CSRFiles Edition 1 by ThistlePraxis Consulting Journals

N 750 . 00 NGN $5 . 00 USD £3 .00 GBP

NUMBERS

68% Quantity of results point to a positive relationship between corporate social performance and financial performance. More than 100 empirical studies published between 1972 and 2000 have examined the relationship between companies’ socially responsible conduct and financial performance. (source: CSR Europe)

3/4 Companies with public commitment to ethics perform better on 3 out of 4 financial measures than those without. These companies also have 18% higher profits on average. (Source: Institute of Business Ethics, 2003)

247 In a survey of 247 C-suite decision makers in the US, UK and China, results revealed that 72% think the benefits of their sustainability initiative exceeded expectations. Only 4% failed to meet expectations. Business leaders identified the main benefits as reputation and trust (cited by 49% of respondents), lower cost (42%) and an improved brand (41%). (Source NYSE: ACN)

41% In the same survey, when asked who should be responsible for ensuring progress is made in a sustainable way, 41% say businesses should, 36% think government should be more responsible while 23% believe individuals should. Almost a half (47%) of respondents think that business is doing the most to promote sustainable progress, against only 23% who think governments are and 26% who identify individuals. (Source NYSE: ACN)

PUBLISHER Ini Onuk EDITOR-IN-CHIEF Emilia Asim – Ita COPY EDITOR Amarachukwu Iwuala CONTRIBUTORS Prof. Craig Smith Dr. Uwem Ite Dr. Kenneth Amaeshi Elaine Cohen Obinna Igwebuike Aman Singh Mallen Baker Thelma Ekiyor Mal Warwick Christian Liistro RESEARCH Amarachukwu Iwuala Oyewale Oketunji DESIGN Diana Ubah ADMINISTRATION Emeka Uwanna Ife Aderoju EDITORIAL CONSULTANCY A’Lime Media Limited MARKETING CONSULTANTS Baoro Communications PRODUCED BY: ThistlePraxis Consulting Limited: 4, Taslim Elias Close Off Ahmadu Bello Way, Victoria Island, Lagos, Nigeria. www.thistlepraxisconsulting.com www.csrfiles.thistlepraxisconsulting.com csrfiles@thistlepraxisconsulting.com info@thistlepraxisconsulting.com DISCLAIMER: All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the publishers, except for the inclusion of brief quotations in a review. Copyright © 2011 by ThistlePraxis Consulting Limited. Volume 1, Issue 1 June 2011 Published in the Federal Republic of Nigeria. ..........................................................................................................................................................................................................................

Cover Image: www.emitra.web.officelive.com/csr.aspx

Cover Story Demystifying CSR

PUBLISHER’S NOTE agree less.

Opinion Why African Businesses Need to Adopt Sustainable Capitalism

Features The many business cases for csr strategy

In Print

Books The Age of Responsibility: CSR 2.0 and The New DNA of Business

Reports Frontier Markets. General Mills

9 Questions MD/CEO, Mouka Foam on Sustainability, CSR and the African Economy.

recall vividly when we held the first of many strategy sessions before the set-up of ThistlePraxis Consulting. We had presented off-shoot ideas to our advisory board, which included CSR Files™. One of the questions that came up was: ‘why a journal?’ Our response alluded to the fact that our vision would hold true and that is to steer the discourse on Sustainability and CSR on the African Continent. What you have in your hands is an aspect of that broad vision and for us, a platform to encourage healthy interactions and intellectual exchange. ThistlePraxis Consulting Limited has come of age. I say this because we live in a world where there are really no barriers to attaining growth, pursuing a vision and sustaining development. As a consulting firm with Big Hairy Audacious Goals, we had a vision that seemed pretty

straightforward - Corporate Social Responsibility - and somewhat simple until the ideas were ready to be implemented. Stepping out however, proved we were in for much more than we bargained for, but we are on top of the waves. When we say we are an Assessments and Strategy firm, it simply means we are committed to thinking outside the box to ensure our clients and partners stay ahead in business at all times. CSR Files™ is not your regular journal. It is a rallying ground for interested ‘stakeholders’ to relate on issues of Sustainability and Corporate Social Responsibility. We will only guide the conversation by employing editorial themes and a format for the presentation of our many lofty ideas through the sections. Our Editor-in-Chief, Emilia, has described this as an open, unending conversation and I cannot

Our effort to process and collect data, print the covers, and assemble this issue has been a first-of-its-kind endeavor. I am grateful to all our contributors for their magnanimity, especially in keeping to our short timelines. I would also like to extend thanks to the people and organizations whose long hours and hard work have made this project possible. I intend to contribute my ideas to this platform in the subsequent editions and would encourage you to do the same. It is expedient for all hands to be on deck as we build and shape the future we are convinced is befitting of the African continent and her business potential. We regret any inaccuracies even as they underscore one of the pitfalls of living in a database globe: The information in circulation is not always right. Please send your comments to me at: ini@thistlepraxisconsulting.com; even as I look forward to engaging our readers on issues of mutual fervor. I am certain the time spent reading from our contributors and researchers will be worth your while and beneficial to your practice. Sustainably yours,

Ini Onuk Publisher

HISTORY

EDITORIAL

An Open, Unending Conversation…

his publication is another aspect of a vision to keep the fire of the discourse on Corporate Social Responsibility, Sustainability and Business Ethics alive.

We intend to define and somewhat, redefine the concept and practice of CSR situated in this context within the African Business Environment. We will be pleased to promote passionate discussions and give room for opinion pieces and rebuttals. Our first attempt seeks to demystify CSR. This becomes very important in circumstances where the meaning of CSR is grossly misunderstood. It presents an expedient starting point for us if we must steer organisations away from Corporate Philanthropy and Charity and if we must truly start a holistic con6

So, what do we mean by demystifying CSR? Is this as simple as it sounds even as we often get swamped in the sea of jargons and similar abbreviations? How different, is CSR from CSI and what is the relationship between Corporate Governance and Business Ethics? In line with a leading business model, should we be bothered about shared values or social responsibility or only concrete social investments? What is this text book of terminologies all about and how do these terms, models and approaches all inter-relate to achieve the ultimate goal of attaining social impact or doing business with the triple bottom line as a yardstick? As a continent, where do we begin? Many other emerging economies and continents, speak of transformational CSR or CSR 2.0, but in Africa, can we assert that we have moved even a little step away from corporate philanthropy and cause marketing? Our Op-ed Page puts this issue and varying parameters into a wellrounded perspective and provides a true picture on the need to propel Africa forward in issues of sustainability. It also proposes an alliance to ensure that these developmental changes are made mainstream and a critical number of enterprises are carried along, somehow.

Since CSR is a constantly-evolving practice, with differing models, approaches and a diverse array of postulations; our many contributors will attempt to answer these questions and more, discussing these issues thoroughly. We have also recommended a few good reads to help you in your further study. Again, we have added our executive education series and self development resources in addition to the major events across the world, all year round to give you a good grasp of the scope of CSR and how to update your practice. I believe this issue will answer many questions that have attended your study and practice whilst providing useful information and resources that will give you a rewarding future in CSR. We are grateful to our knowledge partners and contributors for their support, ideas and commitment to this vision. Finally, this is not a rulebook or journal but an open, unending conversation. More importantly… you’re invited in the discourse. Welcome! Regards,

Emilia emilia@thistlepraxisconsulting.com

Source: www.triplepundit.com

CSR Files™ is a bold attempt to provide practitioners and stakeholders with a resource and reference point on issues of Business Ethics, Corporate Social Responsibility (CSR), Sustainability, Corporate Governance and Social innovation within the African business environment. We will facilitate discussions for a proper industry, a code of conduct and perhaps a peculiar standard to aspire to as African enterprises and above all, the possibility of being a model for others to follow.

versation on the need to be socially responsible.

The History of CSR

The 1980’s CSR was largely unpopular. Business as usual was the order of the day. Widespread calls on organizations to cease doing business in South Africa owing to apartheid. Companies such as General Motors heeded the call in 1986, 15 years after the Episcopal Church filed the first shareowner resolution, asking it to do so. In 1987, a Corporate Responsibility group made up of 63 leading UK companies with a track record in CSR formed a forum of corporate professionals, working in community development. Between 1984 and August, 1989,

a total of 277 foreign companies, mostly American companies, had pulled out of South Africa.

The 1990’s Conferences were organized and awards instituted on CSR in several places. For example: Vodaphone, Egypt pioneered CSR in that country in 1998.

By the turn of the century, Business and Society Review published a special issue of the journal to examine ideas on how CSR would evolve in the 21st century.

