Upload
francois-mangin
View
639
Download
0
Embed Size (px)
Citation preview
lundi 1 mai 20231111
CORPORATE SOCIAL RESPONSIBILITY & BUSINESS ETHICS
Session 1: Facing the Sustainabilitychallenges: Corporate Social Responsibility
François MANGIN2015-2016
lundi 1 mai 20232222
Session 1
Facing the Sustainability challenges: Corporate Social Responsibility
lundi 1 mai 20233333
Course learning objectivesBy the end of this course, students are expected to be able to:
Distinguish between CSR, Sustainable Dvlpt (SD) and Ethics In a given situation, identify the stakeholders, analyze their stakes,
positions, and resources and to propose a engagement strategy Present and explain the major tools and frameworks used to implement
more responsible and sustainable ways of doing business Make a CSR/SD diagnosis of a company in its industry and propose the
major lines of an action plan Explain the new sustainable and responsible Business Models Use a thoughtful approach to dealing with unethical situations in business; Present the key CSR issues currently on the national and international
agenda ; Critically assess companies’ CSR strategies and outcomes
lundi 1 mai 20234444
Course schedule
1. The responsibilities of Business towards Society, and Sustainable Development
2. Stakeholders, controversies and lobbying3. Simulation4. Labor conditions5. Consumer issues and Fair operating practices6. Ethics: how to face unethical situations7. Environmental impact and Eco-design8. Sustainable and responsible Business models9. The challenges of developing less developed countries 10. Simulation
lundi 1 mai 20235555
Session 1
Facing the Sustainability challenges: Corporate Social Responsibility
lundi 1 mai 20236666
Session 1 Learning objectives
By the end of the session, each student is able to::
Situate CSR in the history of Business and Society relationships Explain the political and legal components of Sustainable
Development Explain how CSR is linked to Sustainable Development Explain the differences between European and American visions of
CSR Present the areas where the responsibility of a company can be
engaged Explain the CSR Business Case Use a Virtue Matrix to position and qualify the CSR/SD policy of a
company or a industry
lundi 1 mai 20237777
Introductory Case Study
Who are the stakeholders?What are their stances and on which grounds do they defend them?
lundi 1 mai 20238888
Stakeholders
VedantaOrissa Government
Local CommunitiesIndian government
NGO Medias
OCDE« Peoples »
Indian Supreme CourtShareholders
CSR Rating AgencyInvestors
Financial press
lundi 1 mai 20239999
Worth to note:
• Non-economic impacts• Activist groups and supporters• Complaint filed before OCDE NCP• Legal actions• Involvement of financial institutions
– CSR research & rating agency– Responsible Investors
Project withdrawal
lundi 1 mai 202310101010
Session 1 outline
1. Business in Society: a increasingly challenged legitimacy
2. Sustainable Development: challenging the established decision-makers
3. Corporate Social Responsibility: changing the corporation to make development more sustainable
4. Areas of Corporate Social Responsibility5. Corporate CSR policies
lundi 1 mai 202311111111
1
Business in Society: a increasinglychallenged legitimacy
lundi 1 mai 202312121212
1970: Milton FriedmanThe manager is the agent of the individuals who own the corporation
His unique responsibility is to make as much money as possible while conforming to the law
and to the ethical custom.
He has no expertise nor legitimacy to take decision in other fields than running his company
Social Responsibility is the responsibility of the government
Responding to CSR demands from pressure groups that didn’t succeed in electoral
competitionwould be non democratic
lundi 1 mai 202313131313
North American approach (Carroll)
Philanthropic
Ethical
Legal
Economic
lundi 1 mai 202314141414
Recent illustration
• Annual General Meeting 2011• CEO de Margerie answers a question on the Joslyn tar
sands field in Alberta (Canada) asked by an Athabasca Chipewyan first nation representative
• Link
lundi 1 mai 202315151515
The capitalist systemis under siege.
In recent years business increasingly hasbeen viewed as a major cause of social,
environmental, and economic problems.
Companies are widely perceived to be prospering at the expense of the broader community.
