course on corporate social responsibility lecture 2 xavier amoros ecosysmis révélateur de valeurs

Course on Corporate Social Responsibility

Lecture 2

Xavier Amoros

EcosysmisRévélateur de valeurs

2EcosysmisAccélérateur de confiance www.ecosysmis.com - xamoros@ecosysmis.com

Syllabus

• Lecture 1: CSR rationale

– CSR : Why NOW and where it comes from

– Critics and beyond the critics

• Lecture 2: Principles and dialogue

– CSR principles

– Responsibilities towards whom and about what

• Lecture 3: Core questions

– The 7 areas of responsibilities

Syllabus• Lecture 4

– Evaluation by third parties

– Reporting on CSR

• Lecture 5

– Social and environmental accounting

– State-of-the-art

• Lecture 6

– Outlook

Objectives of the lecture

• Explain the seven principles of CSR as defined by ISO 26000

• Show the scope of these standards in the governance and management of a company

• Consider the recommendations and practices of dialogue with stakeholders

• See how to define the stakeholders, the sphere of influence and build a constructive dialogue that serves the interests of all parties, the expectations of society

Recognising social responsibility

In addressing its social responsibility an organisation should understand three relationships:

1. Between the organisation and society;

2. Between the organisation and its stakeholders; and

3. Between the stakeholders and society

The SR deeply commits the company to the relationship of with its stakeholders

Corporation

Stakeholders

Dialogue

Society and theenvironnement

Contribution to

Sustainability

7 core SR questions7 core SR questions

Fair operatingpractices

Environment

Labour practices

Human rights

Consumer issues

Community involvement

7 principles

Areas of action

4. Biodiversity and restoration

of habitats

2. Sustainable resource use

1. Prevention of pollution

3: Climate change mitigation and

adaptation

4. Consumer service and dispute resolution

6: Access to essential services

7. Education and awareness

5. Consumer data and privacy

2. Protecting consumers' health and safety

1. Fair marketing and fair contractual

practices

3. Sustainable consumption

3. Employment creation and

skills development

4. Technology development and access

5. Wealth and income creation

6: Health

2: Education and culture

7. Social investment

1. Community involvement

1. Anti-corruption

3. Fair competition

4. Promoting SRin the value chain

5: Respect for property rights

1. Employment and employment relationships

2. Conditions of work and social protection

3. Social dialogue

5. Human development and training

4. Health and safety at work

7. Economic, social and cultural rights

8. Fundamental principles and rights at work

3. Avoidance of complicity

2. Human rights risk situations

5. Discrimination and vulnerable groups

6. Civil and political rights

1. Due diligence

4. Resolving grievances

2. Responsible political involvement

ISO 26000 and other CSR standards

Ecosysmis

• Principes directeurs relatifs aux entreprises et droits de l‘Homme - ONU et Commission Européenne

• Lignes OCDE sur la lutte contre la corruption

• Business principles for countering bribery - TI

• ISO 14001, 22000, 50000…• MASE

• UNEP Life Cycle Sustainability assessment

• TEEB - The Economic Evaluation of Biodiversity…

• ISO 9000• OECD Promoting Sustainable

Consumption

• ILO-OSH 2001, OHSAS, SA 8000• UNEP Life Cycle Sustainability

assessment

• Principes du Pacte Mondial• Lignes directrices de l'OCDE pour les entreprises

multinationales• GRI 4, AA1000• EFQM• SIGMA guidelines

• Déclinaisons sectorielles : agro-alimentaire, communication, paysage…

• Déclinaisons fonctionnelles : achats responsables

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CSR PRINCIPLESChapter

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7 CSR principles

Transparency

Ethical behaviour

Respect for stakeholders

interestsRespect for the

rule of law

Respect for international

norms of behaviour

Respect for human rights Accountability

Transparency

Respect of the 7 CSR principles

xamoros@ecosysmis.com

Provide possible access to information for people affected by a decision, without disclosing trade secrets provided neither a strategy

It focuses on a specific list of items, such as

1. the purpose, nature and location of the activities,

2. the identity of any controlling interest in the activities of the organization,

3. how are made, implemented and reviewed decisions, performance in areas where the SR is important and significant, known or probable effects of decisions or activities of the stakeholders…

