Saudi CSR Forum
June 7-8th, 2011
Economic Impact of CSR:
• benefits of CSR.• relationship between CSR & company customers.• private / public partnership.
What is CSR?
2
“There are countless win-win opportunities (in corporate citizenship)
waiting to be discovered: every activity in a firm’s value chain overlaps in some way with social factors …yet very few companies have thought about this. The
goal is to leverage your company’s unique capabilities in supporting social causes, and improve your competitive context
at the same time.”
"Corporate Social Responsibility is the continuing commitment by
business to behave ethically and contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large."
Michael PorterProfessor, Harvard
Business School
Why do companies engage in CSR?
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Moral Obligation “We are bad if we don’t.”
Reputation “People will like us.”
Sustainability “Its in our best interest.”
License to Operate “We must to do business.”
What are the benefits of CSR?
Puts a human face to the Corporation.
Invests in our community by seriously addressing major issues.
Build a reputation among key stakeholders as a significant CSR player.
Builds employee pride & thus loyalty.
Helps recruit top talent.
Builds immune system vs. PR risks.
4
Global Studies link CSR to business results
76% Likelihood to switch brands if associated with a good
cause, (price/quality equal).
86% Consumers that have more positive image of
companies doing something to make world better
place.
64% Consumers willing to pay up to 5% more for a product
associated with a cause.
20% Consumers willing to pay up to 10% more
37% Consumers refusing to buy product because they
don’t like company that makes it.
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CSR targets four sectors
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Environment
Sector Employees
Community
Toyota CSR: Employees
7
Toyota CSR: Community
8
Toyota CSR: Environment
9
Toyota CSR: Sector
10
Developing a CSR Strategy
11
Developing Strategic CSR programs
A strategic approach to CSR strategy development
Generic Social Impacts
• Good citizenship
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Social Issues not significantly affected by a company’s operations nor materially affect its long term competitiveness.GE’s program to adopt underperforming public high schools near GE facilities. Although very successful, it is disconnected from its core business –even recruiting.
Developing Strategic CSR programs
A strategic approach to CSR strategy development
Generic Social Impacts
• Good citizenship
Value Chain Social Impacts
• Mitigate harm from value chain activities
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Proactively evaluating every step in the value chain to remove or modify activities representing a danger to the community.
Developing Strategic CSR programs
A strategic approach to CSR strategy development
Value Chain Social Impacts
• Transform value chain activities to benefit society while reinforcing strategy.
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Proactively creating new product and service value chains that build business AND the community. Toyota’s Prius, the hybrid electric car. Competitors are licensing the technology which is seen as the world standard.
Developing Strategic CSR programs
A strategic approach to CSR strategy development
Social Dimensions of Competitive Context
• Strategic philanthropy that leverages capabilities to develop / strengthen competitive advantages.
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Value Chain Social Impacts
• Transform value chain activities to benefit society while reinforcing strategy.
The entire company value chain is socially responsible AND represents a highly competitive, profitable endeavor.Whole Foods Market which sells organic, healthy, natural food products.
Developing Strategic CSR programs
A strategic approach to CSR strategy development
Generic Social Impacts
• Good citizenship
• RESPONSIVE CSR
Value Chain Social Impacts
• Mitigate harm from value chain activities
• Transform value chain activities to benefit society while reinforcing strategy.
Social Dimensions of Competitive Context
• Strategic philanthropy that leverages capabilities to develop / strengthen competitive advantages.
• STRATEGIC CSR
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Systematic Way To Build Corporate
business, image, employees, & the Community surrounding it.
ELIXIR CSR Strategy Development Module
5 Phases of Sustainable Development
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PHASE 2Qualify Appealing
Concepts
PHASE 3Develop Sustainable
Strategies
PHASE 4Ensure Sustainable
Model
PHASE 5Continuous
Marketing and PR
PHASE1Agree Objectives
and Causes
Phase 1: Agree Objectives And Causes
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PHASE 2Qualify Appealing
Concepts
PHASE 3Develop Sustainable
Strategies
PHASE 4Ensure Sustainable
Model
PHASE 5Continuous Marketing
and PR
CSR objectives.
CSR stakeholders.
“Wish list” from stakeholders.
Determine CSR cause.
PHASE1Agree Objectives
and Causes
Company CSR’s Main StakeholdersExample of Initial List Provided
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Foundation Founders & Board Members
Company Top Talent
Company Employees
Leaders of Company Holding
group of companies
Company Top Management Top Graduating Talent
Company key suppliers
Top Market Talent targeted by company
Company key customers
Amarah
Municipality
Ministry of Labor
HNWI’s
Royal Diwan
New Customers
New Investment
Partners
New Suppliers
Community.
New Suppliers
Banks & Lenders
Ministry of Commerce Ministry of Industry
SAGIA
Central Monetary Authority
KSA Charity Organizations
KSA? Which Region
KSA? Which Region
Ministry of Social Affairs Family & Friends Outside of KSA? Where?
Cause Selection
8 Main Possible Causes/Directions:
Extreme Poverty• Hunger• Shelter• Income
Education and literacy• Schools• Vocational training• Cultural exchange
Basic health• Nutrition• Sanitation• Diseases
Children’s wellbeing• Child mortality• Child labor• Childhood development
Women’s development• Women's health• Girls’ education• Employment and leadership
Environmental Sustainability• Pollution• Land erosion• Natural disasters
Water• Drinking water• Preventing disasters• Cleaning polluted water
Economic development• Community development• Entrepreneurship• Microfinance
Source: UN Millennium goals; Copenhagen consensus; McKinsey analysis 21
Pursue an important Cause
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Unemployment
Youth Enabling
Education
Ethics
Divorce
Crime
Women Empowerment
Imp
ort
an
ce
The above data is illustrative of qualitative study results only.