2001 – 2010 In 2001, Global Compact Net-

work was launched in China. In July, 2002, the UN Commission adopted the new strategy on CSR aimed at enhancing the contributions of businesses to sustainable development. A lot of other organizations also held conferences, seminars, symposia and fora on CSR. They included the European MultiStakeholder Forum on CSR and The Economist’s two-faced Capitalism. Multinationals started launching foundations to drive their CSR. Publications and websites on CSR became increasingly popular just like centres on CSR research and studies. Several CSR awards also sprang up. 7

Arguments Against Corporate Social Responsibility Mallen Baker

Businesses are owned by their shareholders - money spent on CSR by managers is theft of the rightful property of the owners. Response: In the first instance, this case strongly depends on whether the model of social responsibility adopted by the business is a philanthropic one. The starting point assumption is that, through CSR, corporations simply get to “give away” money which rightfully belongs to other people. If CSR is seen as a process by which the business manages its relationships with a variety of influential stakeholders who can have a real influence on its licence to operate, the business case becomes immediately apparent. CSR is about building

Source: www.imagebank.com

f course, one of the challenges in considering cases “for” and “against” CSR is the wide variety of definitions of CSR that people use. We assume here we are talking about responsibility in how the company carries out its core function - not simply about companies giving money away to charity. Below are some of the key arguments most often used against CSR and some responses.

relationships with customers, about attracting and retaining talented staff, about managing risk, and about assuring reputation. The market capitalisation of a company often far exceeds the “property” value of the company. For instance, as much as 96% of Coca Cola is made up of “intangibles” - a major part of which rests on the reputation of the company. Only a fool would run risks with a company’s reputa-

tion when it is so large a part of what the shares represent. In any case, if shareholders are to be accorded full property rights one would expect to see the balancing feature of responsibility for the actions taken by the enterprises they often fleetingly own. Since most shareholders remain completely unaware of any such responsibility, it can only fall to the management - the “controlling mind” of the company, to take on that responsibility. 9

Our company is too busy surviving hard times to do this. We can’t afford to take our eye off the ball - we have to focus on core business. Response: Managing your social responsibility is like any other aspect of managing your business. You can do it well, or you can do it badly. If the process of managing social responsibility leads you to take your eye off the ball and stop paying attention to core business, the problem is not that you’re doing it at all - it’s that you’re doing it badly. Wellmanaged CSR supports the business objectives of the company, builds relationships with key stakeholders, whose opinion will be most valuable when times are hard; reducing business costs and maximising its effectiveness. It’s the responsibility of the politicians to deal with all this stuff. It’s not our role to get involved Response: In some areas, this is right. Albeit, it is getting increasingly difficult to sustain. Most of all the institutions, which are currently getting more powerful in the world, are essentially the global players - the multinational corporations and the non-governmental organisations. The institutions, which are decreasing in power and influence are those tied to the jurisdiction of the na-

tion state - governments first and foremost. It is tempting therefore to look towards the multinationals to take a lead in creating solutions for global problems where the governments seem incapable of achieving co-operative solutions. The interest of Unilever in sustainable fisheries comes to mind. However, there is a strong case that says that the democratic deficit created by such a process is too important to ignore. To whom are the multinational corporations accountable? Outside of that “macro” scale, the argument holds up less well. Many companies actually spend considerable time and money seeking to influence the formation of public policy in their area of interest. And since that area of interest can range far and wide - from international treaties on climate change, through to domestic policy on health (such as that relating to smoking) or transport - the fact is the lobbying activities of companies show that they have a role, like it or not. And if that lobbying has involved blocking legislation that serves a social end purely in order to continue to profit in the short term, then the company is on very dodgy ground. If CSR is simply about obeying the law and paying taxes, then perhaps the above statement is fair comment. If it is about managing the demands and expectations of opinion formers, customers, shareholders, local communities, governments and environmental NGOs - if it is about managing risk and reputation, and investing in community resources on which you later depend - then the argument is

nonsense. I have no time for this. I’ve got to get out and sell more to make our profit line. Response: I have spoken to a lot of business managers about environmental performance, and it always struck me how difficult a sell waste minimisation was to managers, who really needed to save money. Study after study after study has shown that just about any business you can think of, if it undertakes waste minimisation for the first time, can shift 1% of its overall turnover straight onto its bottom line. That is not an insignificant figure. And yet, getting out and selling more products somehow remains more attractive for business managers than making more profit through wasting less. It will take a long time and a change in fundamental attitudes towards doing business before this one shifts. In the mean time, keep looking at the evidence. Corporations don’t really care - they’re just out to exploit the poor and the environment to make their obscene profits Corporations have their share of things to answer for - but I simply don’t recognise the cynical caricature of business leaders in many of the people I deal with in business today. The fact is that if you’re interested in the real solutions to world poverty or environmental degradation, you should have some kind of view about how solutions will be found. I haven’t yet seen the

“

If the arguments for a socially responsible approach were widely accepted, nobody would even use the label “CSR” because everyone would be doing it. Those of us who spend our time marshalling the case for would do well to spend a little time hearing the case against, and considering what should be the response.

“

of the world’s leading companies whilst also showing environmental leadership. The events that latterly tarnished that reputation simply show that skill in execution is key to success - but even those events don’t disprove the fact that success in business and commitment to responsibility can go hand in hand.

Source: blog.floriankaefer.com

The leading companies who report on their social responsibility are basket cases - the most effective business leaders don’t waste time with this stuff. Response: There is no denying the force of this argument. We do not live in a Disney world, where virtue is always seen to be rewarded, and that’s a fact. Nevertheless, the picture is not as simple as the above argument makes out. In the first instance, very few businesses operate in a black or white framework, where they are either wholly virtuous or wholly without redemption. There are many aspects in the way Jack Welch restructured General Electric, which would play to the kind of agenda recognisable to advocates of social responsibility - in particular that of employee empowerment. Welch has gone on record as saying that he believes the time has passed when making a profit and paying taxes was all that a company had to worry about. And since Welch moved on, General Electric has been busy catching up big time with its EcoMagination initiative. Also, many of the leading companies who are committed to their social responsibility are equally successful companies. The same “Most Respected” surveys will usually provide other names at, or near, the top such as IBM and Motorola - and these are companies that have been much more strongly associated with the CSR movement. Coca Cola achieved its place partially because of its profile in social responsibility. When still in charge, Sir John Browne of BP was widely respected as having led BP into a strong position as one

vision described by the anti-corporatist movement that shows how the problems will be solved by “us” somehow triumphing

over “them” - big business. The solutions to these common problems will either be common solutions or they won’t be solutions. By all means give careful scrutiny to those who wield the most power, but recognise CSR as a business framework, which enables the common solution of wealth creation as if people and the environment mattered.

Mallen Baker is a writer, speaker and strategic advisor on Corporate Social Responsibility and Founding Director of Business Respect. He is responsible for the Business Respect email newsletter on CSR, which is the longest running CSR internet newsletter in the world. Published with permission from www.mallenbaker.net 11

EXCERPTS OF THE BILL FOR AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF THE CORPORATE SOCIAL RESPONSIBILITY COMMISSION

Sponsor: Senator Uche Chukwumerije, Senate, Abia North. (Commencement) BE IT ENACTED by the National Assembly of the Federal Republic of Nigeria. As follows: PART ONE Establishment of1 (1) There is hereby established a Commission to be corporate social known as Corporate Social Responsibility Commission. PART TWO Commission 2 (1) (a) Shall be a body corporate with perpetual succession and common seal; and (b) May sue and be sued in its corporate name and may, for the purpose of its function, acquire, hold or dispose of property. (2) The Commission shall be headed by a Director General who shall be responsible for the overall operations of the Commission, and shall be equivalent in rank to a Permanent Secretary in the Public Service of the federation; (3) The Director General shall be the Accounting Officer of the Commission; (1) The Director General shall be appointed by the President and confirmed by the National Assembly –– the appointment shall be based on professional competence and qualification, and without regard to political and partisan affiliations.;

