Workshop presentation - Opening Meeting (Speaker: Olivier Delbard)

1. CITIZEN ACT Opening Meeting
Workshop coach: The CSR challenge
Wednesday, February 2nd 2011
Olivier Delbard
Associate Professor
ESCP Europe

2. 1. The origins of CSR (1/3)
1.1 The U.S. Conception of the social responsibility of businesses
– The Protestant Ethic
– The rise of the corporation and its rights and duties in society
• The need for an « economics of responsibility, developed and
embodied in our business ethics » (Clark, 1916)
• Philanthropy as a « natural » practice
– The notion of « interested groups »èstakeholders today
• Frank Abrams, Standard Oil’s Board Chairman, in 1951: « the role
of management is to maintain an equitable and working balance
among the claims of the various directly interested groups...
stockholders, employees, customers and the public at large
– The modern corporation as a driver for societal improvement, distinct
from legislation
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3. 1. The origins of CSR (2/3)
1.2 The concept of sustainable development and the gradual involvement
of businesses around the world
The landmark definition (1987)
• "Sustainable development is development that meets the needs of the present
without compromising the ability of future generations to meet their own needs."
• (Brundtland report, « Our common Future »)
 A new conception of Time (Long term and short term) and
Space (local and global)
 The need for a new development model
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4. 1. The origins of CSR (3/3)
First, a response to mounting environmental challenges:
– Overintensive use of natural resources (water, forests, land, fossil fuels)
• The ecological footprint
• The exhaustion of non renewable resources
• The risk of irreversibility
⇒ Negative impacts:
• Pollution (air, water, soil, etc.) & waste
• Biodiversity
• Environmental risks & Health hazards
•The climate change challenge
Then, in the wake of globalization, the emergence of major global social and
societal issues:
– The widening gap between the poorest and richest
• The poverty challenge
– Demographics and migratory flows
– Work conditions and human rights
– Local development
– Corruption, bribery and lobbying
 The emergence of sustainability issues for businesses: how can companies
contribute to meeting the global and local sustainable development challenges?
CSR AS BOTH SUSTAINABILITY AND THE ANGLO-SAXON PHILANTHROPY-BASED
APPROACH
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5. 2. CSR and sustainability today
1) 3 levels of corporate responses
• Level 1: Philanthropy
– The U.S. approach: the societal commitment of firms
• Level 2: Search for compliance
– A « reactive » attitude, triggered by legal and/or other external pressures
• 2.a: Legal and regulatory constraints
• 2.b: External pressures (customers, sector, etc.)
• Level 3: Proactive strategy
– CSR as a tool of corporate strategy, embedded in the activites of
the firm
• The Business case: Turning constraints into business opportunities
– CSR and competitive advantage (Michael Porter)
• The European approach to CSR
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6. From community involvement to strategic CSR
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7. CSR as both a global and local concept
– Global: the emergence of an international framework of soft law
• The U.N. Global Compact
• The OECD Guidelines
• The GRI sustainability reporting guidelines
• The ISO 26000 standard
– Local:
• The local political, cultural & regulatory environment
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8. The E.U. Definition of CSR
•A concept whereby companies integrate social and environmental concerns
in their business operations and in their interaction with their stakeholders on
a voluntary basis. (Commission Green Paper 2001 “Promoting a European
Framework for Corporate Social Responsibility”, COM(2001)366 Final)
•CSR covers social and environmental issues, in spite of the English term
corporate social responsibility;
•CSR is not or should not be separate from business strategy and operations:
it is about integrating social and environmental concerns into business
strategy and operations;
•CSR is a voluntary concept;
•an important aspect of CSR is how enterprises interact with their internal
and external stakeholders (employees, customers, NGOs, public authorities, etc.)
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9. 2 interconnected principles
1) The triple bottom line
• CSR as performance: how to measure it? Indicators, reporting? How to
improve non financial performance? How to aggregate it to financial
performance?
2) The stakeholder approach
• Implications on governance
• New stakeholders, new relations: example of civil society (NGOs, local
populations) and suppliers
Four main types of corporate motivations for CSR (Porter and Kramer, 2006)
• The moral appeal
• Sustainability
• The license to operate
• Risks and reputation
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10. 3. The scope of CSR
•Environmental issues
– How to deal with externalities?
• Inputs and outputs/ Impacts
The sustainability vision: reducing the negative impacts
supply chain, product/service life cycle
•(Internal) social issues
– Human resources policies
• Diversity management, motivation, employability…
– HSE (health, security, environment)
•Societal issues
– The « license to operate »
– Local development & territorial impact
– Ethics and politics
• Transparency, corruption, lobbying, etc.
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11. 4. CSR and the banking industry
•A few specificities
– On the environmental side: direct vs indirect impacts
– The importance of compliance: how to link it to CSR
– Ethics and CSR: the aftermath of the financial crisis
– The human capital factor: HRM and CSR
•For a multinational banking group
– Global CSR strategy vs local realities
• Convergence and diversity!
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12. 5. To conclude
•CSR and sustainability as:
– Innovation drivers
– New responsibilities for a company (in this case, a global banking
group)
– Imagining the future (from the perspective of the younger generations)
– Enhancing the meaning of work and life in society
•A few bibliographical references:
– Porter M.E. & Kramer M.R.: « CSR Strategy and Society », Harvard
Business Review, 84(12), 2006.
– Zadek S., The Civil Corporation, London, Earthscan, 2001.
– The Oxford Handbook of Corporate Social Responsibility, Crane A. et
al, Oxford University Press, 2008.
– Visser, W. & Tolhurst N., The World guide to CSR : A country
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13. Thank you!