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CONTENTS CSR 2014
The rise of CSR in business education
MBAs and social responsibility The green trend in business Lowdown on courses and events
Oil companies and MBAs: a pipeline for corporate social responsibility
MBS stresses importance of social responsibility
Teaching Chinaâ€™s business leaders the importance of CSR
PolyU means business when it comes to creating a better world
Corporate social responsibility will revitalise the worldâ€™s economy
CUHK CSR case competition winner will be awarded a Swire internship
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The rise of CSR in business education
n little over a decade, businesses have gone from seeing corporate social responsibility (CSR) programmes and environmental stewardship as, at best, desirable add-ons to regarding them as central to strategic planning.
es are still accused of “greenwashing” - misleading PR exercises where they spend more on advertising their environmental friendliness than on actual sound practices. Such deceptions, though, are increasingly counter-productive.
“Early on, this movement was probably very much driven by individuals who had a personal passion,” says Linda Livingstone, dean of the Graziadio School of Business at Pepperdine University, and vice-chair of the Association to Advance Collegiate Schools of Business (AACSB) International. “Some of them created their own companies around that passion, whereas others brought it into the companies they were part of. But I think as it has developed and become more widespread, companies began to realise it can also be good for business and it can be profitable.” Some business-
“There is a paradox here,” says Raymond Fisman, director of the social enterprise programme at Columbia Business School. “If consumers employees get the sense that it is just about making more money, CSR loses its efficacy in bolstering the company’s image - and its profits.” As organisations and consumers get wiser to the benefits of genuine initiatives in this area, business schools are also recognising this development in their MBA programmes. “There was no social enterprise programme when I arrived at Columbia a dozen or so years ago,” says Fisman. “Now it is a major pres-
The Trend all business strategy,” Sobolev says. “Obviously, I knew about companies where a social mission is embedded in the fabric of their business, but I didn’t know that companies which build their business strategy on a foundation of corporate social responsibility can strategise better in a competi-
There was no social enterprise programme when I arrived at Columbia a dozen or so years ago
tive market place.” However, integrating all these elements into an effective business plan is no simple task. “The closer you can get to the sweet spot, where these components come together, the better off you’re going to be in the long run,” Livingstone says. “But we teach students about the trade-off. For long-term sustainability, in financial terms and in other ways, you really need to think about all of those elements. We see it as an integrated strategy; you really can’t think about them independent of one another anymore.” Photo: AFP
ence at the school. That should give you a sense of how attitudes have changed.” Nikolai Sobolev, a recent MBA graduate at Pepperdine University, focused on entrepreneurship and took the certificate in Socially, Ethically and Environmentally Responsible (SEER) business. He was already committed to social responsibility and sustainability, but wanted to learn more from the best, in this case Dr Michael Crooke, the former CEO of Patagonia who leads the university’s SEER programme. It focuses on profitability and quality products along with CSR and environmental stewardship. “I had seen CSR as stand-alone, one-off initiatives such as charitable contributions and didn’t see social or environmental initiatives as part of an over-
Since the SEER programme first began at Pepperdine, there are clear signs that student concern about concepts like environmental sustainability has grown substantially. “In the last five years or so, issues around sustainability and a global perspective have become much more important to our students,” Livingstone says. “They have really pushed us to do more within our programme. They are very proactive.” Fisman echoes those views, having noticed a major change in the way students entering MBA programmes think about “green” goals and how business can benefit society. “But there is still an awful lot of fuzzy talk about doing good in the corporate world,” Fisman says. “I really think people [want to see] companies that can show them a clear case of combining social progress with business.” Recent changes to the AACSB’s core values and guiding principles for business programmes have added a commitment to environmental sustainability and CSR to the criteria. Currently, the association has more than 670 accredited institutions in nearly 50 countries and territories. “It is a natural progression given the trend [in the business CSR 2014
The trend world] in the last five years or so,” says Eileen Peacock, senior vice-president and chief officer of AACSB Asia. “The Enron disaster had an impact and, following the financial crisis, we saw the major schools looking at their MBA programmes and wondering: is this our fault or is it inbred in people to start with?” Because of business schools’ differing goals, Peacock sees the changes in eligibility standards as a background requirement rather than a demand to make specific amendments to curriculum content or policies. Though Pepperdine may in some ways be ahead of this curve, Livingstone does think changes in the AACSB standards will have an effect. “The mission in our business school is to develop value-centred business leaders and to advance responsible business practice,” she says. “So, to some extent, these standards are embedded in who we are. But I do think the standards will make us think a bit more systematically about what we are doing. No matter what we teach our students, in three to five years from now much of that will be obsolete. So passing on knowledge isn’t as important as teaching them how to think and of the need to continually learn.”
