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PUBLISHERIni Onuk
EDITOR-IN-CHIEFEmilia Asim – Ita
COPY EDITORAmarachukwu Iwuala
CONTRIBUTORSProf. Craig Smith
Dr. Uwem Ite Dr. Kenneth Amaeshi
Elaine CohenObinna Igwebuike
Aman SinghMallen Baker
Thelma EkiyorMal Warwick
Christian Liistro
RESEARCHAmarachukwu Iwuala
Oyewale Oketunji
DESIGNDiana Ubah
ADMINISTRATIONEmeka Uwanna
Ife Aderoju
EDITORIAL CONSULTANCYA’Lime Media Limited
MARKETING CONSULTANTS Baoro Communications
PRODUCED BY:ThistlePraxis Consulting Limited:
4, Taslim Elias Close Off Ahmadu Bello Way, Victoria Island, Lagos, Nigeria.
www.thistlepraxisconsulting.comwww.csrfiles.thistlepraxisconsulting.com
[email protected]@thistlepraxisconsulting.com
Quantity of results point to a positive relationship be-tween corporate social performance and financial per-formance. More than 100 empirical studies published between 1972 and 2000 have examined the relation-ship between companies’ socially responsible conduct and financial performance. (source: CSR Europe)
68%
Companies with public commitment to ethics perform better on 3 out of 4 financial measures than those with-out. These companies also have 18% higher profits on average. (Source: Institute of Business Ethics, 2003)
3/4
In a survey of 247 C-suite decision makers in the US, UK and China, results revealed that 72% think the benefits of their sustainability initiative exceeded expectations. Only 4% failed to meet expectations. Business leaders identified the main benefits as reputation and trust (cited by 49% of respondents), lower cost (42%) and an improved brand (41%). (Source NYSE: ACN)
247
NUMBERS
In the same survey, when asked who should be respon-sible for ensuring progress is made in a sustainable way, 41% say businesses should, 36% think government should be more responsible while 23% believe individ-uals should. Almost a half (47%) of respondents think that business is doing the most to promote sustainable progress, against only 23% who think governments are and 26% who identify individuals. (Source NYSE: ACN)
41% DISCLAIMER: All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the publishers, ex-cept for the inclusion of brief quotations in a review.
Copyright © 2011 by ThistlePraxis Consulting Limited.
Volume 1, Issue 1June 2011Published in the Federal Republic of Nigeria...........................................................................................................................................................................................................................
Cover Image: www.emitra.web.officelive.com/csr.aspx
5
PUBLISHER’S NOTE
I recall vividly when we held the first of many strategy sessions before the set-up of
ThistlePraxis Consulting. We had presented off-shoot ideas to our advisory board, which included CSR Files™. One of the questions that came up was: ‘why a jour-nal?’ Our response alluded to the fact that our vision would hold true and that is to steer the dis-course on Sustainability and CSR on the African Continent. What you have in your hands is an aspect of that broad vision and for us, a platform to encourage healthy interactions and intellec-tual exchange.
ThistlePraxis Consulting Limited has come of age. I say this be-cause we live in a world where there are really no barriers to attaining growth, pursuing a vi-sion and sustaining develop-ment. As a consulting firm with Big Hairy Audacious Goals, we had a vision that seemed pretty
straightforward - Corporate So-cial Responsibility - and some-what simple until the ideas were ready to be implemented. Step-ping out however, proved we were in for much more than we bargained for, but we are on top of the waves. When we say we are an Assessments and Strat-egy firm, it simply means we are committed to thinking outside the box to ensure our clients and partners stay ahead in business at all times.
CSR Files™ is not your regular journal. It is a rallying ground for interested ‘stakeholders’ to relate on issues of Sustainability and Corporate Social Responsibil-ity. We will only guide the con-versation by employing edito-rial themes and a format for the presentation of our many lofty ideas through the sections. Our Editor-in-Chief, Emilia, has de-scribed this as an open, unend-ing conversation and I cannot
agree less.
Our effort to process and collect data, print the cov-ers, and assemble this issue has been a first-of-its-kind endeavor. I am grateful to all our contributors for their magnanimity, especially in keeping to our short timelines. I would also like to extend thanks to the people and organizations whose long hours and hard work have made this project possible. I intend to contribute my ideas to this platform in the subse-quent editions and would encourage you to do the same. It is expedient for all hands to be on deck as we build and shape the future we are convinced is befit-ting of the African conti-
nent and her business potential.
We regret any inaccuracies even as they underscore one of the pitfalls of living in a database globe: The information in circu-lation is not always right. Please send your comments to me at: [email protected]; even as I look forward to engag-ing our readers on issues of mu-tual fervor.
I am certain the time spent read-ing from our contributors and researchers will be worth your while and beneficial to your practice.
Sustainably yours,
Ini OnukPublisher
Opinion
Cover Story
Features
In Print
9 Questions
17
25
29
41
Demystifying CSR
Why African Businesses Need to Adopt Sustainable Capitalism
The many business cases for csr strategy
BooksThe Age of Responsibility: CSR 2.0 and The New DNA of Business
ReportsFrontier Markets. General Mills
MD/CEO, Mouka Foam on Sustainability, CSR and the African Economy.
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6 7
EDITORIAL
This publication is another aspect of a vision to keep the fire of the discourse on
Corporate Social Responsibility, Sustainability and Business Eth-ics alive.
CSR Files™ is a bold attempt to provide practitioners and stake-holders with a resource and ref-erence point on issues of Busi-ness Ethics, Corporate Social Responsibility (CSR), Sustain-ability, Corporate Governance and Social innovation within the African business environment. We will facilitate discussions for a proper industry, a code of conduct and perhaps a peculiar standard to aspire to as African enterprises and above all, the possibility of being a model for others to follow.
We intend to define and some-what, redefine the concept and practice of CSR situated in this context within the African Busi-ness Environment. We will be pleased to promote passionate discussions and give room for opinion pieces and rebuttals.
Our first attempt seeks to de-mystify CSR. This becomes very important in circumstances where the meaning of CSR is grossly misunderstood. It pres-ents an expedient starting point for us if we must steer organisa-tions away from Corporate Phi-lanthropy and Charity and if we must truly start a holistic con-
versation on the need to be so-cially responsible.
So, what do we mean by demys-tifying CSR? Is this as simple as it sounds even as we often get swamped in the sea of jargons and similar abbreviations? How different, is CSR from CSI and what is the relationship between Corporate Governance and Busi-ness Ethics? In line with a leading business model, should we be bothered about shared values or social responsibility or only con-crete social investments? What is this text book of terminolo-gies all about and how do these terms, models and approaches all inter-relate to achieve the ulti-mate goal of attaining social im-pact or doing business with the triple bottom line as a yardstick?
As a continent, where do we be-gin? Many other emerging econ-omies and continents, speak of transformational CSR or CSR 2.0, but in Africa, can we assert that we have moved even a little step away from corporate philanthro-py and cause marketing? Our Op-ed Page puts this issue and varying parameters into a well-rounded perspective and pro-vides a true picture on the need to propel Africa forward in issues of sustainability. It also proposes an alliance to ensure that these developmental changes are made mainstream and a critical number of enterprises are car-ried along, somehow.
Since CSR is a constantly-evolv-ing practice, with differing mod-els, approaches and a diverse array of postulations; our many contributors will attempt to an-swer these questions and more, discussing these issues thor-oughly. We have also recom-mended a few good reads to help you in your further study. Again, we have added our ex-ecutive education series and self development resources in addi-tion to the major events across the world, all year round to give you a good grasp of the scope of CSR and how to update your practice.
I believe this issue will answer many questions that have at-tended your study and practice whilst providing useful informa-tion and resources that will give you a rewarding future in CSR.
We are grateful to our knowl-edge partners and contributors for their support, ideas and com-mitment to this vision.
Finally, this is not a rulebook or journal but an open, unending conversation. More importantly…you’re invited in the discourse.
Welcome!
Regards,
Emilia
An Open, Unending Conversation…
HISTORY
The History of CSR
CSR was largely unpopular. Business as usual was the order of the day.
Widespread calls on organiza-tions to cease doing business in South Africa owing to apartheid. Companies such as General Mo-tors heeded the call in 1986, 15 years after the Episcopal Church filed the first shareowner resolu-tion, asking it to do so.
In 1987, a Corporate Responsibil-ity group made up of 63 leading UK companies with a track re-cord in CSR formed a forum of corporate professionals, working in community development.
Between 1984 and August, 1989,
a total of 277 foreign companies, mostly American companies, had pulled out of South Africa.
Conferences were organized and awards instituted on CSR in several places. For example: Vo-daphone, Egypt pioneered CSR in that country in 1998.
By the turn of the century, Busi-ness and Society Review published a special issue of the journal to examine ideas on how CSR would evolve in the 21st century.
In 2001, Global Compact Net-
The 1980’s
The 1990’s
work was launched in China.In July, 2002, the UN Commis-sion adopted the new strategy on CSR aimed at enhancing the contributions of businesses to sustainable development.
A lot of other organizations also held conferences, seminars, symposia and fora on CSR. They included the European Multi-Stakeholder Forum on CSR and The Economist’s two-faced Capitalism.
Multinationals started launching foundations to drive their CSR. Publications and websites on CSR became increasingly popu-lar just like centres on CSR re-search and studies. Several CSR awards also sprang up.