Q. Which enterprise do you associate each cause with, if any.
The above data is illustrative of quantitative study results only.
Pursue an Unaddressed Cause.Don’t duplicate efforts.
0102030405060708090
Co E
Co D
Co C
Co B
Co A
Phase 2: Qualify Appealing Concepts
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PHASE 2Qualify Appealing
Concepts
PHASE 3Develop Sustainable
Strategies
PHASE 4Ensure Sustainable
Model
PHASE 5Continuous
Marketing and PR
Potential joint concepts.
Reactions from key stakeholders.
Recommended concept.
CSR equity pyramid.
PHASE1Agree Objectives
and Causes
Develop a specific value proposition…just like you would in business
Concept Element Description Development Methodology
ACB Accepted Consumer Belief. • What is the widespread belief of our key
stakeholders? What are the key problems that need to be solved?
• Why are they not being solved properly?
• What are the barriers to solving?
Research among key stakeholders to better understand the major beliefs they have regarding:• Core issues they consider to be priorities
to be solved.• Main issues and barriers preventing the
problem to be eliminated.
Benefit Benefit.• What is the unique value-added service I can
provide to solve the issue?
• How can I talk about this cause in a way to attract supporters?
• Internal Concept Development Lab to develop several potential concepts.
• Qualitative Concept Lab to choose the most powerful concept & optimize.
• Quantitative Concept test if needed.
RTB Reason-to-Believe.• How can I convince others that I can deliver on my
promised benefit?
• Why am I the best organization to tackle this issue better than anyone else?
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Within chosen direction, select pillars
Potential pillars to qualify with stakeholders
Chosen direction
Chosen causeYouth
Enabling
Leadership Development
Leadership kindergarten
Exchange program
Model UN …
26The above data is illustrative only.
Phase 3 and 4: Develop Sustainable Strategies and Model
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PHASE 2 Qualify Appealing
Concepts
PHASE 3Develop Sustainable
Strategies
PHASE 4Ensure Sustainable
Model
PHASE 5 Continuous
Marketing and PR
PHASE1Agree Objectives
and Causes
• Form Committee with Key Stakeholders.• Develop Sustainable Strategies.• Translate into a Sustainable Social Venture
Model (Governance, $, Human Resources, Time, etc).
A World of
Need
Develop Sustainable Strategies via:“How we do it” & “How do we support it?
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SECTOR (Cause)
Theme & Pillars
How do we do it?*
Type of
Assistance
•Operational Strategies & Plan•Resources Required•Legal & Governance Structure•Strategic Partnerships•Detailed Budget•Project Management Plan•CSR monitoring processes & reporting
•Grants•Investments•Partnerships•Launching new organization•Training•Media Innovation
Your CSR
Efforts
Key Stakeholders
•Specific projects adopted by company within cause
•How to involve employees?
Phase 4
Phase 4
Phases 2,3&5
Phase 1
• Which cause? Phase 1
•Government•Employees•Consumers
* To be customized based on specific engagement
Sustainable StrategyClient Example
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BANAWI INDUSTRIAL GROUP CSR PROGRAM: The Young Business Leadership Development Initiative
VISION:
Nurture young business leaders today for a better tomorrow
KEY PILLARS
KEY TARGET: Young Business Leaders in the
Arab World
KEY TARGET: Young Business Leaders in
Saudi Arabia, 28-38 years old,
3-5 years work experience, proven skills in building
business, people, & community.
KEY TARGET: Top Senior College students
in top Saudi Arabian Universities,
High GPAs & diversified extracurricular activities.
KEY TARGET: Top performing participants from Pillars 2 & 3, willing & needing a Mentor to help
them develop their business leadership skills.
PILLAR 1: IDENTIFY BIG Leadership Definition &
Hussein al-Banawi book
Objective : Identify &
propagate the qualities of a
top business leader. The
resulting definition is based
on extensive research
among global, regional, &
local business leaders.
PILLAR 2: REWARD BIG Young Business Leadership Award.
Objective: Reward
top young business
leaders, male & female
annually via a highly
appealing reward and
recognition ceremony.
PILLAR 3: ENABLE BIG Leadership
Acceleration Program ( BIG LEAP)
Objective: Enable
emerging business
leaders via a mini-MBA
program provided by
Thunderbird, a leading
global educational
Institution.
PILLAR 4: NURTURE BIG Mentorship
Program
Objective: Nurture
young business leaders
by matching them with
top business leaders
via the Mentorship
program.
STRATEGIC PARTNER: Author John Cooney
STRATEGIC PARTNER: The Conference Board
STRATEGIC PARTNER: Thunderbird Graduate
School of Business
STRATEGIC PARTNER: TBD
BIG Committed Resources:
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3% of BIG Net Income will be
invested annually.
3
3% of BIG Leadership time will be
committed annually.
3
Each BIG business leader will
mentor 3 promising young
business leaders. Source: Elixir engagement on client CSR
Client Committed Resources
Each client business leader will3% of client Leadership time will be committed annually.
3% of client Net income will be invested annually.
Translate into Sustainable ModelClient Engagement Example
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Research Workshop Work to do
Source: Elixir engagement on Client CSR
Phase 5: Continuous Marketing and PR
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PHASE 2Qualify Appealing
Concepts
PHASE 3Develop Sustainable
Strategies
PHASE 4Ensure Sustainable
Model
PHASE 5Continuous
Marketing and PR
PHASE1Agree Objectives
and Causes
• Communicate to public via the media (To be customized based on specific engagement).
Thank You