TRENDS IN CSR


My invitation in summer 2002, to join in some crystal ball gazing proved tempting to a number of friends and colleagues - and as promised, I am circulating the full list to all who responded. Many of you stressed that these were quick, off the cuff reactions and to be shared on that basis.

I am struck by the breadth of responses. Common themes included an expectation of more pressure - at least in Europe - for mandatory CSR reporting; and more pressure on ngos - especially the internationally branded ngos -to become more transparent and accountable.

Also - a number of suggestions that industries would club together to tackle major social issues - like starvation, mass- migration and inter-cultural understanding.

Views differ on whether investors will become a significant driver of CSR.

I am (no surprise here!) attracted to the suggestions of several colleagues that more of the innovation in CSR will come in smaller firms.

MALLEN BAKER

The next five years of CSR - some predictions
1. There will be a growing emphasis on the quality of management of corporate social responsibility - not just whether you do it at all.
People ask the question whether you can draw a correlation between socially responsible business practice and economic performance or share price. It is the holy grail of CSR to be able to prove such a link to establish the watertight business case.
But there is no other aspect of management where you would expect this. Is there any correlation between companies who conduct marketing campaigns and economic performance? No. There may be such a correlation between those who have conducted effective campaigns - but there have been plenty of disastrous - or just mediocre - campaigns which had a negative impact.
At the moment, it seems enough that companies carry out some kind of community investment, or equal opportunities promotion. And the more of it they do, the more grateful we are. But unless the activity is driven by a solid business case approach, with solid outcomes aligned both to the business objectives and the societal needs - it will run the risk of failing.
Let's put it another way - CSR will either begin to discriminate between good and bad social responsibility or it will become discredited and practiced only on the margins.
2. CSR will increasingly be defined by core business issues, managed strategically across the business.
This is already happening, and happening fast. The days when CSR could be seen as the philanthropic work of the business are gone. The speed of this varies depending on where you are in the world - but the companies which are the trailblazers are often those who have faced serious problems or are particularly exposed. For them CSR means hard choices about how the company does business, not about what it does as an add-on extra.
Not all the promoters of CSR have kept up with this.
3. Companies will become much more sophisticated about how they communicate with stakeholders
At the moment, we are glad to see a growing momentum of companies moving towards some form of social and environmental reporting. CSR reports - usually paper and web based - are appearing in greater numbers, and some of them give solid, pertinent information about company performance in a range of areas. Initiatives such as the Global Reporting Initiative should lead to greater consistency about the areas such reports should cover.
But these reports are most impressively defined by who does not read them. Customers don't read them. Mainstream shareholders don't read them. Often, employees don't read them either - although some will.
The point is that the style and format of such reports serve the needs of a particular, informed group of stakeholders. These are small in number, but potentially influential.
But a report is really just a means of communication - and if a company wants to enjoy the real benefits of enhanced corporate reputation as a result of solid positions and work on areas that matter to their most important stakeholders, they will need to find ways which communicate simply, whilst building trust and - ideally - real engagement.
That will make for more of a challenge for those of us who spend some time reviewing the effectiveness of these pieces of corporate communication!
By the way, there's a big debate out there about whether CSR reports will be web-only within the next five years. For the record, my view is that they won't be. People still want something they can hold in their hands. The current solution where people produce smaller, cheaper, paper-based reports with much more extensive background detail on the web will be the model that will last. But more interesting will be to see how the companies begin to use the website medium to present the same information in different ways to different audiences. That is more likely to represent the real progress in the next few years.
4. The growing expectations on business will survive recession (and even war, if need be)
There's a lot of nervousness out there about how the social responsibility agenda will fare with the arrival of the downturn - and that was before the events of the last fortnight raised the stakes on the same questions very sharply indeed.
But many of the drivers for change are boosted by tough times - not harmed by them. Show me the smart company that thinks the time to play fast and loose with its reputation is when times are hard. Hear the evidence reported last time that companies remain as focused on attracting and retaining the key talent, even though they may be laying off portions of their staff. Ask yourself whether companies respond to slimmer profit margins by paying more for the waste of resources such as energy, water and raw materials.
The real test is how well the CSR community has done its job. Those that have introduced companies to an integrated, core-business approach to CSR will see commitment continue to grow. The continuing spread of information around the world makes it impossible for companies to ignore this agenda. However, those who have been sold a CSR-as-philanthropy line - where good things are done with a community budget as a complete sideline of how the business makes its money - these areas will be the ones to be cut. Because they cost money, but don't measure or demonstrate their value.