2001 – 2010
Source: ww
w.triplepundit.com
9
Mallen Baker
Of course, one of the chal-lenges in considering cases “for” and “against”
CSR is the wide variety of defi-nitions of CSR that people use. We assume here we are talking about responsibility in how the company carries out its core function - not simply about companies giving money away to charity.Below are some of the key argu-ments most often used against CSR and some responses.
Businesses are owned by their shareholders - money spent on CSR by managers is theft of the rightful property of the owners.Response: In the first instance, this case strongly depends on whether the model of social responsibility adopted by the business is a philanthropic one. The starting point assumption is that, through CSR, corpora-tions simply get to “give away” money which rightfully belongs to other people. If CSR is seen as a process by which the business manages its relationships with a variety of influential stakeholders who can have a real influence on its licence to operate, the busi-ness case becomes immediately apparent. CSR is about building
relationships with customers, about attracting and retaining talented staff, about managing risk, and about assuring reputa-tion.The market capitalisation of a company often far exceeds the “property” value of the company. For instance, as much as 96% of Coca Cola is made up of “intan-gibles” - a major part of which rests on the reputation of the company. Only a fool would run risks with a company’s reputa-
tion when it is so large a part of what the shares represent.In any case, if shareholders are to be accorded full property rights one would expect to see the balancing feature of responsibil-ity for the actions taken by the enterprises they often fleetingly own. Since most shareholders remain completely unaware of any such responsibility, it can only fall to the management - the “controlling mind” of the compa-ny, to take on that responsibility.
ArgumentsAgainst Corporate
Social Responsibility
Source: ww
w.imagebank.com
10 11
of the world’s leading companies whilst also showing environ-mental leadership. The events that latterly tarnished that repu-tation simply show that skill in execution is key to success - but even those events don’t disprove the fact that success in business and commitment to responsibil-ity can go hand in hand.
Our company is too busy sur-viving hard times to do this. We can’t afford to take our eye off the ball - we have to focus on core business.Response: Managing your social responsibility is like any other aspect of managing your busi-ness. You can do it well, or you can do it badly. If the process of managing social responsibility leads you to take your eye off the ball and stop paying attention to core business, the problem is not that you’re doing it at all - it’s that you’re doing it badly. Well- managed CSR supports the busi-ness objectives of the company, builds relationships with key stakeholders, whose opinion will be most valuable when times are hard; reducing business costs and maximising its effectiveness.
It’s the responsibility of the poli-ticians to deal with all this stuff. It’s not our role to get involvedResponse: In some areas, this is right. Albeit, it is getting increas-ingly difficult to sustain. Most of all the institutions, which are currently getting more powerful in the world, are essentially the global players - the multinational corporations and the non-gov-ernmental organisations. The in-stitutions, which are decreasing in power and influence are those tied to the jurisdiction of the na-
The leading companies who re-port on their social responsibil-ity are basket cases - the most effective business leaders don’t waste time with this stuff.Response: There is no denying the force of this argument. We do not live in a Disney world, where virtue is always seen to be rewarded, and that’s a fact. Nevertheless, the picture is not as simple as the above argument makes out.In the first instance, very few businesses operate in a black or white framework, where they are either wholly virtuous or wholly without redemption. There are many aspects in the way Jack Welch restructured General Electric, which would play to the kind of agenda recognisable to advocates of social responsibility - in particular that of employee empowerment. Welch has gone on record as saying that he be-lieves the time has passed when making a profit and paying taxes was all that a company had to worry about. And since Welch moved on, General Electric has been busy catching up big time with its EcoMagination initiative.Also, many of the leading com-panies who are committed to their social responsibility are equally successful companies. The same “Most Respected” sur-veys will usually provide other names at, or near, the top such as IBM and Motorola - and these are companies that have been much more strongly associated with the CSR movement. Coca Cola achieved its place partially because of its profile in social re-sponsibility. When still in charge, Sir John Browne of BP was widely respected as having led BP into a strong position as one
tion state - governments first and foremost. It is tempting therefore to look towards the multina-tionals to take a lead in creating solutions for global problems where the governments seem incapable of achieving co-op-erative solutions. The interest of Unilever in sustainable fisheries comes to mind. However, there is a strong case that says that the democratic deficit created by such a process is too important to ignore. To whom are the mul-tinational corporations account-able?Outside of that “macro” scale, the argument holds up less well. Many companies actually spend considerable time and money seeking to influence the forma-tion of public policy in their area of interest. And since that area of interest can range far and wide - from international treaties on climate change, through to do-mestic policy on health (such as that relating to smoking) or transport - the fact is the lob-bying activities of companies show that they have a role, like it or not. And if that lobbying has involved blocking legislation that serves a social end purely in or-der to continue to profit in the short term, then the company is on very dodgy ground.If CSR is simply about obeying the law and paying taxes, then perhaps the above statement is fair comment. If it is about managing the demands and ex-pectations of opinion formers, customers, shareholders, local communities, governments and environmental NGOs - if it is about managing risk and reputa-tion, and investing in communi-ty resources on which you later depend - then the argument is
nonsense.
I have no time for this. I’ve got to get out and sell more to make our profit line.Response: I have spoken to a lot of business man-agers about environmental performance, and it always struck me how difficult a sell waste minimisation was to managers, who re-ally needed to save mon-ey. Study after study after study has shown that just about any business you can think of, if it undertakes waste minimisation for the first time, can shift 1% of its overall turnover straight onto its bottom line. That is not an insignificant figure. And yet, getting out and selling more products some-how remains more attractive for business managers than mak-ing more profit through wasting less. It will take a long time and a change in fundamental attitudes towards doing business before this one shifts. In the mean time, keep looking at the evidence.
Corporations don’t really care - they’re just out to exploit the poor and the environment to make their obscene profitsCorporations have their share of things to answer for - but I simply don’t recognise the cyni-cal caricature of business lead-ers in many of the people I deal with in business today. The fact is that if you’re interested in the real solutions to world poverty or environmental degradation, you should have some kind of view about how solutions will be found. I haven’t yet seen the
vision described by the anti-cor-poratist movement that shows how the problems will be solved by “us” somehow triumphing
over “them” - big business.The solutions to these common problems will either be common solutions or they won’t be solu-tions. By all means give careful scrutiny to those who wield the most power, but recognise CSR as a business framework, which enables the common solution of wealth creation as if people and the environment mattered.
If the arguments for a socially responsible ap-proach were widely ac-cepted, nobody would even use the label “CSR” because every-one would be doing it. Those of us who spend our time marshalling the case for would do well to spend a little time hearing the case against, and consider-ing what should be the response.
“
“
Mallen Baker is a writer, speaker and stra-tegic advisor on Corporate Social Respon-sibility and Founding Director of Business Respect. He is responsible for the Business Respect email newsletter on CSR, which is the longest running CSR internet newslet-ter in the world. Published with permission from www.mallenbaker.net
Source: blog.floriankaefer.com
12 13
EXCERPTS OF THE BILL FOR AN ACTTO PROVIDE FOR THE ESTABLISHMENT OF THE
CORPORATE SOCIAL RESPONSIBILITY COMMISSION
Sponsor: Senator Uche Chukwumerije, Senate, Abia North.(Commencement)
BE IT ENACTED by the National Assembly of the Federal Republic of Nigeria. As follows:
PART ONE Establishment of1 (1) There is hereby established a Commission to be cor-porate social known as Corporate Social Re-sponsibility Commission.