Accountability

Assume one’s decisions, actions and impactsReflect deeds of assumingBe answerable for its decisions and activitiesAccountability participates transparency

Transparency & Accountability

Xavier Amoros

Transparency AccountabilityImpacts of decisions

and actions

• Objet, la nature et l’emplacement des activités

• Identité de toute participation de contrôle à l’activité de l’organisation

• Manière dont sont prises, appliquées et revues les décisions

• Performances dans les domaines où la RS est importante et significative,

• Effets connus ou probables des décisions ou activités sur les parties prenantes…

• Rendre compte du fait d’assumer

• Répondre de ses décisions et de ses activités

• Réparation des dommages causés

Ethical behaviour

Behaviour adequate to accepted principles of right or good conduct in the context of a particular situation

Based on the values of honesty, fairness and integrity

Implies that there is concern for others, animals and the environment

Involves a commitment to address the impact of its decisions and activities on the interests of others

« Ethics is the search for how to properly act »

Recalling an obligation independent of the standard ...

Social Responsibility commits to exceed legal obligations, including its application under the sphere of influence and exercise due diligence

Respect of the

Rule of Law

Principle recalling the importance of human rights and the need for organisations to promote respect

The principle also refers to situations of active complicity, passive or silent

Respect for the Human

Rights

International standards of

behaviour

Universal values contained in the Universal Bill of Human Rights or the fundamental ILO Conventions, including where they have not been transposed into local law

Recognition of stakeholders’

interests

Know & understand the interests of its stakeholders

Take into account the interests of its decisions in an informed manner

Meet its interests

Understanding complicity

• Complicity has both legal and non-legal meanings

• In the legal context, complicity has been defined in some jurisdictions as being party to an act or omission having a substantial effect on the commission of an ILLEGAL act such as a crime, while having knowledge of, or intent to contribute to, that illegal act

• Complicity is associated with the concept of aiding and abetting an illegal act or omission

Understanding complicity

• In the non-legal context, complicity derives from broad societal expectations of behaviour

• In this context, an organisation may be considered complicit when it assists in the commission of WRONGFUL acts of others that are inconsistent with, or disrespectful of, international norms of behaviour that the organisation, through exercising due diligence, knew or should have known would lead to substantial negative impacts on society, the economy or the environment

• An organisation may also be considered complicit where it stays silent about or benefits from such wrongful acts

Transparency principle

• An organisation should be transparent in its decisions and activities that impact on society and the environment

– Disclose in a clear, accurate and complete manner,

– and to a reasonable and sufficient degree,

– the policies, decisions and activities for which it is responsible,

– including their known and likely impacts on society and the environment

Transparency principle

• This information should be readily available, directly accessible and understandable to those who have been, or may be, affected in significant ways by the organisation

• It should be timely and factual and be presented in a clear and objective manner so as to enable stakeholders to accurately assess the impact that the organisation's decisions and activities have on their respective interests

An organisation should be transparent regarding… (1/3)

• the purpose, nature and location of its activities;

• the identity of any controlling interest in the activity of the organisation;

• the manner in which its decisions are made, implemented and reviewed, including the definition of the roles, responsibilities, accountabilities and authorities across the different functions in the organisation;

• standards and criteria against which the organisation evaluates its own performance relating to social responsibility;

• its performance on relevant and significant issues of social responsibility;

• the sources, amounts and application of its funds;

• the known and likely impacts of its decisions and activities on its stakeholders, society, the economy and the environment;

• and its stakeholders and the criteria and procedures used to identify, select and engage them.

Accountability principle

• The responsible organisation is in a position to meet its stakeholders on the impact of its activities on the environment, civil society and / or health, and the actions undertaken to avoid repetition of negative impacts

• These are measured and controlled and the information is clear, understandable, fair, accessible

The principle of ethical behaviour

• “An organisation should behave ethically. An organisation's behaviour should be based on the values of honesty, equity and integrity

• These values imply a concern for

– people,

– animals and the environment,

• …and a commitment to address the impact of its activities and decisions on stakeholders' interests.”