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Oil companies and MBAs: a pipeline for corporate social responsibility Heather McKenzie
orporate social responsibility is quickly becoming a valued concept in the business world. A 2013 report on 3,300 MBA students revealed that 67% would take a 15% pay cut to work with a socially responsible company. Many MBA programmes have expanded their curricula to include courses in corporate social responsibility (CSR). Top business schools such as Harvard, INSEAD, Stanford, and Wharton offer entire degree plans around CSR. For businesses, CSR has become a philanthropic issue and a strategic one. Though a socially conscious MBA might cringe at working for Big Oil, it’s an option for a broad impact. Dedicated business leaders ought to work towards social responsibility from within companies that need it. If sustainable MBAs confine themselves to employers who already value and understand social responsibility, there is a limit to the change they can make. Imagine the possibilities for CSR work with oil companies. A focused business graduate could demonstrate the importance of maintaining a positive reputation for social responsibility in a time when few decisions and actions can be hidden from the public. An insider can persuade the company to engage and invest in research about sustainable practices and options for reduced environmental impact. An oil company with good guidance could focus on ways to help grow the countries they are sourced in. Business skills such as communicating, networking, and strategising would be crucial for initiating a corporate responsibility strategy and creating partnerships with local governments and socially conscious organisations.
Consider Shell Oil as an example. The multinational corporation has been intimately involved in Nigeria’s economy, politics, and overall development for 50 years. Nigeria is the tenth-largest oil-rich nation in the world, but is certainly poor by most first-world standards. Shell brought portable water, reliable lighting, and electricity to the country, creating thousands of jobs in the process. The company has spent millions to enhance roads, education, and healthcare, as well as providing vocational training to their employees and establishing nature reserves. Shell generates billions of dollars in export earnings while providing the Nigerian government with half or more of its revenue and $71 million (in 2010) to local community projects. That sounds like responsible business. MBAs can have an impact by learning and emphasising the specialised sustainability knowledge that oil companies need to have. Attend conferences and keep up with sustainability news; this is a field where the expectations are constantly raised. Network with peers and leaders in the field. Prospective and current MBA students can prepare themselves for this new world order by choosing coursework or degree programmes that centre on social responsibility. It’s also important to gain and utilise transferable skills such as negotiation and project management. MBAs looking for a career focused on corporate social responsibility may dream of working at companies like Unilever, Nike, and Apple, but have the option for a wider reach in industries like oil who desperately need their passion and help. The reality is that few companies are completely pure, and working for an oil company doesn’t have to equate with selling out. CSR 2014
Photo: Edmond So
MBS stresses importance of social responsibility
he job of a top business school is not just to give future directors and corporate leaders the skills and know-how to run complex organisations. Nowadays, it is also to tackle the range of broader challenges faced by the business community and society at large, setting an example in areas like ethics, diversity and social responsibility. “We have committed to contributing to the social and economic success of the local, regional, national and international community,” says Professor Fiona Devine, Dean of Manchester Business School (MBS). “We do that by using our expertise and knowledge to find solutions to the major challenges of the 21st century and by producing graduates who exercise social leadership and responsibility.” MBS defines the challenges as being in three main areas. One is environmental sustainability, which centres on how all of us treat the planet and its resources. Another relates to fairness and diversity at work, which includes dealings with colleagues and all other stakeholders. And the third, govern-
ance and responsibility, is about how to treat customers, those in the extended supply chain, and people who live and work in the areas where a company or organisation does business. “The agenda is moving fast, and it is fair to say that many organisations haven’t fully understood the impact being socially responsible has on their reputation, their stakeholders and, ultimately, on their bottom line,” Devine says. “However, more are now taking CSR (corporate social responsibility) seriously and, as a business school, we can support this by the way we develop our future leaders.” For example, not-for-profit projects are included in the MBA curriculum. These can be in collaboration with volunteer groups, charities or larger organisations that are looking to develop CSR policies. Such projects allow students to test ideas, work with people in the local community and make a positive change for those involved. Also, the school is continuously reviewing syllabuses across its full range of programmes, from
Case Study undergraduate degrees to the MBA, to ensure that issues relating to CSR are clearly addressed and discussed. A new specialism is currently being developed for an undergraduate course on ethical business. And, in partnership with the Centre for Creative Leadership, a new executive education programme will show senior decision makers how to enhance economic value through creating societal value.