PART TWO Commission 2 (1) (a) Shall be a body corporate with perpetual succession and common seal; and (b) May sue and be sued in its corporate name and may, for the purpose of its function, acquire, hold or dis-pose of property. (2) The Commission shall be headed by a Director General who shall be responsible for the overall operations of the Commission, and shall be equivalent in rank to a Permanent Secretary in the Pub-lic Service of the federation; (3) The Direc-tor General shall be the Accounting Officer of the Commission; (1) The Director Gen-eral shall be appointed by the President and confirmed by the National Assembly –– the appointment shall be based on professional competence and qualification, and without regard to political and partisan affiliations.;
(2) The Director General shall hold office in the first instance for a period of 4 years and may be reappointed for a further period of 4 years and not more than such terms and conditions as may be determined, from time to time by the Presidency;
PART THREE Functions And5 (1) Subject to this Act and in addition to any other Pow-ers of The functions conferred on it by oth-er provisions of the Commission Act, the Commission shall:a. Create a standard for social responsibility of corporate organiza-tions that is consistent with international standards; b. Integrate social responsibil-ity in Nigeria trade policies while respect-ing WTO rules and not creating unjusti-fied trade barriers by seeking to introduce provisions in bilateral regional or multilat-eral agreements; c. Conduct research and investigation of needs of host communi-ties of Corporate Organizations; d. Serve notices of social responsibility requests to organizations; e. Identify socially responsi-ble behaviour in compliance with National and Community legislation on equality and non-discrimination in all activities of com-panies;
f. Implement social and environmental reg-
ulation consistent with convention and serve as inspection regime of these agreements;
Carry out classification of corporate organiza-tions, ranking them according to organizational size and magnitude of investment, which shall determine the nature of corporate social respon-sibility expected of them; Publish annual reports on social and environmental impacts of com-pany’s direct activities on communities; Develop policies to encourage corporate organizations to undertake community engagements as part of corporate social responsibility, and ensure that companies sponsor cultural and educational ac-tivities that offer added value to Nigeria’s socio-political and technological development. Pro-vided the cost of a company’s total corporate social responsibility for a given year is not less than 3.5% of its gross annual profit for that year. Promote statutory labour standards and collec-tive social governance in the context of global-ization;
k. Ensure that companies are accountable not only to employees and their trade unions, but to investors, consumers, host communities and the wider environment; l. Sanction through fines or offer incentives to companies who default or comply with corporate social responsibility rules and principles;
m. Develop environmental guidelines that need to be met by corporations doing business in Ni-geria; n. Peg and monitor the implementation of local contents in terms of employment and sourcing of raw materials; Introduce and ensure social responsibility compliance labels which do not violate WTO rules;p. Generally enter into any contract or perform
any act, whether within the Federal Republic or outside, as will in the opinion of the Govern-ing Board contribute towards attainment of the Commissions objectives;
PART FOUR Financial Provisions 6 (a) The Com-mission shall establish and maintain a fund which shall cover all expenditure incurred by the Commission
PART FIVE Miscellaneous Provisions 7 (1) The Commission shall seek and receive information that will help it in the discharge of its respon-sibility. Such information cannot be withheld by persons, organizations and corporations. (2) The Commission shall have the power to tem-porarily shut down and suspend operations of an organization, corporation or a company for a minimum of 30 working days as a penalty for noncompliance with statutory requirement of the corporate social responsibility as stipulat-ed in this Act. (3) An organization that fails to comply with the statutory requirement of this Act commits an offence under this Act and is liable on first conviction to a fine not less than 2% of its gross annual profit and on subsequent violation to a fine of not less than 3.5% of its an-nual gross profit in addition to compliance with statutory corporate social responsibility within the given period. (4) A person that wilfully ob-structs the Commission or its authorized staff in the exercise of any of the powers conferred on its by this Act commits an offence and is li-able to imprisonment upon conviction of not less than six months.
(Source: Sponsor – Sen. Uche Chukwumerije, Abia North Senatorial District, Federal Republic of Nigeria).
14
FAQs
What is the CSR Bill all about?The Bill seeks to establish the Corporate Social Responsibil-ity Commission for the control and regulation of the activities of Corporate Organizations in Nigeria.
Why is this bill necessary?Organizational Social Respon-sibility movement started in the 1960’s with the emergence of various social movements e.g. civil rights, women liberation and environment-protection as-sociations in the United States of America. These bodies helped to enlighten the public that organi-zations have social responsibility to their host communities.
In modern times, the dire need to solve the problems of orga-nizations and their host com-munities brought in a new per-spective in Corporate Social Responsibility. The generally ac-cepted expectation now is that corporate organizations should make profit through legal means, and at the same time identify human rights, employee rights, and the challenges of environ-mental protection and commu-nity development as core values in Corporate Social Responsibil-ity. It is also generally accepted that society is best served by the regulatory hands of the law and political process in protecting a
community’s rights to Corporate Social Responsibility.
What does it seek to address?The Challenges of Industrializa-tion are burning issues. Compa-nies deriving benefits and maxi-mizing profits from communities are not appropriately responding to the needs of host communi-ties through environmental pro-tection, and community devel-opment.
The evolving principles of Cor-porate Social Responsibility in Nigeria are hitherto being pro-pelled mainly by shareholders, consumers and communities, all Non-Governmental Organi-zations. The nearest effort by the Nigerian Government in this regard is the Vision 2010, which preached partnership between government and corporations for improvement in social equity and justice, continuous funding of community development, and sustenance of unpolluted envi-ronment.
What does this mean for or-ganisations?All registered enterprises in Ni-geria will be required (by law) to adhere to a CSR Code of Con-duct to be upheld by the pro-posed commission. Failure to do so will attract a penalty of at least 2% and a maximum of 3.5%
of their Gross Annual Profit to the Corporate Social Responsi-bility commission. The commission will also be mandated to shut down the de-faulting organisation for a mini-mum of 30 working days as pen-alty for non-compliance.
What are the anticipated out-comes of this bill?a. Contribute to economic, social and environmental prog-ress with a view to achieving sustainable development of the affected communities, Respect the human rights of those affect-ed by their activities in keeping with Nigeria’s international obli-gations and commitments.b. Encourage local capacity through close co-operation with local communities, including lo-cal business interests, as well as developing appropriate linkage lines of their corporate activities to the benefit of the communi-ties c. Develop and apply effec-tive self-regulatory practices and management systems that foster a relationship of confidence and mutual trust between enterpris-es and societies in which they operate d. Support and uphold good governance principles and practice, and Abstain from any improper involvement in local political activities.
In this edition, we seek to provide answers to your Frequently Asked Questions (FAQs) on the proposed CSR Bill in Nigeria. See excerpts of the bill on previous page.
17
VERBATIM
In your own words, Define CSR…
CSR is how corporations take responsibility for contribut-ing, while not becoming a barrier, to social, environmen-tal and economic sustainable development
Catherine Chong, MBA candidate in CSR
CSR is looking at your busi-ness model. How it answers the what, how and when of the economic, social, and en-vironmental inputs your busi-ness capitalizes on and all the (economic, social and envi-ronmental) outputs the busi-ness produces.
Pamela Sol Dobniewski; Bud-get Coordinator, Fundación Huésped, Argentina & CSR student
CSR implies reconsidering the way of doing business, shift-ing towards the triple bottom line (Social, Environment and economic perspectives). CSR is voluntary, it depends on the country, it depends on the industry, and it’s beyond compliance.
Neha Bhagtani; Snr. Execu-tive, CSR & Business Develop-ment (UK Based consultancy firm, India)
CSR is how a company ad-dresses it integral business process (natural & man-made capital) & people issues & help to make its business, the community & the environ-ment sustainable
Ron Strauss; Founder & CEO of Brandzone, Co-author, ‘Value Creation: The Power of Brand Equity’
CSR is where a firm’s mission and values lead to initiatives that preserve and/or improve the common good while also improving its business results. Or, the initiative can be dy-namic in nature and instructs the firm to better the com-mon good. In essence, CSR is a ‘win-win.’
Farhana Ahmed; General Manager at ICT Alliance, Bangladesh
CSR is a commitment.A commitment by business-es to behave ethically and contribute to the economic development while improv-ing the quality of life of the workforce and their families, as well as that of the society at large.
Amol Kulkarni; Deputy Director, Share Your Care, Mumbai, India
CSR from a corporate point of view is to reduce the guilt factor. The way people make money these days by step-ping on others, by giving few cents away makes them feel less guilty & they blow it up to earn some good PR image too.
Sune Skadegaard Thorsen; Partner/Director, Global CSR
CSR is the commitment by a corporate entity to take re-sponsibility for the impacts on the environment in which it operates and make restitu-tion for any negative impacts.
John Kirk; Postgraduate Stu-dent, Southern Cross University, Australia.
CSR is a concept created for cor-porations which further allows corporations to integrate social, ethical & environmental con-cerns in giving back to society, a model incorporated within their business operations for their stakeholders.
Ashie Hirji, Director, Asita Informatica Inc
COVER STORY
What is Corporate Social Responsibil-ity (CSR)? CSR has
continued to remain an elu-sive concept. It is a concept still struggling for a defini-tion; with different meanings to different people. I have at-tended a number of both ac-ademic and practitioner con-ferences on CSR where it was often pretended that people knew what “it” is. People freely talk about “it”; yet no one is able to place a finger on “it”. I challenge you to ask anyone that talks about “it” to tell you exactly what he or she means by “it”. I suspect you would be surprised by the breadth of responses and meanings brought upon CSR that you wonder how actors in this field cope with such
diversity of meanings and interpretations. One of the often bandied and dominant definitions of CSR is that of-fered by the EU: ‘a concept whereby companies inte-grate social and environmen-tal concerns in their business operations and in their inter-action with their stakehold-ers on a voluntary basis’ as they are increasingly aware that responsible behaviour leads to sustainable business success (EU, 2002). Stated in a much more managerial speak, the CSR firm should strive to make a profit, obey the law, be ethical, and be a good corporate citizen (Car-roll, 1991:42).
One thing I have come to realise over the years is that CSR is an
DEMYSTIFYING CSR
amorphous animal – the prover-bial elephant and the blind men; at best, it is fluffy and all things for all. As such, it has the ten-dency of presenting itself as an arena of struggles, contestations of ideas and power relations. It is not a static construct, but rather has a way of appropriat-ing issues onto itself. It presents in different cultures, countries and regions in different ways. It is philanthropy somewhere and accounting for sustainability elsewhere. It is a response to the present and anticipated climate change challenges somewhere and a response to the chal-lenges of obesity elsewhere. It is about corporate governance. It is about responsible investment. Who knows what it will become tomorrow?