An organisation should actively promote ethical behaviour by… (1/3)

• identifying and stating its core values and principles;

• developing and using governance structures that help to promote ethical behaviour within the organisation, in its decision making and in its interactions with others;

• identifying, adopting and applying standards of ethical behaviour appropriate to its purpose and activities and consistent with the principles outlined in this International Standard;

• encouraging and promoting the observance of its standards of ethical behaviour;

• defining and communicating the standards of ethical behaviour expected from its governance structure, personnel, suppliers, contractors and, when appropriate, owners and managers;

• preventing or resolving conflicts of interest throughout the organisation that could otherwise lead to unethical behaviour

• establishing and maintaining oversight mechanisms and controls to monitor, support and enforce ethical behaviour;

• establishing and maintaining mechanisms to facilitate the reporting of unethical behaviour without fear of reprisal;

• recognizing and addressing situations where local laws and regulations either do not exist or conflict with ethical behaviour;

• adopting and applying internationally recognized standards of ethical behaviour when conducting research with human subjects; and

• respecting the welfare of animals, when affecting their lives and existence, including by providing decent conditions for keeping, breeding, producing, transporting and using animals

Principle of respect for stakeholder interests

• An organisation should respect, consider and respond to the interests of ALL its stakeholders.

• Although an organisation's objectives may be limited to the interests of its owners, members, customers or constituents, other individuals or groups may also have rights, claims or specific interests that should be taken into account

• Collectively, these individuals or groups comprise the organisation's stakeholders

• An organisation should:

– identify its stakeholders;

– recognize and have due regard for the interests as well as the legal rights of its stakeholders and respond to their expressed concerns;

– recognize that some stakeholders can significantly affect the activities of the organisation;

– assess and take into account the relative ability of stakeholders to contact, engage with and influence the organisation;

• An organisation should (followed):

– take into account the relation of its stakeholders' interests to the broader expectations of society and to sustainable development, as well as the nature of the stakeholders' relationship with the organisation; and

– consider the views of stakeholders whose interests are likely to be affected by a decision or activity even if they have no formal role in the governance of the organisation or are unaware of these interests.

Principle of respect for the rule of law (1/3)

• An organisation should accept that respect for the rule of law is mandatory

• The rule of law refers to the supremacy of law and, in particular, to the idea that no individual or organisation stands above the law and that government is also subject to the law.

Principle of respect for the rule of law (2/3)

• The rule of law contrasts with the arbitrary exercise of power. It is generally implicit in the rule of law that laws and regulations are written, publicly disclosed and fairly enforced according to established procedures.

• In the context of SR, respect for the rule of law means that an organisation complies with all applicable laws and regulations.

• This implies that it should take steps to be aware of applicable laws and regulations, to inform those within the organisation of their obligation to observe and to implement those measures

Principle of respect for the rule of law (3/3)• An organisation should:

– comply with legal requirements in all jurisdictions in which the organisation operates, even if those laws and regulations are not adequately enforced;

– ensure that its relationships and activities comply with the intended and applicable legal framework;

– keep itself informed of all legal obligations; and

– periodically review its compliance with applicable laws and regulations.

Principle of respect for human rights

• An organisation should respect human rights and recognize both their importance and universality

– respect and, where possible, promote the rights set out in the International Bill of Human Rights;

Principle of respect for human rights

– respect the universality of these rights, that is, that they are indivisibly applicable in all countries, cultures and situations;

– in situations where human rights are not protected, take steps to respect human rights and avoid taking advantage of these situations; and

– in situations where the law or its implementation does not provide for adequate protection of human rights

Principle of respect for international norms of behaviour

• An organisation should respect international norms of behaviour, while adhering to the principle of respect for the rule of law – It refers to all international norms and especially Human Rights

• In situations where the law or its implementation does not provide for adequate environmental or social safeguards, an organisation should strive to respect, as a minimum, international norms of behaviour

• In countries where the law or its implementation conflicts with international norms of behaviour, an organisation should strive to respect such norms to the greatest extent possible

Principle of respect for international norms of behaviour

• In situations where the law or its implementation is in conflict with international norms of behaviour and where not following these norms would have significant consequences, an organisation should, as feasible and appropriate, review the nature of its relationships and activities within that jurisdiction.

• An organisation should consider legitimate opportunities and channels to seek to influence relevant organisations and authorities to remedy any such conflict.

