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Social and Environmental Accountability and the
Corporate Brand
Sri Lanka Business Superbrands AwardsThomas Krick, Colombo, 12th of August 2008
Agenda
1. Historical Context2. What is Corporate Accountability?3. How do you do it?4. Case Studies5. How do you communicate it to customers?6. Summary
2Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
The World has been changing
3Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
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What does all this mean for business?
Trends and drivers of corporate
accountability
Growing public distrust towards large corporations
‚License to operate‘ is at stake
g New laws and regulations
g Investors assess social and environmental performance of investments
g Screening of suppliers
g Corporate customers screen their supply chains
g Growing market for ethical goods and services
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Defining Corporate Accountability
Accountability as a pathway to sustainability
Economic Opportunities and Risks
SocialOpportunities
and Risks
EnvironmentalOpportunities
and Risks
The sweet spot of corporate
accountability
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Sustainability: Satisfying the needs
of present generations without
jeopardising the satisfaction of
future generations’needs.
“Assuming responsibility for minimising the negative, and maximising the positive, impacts of business on
the economy, society and the environment.”
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Principles of Accountability
An accountable organisation adheres to the following principles:
Materiality
Completeness
Responsiveness “Demonstrate adequate responses”
“Knowwhat is important for your
business and your stakeholders”
“Understand your impact and peoples’ views
regarding them”
The Principles
of the AA1000 Standard
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
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Direct and indirect impacts
of business
Philanthropy & Community Investments
Investments & Fiscal Contributions
Employment
ResourceConsumption
Products & Services
Operational Activities
Out-Sourcing& Procurement
Public Policy
Business
Impact Pathways
How businesses impact the world
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
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Impact on whom? Stakeholders!
BUSINESS
NGOs
FutureGenerations
Investors
Business Partners & Suppliers
Workforce
Customers
Local & GlobalCommunities
Government
Some stakeholder groups
Stakeholders are those individuals and groups that are affected by the business, or that influence the business or its operating environment.
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Why engage with stakeholders?
Compliance
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Management and Governance
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
What does it mean to be really good at Corporate Accountability?
Business Strategy
EngagedLearning
OperationalExcellenceLeadership
The GLN Framework for Excellence*
Business strategy is in harmony with important social
and environmental trends
Stakeholders become an asset for innovation and
strategy
Performance systems integrate CA throughout
the business
Company takes leadership on areas that
make sense for the business
*www.globalleadershipnetwork.orgAccountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
GE - Ecomagination
12Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Group-wide initiative More than 60 Ecoimagination products
Products & Initiatives: Thin-film solar panels, hybrid locomotives, advanced goal gasification, massive investments into renewable energy, R&D, etc...
Ecomagination has become a global brand, symbolic of innovation at GE
Successfully positioned as partner for sustainability challenges
Actively lobbies governments for tougher environmental regulation
On target to meet Ecomagination revenue target of $25 billion by 2010 / 25% of GE revenue
The GE Brand...
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• In 2003, about 30% of thought leaders viewed GE as an innovative technology company; in 2007, this number was 78%.
• The fourth most valuable brand in the world, valued at $52 billion in Interbrand’s 2007 “Best Global Brands” survey.
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Marks & Spencer
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Stephen Sharp, Executive Director of Marketing: “The challenge for M&S marketing is how we stay ahead of the competition, by responding to the things that matter the most to our customers.”
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
“A five-year plan to tackle some of the biggest challenges facing our business and our world. It will see us working with our customers and our suppliers to make our business more
sustainable and kinder to the environment.“
A Comprehensive Plan for Sustainability
15Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Health of Customers and
EmployeesClimate Change
People in Supply Chain
Natural ResourcesWaste
Defined major impact areas together with stakeholders
1. Introduce random supplier assessments
2. Develop responsible buying guidelines
3. Install worker complaints mechanism
4. Create system to share best-practices amongst suppliers
5. Increase number of small suppliers6. Expand range of fair-trade food7. ...
1. Provide employees and customers with advice on healthy eating
2. Develop labels to indicate healthiness of foods
3. Lead sector to reduce salt contents of food4. Focus promotions primarily on healthy
food and recipes5. Remove artificial ingredients from
childrens’ food6. ...
5 Impact Areas
100 Targets until 2012
Defined specific targets for each
Danone-Grameen pioneering Social Business
16Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Danone built yoghurt factory in rural BangladeshProduction of yogurt fortified to address child malnutrition
Grameen Bank provides microloans to community members: Milk-cows are purchased by community members
Door-to-door retailers buy factory’s yogurt production and sell at low-cost
Malnutrition is addressedIncomes for hundreds of people, and community members can repay microloans
Profits are used to repay Danone’s investment and build more factories
How do you communicate accountably?
17Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Problematic Advertising: Volkswagen
Slide courtesy of: The Brand Plant Ltd. UKAccountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Problematic Advertising: Shell
Slide courtesy of: The Brand Plant Ltd. UKAccountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Consumer Perception in the UK
Slide courtesy of: The Brand Plant Ltd. UKAccountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
Convincing : VW
Slide courtesy of: The Brand Plant Ltd. UKAccountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
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Problematic Advertising: L’Oréal
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
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Dove: Differentiation by addressing a problem in society
Accountability and the Corporate Brand Thomas Krick, Colombo, Sri Lanka, 12 Aug. 2008 [email protected]
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Summary of Key Points
g Corporate accountability is the business response to emerging sustainable development issues and related social demands
g Not just demands, but also new opportunities
g Businesses should identify major risks and opportunities, and the individual business case for corporate accountability
g Key elements of past successes:
g Top level leadershipg Focus on most important issuesg Stakeholder engagementg Public reporting
Choose a strategy:
1. Resist 2. Wait and see 3. Move first
Whatever you do, these trends will intensify...
Building In-House Capacity for CSR Thomas Krick, Vilnius, 22 Nov. 2007 Contact: [email protected]
Thank you for listening!