1. Emerging markets & business sustainabilityToby Webb, Founder/Chairman, Ethical Corporation,CEO and Founder, Stakeholder Intelligence

2. Background Founded Ethical Corporation 2001 80+ CR management conferences world-wide 8000 articles & lots of reports Interview 800+ executives per year: Reports, articles,conferences 3000 Corp customers globally, expert analysts around globe Lecturer, Corporate Responsibility, Birkbeck College (London) Co-chaired independent working group on CSR for UKGovernment 2006-8 for David Cameron / Oliver Letwin Founder/CEO of Stakeholder Intelligence: Bespoke companytraining & contract research. 30 experts round the world: China,SA, Brazil, Russia etc 3. China & sustainable business Key difference: Often about Government vs. People rather thanCampaigners vs. Corporations In accidents and scandals, Government increasingly takes the blame Often attempts to deflect, sometimes onto Western companies Western firms subscribe to local guy stitch up. Despite systemicproblems, Western managers excape censure and a local guy goes to jail Suits Chinese government: Let blogosphere hammer foreign brandsas pressure release, but does not affect FDI Emerging middle class way more powerful than Government realised Major crackdown beginning on freer speech across board justannounced Soccer Moms and emergent middle class professionals are the game-changer: Recent examples in Dalian, high street rail crash demonstratingpowers HSBC/Climate Group research: 57% of Chinese surveyed believeclimate biggest issue they worry about today (2010) 65,000 serious incidents of social unrest in 2005: Then records stopped 4. Brazil & sustainable business Very advanced CR/SD culture: 7 companies in the Dow JonesSustainability World Index. China and India = 1 company each Long tradition of private philanthropy: big biz. large scale social projects 2009 Greenpeace Slaughtering the Amazon report changed the game Showed cattle farming major cause of deforestation in Amazon: Result:three of Brazils top supermarkets Po de Azucar, Wal-Mart and Carrefour- banned beef products. Four biggest meat producers JBS-Friboi, Bertin, Minerva and Marfrig adopted new environmental standards. McDonalds, Timberland, others also pushed by GP on leather, soychicken feed and other Amazon issues from 2006 to 2010 1,352 company members of leading CR organisation: Ethos Institute, NGO pressure vital in Brazil. Business rarely reacts on SD unless profitsare threatened Deeply capitalist country: Instinctive mistrust of state intervention.Bottom line driven corporate responsibility 5. India & sustainable business Culture counts: Hinduism calls on its adherents to give to all, bethey recluses and Brahmins [priests] or wretched, needy beggars 220 million of Indias 1.2 billion under poverty level: Millions ofothers close to it Massive and systemic public sector/business corruptionchallenges Tata: 28 companies, 50 billion revenues. Deep culture ofphilanthropy since foundation. Birlas, Bajaj families similar ethos Bottom of the Pyramid coined by CK Pralahad, for India, nowglobal. Prime example: ITCs e-Choupal project for rural poorhighly successful and profitable Indias share of the USD 2.2 trillion market for low carbon goodsand services in 2020 could be as much as USD 135 billion +10.5 million green jobs. Fastest growing, according to HSBC Ongoing Maoist violent insurgency much bigger than known inWest. Land disputes said to play significant role in recruitment 6. India & sustainable business India now fifth in the world in terms of wind energy production Hindustan Unilever: 2002 campaign RE soap usage. Reducedsize and cost of Lifebuoy soap brand. Significant reduction indiarrhoeal disease. Led to a 20% upsurge in localised sales Chotukool refrigerator worlds lowest-priced model:(48) Tablet computer now sold at $45/35 to students and others Mahindra World City project: Residential, business facilities inenvironmentally and socially sustainable way Still open todebate as to effectiveness Vedanta and other mining firms increasingly controversial:People vs. Land vs. Resources + corruption + oligarchs =Protest and action = Corporate Risk Vigorous debate about mandatory CR laws and transparency 7. South Africa & sustainable business South African companies trying to confront apartheid legaciesthat government has yet to resolve Africas largest and most industrialised economy as well as the12th largest emitter of greenhouse gases globally Heart of the economy is a small core, accounts for 10-15% of thepopulation. 85% of the population in abject poverty Grip of Trade Unions presents major challenges: ie removing poorteachers: Leads to deeply uneducated public sector: Deeplycorrupt and protected Corporate giving has been rising: 24% year on year to 5.1bnrand ($690m) for 2008-09 Business understands the need to balance green, economic andsocial, Government only interested in economic and social Corporate responsibility efforts directed towards taking over, orpropping up failing and under-capacitated governmentservice infrastructure 8. South Africa & sustainable business New black elite created by Black Economic Empowerment Forced some government-owned companies, such as power utilityEskom, to hire foreign non-whites to meet these racial targets Mining companies improved their environmental, social andgovernance performance. Also confronted government overHIV/Aids: one in three mine workers infected Anglo-American lead way with "Zimele" scheme, SAB Millerhelping SMEs get on their feet Middle and upper classes tiny: so less pressure outsidegovernment on business Companies find unique business cases: Massmarts employeesmade clear that they saw nothing unethical in stealing as long asthe company did not make any investment in its localcommunities Some are innovating profitably: Woolworths, third largest foodretailer now sells about $140m worth of organic and free rangeproducts. 9. Emerging Markets: 10 Key lessons1Corporate responsibility and sustainability issues are VASTLY different around the world (Even in Europe)2 Global principles with local implementation, combined with red line areas of ethics (ie bribes) and overall targets, are only way large companies can operate successfully and sustainably3 The world is a lot more left wing than the UK and USA!4 Governments are much less predictable on sustainability issues: ie reporting requirments5 Institutions as we know them often do not exist6 Stakeholders are less predictable issues can escalate very quickly7 Culture counts, more than anything: Local knowledge essential8 Agendas are mixed: But skills, education and jobs are always Number One9 The greener agenda is understood and often consumers are less sceptical than in West10 Get ready for a bumpy road ahead: Global business = Global complexity! 10. Further resources: Ethicalcorp.blogspot.com (Toby Webbs Smarter Business Blog) Slideshare.net/tobiaswebb (Lots of presentations) www.ethicalcorp.com (Search for Country Briefings) Contact me: Toby.Webb@ethicalcorp.com Twitter: tobiaswebb76 +44 (0) 7912 770277