CSR Campaign Autumn 2014

BUSINESS LEADERS SHAPING A BETTER FUTURE

CSR CAMPAIGN

In association with

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Brought to you by

Media partner of the Responsible Business Forum

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Relationship management Welcome to the second of our special reports on CSR – this one focusing on marketplace. Additional content can be viewed on www. businessandleadership.com/ sustainability.

Marketplace covers how businesses manage their relationships with customers, suppliers and stakeholders. If you get it wrong costs to your business can be high – in recent years there have been a number of high-profile cases where reputation was damaged and businesses changed trajectory.

Treating your suppliers fairly is not only doing the right thing but has a huge impact on how you and your brand are perceived by customers.

As always, rather than dwell on mistakes from the past we look at best practice in the area and talk to business leaders we can all learn from. Those interviewed for this report include Carmel McQuaid from Marks & Spencer, Brendan Jennings from Deloitte, Donnchadh O’Leary from Edelman and Dave Murphy from PM Group. Thanks to all for their input.

We are proud to be a media partner of Business in the Community’s upcoming Responsible Business Forum – taking place at Dublin Castle on 11 November. We also have a preview of the forum and highlight just some of those speaking on the day. Hope to see you there!

Thanks again to our CSR campaign partners for their support – Friends First, PM Group, Shell and An Post.

Our next special report published in our winter edition moves on to community – we would love to hear from you if you want to highlight the work done by your employees in the communities near and far. You can contact us at shobbs@businessandleadership.com Sam Hobbs Managing director Business & Leadership Ph: +353 1 625 1425 Email: shobbs@businessandleadership.com Irish Director is published by Business & Leadership Ltd Ph: +353 1 625 1400 Email: info@businessandleadership.com Address: Top Floor, Block 43B,Yeats Way, Park West Business Park,Nangor Road, Dublin 12 © Business and Leadership Ltd 2014

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68 Contents TRUST MATTERS

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ENSURING BEST PRACTICE

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SUSTAINABILITY PROGRAMME

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RESPONSIBLE BUSINESS FORUM 2014

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How building trust can impact the bottom line Managing partner of Deloitte Ireland Brendan Jennings stresses the importance of getting the culture right

How Marks & Spencer is extending its Plan A commitments The spotlight will be on responsible and sustainable business practices

Providing pro-bono support is a key element of PM Group’s CSR programme Irish Director Special Report: CSR marketplace

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Level of

TRUST

Business has the opportunity to drive the trust agenda going forward.

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ith trust being a vital factor in informing buying decisions and motivating behaviour, an organisation’s ability to build and maintain trust levels across a range of indicators can have a significant impact on its bottom line and chances of surviving potential crises.

Business is the second most trusted institution – after NGOs, but ahead of media and government – in Ireland in 2014, according to the most recent Edelman Trust Barometer. And Edelman associate director Donnchadh O’Leary believes business has the opportunity to drive the trust agenda going forward.

He stresses the importance of ‘walking the walk’ across a range of attributes – treating employees well, listening to customers, acting responsibly in a crisis, creating high quality products, being ethical and transparency top the list as the most important among the general public – when trying to build or maintain trust. “It’s fine for firms to preach about all the good they’re doing and about how fantastic they are and how well they deal with customers, but if customers aren’t actually experiencing that in their interaction with that organisation, it’s a huge problem because it makes everything they’ve said look completely incredible,” he says.

Digital and social media have obviously had a significant impact on how companies and customers now engage. “Social media has allowed customers to have a very influential voice,” says O’Leary.

“That’s a whole new environment that companies have to struggle to be effective in. For older companies, they have a lot of changes to make. But companies that have grown up from start-up level in this new culture are embedding that in their organisation.

This increases the pressure on the old guard because it makes these new companies much more effective in engaging with their customer base.”

Impacting the bottom line Research carried out by Edelman indicates that levels of trust

significantly affect the bottom line. In a 2011 study, 73pc of respondents said they had refused to buy products and services from a company that they didn’t trust. At the same time, 85pc of people said they had chosen to buy products and services from companies that they trusted.

“So it’s quite clear that the more trusted that you are, the more chance you have of having your product or service bought versus a competing product that isn’t trusted,” O’Leary says. “In the same study, 75pc of people said they had recommended trusted products to friends or colleagues, while 67pc said they had criticised companies that they distrusted to a friend or colleague.

“As well, 54pc of people said that they were willing to pay more for products or services from trusted companies. And 44pc of people said that they had shared positive opinions about a trusted company online, whereas 33pc said they shared negative opinions about a distrusted company online. So, it’s quite clear there that trust does count for a lot when it comes to a company’s bottom line.”

