Best Practices in Corporate Social Responsibility

A Cross-Industry Analysis - the Examples BMW, Deutsche Bank and Bayer


Master's Thesis, 2010
100 Pages, Grade: 1,6

Excerpt

Table of Contents

List of Abbreviations

Executive Summary

Foreword

1 Introduction & Background
1.1 Problem Definition & Purpose of Study
1.2 Objectives
1.3 Literature Review
1.4 Study Design
1.5 Summary

2 How CSR emerged from the paradigms of sustainability and TBL
2.1 Sustainability
2.2 Triple-Bottom Line
2.3 Corporate Social Responsibility
2.3.1 CSR Problem Areas – Concrete Examples
2.3.2 CSR Topics & Objectives
2.3.3 Benefits and Risks of CSR
2.4 Summary

3 Cross-Industry Analysis
3.1 Cross-Industry Analysis: To Learn from different Sectors
3.2 Best Practices: To Learn from the Best
3.3 Stakeholder Management
3.4 Summary

4 CSR at BMW, Deutsche Bank and Bayer
4.1 CSR at the First Glance
4.2 Company Analysis
4.3 Industry Analysis: Key Success Factors of the automotive, banking and pharmaceutical industry
4.4 How to Come up with a CSR Strategy?
4.4.1 Value Chain Analysis
4.5 CSR Report Analysis
4.5.1 Comparison of CSR Reports
4.5.2 Selection of Analysis CSR Criteria
4.6 The CSR Strategies of BMW, Deutsche Bank and Bayer
4.6.1 General CSR Strategies
4.7 Summary

5 Results & Conclusion

6 Recommendation: The CSR Strategy Model

7 Appendix

8 ITM Checklist

9 CSR Glossary

10 Index

11 Bibliography

List of Abbreviations

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For further explanations on important terms and concepts see also the CSR glossary. If not state differently, the author is the source of the figure.

List of Tables and Figures

Fig.1 Overview over Study

Fig.2 Sustainable Development Triangle

Fig.3 Selection of Sustainability Principles

Fig.4 CSR Terminology

Fig.5 CSR Topics

Fig.6 Survey on Social Responsibility

Fig.7 CSR SWOT Analysis

Fig.8 Sustainability Indices where BMW, DB and Bayer are listed

Fig.9 Sustainability Rating Agencies

Fig.10 Strategy – Performance Relationship

Fig.11 Stakeholder Analysis for BMW

Fig.12 Stakeholder Management Matrix

Fig.13: Company Key Facts of BMW, Deutsche Bank and Bayer

Fig.14: Industry KSF of BMW, Deutsche Bank and Bayer

Fig.15: Industry Drivers of the Automotive, Banking, Pharmeutical Industry

Fig.16: Value Chain Model

Fig.17: CSR Value Chain

Fig.18: Balanced Scorecard: The Four Perspectives

Fig.19: Cover of CSR Reports of BMW, Deutsche Bank and Bayer

Fig.20: Comparison Overview over CSR Reports

Fig.21: CSR Reports: Quantitative Content Analysis

Fig.22: Analysis of CSR Reports of BMW, Deutsche Bank and Bayer

Fig.23: CSR Strategy Overview of BMW, Deutsche Bank, Bayer

Fig.24: CSR Model for Strategy Definition

Fig.25: CSR Triangle for Strategy Definition

Executive Summary

Companies engaging in CSR do better. They tend to benefit from lower costs, better reputation, more motivated employees, improved stakeholder relationships. In short, they show a better performance, reputation and competitive advantage.

The problem is: Most companies still do not know how to integrate CSR into their existing business processes and infrastructure. Some miss to select appropriate activities and instruments, others do not go far enough. The knowledge and insight from leaders and best practices in their field remain ignored.

The study at hand seeks to verify the initially stated hypothesis. The purpose is to identify what CSR concept is suited for what industry and company as well as parallels and differences among industries regarding CSR strategy and their implementation.

As enticing CSR appears as new key concept in business and management, there is little research and literature, in particular when looking at empirical cross-industrial analysis. The study at hand seeks to adress that black spot in CSR knowhow and theory by proceeding in four steps: First, the theoretical background and the concept of CSR is explained; second, the empirical resesarch and cross-industrial is conducted; third, based on the analysis an evaluation is made, results and conclusions are stated, and fourth a concrete recommendation in form of a CSR model is given.

