Final Slide CSR
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Transcript of Final Slide CSR
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Ultimate Foundation of CSR: Where DoWe Base Our Ethico-Logical
Arguments?
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Ethics
=A specialized study of what is rightor wrong
=It concerns itself with the correctapplication of some fundamental moral
principles, such as business decisionsand policies.Therefore, to be ethical is to determinewhether a particular behavior, decision,or action of an individual is morally right
or wrong. Then act accordingly.
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Business Ethics and CSR
Business ethics first, then CSR.A Philosophy of management that can
be both personal and corporate
Goes beyond public relations andprofitability
The big challenge is to actuallyimplement and sustain it.
Requires the involvement of everyone
Aspiration for excellence
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Business ethics first, then CSR.
Individualconscience before
one makes decision
Moralaccountability of
a group ofindividuals
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A Philosophy of management that can beboth personal and corporate
The Ethical behavior of a corporationdepends to a large extent on themoral conviction of its CEO andmanagers
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Goes beyond public relations andprofitability
Sales go up
Goodimage
Do not practice business ethics&
Corporations do not benchmarkCSR to do public relations andincrease sales
CSR
You practice ethics because its
your philosophy of management;You benchmark CSR because it
is the right thing to do.
CSR
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The big challenge is to actuallyimplement and sustain it.
Profit
HostcommunityCustomers
EmployeesCompetitorsGovernment
Environment
Profit motive andcorporate gain servetheInterests of the
variousstakeholders:
The big challenge is to actually share
resources with all,
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everyone
CSR includes:
Code of conduct
Corporate citizenshipEmployeevolunteerismResource sharing and
managementSocial investment andsocial development
It believes that the morepeople are engaged thebetter
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Aspiration for excellence
Excellence is an open-ended goal,which means a personal andcorporate decision to enter theroom for improvement andbecome better.
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When business does not attempt to see a
rigorous respect for the moral, cultural andspiritual requirements, based on the dignity ofthe person and on the proper identity of each
community... Then all the rest (availability ofgoods, abundance of technical resourcesapplied to daily life, a certain level of material
well-being) will prove unsatisfactory and inthe end contemptible
-Pope John Paul II, 1987a al
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Both business ethics and CSR areborn with universal values.
SWI
SS
Indonesian
Italian
Italian
Filipino
Saudian
HonestyTelling the truthProviding assistance
to a needy personPatienceProtecting theenvironmentBusiness integrity, etc.
False advertisingBribery & extortionTechnology piracyMisrepresentationCollusion or cartelTax evasion
Unfair competitionRights & dutiestruthfulness
There is only one universal language for all business
practitioners and professionals everywhere- TRUTH,
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Both business ethics and CSR are practical
We dont simply plan our corporate involvementWe apply it to day-to-day operations as part of ourcore business
It is not enough to recall principles, stateintentions, point to crying injustice and utter
prophetic denunciations
declare Pope Paul VI
Words will lack real weight unless they are accompaniedfor each individual by a livelier awareness of personal
responsibility and by effective action
- Octogesima adveniens, 48
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CSRBusine
ssEthics
Both are not concerned only with orthodoxy(correct policy) but also with orthopraxis
(best practice)
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Business ethics and CSR are all about firmconviction
Ethics is a fixed standard,objective, permanent, and
grounded on the strongestconvictions about what is rightand wrong.
It necessarily refers to the myriadextraordinary and ordinary decisions andpractices, which men and women of
goodwill make, and the lasting values for
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Union Carbide pesticide plant in India
On the night of December 2, 1984, the deadlymethyliscynate gas, a highly toxic chemical(500 times more poisonous than cyanide)exploded
Towns of Jaipraksh and Cola, where hundredswere killed instantly in their bed, chokinghelplessly in violent spasms.
The eyes of thousands were burned andblinded, and still many thousands moresuffered lesions in their throats, nasal andbronchial passages.
Atleast 2,000 people lay dead and 200,000
F th P ti f b th thi d
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From the Perspective of both ethics andlaw
EthicsIt is ethical because someone or some groupof leaders were socially responsible for whatoccurred.
LegalIt is Legal because it has something to dowith the observance of the law.
