a recent interview. His reasoning: “That’s my responsibility. It starts at the top and it is driven and permeates through the entire organization from the top.” As Bea Perez’s appointment as CocaCola’s first Chief Sustainability Officer shows, Kent just might have misread his leaves, realizing that sustainability needed one individual to “own” the day in and day out responsibility of the function. However, this still doesn’t delineate the value a CEO can bring to the sustainability function. Their perspectives are valuable -open any CSR Report, and you will read the CEO perspective on page one – and while easy targets, their voice is consistently perceived as brand reputation. I was surprised then to see that Accenture’s latest white paper only included two independent CEO perspectives. I can think of a fair number that have gone on the record to share their perspective: Brian Dunn from Best Buy, Carlos Brito from Anheuser-Busch InBev, Andrea Jung from Avon Products, Inc., Anders Dahlvig from IKEA, Fadi Ghandour from Aramex International, and John Donahoe from eBay, to name just a few. While the white paper produces some interesting findings, I found myself questioning its methodology. The title “CEO Perspectives” is misleading by implying a widely held perspective of chief executive officers, when here are only two independent CEO voices quoted in the report: Clara Gaymard, CEO of General Electric (GE) Paris (a subsidiary of GE) and Idar Kreutzer, CEO of Storebrand, a Norwegian financial services business. Other than brief contributions from Accenture’s own CEO, who may or may not be impartial, the report did not interview any U.S. CEOs to offer a comprehensive overview of the chosen topic. Further, the white paper misidentifies Jean-Pierre Clamadieu as the CEO of Rhodia when he is in fact, the company’s chairman after a recent merger with Solvay. Now on to its findings:
Oligarchical Sustainability “Some argue that the chief sustainability
officer is already a dying breed,” states the white paper. In other words, some companies choose to have one person responsible for sustainability while others have a more decentralized approach. In the case of GE France, for example, Gaymard suggests that “chief executive officers could decentralize sustainability via
strategy, but for now I don’t think that’s the norm. And even if it were, having a focal point is still a good idea. After all, most people understand that it’s their job to help the company be financially successful, yet we still have CFOs.” While the Weinreb Group report focused on individuals with the CSO title, most companies that have a sustainabil-
“Coca-Cola CEO Muhtar Kent has often emphasized that as CEO, sustainability is part of his job.” ad hoc incentives across the entire management team,” exemplifying GE in the process. She goes on to highlight that the organization appoints leaders to run specific initiatives, such as its major Ecomagination campaign, but otherwise spreads out responsibility across its leadership team. GE, however, is more the exception than the rule in that it has a very strong culture steeped in rigorous metrics taken seriously by all subsidiaries. Mandates from the top are taken care of without any one individual needing to represent it. This works for GE but not for most other companies.
Sustainability Owned by One Leader Now let’s look at the other end of the spectrum. The comments in response to the Environmental Leader story I mentioned above suggest that it is necessary to have one person responsible for overall sustainability function within a company. The CSOs we interviewed for the Weinreb Group report concurred. Gwen Ruta, Vice President of Corporate Partnerships for the Environmental Defense Fund, recently wrote about managing sustainability. She shared her perspective with me: “I wish companies were at the stage where everyone was inherently willing to own and operationalize sustainability
ity function also have one individual (with any number of titles) that really owns it the function. By being at the C-level, the chief not only enjoys more access and influence with other senior level leaders, she also has the influence to generate organizationalwide change. This brings us to today’s keyword: Embed.
How Do You Embed Sustainability? The GE France example is certainly a useful model for embedding sustainability where ownership is divided amongst leaders. The second buzzword is “sustainable” in the longevity sense of the word. What sustainability function has withstood the test of time? What structures put in place today can ensure the long term commitment to sustainability? The answer can be a visionary who as a leader also withstands the test of time. But even the Jeff Schwartz(s) – CEO of Timberland for 23 years – of the world have to leave eventually. What could withstand visionary leaders and change makers is a governance model where checks and balances are put into place to ensure the sustainability continues to bring value. Now that would truly be a sustainable business. Copyright: csrwire.com November 2013 | CSR Today | 27
Building an inclusive future The key challenge is to recognise and accept the problem of non-inclusion first and then making efforts of reversing the process by finding ways to ensure inclusiveness at home, society and the country level. Economic growth has contributed to wealth creation among few and resulted into rising income disparities and gaps between haves and have-nots leading to self indul- gent exclusive societies which solely want to enjoy the fruits of development without caring for poor and vulnerable. by sanjay kumar gupta
he word ‘Inclusive’ has become popular in its use – both in writing and speaking – in last few years especially in the development sector across the world. Phrases such as Inclusive Growth, Inclusive Development, Inclusive School, Inclusive Marketing, and Inclusive Discussion are commonly used these days. In common parlance word ‘Inclusive’ conveys all-encompassing and not leaving anything beyond it. However, in day-to-day lives we don’t find inclusiveness around us as voiceless, powerless, poor and vulnerable, though in majorities; seem to have been left behind in all walks of life. Rising income disparity, racism, human rights violations, crime against women, abuse of the old and children, beggars, and marginalisation of informal sector are some clear examples of non inclusion happening around us.
28 | CSR Today | November 2013
CSR | Society Why is the present situation today as it is today? Rigid and old mindset of generations, our thoughts and attitude that get influenced more by challenges of day-to-day life than universal values and principles, the rat race of acquiring more wealth, and adoption of all means by those in power to keep the status quo lest a change will force them out perpetuate a vicious cycle of division, exclusiveness, and inequality. Societal changes and government policies are surely responsible for such a state of affair but people’s own attitudes and degenerating family values are equally to be blamed but are often overlooked. The key challenge is to recognise and accept the problem of non-inclusion first and then making efforts of reversing the process by finding ways to ensure inclusiveness at home, society and the country level. Inclusive homes constitute inclusive society which in turn makes an inclusive country. Therefore, imagine achieving Inclusive Development, without focus on creating Inclusive Homes and Inclusive Society, is a mirage all of us seem to be following.
