Introduction, Maturity, Communication

What is corporate responsibility?

- looks at impact of company activities on society across multiple dimensions

- goes beyond philantrophy

- demands companies to make meaningful contributions, addressing societal problems

- requires strategic integration

- changes over time, part of core business

ESG

Environmental: energy usage, climate change strategy, waste reduction, greenhouse gas emissions, carbon footprint

Social: fair pay, equal employment, benefits, workplace health&safety, community engagement

Governance: risk management, compliance, ethical business practices, avoiding conflict of interest, accounting integrity

SDG

Sustainable development goals -> companies must realise how their activities relate & impact SDG's

Intrinsic motivation for CR

- company acts ethically because it wants to

- key drivers: CEO, managers, employees

- expl. Patagonia: founder was nature lover, gave profits away for charity

Extrinsic motivation CR

- company acts ethically because it has to

- key drivers: investors, governments, the public, consumers

- expl.: company refuses to ship product to other company, as it violates human rights

Social License to Operate (SLO)

The ongoing acceptance of a company's standard business practices by its employees, stakeholders, and the general public

shared value

Focus on intersection between planet, profit and people -> leading to sustainable value creation which business, environment and people profit from

Pro's of sustainability

- create efficient processes which save money

- builds good reputation & attracts investors

- development of innovative & attractive products & services

Value drivers of corporate responsbility

- Market-Product-Customers

- Production-Process-Resources

- Reputation-Regulation-Public image

- Finance-risk

Market-Product-Customers

Business models with social/environmental considerations

Expl: Whole foods, Tesla

Production-Process-Resources

Optimization of processes, gains of efficiency, cost savings

Expl: PepsiCo

Reputation-Regulation-Public Image

Mitigation of regulatory & social risks, public demand for non-compliance, brand differentiation, corporate activism

Expl. Ben & Jerrys

Finance-Risk

Lines of capital which reward social and environmental activities of a firm

Expl: institutional investors

Sustainability issues along Value Chain

R&D: alternative powertrains, batteries

Supply Chain: Mining of rare materials, Human Rights issues

Production: Energy consumption

Logistics & Transport: Co2 Emissions

Sales & Utilization: Climate change

Disposal: Recycling

CR development path

1. Cultural reluctance

2. Cultural grasp

3. Cultural embedment

CR Maturity

How advanced, developed a company is in integrating social, environmental and ethical responsbilities:

1. Compliance

2. Reactive / Defensive

3. Proactive / Managerial

4. Strategic

5. Transformative

Compliance maturity

Minimum legal & regulatory requirements

Reactive/Defensive maturity

Risk management & reputation protection

Proactive/Managerial maturity

Integrating CSR into business strategy

Strategic maturity

CSR is aligned with business strategy

Transformative

Driving positive systematic changes & influencing industry standards

CR Communication

- defines company's ethical claim

- triggers expectation by stakeholders

- essentially the promise of a company to its stakeholders

Reason for Communicating CR

- comply with regulations

- avoid reputation risks

- use CR profile for marketing

- improve employee satisfaction

- attract new employees

- improve internal processes to enhance CR performance

Interest-Influence model

Low-Low: Information Strategy

Low-High: Consultation Strategy

High-Low: Dialog Strategy

High-High: Partnership Strategy

Information Strategy

- one-way communication

- inform about CR action & impact

- topic chosen by company

- stakeholders are passive receivers

Consultation Strategy

- two-way asymmetric communication

- demonstrate integration of stakeholder concerns

- topic chosen by either side

- stakeholder expectations are considered

Dialog Strategy

- two-way symmetrical communication

- create mutual understanding, invite critical inquiries

- topic is result of repeated exchange

- stakeholders are known counterparts

Partnership Strategy

- two-way symmetrical communication

- built relationship, develop ethical basis, influence discourse

- topic is result of open discourse

- stakeholders are trusted partners

Demonstrating CR impact

Enterprise level: Inputs, Activity, Outputs

Societal level: Outcomes, Impact

Types of washing

Sportswashing, Bluewashing, Greenwashing, Pinkwashing

Sportswashing

Using sport to improve reputation and distract from misconduct

Bluewashing

Refers to over-stated claims of commitment to the UN or Human Rights & Social Responsibility principles

Greenwashing

Pretending to be environmentally responsible while continuing harmful practices

Pinkwashing

Covers two closely related principles involving the colour pink and associated causes (LGBTQ+, women rights)

Greenhushing

when firms strategically choose not to talk about their environmental initiatives out of fear that regulators or other stakeholders will call them out for not having enough substance

Levels of Communication (Talking CR/Doing CR)

Low/Low: Staying under radar

Low/High: Hidden Champion

High/Low: Corporate Hypocrisy

High/High: CR as trademark

Seven sins of greenwashing

1) hidden tradeoff

2) no proof

3) vagueness

4) worshiping false labels

5) fibbing

6) misrepresentation

7) lesser of two evils

Hidden tradeoff

Product is branded green based on an unreasonably narrow set of attributes

No proof

Environmental claim cannot be substantiated by supporting information or reliable third-party certification

Vagueness

Claim is poorly defined or brad that its real meaning is likely to be misunderstood

Irrelevance

Claim is truthful but unimportant or unhelpful for consumers

Fibbing

Environmental claim is simply false, like falsely claiming to be energy star certified

Worshipping false labels

If product give the impression of third-party endorsement while such endorsement doesnt exist

Lesser of two evils

Claim is true within product category but distracts from greater environmental impacts of category

Communication and its Risks of washing

+ great marketing

+ improved employee satisfaction

+ push for action / improve internal processes

- attracting critique

- alleged washing

- loss of trust