Thinking through all these myri-
Kenneth Amaeshi
Source: ww
w.imagebank.com
18 19
COVER STORY
ads of meanings and interpreta-tions, I feel more comfortable articulating CSR as the private governance of corporate exter-nalities. The governance of cor-porate externalities is not a new science. What is new about it is the private dimension of this governance. I see CSR as a firm’s private participation in the gov-ernance of positive and negative externalities. In other words, CSR is the manifestation of firms en-tering into the governance of ex-ternalities arena – an arena that once appeared to be exhausted by the State and its machinery. The participation of firms in the governance of corporate exter-nalities opens a new discursive space, which hitherto was non-
existent or suppressed. It shakes the fundamentals of political science, public policy and the neoclassical economist concep-tualisation of the firm in the mar-ket place; and at the same time, makes it difficult to articulate CSR from the conventional theory of the firm known to an economist and a political scientist.
The emergence of CSR signals the constant collusion of the private and public spheres in the governance of corporate- induced externalities. CSR, as a form of organisational behav-iour, is one of the resultant ef-fects of such collusions. So, CSR presents an arena for contesta-tions. Different firms are motivat-
It is a response to the present and anticipated climate change chal-lenges somewhere and a response to the challenges of obesity elsewhere. It is about corporate governance. It is about responsible investment. Who knows what it will become to-morrow? “
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ed to enter the private gover-nance space by different things. Some firms en-ter this space willingly; some are coerced into it; while others ‘sleep-walk’ into the space. Those that enter it will-ingly may articu-late their actions from different ph i losoph ic a l p e r s p e c t i ve s . Some can be very normative about it – i.e. it is the right thing to do – while others will enter the space from a more strategic (instrumental) perspective of what it offers to the bottom-line through such
incentives as new product de-velopments, sustainable inno-vation, reputational gains, risk minimisation, employee and customer attraction, retention, et cetera. There are also some that are coerced into it because of pressures from competition, the NGOs, local communities, and even threats of local and international regulations. For this kind of entrants, it is always about meeting the minimum re-quirements to meet the expec-tations of pressure groups and remain competitive.
The account of those that will-ingly enter into it and those that are coerced into it tend to suggest a rationalist view of the world.
Another school of thought may have it that firms and managers are often limited by bounded ra-tionality and as such are prone to responding to the demands of their external environments, without much thoughts. In that case, they respond to societal norms and expectations – prac-tices and constitutions that are taken for granted– thereby ‘sleep-walking’ into that space. This latter perspective has been used to explain the rapid spread and diffusion of CSR – most firms now have it on their web-sites – even when it hasn’t been, sometimes, thought through by such firms.
Most economists and political economists are puzzled by CSR, mainly because it appears to run contrary to the fundamental theories of the firm. It seems that the understanding of the firm as an entity solely interested in the pursuit of private interests ap-pears inadequate, today, to ex-plain the reality of the firm. It is becoming, surprisingly, evident that firms are not only private institutions, but are simultane-ously social institutions; and as such may take on social re-sponsibilities. This is at the root
of the conceptualisation of firms as corporate citizens. The eco-nomic sociologists are more at home with this understanding of the firm as a social institution than the economists. Unfortu-nately, the CSR movement – I won’t describe it as a discipline yet - is still struggling to become a discipline in isolation of the traditional disciplines that have sought to ground our under-standing of firms and their be-haviours in ‘good’ theories. Most CSR proponents often appear to have rather run away with the emotional side of the argument with the hope of building a ‘reli-gion’ out of CSR instead of work-ing to develop a science out of it.In summary, therefore, I often like to think of corporate social responsibility (CSR) agenda as a call for organizations to simply “do good” and “cause no harm”. I acknowledge that this may be an oversimplification of what ap-pears to constitute a very com-plex agenda; but I find it difficult to think of anything on the CSR agenda that does not fit into either of these categories: do good or cause no harm. Whilst the CSR movement appears like a ‘new movement’, it may be so in nomenclature but not so in its
COVER STORY
Different firms are moti-vated to enter the private governance space by dif-ferent things. Some firms enter this space willingly; some are coerced into it; while others ‘sleep-walk’ into the space.
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Most CSR proponents often appear to have rather run away with the emotional side of the ar-gument with the hope of building a ‘religion’ out of CSR instead of work-ing to develop a science out of it.
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aspirations. The role of business in the society is an old debate; what is not old is the intensity and prevalence of this debate in the contemporary scheme of things, which has been fur-ther orchestrated by the current global financial crisis.
One of the key starting points of CSR is the promotion of respon-sible business practices – what-ever this means. It is a movement to address the short-falls in the runaway capitalist system. How-ever, the CSR movement is not a unitary movement, but rather a very broad church. Within this church, there are those I will call iconoclasts (those who would prefer to dismantle the current capitalist system), reformers (those who want to drive change from within the current capital-ist system), revellers (those who
celebrate the movement as an aspiration, and a satisfaction in itself, even if it doesn’t change anything at last) and critics (those who believe that it is a distraction, afterwards). Over the years, the CSR move-ment has leveraged strife and antagonism to sustain itself. Be-ing pulled in different directions by the different interest groups and actors, it gains its currency and relevance, anyway. It is also able to sustain itself through its fluidity. In other words, the un-derstanding of CSR as respon-sible business practices gives it the leeway to appropriate and reconstitute its content as it journeys into the future. This is a very powerful attribute of the construct, which may not be readily available to other man-agement fads and fashions of the same scale and contemporari-
COVER STORY
ness. For example, some of the banking practices considered today as irresponsible practices were once considered respon-sible practices. Other examples include the appropriation of the climate change, binge drinking and obesity debates by the CSR agenda, as it evolves.
Most CSR proponents often appear to have rather run away with the emotional side of the argument with the hope of building a ‘reli-gion’ out of CSR instead of working to develop a science out of it.
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Dr. Amaeshi is a political economist and teaches Strategy & International Business at the University of Edinburgh Business School, UK. He is an Associate faculty at Warwick Business School; a Visiting Fellow at Cranfield School of Management, and a Visiting faculty at the Lagos Business School. He is a Senior Associate with the Sustain-ability Advisory Group (London and Dubai) and consults in the broad area of CSR and Sustainable Organizational Development (email: [email protected]).
COVER STORY
Whilst the fluidity of the CSR construct confers on it some sort of strength and resilience, it often carries with it some mana-gerial challenges. For instance, although CSR has successfully found its way into the mana-gerial lingua and practice, its underpinning philosophies are not yet easily transparent and understandable. Many a time, managers struggle to fit the re-quirements of the contemporary CSR agenda into the conven-tional capitalist paradigm: they often look for a business case and competitive advantage; they endlessly search for the link be-tween the CSR agenda and cor-porate performance; sometimes, they don’t get the answers they want; at other times, they ra-tionalise over their findings with the hope that the answers they would want, lie in the ‘long term’ sustainability of the busi-ness. While accepting the pos-sible truism in the ‘long term’ rationalisation rhetoric, another possible truism that is not often reflected in the CSR movement is that the CSR agenda could be underpinned by a different (and sometimes antithetical) set of philosophical tenets from the current capitalist system it seeks to criticise, topple and or reform.
The understanding of the CSR movement as an inclination to-
wards a meta (or post) capital-ist system, makes CSR a change management project, albeit at a very large scale (system trans-formation). It is a change man-agement that needs to win the ‘hearts and minds’ of its target actors and interest groups, who may be already versed and neck-deep in the current system. One of the ways to do this is through education and learning. Educa-tion and learning, it is hoped, will prepare the ground for sow-ing the seeds of the new system. The new system will require a new or modified paradigm – if not, the CSR movement runs the risk of filling old jars with new wine.
In summary, the embedding of
Within this church, there are those I will call iconoclasts (those who would prefer to dis-mantle the current capi-talist system), reform-ers (those who want to drive change from within the current capi-talist system), revellers (those who celebrate the movement as an aspiration, and a satis-faction in itself, even if it doesn’t change any-thing at last) and critics (those who believe that it is a distraction, after-wards).
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“ CSR in organizations, therefore, needs to reflect an understand-ing of the philosophical under-tones between the current capi-talist system and the ‘new mode of economic coordination’ prop-agated by the CSR movement. If the embedding of CSR in orga-nizations is to be authentically realised, it needs to take these differences seriously and explore the implications they would have for such factors as leadership, or-ganizational success and perfor-mance, corporate governance, organizational structure, vision, strategy, business operations in different localities, etc. This will, no doubt, be less prescriptive and would require an open mind in search of the eureka moment. This is, for me, where research takes over from practice.(To be continued in the next edition)
References: i. Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4):39-48. ii. Korhonen, J. (2002). The domi-nant economics paradigm and cor-porate social responsibility. Corp. Soc. Responsib. Environ. Mgmt 9, 67–80
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EXECUTIVE EDUCATION
IntroductionIncreasingly, corporate ex-ecutives must find new ways to address the social, economic, and environmental effects of doing business while balancing conflicting demands on their attention, time, and resources. Emphasizing the alignment of Corporate Social Responsibil-ity (CSR) with business strat-egy, this programme helps you define priorities, integrate social responsibility through-out your business, and build social and business value. You will strengthen your ability to define and implement powerful CSR strategies that position the firm, its reputation, and its way of doing business for enduring success.
What can you expectCorporate Social Responsibility explores the challenges and op-portunities of current CSR mod-els, as well as the next generation of issues that business practitio-ners will face. New frameworks and concepts will help you sharpen your programme’s fo-cus and integrate social respon-
Strategies to create Business and Social Value
sibility throughout operations in order to position your firm for higher levels of success.