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CEO of Wall Street says:
Money never sleeps, and he tells a
competitor to his face: Your interest is like
mine... Its making a lot of money. The top
executives down the rank-and-file employeesare paid precisely because of that: To helpthe company make a lot of money for the
shareholders. It will be a big contradiction to
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Marlboro and Philip Morris in thePhil.
Smoking Factories and Silent-killing machin
Smoking is dangerous, dodgy, and
addictive (even more compulsive ineffect than cocaine)
Philip Morris cited an overwhelming medical
andscientific consensus that cigarette smokingcauses lung cancer, heart disease,
emphysema and other serious diseases in
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Among the actions and attitudes
opposed to the will of God, the good of
neighbor and the Structure created bythem, two are very typical: on the onehand, the all-consuming desire for profitand, on the other , the thirst for power,with the intention of imposing ones will
upon others. In order to characterizebetter each of these attitudes, one canadd the expression: at any price
Pope John Paul II, Sollicitudo reisocialis, n. 37
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CSR and the LawWhatever is legal is not necessarily
socially responsible and whatever isillegal is not necessarily unethical.
CSR is more than obeying the LawThe 2003 Asian Forum on CSR ensures thatpro-profit organizations go:Beyond profit-that business learns to genuinelyaddress the common public good beyond that of
corporate interest;Beyond compliance-that business responds tohigher standards and principles beyond mereobedience to the law;
Beyond formthat the company goes beyond
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Point of Arguments
If the emphasis in CSR is the correctmanagement of all corporate resources,goods, and services, it is because business
is for the betterment of everyones well-being. But everyones well-being cannot bereduced to his/her physical or material
welfareLest it be forgotten, business is for people, andall business activities (including CSR) are only ameans for the total and wholesome development
of the human person.
Th l d l f H
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The total development of Human
person embraces the:Physical and the
spiritual
The
materiala
nd
imm
aterial
Financial andMoral
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The Human Person as the Central Issue
Business Total Human Advancem
Corporate Interest Personal growth
Links1. Anthropological order
Man by his very nature stands completely in need
interpersonal cooperations, synergy and participation2. Theologico-philosophical order
The human person is a micro-cosmic species, a bOr a consumer, but also a social being that has bee
the supernatural order, pronounced Pope John XXIII
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Corporate citizenship advances itsconviction that business should be
at the service of the human
person, and not human person atthe service of business, that ethics
is above technology, and spirit
above matter
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CSR
CSR is a collective human experience ofreading the signs of the times. Wise men andwomen from all great spiritual traditions,such as Islam, Buddhism, and Christianity,
have collectively proposed the basicunderpinning of CSR
Pope John Paul II has stated in his encyclicalCentesimus Annus, the conviction of theintellect must also be the conviction of theFaith
The reason why business should develop practice and
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The reason why business should develop, practice, andinstitutionalize CSR is theological and philosophical,both of which do attempt to satisfy our human need ,
understand (intellectual) and our need to believe(matters of faith).Why theology andphilosophy?
Because theology will help facilitate the deductionfrom Faith of what is good for business, and
philosophy the deduction from the norms of the
natural law and historyDeduction from Faith Labor and ca
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Ultimate sources of business ethicsand CSR
Sacred Scriptures Which is matter of faith, beyond reason but notunreasonable
Social Doctrine of the Church
Human Labor is dignified because the Gospel says so. That iswhat we mean by saying the Bible and social doctrine of theChurch are the ultimate sources of CSR
Natural Law It is the moral norm knowable to human reason without
the aid of supernatural revelation. It is the only law that is immutable and universal
History Scrutinize the signs of the times
S ti i th i f th ti
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Scrutinize the signs of the times
The Philippine Business for Social Progress(PBSP)
80 projects concentrated in the conflict-ridden South of Mindanao (ARMM, SZOPAD,and Caraga Areas
Catchup plan for uplifting human condition
EDSA TRES occurred in 2001
War in
Mindanao
The Philippine Business for Social Progress
(PBSP)Came up with a strategic partnership with the AsianDevelopment Council (HUDCC) for urban povertyreduction known as STEP-UP, aimed at alleviating
destitution among 25 communities in Metro Manila
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Business Leaders, through the CSR agenda,have learned to read the events and to hear thecries of the timeIn fact, in Vatican Council II the Church has
considered her duty to Scrutinize the
signs of the times and to interpret
them in the light of the Gospel(Pastoral Constitution Gaudium et spes, 4)Armed with Faith and reason, with theologyand philosophy, Pope John XXIII urged the
contemporary manager toResolve the social questions in
ways more in accord with the
needs of the present time(Mater et
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Quintessence of CSR: How Do WeKnow Were Doing It Right?