• An organisation should avoid being COMPLICIT in the activities of another organisation that are not consistent with international norms of behaviour

RECOGNISING SOCIAL RESPONSIBILITY – THE STAKEHOLDERS

Chapter

Chapter 2 - Responsibility towards whom and about what

• Who are the stakeholders: Definitions and typology

• Stakeholders mapping

• The sphere of influence

• How to relate to the stakeholders

– Stakeholders panel

– NGOs

– Suppliers

– And others

• Listen, consult, inform, offer and report

UN Johannesburg Summit

Reminder: Stakeholders theory dates back to the 80s

1st Industrial Revolution

80’sDeregulation

19th2nd Industrial Revolution

Communism in USSRExtension of CommunismWelfare state in the West

90’s

18th century

Rerum Novarum, Pope Leon 13

Alterglobalisation movement

Howard R. Bowen, 1st formulation of CSR

UN Global Compact

ISO 260001984

Stakeholders theory E. Freeman

40’s

CSR Europe

Globalisation of capitalist corporations

Stakeholders management: Key to the Corporate Performance

• 0’: What is stakeholders theory• 3’00”: What are stakeholders (skip until

4’30”)• 5’05’’: Stakeholders are people – Business

& ethics fit together• Stakeholders management leads to Social

Resposbility per se• 9’40”: Stakeholders & value creation (!)• 11’05”: Value creation opportunities

• 44’30”: Building Trust• 47’: Who do people trust ?

Main lessons from E. Freeman• Business and Ethics go in the same direction

• Capitalism enables to serve the interests of all stakeholders

• A Business that routinely shrugs off its stakeholders is a Business in decline

• Searching trade-offs between different interests should come after the search of the intersection of all interests

– E.g. cost savings by wiping out pollution / cutting GHG emissions

• Stakeholders are people or organisations who play a role in the value creation process

• Consider Stakeholders like living, breathing human beings

• Managers are best placed to define relevant segmentations of stakeholders

Who are the stakeholders ?

• Stakeholders are the people and groups who have an interest in the decisions and activities of an organisation

• The narrow definition conventionally include the economic stakeholders: clients, owners, suppliers…

• …But impacts appear to happen on a much broader range of stakeholders

Purpose of dialogue with stakeholders

• Discern the interests worn by Stakeholders to assess their consideration by the organisation based on dialogue

• Have the point of view of its stakeholders in order to make decisions being informed of the possible consequences of its decisions on stakeholders

• Exercise the duty of influence

• Strengthen the acceptability of the company

Corporate acceptability StrongWeak

Business in the spotlight

Persona non-grata

Lambda companies

Responsible behaviour

Stakeholders dialogue

Stakeholders dialogue is a starting point for social acceptability

Corporate acceptability StrongWeakBusiness in the spotlightPersona non-grata Lambda companies

• Failure to obtain license to operate

• Non-renewal of concession

• Civil actions to obstruct the activity, sabotage

• Boycott of customers

• Smear campaign

• Difficulty in recruiting

• Trials

• Right to operate: Authorization / concession

• Neutrality of citizens and public authorities: Neither favor nor obstacle

• Ability to deploy its normal activity

• Positive and fast outcome of requests to public authorities

• Financing facilities

• Granting of better conditions to operate

• Informal benefits: Access to information, contacts ...

• Strong appeal of the company (customers, partners, employees, suppliers)

Responsible behaviour

Stakeholders dialogue

Stakeholders dialogue is a starting point for social acceptability

Chapter 2 - Responsibility towards whom and about what

• Who are the stakeholders: Definitions and typology

• Stakeholders mapping & sphere of influence

• How to relate to the stakeholders

– Stakeholders panel

– NGOs

– Suppliers

– And others

• Listen, consult, inform, offer and report

Organisation

Has an impact on…Mutual impacts

Strength of the impacts

Stakeholders mapping

Value chain

Supply chain

Shareholders MediaCompetitors NGOs

Suppliers

Partners

Regulators

Administrations Communities

Consumer associations

Consumers

End of life

ClientsEmployees, unions

Value chain / Supply chain

• A VALUE CHAIN is a representation of the steps involved in producing goods, starting with raw materials and ending with the product delivery and use, with a focus on the economic added value at each step

• A SUPPLY CHAIN is another representation of the steps from raw materials to the product delivery and use, while narrowing its focus on the logistical steps