Your course of studyThis intensive programme fo-cuses on the practices of com-panies that have successfully created business and social val-ue through focused, aligned, and integrated CSR programmes. It provides the practical knowl-edge and insight you need to improve decision making, lever-age partnerships, manage risk, and measure performance.
Who should attend?The programme is specifically designed for senior executives, who direct corporate social re-sponsibility programmes or oversee departments such as public affairs, philanthropy, sus-tainability, environmental health and safety, or community affairs. Senior officers with profit-and-loss responsibilities will benefit from attending.This programme is not targeted to management support organi-zations or consulting firms. Typi-cal participant titles may include, but are not limited to: CEO/Exec-utive director, Senior Vice Presi-dent, Vice President of corporate and community relations, Vice
President of Corporate Social Responsibility, Vice President of development, Vice President of environmental health and safety, Director of Corporate Social Re-sponsibility, Director of corpo-rate/community relations etc.
Improving your organization’s performanceCorporate Social Responsibil-ity (CSR) is integral to long-term business success. Today’s orga-nizations must be increasingly mindful of the impact that their operations have on society at large, and this requires much more than isolated measures. In a climate of heightened social awareness and instant access to information, CSR must be a fundamental part of your com-pany’s targeted practices, broad objectives, and overall culture.This programme is designed to help executives fully integrate social responsibility in ways that benefit both society and business. You will learn how to develop an overarching CSR strategy suited to the unique re-quirements of your company—one that addresses the social, economic, and environmental effects—as you better position your organization for immediate and future successes.
October 19–22, 2011 Havard Business School
Why African Businesses Need to Adopt Sustainable Capitalism
Sustainable capi-talism is all about seeking economic
gains in a sustainable way. Having both terms stand side-by-side is seen by many, as an irony of massive proportions. This group of doubters sees it as a waste of time to suggest any possibility of moderacy of resource exploitation in a system that is motivated by profit and wealth objectives. At surface level, this looks true. However, if we criti-cally look at the body of literature on this subject, we get the impression that actually, the high degree of opposition, but interconnectedness between these two con-cepts warrants extensive discussions and dialogue on how they can live together. In the words of Dragan Loncar, As-sociate Professor in the Faculty of Economics, University of Bel-grade, “The topic of sustainable development wouldn’t be a topic in a non-capitalist world.”
This proposition takes an en-tirely new shape, if we put it in the context of the African region.
With significant underdevelop-ment, in spite of rich resource deposits, the question is: is it economically sensible to join the developed world’s chorus of sus-tainable development? Shouldn’t we throw in everything to en-sure our development levels in-crease? Is there anything to gain by being more sustainable, as the
region already dispropor-tionately ‘bears the brunt’ of the effects of climate change, propelled pri-marily by activities in the developed world?
A Sick BiosphereResources are essentially the inputs to products that meet the people’s needs. Therefore, the im-pact of population growth strongly weighs in on the carrying capacity of the earth and in essence, its ability to sustainably de-velop. It is estimated that world population would have grown by about 5 billion between 1927 and early 2012 according to the United States Census Bureau. This significant growth has come with a corresponding increase
in economic activity to meet the needs of the rising population, leading to a resource crisis of huge proportions. Essentially, in-finite growth is being taken care of on the one hand, by finite re-sources (like fossil fuels). On the other hand, infinite resources are being stretched to their limit, as a result of ecological over shoot. The resource crisis is just one
Obinna Igwebuike
OPINION
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aspect. Another aspect of the damage to the planet is the increasing impact of emis-sions. This is the principal cause of the Climate Crisis, which has been discussed very extensively, since the Kyoto Protocol of December 11, 1997. The Protocol tried to ensure industrialized na-tions commit to emission re-duction. The mechanisms for achieving this lofty idea are: emissions trading, clean de-velopment mechanism and joint implementation. Bear-ing in mind that we are a year from the end of the first commitment period, it does not seem like the world as a whole, has been very suc-cessful in reducing emissions. This is probably as a result of the fact that the Protocol itself
was structured to commit indus-tralised nations. With the shift in economic power from the West to the East in the last decade or so, it is apparent that this was perhaps a wrong approach. The US and China, two of the largest emitters have also not shown consistent support for the ide-als of the Protocol, resulting in far less impact on a global scale than originally expected. With the resource and emissions is-
sues, it is not wrong to say the world is in a biosphere crisis.
Profound EffectsIronically, as stated above, the developing world (including Sub-Saharan Africa) has to suffer more from this biosphere crisis. The socio-economic effects of the crisis, according to the Par-liamentary Office of Science and Technology’s Postnote include; Changes in rainfall patterns, In-creased frequency and sever-ity of: Floods, Droughts Storms, Heat waves, Changes in growing seasons and regions, Changes in water quality and quantity, Sea level rise and Glacial melt.
These effects have significant socio-economic consequences. Postnote asserts that food se-curity is compromised, health of citizens become susceptible to negative effects of industrializa-
tion, infrastructure becomes an issue as inhabitants are displaced and sources of livelihood are lost.With poor disaster management facilities in the developing world, these effects take even more sig-nificant proportions. Our current environmental practices lead to scarcity of clean potable water, high energy costs and disrup-tion in the ecosystem. These will plunge the economic fortunes of Sub-Saharan Africa, a region which already has 239 million people hungry (according to data from the FAO).(To be continued in the next edition)
is it economically sensible to join the developed world’s chorus of sustainable development?
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OPINION
Obinna Igwebuike is an MBA student at the Bristol Business School. His interests are in Macroeconomics, Corporate Finance, Corpo-rate Strategy and Business Sustainability. He can be reached on [email protected] or [email protected].
GLOSSARY
BIO FUELA fuel derived from organic material.Supporters of bio fuels argue that the fact that plants soak up carbon dioxide as they grow means that they can deliver deep cuts in carbon emissions compared to fossil fuels, while avoid-ing the need for investment in new low carbon vehicle technologies.
ANAEROBIC DIGESTORA renewable energy technology that generates heat and electricity from waste organic matter, the resulting residue can also then be used as a fertiliser. The technology is becoming increas-ingly popular across the agricultural sector and advocates claim that it is more cost effective than many alternative renewable energy systems.
a ARTIFICIAL TREES“Artificial trees” are geo-engineering solutions that use amine solutions to capture CO2 out of the atmosphere and sequester it underground. It is also known as “air capture” or “carbon scrubbers”.
BASEL CONVENTIONThe Basel Convention on the Control of Tran boundary Movements of Hazardous Wastes and their Disposal is an international agreement governing the handling of hazardous and other wastes.
BENCHMARKINGIt involves comparing the measures in an orga-nization for certain performance standards with those in a similar organization, as a way to set and understand own standards
b
c CAP-AND-TRADEA mechanism for capping carbon emissions across an economy, cap-and-trade schemes have emerged as the most widely-adopted means of putting a price on carbon emissions.
CARBON ACCOUNTINGUmbrella term referring to the act of measur-ing and reporting on an organisation’s green-house gas emissions, this practice is widely regarded as an essential first step towards cutting carbon emissions.
CARBON CAPTURE AND STORAGE (CCS)The practice of capturing CO2 emissions - typi-cally from coal-fired power plants - and se-questering it in geological formations such as depleted oil and gas fields.
CARBON CALCULATORA tool, typically available online, that allows an organisation to automatically work out their carbon footprint by in-putting related data such as energy used or distance travelled. Commonly available from airlines and carbon offset firms, which use them to calculate how many offset credits customers should buy.
CARBON DISCLOSURE PROJECT (CDP)The Carbon Disclosure Project (CDP) is a global investor-backed initiative designed to encourage blue chip firms and their suppliers to publish in-formation on their carbon emissions and climate change strategies.
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GLOSSARY
ENERGY STAREnergy Star is an international scheme that awards products with an Energy Star label if they meet set energy-efficiency standards.
ENHANCED CAPITAL ALLOWANCES (ECA)Enhanced Capital Allowances (ECAs) are a UK tax break offered to businesses buying energy effi-cient plant and equipment, low carbon vehicles, and water saving technologies. The scheme al-lows businesses to claim 100 per cent first year capital allowances on investment in plant and machinery that qualify for ECAs.
DEREGULATIONAbolishment of monopolies in order to open up for competition, here used as a synonym for liberalisation.d DESERTEC PROJECT
The Desertec Project is a high profile European solar energy initiative with a goal of generat-ing up to 15 per cent of Europe’s electricity through giant solar thermal power plants lo-cated in the North African desert.
e
fFOSSIL FUELSOil, hard coal, lignite, natural gas and peat
FUEL CELLFuel cells are electro-chemical conversion de-vices used to generate electricity that is widely regarded as a zero emission alternative to fossil fuel powered engines.
FUTUREGENFuturegen is a flagship $1.5bn US public-pri-vate project intended to showcase “clean coal” technologies that would result in a 275MW power plant with near-zero emissions.
ELECTRIC VEHICLE (EV) Electric vehicles (EVs) use electric motors pow-ered by batteries to provide propulsion instead of internal combustion engines.
g G3 GUIDELINESThe G3 guidelines are a set of UN-backed inter-national guidelines for corporate sustainability reports. They provide guidance on the processes firms should follow when developing a sustain-ability or CSR report, including recommenda-tions on which environmental, community and human rights metrics should be incorporated.