5. How you downsize and what you make will become the two most significant benchmarks
There will be a lot of downsizing going on over the next year or two. All those companies who have declared their values-driven approach are about to find that approach tested. It is not, after all, what you do during the good times that is the measure of your character.
There's not a vast body of best practice out there on socially responsible downsizing, but there's some (see the article on the website for more on this, and in this edition's news section). You often won't get the credit for it at the time - there are plenty of people who feel companies should just never let people go. But you'll find that your approach has boosted your reputation as a company which cares about its people - and when things change, that will be a benefit you will be able to cash in.
Equally - the current controversies for business are about their core products. GM foods, AIDS drugs, tobacco, you name it. There's no credit fitting low energy lightbulbs in your building if you're investing in hugely environmentally damaging projects across the world. Investing in your people and community is good - but if you sell tobacco and you don't take the same socially responsible approach to the huge issues around your product, then you won't be taken seriously.
That isn't to say that you cannot be socially responsible if you sell harmful products. But you certainly can't if you don't seriously engage in the harm that your products cause - and seek to resolve the problems at source.
6. There will be growing tension between business-led CSR and NGO demands for better globalisation
This was the one prediction during the RSA presentation that created most debate. Surely, NGOs will embrace CSR because it is fully in line with the world they want to create? This is a battle where the enemy is lack of understanding and inertia, because once they "get it" they are all lined up on the right side? And the other objection comes from those who believe that there is no difference between business-led CSR and NGO demands - both arise from people working sincerely to make a difference to the world we live in.
My view is that many NGOs support CSR because it is "going in the right direction" - but this support is qualified and time-limited. When the often unrealistically high expectations of NGOs of what would constitute companies "doing the right thing" are not met, there will be a backlash against CSR by those who therefore decide it has no value or substance. One can already see this backlash emerging through the writings of columnists such as George Monbiot.
Conflict is not necessarily a bad thing. Conflict is often a necessary part of the process of change - and as the rules of the new business environment emerge there will necessarily be a lot of discussion, debate and disagreement.
But there are certainly some who feel that if businesses undertake this agenda because it's good for business rather than good for the soul - then on some level that "doesn't count". Speaking as someone who spends most of his time promoting business solutions, I just don't believe that's the case. There will be many change agents within business who do what they do because they are personally committed and motivated, but without the business case tools to justify it to the business, it won't wash. For change within a business to be sustainable, it has to support the business logic which drives the company inthe marketplace.
7. The business of social accountability is professionalising - there will be firmer standards in the future
The rise of AA1000 and the Institute for Social and Ethical Accountability will lead to the growth of expectations on CSR professionals - in much the same way as has taken place with the environmental standards for business. This ought to be a good thing - although the problems of the quality movement are ones to learn from - too few good quality assessors and too many company approaches bolted on using off-the-shelf bureaucratic systems. Really what's needed is better quality leadership - and it's difficult to plan a system to provide it.
8. Governments will largely refrain from legislation on CSR
Some of my colleagues have particular trouble with this one. With the UK Government appointing a CSR minister, and the EU producing its green paper on CSR - surely the implication is that legislation must follow?
By and large, when governments look at this area in any detail, they are brought back to the basic truth that regulation can only defend against bad practice - it can never promote best practice. Add that to the fact that there are no obvious legislative measures to bring in for this area that any campaign group is highlighting - and you come to the conclusion that moves will be limited to the kind of thing in the UK company law review - moves to encourage, and to pressure companies on disclosure.
9. Political lobbying is a landmine waiting to explode
Few of the CSR frameworks in circulation draw attention to the need for transparency on the attempts of companies - for better or ill - to influence the public policy process. It may well be a tobacco company can defend its existence in the market for an adult product which people buy from free choice. But it makes a big difference to that equation if said tobacco company has been engaged in lobbying to obstruct laws that would improve the public health.
This isn't simple, because attitudes to company lobbying vary enormously. Such activity in the UK and other European companies would be seen as nothings short of scandalous. In the US, it is widely expected and to a large extent tolerated.
But whatever the starting point expectations may be, the company's record on lobbying will increasingly be expected to be a part of what the company reports related to social responsibility. And here I think you will find companies at their most defensive - and their most unwilling to allow full disclosure. It will also be a key flashpoint for the NGOs and the campaigners.
Any thoughts about any of these? Share them with us!
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IAN CHRISTIE