Inclusive Home The first question we need to ask ourselves is ‘do we have inclusive homes today’? I believe we don’t as is exemplified by rising number of nuclear families, financially strained, ignored, isolated and even abused old people, crime against women, divorce cases, and discrimination against people who work in our homes such as maid servants and other service providers. Inclusive home is not an ideal home where all members live in perfect harmony, a rarity in today’s world. Inclusive home is one where all important matters are discussed to build consensus and members bury their differences for a larger cause of staying together for happiness. Head of the family, mostly the main bread earner, guide, anticipates challenges, resolve conflicts, sets vision for an ideal home and make everybody try achieving it and in the process making them all live together. It is a home where elders are respected, spouses are given freedom to pursue their interests, supportive members are taken care and mem-
The second question we need to ask ourselves is ‘are we an inclusive society today’? I believe we are not as is clearly reflected in our day-to-day subtle discriminatory actions towards people of low economic status and engaged in specific occupations such as taxi drivers, beggars, maid servants, homeless, people living in slums and roadsides, the disabled, HIV/AIDS infected, and people engaged in petty businesses who are subjected to restrictive entry in many places, abuse, looked down upon, receive low payment and are not supposed to raise their voice even for their genuine rights. Economic growth has contributed to wealth creation among few and resulted into rising income disparities and gaps between haves and have-nots leading to self indulgent exclusive societies which solely want to enjoy the fruits of development without caring for poor and vulnerable, who are considered government’s sole responsibility. We, of course, can’t change the karmas of others but we can certainly change our attitude towards them and contribute to creating conducive support mechanism and developing pro-poor policies that addresses health, education, shelter and food needs which take away major chunk of their earning pie. The idea is not to make them ever dependent on freebies but addressing their basic needs should be the priority. Inclusive society is one where all sections of society, irrespective of their creed, caste and colour, live in harmony. Local leaders have specific responsibility to take a lead in this direction and become torch bearers of the cause.
gets the answer as perhaps most countries are not. In every country we may find tribal, aboriginals who are synonymous with poverty pockets, and infrastructure constraints put rural areas in disadvantageous position compared to cities that receive repetitive investments, and remain ahead on the growth curve and become engines of growth. Also, when majority is engaged in non-formal sectors, lack of policies to support them in terms of working capital requirement, skill enhancement, tax benefits/exemptions, marketing support, and legal protection from harassment by local authorities, remain a concern. Natural instincts and entrepreneurial attitude will surely make some communities move faster and reach early at the top of Maslow’s pyramid of self actualisation stage but for the majority, who remains at the bottom of pyramid and struggle for their daily survival, pro-poor government policies would be required. Harmony among different sects, equitable distribution of resources, equality of all human beings, and developing sensitivity towards nature is important to make an inclusive country and therefore, an inclusive world. There ever was such a period of inclusive growth or there would ever be such an ideal period remains an elusive answer but history shows that things happen for good only when we think and act upon them. Inclusive Approach resides in an Inclusive mind built over a period of time by Inclusive attitude which we develop by acquiring learning from actions of our parents in childhood or triggered by an act of discrimination or feeling of hurt or developing compassion for others. Inclusive approach involves a workable marriage between top-down and bottom-up approach by involving poor community in co-creation, implementation and monitoring. Till such time the goal of achieving equitable allocation of resources with benefits incurred to every section of the society is met, development and growth would be elusive and not inclusive.
About the author
The last question we need to ask ourselves is ‘is mine an inclusive country today ensuring inclusive development for all?’ and one
Sanjay Kumar gupta is livelihood and Enterprise con-
bers complement each other. If the head of the family fails to discharge these responsibilities family disintegrates gradually creating exclusive homes. It is value-based education at home and school that would first prepare individuals with inclusive mindsets who then become creators of inclusive homes in future.
sultant and Consults UN Agencies, ADB, INGO/NGOs in India and South Asia. Views expressed are personal. November 2013 | CSR Today | 29
Discovering untapped Skills of the Country A new push to hire people with disabilities… by dr. k. k upadhyay and ms. somyah gupta
he rights enumerated in the Universal Declaration of Human Rights, in a perfect world, would be enough to protect everyone. But in practice certain groups, such 30 | CSR Today | November 2013
as women, children and refugees have fared far worse than other groups. According to the UN convention on the Rights of Persons with Disability, around 10 per cent of the world’s popula-
tion which is around 650 million people in the world, are living with disabilities and are boycott from the opportunities of the mainstream population. In India, the broad definition of different categories of disabilities has been adopted in the Persons with Disabilities (Equal Opportunities, Protections of Rights and Full Participations) Act, 1995 as well as under the Rehabilitation Council of India Act, 1992; “Persons with Disability” could be defined as a person suffering from not less than forty percent of any disability certified by a medical authority. Disability is not a homogenous group, there are different types of disabilities and of varied types such as disability of vision, hearing or speech or learning. Each once problems, needs and help required are different from the other. The disabled are deprived of all opportunities for social and economic development. The Basic facilities like health, education and employment are denied to them. People with physical disabilities at least get noticed, but the others with mental illness are just written off. Along with the physical
CSR | Society problems they also bear the brunt of social ostracism and stigma. It is ironic how irrespective of the degree of impairment, these people are often seen as better contenders for pity than official employment. However, globally the employment rates of PWD are lower than of their population. According to OECD (2003), this is true even in high income countries with the most progressive employment practices and strong active labor market programs. With the advance of technology, assistance and medicines, now PWD have been enabled to live a life closer like those of normal people. However, as seen in the table, globally their inclusion in the mainstream population is still very low. The general social acceptance is still yet not in their favor and Issues likes violence, physical and social obstacles stand as big road blocks to their upliftment. The rapidly evolving paradigm of corporate social responsibility (CSR) to a stakeholder centric approach is not only leading to sustainability of business and resource optimization but also creating an enabling environment for inclusive development and empowerment of vulnerable people, including people with disability. Today, many corporates have started hiring people with disabilities and addressing their needs in products and services. Hiring people with disabilities can contribute to the overall diversity, creativity and workplace morale , enhance a companyâ€™s image among its staff, in the community and among customers. Recognizing the potential of increasing workforce of the country to many folds with the employment of PWD, FICCI (Federation of Indian Chambers of Commerce and Industry)-Aditya Birla CSR Centre for Excellence has been working strongly on the theme. Along with employing of people with disabilities in its own office, FICCI has been playing a pivotal role in thought leadership to create awareness and opportunity in the industry for imparting skills, creating job opportunities and overall healthy environment for PwDs. Now corporates have started making special effort for the welfare of these unique