GEO-ENGINEERINGGeo-engineering is an umbrella term referring to technologies designed to engineer the natu-ral environment on a huge scale in an attempt to counteract the effects of global warming.
The Many Business Cases for CSR StrategyCraig Smith
Today, it is a small and di-minishing minority of multinational corpora-
tions that does not produce corporate responsibility, sustain-ability, or corporate citizenship reports, proclaiming the com-pany’s good works. This height-ened attention to CSR is not due to business leaders discovering religion; it is because the busi-ness case has become much more compelling.
It has become difficult to avoid the abundance of sources on the business case for Corporate Social Responsibility. It is evi-dent in the reports of individual companies that they justify CSR activities to shareholders. British American Tobacco, for example, in its 2003/4 Social Report says: “Accepting corporate social and environmental responsibilities, and contributing in the ways that a business can, makes good busi-
ness sense.” Presumably, this ex-plains, in part at least, BAT’s role in establishing the Elimination of Child Labour in Tobacco Grow-ing Foundation and its claim that it does not employ children in its operations.
Various organizations produce reports on the business case for Corporate Social Responsibility, such as Business for Social Re-sponsibility (www.bsr.org), the
FEATURESource: w
ww.gettyim
age.com
1. www.businessgreen.com/glossary/corporate-social-responsibility-csr2. www.epaw.co.uk/csr/glossary.html3. www.vattenfall.com/en/csr-glossary.html4.www.mhcinternational.com/corporate-social-responsibility/csr/glossary.html5. en.wikipedia.org/wiki/Global_warming6. en.wikipedia.org/wiki/Environmental_ impact_assessment
7. Zadek, Simon: The Civil Corporation, (p7, Earthscan, London, 2001)8. Cadbury, Adrian (Sir): in Global Corporate Governance Forum, (World Bank, 2000)9. Price Waterhouse Coopers10. Oxford Dictionary11. Rosthorn, John: Business Ethics Auditing – More Than a Stakeholder’s Try (Journal of Business Ethics 00: 1-11, 2000, Kluwer Academic Publishers, Netherlands).
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World Business Council for Sus-tainable Development (www.wbcsd.org), and the International Business Leaders Forum (www.iblf.org) which, in its report Profits With Principles, shows “the quanti-fiable and enduring business ad-vantage to ‘doing the right thing’.
However, attention to the busi-ness case for Corporate Social Responsibility can be misguided in two respects. First, there is no one business case other than at the most basic level (i.e. corpo-rate responsibility can provide an enduring economic advantage for the firm). Second, because the business case is idiosyn-cratic, it varies markedly in both form and strength across firms, industries and other situational considerations. Without doubt, there are circumstances—and increasingly so—under which CSR is in the best economic in-terests of a particular company (Margolis and Elfenbein 2008). Indeed, this win-win combi-nation of society and business benefiting is the holy grail of Corporate Social Responsibility. However, because the business case is contingent upon a variety of circumstantial considerations, it is difficult to find a justification for many of the generalizations
Indeed, this win-win combination of so-ciety and business benefiting is the holy grail of corporate so-cial responsibility.
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made about the business case beyond wishful thinking. It is important for today’s business leader not to simply accept the generalizations of the generic business case, nor dismiss it as flawed, but look to when, where and how greater attention to CSR is demanded of his or her firm.
Key drivers of corporate atten-tion to Corporate Social Respon-sibility are consumers, employ-ees and “ethical investors”. As Starbucks puts it:Consumers are demanding more than ‘product’ from their favorite brands. Employees are choos-ing to work for companies with
strong values. Shareholders are more inclined to invest in busi-nesses with outstanding corpo-rate reputations. Quite simply, being socially responsible is not only the right thing to do; it can distinguish a company from its industry peers. (Starbucks, 2002, p.3)
Do Your CSR Initiatives Fit with your Industry?However, what works for Star-bucks—a company that has al-ways positioned itself as a so-cial responsibility leader—will not necessarily work for other companies. The sourcing and environmental issues that re-
FEATURE
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ceive considerable attention at Starbucks are far less relevant to a financial institution such as Citibank. More appropriate for a global consumer bank are initia-tives in microfinance or serving the “unbanked” majority of con-sumers in developing countries (and substantial minorities in many developed economies).Likewise, Shell working hard to eliminate greenhouse gas emis-sions makes sense; HSBC, an-other bank, declaring itself car-bon neutral is more suspect. Consumer-facing companies, such as retailers like Wal-Mart, are more likely to attend to is-sues of consumer concern than companies further up the value chain, such as manufacturing companies—they may be more susceptible to issues of con-cern to the local communities, where facilities are located, such as plant closures or emissions. Pharmaceutical companies and those in the resource extraction industries are also typically less exposed to consumer pressure, but highly dependent on the ap-proval of regulators. As these examples illustrate, the form and strength of a company’s Corpo-rate Social Responsibility activi-ties will vary according to the in-dustry in which it operates. This is the first of our four indicators of CSR strategy. But even within a given industry further differen-tiating characteristics come into the mix; notably, the following: stakeholder power and activism; market positioning; and compa-ny history.
Does your CSR Strategy re-spond to your stakeholders?Within any industry, individual companies’ attention to Cor-
porate Social Responsibility will differ according to the extent to which they have been the sub-ject of activist pressure or CSR-related crises. The Corporate Social Responsibility leadership on sourcing issues of Nike and the Gap reflects their earlier record as targets of NGOs campaigning against sweatshops (Zadek, 2004). Often the most successful strategy in this situ-ation is to turn en-emies into allies. By partnering with, for example, the very NGOs that once campaigned against them, companies not only head off trouble, but can also gain competitive advan-tage and even po-tentially some influ-ence with legislators (Yaziji, 2004). Shell is a good example. Learning from the experiences of 1995, when Greenpeace protests prevented the company from dumping its obsolete Brent Spar oil platform at sea, it now con-sults with NGOs, such as the World Wildlife Fund, Amnesty In-ternational and local campaign groups at the initial stages of projects. Shell, thus, manages both to diminish conflict and to keep any battles that do occur out of the public eye. Of course, it is also looking more carefully and arguably more responsibly at its projects as a result of in-volving NGOs.
Does your CSR strategy take your Market Positioning into
FEATURE
account?No matter how successful its strategy of turning enemies into friends, Shell—like all other com-panies—also has to consider the third of our key characteristics: market positioning, defined in the simplest terms as the way in
which it differentiates itself from its competitors. The Irish bud-get airline Ryanair, for example, originally saw no problem in making wheelchair users pay an extra charge that frequently ex-ceeded the price of their original ticket. The corporate response was that Ryanair’s commitment to customers was all about low price—and that if European air-port operators were unwilling to pay up for wheelchair services, then it was the airline’s duty to pass on the extra cost to the dis-abled passengers themselves. It
Within any industry, individual companies’ attention to corporate social responsibil-ity will differ accord-ing to the extent to which they have been the subject of activist pressure or CSR-related crises.
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“argued: why should other cus-tomers suffer higher prices? It took a legal ruling to change the company’s mind.
Meanwhile, the question did not arise for premium airlines, which simply swallowed the extra cost. Customers expect more of pre-
mium products. Hence, Italian coffee company illycaffè’s ethi-cal approach to driving quality through its supply chain—trans-ferring knowledge for the good of its suppliers and its products (Perrini & Russo, 2009). Hence too British smoothie maker In-nocent’s distinctive brand is founded on taste, nutrition and ethics (Brown & Grayson, 2009). The challenge for companies such as Innocent is to continue to compete as supermarket own brands. As global food and drink corporations target their premi-um market and recession drives
consumers to trade down, they can at least take heart from the British retail institution, Marks & Spencer’s “Look behind the label” campaign, which brought to-gether a multitude of social, nu-tritional and quality issues: from fair trade, animal welfare and en-vironment through salt and fats
to washability and durability of cloth-ing. The company rated this campaign one of its most ef-fective ever and a significant strategic success, resulting in increased sales and awards for green retailing (Butler 2007). Significantly, Marks & Spencer has stayed ahead of the competition even in today’s more chal-lenging economic environment.
What is Your Com-pany’s CSR His-tory?In Marks & Spencer’s case, the company
has a long tradition of social responsibility, which brings us to the final of our differentiat-ing factors: history. Nineteenth-century beginnings can and often do inform twenty-first century strategy. Multinational food, home care and personal care giant, Unilever, originated in the 1890s start-up, Lever Bros. Founder, William Hesketh Lever was one of the greatest British philanthropic business leaders of the Victorian era. On the one hand, his products promoted public hygiene. On the other, his company pioneered employee
FEATURE
Prof. Craig Smith is the INSEAD Chair Professor of Ethics and Social Responsibil-ity at INSEAD, the leading international business school with campuses in France, Singarpore and Abu Dhabi, where he is also the Academic Director of the CSR and Ethics Research Group in the INSEAD Social Innova-tion centre. He was previously on the facul-ties of London Business School, Georgetown University and Harvard Business School.
welfare programmes. Today, the company’s diverse Corporate Social Responsibility initiatives include the worldwide Dove Campaign for Real Beauty, which celebrates the natural variations in women’s bodies (rather than extolling an idealized form as found in many advertising cam-paigns for beauty products), and a collaboration with Oxfam to examine the role of business in poverty reduction through Uni-lever’s operations in Indonesia. The geography may have shift-ed, yet the history still shapes the company’s CSR strategy (Smith & Crawford, 2009).