Having higher levels of trust are also important for companies that experience issues or a crisis, O’Leary says. “Generally, reputation is almost an aggregate of everything you’ve done in the past, whereas trust really is about future expectations. If you can build high levels of trust, they will certainly help sustain you in a crisis or when you are experiencing an issue. If you have a very low level of trust and a crisis or issue hits, your ability to sustain that and continue to trade going forward is hugely reduced versus a company that is very well trusted.”

O’Leary stresses the opportunity that exists for business in terms of becoming an authoritative voice for trust in society. “Business should be poised really to be on the upward curve in terms of trust levels and business is significantly more trusted than government,” he says. “There’s a really opportunity there for business to take the lead and almost drive the trust agenda in terms of openness and transparency and that kind of culture, especially now that the economy is turning around.”

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Doing the

RIGHT THING Ensuring best practice in the area of the marketplace pillar of CSR often comes down to a number of factors, including the organisation’s culture, according to Deloitte Ireland managing partner Brendan Jennings

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he marketplace element of CSR is complex, covering everything from product quality to sustainable supply chains and customer relations, and its impact varies depending on the nature of an organisation’s business. For Brendan Jennings, managing partner of Deloitte Ireland, having a culture of trying to do the right thing within and outside the organisation is the cornerstone of any attempt to achieve best practice in this area.

For companies buying commodities from around the world and from different sources, visibility is an important point, he says.

“What do you have to have in place to be able to get some sense of the source of inputs or who is supplying that through the whole value chain? That’s the bit that’s very challenging because when you start to drill down into that, there can be an awful lot of people supplying components into the various pieces of the jigsaw.

“In my mind what becomes very important is that really close understanding of the supplier you’re dealing with,” says Jennings.

He advises having a collaborative style with the main supplier. “That person knows what your expectation is from them and they then cascade that down to the people that supply into them. I suppose you’re hoping that cascades down further and everyone gets onto that particular agenda. Understanding the supplier of your key product is a fairly fundamental point.”

Next up, he says, are the controls that need to be in place around the quality and the safety of the product and people’s ability to interfere with the product along the supply chain. “For certain products that becomes a fairly critical issue. If you’re into food and health, well-being, anything medical, then the robustness of controls around anybody’s ability to tamper with the product is a very important point.

“Very large corporates probably can get their head around that a little bit. But when you get into a small company, there’s a limit to what it can do to track back through that value chain. So driving this whole topic within countries and within markets at a national level can help with that particular agenda.”

The response plan In any supply chain or any business process, there is always an associated risk, he says. “So it’s very difficult – and in fact uneconomic in a lot of cases – to completely eliminate risk out of business. One does one’s best in relation to these areas, but then I think what’s really important is that the corporate has a plan in place for when something does go wrong. What happens in the next hour or in the next day? If it’s a supplier issue, where do they go to get alternative supply? What actions do they need to take in relation to protecting their customers and their brand? It’s a bit like business interruption. You need to know when a hacker gets into the system at 2am, what happens next, what are the things you need to do to lock things down and protect the business, your customers and employees.”

He says that organisations with a reputation for doing the right thing that respond quickly and in the right way will get more forgiveness from customers. “But you can’t keep doing that,” he warns.

The increasing need for transparency is a positive thing, he says.

“We live in a very connected world. The reality is that if something goes wrong today and you end up in the media, it’s a global advertisement. There’s no place to hide. And you’d have to say that is a good thing.”

It impacts at two main levels, he says. “There are certain brand companies out there that are very, very sharply alert to that particular point because they are managing a brand and they understand the power of social media, or media in general, to damage their brand.

“Outside of the big brand companies, there is a level of organisations that are not supplying brands to their customers directly but they are supplying products that go into big recognised brands. Very quickly they realise that the damage they can do to their company can be phenomenal. If you can’t get it right for that global company that has as one of its key objectives to protect its brand, well then you won’t be a supplier to them for very long and indeed it might cost you a bit of money. If they have to do a product recall they may well lay the cost of that at your door.”

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Setting the ethos from the start The good news for start-ups and smaller companies is that it is easier to adopt good practices at the beginning or in smaller organisations, he says. “One of the fundamental points in all of this is really the culture of the organisation. What way do people think?

When people start to do something do they do it because this is what they believe, this is what’s right and that’s the ethos from the very start? The difficulty is that if you don’t do that, it can be very hard to change and you could have some very expensive lessons to learn along the way.

