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AUSCHAM How to Develop a framework for CSR and Sustainability

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<ul><li>Develop long term capacity within the various actors (NGO, MNC, academic, gov’t, and citizen) to create stable/ sustainable solutions </li></ul><ul><li>Provide a platform where civil sector professionals can share best practices </li></ul><ul><li>Conduct research, study problems, assess program, & create partnerships </li></ul><ul><li>Work with social entrepreneurs and NGO leaders to develop capacity </li></ul><ul><li>On campus research, develop student leaders, clubs, mentorships, internships </li></ul><ul><li>Established in 2004, Hands On China’s mission is connecting people – both locals and foreigners in Shanghai who want to become involved as volunteers in community activities with local charities who need assistance. </li></ul><ul><ul><li>Coordinates volunteer opportunities for active professionals, according to their availability and personal interests </li></ul></ul><ul><ul><li>Support project partners with direct donations, fundraising planning and execution, community project design/implementation </li></ul></ul><ul><ul><li>Design and manage a variety of community relations programs for private sector partners in Shanghai – CorpWorks! </li></ul></ul><ul><li>Developed the project based class Sustainability and Responsible Leaderships for 193 MBA students </li></ul><ul><li>To institutionally support society by leveraging its students, faculty, alumni </li></ul><ul><li>Improve student awareness of the social and environmental challenges in China </li></ul><ul><li>36 teams will conduct research, develop external partner, & present business plan </li></ul>

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CSR in Transition Moving Past traditional definitions and appearances of “ CSR” and “Sustainability” <ul><li>Changing Business Model </li></ul><ul><li>Paying full price of operations </li></ul><ul><li>Rebalancing risk / reward equation </li></ul><ul><li>Improving labor conditions and standards </li></ul><ul><li>Addressing issues of governance and exploitation </li></ul><ul><li>Changing Product Portfolios </li></ul><ul><li>Focus on quality and safety vs. price and speed </li></ul><ul><li>Moving away from environmentally damaging processes </li></ul><ul><li>Working to improve industry standards </li></ul><ul><li>Developing Communities </li></ul><ul><li>Internally and Externally </li></ul><ul><li>Creating core values that align with values of employees </li></ul><ul><li>Moving away from value system that places citizens before consumers </li></ul>Positive messaging.. That could be managed

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<ul><ul><li>3 Core questions to understanding this questions: </li></ul></ul><ul><ul><li>What are the problem faced? </li></ul></ul><ul><ul><li>What are the causes / effects of these problems? </li></ul></ul><ul><ul><li>What needs to be done to change the current path? </li></ul></ul><ul><ul><li>What is the problem we face? </li></ul></ul><ul><ul><li>Is the problem “carbon”? Or is it the by product of problems </li></ul></ul><ul><ul><li>Is their a problem internal to the firm related to governance, labour practice, other? </li></ul></ul><ul><ul><li>Is the problem different for everyone? </li></ul></ul><ul><ul><li>What are the causes / effects of these problems? </li></ul></ul><ul><ul><li>Is the problem systemic? Contained to a BU/ business practice? </li></ul></ul><ul><ul><li>Is the problem different for everyone? </li></ul></ul><ul><ul><li>What needs to be done to change the current path? </li></ul></ul>What is the Goal?

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<ul><li>The Facts: </li></ul><ul><li>Over past 4 years, Apple has had 4 newsworthy labor actions </li></ul><ul><li>Its own Supplier Responsibility reported a 50+ non-compliance rate </li></ul>In fact, nothing has happened. No market share in US or China lost <ul><li>Questions: </li></ul><ul><li>Are the above problems a real risk to Apple brand, and if so, how? </li></ul><ul><li>Is Apple responsible for forcing supplier compliance? </li></ul><ul><li>What are the gains of “business as usual”? </li></ul><ul><li>What are the risks of “business as usual”? </li></ul><ul><li>Could Apple’s market in China, its potentially largest market, be at risk? </li></ul>Example 1: Apple <ul><li>Twice Apple has had to “respond” to allegations </li></ul>Reaction to date:

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<ul><li>Core Reason for Action: </li></ul><ul><ul><li>Make Money </li></ul></ul><ul><ul><li>Save Money </li></ul></ul><ul><ul><li>Spend Money </li></ul></ul><ul><ul><li>Look Good </li></ul></ul><ul><ul><li>Feel Good </li></ul></ul><ul><li>Source of action: </li></ul><ul><li>Top-down or bottom-up </li></ul><ul><li>Motives for action </li></ul><ul><ul><li>Global Directive </li></ul></ul><ul><ul><li>Improvement in product of service </li></ul></ul><ul><ul><li>Non-critical process improvement </li></ul></ul><ul><ul><li>Critical regulatory Change </li></ul></ul><ul><li>Scale of action </li></ul><ul><ul><li>Global, regional, local </li></ul></ul><ul><ul><li>Corporate vs. Business Unit </li></ul></ul><ul><ul><li>Supply Chain/ Distribution Channels impact </li></ul></ul><ul><li>Speed of action </li></ul><ul><ul><li>Business as usual or Crisis </li></ul></ul><ul><li>Duration of action </li></ul><ul><ul><li>One-off </li></ul></ul><ul><ul><li>Long term program </li></ul></ul><ul><ul><li>Process </li></ul></ul><ul><li>Focus of action </li></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Process </li></ul></ul><ul><ul><li>System </li></ul></ul>Determinants of a CSR Program

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<ul><li>Champions Won’t do it </li></ul><ul><ul><li>For big changes, it can only be done through executive to executive relationships </li></ul></ul><ul><ul><li>For lasting changes, it can only be done through development of internal buy in and culture change </li></ul></ul><ul><ul><li>Collaboration over coercion </li></ul></ul><ul><ul><li>Requires collaboration as, unlike an internal buy in, externals can push back </li></ul></ul><ul><ul><li>“ partners” always have options, and self preservation ultimately will rule </li></ul></ul><ul><ul><li>Higher level of compromise and increased number of steps </li></ul></ul><ul><li>Communication.. Communication… communication </li></ul><ul><ul><li>Clear communication of goals, partnership, and steps is a must </li></ul></ul><ul><ul><li>Any miscommunication can lead to the tabling of idea </li></ul></ul><ul><ul><li>Requires each actor build internal buy in as well </li></ul></ul><ul><li>Time </li></ul><ul><ul><li>Planning, rollout, and measurements require more time </li></ul></ul><ul><ul><li>Speed is determined by slowest player </li></ul></ul>Successful Roll Out

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Good Programs Brand Themselves <ul><li>Programs don’t have to be sexy </li></ul><ul><li>Programs don’t have to be innovative </li></ul><ul><li>Programs don’t have to win awards </li></ul><ul><li>Need to align core values </li></ul><ul><li>Need to be long term </li></ul><ul><li>Need to be communicated effectively </li></ul>

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“ In the end, environmental, social and economic sustainability cannot be separated. A sustainable planet must include a sustainable human civilization – resilient human systems that respect the complicated relationships among poverty, human rights, economic development, environmental health, and human success” - Institute for the Future, 2008 <ul><ul><li>Richard Brubaker , Founder </li></ul></ul><ul><ul><li>[email_address] </li></ul></ul>