This, in no particular order, is a mixture of hunches based on gut feeling
and developments which we
can already see emerging:

* Resurgence of the ethical case for CSR and rise in interest in process of
transforming values and personal lifestyle among top managers

* More exposure of corporations to spectrum of hostility ranging from
distrust, boycotts, and 'subvertising' all the way to violent protest and
terrorist campaigns

* Growing need for global brands to seek local identities as resistance
grows to cultural homogenisation

* Stronger challenges to corporate welfare dependence in the North - eg
subsidy junkies in US and EU agribusiness, fisheries etc - and hypocrisy of
US and EU protectionism and subsidy culture and approaches to intellectual
property rights

* Role of business in making the public case in the EU for increased
migration from developing world as a benefit to labour markets and cultures
in Europe and as an economic benefit to households in the South

* New models of environmental stewardship and business-community partnership
emerging from innovations in carbon emission trading, FSC etc

* In the UK - revival of mutuality / cooperative models for social
enterprise and community regeneration

* Growing pressure for transnational regulation of environmental and social
responsibility of corporations, and for rewriting of WTO rules to integrate
them with sustainable development goals and criteria

* Mandatory reporting on social and environmental impact

* Growing importance of economic equity issues - income inequalities,
executive pay and perks, shareholder challenge to boards on pay and
incentives

* Corporate support for 'good governance' policies in the South - eg
supporting establishment of capital markets, legitimate livelihoods and
property rights for the
poorest in developing countries, building on the ideas of Hernando de Soto
in THE
MYSTERY OF CAPITAL

* Growth in demands for NGO accountability to be strengthened

* Sustainability reporting among growing minority of companies, rather than
separate environmental, social, financial reports

* Distinct CSR agendas emerging in developing world - eg India, China

* Growing importance of policies against corruption and organised crime

* More corporate leaders calling for better regulation and improvement of
public goods, rather than for yet more liberalisation, as decay of the
public realm in many countries begins to pile up costs for business -
perhaps on the model of W. Buffet et al in the USA arguing against further
tax breaks for the rich as proposed by George W Bush

* Greater need for business / CSR movement to engage with religions
worldwide as faiths begin to develop stronger positions on sustainable
development and globalisation issues


RICHARD STECKEL

I can envision an ISO 2000 type standard being adopted but have
mixed feelings about that. It becomes too rote. I would prefer a public celebration of innovation
and impact as regards corporate social responsibity. There must be a differentiation of company
sizes to accomodate the many smaller companies who shake their heads and say it isnt for them
because of their size. I would love to see a Fortune list on the subject. Perhaps with the
Financial Times and Forbes magezine tossed in. An annual show on CNN would help. In other words a
world wide and very coordinated series of communication events with attendent tool kit materials for
companies to use locally and profiles on the people and results achieved.

Mostly paying lip service to its importance!

Reacting to growing consumer pressure to be responsible because of recent Enron type events. The
focus has changed a bit as consumers are stockholders and feel the pinch of defaults and severe
stock declines. Self interest will play a bigger role in consumer behavior with stock ownership up
and spread around more; shareholders with employee interest groups will form coalitions to demand
untainted behavior.

More layered and sophisticated cause marketing strategies to go along with tactical, money
donated with purchase ones. Future heroes will be those that involve customers and employees
volunteering along with standard donation procedures. Creating communities of concerned people
around an issue will help build relationships with customers and employees.

The emergence of new faces from industry that the public finds endearing and then becoming
symbols of inventive, sincere, and models of how corporations will earn their license to practice
business.

BRAD GOOGINS

_- European madatory social and environmental reports
creates two very different models - one in the US and UK which sticks
with the voluntary reporting, and the European which goes with the
mandatory

- A few leading companies create a major presence ( al
Bill Gates Foundation has on billion dollar commitments to major social
issues. In this case it will be coalitions of comanies pooling
resources and assets to address global poverty and inequality


- Corporate citizenship committess become a routine
expectations on corporate boards

- m Social Investment Funds create a 100 fold increase
in shareholder resoultions over the next 5 years.

GEOFF LANE

For global coporates to thrive they will need to show their credentials for innovation of products
in not just underserved markets, but non-served markets, but avoiding damage to fragile eco systems.
If you can't make it better - stay away so you don't make it worse.

CSR is the springboard/catalyst for joined up/collaborative corporate action to impact biggest
issues of poverty and health, not through emergency appeals but through long term, combined and
complementary programmes incorporating access to energy supply, water, micro finance, telecomms,
skills, new markets, to exploit indigenous natural resource/skills in sustainable ways to preserve
diversity of local culture and value systems, and avoid bland and meaningless existence - a la
settlement of North American Indian tribes.

Corporates can take quick and innovative action - governments and NGO's less so.

For example can BP, EDF, Cable & Wireless, Coca Cola, Cap Gemini, McKinsey, United Utilities,
Pfizer, BUPA, think laterally about how they could complement each other to make an impact in the
3rd world.

Quality of government and strong NGOs is vital, coporates have limited powers - so what can
coporates do to make this better? Will CSR lead to more crossing of sectors by skilled executives
sponsored by their 'home organisation' but hosted in the others.

ELIZABETH FORBES

This is interim, just to put down a market. I wanted to flag up the
tendency in the US to use the Courts to enforce corporate governance issues
and improvements.

I'll come back to you on this! Class actions, etc etc compared with eg
Paddington Ladbroke Grove train crash enquiry recomendations and lack of
enforcement thereof.

DAVID DARLASTON

My thoughts recently have focussed on the ' Democracy Challenge'..that
is to say the challenge faced by business ( and BITC) given the
devolution of decisions and resources to regional, loocal and
increasingly neighbourhood level. This is the global consumer bieng
legitimised and recognised. In addition from a regional perspective the
increasing lack of autonomous business units through merger acqusition
etc...How do we engage business effectively? and where in the myriad of
goverment layers is their engagement most effective?