Various ways to segment one’s stakeholders

• Internal stakeholders

• Market stakeholders

• Extensive stakeholders

• Social sphere

• Pubic sphere

• Economic sphere

• Trade and scientific sphere

• Direct stakeholders

• Indirect stakeholders

• Strategic stakeholders

• With low influence

• With a moderate influence

Organisation

Value chain

Supply chain

Suppliers

Partners

Regulators

Consumers

End of life

Subsidiaries

NatureFuture generations

• Internal stakeholders

• Market stakeholders

• Extensive stakeholders

Organisation

Value chain

Supply chain

Suppliers

Partners

Regulators

Consumers

End of life

Subsidiaries

Trade organisations

• Social sphere

• Pubic sphere

• Economic sphere

• Trade and scientific sphere

Financial community

Retailers

Organisation

Value chain

Supply chain

Suppliers

Partners

Regulators

Consumers

End of life

Subsidiaries

Trade organisations

• Direct stakeholders

• Indirect stakeholders

Financial community

Retailers

Organisation

Stakeholders mapping: Defining the sphere of influence

Suppliers

Partners

RegulatorsCommunities

Administrations

Consumers

End of life

Sphere of influence

• Strategic stakeholders

• With low influence

• With a moderate influence

Value chain

Supply chain

58EcosysmisAccélérateur de confiance www.ecosysmis.com - xamoros@ecosysmis.comTitre de la présentation - Date

Identify its sphere of influence to exert its full influence

• What is the sphere of influence of the business?

– It includes stakeholders that an organisation considers capacity to be influenced by its messages, actions and decisions

• Corporate Social Responsibility urges to use its influence wherever it leads others to more responsibility

– Within its sphere of influence, the company MUST use its influence, if it can, to encourage the maximum players to implement best SR practices

Organisation

The high number of stakeholders calls for tools of dialogue & sampling

Shareholders MediaNGOs

Suppliers

Partners

RegulatorsCommunities

Administrations

ConsumersClientsEmployees, unions

Value chain

Supply chain

100 000 Millions

> 500 000

> 50 000

DozensThousands

Dozens Hundreds

A software offering appears to manage Stakeholders

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Focus on usual strategic stakeholders

• Stakeholders panels

• NGOs

• Suppliers

• Local communities

• Shareholders

• Administrations

• Customers - Consumers

Panels of stakeholders

• With the panels, the company brings together a selection of stakeholders to discuss issues of CSR

– at a given moment, one or several times per year

– The issues must be previously identified: a particular topic (water management, biodiversity) or all of the topics covered in the company's CSR strategy

• These forums of viewpoints, even divergent, can help move from a mode of confrontation to a relationship of trust

Objectives of the panels

• Collect expectations and critical opinions on the CSR strategy or report

• Examine some aspects of the company’s policies, actions or performance, and

• Produce one or a series of results, comments, recommendations on which the company has committed or may commit

• Anticipate possible threats that may occur in the future

Opportunities for stakeholders in panels

• Let know their expectations and activities to companies and in particular to their top management

• Mode of dialogue that goes beyond the simple communication because of the confidentiality clause

• Can highlight challenges of sustainable development and influence the business strategy

• Facilitates exchanges between stakeholders and create new forms of collaboration between stakeholders

• Arouse the interest of management on certain topics and induce change

Opportunities for companies in panels

• Brings together the concerns of its stakeholders in one place

• Confront positions between the different spheres of influence and encourage a greater culture of dialogue, even internally

• Defuse conflicts with stakeholders, spot in advance the reputation risks and reduce controversy

• Shows that the company wants a sustainable future with its stakeholders and broach all issues

• Free choice of partner for each stakeholder

Risks for companies in panels

• More exposed to potential attacks because its activities are subject to constant monitoring and dialogue is by no insurance against NGO campaigns

• Risk that stakeholders develop a collective voice against the company which would be greater than the individual positions

• Bring together experts can raise new topics

• Risk of an unmanageable stakeholder

• Put on the same level all the stakeholders, though unequal weight and with lack of issues prioritization

Stakeholders panel at Lafarge

• 2 panels bring a critical perspective on Lafarge’s CSR efforts:

– The stakeholders panel since 2003

– The advisory panel on biodiversity, since 2006

• They work with the Exec Committee on performance and management with regard to CSR

• Members meets 3 times a year to develop recommendations concerning:

