Regent Business School Conference

'Not Business As Usual'

Making Corporate Responsibility &

Sustainability SustainableWilliam P. Kittredge, Ph.D.

President Cervelet Management & Strategy Consulting

www.cerveletconsulting.com

Sustainability Defined

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What is Sustainable Development?

Sustainable development is a form of economic growth that recognizes the importance of environmental and social objectives in long-term company financial performance and survival

Contrast neoclassical economic theory

Sustainability leads to the institutionalization of Corporate Responsibility & Sustainability (CR&S)

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Sustainable Development

Weyerhaeuser Forest Products, USA

The Body Shop, England

Saga Sports, Pakistan – Faiz Shah

Bank of America, USA

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Corporate Social Responsibility (CSR) Involves diverse partners

Requires stakeholder identification & engagement, and may require technical support

Private sector generates responsible profits

Society reaps the benefits of sustainable development.

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Corporate Social Responsibility (CSR)

“It takes 20 years to build a reputation and five minutes

to ruin it. If you think about that, you'll do things

differently.” - Warren Buffett

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Bank of America

U.S. government lawsuit accusing Bank of America of

fraud

The suit accuses BoA of a racketeering operation

Bank of America settles with shareholder $2.43 billion

Layoffs at Bank of America Corp – 2,100 jobs

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Evolution of CSR Compliance

Establishment of standards

Cerfitications

Triple Bottom Line (TBL) “making a business case” for CSR

Social, environmental, & financial impacts

Responsible Competitiveness Market forces engaged

Companies rewarded and punished using CSR standards

source: Responsible Business Guide: A Toolkit for Winning Companies

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Sustainability & CSR

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Arts & Culture

Employee Voluntarism

EducationHealth

Disaster Relief

Community /Livelihood

Development

CSR Initiatives by

Group Companies

Environment

CSR

Corporate Responsibility & Sustainability (CR&S)

Implementation in line with organizational goals, mission and vision – strategic plan implementation

CR&S - a comprehensive framework developed and adopted by the organization

No generic framework fits all situations Role of public authorities and regulatory bodies Transparency and credibility of CR&S

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CR & S: Who Pays; Who Benefits?

Old assumption – companies with CR&S underperform Research suggests – organizations adopting CR&S

enjoy higher rate of returns CR&S provides more robust governance structure &

accounts include environmental and social impacts Enhanced measurement protocols and reporting system Together, generate social trust

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Ensuring Real Sustainability

Build a business case for CR&S as opposed to the normative case for sustainability

Identify and distinguish sustainability and greenwashing Commitment to transparency and TBL disclosures Develop, implement and integrate operations in

consonance with TBL philosophy Commitment to multi-dimensional measurement &

reporting

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Transparency Initiative Adopting transparency in operational and reporting

processes Social expectation shifts from ‘why do you report?’ to

‘why don’t you report meaningfully and understandably?’ Research indicates correlation between economic, social

and environmental indicators Externality impact of environmental degradation becomes

company economic liability – BP's Gulf spill Poor social performance e.g. high work place injuries also

incur economic impacts – loss of skilled employees reduces productivity & morale

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CR&S Framework

CR&S Lifecycle

Six stages of CR&S lifecycle are Initiation Implementation Organisational growth CR&S process repetition CR&S goal update Updated CR&S implementation

N.B There exists a ‘Growth Lag’ between CR&S process repetition stage & the second organisational growth phase

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CR&S Lifecycle

How to respond? Adopt sustainable practices to improve processes and

productivity at the same time reducing negative environment impact

Build a business case for CR&S as opposed to the normative case for sustainability

Identify and distinguish sustainability and greenwashing Develop, implement and integrate operations in line with

sustainability policy and reporting framework Sustainability reporting, disclosure and assurance

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How to respond? Do something, make a start Set and realise realistic CR&S goals

Company resources

Business lines

Acknowledge that this is an iterative process, not an end point.

Companies and those who own and manage them have more power than the average citizen

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How to respond? Select a CS&R model that is relevant to your business,

and its social, political, and cultural environment. Remember you are changing corporate culture

Secure commitment of senior management. Make use of the 'workbooks' and 'toolkits' that are

available – step-by-step guides streamline the process, making results easier to achieve.

Train key personnel – use 'train the trainers' model Don't be afraid

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Seattle | Bangkok | Karachi | Islamabad

www.cerveletconsulting.com

From Sustainability to Sustainability…

William P. Kittredge, Ph.D.President

Cervelet | Management & Strategy Consulting

wkittredge@cerveletconsulting.com(084) 717 7900