people. While some donate calipers, spectacles in thousands to economically disadvantages people, many companies like Gitanjali gems, Titans, Elin Appliances, Pizza Hut, ITC hotels have started employing them. For example Gitanjali gems currently not only employs 250 disabled people but also holds a special training centre that offers 6 months of training to people with dis-
on the subject of People with Disabilities. The agenda was to create open dialogues between all the various stakeholders that concern with the employment of PWDs. The main key partners of the event were the office of the Chief Commissioner of People with Disabilities (CCPD) GOI, Accenture Business Services and Leonard Cheshire Disability Trust, UK. The congregation
The rapidly evolving paradigm of corporate social responsibility (CSR) to a stakeholder centric approach is not only leading to sustainability of business and resource optimization but also creating an enabling environment for inclusive development abilities in the basics of jewellery designing and manufacturing along with aiding with their absorption in the company or the industry at the completion of the programme. Similarly, Indian government has framed various policies to give preference and reservation for the development of PWD across the country. The government has decided to ensure a barrier-free environment for the differently abled persons by providing special facilities in multi-storeyed and public buildings, such as ramps, lifts etc. The government amended the Urban Local Bodies Acts to ensure that all disabled people, irrespective of the degree of disability would be entitled to professional tax exemption For example: Under the government regulations, all the new building construction has to be made as disabled-friendly; the success of this can be seen in all the new hotels, office buildings, airport and Delhi metro. To create a big platform to understand the larger issues of employing PWD and create guideline on skill development and employment of PWD, FICCI had recently organized a national conference exclusively
brought together over 200 corporates, senior spokesmen of the civil society and the senior government personnelâ€™s, legal heads, NGOs , media houses, to a common stage to share the need and statuary obligations in promoting livelihoods of people with disabilities (PWD) along with case studies of Break through initiatives. The event went successful with more than 100% attendance and was covered by National media all over the country. In a step forward, an exclusive core group has been formed to have a regular dialogue between multiple stakeholders and create pathway for the advocacy and success on eradication of misnomers on the capability of people with disabilities and increase gainful employment for PwDs.
About the author Dr. K.K.Upadhyay is Head - Corporate Social Responsibility, Federation of Indian Chambers of Commerce and Industry (FICCI) Federation House, Tansen Marg, New Delhi-110001, INDIA. Landline No: +91-11-23357243(D), 23738760-70 (Extn.516), Email id: firstname.lastname@example.org, Website: www.ficci.com November 2013 | CSR Today | 31
case study Tetra Pak
Food for Development Office
Tetra Pak knows that it has special competences when it comes to the processing, packaging and distribution of liquid foods. With awareness about itd competences Tetra Pak has found problems outside its normal operations that it can solve. Modest estimates show that there are 170 million chronically hungry children in the world that do not receive any food in school, while at the same time several studies show that if children receive food in school it improves attendance and learning. The corporation receives a good reputation and lays the foundation for a future market for its products while at the same time profiting from the sale of packag- ing material. 32 | CSR Today | November 2013
etra Pak is a world leader with regard to systems for processing, packaging and distributing liquid foods, and is active in more than 165 countries. Tetra Pak’s Food for Development Office (Ff DO) is a department that aims to fight extreme poverty and hunger by creating sustainable economic and social development. Ff DO’s activities go beyond the “normal” business operations, but are not charity. Ff DO starts, develops and supports school feeding programs and agricultural programs around the world. For more than 40 years Tetra Pak has worked with school feeding programs. In 2006 Tetra Pak served nutritional beverages to 43 million school children, of which 17 million were in poor countries, within the framework of 49 different school feeding programs. According to Tetra Pak these activities stem from the corporation’s core competences within processing, packaging and distribution of liquid foods. In 2006 Tetra Pak’s achievement was honored with the UN’s World Business Award in recognition that the corporation has contributed significantly to the achievement of the UN Millennium Development Goals. How do the activities of the Ff DO fit in with what has been said previously about corporate strategy and opportunities to engage in win-win-CSR? Through the process of being conscious about one’s core competences Tetra Pak has been able to analyze its political and social environment in order to find problems that their particular skills are suited to solve. These problems have led to new business op-
Case Study | Tetra Pak portunities when one has been able to find new methods of financing projects that differ from the traditional model of a customer simply paying for receiving goods and services. Tetra Pak knows that it has special competences when it comes to the processing, packaging and distribution of liquid foods. Furthermore, the corporation has an effective organization with many years of experience in underdeveloped countries that knows how to get things done. With awareness about these competences Tetra Pak has found problems outside its normal operations that it can solve. Ulla Holm, Global Director of Ff DO, says: “Modest estimates show that there are 170 million chronically hungry children in the world that do not receive any food in school, while at the same time several studies show that if children receive food in school it improves attendance and learning.” Tetra Pak’s competence is very valuable if one has the ambition to distribute food to undernourished children, because this requires that someone knows how to organize production, packaging and distribution. But how does the corporation get compensated for providing its resources and competences for the school feeding programs? In order to realize school feeding programs Tetra Pak starts and participates in public-private partnerships. A common scenario is that the corporation offers to provide its competence within school feeding programs to a government or NGO (non-governmental organization) that has the goal of providing nutritional aid. The most significant difference with win-win- CSR in this context, compared with normal business operations, is primarily that some of the recipients of the corporation’s competence are not paying customers. The school children do not pay for the beverages; they are recipients of the governments/NGO’s charity, not Tetra Pak’s. Neither does Tetra Pak receive payment from the government/NGO, but provides without any direct compensation practical help to develop and implement the programs. Tetra Pak only receives payment from its customers when they buy packaging material in order to package the beverage for the school feeding program which is purchased by the government/NGO. The result it that the government/NGO gets access to Tetra Pak’s competence and effective organization, Tetra Pak gets paid for its packaging material (through its customers), and the school children receive necessary nourishment. This is a winwinwin! Figure 5 show a simplified representation of these relationships. Holm says: “Tetra Pak contributes to public-private partnerships by using its core competences within packaging and dairy production. By cooperating with governments and NGOs and by coordinating the different tasks, Ff DO makes sure that the necessary support is available for the different parties to work together towards a common goal.” Tetra Pak initiates, coordinates, and provides specific industry competence. For this the corporation is rewarded with increased sales of its packaging systems and packaging material. Although the packaging material in this context is often sold with lower profit margins than usual the corporation is also rewarded through other positive effects. For instance, Tetra Pak receives a positive reputation in society that helps reduce employee turnover. Furthermore