– the management's sustainable development approach

– and the company's environmental and social performance

– the content and quality of the Sustainability Report

Lafarge’s panel consists in stakeholder representatives and experts

• 9 members are selected for their experience and knowledge in the following bodies:

– Professional organisations: • European Works Council• Building and Wood Workers International• Architect

– NGOs and thought leaders• WWF• CARE• Centre for Human Ecology• African Center for Economic Transformation

– Active shareholder• F&C Asset Management

Example of a critical panel member comment

• “A relationship of trust and a long-term mutual understanding are the key milestones to ensure the sustainable development of Lafarge and its communities. Once again, I want to reaffirm this point in 2011:

While Lafarge is keen to assert its determination to improve its environmental, social and economic impacts, it should also demonstrate that it is practically achieved, by presenting structured, integrated and efficient local actions plans.

The actions presented in previous sustainability reports, as well as in this one, set on an equal footing well-established initiatives and very new ones, projects having the capacity to bring major

positive changes and much more anecdotic ones: I wish to find more consistency and legibility.However, I appreciated reading in this document a transparent report about the tensions around the sites of Himachal Pradesh and Banda Aceh.Starting today, Lafarge has to ensure that there are enough resources allocated to the achievement of the 2020 Ambitions: In my point of view, the current budgets allocated to local development programs are insufficient and the frequency of the review of their relevance is too low. (…).”

Focus on usual strategic stakeholders

• NGOs

• Suppliers

• Shareholders

• Administrations

NGOs are in the midst of the societal jigsaw

• Soaring number from 20,000 to over 50,000 from 1985 to now

• Have developed their professionalism

• Extended worldwide networks

• Scope of competences and involvement expanded

• Relevant partners for businesses facing the social, environmental and brand challenges

Engagement with NGOs

• NGOs have developed common plate-forms for dialogue with businesses to find out creative answers to sustainability challenges

• True strategic partnerships come out with common roadmaps to achieve shared goals

• These partnerships fit into the core missions of both businesses and NGOs

• They entail long-term exchanges of expertises and a collaboration

Steps to succeed in partnership

Identify the stakes and self-assess

Dialogue frankly

Chose the ideal partner

Engage vis-à-vis the partner contractually

Define the content of the partnership

Implement the

partnership

Evaluate the partnership

and its results

NGOs active on all matters

• Biodiversity

• Pollution

• Water

• Forest

• Sea life

• Human rights

• Poverty / Health

• Solidarity N / S

• Corruption

The NGO strategic partnerships rely on leaders

BTP & Biodiversity

Beverages & Water

Electronics & Conservation

Energy & Biodiversity & Renewables

Furniture & ForestsClothes & Water

Selection criterions for the NGOs

• Accepted guidelines

– Mutual respect

– Transparency, potentially with independent checking

– Right to criticize

• Exclusion

– CARE excludes the arms industry

• Specific strategies

– WWF takes only the leader in a sector and aims at trigger a breakthrough in the overall sector

Selection criterions for the company

• Key competencies: expertise of the NGO corresponding to the selection of topics

• The strategy of NGOs vis-à-vis companies (open or not dialogue or partnerships)

• The geographic scope of the NGO as the need is local or global

• The legitimacy and credibility of the NGO

Opportunities for companies

• Take advantage of the specific skills and resources of the NGO and innovate

• Open itself to civil society

– Get involved in the civil society thanks to the NGO

– Demonstrate its willingness to engage in socially responsible practices

– Improve its image in the business and outside

• Improve internal management on CSR issues

– Train and sensitize stakeholders on CSR business

– Avoid or get out of crisis

• All CSR issues are potentally covered by NGOs

Risks for companies

• Further exposure to potential attacks because its activities are subject to constant monitoring, a partnership is in no case an insurance against NGO campaigns

• Being a victim of information leaks

• Wasting time and money if the partnership does not result

Opportunities for NGOs

• Diversify its sources of funding

• Take advantage of specific business skills and innovate

• Better understand how businesses work

• Encourage the company to improve its practices on CSR issues

• Be associated with the definition of the business strategy and monitoring

• Gain greater visibility

• Increase its credibility by seeking to establish a real discussion rather than having a hostile attitude

Risks for NGOs

• Jeopardize its reputation if the company is not up to the expectations set beforehand

• Compromising its principles, its initial mission on behalf of the partnership and lose its independence

• Be used by an unscrupulous company to destabilize one of its competitors

• Create disagreements of opinion within the NGO

• Wasting time and money if the partnership does not result

• Risk to substitute for consultants or staff representatives on certain subjects

Key Trends in the NGOs activism

• Networks of NGOs intended to gain greater efficiency

– Steady coalitions: Coordination SUD, ONG-GNO

– Ad hoc coalitions around events: CCFD and Greenpeace against soybeans in the Amazon

• Becoming a shareholder to influence the decisions of the company

– 'Share the power' campaign of Amnesty Intl.