The diversity issue and cultural interface as opposed to retention and
recruitment will become the prime mover in this debate...in my view. The
taliban, islamic,middle east conflicts suggest the need for business to
pay greater attention to cultural lifestyle understanding than simply
benchmarking their progress against /HR best practice.

SMEs and valueing thier contribution, providsing a CSR framework ( in
janet and john speak) which will encourage and recognise is our
challenge - we are nowhere near yet even with ?community mark in respect
of small business in my view.

Lasat thought is around the responsible employer..establishing trust...
that the employer will do a days wotk and the emplyoer will pay,provide
security of employment etc. This leads into the citizenship debate which
will be of greater focus in educ as business is aked to contribute more
to the life learning /citizenship agenda.

MARTIN LE JEUNE

You asked for blue-sky thinking - so these are not 'predictions' so much as
possible scenarios which might happen or might not depending on a host of
other variables:

CSR ceases to exist. The lack of buy-in by the majority of companies means
that governments and multilateral organisations impose what they call CSR by
law, regulation, and contract compliance. The idea of going beyond these
minima in order to win customers or gain reputation is no longer attractive
as the compliance bar is set high enough to discourage it.

Social reporting is taken over by the accountancy standards regulators
because too many Enron-style divergences between reports and practice have
occurred. Standardised social data is included in regular OFRs according to
a set formula.

The increasing power of NGOs becomes the issue in accountability and social
responsibility terms. Business leaders regularly demonstrate at the AGMs or
equivalents of global NGOs accusing them of exploiting developing world
populations for their own ends. The response is an agreed code of conduct
for NGOs policed by stakeholder groups including TNCs.

MIKE ZEILDER

The label for CSR will change as legislation and moves on and boundaries
between public and private responsibilities to society become
increasingly blurred - perhaps to Social Marketing (the cycnics),
Corporate Placement or simply Accountable Impact....?
Newly enforcable issues of governance will drive board level
appointments which are still likely to be biased towards risk management
The top down approach will increase the workload of middle management,
but resources will remain scarce
The most significant changes will be around the valuation of responsible
behaviours in the financial markets - both in banks and loan policies
and in share pricing
Insurers will continue to suffer and the changing valuation of risk will
cause the attention paid to reporting and governence to intensify
SME/Big business exchange may increase through reciprocal placements of
staff, but the most powerful influence on the uptake of CSR remains the
supply chain
Governments will begin to realise the potential of encouraging better
corporate citizenship through tax breaks for issues which lead
indirectly (but clearly) to significant social costs that the
government has to address

HILARY SUTCLIFFE

Where will it all end? What issues may emerge and what trends in business and society will have an impact on how a retailing business should approach corporate responsibility issues?

This brief outline is a 'top of the head' attempt to summarise some of the current thinking, together with my own personal views on the future of business and therefore corporate responsibility. It is not at all comprehensive and like scenarios often do, they seem rather prosaic. It is worth remembering that the people who invented scenario planning, and had been using it to help steer their business for over 30 years, were Shell, the ones caught out by a change in society's approach to business with the problems they incurred over the Brent Spar and Nigeria. That's the thing about unexpected changes, they're unexpected.

I have divided it into five categories which I think are the main fields of impact:
• Globalisation and anti-globalisation
• People power
• The future of investment
• 'Left-field' risk
• What will corporate responsibility mean?

Globalisation and anti-globalisation
• Shell, in their latest publication, suggests two scenarios , Business Class, where Shell global capitalism continues unchecked. In this future there is a backlash as people become more cynical, more anti-business and inclined to take more direct action, giving still more trust and power to ngos, with "the rise of high profile brands accompanied by equally high profile - and effective-consumer boycotts….boycotts are more effective than voting as corporations seem to have more power than governments."

• The second, Prism is a more diverse, less monochromatic 'MacDonald's' world. Quoting Geoff Lamb of the World Bank there is already a growing "backlash against the equation of everything Western with a good life" and this will become more prevalent if the Prism scenario prevails - "rather than one modernity, we may be living in a world of many" and celebrating more diverse cultural values and practices.
• People will look to their roots, heritage, families, community as a source of values around which to organise their lives. "People no longer trust that economic liberalisation and a rising tide of opening markets will lift all boats", but they do "actively support governments, and companies which are responsive to their concerns."
 In both these scenarios responsible business behaviour is very important but for different reasons. The first - as a reactive risk management exercise to avoid being sued, boycotted and deserted and the second - as part of a new collaborative approach to business and society. Either way the one who starts now is more likely to win in either scenario.