Equally, brand and social responsibility are becoming inextricably linked
“With the introduction of non-financial reporting and other legislation, businesses are realising they need to deliver on the CSR front,” Devine says. “Equally, brand and social responsibility are becoming inextricably linked. The public are staring to pay more attention to business practices, which means companies must pay more attention too in order to be successful.” MBS is also showing the way in other respects. Its Fairness at Work Research Group undertakes studies in the areas of gender and diversity, stress and well-being, as well as dignity at work, bullying and harassment. Its Sustainable Consumption Institute is a recognised centre of excellence doing research into environmental concerns and the use
of natural resources. And a director of social responsibility was appointed in January to drive the school’s agenda on all relevant issues. “To ensure CSR principles are engrained in what we teach, we draw on new and existing research from across the school and the University of Manchester and case studies from the world of business,” Devine says. “Also, we are always looking for ways to engage the public in CSR activities.” That aim is behind the school’s first massive open online course (MOOC), which begins in May. Addressing the topic of water supply and sanitation in developing countries, it will examine the consequences of current conditions, spurred by the fact that more than two million deaths annually are caused by water-related diseases. The course will ask what can be done to solve such problems, as well as to cut the cost of avoidable health care expenditure and time spent on carrying water from sources outside the home. “We are planning an annual lecture about social responsibility, designed to reach out beyond an academic audience and generate public debate,” Devine says. “As part of this external engagement, we also intend to run a three-day event in September, giving leaders in the third sector access to world-leading MBS academics and the latest management thinking on a no-cost basis. “Overall, from the business school perspective, we must continue to support research which has real impact on policy in this area and produce a next generation of leaders who take CSR seriously and ensure it is integral to all their business activities.”
Environmental sustainability is one of the key CSR issues which business has to deal with. CSR 2014
Teaching Chinaâ€™s business leaders the importance of CSR Freda Wan
hinaâ€™s business leaders have an increasingly important challenge: they have to drive their companies to achieve sustainability, not just profits. Already, the top business schools in China have mandatory courses teaching sustainability and Corporate social responsibility (CSR) to all MBA and EMBA students. The challenge, though, is to
get those students - and others - to put theory into practice. At the main campus of the Cheung Kong Graduate School of Business (CKGSB) in Beijing, there is even a requirement that all students, whether chairmen of state-owned enterprises or senior managers of private organisations, must complete a volunteering requirement. They have to mobilise
Teaching CSR When established in 2002, CKGSB was one of the first business schools in the world to make an ethics course mandatory for all MBA students. At that time, ethics was a less debated topic in the world of banking and finance than it is now. As a result, the school’s 5,000 alumni and about 2,500 current students have taken the course, which today incorporates key aspects of sustainability and CSR. By Wong’s definition, several Chinese business leaders are already implementing CSR principles in “the right way”.
All Chinese companies which try to implement CSR initiatives always encounter some challenges
One of them is Jack Ma, founder of Alibaba Group, whose company provided a 60 per cent discount on services for subscribers with a “gold” credit standing and free training for small- to medium-sized enterprises, when the financial tsunami hit in 2008. The company also partnered with Grameen Trust of Bangladesh in 2009 to form Grameen China, a micro-lending institution supporting small businesses in rural communities. their colleagues and build a community investment project as a team. “In this way, there is a larger influence on the company,” says Anson Wong, assistant director of the CKGSB’s research centre on sustainable and inclusive development. “We believe that when there is one leading business person doing things the right way, others will follow.”