The greater framework is given by explaining the theoretical background in form of concepts and models such as sustainability and triple-bottom line (TBL) since the CSR concept can be derived from the political arena that is transferred as a business ethics and compliance subject into the business context.

The cross-industrial analysis selects best practices in their respective industry: BMW as the leading brand in the currently technology-wise changing automotive sector, Deutsche Bank as strongly socially engaged big player with a fantastic yield-rate in the currently turbulent banking industry and Bayer as strongly subdivsioned and traditional performer in the pharmaceutical industry that is demographically seen said to be in a long-term upward trend.

The company analysis by the means of looking at the key performance indicators showed the parallels of all three to be international, public Germany headquartered companies being 90 years or longer in existence with a diverse product portfolio, a strong brand, proactive CSR engagement (including perennial intense CSR reporting) with more than 75.000 employees that strongly depend on public reputation and good stakeholder relationships.

The strategy analysis proved that a different focus was set within the CSR „toolkit“: While for the manufacturers BMW and Bayer product responsibility and ecological efficiency like e.g. recycling, low emissions, energy use and renewable energy proved to be relevant, for Deutsche Bank as financial services provider, social and societal aspects weighted more like e.g. training, education, arts and culture.

This was also uncovered through the assessment and evaluation of the three CSR reports. The reports reflected deviating CSR strategies that responded to the respective core competence and industry type.

As conclusion can be drawn that companies must find their unique set of values, their core competence and competetive advantage to then define their CSR strategy in accordance with; has to resonate with the corporate strategy for authenticity. Also, the value chain must be carefully analysed for process and product optimization potential to have solid facts to report and communicate effectively to the public.

The offerered CSR model helps companies to benefit from the potential of CSR in terms of improving compliance and prevention, strategic and competitive advantage, CSR performance, corporate reputation, and stakeholder value enhancement. However, it is to state that the fairly young concept of CSR still is in the process of becoming applied in accordance with public standards and it will remain both a theoretical and practical issue to deal with over the next decade, particulary considering the ongoing globalization process that offer new opportunities and risks for internationally operating companies engaging in CSR.

The outlook that can be given is: To some companies CSR is a trend topic, for others who identify the real company-specific cost and reputation potential it will be a long-term issue that must be continually developed in line with the larger company strategy. Ideally, CSR can indicate how and where to develop a company as results of a feedback response of the diverse stakeholders to assure a sustainable competitive advantage.

Foreword

Corporate Social Responsibility (CSR) is omnipresent – governments, media, NGOs, etc. are milking the story for all it's worth; if you google for “CSR” you get more than astronomic 37.400.000 results. However, as the term CSR is constantly resounding throughout the globe, it is threatened to lose its substance due to ambiguous meanings, overload and misuse.

This is partly because, by definition, CSR is looking at multiple stakeholders, a broad range of topics and as such is involving apologists from many, poorly connected disciplines (e.g. companies are confronted with various stakeholders such as shareholders, employees, customers, NGOs, etc., and topics ranging from waste management to CO2-footprints, ethical supplier codes or cultural sponsoring, and, ultimately, with scholars such as economists, biologists, philosophers or theologians). Another reason lies in the implicit moral aspects of sustainability and the complexity to both define “good” and “bad” for corporate behavior and to sensitively translate it into pragmatic management guidelines. So how can we find orientation in this maze of opinions, needs and requirements? And how can we – governments, private sector, academia, individual etc. alike – reasonably react to the pressing needs of our times?

A typical reaction – fair or not – is to look at corporations to find those strategic solutions for our economic, social and environmental issues. However, the aforementioned information overload and lack of clarity have led to an increasing level of resistance and frustration on the corporate side. As such the CSR discussion has shifted focus from philanthropic aspects to the idea of risk mitigation (mainly by communication and reporting to protect premier brands). There is hardly any company yet that has interpreted CSR as an innovative opportunity to improve its bottom-line based on an increase in e.g. market growth, customer intimacy or employee loyalty.

It is therefore of utmost importance to bring the whole hyped CSR discussion to a reasonable level and into both mainstream management theory and practice. This does not mean to establish parallel CSR curricula, but to enhance proven management tools by incorporating social and environmental aspects. This will provide corporate managers with the needed clarity to define pragmatic CSR strategies based on what they do best (innovation based upon their core competencies). And it will eventually give rise to a subtle paradigm shift in management ethics and corporate behavior.