“When you do damage to your business, it’s a slow process to rebuild your reputation. It doesn’t happen overnight. I think getting it right from the very start just makes so much sense. It might just require a little bit of extra process, a little bit of extra diligence at the start, but it pays.

“Any company that starts off focusing on doing things right, even about how it plans its cash flows and how it manages its business, has a greater chance of being successful in the end. Those companies have good strategy, good vision and good planning processes. And that serves them well in the long term.”

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As a guide, he notes that there is plenty of material available around codes of conduct, ethics, customer charters, mission statements and corporate culture.

“But those things are not worth that much unless they’re real.

You can write a code of conduct but if that’s not what the boss or the leadership team does or says it’s irrelevant really. It has to be seen by the organisation as important to the boss or the top three or four people, that they’re all driving the particular agenda. You can’t expect people down through the organisation to for example have a focus on quality if they don’t believe you’re focused on that. And then you become exposed, because your people become your weakest link in the end. And that’s true in all businesses.

“So, codes are great and there’s lots of stuff out there but it has to start at what is real in the organisation. It’s all about leadership really – that tone at the top of the organisation. Unless you get that right, you could be wasting your time on some of the other points.”

Brendan Jennings will give the keynote address at BITC Ireland’s Responsible Business Forum 2014 in Dublin Castle on 11 November.

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Planning

AHEAD

The third iteration of Marks & Spencer’s ‘Plan A’ has extended the retailer’s commitments across its international business over the next six years

ne of the key achievements of Marks & Spencer’s ‘Plan A’ sustainability programme has been in its engagement with food suppliers, according to Carmel McQuaid, head of sustainable business at Marks & Spencer.

Nearly a quarter (23pc) of the volume of food the retailer sources now comes from factories meeting Plan A’s ‘Silver’ sustainability standard. Under the programme, suppliers can strive to achieve Bronze, Silver or Gold measured on criteria such as quality, price and delivery on time and products must incorporate at least one Plan A element.

“The scorecard we developed together with the factories focuses on what responses are needed for them to be lean and competitive,” explains McQuaid. “This meant that a lot of suppliers have seen the business case for operating in a sustainable way and they have become more efficient and better places to work.”

“Silver status means something from a commercial point of view – that, all other things being equal, it makes it more likely that the supplier will win business. It has become an industry standard.”

Plan A was first introduced in 2007 and its third iteration was launched in June of this year, extending its commitments across its international business over the next six years.

Marks & Spencer has 798 UK stores, 455 international stores, 54 international territories and 85,000 employees worldwide.

“The first Plan A was about making stakeholders aware of sustainable practices and doing the right thing, while the second drive was focused on technical improvement and ensuring that every product we sourced had a sustainable attribute. This version aims to make the existing business model better, helping us to prepare to tailor our offering around the world to be more local. It strives to empower managers to understand issues in the community and tailor-make their approach,” says McQuaid.

It also further aligns the sustainability plan to M&S’s business plan to be a leading international, multi-channel retailer and includes innovative commitments that are firsts in retail and sustainable business. Highlights of the plan include the launch of a global community programme to increase the scale of the social, environmental and economic benefits of supply chain Plan A projects; ‘Make Your Mark’ being extended to help 5,000 young unemployed people by 2016 and the ‘Marks & Start’ employability

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programme being launched in international markets. Sustainable learning stores are to be launched overseas and UK stores are to be

In 2013, 20pc of cotton used in M&S products came from sustainable sources, including Fairtrade adapted for future climate change challenges.

The retailer’s energy efficiency target has been increased from 35pc to 50pc per sq ft by 2020 and UK stores will aim to raise £1m every year for local charities and plan to raise £20m for health and well being charities by 2020.

Marc Bolland, chief executive of M&S, said at the launch in June: “Plan A is at the heart of our plans to become a sustainable, international, multi-channel retailer. It’s become a vital part of how we run our business and represents a better way of working that materially improves our customers’ and partners’ experience of M&S. Once again we have made 100 commitments comprising of existing, revised and new targets with our sights set on significant progress in the next few years.”

Carmel McQuaid will speak at BITC Ireland’s Responsible Business Forum 2014 in Dublin Castle on 11 November.

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Responsible Business Forum 2014

Build Trust, Reputation and Culture #rbforum14

Tuesday, November 11th, Dublin Castle

Book your ticket today at www.bitcforum.ie The Responsible Business Forum is Ireland’s major conference on responsible and sustainable business practices and promises to be the most comprehensive, engaging and inspirational business event in Ireland.