The desire of power in excess caused
angels to fall; the desire of knowledge inexcess caused men to fall. But in charity
there is no excess neither can man nor
angels come into danger by it
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Drivers pushing business towardsCSR
1. The shrinking role of government2. Demands for greater disclosure
3. Increased customer interest4. Growing investor pressure
5. Competitive labor markets
6. Supplier relations7. Ecological concerns.
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1. The shrinking role of government
PastGovernment
Legislation and regulation
Social and environmental objectives
Business Sectors
Government
Social
development
Reasons:Shrinking GovtresourcesMuddle bureaucracy
&Red TapeDistrust of regulationsGovernment can
only accomplishthe mission
impossible of
serving all citizensin partnership with
the business
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2. Demands for greater disclosure
Growing demand for corporate disclosure from
stakeholders, including customers, suppliers,employees, communities, investors, and activistorganization.
Example:
Petroleum Company,Shell is creating ananti-corruption
culture, for instance,with its joint venturespartners, contractors,
and suppliers. The Principle of Transparency
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3. Increased customer interest
Consumer rewarded or punished companies
based on their perceived Social Performance
REASONS:-Insist on reputable products and
services.-Consumer Movement gives everyindication of becoming a permanentinfluence on business
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4. Growing investor pressureInvestors are changing the way they assesscompanies performance and are making decisions
based on criteria that include ethical concerns andsocial involvement of business.
In US in 2000 more than $2 trillion worth of assetsinvested in portfolios that used screens linked tothe environment, sustainable development andsocial responsibility.AMERICAN took into account ethicalconsideration when buying and selling stocks.
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5. Competitive labor marketsEmployees considered the following:
1. Seeking out employers whose philosophies andoperating practices match their own socialprinciples.
2. Workers are looking for jobs that can provide
bread and butter, plus Chicken Soup for the Souland formation for ones values.
3. In order to hire and retain skilled employees,companies are put to task to improve working
conditions, eliminate the climate of sexualharassment and provide equal employmentopportunities, in addition to benefits package.
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6. Supplier relations
Companies are taking steps to ensure that theirpartners conduct themselves in a sociallyresponsible manner.
Companies
Code
ofConduct
Supplier
to ensure that policies or practices of
other companies do not tarnish theirreputation
Clothing Company C&A has developed a suppliercode of conduct, which expressly states that
exploitation of child labor is AbsolutelyUnacce table
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7. Ecological concerns.Include the use of recyclable materialsfor packaging and conservationprograms by businesses like ILOG
PASIG PROJECTIt also affected product design,production, and marketing,
especially as the expense ofproduct modification hasincreased the retail cost.
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CSR isbeyond
profit,
beyond
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It is CorporateIt is
composedof humanindividuals
who act asoneCooperating together, synergizing,brainstorming and reflecting
Collective Effort
Corporate Act
It is Social
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It is Social
Because the corporate action is gearedtowards the society in general, a smallcommunity-at-risk, the internal customers or apart of the environment in particular.
It is a
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It is aResponsibilityA corporation (a legal entity, a group ofpersons) can act as individual
Corporation is morally responsible for
its actions
develop its own strategy, performance indicators andobjectives.
The antonym of active responsibility is passive
non-involvement:Active responsibilityrefers to doing something positiveand being accountable for it.Passive non-involvementrefers to plain observingfrom the bench
Wh t CSR i
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What CSR isnot?
1.CSR is neither sharingcompany donations nor
a pure act ofphilanthropy
2.CSR is not a doleout
3 CSR is not just public 1 CSR is neither sharing company donations
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1. CSR is neither sharing company donationsnor a pure act of philanthropy
Corporate giving is a social investment indevelopmental activities and not a kind of welfareprogram (www.asianforumcsr.com)
Donations and philanthropy connotewelfare activities, not developmentalactivities.