The subsequent work of Dr. Iris Pufé is such a step towards a critical multi-disciplinary dispute about sustainability aspects, how they are interpreted by industry “best practice” and if lessons-learned can be translated into pragmatic management guidelines. Its great basic logic is to leverage existing management tools for the analysis of (economically) highly successful industry players that have also attracted important CSR awards. Dr. Pufé’s work then tries to identify critical success factors for this synchronous success and to translate them into hands-on recommendations. As such, Dr. Pufé’s work encourages further “academic mainstreaming” of CSR and ultimately paves the way to simple management guidelines.

Ulrich Merkes

Managing Director Vineta GmbH

1 Introduction & Background

Globalization, climate change, resource depletion, environmental destruction, corruption, child labour, discrimination and safety hazards: Management challenges for the 21st century are plentiful and diverse, confronting “old school managers” with problems beyond conventional corporate challenges. They increasingly face problems of global, social and ecological nature that they have to integrate into their decision and business making in order to thrive and survive in a chaotic, disrupted, fragmented corporate world and society.[1]

By and large, corporations of the 21st century have come to realize that their obligations to society strongly increased. When opening a newspaper it´s becoming increasingly normal that they are subject to investigation, inquisition or changes in their strategy. To read are news like:[2]

- „Deutsche Bank under suspicion in emissions-trading fraud“: Deutsche Bank has come under suspicion of involvement in a scheme to avoid taxation of 180 Mio. Euro on emissions trading. In nationwide raids 230 premises were searched. The investigation concerns some 50 companies and over 150 suspects, who are thought to have bought carbon credits from abroad and resold them through interconnected companies in Germany without declaring or paying the appropriate sales tax according to the prosecutors.[3]
- Lawmakers Say Chemical Company Withheld Information About Explosion. The explosion, at the West Virginia chemical plant of Bayer CropScience killed two employees and sickened six volunteer firefighters. It was felt 10 miles away, and a tank weighing several thousand pounds „rocketed 50 feet through the plant“, committee investigators found.[4]
- „BMW Pulls Out of Formula One Racing: Adding to Sport's Woes, Car Maker Ditches Costs, Embraces Greener Image“: Falling sales, poor racing results, and the mismatch between Formula One's gas-guzzling extravagance and BMW's quest for a greener image all played a role in the German auto maker's decision, company officials said. The fossil fuel intense car racing project costed BMW 300 Mio. Euro per year. The fossil fuel intense car race costed BMW 300 Mio. Euro per year.[5]

The examples show that scandals dealing inherently with CSR issues can hit single companies but also entire industries and even countries or continents. From this point of view, every major decision has an ethical component for their far reaching impact and consequence.

In this context, the new flamboyant acronyom in the current business world is CSR. Standing for „corporate social responsibility“, it describes a new approach in stakeholder management by implying a threefold dimension of responsibility: towards society, the environment, and a company´s own economic well-being.

Integrating CSR into the corporate value chain, strategy, and communication can provide a better sustainable performance and tangible benefits. Externally the reputation increases among customers, stakeholders and suppliers while internally employee recruitment, retention, and motivation are improved.[6]

The paper at hand deals exactly with this – an innovative paradigm relating to business ethics. This paradigm is translated into the concept of CSR that supports companies regarding the triple-bottom line challenge and in their quest for for balance between the so called 3 Ps – people, planet, profit (see also section 2.2).

1.1 Problem Definition & Purpose of Study

Companies, particularly internationally operating ones, are confronted with extended and increased shareholder expectations regarding socio-environmental issues. For many, CSR is a new topic and challenge. As the initially given news indicate companies do not act in a vaccuum but are demanded to show transparency, good governance, and ethical behavior. Many companies are unsure how to integrate sustainability and CSR issues into their existing corporate strategy or how to renew their corporate strategy respectively. However, those companies who seek to establish and maintain good stakeholder relationships make their business fit for sustainable demand and growth. In comparison, companies who miss out to respond to changed stakeholder demands or do not invest into social and ecological well-being risk to damage their reputation once scandals or crisis arise.