Speakers include:

• Hear from 20 CEOs and thought leaders on key business challenges and the importance of embedding trust, reputation and culture.

• Choose one of three interactive workshops which delve into building sustainable relationships with consumers, employees and suppliers.

• Meet and network with senior delegates from Ireland’s leading businesses.

Visit www.bitcforum.ie to view the full programme and to book your ticket.

The conference is brought to you by Business in the Community Ireland and is sponsored by:

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Penny Hughes CBE, Non-Executive Director, RBS

Brendan Jennings Managing Partner, Deloitte

Dr. Andreas Kicherer Director Sustainability Strategy, BASF SE

Michael Crothers Managing Director, Shell E&P Ireland Limited

Margot Slattery Managing Director, Sodexo Ireland

Carmel McQuaid Head of Sustainable Business, Marks and Spencer

Tom Browne Group CEO, Friends First

Olivia O’Leary Journalist, writer and current affairs presenter

Digital Partner:

Media Partners:

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Forum for the

FUTURE

Responsible and sustainable business practices will come under the microscope at BITCI’s Responsible Business Forum 2014

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major conference on trust, reputation and culture takes place in Dublin Castle on 11 November.

Organised by Business in the Community Ireland (BITCI), the one-day event aims to explore and inspire responsible and sustainable business

practices.

Entitled ‘Building Trust, Reputation and Culture’, it will feature more than 20 national and international expert speakers, including Tom Browne, group chief executive officer, Friends First; Lloyd Burdett, head of global clients and strategy, The Futures Company; Penny Hughes CBE, non-executive director, RBS; Brendan Jennings, managing partner, Deloitte Ireland; Geoff McDonald, global vicepresident human resources , Unilever; and Carmel McQuaid, head of sustainable business, Marks & Spencer.

This year’s conference, which follows similar events in 2006 and 2010, will once again bring together the CEOs and senior management of some of Ireland’s top companies to discuss key trends in ethics, reputation and sustainability. It will present leading and inspirational thinking from the world’s largest, most innovative companies and practical workshops on how trust, reputation and culture can be built with key stakeholders.

Delegates will also have access to cutting-edge content on corporate responsibility and sustainable practices and the opportunity to hear from and be inspired by thought and corporate leaders, whose focus will be on lessons learned as well as successes.

The forum aims to explore business challenges of the future, hear from companies that have faced significant reputational challenges and what they have learned and explore the new business model where sustainability is embedded at the core.

Specific sessions will include panel discussions on the business challenges faced by organisations in the age of transparency; on winning back trust with representatives from Shell, RBS and BASF; and on embedding sustainability at the core in the new business model. There will also be three parallel workshops on building trust, reputation and culture with employees, with customers and with suppliers. A closing address will be given by Minister for Jobs,

Tina Roche, CEO, BITCI with Brendan Jennings, managing partner, Deloitte Enterprise and Innovation Richard Bruton.

“Drawing on over a decade’s experience, BITCI have witnessed first-hand a real sea change in the attitudes of Irish companies towards trust and reputation, with many companies using responsible business practices as the cornerstone of their strategic and sustainable planning for the future,” says Tina Roche, CEO, BITCI. “These forward thinking companies believe that customers, employees, investors and regulators place a high premium on trust and ethics and good governance are key in earning it.

“The conference will be a unique opportunity to explore how companies can transform to sustainable businesses by placing corporate responsibility firmly on their business agenda. It will also reinforce the importance of sustainable business practices in the current business climate.”

Sponsors of the conference include AOL, ESB, Shell, State Street, Ulster Bank and Accenture. The media partners are The Irish Times, RTÉ and Irish Director.

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Radisso

Radisson Blu Hotel & Spa, Galway The Radisson Blu Hotel & Spa, Galway offers the most impressive meetings and events facilities in Galway City Centre and as the largest premier conference venue in the West of Ireland, it offers cutting edge facilities catering for up to 1000 delegates. The experienced Meeting and Events Team have the expertise to ensure your conference is a success, making it the perfect choice for event organisers and businesses in the area.

With a varied range of meeting, exhibition and syndicate rooms to choose from, the Radisson Blu Hotel & Spa, Galway is the perfect venue for every event. The Inis Mór Ballroom offers excellent flexibility. It can be enjoyed in its entirety for large events accommodating up to 1000 guests. Alternatively, the sound proofed partitions allow for three separate events with a large reception area perfect as an extension to the main conference facility. There are also 6 modern Syndicate Rooms and a business centre. All meeting space is air conditioned and free high speed broadband access is available to all meeting delegates and hotel residents.

