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 – 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 “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 industry� 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 SME’s/Global
Civil Society Customers
TUI, TOI and WWF
Champions Social entrepreneurs Host communities Associations NGO’s