Another example is Wang Shi, founder of real estate company China Vanke Group, who has pioneered green buildings, biodiversity and impact investing and who, like, Ma, is a CKGSB alumnus. Wong conducts field research into the CSR initiatives of domestic enterprises and government entities in China and uses them as case studies at CKGSB and for general audiences. CSR 2014
Teaching CSR “All Chinese companies which try to implement CSR initiatives always encounter some challenges and have to work towards resolving them,” says Wong, who sees value in informing both mainland and international observers about efforts and successes in China.
to set up a food bank in Shanghai and a waste recycling programme at the Shanghai World Expo.
In theory, very few people oppose sustainability. But in practice, the Chinese government still has some way to go in changing the attitudes and behaviour of mainland companies. In March 2013, the Ministry of Commerce issued official guidelines for Chinese businesses investing overseas. All state-owned enterprises are in the process of putting these into practice, though the guidelines are not compulsory in a legal sense.
“Several firms are now expanding their internships and corporate consulting programmes into the school as well,” Brubaker says.
It has also been difficult for business schools to teach the next generation of leaders to be socially and environmentally responsible.
Overseas companies investing in China have regularly hired CEIBS graduates to manage their CSR projects.
Demand for sustainability and CSR courses at Chinese business schools can only grow as the country will have to tackle an enormous environmental challenge in the years ahead. “Water and air quality are deteriorating at a very fast pace,” says Brubaker, who has lived in China since 2002 and advised many international companies on sustainability issues. “If the goal is to urbanise another 300 million people and double the size of the economy in real terms, we will only see the size, scale and scope of challenges for China’s environment continue to grow.” CEIBS is planning to start executive development programmes focusing on CSR and sustainability in 12 to 18 months’ time.
Richard Brubaker, adjunct professor at the China Europe International Business School (CEIBS), has taught more than 1,000 MBA students since 2009 about sustainability and CSR. He emphasises the practical application of CSR concepts, using case studies of both foreign and domestic brands. “We begin with risk analysis,” he says. “But we also try to show students how entrepreneurs are identifying opportunities which are redefining industries.” Previously, Brubaker had to convince students about the importance of CSR. Now, they generally accept the concepts and are keener to learn the tools related to implementation. Brubaker’s CEIBS course on “business, society and environment” includes a practical project, which has inspired former students, for example,
Several firms are now expanding... corporate consulting programmes into the school
Advertorial Photos: PolyU
PolyU means business when it comes to John Brennan creating a better world The decision of the Faculty of Business at Hong Kong Polytechnic University (PolyU) to host this July’s 50 + 20 Agenda - Renewing Business Education in Asia Conference is not a radical departure for the school but a milestone in an ongoing process of engagement with the 50 + 20 vision. Professor Edwin Cheng is the Dean of PolyU’s Faculty of Business and Chairman of the Organising Committee for the conference. “Hosting the conference signifies PolyU’s and Hong Kong’s support for business and management education reform, education and research that are ‘relevant and applied, holistic and integrative, responsible and sustainable, interdisciplinary and multilevel, and learning-oriented’, and also business that works towards a better world,” Cheng explains. “PolyU is committed to working for the betterment of Hong Kong, the nation and the world, and our mission includes producing ethical leaders and meeting the changing needs of society. Nurturing serving leaders and driving sustainability is one focus of our education and research. Apart from adding service learning, as well as environmen-
tal and sustainable development elements, to our curriculum, the university has been collaborating with various institutions and different sectors of society to facilitate the pursuit of economic prosperity, environmental quality and social equity.” Hong Kong may be seen - rightly or wrongly - as the home of unfettered free-market capitalism but Cheng sees reason for optimism when it comes to setting a new agenda for local business practice. “Hong Kong has a number of social problems, including a widening gap between the rich and poor,” he admits. “But we also have extensive expertise, great entrepreneurs and a highly educated population. All these can be contributory factors to a better society and a healthier community. “Nowadays Hong Kong businesses know more about sustainable economic and social development. Environmental awareness has also increased over the years and businessmen witness how catering for the needs of different stakeholders contribute to talent retention and long-term growth. They understand that rights and responsibilities go hand in hand.”