1.2 Objectives

How to raise, integrate and communicate CSR topics in corporate marketing strategy and activities? How can companies respond to the current relevant – and in future even more so – CSR issues - such as workforce health, security and diversity, environmental protection or social repsonsible investment (SRI) - to improve the world and their competitive situation? The study is about identifying how managers and executives can transform challenges into oppportunities. Or, to put it short:

How can campanies do good by being good?

The study at hand seeks to enquire both in theory and practice from an up-to-date point in time what CSR means. It shows, where the concept is derived from, what key topics are, and how CSR can be used as a guiding principle to define a respective strategy, to then illustrate by three best practices how to implement a customized CSR- strategy.

Central questions are: What can be learned from best practices regarding the development of a CSR strategy? How can a strategy be defined so it is in line with the individual corporate strategy and goals and be adjusted to the respective industry? What success factors for the formulation and the implementation of a CSR strategy can be identified for each industry (automotive, banking, pharmaceutical) and what factors are valied across those industries?

The paper is based on two hypotheses:

a) Companies striving to be successful, profitable and acknowledged in the long run in tomorrow´s economy must deal with CSR issues.
b) Companies seeking to be successful with CSR must define, choose from and focus on – among the plentilful CSR topics, instruments and activities – on those that are best in line with their overal business focus and strategy.

In total, the objective of the study is to illustrate how sustainability strategies can be successfully implemented in diverse industries, how companies can transfer to new, holistic, innovative, future-oriented business models, processes and organisation as well as to assist companies in renewing their business according to sustainability principles.

1.3 Literature Review

CSR is a recent, actual and young topic. Over the recent years there has been an increase in literature dealing with CSR, both in theory and in corporate practice. However, there are only few studies on CSR from a cross-industrial perspective. Also, there is no current study focussing on best practices from the three different chosen industries. In particular, there is no study comparing the the three chosen globally leading companies – BMW, DB, and Bayer – that seek to identify what makes them leaders due to their engagement in CSR.

The study is of interest to sustainability and CSR managers. It is relevant to those working in production, marketing and communication as well as in product/service and business development. In short, the study addresses all those dealing with sustainability and CSR issues and strategy formulation.

1.4 Study Design

The study has four parts. The first part gives an introductory overview over key concepts of CSR by explaining the generic approach of sustainability and triple-bottom line; it describes the problems, topics and objectives CSR deals with as well as the concept´s strengths, weaknesses, opportunities and threats. The second part gives an introductory overview over the study itself; it explains the reasons for choosing a cross industry analysis and the selected best practices as well as the stakeholder management concept as the underlying relationship management model. The third part represents the analysis; the systematic company and industry analyses are followed by theoretical notions on strategic management that narrow down to requirements for a CSR strategy. According to selected CSR criteria the best practices CSR reports data is analysed to identify the company- and industry specific CSR strategy and implementation. The fourth and last part is the evaluation of the analysis and its results that conclude in the recommendation of a generally applicable model for CSR strategy formulation. At one glance, the design of the study looks as follows:

Fig.1 Overview over the Study

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The study is based on the analysis of CSR reports. It is backed-up by desk research like studies, surveys and press articles as well as by empirical qualitative research through interviews with business practitioners and decision-makers with a background in sustainability or CSR and the respective industry.

1.5 Summary

In the 21st century, the obligations of international companies toward society have strongly increased. Their responsibility extended due to extended shareholder expectations. They comprise aspects of society, economy and environment alike. While integrating CSR into the corporate value chain, strategy, and communication can provide competitive advantage, many companies are unsure how to integrate sustainability and CSR issues into their existing corporate strategy. The paper deals with the new paradigm of CSR asking how to define a CSR strategy by learning from best practices and addressing a respective industry, in this case automotive, banking, and pharmaceutical?

The recent young topic CSR is increasingly dealt with in literature with only few studies from a cross-industry perspective and none on the three chosen globally leading companies, BMW, DB, and Bayer.

Its divided into the four parts background explanations, preliminary study information, analysis and recommendation.

To note: If not stated differently the source of figures is the author.

2 How CSR emerged from the paradigms of sustainability and TBL

Every concept has its history. In the case of the fairly recent business concept CSR, the larger framework, the theoretical as well political background is to be found in two paradigm sustainability and triple-bottom line.

While sustainabilty stands for the greater framework concept that provides the fundamental pillars that define actions, CSR represents the term and concept that is used when describing and dealing with sustainability in a corporate context. That is why it is called „corporate“ social responsiblity, with corporate adressing the business context, and „social“ the responsibililty toward the greater environment, both under societal and ecological perspective.