• Lobbyism to change the rules of the game

– Integrate the political agenda as with the REACH regulation

• Judicial activism

– Growing clout of consumer organisations (UFC Que Choisir in France)

Tips for stakeholder engagement with activists

• Focus on consumer-facing brands to drive change on environmental and social issues

• Rise of social media, higher demand for supply chain transparency and increasingly savvy coordination between activist networks,

• Companies are scrambling to address stakeholder concerns before they bubble into conflict

• Strategic reactive engagement approach increases the likelihood for positive outcomes and diminish conflict with their most emboldened stakeholders

Tips for stakeholder engagement with activists

1. Respond quickly and genuinely

2. Show a human face quickly

3. Don’t remove negative comments

4. Don’t lead with your lawyers

5. Invite them in. Don’t call the police

6. Don’t be dismissive

7. Don’t hide behind other entities

8. Engage your internal stakeholders

9. Look to industry counterparts for support and opportunities

10. Turn the focus away from the company to the problem

Focus on key stakeholders

• NGOs

• Suppliers

• Shareholders

• Administrations

Dialogue: A fair conversation…

Now, Tell me

Do you firmly comply with our social standards?

Purchase is strategic for CSR

• This importance is due to:

– General implementation of outsourcing, subcontracting and offshoring policies

– Optimization of the total cost of ownership (TCO)

– Positive impact on innovation

– Risks mitigation: supply security

• 60% of the turnover of companies in the EU comes from purchase

– Public procurement makes up 17% of the EU GDP

• Purchasing function has attracted the attention of stakeholders

Under scrutiny of Social Responsibility

• Globalisation has grown concerns on social and environmental impacts as well as on money laundering and tax evasion

• Global media exposure has increased the reputation risks

• Suppliers involvement is two-fold:

– Focus on the products, in order to handpick the eco- / people- friendliest

– Focus on the supplier itself in order to commit them to a community of values and to continuous improvement

Main tools along the purchase process

Listing Contracting Follow-up

• Declaration of Commitment of the principal– Code of conduct– Code of ethics– Charter

• Commitment request to the supplier

• Diagnosis– Self-assessment

questionnaires

• General and specific terms

• Certification or labelling procedures

• Monitoring of progress

• Compliance audit

• Improvement plan and audit

What is a Code of Conduct ?

• A Code of Business Conduct consists of the policies relating to the ethical and legal standards of conduct to be followed by employees and agents of the Company in the conduct of its business

• It tells the methods and tools at disposal to implement the Code and warns of the consequences of breaching it

Typical items in a Code of Business Conduct

1. COMPLIANCE WITH LAWS AND REGULATIONS

– Compliance with Competition and Trade Laws

– Compliance with laws on corruption

– Compliance with Laws on Insider Trading

2. PREVENTING CONFLICTS OF INTEREST

– Payments, gifts and benefits

– Political Involvement

3. ATTENTION TO PEOPLE AND ENVIRONMENT

– Health and Safety

– Preventing discriminatory actions and harassment

– Environment

4. PROTECTION OF THE GROUP’S ASSETS

– Accuracy and protection of information

– Protection of Group’s assets and resources

5. FAIRNESS IN FINANCIAL REPORTING

6. IMPORTANCE OF INTERNAL CONTROLS - INTERNAL AUDIT

– Internal Control

– Internal Audit

7. IMPLEMENTATION OF THE CODE AND VIOLATIONS

– Implementation

– Alertness

– Recommended approach in case of doubt

– Violations of the Code

Example of declaring a code on a given theme: "Political Activities"