Experience Meetings, an innovative concept was launched by Radisson Blu in response to changing customer demands and focuses on delivering seven key components for successful meetings:

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Rooms and Suites The hotel has 261 guest rooms including standard rooms, family rooms, junior suites, level 5 executive suites and 2 penthouses.

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International

team spirit The provision of skilled pro-bono support is a key element of engineering, architecture and project management firm PM Group’s CSR programme

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arlier this year, PM Group made a commitment to expand its CSR programme internationally and is already well on the way to meeting its target of 2,000 hours volunteered this year.

“I am immensely proud of the additional work and time our senior management and employees are putting into helping local communities. They have very quickly embraced the CSR programme and are already exceeding the challenge we gave them at the start of the year,” said Dave Murphy, CEO, PM Group.

As an organisation projects are in PM Group’s DNA. It operates in a project environment with the knowledge that projects will fail if the leadership and the team are wrong. So when it came to extending the CSR programme senior management were engaged first and organised into teams across its office network.

Mags Dalton, CSR co-ordinator at PM Group, explains that senior managers at its offices around the world were then tasked with identifying charities and local community organisations that would benefit from the firm’s assistance.

“PM Group’s senior managers were very pleased with the response of their employees. It seems we have been involved in many charitable projects simply because of a personal connection someone had with a local charity,” she says.

“It was therefore really important from the outset to ensure the choice of who to support was made by the employees themselves.

Each choice is benchmarked against a set of guidelines and must have the proper governance.”

A number of projects have started recently driven by PM Group’s offices in Bangalore in India, Shanghai in China, Warsaw in Poland and in Singapore.

As the company is finding out, it isn’t always possible to help every request but its employees’ personal involvement can be very persuasive.

“The typhoon is sweeping Shanghai and it’s raining a lot recently.

We worry more about the children and their kitchen than ever before,” said Rui Gao, senior HR and administration officer, when proposing support for the Guangci Orphanage in Shanghai.

Gao is one of 30 volunteers from PM Group’s Shanghai office providing services for the creation of a clothes drying room, new kitchen, storage and utility room for the orphanage. PM Group is working with local partners EDRI Shanghai and Wuxi on the

L–R:Joanna Sierocinska, architect’s assistant); Mariusz Toporowski, leading architect; Marta Roszak, structural engineer; and Rafał Płominski, mechanical engineer

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Pictured at the Rice Bucket Challenge with Suresh Babu, Karunashraya Bangalore Hospice Trust (CEO) (second left) were from PM Group: KK Gopala (MD India), Anandhi Sathyamurthy (finance manager), Dave Murphy (CEO) and Allan Schouten, (MD Asia)

‘The typhoon is sweeping Shanghai and it’s raining a lot recently. We worry more about the children and their kitchen than ever before’

provision of funding and help with repairing the roof and decoration inside.

“We can make a difference to the children’s everyday lives. We’re excited too about continuing to help them with other projects and are looking at educational projects in the future,” says Gao. Meanwhile in Bangalore, PM Group was contacted by a local clinic that takes care of terminally ill patients – over 50 people at any one time. So far it has provided funding for the clinic’s ‘Rice Bucket Challenge’ – similar to the Ice Bucket Challenge, but involving bags of rice being donated to families as well as bedding and equipment.

“We have realised that our involvement has helped to raise awareness of this charity and they are receiving more support from other companies as a result. So we’re delighted about that,” says Anandhi Sathyamurthy, finance manager with PM Group in Bangalore.

In Singapore, PM Group employees volunteered their time in October to help out at the Willing Hearts Soup Kitchen, while in Lodz in Poland PM Group staff are providing skilled pro-bono support for

the redevelopment of the main entrance to Miedzylesie Children’s Clinic, a home for disabled and abandoned children.

“The Miedzylesie Clinic is the only centre of its kind in Poland. It brings me joy working with this charity in particular as we can really make a difference,” says Monika Dziecioł, senior administrative assistant in PM Group’s Warsaw office.

PM Group has also helped a number of community organisations in Ireland and continues to place an emphasis on education projects, which saw over 40 volunteers from the firm working with education programmes such as Junior Achievement in the past year.

Learnings from the Ireland experience over the past two years are being shared with the international offices to ensure PM Group’s support provides maximum benefit and efforts are coordinated.

Employing a total of over 2,000 people, PM Group has recorded over 1,400 hours volunteered this year and this figure is going to increase as more employees get involved and the programme develops further across the international office network.

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