The Last CSR ClassThe Last CSR Class

Professor McElhaneyProfessor McElhaney

9 May 20079 May 2007

MBA 292.1MBA 292.1

TonightTonight

• Dreyers & PWM project presentationsDreyers & PWM project presentations

• CSR in the NewsCSR in the News

• Personal SR StrategiesPersonal SR Strategies

• Final Class DeliverablesFinal Class Deliverables

• CSR Wrap-UpCSR Wrap-Up

• Course Evaluations (Margo)Course Evaluations (Margo)

Final DeliverablesFinal Deliverables

• Due by 5 pm, Monday, May 14Due by 5 pm, Monday, May 14thth

• Deliver one hard copy, one electronic Deliver one hard copy, one electronic copy to mecopy to me

• Deliver one hard copy, one electronic Deliver one hard copy, one electronic copy to your liaison(s)copy to your liaison(s)

• Don’t forget peer evaluationsDon’t forget peer evaluations

CSR in the NewsCSR in the News

• Leaders will always be targetedLeaders will always be targeted– For Kids By KidsFor Kids By Kids

• Choices Expand for "Green" Investors Choices Expand for "Green" Investors – In February, JPMorgan and Innovest Strategic

Value Advisors announced the first bond index “designed to address the risks of global warming”

– The new JPMorgan Environmental Index-Carbon Beta is intended to take into account risks and opportunities bond issuers face as they address climate change

CSR in the NewsCSR in the News• Trademarking Coffee: Starbucks, Dean's

Beans Strike Bargain with Ethiopia– Coffee companies shift from opposing to honoring

Ethiopia's new system to protect its coffee names and increase revenues for small farmers

– Starbucks and Dean's Beans are joining the dozen other US companies in signing agreements with the Ethiopian government to honor the trademarks

• PepsiCo Joins United States Climate Action Partnership– PepsiCo recently announced its landmark purchase of

renewable energy certificates (RECs) to match purchased electricity used by all PepsiCo US-based manufacturing facilities, headquarters, distribution centers and regional offices

– PepsiCo also has a number of facilities using renewable energy, including six Frito-Lay distribution centers in California and New York using solar power and a seventh under construction in Arizona

CSR in the NewsCSR in the News• Corporate Board Committee on Human

Rights Resolution on Ballot at Yahoo! Inc. Annual Shareholders Meeting – Harrington Investments, Inc., a Napa, California-

based SRI advisory firm, has been successful in defeating a Yahoo! Inc. corporate challenge to keep a shareholder resolution on human rights off the ballot for the annual meeting scheduled for June

– "This is the first time a binding by-law amendment to create a corporate Board Committee on Human Rights has made it on a shareholder ballot," said John Harrington, President and CEO of HII. "The internationally recognized moral issue of human rights will now become an important fiduciary issue for corporate directors"

CSR in the NewsCSR in the News

• Novartis Delivers Malaria Medicine to Novartis Delivers Malaria Medicine to Tanzania Tanzania – Swiss pharmaceutical firm Swiss pharmaceutical firm Novartis AGNovartis AG

delivered 4.7 million treatments of its anti-delivered 4.7 million treatments of its anti-malaria medication Coartem to the United malaria medication Coartem to the United Republic of Tanzania in East Africa this week, Republic of Tanzania in East Africa this week, where malaria is the leading cause of death where malaria is the leading cause of death

• A Greener Apple?A Greener Apple?– http://http://

www.apple.com/hotnews/agreenerapplewww.apple.com/hotnews/agreenerapple//

Personal SR Personal SR StrategiesStrategies

Share your inspiration and Share your inspiration and learnings?learnings?

In case he wants to In case he wants to share...share...