Customers of the future
• Most brand futures stories focus on customers feeling "more demanding, wiser and more worried", Mike Clasper of Procter & Gamble suggests in The Future of Brands.
• Demanding means, more assertive about what they want less loyal about where they get it. It also means more vocal about their expectations of everything from products, quality, buying experience and corporate behaviour. The purchasing experience becomes as important as the product and clear brand differentiation becomes still more powerful.
• Wiser means there will be lots more information to help them make buying decisions, understand what sort of company you are, and how you behave. Because they are more demanding, they will be more likely to act on this information.
• Worried means a greater concern about a wide range of issues which affect them - health, wealth, pensions, the environment, less fortunate people, terrorism, crime. These things have always worried people, but increased information and increased expectation that someone should be solving these things will lead to further demands on companies and governments to act.
• One of my hobby horses is that we, the consumer, never really think it's our problem, its always someone else that has to behave better, not us. I don't see this changing, and see companies becoming an even stronger focal point for this.
• The word TRUST comes up everywhere - particularly the importance of trust and reputation to future business success. "Trust is replacing loyalty as a way of bonding people into collective enterprises" Robert Bruce Shaw is meaning internal bonding here, but it is the same for external loyalty. Customers do and will need to have someone to trust to take some of the angst out of the purchasing decision. Trust for CR means taking the burden of responsibility for worrying about these issues away from the customer/shareholder/employee and being rewarded with perhaps a little more loyalty than others, because it's just easier.
• Another aspect of trust and knowledge is the need for signposts. These might include good company awards; inclusion in SRI funds or indices such as FTSE4Good; media or NGO league tables. Shell suggests there may be "'points' awarded for social conscience and 'corporate virtue'" and ngos specialising in "advertising brand ratings along a scale of social responsibility indicators". I'd be surprised if other signposts like social labelling don't take off in some form or other despite the resistance from some.
• This need for trust will also dictate who your partners are for CR initiatives and who and how your choose to 'prove' that you are a good company. This is behind the growth in verification of data and behaviour by ngos and not large consultancies.

 It appears that customers will continue to care about a wide range of things and will become more vocal and active in making that point. NGOs will become better and more sophisticated about how they seek to change company behaviour and real relationships with the opinion formers at every level will become very very important. Real relationships come about through transparency, openness, honesty and a willingness to make big efforts to understand the issues and change your behaviour accordingly. Listening is big, so's acting on people's concerns and communicating without puff about what you are doing. Getting it exactly right is less important that ensuring that you are putting your efforts in the right place with the right partners for the right reasons.




War for Talent
• A McKinsey study and others sources identified a, if not THE, key issue for business in the future as a battle for the best people. But this doesn't just apply to high price management consultants. "People drive value" and retailers already know this is an important issue. Most predictions suggest that people will be increasingly attracted to companies which have "a strong sense of identity and purpose - not just a brand identity - and a drive to make a money, but a sense of 'who we are' as a corporation and purpose that is connected to the larger world and lives as something more than a slogan .

You know all this, the big issue is how much you are prepared to change to make it happen. Review the whole 'people as overhead' issue and get down to being the best employer you can be. I keep hearing stories where people say 'that's leadership' which usually describes dictatorial, 'mushroom' management (a new phrase I just invented - keep them in the dark…etc!). In 2010 this will look even more like dinosaur behaviour!

I never found one reference to the possibility that people may just forget all about companies being responsible, and decide that making money matters most and people don't count and they don't care how you behave. Not sure if this is because it isn't going to be like that, or I'm reading the wrong stuff or it's not trendy for the people who write these things to suggest that people are all self serving bigots who don't give a damn about a better world!

The future of investment
• The latest Socially Responsible Investment Survey (April 2002) indicates that SRI is likely to grow, but will remain a small, niche market. Whilst SRI is an interesting development which has undoubtedly stimulated investors to ask different questions, I don't think it's a key driver for major change.
• The very big deal will be a growth in investors looking at corporate responsibility as a contributor to a company's intangible assets and future earnings potential - whether that is its ability to retain people, engender trust in customers, build a good reputation or manage its risks. Increasingly questions are being asked about this area and I believe that by 2010 it will be both a differentiator when a company deals with analysts and investors and one of the key questions which will be asked of certain companies in certain industries as part of the ordinary investor Q&A. Retailing is one sector.
• Certain high profile cases such as Marconi, Equitable, Enron and others have begun to force investors and directors to ask different questions, look at different aspects of company behaviour, seek different indicators that all is well and particularly importantly take a longer term approach rather than a short term, quick fix 'returns today' approach. A long term approach usually means taking other stakeholders into consideration in how your run the business resulting in more responsible behaviour.
•
This is a very important area and the jury is out on which way it will go. However the ABI guidelines, the new pension fund guidelines from many major institutions could be by far the most important driver for best practice in corporate responsibility. Lots of indicators suggest that it will go the way of increased investor scrutiny and increased reward for those who take a leadership stance on corporate responsibility issues in their broadest sense from corporate governance to lobbying or labour issues to pricing.

