Pauline Sheldon

EIAT Conference 2011 Belgrade, Serbia Pauline J. Sheldon, PhD School of Travel Industry Management University of Hawai’i

Outline  What

is CSR?  Why is it so important now?  Why is it important to tourism and hospitality?  How tourism firms can manage their CSR efforts  Two questions for you

 Financial  Peak

Crisis

Oil  Climate change  Food & water shortages  Human rights  Technology

Society is changing its mind  In

1970 it was OK to smoke on planes  In 1970 it was OK to do a lot of things, and…  In

1970, it was OK for Milton Friedman to say: The only social responsibility of business is to make a profit.  Not OK now…

Why? Changing Values

Firms are changing too….

Life-Centered Property-Centered Corporation: Corporation:  Organic growth  Maximum growth  Ethical profits  Maximum profits  Creating values for a  Creating wealth for variety of stakeholders financial elite and CEO  Employees as key assets  Employees as costs  CORPORATION AS PIECE OF  CORPORATION AS PROPERTY LIVING SYSTEM

Uniting Enterprise and Responsibility  “Let us choose to unite the power of markets

with the authority of universal ideals. Let us choose to reconcile the creative forces of private entrepreneurship with the needs of the disadvantaged and the requirements of future generations.” 

Kofi Annan, Former UN Secretary General

Socially Responsible Investments outperform others

Question 1: Do you think CSR is more important for Tourism & Hospitality than for other industries? If so why? If not, why not?  A major

‘user’ of environmental and cultural resources - responsibility  Natural flow of wealth from developed to developing nations – poverty alleviation (MDG goal)  Tourism experience can to educate and change life styles of tourists  Tourists can be engaged in CSR efforts  Socially and environmentally conscious tourists – pushing and networking

How to Make CSR Part of Corporate Strategy? 

Place it on Organizational Chart  Manager

of Sustainable Practices  Responsible Business Coordinator  VP for Responsible Tourism  

Create an Environment and Social Council to meet regularly Create Measurement Systems: “What gets measured gets managed”:  Create

goals and track over time  Report activities in Annual Report: 

E.g. KLM, Cathay Pacific, Banyan Hotels – CSR Reports online

Identify strategic points of intersection between firm’s activities and society Society

Firm

 Inside-out linkages  Boeing International Relief Flights  Outside-in linkages  Starwood - Waikiki beach

What type of CSR Programs?  SIX

TYPES

Environmentally Responsible Business Practices  Recycling,

energy saving, pollution minimization, clean-up 

Aspen Skiing Company: wind power, bio-diesel, certified green buildings, and ISO 14001 certification. 100 % renewable energy.

 Species

and Nature Protection Programs

(engaging visitors)  Banyan

Hotels – turtles, plantings

Socially Responsible Practices (engaging visitors) 

Community educational and social programs



Exotissimo Travel – connects guests with cultural events – e.g. guests fund ceremonies that residents otherwise could not afford. Guests visit the authentic ceremonies.



Shinta Mani Hotel – guests contribute to the surrounding community and see their impact.

Corporate Philanthropy  Financial

contributions directly to a cause or a destination community  “Outsourcing” CSR  Harness Visitors  British

Airways “Change for Good Program” Starwood: “Check out for Good”

Community Volunteering  Employees’

donation of time and talents for social or environmental programs in the destination  Marriott’s

employees help sick children, build houses, mentor students, assist in disaster recovery and clean up.

 Increasingly

areas

important in natural disaster

Cause Promotion  Increase

awareness of social causes or disadvantaged populations  Supporting

Special Olympics

 Singapore Airlines  pledged

$4 million to the Movement for the Intellectually Disabled of Singapore (MINDS) employing up to 400 intellectually disabled members.

Look inside: Value-based programs in the firm  Do

business with responsible suppliers

 Tour

 Labor

Operators Initiative

practices that value employees

 Tourism

 Triple

Concern

Bottom Line Accounting

Question 2: How would you convince a tourism firm that CSR is a competitive strategy?  Build

brand value and market share with environmentally and socially conscious tourists;  Enhance ability to recruit, motivate and retain employees  Be favored by destinations who prioritize sustainability  Be better positioned to respond to risks and opportunities.  Attract socially conscious investors, improving access to capital and building share value

Where do we go from here?

Move along the CSR Continuum

Call to Action for Tourism & Hospitality to become a ‘lighthouse’ industry • Realize our unique potential to transform destinations, employees and tourists • Realize our unique opportunity for stewardship of environmental and sociocultural resources • I invite you to be a champion for CSR • ...Make a difference and be inspired..............and inspire!

Thank you! psheldon@hawaii.edu

Strategic Corporate Involvement in Society Generic Social Impacts Good citizenship

Value Chain Social Impacts Mitigate harm from Value chain activities

Transform value-chain activities to benefit society while reinforcing strategy

Social Dimensions of Competitive Context Strategic CSR that leverages capabilities to improve areas of competitive context

Corporate Social Responsibility (CSR)  Concept

began in 1950’s (Carroll, 1999)  Transferred more recently to Tourism and Hospitality in the context of sustainability  BESTEN

Think Tank on CSR in Tourism:

2006  Graham Miller – UK studies: Nancy McGehee US hospitality industry

Reasons for CSR (Porter and Kramer, 2006)

 Moral

obligation  Sustainability  License to operate  Reputation Which is most mobilising?