• « Les collaborateurs, à tout niveau, s’engageant dans une activité politique devront le faire en leur qualité personnelle de citoyen et non en tant que représentant de la société. La décision prise par un collaborateur, dans le respect de la loi, d’effectuer ou de ne pas effectuer de versement à un parti politique ou un candidat, n’aura d’influence ni sur son salaire, ni sur la sécurité de l’emploi, ni sur son développement de carrière. »

• « La société s’interdit tout versement à des partis politiques ou à des candidats à des élections politiques, qui ne soit conforme aux lois en vigueur et qui n'ait été approuvé par le Conseil d'Administration ou équivalent. »

• « Sa politique est d’informer et de faire connaître son point de vue sur les questions d’intérêt général qui ont un impact important sur la société. »

• « La société considère que s’inscrire sur les listes électorales, voter, apporter une contribution financière au parti ou candidat de son choix, se maintenir informé sur les questions politiques, participer à la vie publique, faire campagne et exercer un mandat au niveau local, régional ou national, sont des droits et des responsabilités légitimes et importants pour les citoyens d’une démocratie. «

Opportunities for companies to commit their supply chain to CSR

• Improving the quality and overall performance

• Greater transparency in the supply chain:

– Better monitoring of social risks, environmental, health, human rights, reputation

• Anticipation normative and regulatory

• Enrichment collaboration, co-design and innovation

• Enhancing the attractiveness (internal and external)

• Reduction in cost of ownership and value creation

• Improved extra-financial rating

Risks for companies to commit their supply chain to CSR

• Increased exposure on an area difficult to control

• Sometimes limited ability to influence

Opportunities for suppliers

• Improving the quality and overall performance

• Customer loyalty in a long-term relationship and trust

• Highlighting new competitive advantages CSR

• Anticipation normative and regulatory

• Enhancing the attractiveness

• Improved extra-financial rating

• Presence of contradictory injunctions (pressure on prices and times and new CSR demands)

• Human, logistical and financial resources are inadequate (SMEs)

• Heavy investments accompanied by a financial risk if lack of visibility on the medium term client’s strategy or short duration of contract

• Risk of dependence vis-à-vis the purchaser

Risks for suppliers

Dialogue must match the features of companies

• Given the diversity of situations, there is no single strategy regarding CSR engagement between companies and their suppliers or subcontractors, it is up to each company to develop its own approach

• It reaches from mere awareness to quality enhancement programmes

Raising awareness of suppliers

• This approach is mainly retained in the sectors where purchases have little social and environmental risks

• …by firms that initiate a responsible purchasing policy, or

• … segments families purchase or providers considered low risk

• The objective is to minimize the risks (especially image) adopting an attitude of caution

• The process is unilateral, insurance-little binding and non-coercive to the supplier

• It is essentially based on self-assessment and best practices. There is little or no control

Programmes of quality improvement and mitigation of social risks

• Originally developed in the industrial sectors with environmental / social risks (textile, apparel and retail), those programmes now tend to generalize across highly decentralized international groups and / or using suppliers located in developing countries

• It leads to the realization of preliminary mapping criteria (products / markets / countries)

• The process is gradual and specific tools are broken down by area

• Sustainability tends to become a new criterion for the evaluation of suppliers as well as aspects of quality / cost / time

• The obligations of suppliers are strengthened

• Depending on the maturity level of the company responsible purchasing, the approach is more or less collaborative

Standards pertaining to CSR matters in relation with suppliers

• Standard SA 8000

– The Company will establish and maintain appropriate procedures to evaluate and select suppliers based on their ability to meet the requirements

– The company will maintain a proper record of supplier engagement social responsibility

– The company shall maintain reasonable evidence that the requirements of the standard are met by suppliers and subcontractors

• Global Reporting Initiative (GRI) - Three types of indicators:

– Economic performance: EC6: Practices and proportion of spending with local suppliers. Indicator to inform the development of capacities in local economies

– Social Performance: LA7: Rates of injury and absenteeism

– Human Rights: HR2

• Others: Global Compact (Global Compact) - ISO 9004 /14001 / 26000

EcosysmisAccélérateur de confiance Titre de la présentation - Date

course on corporate social responsibility lecture 2 xavier amoros ecosysmis révélateur de valeurs

ecosysmis acclrateur

stakeholders slide

principles of csr

csr lecture

outlook slide

valeurs slide

social dialogue

csr rationale csr

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