It is interesting to note that a corporation like Tetra Pak initially uses its core competence to capitalize on new opportunities in society, but after many years this leads to the corporation developing a special competence within the new area that can itself be reused over and over again. the beverage industry in these poor countries starts developing which lays the foundation for a future market for Tetra Pak’s main business operations. In order to make this more concrete let us look closer at Tetra Pak’s work in Nigeria with the “The Nasarawa State School Feeding Program”. After having been introduced to Tetra Pak’s “integrated value chain method”, Nigeria’s president Olusegun Obasanjo took the initiative to help the country’s malnourished children, where 36 percent are underweight and almost 50 percent suffer from stunted growth due to a lack of nourishment. The Nasarawa program is fully financed by the Nigerian state. Throughout the entire development and implementation of the program Ff DO has assisted with technical advice. Tetra Pak has contributed with the expertise it has gained from many years of starting and running school feeding programs. The corporation has contributed with its own personnel and Ff DO has introduced several actors that have also contributed to the program. November 2013 | CSR Today | 33
case study | Tetra Pak
Figure 5: The Stakeholders in Tetra Pak’s Public-Private Partnership
An administrative structure has been created in cooperation with personnel from the Nasarawa program. Infrastructure for transportation and distribution has been developed and storage facilities have been prepared. The schools that should participate in the program have been identified and the preparatory work has been coordinated down to a very local level. Moreover, follow-up and reporting systems have been set up in order to avoid that the beverages end up anywhere else but in the hands of the school children, which otherwise is a big risk. Finally, the gathering of consumption and physical data about the children has been organized, which is a very important in order to measure the success of the program. For all these steps in the program Tetra Pak has drawn on its previous experience of similar programs in other countries with similar problems and possibilities. It is interesting to note that a corporation like Tetra Pak initially uses its core compe-
Tetra Pak has identified its core competence and has managed to raise its sights to find new opportunities outside is normal business. By offering its competence and suggesting projects to governments 34 | CSR Today | November 2013
tence to capitalize on new opportunities in society, but after many years this leads to the corporation developing a special competence within the new area that can itself be reused over and over again. The school feeding program in Nasarawa State distributes a soy and maize based beverage named Nutri-Sip. The beverage is very rich in protein and contains 30 added vitamins and minerals. Tetra Pak participated in the development of the beverage that is produced by the Good Hope International in South Africa. The beverage is produced and packaged with Tetra Pak’s aseptic UHT technology, which provides up to 12 months shelf life, which is necessary in the hot climate of the Nasarawa region. What has the result been? During the spring of 2007 more than 320 schools in Nasarawa received Nutri-Sip reaching 200 000 children five days per week. Work is currently in progress to expand the program to other states in Nigeria. The president of Nigeria set the goal of reaching all of the country’s 27 million children within 10 years through similar programs. What does this mean for Tetra Pak? The corporation receives a good reputation and lays the foundation for a future market for its products while at the same time profiting from the sale of packaging material. The sale of school feeding beverages reached about 40 million packages in 2007. But if Tetra Pak is successful in future negotiations and gets to sell to the majority of future school feeding programs (to 27 million school children) then the sales could reach 5 billion packages per year, which would be equivalent to 4 percent of Tetra Pak’s sales globally! Tetra Pak has identified its core competence and has managed to raise its sights to find new opportunities outside is normal business. By offering its competence and suggesting projects to governments and NGOs the corporation has successfully engaged in win-winCSR, which has benefited government/NGOs, malnourished school children around the world, and Tetra Pak itself.
Mainstream Investors Look To Sustainability to Unlock Value Environmental analysis is moving from the fringes of socially responsible investment to the mainstream, helping push the sustainability agenda forward in large corporations in North America. by libby bernick, vp trucost (na) and liesel van ast
eople outside the “green” professional community are increasingly recognizing that companies’ environmental performance is linked to financial performance. This type of mainstream recognition in the business world will help push the sustainability agenda forward in large North American corporations.
Accounting Firms, Others Take Note of Environmental Factors Accounting firms and management consultants in particular took note of the link between sustainability and financial performance. McKinsey’s Resource Revolution: Meeting the world’s energy, materials, food and water needs recognized the importance of sustainablity to business value and opportunity and KPMG reflected in Expect the Unexpected: Building Business Value in a Changing World that corporate responsibility in response to sustainability megaforces can be good for the bottom line and shareholder value. November 2013 | CSR Today | 35
Sustainability | Investment ital use, and one pollutant most relevant across all industries is carbon. Companies in California, China, South Korea and South Africa will start paying for carbon emissions under pricing programs due to kick in between 2013 and 2015 and they’ll join companies already covered by carbon pricing in Europe, Australia and New Zealand.
The implication of this?
But it was not just consultants. 2012 also saw investors looking at environmental factors ranging from natural capital and carbon efficiency to good governance and stakeholder relations. Sustainability-themed funds demonstrate that environmental factors indicate how a business is positioning for a changing world constrained by increasing demands on commodities. A growing sustainability leadersnumber of traditional investors were spurred to use environmental analysis in mainstream investments because evidence is mounting that this practice pays off. This marks a shift from traditional socially responsible investment approaches, such as screening out “sin” stocks like tobacco or gambling companies. For instance, First State’s £275 million Global Emerging Markets Sustainability Fund, which focuses on “sustainability leaders”, has outperformed its emerging mar-
kets benchmark since its launch in 2009. Unilever[NYSE: UL] (food producers), Satyam Computer Services[NYSE: SATYAMCOM.NS] (technology) and Aspen Pharmacare [OTC Markets: APNHF] (pharmaceuticals) are among the fund’s top 10 holdings. David Gait, Senior Portfolio Manager, explains “By sustainable investment, we are not referring to ‘green,’ ‘clean tech’ or ‘ethical’ investing. Our emphasis is on sustainable development. We are simply setting out to invest in companies we believe are well positioned to deliver long-term returns in the face of the huge development challenges facing all countries today.”