Advertorial Overall, Cheng is relaxed about the motivations behind the CSR initiatives launched by local companies. “These activities serve the dual purpose of publicising your company and enhancing your image while, at the same time, doing good to the beneficiaries. In many cases, it is better than mere advertising. Whatever their intention, I consider it worthwhile as long as these projects produce good outcomes – promoting kindness and charity, supporting the underprivileged, protecting the environment, and so on.” Alongside the mainstream business world, Cheng points to the rapid growth of a social enterprise “sector”, quantified in a report by the Hong Kong Council of Social Service-HSBC Social Enterprise Business Centre, as a welcome development. “As at the end of 2013, we had a total of 457 social enterprises, representing a rise of 13 per cent from the previous year. The total number of social enterprises in 2008 was 269.” Most of these were involved in the food, lifestyle and retail, and the care and medical industries. “But particularly worthy of note,” Cheng notes, “is that recycling and education and training showed remarkable growth of 64 per cent and 42 per cent respectively.” As for PolyU, he sees the 50 + 20 philosophy manifested both within and outside the business faculty’s formal curricula. “For classroom learning, we have a subject named Corporate Social Responsibility for the under-
graduates. It covers topics like human rights and environment, ethical and moral reasoning, the relationship between law, ethics and CSR, Asian and western concepts of fairness and justice, privacy, intellectual property, cultural values, economic performance and social responsibility. The purpose is to help them develop a global outlook, and identify and resolve ethical issues. For postgraduates, we have separate courses in Business Ethics, Global Leadership in the Asian Context, Strategies for Sustainable Product-Service Systems, and the like. In fact, citizenship, sustainability, responsible management and leadership are closely intertwined and important elements of our accounting, finance, logistics, management and marketing syllabuses. “Outside the classroom, we engage the students in voluntary service to help the needy as well as in student ambassadorship and mentorship to serve the community and support their peers.” Cheng believes that the values these activities are intended to engender are taking root. “From what the current students do and say, I believe many of them have a passion for sharing responsibility and safeguarding the environment. Some of them have creative and interesting ideas about helping the needy, eco-eating, green living and involving businesses. “A recent graduate set up his own social enterprise that works towards a racial-barrier-free society. WEDO GLOBAL organises cultural tours to deepen participants’ understanding of South Asians and their cultures and to foster social and racial harmony.”
Cheng says PolyU has been collaborating with various institutions and different sectors of society to facilitate the pursuit of economic prosperity, environmental quality and social equity. CSR 2014
Corporate social responsibility will revitalise the worldâ€™s economy Sam Prince
fter the economic nosedive five years ago and the struggle for stability since, corporations have increasingly been scrutinised by the public for their arguable lack of ethics that may have helped contribute to the recession. Business schools soon realised that perhaps the lesson plan for corporate social responsibility needed to be overhauled, with a new emphasis on how companies and organisations add to the world
they exist in and their long-term effect on it. Once these business school students graduated and joined the workforce, businesses were pleased to find that this new wave of business people with their CSR mentality was not only good for public relations (PR), but also profitability. Because CSR plays a huge role in risk management and innovation, it can increase profitability by
Economy Photo: Robert Ng
have the forethought to be transparent with the public - especially to a public that demands it now more than ever. Companies have begun to issue annual “sustainability reports” on their own accord, and will have increasingly have to navigate burgeoning laws about CSR, too. For example, in the United States, a new financial reform act has been passed to ensure that minerals bought from Central Africa aren’t helping to fund wars that encompass that region. CSR-savvy companies see this as an opportunity, too: sustainability shoppers often want to know such things as the origins of their products nowadays when buying things. As it is, sustainability shoppers will take over the market in the future, so it is best for companies to transition to that mindset now. Furthermore, millennials want to pick employers who are CSR-minded, too. A person wants to feel that their job is doing some inherent good to the world besides just making money, and view companies’ environmental, social, and ethical performance as a key deciding factor on whether or not to work for them. The market demands it, as well as the workforce. In the end, corporate social responsibility is the way of the future and the only feasible way the market can rebound. CSR drives innovation, focuses risk management, and improves investor confidence. Not only that, it is also what the market demands: people want to feel good about what they’re doing and buying. Not only that, but also where they work.