For clarification the most important terms are explained in the following.

2.1 Sustainability

The idea of sustainability is best described by the underlying principle that it is derived from forestry: to not extract more trees from a forest than the forest is able to reproduce due to overexploitation that depletes its very stock and resource base.

In the 1970s the idea of sustainable development entered the political arena because environmental problems became evident e.g. as described in Rachel Carsons investigative ecologic novel “Silent Spring”.[7]

The up to now most widely accepted definition of sustainable development was given by the United Nations World Commission on Environment and Development in 1987:

“Sustainable development is a development that meets the needs of present generations without compromising the ability of future generations to meet their needs”.[8]

Simply speaking, sustainability is the “ability to sustain” or survive over a long time. Over the last fiveteen years, the concept gained popularity and was gradually transferred into the economical and business context.[9]

A very good characterization of sustainability from a business perspective is given by Savitz and Karl:

“Sustainability has since become a buzzword for an array of social and environmental causes, and in the business world it denotes a powerful and defining idea: a sustainable corporation is one that creates profit for its shareholders while protecting the environment and improving the lives of those with whom it interacts. It operates so that is business interests and the interests of the environment and the society intersect. And as we will show, a sustainable business stands an excellent chance of being more successful tomorrow than it is today, and remaining successful, not just for months or even years, but for decades or generations.”[10]

In any case, the core of sustainability is: in order to survive – both as a company and a society – development has to be economically, ecologically and socially oriented.

It is recommended to understand sustainability less as an objective, scientific, neutral and final concept, but rather as a normative and subjective topic containing a set of implicit or explicit values that serves as a values-ladden umbrella concept about the way in which the interface between the environment and society (including its institutions and individual members) is managed to ensure that human needs are met without destroying the life supporting ecosystems on which they depend.

Fig.2: Sustainability Triangle

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The sustainability triangle shows that all three pillars or dimensions are interconnected with regard to time (intra-, intergenerational) and purpose (poverty, climate change): all three corners are to balance out carefully for integrative problem-solving. While the above illustration states some parameters of each dimension the table below lists additional principles companies can pursue.

Fig.3: Selection of Sustainability Principles

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According to the accounting and consulting firm Deloitte, sustainability in business is quite complex and still evolving. However, significant challenges remain as sustainability leaders work to align company practices with company principles and essentially, guiding their organizations to walk the talk.

“What is the state of sustainability in business today? The answer…may depend on how one interprets the results. Our conversations with respondents left no doubt in our mind that these companies are interested and involved in sustainability, and most of them see a clear alignment between sustainability and their overall business strategy. On the other hand, our survey also suggests that many companies have a clear gap between their leaders’ aspirations with regard to sustainability and the way that sustainability is enabled within their organizations.”[11]

2.2 Triple-Bottom Line

The term triple-bottom line – abbreviated as "TBL" or "3BL", and also known as "people, planet, profit" or "the three pillars" – captures an expanded spectrum of values and criteria for measuring organizational (and societal) success:

1) economic aspects – profit,
2) social aspects – people, and
3) ecological aspects – planet.

The phrase was coined by John Elkington in 1994. It was later expanded and articulated in his 1998 book „Cannibals with Forks: the Triple Bottom Line of 21st Century Business“. With the ratification of the United Nations and International Council for Local Environmental Initiatives (ICLEI) TBL standard became the dominant approach to public sector full cost accounting. Similar UN standards apply to natural capital and human capital measurement to assist in measurements required by TBL, e.g. the ecoBudget standard for reporting the ecological footprint.

In the private sector, a commitment to corporate social responsibility implies a commitment to some form of TBL reporting. In practical terms, triple bottom line accounting means expanding the traditional reporting framework to take into account ecological and social performance in addition to financial performance.[12]

The concept of TBL demands that a company's responsibility lies with stakeholders rather than shareholders. In this case, the term stakeholders refers to anyone who is influenced, either directly or indirectly, by the actions of the firm. According to the stakeholder theory, the business entity should be used as a vehicle for coordinating stakeholder interests instead of maximizing shareholder/owner profit.[13]

To be more concrte, a TBL company does e.g. not produce harmful or destructive products such as weapons, toxic chemicals or batteries containing dangerous heavy metals. Positively speaking, TBL companies look for financially profitable niches which were missed when money alone was the driving factor like adding ecotourism or geotourism to an already rich tourism market such as the Dominican Republic, or providing products or services which benefit underserved populations and/or the environment which are also financially profitable.