•   DFILMDFILM• DFILMDFILM• DFILMDFILM• DFILMDFILM

New Fall 2007 Class!New Fall 2007 Class!MBA 292.2 Social Enterprise:  The Convergence MBA 292.2 Social Enterprise:  The Convergence

of Business & the Social Sectorof Business & the Social SectorTuesdays, 6-9:00, 2 units, Cheit 300Tuesdays, 6-9:00, 2 units, Cheit 300

  Course Summary:Course Summary:  This course will explore the spectrum of activity in the   This course will explore the spectrum of activity in the

emerging “fourth sector”, where business models and activities are applied to emerging “fourth sector”, where business models and activities are applied to address social issues.  Topics covered will include private and nonprofit social address social issues.  Topics covered will include private and nonprofit social ventures, social entrepreneurship, and social investing.  Course content will ventures, social entrepreneurship, and social investing.  Course content will include a combination of lecture, readings, guest speakers, and a group include a combination of lecture, readings, guest speakers, and a group project that can be related to plan development for the GSVC if desired.  project that can be related to plan development for the GSVC if desired. 

  Instructor Bio:Instructor Bio:  Jim Schorr’s experience at the intersection of business and the   Jim Schorr’s experience at the intersection of business and the

social sector spans a variety of activity over the past 15 years.  Since 2000, social sector spans a variety of activity over the past 15 years.  Since 2000, Professor Schorr has led Juma Ventures, one of the world’s leading social Professor Schorr has led Juma Ventures, one of the world’s leading social enterprises.  Juma develops business enterprises to create employment enterprises.  Juma develops business enterprises to create employment opportunities for at-risk youth and was the 1st nonprofit organization in the opportunities for at-risk youth and was the 1st nonprofit organization in the US to operate a corporate business franchise (Ben & Jerry’s shops in San US to operate a corporate business franchise (Ben & Jerry’s shops in San Francisco).  As an MBA student at Kellogg in 1993, Jim was a co-founder of Francisco).  As an MBA student at Kellogg in 1993, Jim was a co-founder of Net Impact.  In recent years, Jim has been published in the Stanford Social Net Impact.  In recent years, Jim has been published in the Stanford Social Innovation Review, has guest lectured at Haas and several other MBA Innovation Review, has guest lectured at Haas and several other MBA programs, and has served as a judge in the GSVC annually since 2001.  programs, and has served as a judge in the GSVC annually since 2001.  Currently, Jim serves on the Board of Directors of Net Impact, Social Currently, Jim serves on the Board of Directors of Net Impact, Social Enterprise Alliance, and Evergreen Lodge, an innovative for-profit social Enterprise Alliance, and Evergreen Lodge, an innovative for-profit social venture he helped launch in 2001.  venture he helped launch in 2001. 

CSR Take-AwaysCSR Take-Aways• The arguments against The arguments against goodgood strategic CSR just strategic CSR just

aren’t that strongaren’t that strong• Growing body of data to support components of Growing body of data to support components of

CSR; will never be one silver-bullet, off-the-shelf CSR; will never be one silver-bullet, off-the-shelf casecase

• CSR is one component of overall corporate CSR is one component of overall corporate strategy, not meant to be stand-alone panaceastrategy, not meant to be stand-alone panacea

• Start and end CSR case with business objectives Start and end CSR case with business objectives integrationintegration

• Communication is critical (internal & external)Communication is critical (internal & external)• Engagement is critical (internal & external)Engagement is critical (internal & external)• Not all “CSR” is strategic, or good businessNot all “CSR” is strategic, or good business• Understand risks, limitations, constraintsUnderstand risks, limitations, constraints• All change starts with one voice, one strategyAll change starts with one voice, one strategy

Simon Zadek, 2004

Map Your Companies and Move Map Your Companies and Move ThemThem

Civil

Strategic

Managerial

Compliance

Defensive

Work Towards the FrontierWork Towards the Frontier

FRONTIER(Intrinsic)

Strategic Structural

Choice Compliance

CIVIL FOUNDATION(instrumental)

+ society, + shareholders + society, - shareholders

WO

RL

D Transform multiple industries.

IND

US

TR

Y

Transform an industry. Take responsibility for our full impact (social, environmental, economic).