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General Mills is one of the world’s leading food companies, operating in over 100 countries. This report focuses on the company’s progress
on health, community and environmental initiatives. Some of the highlights include: reducing sugar in ce-reals advertised to children under age 12, reducing 10% sodium in its products, contrib-uting more than 100 Million US Dollars to charita-ble causes in the 2010 fiscal year etc.Source: csrwire.com
IN PRINT
books
reports
Title: The Age of Responsibility: CSR 2.0 and The New DNA of Business Author: Wayne VisserReviewer: Amarachukwu Iwuala
According to a release on csrwire.com, “Wayne Visser … wants to direct business towards the true Age of Responsibility by veer-ing away from the traditional approach of philanthropy or public
relations (widely criticized as ‘greenwash’) and pioneering a more in-teractive, stakeholder-driven model…
CSR 2.0 adheres to five key principles: creativity, scalability, respon-sivesness, glocality & circularity. Visser uses 300 cases to show best & worst practices, regarding corporate sustainability & responsibility.
General Mills 2011 Corporate Social Responsibility ReportIssued by: General MillsReviewer: Amarachukwu Iwuala
The report highlights case studies of how the private sector; in partnership
with NGOs, public sector en-tities and multi-lateral insti-tutions address some of the world’s most serious chal-lenges in the water, food, security and economic de-velopment sectors.The new report builds on the work of Chamber BCLC’s Global Corporate Citizenship Programme, which focus-es on facilitating dialogue and collaboration amongst practitioners in the international development arena. Source: csrwire.com
Frontier Markets. Global Partnerships. Local Solutions; February, 2011Issued by: U.S. Chamber’s Business Civic Leadership Centre – U.S. (BCLC)Reviewer: Amarachukwu Iwuala
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A Perspective on Public Sector Role in Promoting Corporate Social ResponsibilityDr. Uwem E. Ite
Components and Drivers of CSR
As a business management model, CSR has two main com-ponents. The first is redefining the company’s mission to in-clude benefits to stakeholders and the society. The second is operationalizing the new mis-sion through management, au-diting, and reporting systems . As such, a commitment to CSR requires business owners and their managers to re-conceptu-alize and reformulate the com-pany’s mission in terms of pub-lic purpose as well as private
gain. A CSR mission commits the company to the pursuit of a triple bottom line (TBL) i.e. finan-cial, social and environmental. It also recognizes that apart from the company’s shareholders, a wide circle of stakeholders, in-cluding employees, investors, consumers and local commu-nities are affected by the com-pany’s decisions and operations. TBL requires effective policies, procedures and systems that will enhance the company’s ac-countability to stakeholders and the general public.Several key drivers often compel a company to adopt and imple-
ment CSR policies and pro-grammes. These include managing risk and repu-tation, protecting human capital assets, respond-ing to consumer demands and avoiding regulation . Although CSR has shifted from the margins to the mainstream of business practice, two main prob-lems constitute impedi-ments to the realization of the potential benefits of CSR. In the first instance, ‘fear’ is one of greatest rea-sons why businesses adopt CSR, with the emphasis on avoiding trouble rather than looking for opportu-
nities to contribute to the social, economic and environmental development of the societies in which they operate. Secondly, CSR is too often a ‘bolt-on’ to business operations rather than ‘built in’ to business strategy. In the process CSR ends up becom-ing either a distraction or hin-drance to business purpose and objectives, rather than a help to the wider society. This result in the considerable gap observed between corporate rhetoric and actual practice of CSR. Against the above background, there is the need for active public sector participation in the promotion of
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CSR practice.
The Public Sector and CSR in NigeriaSustainable development re-quires business organizations to take their economic, social and environmental responsibili-ties seriously. The CSR initiatives and programmes that compa-nies in Nigeria pursue depend to a very large extent how they define CSR and the relative im-portance they attach to it. There are therefore multiple CSR in-terpretations, as each organiza-tion faces different stakeholders with different expectations and priorities. For many business organisations, the challenge is simply the political will to look at their impact through the prism of sustainability. Generally, major corporations worldwide pursue
similar CSR policies. However, the unique challenges that the Nigerian environment presents makes the practice of CSR within country significantly different in
In the first instance, ‘fear’ is one of great-est reasons why busi-nesses adopt CSR, with the emphasis on avoiding trouble rath-er than looking for opportunities to con-tribute to the social, economic and envi-ronmental develop-ment of the societies in which they operate.
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some respects from similar prac-tices in other countries. The public sector (i.e. the gov-ernment) has to provide the enabling environment for the private sector to contribute to sustainable development through the framework of CSR. An ‘enabling environment’ im-plies a policy environment that encourages (or mandates) busi-ness activity that minimizes en-vironmental and/or social costs and impacts while at the same time maintaining or maximizing economic gains. It is generally believed that the public sector role in promoting CSR should consist of the following :• Awareness-raising efforts to create shared understanding of corporate responsibility among companies and the broader pub-lic, including what businesses can do to implement it,• Partnerships designed to cre-ate win-win situations, in which various stakeholders work col-lectively towards a shared goal,• Soft law approaches that pro-mote and incentivise voluntary action by businesses as a com-plement to state regulation,
• Mandating instruments that allow governments to monitor and enforce corporate account-ability.In Nigeria, an attempt was re-cently made to legislate CSR through an Act of the National Assembly. If the bill was success-fully passed into law, it would have created an impression of the failure of the Nigerian gov-ernment to use the vast amount of resources available for the purposes of social, economic and environmental develop-ment of the country. This is be-cause government has a central role in the ultimate development of any nation or country. Basic among their responsibilities are the maintenance of law and or-der and the provision of basic socio-economic infrastructure. Therefore, CSR alone cannot bring about expected develop-ment in Nigeria, as evident in the Niger Delta dilemma. The current CSR initiatives and social investments by private sector or-ganizations in Nigeria are meant to support and complement the development efforts of the Nigerian government. In other
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words, CSR should not and does not replace the legitimate role of government in the development process.It is important to note here that the formal legislation of CSR in Nigeria would have increased the burden on the various private sector organizations currently and actively undertaking CSR ini-tiatives and activities. This could lead to a negative impact on the overall objectives of CSR. There-fore, government legislation of CSR (if any) should be limited to helping create incentives and conditions that encourage good corporate behaviour through voluntary self-regulation. In es-sence, good corporate gover-nance, functional leadership and creativity are more likely to de-liver a more positive impact on the society than government regulation or legislation of CSR. There is a need for the Federal government to develop and im-plement incentives that should accrue to the organisations adopting and implementing CSR policies, which contribute to sustainable development. In-stead of full-scale legislation on CSR, several countries (e.g. Bel-gium, United Kingdom, Canada, Finland, Germany, Netherlands, Poland and Sweden) have de-veloped policies and guidance documents, outlining their ap-proach to CSR and their expecta-tions from private sector organi-zations. A review of the relevant documents from these countries would be a step in the right di-rection to glean best practices that could be relevant to the sit-uation in Nigeria.
ConclusionCSR is a voluntary initiative un-
dertaken by organizations as a contribution to sustainable de-velopment. It involves going ‘beyond compliance’ with the law already in place in a par-ticular country. The drivers and motivation for CSR differs be-tween organisations, and these cannot be readily captured and harnessed for national develop-ment through legislation. There is now growing consensus that significant progress towards sustainable development re-quires effective management of social and environmental issues through constructive input from the private sector, government and the civil society.The best and innovative CSR ac-tivities and initiatives will be de-rived from the core values, cul-ture, decision-making, business strategy and operational issues of the organisations wishing to voluntarily contribute to sustain-able development - not through legislation by the government. Rather than imposing CSR on organizations in Nigeria through
legislation, the Nigerian govern-ment through the appropriate public sector agencies should explore ways of encouraging the promotion of CSR by providing the enabling environment for CSR to flourish in Nigeria.
Dr. Uwem Ite is a CSR professional and an expert on sustainable development. He is currently the Team Leader, Audit Compli-ance, Monitoring and Evaluation within the Sustainable Development and Community Relations Department, the Shell Petroleum Development Company of Nigeria Limited. The perspectives presented in this article are personal and does not in any way reflect the views of his organisation or employers. His previous publications on the subject of CSR and sustainability development can be found in various international journals including: Corporate Social Responsibility and Environmental Management; Sustain-able Development; Journal of International Development and Review of African Political Economy. He can be reached on [email protected].
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Towards Nigeria-Centric PhilanthropyThelma Ekiyor
The growth of organized philanthropy in Nige-ria has been on the rise
in the last five years, though in some cases, Western Founda-tions have operated in the coun-try since independence in 1960. There is widespread agreement among different sectors that phi-lanthropy can make significant contributions to Nigeria’s de-velopment. However the ques-tion of what constitutes Nigerian philanthropy or Nigeria-centric philanthropy is one that actors and organizations, attempting to steer indigenous philanthropy in the country are increasing ask-ing.