Companies can say they are sociallyresponsible and has opted for the poor is throughcorporate giving (the transfer of resources,usually financial) in the form of tax deductibledonations for a wide ran e of ro ects and
2 CSR is not a doleout
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2. CSR is not a doleout
Its not a matter of giving fish but a matter of
patiently teaching them how to fish.3. CSR is not just a PublicRelationExample: The Calvert Group, a mutual fund Americancompany based in Maryland, Baltimore, demonstratedsocial zeal in prohibiting investments in companies thatproduce guns, cigarettes, and vodka.
Wh t CSR
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What CSRactually is1. CSR is a socialinvestmentIn CSR, resources are invested responsibly inprojects, which allow the company to discharge itsobligations to the various publics it is related with, whileat the same time gaining higher returns from resourceinvestments.Financial contributions are used not only to remedy aparticular deficiency or situation but can also become aSocial investment funds in the form ofrevolving
capital.CSR can indeed become a wise investmentbecause it opt for the poor and the less privilegeda preferential option that pays in the long run.
E l
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ExampleIN_HAND Phils. (an organization that opted for
the poor)Produced thousands of Christmas lanterns andother
occasional products. It expanded into makingstuffed toys and other sewing products.
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2. CSR is resource sharing
A company might have relatively easy access toresources and may even be a better utilizer ofcertain resources than other organizations.
However, a company may allow others fair accessto the same resources and, at the same time,criticize unfair allocation of resources including
credit, land and technology.
A monopoly of access is a form of inequity,corporate social responsibility is sharing
resources with the less endowed.
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An Important dimension of CSR
Resource sharing is a give-and-take procedureBusinessmans give-with-one hand-and-take-with-two policy
The concept of business partnership is extended tothose who have nothing but little brain and brawn.
In this sense, the less privileged canbecome partners of business, particularly of
the manufacturing sector.There are other companies, opting to enter into suchpartnership, that have eventually allowedcommunities to take over specific limited functions or
enter into subcontracting arrangements.
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WhatFilipinoCEOs aresaying
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According to Andres Soriano III
Public welfare,unemployment, education,and economic opportunities
should also be deep, concreteconcerns of private business.Pooling together the
resources of the businesssector to meet thesechallenges...is a landmark
strategy in corporate business
I h b l d h h Phili i
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It has been long accepted that the Philippinegovernment alone can neither solve the problem ofpoverty nor provide the necessary basic services toall, for the demand for benefits is just beyond whatthe government can supply.
What is urgent is to bring together differentgroups under one umbrella organization sothat fund and resources management can
have a deeper impact on the most needyin our society.
C th i W i Citib k
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Catherine Weir, Citibankcountry chair, says:
This is the beauty of
collective response.With resources put
together, more can beaccomplished and theimpact becomes
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Cesar A.Buenaventura
Overall, we feel that all the developmentwork we are doing is still small comparedto the needs of the country. But if other
companies with resources would do thesame, the multiplier effect in terms ofassistance extended to families and
communities nationwide would have a
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3. CSR is part of the work ethic of acorporation
CSR is business ethics
concretized andreflected in corporate
values.
Ricardo S. Pascua, former
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,President and CEO, Fort BonifacioDevelopment Corp. Explained CSR
as part of work ethic in theconcrete: You very seldom do something with a single
motivation; things that you do very often have
multiple objectives that may be synergisticallysupportive of each other. When I do good as acorporation, it assuages my Christianconscience; it is also good business. If Icontribute to the development of myimmediate nieghborhood , criminality goesdown. My employees can come to work with
peace of mind and I have access to a better
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4. CSR is partnership
Private enterprise is beginning toreach out to other constituents of
civil society such as non-governmental organizations,
academe, women, employer andlabor sectors, the United Nations,and national and local government
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League of Corporate Foundations-a working partnership of different
companies across different industries in anumbrella organization .
ExamplesRival companies like Shell and Petron of the oilindustryPfizer and Zuellig of the drug industryBPI and Metrobank of the banking industry
They forget their differences towork with the government andNGOs for the betterment of the
Fili in l .
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Stakeholders of CSR
THE SOCIETY AT LARGETHE EMPLOYEESTHE CONSUMERS
THE COMPETITORSTHE GOVERNMENT, SUPPLIERS, ANDCORTRACTORS
THE ENVIRONMENT
Its also advantageous for
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It s also advantageous for
business(businesses adopt a policy of
social responsibility such as:1. Company benefits improved financial performance Lower operating costs Enhanced brand image and reputation
Increased sales and customer loyalty Greater productivity and quality More ability to attract and retain good employees Reduced regulatory oversight
Access to capital Workforce diversity Product safety and decreased liability.