Investors Favor Carbonefficient Companies Measuring environmental performance comes down to pollution and natural cap-
“More than 1,000 investors globally with over US$30 trillion in assets under management are incorporating environmental issues into investment analysis” 36 | CSR Today | November 2013
Mainstream index providers, fund managers and asset owners will need to to position investments to reduce exposure to risks from carbon liabilities, and increase exposure to companies that stand to windmills and cleantechgain in lowcarbon economies. In 2012, we saw more investors applied carbon-efficient tilts to their portfolios, while maintaining sector allocations, diversiﬁcation and ﬁnancial performance. Three examples stand out: • S&P Dow Jones Indices designed the U.S. Carbon Efficient Index to help investors find more carbon-efficient companies. The U.S. Carbon Efficient Index is a subset of constituents in the S&P 500 with a relatively small carbon footprint, and maintains at least 50 percent of the underlying sector weightings in the S&P 500. Trucost calculates a carbon intensity so investors can compare companies, indices and funds of all sizes on their dependence on carbon-emitting resources to generate returns. • European asset managers have already attracted more than US $500 million in assets under management that are carbon optimized. Investors include the U.K.’s largest corporate pension scheme, the BT Pension Scheme, with more than US$161 million in a carbontilted passive equity index fund with markedly lower exposure to carbon and fossil fuel costs. The LGIM UK Equity Carbon Optimized Index Fund (managed by Legal & General Investment Management) returned 3.42 percent in gross returns compared with 3.37 percent for its benchmark index (the FTSE All-Share Carbon Optimized Index)
Sustainability | Investment and 3.06 percent for the FTSE All-Share Index, between the fund’s inception in May 2011 and 30 November 2012. • The recent Institutional Investors Group on Climate Change survey found that investors increasingly addressed climate change in 2011. For example, the Australian superannuation fund VicSuper has invested more than US$210 million in a carbon-efﬁcient portfolio managed by Vanguard Investments Australia Ltd since 2009, as part of its strategy to manage carbon risk. The Carbon Aware International Shares portfolio consists of more than 700 companies and is benchmarked against the MSCI World ex-Australia Index, but reweights stocks based on carbon efﬁciency with the aim to achieve a carbon footprint 50 percent smaller than that of the underlying Index.
Institutional Investors Increasingly Disclose Environmental Performance Another interesting trend we saw in 2012 is institutional investors that are increasingly disclosing environmental performance of their portfolios in new ways. Disclosure helps to create awareness calpersabout risks and it is being fueled by technology as well as sustainability initiatives. For example: • Each year, VicSuper monitors the carbon impact of its listed holdings, which had a combined value of some US$4,377 million in June 2012. VicSuper reports each member’s carbon footprint from listed equities to help raise awareness of the need to manage carbon exposure, and to help people see that their pension savings are invested in real companies with real carbon emissions. Earlier this month, the fund’s climate risk management was recognized by the Asset Owners Disclosure Project, a not-for-profit organization that gave VicSuper an “AA” rating and ranked it in the top 20 asset owners in a Global Climate Index. The Index top 20 includes three U.S. asset owners: New York State Common Retirement Fund, CalPERS and Califor-
nia State Teachers’ Retirement System (CalSTRS). CalSTRS is among pension funds using environmental data over the FactSet network. Widespread access to robust environmental data from platforms like FactSet has made it easier for fund managers to analyze companies’ carbon
be under increasing pressure to disclose, while corporations can expect greater scrutiny of their own environmental records, and strong performers could see costs of capital lowered. Deutsche Bank’s review of Sustainable Investingwas one of several studies in 2012 that found a link between
“Sustainability-themed funds demonstrate that environmental factors indicate how a business is positioning for a changing world” emissions, water use, and waste alongside financial metrics. • More than 1,000 investors globally with over US$30 trillion in assets under management are incorporating environmental issues into investment analysis and decision-making processes, as one of six commitments under the United Nations-based Principles for Responsible Investment (PRI). Signatories will need to use a new reporting framework to explain how they are doing this in 2013. The implications are that investors will
corporate social responsibility, lower risk and financial outperformance. Do you have more examples of how environmental performance is becoming mainstreamed by investors? We’d love to hear from you. Contact Libby to share examples of environmental analysis helping to increase profits.
About the Author Libby Bernick is Senior Vice President of Trucost in North America. Liesel van Ast is Research Editor. Copyright: csrwire.com November 2013 | CSR Today | 37
15 ways to get your CEO on board with sustainability and corporate responsibility Convincing senior leadership as to why sustainable business matters remains a major challenge.
ere’s a few proven ways, in no particular order, that may help.
Get a non-executive/ independent director on your side
Toby Webb is the founder and chairman of Ethical Corporation and Member Advisory Board Indian Centre for CSR. Toby is also co-founder of Stakeholder Intelligence Ltd. SI provides training, facilitation, advice and contract research on sustainability to large companies and other clients. He teaches Corporate Responsibility at Birkbeck College, part of the University of London, on the MSc. Corporate Governance & Ethics and on the Strategic Human Resource Management MSc. From 2006-8 Webb co-chaired the UK Conservative Party’s Working Group on Corporate Responsibility, which outlined CR policy, some of which the current UK Government is now implementing. 38 | CSR Today | November 2013
This is largely for listed firms, but some nonlisted companies also use outside views at a senior level. Find one most amenable to the agenda, perhaps a younger one that sees the agenda mattering to their career future. Have them tabling board meeting agenda questions and adding some steel to your CSR committee meetings. Invest some personal time and ask them to mentor you. Flattery works.
Lay the breadcrumb trail
Your ideas don’t matter. Your CEOs, of course, do. So find smart ways to plant seeds that may take a year or two to take root. Then when your CEO summons you to hear ‘their’ idea, feign your surprise well, and put your pre-prepared plan into action quickly. Your bonus may go up that year.
