Wharton Global Alumni Forum: International Corporate Social Responsibility

1. Professor Diana C. Robertson Beijing, China June 13, 2009 Wharton Global Alumni Forum:International Corporate Social Responsibility

2. 2005

3. 2006

4. 2007

5. 2008

6. Agenda • What is Corporate Social Responsibility (CSR)? • What’s the case for (and against) CSR? • Debate: Global standards of CSR • What can we learn about best practices of CSR in China? • What’s the future of CSR?

7. What is CSR? • A firm’s efforts to further a social objective, also known as corporate citizenship, triple bottom line, sustainability • Normative and business cases for CSR • Philanthropy • Stakeholder model • Strategic model –creating value

8. A Stakeholder Map Mass media Pressure groups Local communities Shareholders Employees Company Corporate management Customers Political parties Privatesector Professionals Governments Special interest Groups Suppliers International Organizations NGOs • Slide Compliments of Klaus Leisinger, Novartis Foundation

9. What is the Business Case for CSR? • Building reputation • Attracting customers • Attracting and retaining employees • Attracting investors

10. What is the Business Case against CSR? • Milton Friedman’s argument that the “business of business is business” • The firm exists to benefit shareholders • CSR does not contribute to the bottom line

11. What Is the Evidence? “A simple compilation of the findings [from 127 empirical studies over the past 30 years] suggests that there is a positive association, and certainly very little evidence of a negative association, between a company’s social performance and its financial performance.” Margolis, Joshua D., and James P. Walsh, Misery Loves Companies, Administrative Science Quarterly June 2003

12. Debate: Should firms adopt global CSR standards? PRO Yes, firms should adopt global standards --and here is what they are. CON No, firms should not adopt global standards--only country standards—and here is why.

13. UN Global Compact • A strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption • 6200 participants, including over 4700 businesses in 120 countries around the world • 1147 participants in Asia (20+ countries) • 201 participants in China (7 in FT 500)

14. United Nations Millennium Development Goals An overarching framework to measure progress in reducing global poverty Growing Inclusive Markets Initiative: • Launched in 2006 • Promote the private sector as a resource for investment and innovation to achieve the MDGs

15. CSR in Singapore, Turkey, and Ethiopia • Field research on the meaning and nature of CSR in three very different economies • Singapore -Enlightened self-interest model • Turkey-Philanthropy • Ethiopia-Partnerships with NGOs • My conclusion: CSR looks very different and should be tailored to a country’s economic and social needs.

16. CSR – Best Practices • “Golden Bee CSR China Roll” sustainability awards (China WTO Tribune magazine) • A total of 60 companies including: • Lenovo • Haier • Pepsi • Eaton • Novartis • Sony

17. Unilever Hope Schools • Donated money and resources to help set up 18 “Hope Schools” in rural China. • Funded tuition fees for promising college students

18. McDonald’s • Disaster relief – Sichuan Earthquake • 30,000+ food deliveries • Monetary donation to relief effort

19. Lenovo • Hope through Entrepreneurship • Bottom of the Pyramid (BOP) Investments: exploring new products and new business models that bridge the digital divide

20. Haier – Environment Sustainability • The only representative from Asia to be invited to the 7th meeting of the parties to Montreal Protocol • Award-Winning, Environmentally-Friendly Products

21. Minsheng Bank • China Poverty Reduction • SA 8000 accreditation • Awards: • 2006: “2005 Contribution Award for Poverty Reduction” and the title of “Most Respected Enterprises in China” and the award of Top 100 Excellent Enterprises in China’s enterprise social responsibility survey • 2007: nominated for the “2006 China Charity Award” • 2008: “2007 Special Award for China Poverty Reduction” issued by China Foundation for Poverty Alleviation . 

22. Industrial and Commercial Bank of China • Green Credit Policy • Serving the Community • People's Award for Social Responsibility • 2008 Best Corporate Citizen

23. What Can We Learn about Best Practices in CSR? • Ideally integrated with the core business • Compensation and control systems must be aligned with CSR • Should include specific objectives, timetables, and metrics to track progress • Leadership is key • CSR is motivating and contagious

24. What is the Future of CSR? • Increased social entrepreneurship • Bottom of the pyramid (BOP) initiatives • Greater focus on microfinance, microinsurance, micro health care insurance • Increased NGO-government-corporate partnerships