'Left-field' risk
• Companies don't like surprises. Risk management and scenario teams are increasingly looking for the nasty stuff which is coming at them from 'left field'. What is our equivalent of Brent Spar, mobile phone radiation, the McLibel law suit?
• The bad news is 'you can't catch 'em all'. Some new little ngo will come up with some great campaign to get publicity on an injustice; science will find a problem with some of the most innocuous products; or the complexities of the issues mean that different people expect entirely opposed behaviours and you are caught in the middle. This is going to get worse not better.
• Take Sept 11 as an example. A real 'left field' risk which brings new worries for consumers and big new headaches for companies in terms of commodity or product sourcing, security and recruitment. If someone got it in for you there are lots of places they could hurt you. But perhaps it's not that 'left field', the anti-US/West backlash has been apparent for a while, but it wouldn't have made it to the priority list of even the most cautious companies.
• There won't be any cast iron solutions to anticipating left field risks or even heading off the ones you know about. Effective risk identification and prioritisation programmes are essential. One of the very best early warning system and mitigation programmes will be making connections with a wide range of individuals and groups and by your behaviour having them trust you enough that they share their concerns with you first and work with you to get a solution rather than you reading about it on the front page of the Daily Mail.
• However I see three different things happening in the ngo world. They'll get cleverer at what they do - highlighting company shortcomings - but many will feel they are selling out and there's no fun and no benefit for their own PR in working with business, so they'll pride themselves on springing the big surprise. Also they will lose trust unless they start to get their own house in order. They are not great employers, they don't necessarily represent the views of a large percentage of society; the 'solutions' sometimes posed will not benefit those they most want to help, and the methods of 'proving' their point often use the same scientific approach which they are discrediting with their initial premise. However, until that happens they are still the most trusted organ in society.

So what will Corporate Responsibility mean?

• It's hard to predict which issues will be hot and not as they are different from industry to industry and year to year. Financial services might have to worry about issues around credit, lending, social exclusion and selling techniques; a manufacturer (remember if you are a retailer they get to your supplier through you) about health and safety, human rights and supply of commodities, as a retailer anything from what your suppliers are doing to employee rights to perceived lack of transparency or a mismatch between your PR and your behaviour.
• It does and will increasingly mean how responsibility you run your company, not how good your community or supply chain assurance programmes are. Integrating corporate responsibility into your management systems is where it is at.
• Opinion formers who care about these things will get more and more savvy about how a good business behaves, about management and performance systems and more likely to punish it when things go wrong.


• A bank of goodwill is essential as things will happen which are out of your control. This is where the trust comes in. You need to build trust by building genuine partnerships, being open, honest and DOING things right, not just talking about it.
• Your approach to GMOs was an example of leadership and acting in line with your reputation and your customer's needs. Corporate responsibility is often about doing more of that, around a wider range of issues.
• Everything I've read about the future of business and corporate responsibility talks about the importance of explicit purpose and values and embedding an understanding of what that means throughout the company. That will become more and more important I think.
• A 'no brainer' for me is the need to take an innovative approach. There will be a level which is expected and which will be a 'given' in corporate responsibility and this will change from year to year. But the real competitive advantage, as in any other aspect of business, is being innovative about your approaches and creating value through what you do, not simply avoiding losing value. By value I mean value for the company and the stakeholder.
• This is a big challenge. Being innovative without putting your head so far above the parapet that it gets shot off; taking a leadership approach without it being so risky that it backfires.

 It all comes down to understanding your business, your stakeholders and what they want and expect and how it works best for you. Iceland is the good example - an innovative and leadership approach to stocking organic foods, just not remotely what their customers wanted and in no way connected to their market positioning, heritage or business strategy. Neither responsible, nor good business sense.


The thing I think/hope is that a company's performance in social and ethical
issues will become part of the mainstream intangible assets of the business
and as that movement gets more sophisticated so will our understanding (a)
what the components of successful businesses really are, and (b) how social
and ethical issues really do contribute to other intangibles - people,
brand, productivity, efficiency etc.

JULIA EGGERER - EPPA

SRI will be a major driver for CSR. More and more this will be taken up by
the financial community to influence investment decisions.

At the same time NGOs will lose some credibility as people are turning
again more to politics for solutions. (This is a very personal idea and is
based on recent French elections, the mobilisation and the role of the US
gov't after Sept 11)

THe transatlantic dimension will become ever more important

Within the European Union, countries are pushing companies to increase
disclosure. (France has already reformed its law on reporting
requirements). The European Commission's Communication on CSR is expected
in July 2002.

CSR will benefit from more and more initiatives that will help to define
it.

TALIA AHARONI

On top of adopting your ideas, especially the one that refers to the small
business being enriched by large corporations I suggest the following :
1. I believe the the international challenge will be so big, the we will see
consortiums of industries addressing issues . Like : The food industry -
addressing hunger in Africa etc.
2. I believe the CSR will be less business oriented and more social, issues
oriented. Meanings that while we will still get Cause Related Marketing
projects and branding, the major focus will be around addressing issues and
topics such as : The older population in Europe, Integration of large
immigrants groups, Addressing immigrants from 3rd world countries etc.
3. Trying to think perhaps 10 years ahead we may see a counter trend to the
holistic approach of CSR. While now almost every business aspect is being
related to CSR especially with the social accountability, we may face a
"back to basic" approach where companies will focus on Community Relations
or break down CSR into issues such as environment or stakeholders such as
suppliers, consumers etc. with each managed separately.