The legitimacy of business has fallento levels not seen in recent history.
2011: Michaël Porter
lundi 1 mai 202316161616
lundi 1 mai 202317171717
Synthesis:
• CSR origins lie in the USA where some questions arose about the missions of the corporation and of its executives.
• But the US tradition restricted the corporate social engagement to voluntary philanthropic activities.
• Criticisms against the negative impacts of corporate operations threat its legitimacy and put pressure on this too limited approach.
lundi 1 mai 202318181818
2
Sustainable Development: challenging the established decision-makers
lundi 1 mai 202319191919
Global challenges
Micro-levelcauses
lundi 1 mai 202320202020
Causes of the unsustainable development?
No consideration of the long-term and distant impacts of decisions
AccountingFinance
No consideration of the advocates of the
interests affected by the unsustainable development
Lack of transparency
lundi 1 mai 202321212121
SustainableDevelopment
Development that balances economic, social and environmental stakes and thus preserves the future of the future generations by:
• Implementing new ways of making decisions by addition of non-economic criteria and by engagement with new stakeholders
• Increasing the accountability of decision-makers by organizing data transparency as well as by modifying the legal environment to allow the prosecution of decision-makers
lundi 1 mai 202322222222
Stakeholder
A person, group, organization:• whose interests are affected
by the decision• that has an influence on the
decision-making process
lundi 1 mai 2023232323
Rio Declaration
Participative and transparent decision making process
Risk analysisImpact studies
lundi 1 mai 2023242424
Rio Declaration
Implementlegal Frameworks
3 Principles– Responsibility– Precaution– Polluter Pays
lundi 1 mai 202325252525
Precautionary Principle
The lack of sound scientific data, considering the present state of art, should not delay the adoption of effective and proportionate measures aiming at risk prevention against environmental, health or nutrition hazards.
lundi 1 mai 202326262626
Polluter Pays Principle
Those who produce negative externalities should bear the costs of managing them to prevent damage to human health or the environment. Defined by OCDE in 1972Part of UE Treaties (1987)
lundi 1 mai 202327272727
Synthesis:
• SD is not just a call to preserve the environment and the future generations
• It promotes the ways and means to achieve it :• A political change in the decision-making processes of
companies, local and national governments.• An enlargement of the decision-makers liability by
increasing transparency and easing prosecution• [It recalls the right of the South to pursue its
development too].
lundi 1 mai 202328282828
3
Corporate Social Responsibility: changing the corporationto make development more sustainable
lundi 1 mai 202329292929
To achieve sustainabledevelopment, a top priority:
Involve the business(in the whole world)!
lundi 1 mai 202330303030
Legal levers(hard law & soft law)
ObligationsInterdictions
Liabilities and indictmentsDecision criteria &Decision making pocesses
Governance
lundi 1 mai 202331313131
Soft law
instruments (guidelines, codes of conduct) which :• Aim to modify or to guide behaviors by the
voluntary adhesion of the participants ;• Do not have any legally binding force and do note
create legal rights or obligations;• Are elaborated and designed in a formalized way,
very similar to the process used for the rules of law.
From French Conseil d’État, Étude annuelle 2013
lundi 1 mai 202332323232
From the soft to the hard law
Legal Obligation
JurisprudenceIndividual Pledge
Voluntary adhesion to a
Pact or Covenant
Voluntary Frameworks &
Guidelines
lundi 1 mai 202333333333
Hard law & soft law: an example
CSR/SD ReportingPublishing the CSR/SD impacts andthe actions to prevent and to attenuate them
Mandatory for the large then the middle-sized companies… but no prescription of specific guidelines to do it
Ruled mandatory by the EU… since 80% of the targeted companies still willingly do it
lundi 1 mai 202334343434
Economiclevers
Modify pricesTaxes
Create New Markets
SubsidizesPublic Investments
lundi 1 mai 202335353535
Innovations
Management tools
TechnologiesBusiness Models
lundi 1 mai 202336363636
Visions of CSR
DefinitionCore issues Means for action
Legal enforcement?National law?