(2) The Director General shall hold office in the first instance for a period of 4 years and may be reappointed for a further period of 4 years and not more than such terms and conditions as may be determined, from time to time by the Presidency; PART THREE Functions And5 (1) Subject to this Act and in addition to any other Powers of The functions conferred on it by other provisions of the Commission Act, the Commission shall:a. Create a standard for social responsibility of corporate organizations that is consistent with international standards; b. Integrate social responsibility in Nigeria trade policies while respecting WTO rules and not creating unjustified trade barriers by seeking to introduce provisions in bilateral regional or multilateral agreements; c. Conduct research and investigation of needs of host communities of Corporate Organizations; d. Serve notices of social responsibility requests to organizations; e. Identify socially responsible behaviour in compliance with National and Community legislation on equality and non-discrimination in all activities of companies; f. Implement social and environmental reg-

ulation consistent with convention and serve as inspection regime of these agreements; Carry out classification of corporate organizations, ranking them according to organizational size and magnitude of investment, which shall determine the nature of corporate social responsibility expected of them; Publish annual reports on social and environmental impacts of company’s direct activities on communities; Develop policies to encourage corporate organizations to undertake community engagements as part of corporate social responsibility, and ensure that companies sponsor cultural and educational activities that offer added value to Nigeria’s sociopolitical and technological development. Provided the cost of a company’s total corporate social responsibility for a given year is not less than 3.5% of its gross annual profit for that year. Promote statutory labour standards and collective social governance in the context of globalization; k. Ensure that companies are accountable not only to employees and their trade unions, but to investors, consumers, host communities and the wider environment; l. Sanction through fines or offer incentives to companies who default or comply with corporate social responsibility rules and principles; m. Develop environmental guidelines that need to be met by corporations doing business in Nigeria; n. Peg and monitor the implementation of local contents in terms of employment and sourcing of raw materials; Introduce and ensure social responsibility compliance labels which do not violate WTO rules; p. Generally enter into any contract or perform

any act, whether within the Federal Republic or outside, as will in the opinion of the Governing Board contribute towards attainment of the Commissions objectives; PART FOUR Financial Provisions 6 (a) The Commission shall establish and maintain a fund which shall cover all expenditure incurred by the Commission PART FIVE Miscellaneous Provisions 7 (1) The Commission shall seek and receive information that will help it in the discharge of its responsibility. Such information cannot be withheld by persons, organizations and corporations. (2) The Commission shall have the power to temporarily shut down and suspend operations of an organization, corporation or a company for a minimum of 30 working days as a penalty for noncompliance with statutory requirement of the corporate social responsibility as stipulated in this Act. (3) An organization that fails to comply with the statutory requirement of this Act commits an offence under this Act and is liable on first conviction to a fine not less than 2% of its gross annual profit and on subsequent violation to a fine of not less than 3.5% of its annual gross profit in addition to compliance with statutory corporate social responsibility within the given period. (4) A person that wilfully obstructs the Commission or its authorized staff in the exercise of any of the powers conferred on its by this Act commits an offence and is liable to imprisonment upon conviction of not less than six months. (Source: Sponsor – Sen. Uche Chukwumerije, Abia North Senatorial District, Federal Republic of Nigeria).

FAQs

In this edition, we seek to provide answers to your Frequently Asked Questions (FAQs) on the proposed CSR Bill in Nigeria. See excerpts of the bill on previous page. What is the CSR Bill all about? The Bill seeks to establish the Corporate Social Responsibility Commission for the control and regulation of the activities of Corporate Organizations in Nigeria. Why is this bill necessary? Organizational Social Responsibility movement started in the 1960â&#x20AC;&#x2122;s with the emergence of various social movements e.g. civil rights, women liberation and environment-protection associations in the United States of America. These bodies helped to enlighten the public that organizations have social responsibility to their host communities. In modern times, the dire need to solve the problems of organizations and their host communities brought in a new perspective in Corporate Social Responsibility. The generally accepted expectation now is that corporate organizations should make profit through legal means, and at the same time identify human rights, employee rights, and the challenges of environmental protection and community development as core values in Corporate Social Responsibility. It is also generally accepted that society is best served by the regulatory hands of the law and political process in protecting a 14

communityâ&#x20AC;&#x2122;s rights to Corporate Social Responsibility. What does it seek to address? The Challenges of Industrialization are burning issues. Companies deriving benefits and maximizing profits from communities are not appropriately responding to the needs of host communities through environmental protection, and community development. The evolving principles of Corporate Social Responsibility in Nigeria are hitherto being propelled mainly by shareholders, consumers and communities, all Non-Governmental Organizations. The nearest effort by the Nigerian Government in this regard is the Vision 2010, which preached partnership between government and corporations for improvement in social equity and justice, continuous funding of community development, and sustenance of unpolluted environment. What does this mean for organisations? All registered enterprises in Nigeria will be required (by law) to adhere to a CSR Code of Conduct to be upheld by the proposed commission. Failure to do so will attract a penalty of at least 2% and a maximum of 3.5%

of their Gross Annual Profit to the Corporate Social Responsibility commission. The commission will also be mandated to shut down the defaulting organisation for a minimum of 30 working days as penalty for non-compliance. What are the anticipated outcomes of this bill? a. Contribute to economic, social and environmental progress with a view to achieving sustainable development of the affected communities, Respect the human rights of those affected by their activities in keeping with Nigeriaâ&#x20AC;&#x2122;s international obligations and commitments. b. Encourage local capacity through close co-operation with local communities, including local business interests, as well as developing appropriate linkage lines of their corporate activities to the benefit of the communities c. Develop and apply effective self-regulatory practices and management systems that foster a relationship of confidence and mutual trust between enterprises and societies in which they operate d. Support and uphold good governance principles and practice, and Abstain from any improper involvement in local political activities.

COVER STORY

VERBATIM

Source: www.imagebank.com

In your own words, Define CSR… Catherine Chong, MBA candidate in CSR

Pamela Sol Dobniewski; Budget Coordinator, Fundación Huésped, Argentina & CSR student

Neha Bhagtani; Snr. Executive, CSR & Business Development (UK Based consultancy firm, India)

CSR is looking at your business model. How it answers the what, how and when of the economic, social, and environmental inputs your business capitalizes on and all the (economic, social and environmental) outputs the business produces.

CSR implies reconsidering the way of doing business, shifting towards the triple bottom line (Social, Environment and economic perspectives). CSR is voluntary, it depends on the country, it depends on the industry, and it’s beyond compliance.

CSR is how a company addresses it integral business process (natural & man-made capital) & people issues & help to make its business, the community & the environment sustainable

Ron Strauss; Founder & CEO of Brandzone, Co-author, ‘Value Creation: The Power of Brand Equity’

Farhana Ahmed; General Manager at ICT Alliance, Bangladesh

Amol Kulkarni; Deputy Director, Share Your Care, Mumbai, India

CSR is where a firm’s mission and values lead to initiatives that preserve and/or improve the common good while also improving its business results. Or, the initiative can be dynamic in nature and instructs the firm to better the common good. In essence, CSR is a ‘win-win.’

CSR is a commitment. A commitment by businesses to behave ethically and contribute to the economic development while improving the quality of life of the workforce and their families, as well as that of the society at large.

CSR from a corporate point of view is to reduce the guilt factor. The way people make money these days by stepping on others, by giving few cents away makes them feel less guilty & they blow it up to earn some good PR image too.

Sune Skadegaard Thorsen; Partner/Director, Global CSR

John Kirk; Postgraduate Student, Southern Cross University, Australia.

Ashie Hirji, Director, Asita Informatica Inc

CSR is how corporations take responsibility for contributing, while not becoming a barrier, to social, environmental and economic sustainable development

CSR is the commitment by a corporate entity to take responsibility for the impacts on the environment in which it operates and make restitution for any negative impacts.

CSR is a concept created for corporations which further allows corporations to integrate social, ethical & environmental concerns in giving back to society, a model incorporated within their business operations for their stakeholders.

DEMYSTIFYING CSR Kenneth Amaeshi

hat is Corporate Social Responsibility (CSR)? CSR has continued to remain an elusive concept. It is a concept still struggling for a definition; with different meanings to different people. I have attended a number of both academic and practitioner conferences on CSR where it was often pretended that people knew what “it” is. People freely talk about “it”; yet no one is able to place a finger on “it”. I challenge you to ask anyone that talks about “it” to tell you exactly what he or she means by “it”. I suspect you would be surprised by the breadth of responses and meanings brought upon CSR that you wonder how actors in this field cope with such

diversity of meanings and interpretations. One of the often bandied and dominant definitions of CSR is that offered by the EU: ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis’ as they are increasingly aware that responsible behaviour leads to sustainable business success (EU, 2002). Stated in a much more managerial speak, the CSR firm should strive to make a profit, obey the law, be ethical, and be a good corporate citizen (Carroll, 1991:42). One thing I have come to realise over the years is that CSR is an

amorphous animal – the proverbial elephant and the blind men; at best, it is fluffy and all things for all. As such, it has the tendency of presenting itself as an arena of struggles, contestations of ideas and power relations. It is not a static construct, but rather has a way of appropriating issues onto itself. It presents in different cultures, countries and regions in different ways. It is philanthropy somewhere and accounting for sustainability elsewhere. It is a response to the present and anticipated climate change challenges somewhere and a response to the challenges of obesity elsewhere. It is about corporate governance. It is about responsible investment. Who knows what it will become tomorrow? Thinking through all these myri17

COVER STORY

The account of those that willingly enter into it and those that are coerced into it tend to suggest a rationalist view of the world.

“

It is a response to the present and anticipated climate change challenges somewhere and a response to the challenges of obesity elsewhere. It is about corporate governance. It is about responsible investment. Who knows what it will become tomorrow?