MICHAEL KANE - US EPA

-
- A few months ago I added a section to my directory for trends
and surveys.

I see more linking of CSR to trade expansion. An example is the
CSR conference (http://www.csramericas.org/) chaired by the
Inter-American Development Bank at the instructions of heads of state
for the Free Trade of the Americas Agreement. I have been on the
planning committee for that conference. (Adrian has been invited to
participate.) The CSR Europe program is a competitive force that
positions European companies ahead of other companies (including US
companies).

- I see faster learning about CSR around the world. Five years
ago, BSR's annual conferences were mostly domestic, but now are global
in scope.

- Socially responsible investment is expanding steadily, and will
continue to do so, with a big push from organizations promoting
corporate governance.

- I would like to see recruiting firms (and companies with good
CSR programs) develop some standard recruiting terms that could lead to
a new growth industry of CSR recruiting. CSR recruiting is an industry
just waiting to happen. IBLF or BiTC could take the lead.

I would be quite interested in seeing your full list of
suggestions. Perhaps you could do something like this from time to
time.

CORPORATE COMMUNICATIONS DIRECTOR, UK HQED COMPANY

Here are some very quick thoughts that may fit the framework of your
presentation. Its not really new thinking so its probably best if you did not
share these (that will let me be more blunt and stay on my personal soapbox!).

The Ethical Case and the Business Case are blurring at edges. Large corporates
are dealing increasingly with the need to demonstrate so-called ethical
behaviours or decision making through market pressures. In some industries like
financial services, core deals and activities come under fierce crticisim from
ethical lobby groups. Large banks can't simply extract themselves from complex
deals, but they can compensate for their activities by launching strong CSR
programmes that drive good PR and act as a deflector for the reputation damage
done by vocal pressure groups.

That's the low end of this thinking. Moving up the value stream, I can see a
much greater need for capability sharing between businesses of all sizes and
their communities. This has been the domain of large or medium sized corporate
(which, frankly, would rather write cheques), but it is becoming increasingly
relevant for smaller businesses. [Think serial entrepreneurs working as pro
bono partners on a local authority regeneration scheme.]

Drip feeding hands-on capability into communities is difficult for organisations
to manage, but the rewards on both sides are signficant. Companies
traditionally have looked at these programmes as a basis for personal and
professional development for their people, but stronger benefits can be achieved
when companies can find a way to build an enduring, branded link with a
community through facilitating some benefit. A good example of this was the
Unipart graduate team that worked for a week on a project to transform a disused
bakery into a community IT centre as part of a regeneration project. The
following year, the community held a fete and donated the proceeds to Unipart's
chosen charity as a thank you.

In some instances, the "business world" hides its greatest assets (its creative
thinking and know-how) beneath formalised, highly orchestrated CSR programmes.
Perhaps more enlightened companies will ditch their favoured corporate approach
for programmes that empower employees to get involved and make a difference as
teams or individuals. We've found a trueism in the phrase "people buy from
people". It extends to all manner of exchange whether it be a commercial sale
or a CSR programme. Creating space for employees to engage personally in
communities or special interest groups is challenging for larger companies that
are dealing with vast numbers of people. But SMEs with clear vision and focus
can develop commercial and intellectual capital by engaging their people in
activities that develop or transfer knowledge and capability through CSR
initiatives. After all, we've always believed that we learn best when we teach.

If there is a developing trend for the future of CSR, it might be summed up in
the phrase "the personalisation of shared vision." Organisations of all sizes
live their brands and vision through the actions of their people -- people who
are recognised as individuals and who are given the freedom to express their
individual creativity in their jobs and in the time they may spend representing
their companies. I'd rather see a sales room manager spending his or her lunch
hour reading with eight year olds every week than 200 anonymous employees
cleaning out a neighbourhood swamp once a year.

Sure, there will always be interesting, complex, big corporate CSR programmes.
But we may get far more impact in society if we can change the C in CSR to a P
for personal and get companies to facilitate ways in which staff can get
involved in causes that they honestly care about and in which they can share
knowledge, experience or other capabilities.


DEBORAH LEIPZIGER

one of the trends i am following with keen interest is the use of "brand
citizenship", building csr into brands. Danone is working on this as is bp
and others.


LEIGHTON ANDREWS




- NGOs increasingly challenged on accountability, especially large western-based global NGOs; and made to adopt greater transparency and actual KPIs for reporting on project effectiveness

- Businesses in Europe increasingly having to account publicly
against agreed standardsm probably mandated by the EU*
- Businesses in US possibly becoming more resistant to reporting
with meaningful detail and transparency, under threat of legal
action (just a hypothesis: could go either way)

- More supplier interrogation in advance of contract awards
- accountants try to colonise CSR reporting and verification
internationally: but Enron fears make it harder for the Big 5 (or 4)
to sell both traditional auditing and CSR consultancy (whoops, naked
self-interest there!)

