social and environmental accountability and the corporate ... · social and environmental...

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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


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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


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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


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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


Management and Governance


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


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.


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.”


“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.“

http://www.marksandspencer.com/gp/node/n/42966030/026-0140333-1286816?ie=UTF8&mnSBrand=core

A Comprehensive Plan for Sustainability


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


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?


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


Consumer Perception in the UK


Convincing : VW


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Problematic Advertising: L’Oréal


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Dove: Differentiation by addressing a problem in society


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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!

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