“

ads of meanings and interpretations, I feel more comfortable articulating CSR as the private governance of corporate externalities. The governance of corporate externalities is not a new science. What is new about it is the private dimension of this governance. I see CSR as a firm’s private participation in the governance of positive and negative externalities. In other words, CSR is the manifestation of firms entering into the governance of externalities arena – an arena that once appeared to be exhausted by the State and its machinery. The participation of firms in the governance of corporate externalities opens a new discursive space, which hitherto was non-

existent or suppressed. It shakes the fundamentals of political science, public policy and the neoclassical economist conceptualisation of the firm in the market place; and at the same time, makes it difficult to articulate CSR from the conventional theory of the firm known to an economist and a political scientist. The emergence of CSR signals the constant collusion of the private and public spheres in the governance of corporateinduced externalities. CSR, as a form of organisational behaviour, is one of the resultant effects of such collusions. So, CSR presents an arena for contestations. Different firms are motivat-

Most economists and political economists are puzzled by CSR, mainly because it appears to run contrary to the fundamental theories of the firm. It seems that the understanding of the firm as an entity solely interested in the pursuit of private interests appears inadequate, today, to explain the reality of the firm. It is becoming, surprisingly, evident that firms are not only private institutions, but are simultaneously social institutions; and as such may take on social responsibilities. This is at the root

“

Most CSR proponents often appear to have rather run away with the emotional side of the argument with the hope of building a ‘religion’ out of CSR instead of working to develop a science out of it.

“

Different firms are motivated to enter the private governance space by different things. Some firms enter this space willingly; some are coerced into it; while others ‘sleep-walk’ into the space.

“

Another school of thought may have it that firms and managers are often limited by bounded rationality and as such are prone to responding to the demands of their external environments, without much thoughts. In that case, they respond to societal norms and expectations – practices and constitutions that are taken for granted– thereby ‘sleep-walking’ into that space. This latter perspective has been used to explain the rapid spread and diffusion of CSR – most firms now have it on their websites – even when it hasn’t been, sometimes, thought through by such firms.

Source: www.imagebank.com

ed to enter the private governance space by different things. Some firms enter this space willingly; some are coerced into it; while others ‘sleep-walk’ into the space. Those that enter it willingly may articulate their actions from different philosophical perspectives. Some can be very normative about it – i.e. it is the right thing to do – while others will enter the space from a more strategic (in st r umental) perspective of what it offers to the bottom-line through such incentives as new product developments, sustainable innovation, reputational gains, risk minimisation, employee and customer attraction, retention, et cetera. There are also some that are coerced into it because of pressures from competition, the NGOs, local communities, and even threats of local and international regulations. For this kind of entrants, it is always about meeting the minimum requirements to meet the expectations of pressure groups and remain competitive.

of the conceptualisation of firms as corporate citizens. The economic sociologists are more at home with this understanding of the firm as a social institution than the economists. Unfortunately, the CSR movement – I won’t describe it as a discipline yet - is still struggling to become a discipline in isolation of the traditional disciplines that have sought to ground our understanding of firms and their behaviours in ‘good’ theories. Most CSR proponents often appear to have rather run away with the emotional side of the argument with the hope of building a ‘religion’ out of CSR instead of working to develop a science out of it. In summary, therefore, I often like to think of corporate social responsibility (CSR) agenda as a call for organizations to simply “do good” and “cause no harm”. I acknowledge that this may be an oversimplification of what appears to constitute a very complex agenda; but I find it difficult to think of anything on the CSR agenda that does not fit into either of these categories: do good or cause no harm. Whilst the CSR movement appears like a ‘new movement’, it may be so in nomenclature but not so in its 19

We are ThistlePraxis Consulting We are an Assessments and Strategy Business

ThistlePraxis Consulting Limited 4, Taslim Elias Close Off Ahmadu Bello Way, Victoria Island, Lagos, Nigeria. www.thistlepraxisconsulting.com info@thistlepraxisconsulting.com

.........................................

CSR Policy & Strategy Project Monitoring & Evaluation Research & Documentation Impact & Needs Assessments Competence Development

.........................................

“At ThistlePraxis Consulting, we are a magnet for outside ideas - we create and dominate a ‘deal flow’ for innovation.”

+234 8136611906 +2348023977421 +234 (1) 2131776

COVER STORY

“

ness. For example, some of the banking practices considered today as irresponsible practices were once considered responsible practices. Other examples include the appropriation of the climate change, binge drinking and obesity debates by the CSR agenda, as it evolves.

The understanding of the CSR movement as an inclination toSource: www.getty image.com

One of the key starting points of CSR is the promotion of responsible business practices – whatever this means. It is a movement to address the short-falls in the runaway capitalist system. However, the CSR movement is not a unitary movement, but rather a very broad church. Within this church, there are those I will call iconoclasts (those who would prefer to dismantle the current capitalist system), reformers (those who want to drive change from within the current capitalist system), revellers (those who

celebrate the movement as an aspiration, and a satisfaction in itself, even if it doesn’t change anything at last) and critics (those who believe that it is a distraction, afterwards). Over the years, the CSR movement has leveraged strife and antagonism to sustain itself. Being pulled in different directions by the different interest groups and actors, it gains its currency and relevance, anyway. It is also able to sustain itself through its fluidity. In other words, the understanding of CSR as responsible business practices gives it the leeway to appropriate and reconstitute its content as it journeys into the future. This is a very powerful attribute of the construct, which may not be readily available to other management fads and fashions of the same scale and contemporari-

“

Within this church, there are those I will call iconoclasts (those who would prefer to dismantle the current capitalist system), reformers (those who want to drive change from within the current capitalist system), revellers (those who celebrate the movement as an aspiration, and a satisfaction in itself, even if it doesn’t change anything at last) and critics (those who believe that it is a distraction, afterwards).

“

Source: www.imagebank.com

aspirations. The role of business in the society is an old debate; what is not old is the intensity and prevalence of this debate in the contemporary scheme of things, which has been further orchestrated by the current global financial crisis.

Whilst the fluidity of the CSR construct confers on it some sort of strength and resilience, it often carries with it some managerial challenges. For instance, although CSR has successfully found its way into the managerial lingua and practice, its underpinning philosophies are not yet easily transparent and understandable. Many a time, managers struggle to fit the requirements of the contemporary CSR agenda into the conventional capitalist paradigm: they often look for a business case and competitive advantage; they endlessly search for the link between the CSR agenda and corporate performance; sometimes, they don’t get the answers they want; at other times, they rationalise over their findings with the hope that the answers they would want, lie in the ‘long term’ sustainability of the business. While accepting the possible truism in the ‘long term’ rationalisation rhetoric, another possible truism that is not often reflected in the CSR movement is that the CSR agenda could be underpinned by a different (and sometimes antithetical) set of philosophical tenets from the current capitalist system it seeks to criticise, topple and or reform.

wards a meta (or post) capitalist system, makes CSR a change management project, albeit at a very large scale (system transformation). It is a change management that needs to win the ‘hearts and minds’ of its target actors and interest groups, who may be already versed and neckdeep in the current system. One of the ways to do this is through education and learning. Education and learning, it is hoped, will prepare the ground for sowing the seeds of the new system. The new system will require a new or modified paradigm – if not, the CSR movement runs the risk of filling old jars with new wine. In summary, the embedding of

CSR in organizations, therefore, needs to reflect an understanding of the philosophical undertones between the current capitalist system and the ‘new mode of economic coordination’ propagated by the CSR movement. If the embedding of CSR in organizations is to be authentically realised, it needs to take these differences seriously and explore the implications they would have for such factors as leadership, organizational success and performance, corporate governance, organizational structure, vision, strategy, business operations in different localities, etc. This will, no doubt, be less prescriptive and would require an open mind in search of the eureka moment. This is, for me, where research takes over from practice. (To be continued in the next edition) References: i. Carroll, A. B. (1991). The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, 34(4):39-48. ii. Korhonen, J. (2002). The dominant economics paradigm and corporate social responsibility. Corp. Soc. Responsib. Environ. Mgmt 9, 67–80

Dr. Amaeshi is a political economist and teaches Strategy & International Business at the University of Edinburgh Business School, UK. He is an Associate faculty at Warwick Business School; a Visiting Fellow at Cranfield School of Management, and a Visiting faculty at the Lagos Business School. He is a Senior Associate with the Sustainability Advisory Group (London and Dubai) and consults in the broad area of CSR and Sustainable Organizational Development (email: kenneth.amaeshi@ed.ac.uk). 23

OPINION

EXECUTIVE EDUCATION Source: www.imagebank.com

Why African Businesses Need to Adopt Sustainable Capitalism

Strategies to create Business and Social Value October 19–22, 2011 Havard Business School

Introduction Increasingly, corporate executives must find new ways to address the social, economic, and environmental effects of doing business while balancing conflicting demands on their attention, time, and resources. Emphasizing the alignment of Corporate Social Responsibility (CSR) with business strategy, this programme helps you define priorities, integrate social responsibility throughout your business, and build social and business value. You will strengthen your ability to define and implement powerful CSR strategies that position the firm, its reputation, and its way of doing business for enduring success.

What can you expect Corporate Social Responsibility explores the challenges and opportunities of current CSR models, as well as the next generation of issues that business practitioners will face. New frameworks and concepts will help you sharpen your programme’s focus and integrate social respon24

sibility throughout operations in order to position your firm for higher levels of success.