Treaties and InternationalPrinciples & Declarations?
FrameworksGuiding actionsComparing outcomes
lundi 1 mai 202337373737
What is CSR?
• “Corporate Sustainability is a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental, and social developments.“
• CSR is a guiding vision that can help companies maintain their license to operate in an increasingly globalized world.
• d
lundi 1 mai 202338383838
lundi 1 mai 202339393939
lundi 1 mai 202340404040
What is CSR?
• CSR is the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large.
• “A sustainable business is one that delivers value for investors, customers, and employees; improves the living standards of its employees and the communities it touches; makes wise use of natural resources; and treats people fairly.”
• d
lundi 1 mai 202341414141
European approach of CSR
« the responsibility of enterprises for their impacts on society »
European Commission, 2011
“Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing “more” into human capital, the environment and the relations with stakeholders”
European Union, 2001
lundi 1 mai 202342424242
Corporate SocialResponsibilityA process driven in close collaboration with the stakeholders,To integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy, with the aim of:
• maximizing the creation of shared value for their owners/shareholders and for their other stakeholders and society at large;
• identifying, preventing and mitigating their possible adverse impacts
lundi 1 mai 202343434343
International
Conventions & Agreementsbetween signatory states
Guidelines for the Business
lundi 1 mai 202344444444
Standard ISO 26000
Mandatory further reading on Moodle"Mieux comprendre la norme ISO 26000" in: Lecomte & Adary: L’ISO 26000 en pratique : Faire de la responsabilité sociétale un levier de performance pour l’entreprise , Dunod, 2012
• First international framework proposed for the design and implementation of the corporate CSR/SD policy
• A voluntary and non certifiable standard– No certification by a third party certification body– Preventing the risks of CSR/SD-based trade discrimination (towards
Southern countries products & services)
lundi 1 mai 202345454545
Corporate socialresponsibilityThe responsibility of an organization for the impacts of its decision and activities on society and the environment, through transparency and ethical behavior that:
• Contribute to sustainable development, including health and welfare of society
• Takes into account the expectation of stakeholders• Is in compliance with applicable law and consistent with
international norms of behavior• Is integrated throughout the organization and practices in its
relationship
lundi 1 mai 202346464646
Synthesis:
• CSR is the lever used to change and transform business practices towards more sustainability
• CSR expectations are more or less demanding depending the country and its national culture regarding Business & Society
• Even if the soft law approach is still dominant, legal constraints increase:• Criminal and civil liability (scope, fines & damages)• Accountability requirements
lundi 1 mai 202347474747
4
Areas of CorporateSocial Responsibility
lundi 1 mai 202348484848
Principles & Methodology
• Accountability– being answerable for decisions and activities and their
impacts on society, the economy and the environment– to the organization's governing bodies, legal authorities
and, more broadly, its stakeholders• Defining the Scope of action
– Explicit the specific CSR of the company– Identify company’s stakeholders and sphere of
influence
lundi 1 mai 202349494949
Sphere of influence
« Area where, by its political, contractual or economic relationships, a company is able to affect the decisions or activities of companies, organizations or individuals. »
Area of power: the company's ability to guide the behavior and the activity of other actors, without jeopardizing their legal autonomy
lundi 1 mai 202350505050
Human rights
Labour
Environment
Anti-corruption
Human rights
Labor Practices
Environment
Society
Economic
Products
Human rights
Labor Practices
Environment
Community involvement
Consumers
Operating practices
Governance
A larger and larger scope…
lundi 1 mai 202351515151
… that gets very specific
Consumers
lundi 1 mai 202352525252
… and requires more and moreaccurate and quantitative data
Society
lundi 1 mai 202353535353
Case: impacts et influence of large retailers
Human Rights
Labor conditions
Environment
Communities
Consumers
Operating practices
Governance
lundi 1 mai 202354545454
Synthesis:
• CSR is not simply about environmental management and philanthropy.
• The whole company is impacted, including its core business activities.