The first point in this analysis is to expatiate on the idea of Nigeria-
centric philanthropy or Nigerian philanthropy. My definition of this concept is philanthropy that focuses on addressing the devel-opmental challenges in Nigeria with Nigerian resources or re-sources accumulated from other sources, and working with Nige-rian actors; government, private and non-profit. This type of phi-lanthropy will be vastly different in ideology from what is imple-mented by Western foundations working in Nigeria. These foun-dations have made tremendous contributions in the country but the reality is that most of them largely execute Western phi-losophies of philanthropy and in many cases will eventually re-think their strategies in the country, downsize or exit. Other
African countries are also expe-riencing similar downsizing or exits by Western foundations.
Exiting is not an option for Ni-geria-centric foundations. Such Foundations are based in Nige-ria, and gain their mandates and credibility from being philosoph-ically and ideologically Nigerian. They carve out their visions and growth strategies on develop-ments in the country. Nigeria-centric Foundations will essen-tially align their existence to the country’s pulse.
This concept is exciting for many of us who want African philan-thropy to mature, but this is not an easy feat. For instance, or-ganized philanthropy has suc-ceeded in the United States for a variety of reasons including; a proper regulatory environment, peer accountability, profession-alism and notable investments by corporations, families and individuals. The result of all this is a thriving sector that has over 75,000 organizations.
Nigeria philanthropy is not near-ly at that stage, but the early signs of its emergence point to promising possibilities. There are currently several types of philan-thropic organizations emerging in Nigeria. They include private foundations set up by wealthy individuals of which the TY Dan-juma Foundation falls into. Cor-
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porate foundations, which in the past would have solely referred to their programmes as being Corporate Social Responsibility initiatives but have recently tak-en the institutional frameworks of foundations; operating family foundations that raise some of their funds, but were established by family resources; and a small number of community founda-tions. These organizations all seek to operate as indigenous Nigerian entities but are increas-ingly finding that “indigenous-ness” is a difficult concept to frame.
The term” indigenous” means “to be native, produced, growing or living naturally in a country or climate; not exotic, nor im-ported”. Thus, indigenous Nige-rian philanthropy should be pro-duced within Nigeria and grow naturally in the country. Specifi-cally, this type of philanthropy should not be imported.
Therefore the question for the emerging Nigerian philanthropic sector is: how can we promote philanthropy that is produced in the country, reflects the culture of its peoples and grows natu-rally based on the needs and as-pirations of Nigerians?
These are questions that TY Danjuma Foundation grapples with. How can philanthropic or-ganizations seeking to maintain an identity of indigenousness make grants in an environment where regulation is lacking, the civil society sector is largely weak and there are no prece-dents for implementing this kind of philanthropy? We are increas-ingly finding out that our indig-
enousness lies in the fact that we consciously place Nigeri-ans at the cen-tre of designing our interven-tions, and we are dedicated to applying local-ized responses to address social problems. How-ever, we are also conscious that it is important to operate with in-ternational standards and learn from examples in countries that have established philanthropic sectors. Additionally, indigenous Nigerian philanthropy has to recognize that global decisions have local implications that can affect how national govern-ments shape policies and how resources are distributed to the communities we work in. Con-sequently, actors in the Nigerian philanthropic sector have to en-gage on global issues and influ-ence discussions and decisions from a Nigerian perspective.
I believe the Nigerian philan-thropic sector has a lot to learn from the country’s vibrant en-tertainment and film industries. These industries have taken the lessons of international movie in-dustries like Hollywood and Bol-lywood, and the “hip hop” music culture and converted them into truly credible Nigerian genres and a recognised Nigerian brand that is now exported worldwide. Popular Nigerian culture or “Nai-ja” culture depicts both the dif-ficulties and challenges of Ni-geria as well as the possibilities,
talents, innovation and dogged tenacity of the Nigerian people. It remains to be seen if contem-porary indigenous Nigerian phi-lanthropy can also capture this essence and become a credible, recognized brand.
It is apparent that we have much to learn about shaping Nigeria-centric philanthropy, but what is certain is that it is here to stay, evidenced by the frequent an-nouncements of new foun-dations being launched. The challenge is how we build an accountable, professional and credible sector that preserves traditional Nigerian practices such as adashe, and other forms of communal reciprocity and in-terdependence that have existed for centuries, while adopting contemporary forms of volun-teerism and giving. The conver-sation has started, the actors are engaged and the Nigerian soci-ety is watching.
Ms. Thelma Arimiebi Ekiyor is the Executive Director/CEO of the TY Danjuma Foundation in Nigeria.
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MD/CEO, Mouka Foam on Sustainability, CSR and the African Economy.
9 QUESTIONS
Ini Onuk
Peju Adebajo
What does Sustainabil-ity mean to you as a Business Leader?
It means taking into account the ethical, social and environment impacts of every business deci-sion for the future of our society. While sustainability is about the future of our society, for today’s industries and businesses, it is also about commercial success. The mandate to transform busi-nesses to respect environmental limits while fulfilling social wants and needs has become an un-paralleled platform for innova-tion on strategy, design, manu-facturing and brand, offering massive opportunities to com-pete and to adapt to a rapidly evolving world.
How do you strive to achieve success in these areas?Production Process and Stan-
dards - Mouka’s position as an innovative and eco-friendly in-dustry leader is underscored by some of the awards and achievement – phasing out CFC (carbon-flouro-carbon) material in production process, ISO 9001, ISO 14001, ISO 18001 certifica-tions.Corporate Accountability - we encourage ethical conduct and a commitment to compliance with the law. Mouka is governed by an independent Board of Di-rectors with several sub-com-mittees on Business Strategy, Audit and Finance/General Pur-pose. The Board participates ac-tively in Governance and this is evidenced by regular Board sub-committee meetings.Quality - The Mouka name is synonymous with Quality. Mou-ka was the first foam company to offer a quality warranty on
our mattresses and other poly-urethane products. Our ability to maintain this consistency is due to a combination of the latest technology and the determina-tion of our people to add com-fort to life daily.Human Capacity - Developing educational and economic op-portunities for our workforce and local c o m m u n i t i e s through improvement of basic human needs, access to educa-tion, and civic responsibility as well as through job creation and vocational job training and in-vestment in small to medium-sized enterprises.
Does Mouka have a different approach to CSR; can you share this approach; what informed this model and the impact you expect or have measured from it?
MD/CEO, Mouka Foam on Sustainability, CSR and the African Economy.
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We have implemented a CSR framework that will ensure that as we go about our business we also incorporate ethical values, respect for people, communities and the environment.Our Corporate Social Responsi-bility practice is integrated into our culture and business and fall into four key areas: our gover-nance practices, how we treat our employees, our environ-mental impact and our invest-ments in the communities.
The manufacturing industry in Nigeria experiences major challenges, how do these affect Corporate Social Investments and Sustainability practices? CSR is here to help businesses flourish long-term, not to burden it. It is about integrating social contribution and responsibility into everyday business activities.
In your opinion: who should control the economy so that business enterprises serve na-tional interest and don’t just service the pockets of a few rich men and politicians? The government should be the key architect of the economy with considerable influence over corporate behaviour. The econ-omy calls for massive social, po-litical, technological, cultural and behavioural transition. The onus is currently on the government to improve regulatory controls. There is a growing expectation that the private sector can and will play a role in helping to ad-dress these challenges. The criti-cal issue for all stakeholders is to define appropriate and realistic boundaries.
So much has been said about
the mandate on lending to in-dustries such as agriculture as well as SMEs; what does this mean to your brand in the light of reputational risks associated with impact investing? Currently there is low level of fi-nancial inclusion in the country because of the huge amount of resources lost due to lack of ac-cess to financial services. The private sector will need to infuse impact investing in their pro-grammes as a way to enhance sustainability and not just pre-occupied with financial returns thus laying emphasis on the so-cial, environmental and develop-ment impacts of their activities.
Socially Responsible Invest-ments (SRIs) now account for about 10% of total invested as-sets in the US and Europe. What informed the establishment of the Mouka Academy to train young people in skill acquisi-tion?The Mouka Academy was founded as a result of our re-sponse to creating meaningful employment and opportunities for young people throughout Ni-geria which is one of the most critical sustainable development challenges facing the country. Many of our Mouka Academy activities are still in their infancy. The Academy will improve the quality of life of our workforce as well as the local community and society at large.
How does the establishment of the Mouka Academy rub off on your reputation as a socially-re-sponsible company; is this not only providing a support struc-ture for ready-to-use skills for your organisation?
We are committed to youth and education, Mouka Academy is geared to sustainability and mindful of future generations. Trainees and apprentices pro-grammes are tailored to their needs. To do this effectively, we will partner with renowned training and educational institu-tions that have displayed com-petence and goods results over time. Trainees will have the op-portunity for on-site learning at our Training Centre or at partner organisation Learning Centres. The Academy also has a mentor-ing scheme for SMEs. To date we have successfully trained more than 2000 participants from over 300 companies.
In what way(s), in your view, are you able to compete favourably with competing brands and maintain international stan-dards?Businesses that imbibe CSR in their business principles attract a good number of employee and loyal customers. This helps to compete with competitors, progress faster; gain high profits in short time and improve cash flow. Not only can CSR increase company profits by increas-ing the consumer’s willingness to pay for the product, it helps prevent consumer boycotts and credibly signals the unobserved high quality of its products. Looking inward where CSR be-gins, we attach great importance to the well-being of our staff. Our commitment to youth and edu-cation comprises activities in the fields of vocational training sup-port for young people, promo-tion of young SME potentials through the Mouka Academy.
9 QUESTIONS
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