helping cement initial investment with stakeholders. A CSR-driven company will be able to prevent hostile workplace conditions that could lead to financial loss via protests or work stoppages. Investors will not only be more confident that all angles have been thought through, but that no bad PR can unexpectedly arise, either. Speaking of bad PR, a CSR-minded company will
CSR... can increase profitability by helping cement initial investment with stakeholders
Event Photo: Bloomberg
CUHK CSR case competition winner will be awarded a Swire internship Freda Wan
n many Asian countries, corporate social responsibility has come a long way and is now a mainstream business issue. Increasingly, too, it is a contributing factor in valuations and has a recognisable impact on a company’s overall reputation. However, a group of future business leaders MBA students at the Chinese University of Hong Kong - believe more can be done. “Too many companies think CSR means donating money to charity, so there is a misunderstanding about how effective it can be,” says Ben Wong, who is from the United States and worked in international trade and sourcing in Asia before starting his MBA. “Our hope is that the next generation of business managers will have CSR engrained in them.” For the eighth year, CUHK MBA students are organising a conference focusing on CSR, with the main theme this time being “Success through CSR Innovation”. The full-day event takes place on May 28 at the Hong Kong Convention and Exhibition Centre. The two keynote speakers are Richard
Welford, chairman of CSR Asia, and Michael Kilburn, senior environmental manager of the Airport Authority. For the first time, the conference will feature a CSR case competition - the only one of its kind in Asia - with the winning team being awarded an internship with the Swire Group. Teams from business schools in Hong Kong, Taiwan, mainland China, and India have entered, and the three finalists will make presentations at the conference. Wong, who is on the organising committee of the CUHK CSR conference, has taken part in other international business case competitions in Asia and Europe. He says about 20 of his 82 MBA classmates at CUHK have a strong interest in CSR, but have had trouble finding CSR-focused events or case competitions designed with business school students in mind. Therefore, this competition is showing the way, specifically giving MBA students an opportunity to
Event showcase their best ideas to leading companies. An audience of about 300 business professionals is expected to listen to the finalists’ presentations and to engage in an energetic dialogue on best practices.
Unfortunately, even within CUHK, many students still pay little attention to sustainability efforts on campus. The university, though, will continue to pioneer such efforts, particularly as it expands with new buildings and a growing student population.
Although CSR is receiving more public attention in Asia, Wong still sees a lot of potential for multinationals everywhere to make a difference in the communities they impact through better CSR initiatives.
Indeed, two newly built colleges at CUHK have applied the principles of green architecture, incorporating natural slopes and trees as part of the landscape design. The university is also working on ways to reduce water and energy consumption, ensure environmentally friendly food sources, and cut food waste on campus.
Ideally, CSR needs to be driven from inside an organisation and not done just to satisfy certain external requirements. Wong is encouraged to see stock exchanges in Hong Kong and mainland China starting to make sustainability or CSR reporting a requirement. “However, the integrity of [some] CSR reports comes into question as soon as you think about who is paying for them,” he says. For instance, a potential conflict of interest can arise if external consultancies have the incentive to give a positive assessment in sustainability reports in order to please their clients.
“The missing piece in CSR is still the need for education,” says Wong, who believes that companies can take a more comprehensive view of CSR, as CUHK has done. “We also hope that more companies realise that small measures can bring large benefits over time.”
Too many companies think CSR means donating money... there is a misunder standing about how effective it can be
“In China, many factories are still lagging behind in their CSR practices, even when they are owned by Hong Kong or overseas companies,” says Wong, drawing on his own observations. “The business managers attending our conference will be in a position to change this as they transition into leadership roles.”
Wong, who is on the organising committee of the CUHK CSR conference, has taken part in other international business case competitions in Asia and Europe. CSR 2014