2. Benefits to the community and the general
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2. Benefits to the community and the generalpublic:
Charitable contributions and social development
Employee volunteer programs Corporate involvement in community education,
employment and housing programs Consumer protection
Product safety and quality3. Environmental benefits: Greater material recyclability Better product durability and functionality
Greater use of renewable resources Conservation and protection of species Integration of environmental management tools into
business plans, including life-cycle assessment and
costing, environmental management standards, and
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Link between CSR and marketperformanceThe Price Waterhouse Coopers CEO Surveylaunched at the 2002s World Economic Forum
annual meeting found 70% of CEOs consideredCSR vital to profitability. The top business
practitioners have spoken: Its good businesswhen business is socially responsible.
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Framework of strategic CSR: a
proposalStrong LeadershipPolicy setting
Program DevelopmentSystems and resourcesMeasurement and standard
indexReporting and feedbackmechanism
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1. StrongLeadership
Leadership can be a potent force insetting a CSR agenda and in activelypromoting CSR practice in the company
The company needs a leadership thatwould lead in defining CSR performance
indicators and assume full accountability ofthe CSRs impact on the companys
economic, social, and environmental
bottomlines
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2. Policysetting- Is to provide the mandate and define thedirection of the companys CSR agenda.
An Excellent CSR policy must have the following
features:1.Written, clear and crisp, easily understandable a
2. Communicated to and shared with allinternal and external publics
3. Perfectly aligned with companys business
goals4. To promotes the welfare of all
stakeholders.
Mc Donalds CSR Policy
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Mc Donald s CSR Policy
3 Program
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3. ProgramDevelopment
PraiseworthyCommitment1. An excellent CSR program must be in linewith the CSR mandate and related to the
main line of business.2. CSR programs should be identifiedthrough consultation with intendedbeneficiaries, hence they are market-driven
or need-based in order to address thespecific needs of the company andcommunity.3. CSR programs are designed to haveclear and workable target objectives,
implementation strategies and evaluation
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4. Systemsmanagement-A CSR program cannot be effective withoutwell-defined organizational, functional,financial, monitoring, and evaluation systems
management.-The tools, systems, and frameworks aredeveloped by taking into consideration the localcontext and corporate culture.System management leads to the continuingdevelopment and installation of sustainabilitystrategies such as partnership building,
corporate volunteerism, and phase-out
A t t di CSR ld b
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An outstanding CSR program would bebased on the following:
1. ORGANIZATIONAL SYSTEM2. MANAGEMENT SYSTEM3. KNOWLEDGE MANAGEMENT AND
COMMUNICATION SYSTEM4. FINANCIAL SYSTEM
1 ORGANIZATIONAL SYSTEM
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1. ORGANIZATIONAL SYSTEM
Which may be created througha manual, guide, or roadmap,
tools, and technologydevelopment and information
baselines; supervised by a unitof highly competent staff andsupport system;
MANAGEMENT SYSTEM
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2. MANAGEMENT SYSTEM
Which means a top-to-bottominvolvement in program planning,controlling and decision makingprocesses; and provides for a specificaudit of operations
3 KNOWLEDGE MANAGEMENT AND
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3. KNOWLEDGE MANAGEMENT ANDCOMMUNICATION SYSTEM
Which is none other than a fast and
efficient flow of communication toand from stakeholders and createdvenues for information exchange.
4 FINANCIAL SYSTEM
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4. FINANCIAL SYSTEM
Which is a provision for bookkeepingof finance records, maintenance ofaudit and internal control.
5 Measurement and standard
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5. Measurement and standardindex
In 1999- DOW JONES SUSTAINABILITY GROUPINDEX-It is the first global index to track the
performance of companies which are leaders in
sustainable development issues.In 2003- BUSINESS IN THE COMMUNITY inEngland published the CORPORATERESPONSIBILITY INDEX- which is the first
business-led, voluntary, standard index, publiclybenchmarking the CSR agenda and practice amongcompanies.
What did it accomplish
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What did it accomplish
The new index is a business tool for
companies to evaluate their own performanceand to compare it with their peers.
It enables them to assess the extent to whichstrategy and values are translated intoresponsible practice throughout their
organization, in four key areas (community,environment, marketplace, and workplace.