Your course of study This intensive programme focuses on the practices of companies that have successfully created business and social value through focused, aligned, and integrated CSR programmes. It provides the practical knowledge and insight you need to improve decision making, leverage partnerships, manage risk, and measure performance.

Who should attend? The programme is specifically designed for senior executives, who direct corporate social responsibility programmes or oversee departments such as public affairs, philanthropy, sustainability, environmental health and safety, or community affairs. Senior officers with profit-andloss responsibilities will benefit from attending. This programme is not targeted to management support organizations or consulting firms. Typical participant titles may include, but are not limited to: CEO/Executive director, Senior Vice President, Vice President of corporate and community relations, Vice

President of Corporate Social Responsibility, Vice President of development, Vice President of environmental health and safety, Director of Corporate Social Responsibility, Director of corporate/community relations etc.

Improving your organization’s performance Corporate Social Responsibility (CSR) is integral to long-term business success. Today’s organizations must be increasingly mindful of the impact that their operations have on society at large, and this requires much more than isolated measures. In a climate of heightened social awareness and instant access to information, CSR must be a fundamental part of your company’s targeted practices, broad objectives, and overall culture. This programme is designed to help executives fully integrate social responsibility in ways that benefit both society and business. You will learn how to develop an overarching CSR strategy suited to the unique requirements of your company— one that addresses the social, economic, and environmental effects—as you better position your organization for immediate and future successes.

Obinna Igwebuike

ustainable capitalism is all about seeking economic gains in a sustainable way. Having both terms stand side-by-side is seen by many, as an irony of massive proportions. This group of doubters sees it as a waste of time to suggest any possibility of moderacy of resource exploitation in a system that is motivated by profit and wealth objectives. At surface level, this looks true. However, if we critically look at the body of literature on this subject, we get the impression that actually, the high degree of opposition, but interconnectedness Source: www.getty Image.com between these two concepts warrants extensive discussions and dialogue on how they can live together. In the words of Dragan Loncar, As- With significant underdevelopsociate Professor in the Faculty ment, in spite of rich resource of Economics, University of Bel- deposits, the question is: is it grade, “The topic of sustainable economically sensible to join the development wouldn’t be a topic developed world’s chorus of sustainable development? Shouldn’t in a non-capitalist world.” we throw in everything to enThis proposition takes an ensure our development levels intirely new shape, if we put it in crease? Is there anything to gain the context of the African region. by being more sustainable, as the

region already disproportionately ‘bears the brunt’ of the effects of climate change, propelled primarily by activities in the developed world? A Sick Biosphere Resources are essentially the inputs to products that meet the people’s needs. Therefore, the impact of population growth strongly weighs in on the carrying capacity of the earth and in essence, its ability to sustainably develop. It is estimated that world population would have grown by about 5 billion between 1927 and early 2012 according to the United States Census Bureau. This significant growth has come with a corresponding increase in economic activity to meet the needs of the rising population, leading to a resource crisis of huge proportions. Essentially, infinite growth is being taken care of on the one hand, by finite resources (like fossil fuels). On the other hand, infinite resources are being stretched to their limit, as a result of ecological over shoot. The resource crisis is just one 25

GLOSSARY

OPINION aspect. Another aspect of the damage to the planet is the increasing impact of emissions. This is the principal cause of the Climate Crisis, which has been discussed very extensively, since the Kyoto Protocol of December 11, 1997. The Protocol tried to ensure industrialized nations commit to emission reduction. The mechanisms for achieving this lofty idea are: emissions trading, clean development mechanism and joint implementation. Bearing in mind that we are a year from the end of the first commitment period, it does not seem like the world as a whole, has been very successful in reducing emissions. This is probably as a result of the fact that the Protocol itself

“

is it economically sensible to join the developed world’s chorus of sustainable development?

“

was structured to commit industralised nations. With the shift in economic power from the West to the East in the last decade or so, it is apparent that this was perhaps a wrong approach. The US and China, two of the largest emitters have also not shown consistent support for the ideals of the Protocol, resulting in far less impact on a global scale than originally expected. With the resource and emissions is26

a b Profound Effects Ironically, as stated above, the developing world (including Sub-Saharan Africa) has to suffer more from this biosphere crisis. The socio-economic effects of the crisis, according to the Parliamentary Office of Science and Technology’s Postnote include; Changes in rainfall patterns, Increased frequency and severity of: Floods, Droughts Storms, Heat waves, Changes in growing seasons and regions, Changes in water quality and quantity, Sea level rise and Glacial melt. These effects have significant socio-economic consequences. Postnote asserts that food security is compromised, health of citizens become susceptible to negative effects of industrializa-

tion, infrastructure becomes an issue as inhabitants are displaced and sources of livelihood are lost. With poor disaster management facilities in the developing world, these effects take even more significant proportions. Our current environmental practices lead to scarcity of clean potable water, high energy costs and disruption in the ecosystem. These will plunge the economic fortunes of Sub-Saharan Africa, a region which already has 239 million people hungry (according to data from the FAO). (To be continued in the next edition)

Obinna Igwebuike is an MBA student at the Bristol Business School. His interests are in Macroeconomics, Corporate Finance, Corporate Strategy and Business Sustainability. He can be reached on obinnaigwebuike@ ymail.com or obigwebuike@gmail.com.

ARTIFICIAL TREES “Artificial trees” are geo-engineering solutions that use amine solutions to capture CO2 out of the atmosphere and sequester it underground. It is also known as “air capture” or “carbon scrubbers”.

BASEL CONVENTION The Basel Convention on the Control of Tran boundary Movements of Hazardous Wastes and their Disposal is an international agreement governing the handling of hazardous and other wastes.

BIO FUEL A fuel derived from organic material. Supporters of bio fuels argue that the fact that plants soak up carbon dioxide as they grow means that they can deliver deep cuts in carbon emissions compared to fossil fuels, while avoiding the need for investment in new low carbon vehicle technologies.

BENCHMARKING It involves comparing the measures in an organization for certain performance standards with those in a similar organization, as a way to set and understand own standards

Source: www.imagebank.com

sues, it is not wrong to say the world is in a biosphere crisis.

ANAEROBIC DIGESTOR A renewable energy technology that generates heat and electricity from waste organic matter, the resulting residue can also then be used as a fertiliser. The technology is becoming increasingly popular across the agricultural sector and advocates claim that it is more cost effective than many alternative renewable energy systems.

CAP-AND-TRADE A mechanism for capping carbon emissions across an economy, cap-and-trade schemes have emerged as the most widely-adopted means of putting a price on carbon emissions.

CARBON ACCOUNTING Umbrella term referring to the act of measuring and reporting on an organisation’s greenhouse gas emissions, this practice is widely regarded as an essential first step towards cutting carbon emissions. CARBON CAPTURE AND STORAGE (CCS) The practice of capturing CO2 emissions - typically from coal-fired power plants - and sequestering it in geological formations such as depleted oil and gas fields.

CARBON DISCLOSURE PROJECT (CDP) The Carbon Disclosure Project (CDP) is a global investor-backed initiative designed to encourage blue chip firms and their suppliers to publish information on their carbon emissions and climate change strategies.

CARBON CALCULATOR A tool, typically available online, that allows an organisation to automatically work out their carbon footprint by in-putting related data such as energy used or distance travelled. Commonly available from airlines and carbon offset firms, which use them to calculate how many offset credits customers should buy. 27

GLOSSARY

DEREGULATION Abolishment of monopolies in order to open up for competition, here used as a synonym for liberalisation.

FEATURE DESERTEC PROJECT The Desertec Project is a high profile European solar energy initiative with a goal of generating up to 15 per cent of Europe’s electricity through giant solar thermal power plants located in the North African desert.

The Many Business Cases for CSR Strategy Craig Smith

ENERGY STAR Energy Star is an international scheme that awards products with an Energy Star label if they meet set energy-efficiency standards. ENHANCED CAPITAL ALLOWANCES (ECA) Enhanced Capital Allowances (ECAs) are a UK tax break offered to businesses buying energy efficient plant and equipment, low carbon vehicles, and water saving technologies. The scheme allows businesses to claim 100 per cent first year capital allowances on investment in plant and machinery that qualify for ECAs.

FOSSIL FUELS Oil, hard coal, lignite, natural gas and peat

FUTUREGEN Futuregen is a flagship $1.5bn US public-private project intended to showcase “clean coal” technologies that would result in a 275MW power plant with near-zero emissions. G3 GUIDELINES The G3 guidelines are a set of UN-backed international guidelines for corporate sustainability reports. They provide guidance on the processes firms should follow when developing a sustainability or CSR report, including recommendations on which environmental, community and human rights metrics should be incorporated.