A Continuum of Social Responsibility Strategies

Blending tourism with social causes  United Way partnered with Cheaptickets.com to launch a website for people planning holidays with a service component in 2007.  ASTA and Global Volunteers launched an initiative late 2006 to promote volunteer service travel as “a unique way to experience new places, people and cultures while making a positive contribution.”

WTTC Social Leadership www.wttc.org  Abercrombie

and

Kent  Accor Hotels  Avis  British Airways  Marriott Hotels  Carlson Group

 Radisson

Hotels  Singapore Airlines  Taj Hotels  TUI Group  Worldspan

 CSR

is particularly important for tourism due to dependence on destination’s environment and society (Mean=6.2; St.Dvn=1.1).  CSR is more important now than ever before (Mean=6.2; SD=1.1).

 If

practicing CSR, what are the benefits?

 Good

way of marketing (Mean=5.5; SD=1.3)  Important for competitive advantage (Mean=5.3; SD=1.5),  Important for bottom line (Mean=4.9; SD=1.5).

 Why

is your company engaged in CSR?

 Part

of corporate mission  Right/ethical thing to do  Why

is your company NOT engaged in CSR?  Limited

resources  Lack of interest/need

 34%

have a mission statement incorporating CSR  24% have a designated employee for CSR  75% have engaged in CSR during 2006-07  Word associations and CSR:  vague

(79%), ethical (73%), long-run (66%), mutually beneficial (61%), competitive (56%)



(Other words not ranking highly: voluntary, expensive, nuisance, overdue, cumbersome, profitable, people-centered, environment-centered, necessary)

Are Tourism Firms Awakening?  Not

enough  Sincerity over tokenism is needed  Action over rhetoric  Certification may help  Need Innovation  Need Collaboration



Tourism/hospitality industry members think: 

   

CSR is particularly important for the travel industry due to high dependence on destination (environment, society) CSR is more important now than ever before.

CSR is a good marketing tool (image, competitive advantage).

CSR is mainly about the environment.

Concept of CSR is vague.



Tourism/hospitality industry members do:  CSR

actions < CSR rhetoric  Limited resources  Many initiatives, associations, but still not widespread

IBM Survey of CSR in 250 Global Companies  Customer

loyalty  New products ad services  Market share  Opportunity to build or damage brand

 The Abercrombie

& Kent Global Foundation provides assistance to reserves and parks and surrounding communities and helps to cope with the environmental consequences of manmade disasters.  In

2001, $500,000 in support was given for projects in 20 countries. Guests often visit project sites, providing an opportunity for meaningful contact between travelers and residents.

Center for Corporate Citizenship, Boston College (‘07)

751

U.S.

Economic Intelligence Unit (‘08)

1,122 World

McKinsey & Company (‘08)

1,306 U.S.

• Common findings:  CSR is increasingly important, and will be more so in the future.  Perception (rhetoric: what should be) ≠ Reality (what’s done)  Good/important for reputation  66% see CSR as new revenue stream  IBM study of 250 global companies

Ashoka social entrepreneurship Smart tourism slow tourism deep tourism Boeing â&#x20AC;&#x201C; International Relief Flights

Socially Responsible Investment  Provides

greater demand, higher share price, and access to capital  $2.34 trillion invested in such portfolios in US ($1 in $8)  DJSI, FTSE4GOOD,

CSR in Hong Kong  Government

leadership would help  Richard Welford - Supply Chain Audits  Local operations versus intl operations.  SME’s vs. conglomerates. (expertise)

Seven CSR Approaches  Value-based

Programs within the Firm  Corporate Philanthropy  Cause Promotion  Community Volunteering  Corporate Social Marketing  Socially Responsible Practices  Environmentally Responsible Business Practices

Social Entrepreneurs â&#x20AC;&#x153;Social entrepreneurs are not content just to give fish or to teach how to fish. They will not rest until they have revolutionized the fishing industryâ&#x20AC;? Bill Drayton, Ashoka (www.ashoka.com)

Corporate Social Marketing  Behavior

change campaigns such as education of travelers

 Travelocity’s  Promotes

“Travel for Good” program

‘voluntourism’  “Change Ambassadors” Grant program launched in 2006 – up to $5,000 for travel to a volunteer trip

Human Values Matter in Business  Sustainable

economic competitive advantage is correlated with ethical corporate behavior

 Performance

is higher where company values and personal ethics/spiritual values coalesce

 While

most people have strong personal ethics/ spiritual values, few feel that they can act on them at work

Determine Values to Drive CSR for your firm  Consider  Justice

 Consider

‘duty’ and the ‘rights’ of others – fair trade in tourism

desired outcomes

 Improved

 Other-

reputation, improved bottom line

e.g. family values

 Example:

Kaanapali Beach Hotel, Maui

Market Shifts in Tourism Demand  Value

Simplicity  Committed to Authenticity  Spiritually Engaged  Believe in Engaged Action & Service  Concerned about Ecology  Are Altruistic and Self Actualizing

Source: Peter Yesawich, 2005

Are we awake enough?  Need

to speed up the awakening

 Action

over rhetoric  Sincerity over tokenism  Need

a shift in values in all stakeholders  Need collaboration  Need more agility

CSR Networks Destination Governments National/local

Tourism Firms SMEâ&#x20AC;&#x2122;s/Global

Civil Society Customers

TUI, TOI and WWF

Champions Social entrepreneurs Host communities Associations NGOâ&#x20AC;&#x2122;s