To identify gaps in performance and make
David Varney Chairman of
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David Varney, Chairman ofBusiness in the Community
conclues:
This is not a just a tick-box exercise... The
first Corporate Responsibility Indexdemonstrates to stakeholders thatcompanies are taking the lead in promoting
awareness and public reporting. It will helpincrease trust in business and transparencyin business performance.
Benchmarking
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Benchmarking
CSRFordFoundation
PBSP in partnership with LCF-League ofcorporate foundation
Came up with a measurement mechanism or tool calledTHE CORPORATE CITIZENSHIP BENCHMARK RATING CHART--to compare how a companys internal systems and processesfared with its primary competitor
Another tool INDIVIDUAL COMPANYBENCHMARK REPORTwhich you or anyCEO may freely use to see how your company
manage in relation to the overall benchmark
Individual Company Benchmark
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IndividualCompany BenchmarkReport
This tool, a technology created byPBSP-Center for CorporateCitizenship, assesses the company
based on the five key elements(measurement and reporting togetherconstituting the fifth element).
Standard Index
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Standard Index
-to measure CSR impact vis-avis companystriple bottomlines (Financial, Social,Environmental) and identify possible areasfor improvements
In other words, the indexcan determine whether or
not a CSR program is cost-efficient and effective.
Example
It h d t l f h t t k
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Its handy tool for managers who want to know
the actual returns of their CSR investments.
Not only that. A standard index is also anexcellent yard which can ensure that the CSRinitiatives are adequate and sustained,
comprising good business sense.It is a kind of set of guide questions, roadmaps-transparent, systematic and well-defined-that helpsidentify key results areas by doing a cost andbenefit analysis of the CSR impact on business.
It also includes a monitoring evaluation systemthat helps in establishing baseline informationthrough surveys, reviews, and consultation.
6. Reporting and Feedback
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p gMechanismGlobal Corporations is usually communicated through
compliance with standards such as the
Global Reporting (GRI) and ISO1400Is an international, multi-stakeholder effort to create
a common framework for voluntary reporting of the
economic environmental, and social impact oforganization level activity.Mission: To Improve the comparability and
credibility of sustainability reportingworldwide: Let the best practices in CSRbe revealed; let the good news be
announced
Reporting and the feedback mechanism
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Reporting and the feedback mechanismresults would give credibility to the CSR
program and build peoples trust andconfidence in the company.Compan
y
Improves itsreputation with
the generalpublic
by generatingvaluable feedback
from variousstakeholders
An excellent reporting helps to review
on a regular basis based on feedbackwhether your CSR programs isperfectly aligned with your financial
Interactivity among the 6 key
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Interactivity among the 6 keyelements:(Impressive) Corporate
CitizenshipStrong business leadership
-that practically influences the other
elements, can effect the creation of a clearand definite
CSR policy
Implement doableprogramInstall inter-
functional workin
Measurementand reporting
mechanism
San Miguel Corporation: Profit with
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San Miguel Corporation: Profit with
HonorPolicy:To maintain its image as a premier company thatproduces high quality products. Profit with
HonorStrong Leadership and pro-environment
programTop Management made it a point that the policyof profit with honor and a social work ethicshould pervade the entire corporation
Systems inplaceManagement sees to it that the green office conceptis replicated in the companys production facilities
throughout the country. Each plant has an
environmental management officer who takes charge
(SMC)Standard Index and
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(SMC)Standard Index andTQM
Most of the companys facilities already haveISO 9000 certification, which facilitates certificationto ISO 14000.
SMC has adopted the internationally
recognized Malcolm Baldridge quality management.Burt Hammer, an environmental consultant
based at the Asian Institute of Management. Nowworks with SMC to develop another management
framework that integrates the Baldridge criteria, ISO14000 Environmental Management System standardelements, and principles of Total QualityEnvironmental Management (TQEM)
SMC Reporting Mechanism
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SMC Reporting Mechanism
Highlighted activities include a clean air program
that prohibits smoke-belching vehicles fromentering SMC compounds, reforesting watershedsthat supply water to SMC facilities, and livelihood
SMC publishes information booklets on social
development, best practices in sustainabledevelopment and environment protection every2 years to inform its stockholders and otherinterested stakeholders of the companys work
in these area.
Activities