1. www.businessgreen.com/glossary/corporate-social-responsibility-csr 2. www.epaw.co.uk/csr/glossary.html 3. www.vattenfall.com/en/csr-glossary.html 4.www.mhcinternational.com/corporate-social-responsibility/csr/glossary.html 5. en.wikipedia.org/wiki/Global_warming 6. en.wikipedia.org/wiki/Environmental_ impact_assessment

FUEL CELL Fuel cells are electro-chemical conversion devices used to generate electricity that is widely regarded as a zero emission alternative to fossil fuel powered engines.

GEO-ENGINEERING Geo-engineering is an umbrella term referring to technologies designed to engineer the natural environment on a huge scale in an attempt to counteract the effects of global warming.

7. Zadek, Simon: The Civil Corporation, (p7, Earthscan, London, 2001) 8. Cadbury, Adrian (Sir): in Global Corporate Governance Forum, (World Bank, 2000) 9. Price Waterhouse Coopers 10. Oxford Dictionary 11. Rosthorn, John: Business Ethics Auditing – More Than a Stakeholder’s Try (Journal of Business Ethics 00: 1-11, 2000, Kluwer Academic Publishers, Netherlands).

Source: www.gettyimage.com

ELECTRIC VEHICLE (EV) Electric vehicles (EVs) use electric motors powered by batteries to provide propulsion instead of internal combustion engines.

oday, it is a small and diminishing minority of multinational corporations that does not produce corporate responsibility, sustainability, or corporate citizenship reports, proclaiming the company’s good works. This heightened attention to CSR is not due to business leaders discovering religion; it is because the business case has become much more compelling.

It has become difficult to avoid the abundance of sources on the business case for Corporate Social Responsibility. It is evident in the reports of individual companies that they justify CSR activities to shareholders. British American Tobacco, for example, in its 2003/4 Social Report says: “Accepting corporate social and environmental responsibilities, and contributing in the ways that a business can, makes good busi-

ness sense.” Presumably, this explains, in part at least, BAT’s role in establishing the Elimination of Child Labour in Tobacco Growing Foundation and its claim that it does not employ children in its operations. Various organizations produce reports on the business case for Corporate Social Responsibility, such as Business for Social Responsibility (www.bsr.org), the 29

FEATURE World Business Council for Sustainable Development (www. wbcsd.org), and the International Business Leaders Forum (www. iblf.org) which, in its report Profits With Principles, shows “the quantifiable and enduring business advantage to ‘doing the right thing’.

“

Indeed, this win-win combination of society and business benefiting is the holy grail of corporate social responsibility.

“

Source: www.imagebank.com

However, attention to the business case for Corporate Social Responsibility can be misguided in two respects. First, there is no one business case other than at the most basic level (i.e. corporate responsibility can provide an enduring economic advantage for the firm). Second, because the business case is idiosyncratic, it varies markedly in both form and strength across firms, industries and other situational considerations. Without doubt, there are circumstances—and increasingly so—under which CSR is in the best economic interests of a particular company (Margolis and Elfenbein 2008). Indeed, this win-win combination of society and business benefiting is the holy grail of Corporate Social Responsibility. However, because the business case is contingent upon a variety of circumstantial considerations, it is difficult to find a justification for many of the generalizations

made about the business case beyond wishful thinking. It is important for today’s business leader not to simply accept the generalizations of the generic business case, nor dismiss it as flawed, but look to when, where and how greater attention to CSR is demanded of his or her firm.

strong values. Shareholders are more inclined to invest in businesses with outstanding corporate reputations. Quite simply, being socially responsible is not only the right thing to do; it can distinguish a company from its industry peers. (Starbucks, 2002, p.3)

Key drivers of corporate attention to Corporate Social Responsibility are consumers, employees and “ethical investors”. As Starbucks puts it: Consumers are demanding more than ‘product’ from their favorite brands. Employees are choosing to work for companies with

Do Your CSR Initiatives Fit with your Industry? However, what works for Starbucks—a company that has always positioned itself as a social responsibility leader—will not necessarily work for other companies. The sourcing and environmental issues that re-

Does your CSR Strategy respond to your stakeholders? Within any industry, individual companies’ attention to Cor32

porate Social Responsibility will differ according to the extent to which they have been the subject of activist pressure or CSRrelated crises. The Corporate Social Responsibility leadership on sourcing issues of Nike and the Gap reflects their earlier record as targets of NGOs campaigning against sweatshops (Zadek, 2004). Often the most successful strategy in this situation is to turn enemies into allies. By partnering with, for example, the very NGOs that once campaigned against them, companies not only head off trouble, but can also gain competitive advantage and even potentially some influence with legislators (Yaziji, 2004). Shell is a good example. Learning from the experiences of 1995, when Greenpeace protests prevented the company from dumping its obsolete Brent Spar oil platform at sea, it now consults with NGOs, such as the World Wildlife Fund, Amnesty International and local campaign groups at the initial stages of projects. Shell, thus, manages both to diminish conflict and to keep any battles that do occur out of the public eye. Of course, it is also looking more carefully and arguably more responsibly at its projects as a result of involving NGOs. Does your CSR strategy take your Market Positioning into

account? No matter how successful its strategy of turning enemies into friends, Shell—like all other companies—also has to consider the third of our key characteristics: market positioning, defined in the simplest terms as the way in

argued: why should other customers suffer higher prices? It took a legal ruling to change the company’s mind. Meanwhile, the question did not arise for premium airlines, which simply swallowed the extra cost. Customers expect more of pre-

consumers to trade down, they can at least take heart from the British retail institution, Marks & Spencer’s “Look behind the label” campaign, which brought together a multitude of social, nutritional and quality issues: from fair trade, animal welfare and environment through salt and fats to washability and durability of clothing. The company rated this campaign one of its most effective ever and a significant strategic success, resulting in increased sales and awards for green retailing (Butler 2007). Significantly, Marks & Spencer has stayed ahead of the competition even in today’s more challenging economic environment. Source: ThistlePraxis Library

ceive considerable attention at Starbucks are far less relevant to a financial institution such as Citibank. More appropriate for a global consumer bank are initiatives in microfinance or serving the “unbanked” majority of consumers in developing countries (and substantial minorities in many developed economies). Likewise, Shell working hard to eliminate greenhouse gas emissions makes sense; HSBC, another bank, declaring itself carbon neutral is more suspect. Consumer-facing companies, such as retailers like Wal-Mart, are more likely to attend to issues of consumer concern than companies further up the value chain, such as manufacturing companies—they may be more susceptible to issues of concern to the local communities, where facilities are located, such as plant closures or emissions. Pharmaceutical companies and those in the resource extraction industries are also typically less exposed to consumer pressure, but highly dependent on the approval of regulators. As these examples illustrate, the form and strength of a company’s Corporate Social Responsibility activities will vary according to the industry in which it operates. This is the first of our four indicators of CSR strategy. But even within a given industry further differentiating characteristics come into the mix; notably, the following: stakeholder power and activism; market positioning; and company history.

FEATURE

which it differentiates itself from its competitors. The Irish budget airline Ryanair, for example, originally saw no problem in making wheelchair users pay an extra charge that frequently exceeded the price of their original ticket. The corporate response was that Ryanair’s commitment to customers was all about low price—and that if European airport operators were unwilling to pay up for wheelchair services, then it was the airline’s duty to pass on the extra cost to the disabled passengers themselves. It

mium products. Hence, Italian coffee company illycaffè’s ethical approach to driving quality through its supply chain—transferring knowledge for the good of its suppliers and its products (Perrini & Russo, 2009). Hence too British smoothie maker Innocent’s distinctive brand is founded on taste, nutrition and ethics (Brown & Grayson, 2009). The challenge for companies such as Innocent is to continue to compete as supermarket own brands. As global food and drink corporations target their premium market and recession drives

What is Your Company’s CSR History? In Marks & Spencer’s case, the company has a long tradition of social responsibility, which brings us to the final of our differentiating factors: history. Nineteenthcentury beginnings can and often do inform twenty-first century strategy. Multinational food, home care and personal care giant, Unilever, originated in the 1890s start-up, Lever Bros. Founder, William Hesketh Lever was one of the greatest British philanthropic business leaders of the Victorian era. On the one hand, his products promoted public hygiene. On the other, his company pioneered employee

“

Within any industry, individual companies’ attention to corporate social responsibility will differ according to the extent to which they have been the subject of activist pressure or CSRrelated crises.

“

FEATURE

welfare programmes. Today, the company’s diverse Corporate Social Responsibility initiatives include the worldwide Dove Campaign for Real Beauty, which celebrates the natural variations in women’s bodies (rather than extolling an idealized form as found in many advertising campaigns for beauty products), and a collaboration with Oxfam to examine the role of business in poverty reduction through Unilever’s operations in Indonesia. The geography may have shifted, yet the history still shapes the company’s CSR strategy (Smith & Crawford, 2009).