Map out board roles and tasks, based on personal interest What does your CFO like to do in his/her
spare time? How about your legal director, what pushes his/her buttons personally? This can be connected to the CR agenda specifically or in general. Map out roles and tasks/speeches for the board aligned with their interests. Do it right and it works.
Use the family
As creepy as this sounds, it can work. GAP’s President Paul Pressler said in 2004 that when he joined the company from Disney his daughter asked, “don’t they run sweatshops?” and the path was set for disclosure/transparency leadership by the company. I can’t tell you exactly how to do this, but kids count. Perhaps use company ‘family days’, the power of the spouse, or educational programme involvement to get the family making the case for sustainability.
Present your CEO with solid case studies of opportunity
Yes this is blindingly obvious. But too many heads of CR let CEOs find shaky Michael Porter Harvard Business Review articles on their own. Why leave it to chance? Create a quarterly CEO update on ways companies are ‘commercialising sustainability’, and put
CSR | Leadership it in front of your boss for those long plane journeys where iPhones don’t work, yet.
carve his or her own ‘niche’ to boast about at Davos or the annual industry shindig?
moral and logical case for sustainability and ‘resource resilience’.
Pitch it as a governance issue
I’m always surprised at how few heads of CR do this well. It should be an easy win. Make it clear to your board/bosses that badly managed companies trade at a discount, and that transparency and engagement is clearly linked to better management by investors. Good governance reputation is also vital for that next senior management job. See next point.
Link it with where they are going next
Let’s say your CEO isn’t a lifer. Most are not. It’s quite helpful to plant the seed
Evoke the competitive spirit
Similarly to the point below, the idea of keeping up with peers, and overtaking them, is vital to get a CEO motivated on CR leadership. Competition should be framed in ways they can understand: fewer truck miles per tonne, lower power costs, better consumer and employee engagement are all methods that can work.
Use a bucket of cold water
This is a serious point. Shock tactics are risky, but I’ve seen some work. Bring in a couple of outside voices (not consultants)
CEOs hate to feel left behind. That may invoke a reaction of retreat into what they do know. That goes for both management and morality. The idea of keeping up with peers, and overtaking them, is vital to get a CEO motivated on CR leadership. that wherever they work next, this stuff is going to matter there too. There’s not an industry or organisation that won’t expect some knowledge of the responsibility agenda. Find a way to point that out that steers them away from bitching about the greenwash of another CEO who runs the competition.
Pick an issue and offer a leadership opportunity
Note how some CEOs jumped on the UN CEO water mandate some years ago and made the issue their own. What else is coming up the agenda for them to show global leadership on? The Plastics Disclosure Project is a new one gaining traction. Why not use it, or something else, to help your CEO
who can tell a business leaders meeting some tough home truths about your performance vs. the competition. This must be followed quickly by a focus on the opportunity to catch up and overtake. The competition angle is key here, not the negatives.
Send them into the supply chain
Back in 2010, I travelled to Ghana to visit cocoa farms with the UK CEO of Kraft, Nick Bunker. He was clearly very affected by what we saw. Kraft/Cadbury’s then £50 million investment in cocoa sustainability is now worth $400 million via Mondelez, the new iteration of both brands. There’s nothing like meeting a smallholder farmer on two dollars a day to persuade a CEO of the
Put them in front of some critical stakeholders
This is not easy, but essential. CEOs must understand how others see them. Middle age male (mostly) delusion is a very powerful problem. I’d suggest start small. One on one meetings with a conservation NGO could be followed up with something more substantive, such as a nontame stakeholder meeting where the CEO must stay quiet(ish).
Show them just how the really poor and unfortunate live
This is where struggling Business in the Community in the UK always did their best work. It’s a simple idea. Take your board or some of them, and show them a crack den. Have someone tell them how these come to exist. If that’s too 1980’s for you, what about simply showing the poverty that exists so close to top financial centers all over the world? This is your moral pitch. Get it right, and it can work. Just because it’s old school doesn’t mean it can’t be effective.
Demonstrate just how motivating responsible business is for employees
This is an obvious point. But how well have you really done this? Relying on the employee annual or quarterly survey is not enough. Use proper studies, books from credible sources and tell stories from inside your business. Create annual individual sustainability innovation awards and make the board judge them, with some outside help.
Take out the buzzwords and irritating jargon
CEOs hate to feel left behind. That may invoke a reaction of retreat into what they do know. That goes for both management and morality. Take out the three letter acronyms and talk the language of simple business improvements, I’ve seen that work many times. November 2013 | CSR Today | 39
Visions of the Future: CSR, Sustainable Business & Capitalism in 2020 A gaze into the crystal ball and an invitation to dialogue. by dr. wayne visser
ver the last 12 weeks, I have shared examples from around the world of an approach to CSR (by which I mean Corporate Sustainability and Responsibility) in which companies seek to identify and tackle the root causes of our present unsustainability and irresponsibility, typically through innovating business models, revolutionizing their processes, products and services and lobbying for progressive national and international policies. Based on this vision â€“ and the evolution of sustainable business over the past 20 years â€“ I have made 10 forecasts for 2020. They are meant as a basis for discussion and action, rather than an attempt at predictive certainty. Here is my opening gambit â€“ and an open invitation to dialogue:
Forecast 1 By 2020, we will see most large, international companies having moved through the first four types or stages of CSR (defensive, charitable, promotional and strategic) and practicing, to varying degrees, transformative CSR, or CSR 2.0. 40 | CSR Today | November 2013
Sustainability | Capital Forecast 2 By 2020, reliance on sustainable business codes, standards and guidelines such as the UN Global Compact, ISO 14001 and SA 8000, will be seen as a necessary but insufficient way to practice CSR. Instead, companies will be judged on how innovative they are in using their products and processes to SASB, IIRC and GRItackle social and environmental problems.
Forecast 3 By 2020, self-selecting ‘ethical consumers’ will become less relevant as a force for change. Companies—strongly encouraged by government policies and incentives— will scale up their choice editing and cease offering ‘less ethical’ product ranges, thus allowing guilt-free shopping.
ting to the goal of zero-waste, carbon-neutral and water-neutral production, with mandated take back schemes for most products.