• Its responsibility can extend as far as the influence that the company can exert on other companies and other organizations.
lundi 1 mai 202355555555
5
CorporateCSR policies
lundi 1 mai 202356565656
CSR impacts on the company
OpportunitiesThreats
Protests against business practices
Lawsuits, Fines& Damages
New constraints
Costs increase
New segments & markets
Differentiation/competitors
NewBusiness Models
Sales increase and lower costs
lundi 1 mai 202357575757
Compliance• Meeting new
constraints• Managing
new risks
Commitment• Reducing
externalities• Creating new
sustainable and responsible markets and business models
Two perspectives
lundi 1 mai 202358585858
ComplianceCommitment
Up to what level?At what cost?
… For all competitors?
lundi 1 mai 202359595959
Level playing field
Situation where all the competitors are playing by the same set of rules, with equal opportunities and constraints.• Eliminate the risk of social or environmental
« dumping » by competitors not subjected to the same rules and constraints
• Prevent unfair competition
lundi 1 mai 202360606060
Business Case
Documented argument that justifies the company’s involvement in a project
• Cost of investment• Operating costs• Expected benefits and returns
lundi 1 mai 202361616161
Top 3 reasons for CSR
lundi 1 mai 202362626262
The CSR Business Case
Image& Réputation
Consumers and purchasersEmployees and applicantsInvestorsLocal and national government
BusinessB to B (responsible purchasing)B to C (responsible consumers)Green Business
RisqueAnticipating new risks, complaints and jurisprudences and regulationsLicense to operate
Finance Better risk managementAttracting responsible investors
Competitive Advantage
Innovation aimed towards rupture, reconfiguration, efficiency and frugalityDifferentiation and strategic shift
lundi 1 mai 202363636363
The CSR Business Case
Mandatory further readings on MoodleInterview de Paul Polman, CEO Unilever, sur le changement climatique.
lundi 1 mai 202364646464
Stakes and Impacts Assessment
Choice of areas for action
ProjectsObjectivesIndicators
Implementation
Control and Outcomes’
Measurement
Communication and CSR Reporting
The strategic process
Stake-holders
Stake- holders
lundi 1 mai 202365656565
A responsible retailer?
Vidéo
Mandatory further readings on MoodleInterview de Serge Papin, PDG Système U sur les enjeux RSE de la grande distribution.
lundi 1 mai 202366666666
The company and its CSR: The Virtue Matrix
Rational Commitment Radical Activism
Social mimetism Legal ComplianceRiskmanagement
Commitment
Martin R (2002) : "The Virtue Matrix: Calculating the Return on Corporate Responsibility".; HBR
lundi 1 mai 202367676767
Why using the Virtue Matrix?To analyze and position CSR strategies• Position at a given time
– For a company• Position the CSR policy for each ISO 26000 core issue• Position the CSR policy for each country where the firm is operating
– For an industry• Position the industry’s competitors
– For a CSR/SD issue or for a country• Position each company, each industry or each core issue
• Dynamics of positions– Companies or industries– CSR/SD actions/tools: from commitment to compliance
lundi 1 mai 202368686868
CSR/SD policies positioning
Rational CommitmentSocial Diversity
Eco-designPsychosocial risks
Dialogue with NGOs
Radical ActivismProduction relocalizationResponsible Supply Chain
Human RightsSustainable Business Models
Social ImitationDisabled employees
Carbon emission assessmentGender Equaility
Green sponsoring
Legal ComplianceWorkplace safety
Illegal employmentEnvironmentally-sensitive
facilities
Riskmanagement
Commitment
lundi 1 mai 202369696969
Trivialization and Regulation
Rational Commitment Radical Activisme
Social imitation Legal ComplianceRiskmanagement
Commitment
lundi 1 mai 202370707070
Synthesis:
• Facing CSR/SD challenges, a company can choose different positionings on each issue, considering the specificities of its industry and its operational activities.
• A genuine CSR/SD policy is based on:• a strong commitment on major CSR/SD issues• an actual dialogue with stakeholders• Feedback and corrective loops in case of CSR/SD dysfunction
or alert