Prof. Craig Smith is the INSEAD Chair Professor of Ethics and Social Responsibility at INSEAD, the leading international business school with campuses in France, Singarpore and Abu Dhabi, where he is also the Academic Director of the CSR and Ethics Research Group in the INSEAD Social Innovation centre. He was previously on the faculties of London Business School, Georgetown University and Harvard Business School. 33

IN PRINT

COLUMN

books Title: Author: Reviewer:

A Perspective on Public Sector Role in Promoting Corporate Social Responsibility

The Age of Responsibility: CSR 2.0 and The New DNA of Business Wayne Visser Amarachukwu Iwuala

CSR 2.0 adheres to five key principles: creativity, scalability, responsivesness, glocality & circularity. Visser uses 300 cases to show best & worst practices, regarding corporate sustainability & responsibility.

Dr. Uwem E. Ite

Source: www.csrwire.com

ccording to a release on csrwire.com, “Wayne Visser … wants to direct business towards the true Age of Responsibility by veering away from the traditional approach of philanthropy or public relations (widely criticized as ‘greenwash’) and pioneering a more interactive, stakeholder-driven model…

Source: www.imagebank.com

reports Frontier Markets. Global Partnerships. Local Solutions; February, 2011 Issued by: U.S. Chamber’s Business Civic Leadership Centre – U.S. (BCLC) Reviewer: Amarachukwu Iwuala

General Mills 2011 Corporate Social Responsibility Report Issued by: General Mills Reviewer: Amarachukwu Iwuala

omponents and Drivers of CSR

eneral Mills is one of the world’s leading food companies, operating in over 100 countries. This report focuses on the company’s progress on health, community and environmental initiatives. Some of the highlights include: reducing sugar in cereals advertised to children under age 12, reducing 10% sodium in its products, contributing more than 100 Million US Dollars to charitable causes in the 2010 fiscal year etc. Source: csrwire.com

Source: www.csrwire.com

he report highlights case studies of how the private sector; in partnership with NGOs, public sector entities and multi-lateral institutions address some of the world’s most serious challenges in the water, food, security and economic development sectors. The new report builds on the work of Chamber BCLC’s Global Corporate Citizenship Programme, which focuses on facilitating dialogue and collaboration amongst practitioners in the international development arena. Source: csrwire.com

ment CSR policies and programmes. These include managing risk and reputation, protecting human capital assets, responding to consumer demands and avoiding regulation . Although CSR has shifted from the margins to the mainstream of business practice, two main problems constitute impediments to the realization of the potential benefits of CSR. In the first instance, ‘fear’ is one of greatest reasons why businesses adopt CSR, with the emphasis on avoiding trouble rather than looking for opportunities to contribute to the social, economic and environmental development of the societies in which they operate. Secondly, CSR is too often a ‘bolt-on’ to business operations rather than ‘built in’ to business strategy. In the process CSR ends up becoming either a distraction or hindrance to business purpose and objectives, rather than a help to the wider society. This result in the considerable gap observed between corporate rhetoric and actual practice of CSR. Against the above background, there is the need for active public sector participation in the promotion of

As a business management model, CSR has two main components. The first is redefining the company’s mission to include benefits to stakeholders and the society. The second is operationalizing the new mission through management, auditing, and reporting systems . As such, a commitment to CSR requires business owners and their managers to re-conceptualize and reformulate the company’s mission in terms of public purpose as well as private

gain. A CSR mission commits the company to the pursuit of a triple bottom line (TBL) i.e. financial, social and environmental. It also recognizes that apart from the company’s shareholders, a wide circle of stakeholders, including employees, investors, consumers and local communities are affected by the company’s decisions and operations. TBL requires effective policies, procedures and systems that will enhance the company’s accountability to stakeholders and the general public. Several key drivers often compel a company to adopt and imple-

COLUMN

CSR practice.

In the first instance, ‘fear’ is one of greatest reasons why businesses adopt CSR, with the emphasis on avoiding trouble rather than looking for opportunities to contribute to the social, economic and environmental development of the societies in which they operate.

“

similar CSR policies. However, the unique challenges that the Nigerian environment presents makes the practice of CSR within country significantly different in 36

some respects from similar practices in other countries. The public sector (i.e. the government) has to provide the enabling environment for the private sector to contribute to sustainable development through the framework of CSR. An ‘enabling environment’ implies a policy environment that encourages (or mandates) business activity that minimizes environmental and/or social costs and impacts while at the same time maintaining or maximizing economic gains. It is generally believed that the public sector role in promoting CSR should consist of the following : • Awareness-raising efforts to create shared understanding of corporate responsibility among companies and the broader public, including what businesses can do to implement it, • Partnerships designed to create win-win situations, in which various stakeholders work collectively towards a shared goal, • Soft law approaches that promote and incentivise voluntary action by businesses as a complement to state regulation,

• Mandating instruments that allow governments to monitor and enforce corporate accountability. In Nigeria, an attempt was recently made to legislate CSR through an Act of the National Assembly. If the bill was successfully passed into law, it would have created an impression of the failure of the Nigerian government to use the vast amount of resources available for the purposes of social, economic and environmental development of the country. This is because government has a central role in the ultimate development of any nation or country. Basic among their responsibilities are the maintenance of law and order and the provision of basic socio-economic infrastructure. Therefore, CSR alone cannot bring about expected development in Nigeria, as evident in the Niger Delta dilemma. The current CSR initiatives and social investments by private sector organizations in Nigeria are meant to support and complement the development efforts of the Nigerian government. In other

Conclusion CSR is a voluntary initiative un-

Source: ThistlePraxis Library

“

Source: www.livingstonefor congress.com

The Public Sector and CSR in Nigeria Sustainable development requires business organizations to take their economic, social and environmental responsibilities seriously. The CSR initiatives and programmes that companies in Nigeria pursue depend to a very large extent how they define CSR and the relative importance they attach to it. There are therefore multiple CSR interpretations, as each organization faces different stakeholders with different expectations and priorities. For many business organisations, the challenge is simply the political will to look at their impact through the prism of sustainability. Generally, major corporations worldwide pursue

words, CSR should not and does not replace the legitimate role of government in the development process. It is important to note here that the formal legislation of CSR in Nigeria would have increased the burden on the various private sector organizations currently and actively undertaking CSR initiatives and activities. This could lead to a negative impact on the overall objectives of CSR. Therefore, government legislation of CSR (if any) should be limited to helping create incentives and conditions that encourage good corporate behaviour through voluntary self-regulation. In essence, good corporate governance, functional leadership and creativity are more likely to deliver a more positive impact on the society than government regulation or legislation of CSR. There is a need for the Federal government to develop and implement incentives that should accrue to the organisations adopting and implementing CSR policies, which contribute to sustainable development. Instead of full-scale legislation on CSR, several countries (e.g. Belgium, United Kingdom, Canada, Finland, Germany, Netherlands, Poland and Sweden) have developed policies and guidance documents, outlining their approach to CSR and their expectations from private sector organizations. A review of the relevant documents from these countries would be a step in the right direction to glean best practices that could be relevant to the situation in Nigeria.

dertaken by organizations as a contribution to sustainable development. It involves going ‘beyond compliance’ with the law already in place in a particular country. The drivers and motivation for CSR differs between organisations, and these cannot be readily captured and harnessed for national development through legislation. There is now growing consensus that significant progress towards sustainable development requires effective management of social and environmental issues through constructive input from the private sector, government and the civil society. The best and innovative CSR activities and initiatives will be derived from the core values, culture, decision-making, business strategy and operational issues of the organisations wishing to voluntarily contribute to sustainable development - not through legislation by the government. Rather than imposing CSR on organizations in Nigeria through

legislation, the Nigerian government through the appropriate public sector agencies should explore ways of encouraging the promotion of CSR by providing the enabling environment for CSR to flourish in Nigeria.

Dr. Uwem Ite is a CSR professional and an expert on sustainable development. He is currently the Team Leader, Audit Compliance, Monitoring and Evaluation within the Sustainable Development and Community Relations Department, the Shell Petroleum Development Company of Nigeria Limited. The perspectives presented in this article are personal and does not in any way reflect the views of his organisation or employers. His previous publications on the subject of CSR and sustainability development can be found in various international journals including: Corporate Social Responsibility and Environmental Management; Sustainable Development; Journal of International Development and Review of African Political Economy. He can be reached on uwem.ite@ gmail.com. 37

COLUMN

Towards Nigeria-Centric Philanthropy Thelma Ekiyor African countries are also experiencing similar downsizing or exits by Western foundations.

