Wharton Global Alumni Forum:International Corporate Social Responsibility

Professor Diana C. Robertson

Beijing, ChinaJune 13, 2009

2005

2006

2007

2008

Agenda

What is Corporate Social Responsibility (CSR)?

What’s the case for (and against) CSR?

Debate: Global standards of CSRWhat can we learn about best

practices of CSR in China?What’s the future of CSR?

What is CSR?

A firm’s efforts to further a social objective, also known as corporate citizenship, triple bottom line, sustainability

Normative and business cases for CSR

Philanthropy Stakeholder model Strategic model –creating value

A Stakeholder Map

Company

Mass media

Special interestGroups

Privatesector

Politicalparties

InternationalOrganizations

Pressuregroups

Localcommunities

NGOs

Customers

Professionals

Employees

Governments

Suppliers

Corporatemanagement

Shareholders

• Slide Compliments of Klaus Leisinger, Novartis Foundation 8

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What is the Business Case for CSR?

Building reputation

Attracting customers

Attracting and retaining employees

Attracting investors

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What is the Business Case against CSR?

Milton Friedman’s argument that the “business of business is business”

The firm exists to benefit shareholders

CSR does not contribute to the bottom line

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What Is the Evidence?

“A simple compilation of the findings [from 127 empirical studies over the past 30 years] suggests that there is a positive association, and certainly very little evidence of a negative association, between a company’s social performance and its financial performance.”

Margolis, Joshua D., and James P. Walsh, Misery Loves Companies, Administrative Science Quarterly June 2003

Debate: Should firms adopt global CSR standards?

PROYes, firms should adopt global standards --and here is what they are.

CONNo, firms should not adopt global standards--only country standards—and here is why.

UN Global Compact

A strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption

6200 participants, including over 4700 businesses in 120 countries around the world

1147 participants in Asia (20+ countries)

201 participants in China (7 in FT 500)

United Nations Millennium Development Goals

An overarching framework to measure progress in reducing global povertyGrowing Inclusive Markets Initiative: Launched in 2006 Promote the private

sector as a resource for investment and innovation to achieve the MDGs

CSR in Singapore, Turkey, and EthiopiaField research on the meaning

and nature of CSR in three very different economies

Singapore -Enlightened self-interest model

Turkey-PhilanthropyEthiopia-Partnerships with NGOs

My conclusion: CSR looks very different and should be tailored to a country’s economic and social needs.

CSR – Best Practices

“Golden Bee CSR China Roll” sustainability awards (China WTO Tribune magazine)

A total of 60 companies including: Lenovo Haier Pepsi Eaton Novartis Sony

Unilever Hope Schools

Donated money and resources to help set up 18 “Hope Schools” in rural China.

Funded tuition fees for promising college students

McDonald’s

Disaster relief – Sichuan Earthquake 30,000+ food deliveries

Monetary donation to relief effort

LenovoHope through

EntrepreneurshipBottom of the

Pyramid (BOP) Investments: exploring new products and new business models that bridge the digital divide

Haier – Environment Sustainability

The only representative from Asia to be invited to the 7th meeting of the parties to Montreal Protocol

Award-Winning, Environmentally-Friendly Products

Minsheng Bank China Poverty Reduction

SA 8000 accreditation

Awards: 2006: “2005 Contribution Award for Poverty

Reduction” and the title of “Most Respected Enterprises in China” and the award of Top 100 Excellent Enterprises in China’s enterprise social responsibility survey

2007: nominated for the “2006 China Charity Award”

2008: “2007 Special Award for China Poverty Reduction” issued by China Foundation for Poverty Alleviation . 

Industrial and Commercial Bank of China

Green Credit PolicyServing the Community

People's Award for Social Responsibility

2008 Best Corporate Citizen

What Can We Learn about Best Practices in CSR?

Ideally integrated with the core business

Compensation and control systems must be aligned with CSR

Should include specific objectives, timetables, and metrics to track progress

Leadership is key CSR is motivating and contagious

What is the Future of CSR?

Increased social entrepreneurship

Bottom of the pyramid (BOP) initiatives

Greater focus on microfinance, microinsurance, micro health care insurance

Increased NGO-government-corporate partnerships