Take responsibility for adjacent industries.

Take responsibility for global conditions (climate change, global inter-dependence, etc.).

Be a beacon to others. Develop codes of conduct for the industry.

Build strong coalitions to effect and enforce them.

CO

MM

UN

ITY

Be a good neighbor. Innovate and demonstrate restorative business practices.

Influence the industry indirectly, by example.

Give something back.

Support local communities (corporate philan., direct programs, employee matching & volunt’ring.)

Reduce waste, consumption and emissions.

CO

MP

AN

Y

Run a good business.

Provide access to tools/ product.

Disaster relief.

COMPANY COMMUNITY INDUSTRY WORLD

Start, Move, ChangeStart, Move, Change

Use Your ToolsUse Your Tools

• Conduct current Conduct current CSR assessmentCSR assessment

• Map issuesMap issues, vulnerabilities, opportunities for firm, vulnerabilities, opportunities for firm

• BenchmarkBenchmark against competitors, peers, leaders in against competitors, peers, leaders in industryindustry

• Map CSR to current corporate strategyMap CSR to current corporate strategy (business objectives and competencies)(business objectives and competencies)

• Look for Look for gaps, opportunities, risks, gaps, opportunities, risks, partnerships, collaborationspartnerships, collaborations

• Develop Develop CSR strategy: focus, set goals, plan CSR strategy: focus, set goals, plan for implementationfor implementation

Use Your ToolsUse Your Tools• Leverage resourcesLeverage resources (existing, then new) (existing, then new)

• Sell internallySell internally, leading with business case, link to firm objectives, leading with business case, link to firm objectives

• Refine, measure, evaluate and reportRefine, measure, evaluate and report on progress, KPIs on progress, KPIs

• Leverage small winsLeverage small wins, build momentum, build momentum

• Build Build cadre of supporterscadre of supporters, spheres of influence, beyond one , spheres of influence, beyond one person, one departmentperson, one department

• Develop Develop communications strategycommunications strategy (to whom, who communicates) (to whom, who communicates)

• Integrate into all Integrate into all corporate communications, branding, corporate communications, branding, messaging (internal & external)messaging (internal & external)

CSR Necessities for CSR Necessities for CompaniesCompanies

• Deeply ingrained valuesDeeply ingrained values• Strategic positioningStrategic positioning• Top management supportTop management support• Systems alignment (structures, Systems alignment (structures,

systems)systems)• Metrics of impactMetrics of impact• Integration across functions Integration across functions • Stakeholder engagementStakeholder engagement

You Are Now CSR TeachersYou Are Now CSR Teachers

• Students retainStudents retain– 5%5% of what they of what they hearhear in lecture in lecture– 10%10% of what they of what they readread and hear and hear– 20%20% of what they of what they seesee, read, and hear, read, and hear– 50%50% of what they of what they discussdiscuss, see, read, and , see, read, and

hearhear– 75%75% of what they of what they dodo, discuss, see, read, , discuss, see, read,

and hearand hear– 90%90% of what they of what they teach to othersteach to others,, do, do,

discuss, see, read, and heardiscuss, see, read, and hear

It’s never too late to be who It’s never too late to be who you might have been.you might have been.

- George Eliot- George Eliot

You have been exposed to the You have been exposed to the CSR wave….CSR wave….

… but the waters are still full of sharks.

The only thing necessary for the The only thing necessary for the triumph of evil is for good men triumph of evil is for good men

to do nothing.to do nothing.

- Edmund Burke- Edmund Burke

CSR is not about how you CSR is not about how you spendspend the money you make, the money you make,

CSR is about how you CSR is about how you makemake

the money you spend.the money you spend.

How will How will YOUYOU make make your money?your money?

Please hold on to Please hold on to your soul and your soul and

don’t be a don’t be a soldier.soldier.

THANK YOU for THANK YOU for inspiring and re-inspiring and re-energizing me, energizing me,

sincerely.sincerely.