Source: www.imagebank.com

he growth of organized philanthropy in Nigeria has been on the rise in the last five years, though in some cases, Western Foundations have operated in the country since independence in 1960. There is widespread agreement among different sectors that philanthropy can make significant contributions to Nigeriaâ&#x20AC;&#x2122;s development. However the question of what constitutes Nigerian philanthropy or Nigeria-centric philanthropy is one that actors and organizations, attempting to steer indigenous philanthropy in the country are increasing asking. The first point in this analysis is to expatiate on the idea of Nigeria-

centric philanthropy or Nigerian philanthropy. My definition of this concept is philanthropy that focuses on addressing the developmental challenges in Nigeria with Nigerian resources or resources accumulated from other sources, and working with Nigerian actors; government, private and non-profit. This type of philanthropy will be vastly different in ideology from what is implemented by Western foundations working in Nigeria. These foundations have made tremendous contributions in the country but the reality is that most of them largely execute Western philosophies of philanthropy and in many cases will eventually re-think their strategies in the country, downsize or exit. Other

Exiting is not an option for Nigeria-centric foundations. Such Foundations are based in Nigeria, and gain their mandates and credibility from being philosophically and ideologically Nigerian. They carve out their visions and growth strategies on developments in the country. Nigeriacentric Foundations will essentially align their existence to the countryâ&#x20AC;&#x2122;s pulse. This concept is exciting for many of us who want African philanthropy to mature, but this is not an easy feat. For instance, organized philanthropy has succeeded in the United States for a variety of reasons including; a proper regulatory environment, peer accountability, professionalism and notable investments by corporations, families and individuals. The result of all this is a thriving sector that has over 75,000 organizations. Nigeria philanthropy is not nearly at that stage, but the early signs of its emergence point to promising possibilities. There are currently several types of philanthropic organizations emerging in Nigeria. They include private foundations set up by wealthy individuals of which the TY Danjuma Foundation falls into. Cor39

COLUMN

The term” indigenous” means “to be native, produced, growing or living naturally in a country or climate; not exotic, nor imported”. Thus, indigenous Nigerian philanthropy should be produced within Nigeria and grow naturally in the country. Specifically, this type of philanthropy should not be imported. Therefore the question for the emerging Nigerian philanthropic sector is: how can we promote philanthropy that is produced in the country, reflects the culture of its peoples and grows naturally based on the needs and aspirations of Nigerians? These are questions that TY Danjuma Foundation grapples with. How can philanthropic organizations seeking to maintain an identity of indigenousness make grants in an environment where regulation is lacking, the civil society sector is largely weak and there are no precedents for implementing this kind of philanthropy? We are increasingly finding out that our indig40

enousness lies in the fact that we consciously place Nigerians at the centre of designing our interventions, and we are dedicated to applying localized responses to address social problems. However, we are also conscious that it is important to operate with international standards and learn from examples in countries that have established philanthropic sectors. Additionally, indigenous Nigerian philanthropy has to recognize that global decisions have local implications that can affect how national governments shape policies and how resources are distributed to the communities we work in. Consequently, actors in the Nigerian philanthropic sector have to engage on global issues and influence discussions and decisions from a Nigerian perspective. I believe the Nigerian philanthropic sector has a lot to learn from the country’s vibrant entertainment and film industries. These industries have taken the lessons of international movie industries like Hollywood and Bollywood, and the “hip hop” music culture and converted them into truly credible Nigerian genres and a recognised Nigerian brand that is now exported worldwide. Popular Nigerian culture or “Naija” culture depicts both the difficulties and challenges of Nigeria as well as the possibilities,

Source: www.imagebank.com

porate foundations, which in the past would have solely referred to their programmes as being Corporate Social Responsibility initiatives but have recently taken the institutional frameworks of foundations; operating family foundations that raise some of their funds, but were established by family resources; and a small number of community foundations. These organizations all seek to operate as indigenous Nigerian entities but are increasingly finding that “indigenousness” is a difficult concept to frame.

9 QUESTIONS

talents, innovation and dogged tenacity of the Nigerian people. It remains to be seen if contemporary indigenous Nigerian philanthropy can also capture this essence and become a credible, recognized brand.

Peju Adebajo MD/CEO, Mouka Foam on Sustainability, CSR and the African Economy. Ini Onuk

It is apparent that we have much to learn about shaping Nigeriacentric philanthropy, but what is certain is that it is here to stay, evidenced by the frequent announcements of new foundations being launched. The challenge is how we build an accountable, professional and credible sector that preserves traditional Nigerian practices such as adashe, and other forms of communal reciprocity and interdependence that have existed for centuries, while adopting contemporary forms of volunteerism and giving. The conversation has started, the actors are engaged and the Nigerian society is watching.

hat does Sustainability mean to you as a Business Leader? It means taking into account the ethical, social and environment impacts of every business decision for the future of our society. While sustainability is about the future of our society, for today’s industries and businesses, it is also about commercial success. The mandate to transform businesses to respect environmental limits while fulfilling social wants and needs has become an unparalleled platform for innovation on strategy, design, manufacturing and brand, offering massive opportunities to compete and to adapt to a rapidly evolving world.

Ms. Thelma Arimiebi Ekiyor is the Executive Director/CEO of the TY Danjuma Foundation in Nigeria.

How do you strive to achieve success in these areas? Production Process and Stan-

dards - Mouka’s position as an innovative and eco-friendly industry leader is underscored by some of the awards and achievement – phasing out CFC (carbon-flouro-carbon) material in production process, ISO 9001, ISO 14001, ISO 18001 certifications. Corporate Accountability - we encourage ethical conduct and a commitment to compliance with the law. Mouka is governed by an independent Board of Directors with several sub-committees on Business Strategy, Audit and Finance/General Purpose. The Board participates actively in Governance and this is evidenced by regular Board subcommittee meetings. Quality - The Mouka name is synonymous with Quality. Mouka was the first foam company to offer a quality warranty on

our mattresses and other polyurethane products. Our ability to maintain this consistency is due to a combination of the latest technology and the determination of our people to add comfort to life daily. Human Capacity - Developing educational and economic opportunities for our workforce and local communities through improvement of basic human needs, access to education, and civic responsibility as well as through job creation and vocational job training and investment in small to mediumsized enterprises. Does Mouka have a different approach to CSR; can you share this approach; what informed this model and the impact you expect or have measured from it? 41

9 QUESTIONS We have implemented a CSR framework that will ensure that as we go about our business we also incorporate ethical values, respect for people, communities and the environment. Our Corporate Social Responsibility practice is integrated into our culture and business and fall into four key areas: our governance practices, how we treat our employees, our environmental impact and our investments in the communities. The manufacturing industry in Nigeria experiences major challenges, how do these affect Corporate Social Investments and Sustainability practices? CSR is here to help businesses flourish long-term, not to burden it. It is about integrating social contribution and responsibility into everyday business activities. In your opinion: who should control the economy so that business enterprises serve national interest and donâ&#x20AC;&#x2122;t just service the pockets of a few rich men and politicians? The government should be the key architect of the economy with considerable influence over corporate behaviour. The economy calls for massive social, political, technological, cultural and behavioural transition. The onus is currently on the government to improve regulatory controls. There is a growing expectation that the private sector can and will play a role in helping to address these challenges. The critical issue for all stakeholders is to define appropriate and realistic boundaries. So much has been said about 42

the mandate on lending to industries such as agriculture as well as SMEs; what does this mean to your brand in the light of reputational risks associated with impact investing? Currently there is low level of financial inclusion in the country because of the huge amount of resources lost due to lack of access to financial services. The private sector will need to infuse impact investing in their programmes as a way to enhance sustainability and not just preoccupied with financial returns thus laying emphasis on the social, environmental and development impacts of their activities. Socially Responsible Investments (SRIs) now account for about 10% of total invested assets in the US and Europe. What informed the establishment of the Mouka Academy to train young people in skill acquisition? The Mouka Academy was founded as a result of our response to creating meaningful employment and opportunities for young people throughout Nigeria which is one of the most critical sustainable development challenges facing the country. Many of our Mouka Academy activities are still in their infancy. The Academy will improve the quality of life of our workforce as well as the local community and society at large. How does the establishment of the Mouka Academy rub off on your reputation as a socially-responsible company; is this not only providing a support structure for ready-to-use skills for your organisation?

We are committed to youth and education, Mouka Academy is geared to sustainability and mindful of future generations. Trainees and apprentices programmes are tailored to their needs. To do this effectively, we will partner with renowned training and educational institutions that have displayed competence and goods results over time. Trainees will have the opportunity for on-site learning at our Training Centre or at partner organisation Learning Centres. The Academy also has a mentoring scheme for SMEs. To date we have successfully trained more than 2000 participants from over 300 companies. In what way(s), in your view, are you able to compete favourably with competing brands and maintain international standards? Businesses that imbibe CSR in their business principles attract a good number of employee and loyal customers. This helps to compete with competitors, progress faster; gain high profits in short time and improve cash flow. Not only can CSR increase company profits by increasing the consumerâ&#x20AC;&#x2122;s willingness to pay for the product, it helps prevent consumer boycotts and credibly signals the unobserved high quality of its products. Looking inward where CSR begins, we attach great importance to the well-being of our staff. Our commitment to youth and education comprises activities in the fields of vocational training support for young people, promotion of young SME potentials through the Mouka Academy.

2012

June 20-22, 2012 Abuja, Nigeria partnerships sponsorships enquiries +234 (1) 213 1776

participation hosting rights

+234 8023977421 +234 8136611906

www.ar-csr.com

info@ar-csr.com