- massive expansion of Business School CSR posts, all of which will
go to business school academics who suddenly see this as a sexy area


DAVID VIDAL - THE CONFERENCE BOARD, NEW YORK


You should also know that BSR recently conduced a survey of this type in
which I participated and they also asked for prognostications for next 5 or
so years...

JERR BOSCHEE, SOCIAL ENTREPRENEUR - USA



1) Major corporations are slowly (but increasingly) beginning to
operationalize their philanthropy. By that I mean they are using nonprofit
enterprises as sub-contractors, suppliers and distributors rather than
simply as the recipients of a financial contribution, an in-kind donation or
a destination for corporate volunteers. Two good examples are Pioneer Human
Services of Seattle, which does sub-contracting for Boeing (actually
constructing and supplying parts for Boeing's jets), and Greyston Bakery of
Yonkers (New York), which supplies brownies and blondies for Ben & Jerry's.

This type of arrangement is conducted on a purely business-like basis:
Boeing and Ben & Jerry's need Pioneer and Greyston to perform in order for
their products to be successful in the marketplace; and Pioneer and Greyston
need the contracts from Boeing and Ben & Jerry's in order to operate
successful (read: profitable) businesses that employ people who are
disadvantaged.


2) Most discussions of corporate social responsibility fail to include the
concept of encouraging social entrepreneurship (which can be accomplished,
as you well know, in a variety of ways) . . . for example, I'll be attending
a full-day conference in Washington, D.C., this week devoted to partnerships
between corporations and nonprofits, but there is nothing on the agenda (I
intend to raise the issue!) about social enterprise . . . corporate social
responsibility is a wonderful thing, but the corporations that practice it
are rarely delivering a product or service that is itself addressing a
social need (the CSR activities typically fall into categories such as
environmental sensitivity, employee empowerment and other wonderful areas),
whereas social enterprise is rooted in the simultaneous pursuit of a double
bottom line (profitability and social impact) . . . I'd like to think CSR
and SE will be moving closer together as the years go by . . . most
certainly, there is a clear trend toward the creation of more social
enterprises than ever before (for example, there will be more than 500
people in Minneapolis this December for the 4th annual National Gathering
for Social Entrepreneurs) . . .

MALCOM ALLEN -CEO - LEADING MINDS - UK
1. In western Europe, an increasing awareness of the need to "lead
responsibly" and the term "responsible leadership" perhaps replacing
"corporate social responsibility" as a way of describing, simply, what we
currently recognise as falling under the CSR umbrella.

2. A slow growth in the recognition by SME's in western economies of the
value of responsible leadership and of their need, collectively, to be seen
to be taking more of a lead on ethical, social and environmental issues in
their communities.

3. A dawning realisation in the chambers of commerce and business
representation bodies such as the IoD and the CBI that the "costs" of such
concerns are not so much a burden on business but a necessary investment by
it in creating a climate of support in the wider community for a balanced
approach to wealth creation and investment in the community, which "permits"
business to operate in a climate of trust.

4. A growing interest in CSR as we know it from central, regional and local
governments and new partnerships/organisations being developed beyween the
public and private sectors for maintaining and creating "balanced
environments" in which responsible businesses receive support for their
wealth creation activities.

5. A growth in the use of "environmental indexing" of company activities by
regulatory authorities leading to a greater willingness by companies to take
social and environmental responsibility issues more seriously in a voluntary
way in order to avoid being "branded" as polluters.


DOROTHY MACKENZIE - CEO OF DRAGON INTERNATIONAL

Generally, hard to predict anything other than a continuing development of
the recognition of the importance of CSR. But here goes:

- Move away from trying to prove the business case for CSR through looking
at relatively short - medium term specific commercial benefits, towards
looking at it in terms of the development of strong relationships with
important stakeholders over the long term, and therefore of long term
commercial importance

- Real move towards integrating CSR into businesses - and quite possibly
therefore not explicitly calling it CSR, as marketing people being to see
this as important dimension of brand behaviour, and HR people develop their
own responsible employee practices etc.

- As part of this, we may see some 'turf wars' as marketing people being to
get to grips with the agenda, and realise the importance for brands, and the
possible benefits to them of 'owning' this territory, in view of the growing
importance of finding new bases for differentiation, and interesting ways to
build the 'brand story'.

- Ethical communication of all sorts will become an issue - both in relation
to how CSR is communicated (what is said and not said in reports, how
reports are validated, how far mainstream media such as advertising are used
to convey a CSR message), and a far greater focus on the integrity of other
forms of communication, such as employee communication and customer
communication

- Likely to be more and more partnerships between government, business and
NGO's trying to get to grips with some of the tough problems facing
everyone, especially on a global scale. "Unlikely partnerships" may be very
helpful in giving credibility to some actions.