By 2020, cross-sector partnerships will be at the heart of all CSR approaches. These will increasingly be defined by business bringing its core competencies and skills (rather than just its financial resources) to the party.
By 2020, some form of Generally Accepted Sustainability Practices (GASP) will be agreed upon, much like the Generally Accepted Accounting Practices (GAAP), including consensus principles, methods, approaches and rules for measuring and disclosing sustainable business. Furthermore, a set of cradle to cradlecredible CSR rating agencies will have emerged.
Forecast 5 By 2020, companies practicing sustainable business will be expected to comply with global best-practice principles, such as the UN Global Compact or the Ruggie Human Rights Framework, but simultaneously demonstrate sensitivity to local issues and priorities.
Forecast 6 By 2020, progressive companies will be required to demonstrate full life-cycle management of their products, from cradle to cradle. We will see most large companies commit-
Forecast 8 By 2020, many of today’s sustainable business practices will be mandatory requirements. However, CSR will remain a voluntary practice – an innovation and differentiation frontier – for those companies that are either willing and able, or pushed and prodded through non-governmental means, to go ahead of the legislation to improve quality of life around the world.
Cross-sector partnerships will be at the heart of all CSR approaches. These will increasingly be defined by business bring- ing its core competencies and skills
Forecast 9 By 2020, corporate transparency will take the form of publicly available sets of mandatory disclosed social, environmental and governance data—available down to a product life-cycle impact level—as well as web 2.0 collaborative sustainable business feedback platforms, WikiLeakstype whistleblowing sites and product rating applications.
Forecast 10 By 2020, CSR will have diversified back into its specialist disciplines and functions, leaving little or no sustainable business departments behind, yet having more specialists in particular areas (climate, biodiversity, human rights, community involvement, etc.), and more employees with knowledge of how to integrate CSR issues into their functional areas (HR, marketing, finance, etc.). Admittedly, all these forecasts suggest a transformational agenda for sustainable business or CSR. I call this CSR 2.0, but the labels do not matter; the substance of the change matters. However, underlying these trends is an even more potent shift, which is an evolution from our winner-takes-all shareholderdriven model of capitalism to what we might call Sustainable and Responsible Capitalism, or Purpose-Inspired Capitalism. For me, this means testing all economic activity against five principles: 1) Productive Investment: Ensuring that money is channeled toward producNovember 2013 | CSR Today | 41
Sustainability | Capital
tive investments and not into speculative trading in the casino economy, as the Co-operative Bank has demonstrated successfully. 2) Long Termism: Understanding that taking a long-term perspective, which includes the needs of future generations, as Al Gore’s Generation Investment and Warren Buffet’s Berkshire Hathaway practice evidence, creates real wealth. 3) Transparency: Embracing transparency in revenue and social and environmental impacts, in line quest for sustainable businesswith the Global Reporting Initiative, International Integrated Reporting Council, Carbon Disclosure Project and Extractive Industries Transparency Initiative (EITI). 4) Full Cost Accounting: Internalizing social and environmental costs (externalities) through taxes (e.g., on carbon
and pollution) and social and environmental profit and loss accounts, such as the kind Puma is pioneering. 5) Social Inclusion: Enacting Michael Porter and Mark Kramer’s concept of creating shared value, and Stuart Hart and C.K. Prahalad’s model of serving the bottom of the pyramid (BOP) markets, as demonstrated by the BOP 2.0 Protocol. We live in exciting times – a true period of bifurcation – and the cusp of the postindustrial revolution. For the first time, we can finally glimpse what a new model of sustainable business and purpose-inspired capitalism could look like. But as with so many things in life, the quest for a sustainable future is like a wheelbarrow. The only way we will make progress is if we pick it up and push forward. And the only way we will motivate people to join us
in this effort is if they believe in what we are building. That means having a compelling vision of the future, what I call a 5-S vision of “future fitness” in which our products, organizations, communities, cities or countries are Safe, Smart, Shared, Sustainable and Satisfying. What that means and how we get there is another quest, another book and another set of stories. For now, we have come to end of this Searching for Sustainable Business series of articles, which were all extracted, summarized and adapted from my book, The Quest for Sustainable Business. I hope that they have given you a glimpse into some of the insights from my own journey to more than 65 countries over the past 20 years – and that you will be inspired to continue on your own quest.
About the author Wayne Visser is Founder of Kaleidoscope Futures, Founder of CSR International and the author of 17 books. In addition, Dr. Visser is Senior Associ-
Evolution from our winner-takes-all shareholder-driven model of capitalism to what we might call Sustainable and Responsible Capitalism 42 | CSR Today | November 2013
ate at the University of Cambridge Programme for Sustainability Leadership and Visiting Professor of Corporate Responsibility at the Gordon Institute for Business Science in South Africa. Before getting his PhD in CSR, Dr. Visser was Director of Sustainability Services for KPMG and Strategy Analyst for Cap Gemini in South Africa.
The Sustainability Revolution
he Sustainability Revolution provides a broad portrait of a paradigm shift, as the sub title claims. Although I checked this out of the library, this is a book to own and refer to especially if you are interested in furthering sustainable best practices or even wondering what they are. Sustainability can be a challenge to get understanding and organized around and this book neatly categorizes it in 7 chapters and concludes with a substantial resource section; it is well referenced throughout for additional follow-up. First we read about how sustainability’s environmental roots were expanded to include consideration of the 3 E’s, ecology, economy and equity; sustainability therefore looks at the interdependencies of the 3E’s and engages a diversity of stakeholders when we broaden the undeniable scope of impact. Ecology is the environmental consideration in which we shift to a long term perspective, acknowledge and respond in turn to our dependence on our life support systems. Looking at economy we see a healthy environment and a healthy economy coexisting, not the opposition of these as is often still purported. The human well being requirement of the sustainability triangle is referred to herein as equity or equality as it acknowledges that the well being of the individual is dependant on the well being of the community and calls us toward a spirit of cooperation and ethics within the distribution of basic resources such as food, shelter and water and a greater emphasis on the value of education. The author then proceeds to describe sustainability principles in 5 basic categories, Community, Commerce, Natural Resources, Ecological Design, and the Biosphere with education as a key component of each as we weave our way into the sustainable path. Each of the respective principles are presented in a separate highlighted box within each chapter and then commented on by the author. Sustainability and Community describes tools created by task forces and working groups to tackle the challenges
of bringing the 3E’s into balance by implementing long term systematic approaches at all levels, local, regional, national and international communities. These include the Ontario Roundtable on Environment and Economy (local initiative,) the Minnesota Planning Environmental Quality Board Principles of Sustainable Development for Minnesota (regional,) The Netherlands National Environmental Policy (national,) and the Earth Charter’s Commission and ICLEI (international.) All told these community based principles integrate a diversity of perspectives and interests toward defining and working toward a shared vision for a sustainable future.
Sustainability and Commerce reveals how business practices and the long term health of our planet and all its life forms are advantaged when business mimics natural systems rather than destroys them. The precautionary principle is presented as an ethical standard wherein the company realizes that it must consider its investors and the community as a whole, igniting the conscience of business activity; if the best way for an individual to live is to do no harm, the same standard, already prevalent in other countries, must apply to the organization that has more power to do harm if precau-
tion were not taken. The precautionary principle for example is about placing responsibility to avoid harm onto the manufacturer. It was implemented in 2003 in San Francisco at the municipal level. The Natural Step can be used by a company to assess its impact with respect to the laws of nature as it combines science and management best practices. The Houston principles links labor with environmental movements and offers the power of creative cooperation to bolster communities through jobs and healthy ecosystems. The CERES principles offer a voluntary approach to organizations that seek a conscience by providing a framework in which sustainability practices can be adopted in a supportive manner, and includes a risk reduction clause; in a sense the CERES principles leverage peer pressure and provide sharing of sustainable successes among its participants. Sustainability and Natural Resources describes the challenge for industries directly benefiting from resource extraction, the fuel from the former industrial revolution, and our shared need for survival such that even the American Petroleum Institute calls for conservation and investment in renewables but continues to ignore equity in resource usage. Forest Stewardship Council (FSC) wood is widely available and promotes sustainable forest usage while calling on each of us to consider where and how the products we consume are appropriated as does the Marine Stewardship Council (MSC) that requires sustainable fishery. The Asilomar Declaration for Sustainable Agriculture practices speaks to the need to make our food systems sustainable; our broken system is witnessed in recent outbreaks of food contamination and the cost of food rising with the cost of energy as we grow our food large distances from the eating populations. Sustainable agriculture requires ethics for land usage and animal treatment and calls for a shift toward local food production, a recognition for the value of rural and farming lifestyles, heightened awareness regarding the true cost of unsustainable methods November 2013 | CSR Today | 43
book | review for growing food and the need to reduce government subsides that allow the mega corporate farm to continue in a manner that most would find unconscionable when its impacts are understood. Sustainability and Ecological Design shows that nature holds the key to how we can design the new way of producing, living and working in balance as it considers the interaction of architecture, people and nature. The Hannover Principles require that decisions are made within the context of Earth, Air, Fire, Water and Spirit; considering these essential elements reveals humans as being a part of and interdependent with nature and requires responsibility for the consequences of design. A waste free holistic life cycle approach to manufacturing is described in detail by the Hannover founders in “Cradle to Cradle Remaking The Way we Make Things.” The Todds’ Principles of Ecological Design place nature at the center of the design process and incorporate energy, architecture, food production and waste management with “bio-regional” approaches. The Sanborn Principles further include the needs of communities bringing beauty and practicality into our living environments in the form of parks, culture
and healthy buildings. The USGBC promotes its LEED standards to create and assure healthy and energy effective buildings a rising major area of focus in building and renovation because of the magnitude of long term benefits with minimal increase in short term costs. Sustainability and the Biosphere calls each of us to reconsider our relationship with nature and each other, the crux of sustainability. Deep Ecology requires self realization to connect all human and non human life forms with the force that pulses through all life and cites diversity as a key value characteristic to remind us that we must act in line with the inherent value that promoting the well being of all life brings. The Charter for Rights and Responsibilities for the Environment extends Deep Ecology to all species further emphasizing interdependence with the natural world. The Biomimicy Principles as described in detail by Janine Benyus’ book Biomimicry, reveal the lessons we can learn from nature such as the fact that nature recycles everything, nature runs on sunlight and nature uses only the energy it needs. I especially like the principle that nature taps the power of limits because it looks at nature’s abil-
ity to leverage limits to its advantage such as seasonality instead of the 20th century human response to dare these limits into submission while breeding sickness. Permaculture Principles expands Biomimicry toward the integration of sustainability within economic, social and even political systems as these systems interact and can be designed to work with nature. The final chapter, Future Pathways charts and links all these principles herein that I took the time lay out in as sense to honor the importance of this body of work and the contributors to the sustainable revolution many included in the “advance praise” intro. These principles in total call for stewardship, an intergenerational perspective and offer nature as our teacher and require that we reach far beyond `green,’ as we forge the sustainable path. Concluding with a robust Resource section further affirms that you can read this book to get started or to keep going. After reading this book you will be able to answer the question “If the industrial revolution is over what’s next?” and be able to describe, explore and embrace the opportunities and challenges that “the sustainability revolution” offers. – G. M. Flach
The A to Z of CSR
his book is the vital, definitive “must have” compendium for practitioners both in business and government and civil society as well as academics and students in the fields of CSR, sustainability, corporate governance andbusiness ethics. The “A to Z of CSR” is a unique publication providing an easy-to-use guide to the rapidly expanding field of corporate social responsibility: from general concepts such as sustainability, stakeholder management, business ethics and human rights to more specific topics such as carbon trading, microfinance, biodiversity, the Base of the Pyramid model and globalisation. In addi-
44 | CSR Today | November 2013
tion to definitions of the most important terms across the wide range of CSR associated topics, this book also covers all the most important codes and guidelines, such as the Equator Principles, the UN Global Compact and ISO standards, as well as providing background on organisations such as the World Business Council for Sustainable Development and Transparency International and profiles of CSR in particular industries and regions. The “A to Z of CSR” is also unique in that it has brought together for the first time over a hundred of the worlds leading thinkers, opinion formers, academics and business people to write on each subject in their own words.
RNI No. MAHENG13231/13/1/2012-TC
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