An example how striving for environmental protection can proactively be used as competitive advantage rather than being a cost-intensive competitive disadvantage. The US furniture manufacturer Hermann Miller decided to sell all items sold only when complying with a certain enviornmental protection standard at a rate increasing from 5% to 50% between 2004 and 2010. “In the beginning the high set goals sounded crazy but we achieved them even earlier than expected”, Brian Walker, CEO of Hermann Miller. Now, 90% of the customers inquiries refer to enviromental product compatibility. By 2020 the company seeks to operate fully carbon neutral e.g. through optimizing recycling, avoiding emissions and using renewable electricity.[14]

Savitz and Karl put it short: “Triple Bottom Line captures the essence of sustainability by measuring the impact of an organization´s activities in the world”.[15]

2.3 Corporate Social Responsibility

It is in our own interest to invest in the stability and prosperity of the societies in which we operate. As one of the world's leading banks, we view corporate social responsibility as an integral part of our work - of mutual benefit to us and society as a whole.

(J. Ackermann)[16]

According to the author CSR is the transformation of a long-term oriented integrative perspective from the political arena into the economic one. While “corporate” refers to privately run for profit organisations or companies, “social” refers to the responsibility to the society – including the environment – at large. A more comprehensive and detailed definition that states concrete aspects of CSR is given in the handbook “A to Z of Corporate Social Responsibility”:

“Whatever the definition used, CSR is all about business performance in a variety of social and environmental topic areas that usually embrace issues of diversity, philanthropy, socially responsible investing (SRI), environment, human rights, workplace issues, business ethics, sustainability, community development and corporate governance.”[17]

Particularly in the face of the current/recent global financial and economic crisis that is at least partly attributable to companies heavily focussing on short-term and risk-oriented profitability modern businesses have responsibilities to society that extend beyond their obligations to stockholders and investors.[18] The responsibility towards investors to generate and maximise long-term profits, capital and wealth remains to be valid since it secures the very existence and survival of a company that represents the base, purpose and premise of any business. On the other side, it is to mention that if companies did not act in a socially responsible way, many executives realize that government would (have to) regulate and force respective policies. However, beyond the conventional main interest groups, the stakeholders, societal shareholders are of increasing importance such as consumers, employees, the community and citizenry at large, government, and, interestingly, the natural environment itself.

Though the CSR concept and the related discussions tend to focus on large organizations corporations and global players – often boiling down to the Forbes 500 companies since they are the most visible and powerful – in line with the imperative “with power comes responsibility” –, the concept applies to organizations of any scope and size.

While the definition of CSR evolved over time, it encompasses as a concept the economic, legal, ethical, and philanthropic expectations that society has of organisations. This places the traditional economic and legal expectations of business in context by combining them with more socially and environmentally oriented concerns such as ethics and philanthropy. These ethical responsibilities extend to actions, decisions and practices which are beyond what is required by the law. Examples of these voluntary activities include making charitable contributions or employee voluntarism. The latter means that companies e.g. grant their staff to devote part of their work time to work in a honorary capacity like.[19]

Fig.4: CSR Terminology

illustration not visible in this excerpt

To summarize the key aspects characterizing CSR are:

- the importance of good and intense stakeholder relationships and management
- the principle of voluntariness
- triple-Bottom Line as higher goal and vision

2.3.1 CSR Problem Areas – Concrete Examples

What problems does CSR adress? Why engaging in CSR? The three introductory examples gave a first idea what problems CSR addresses. But to broaden the view – what array of problems lie at the heart and base of considering CSR activities? What are the driving issues, forces and catalysts behind CSR?

Among the variety of problems, some are recent ones others represents „classical“ challenges companies face. There is a wide range of problems CSR can tackle. Below are listed some examples. For a comprehensive listing of examples of CSR problems along with statistical data see in the appendix. The source of information is the European Commission and Eurostat.[20]

Economic issues

- Across the EU, 60% of young people today say they are interested in entrepreneurship but less than 5% of them have access to entrepreneurship education in Europe.
- Studies show that supply chain 'glitches' almost always have negative impacts on stock performance, and that 'glitches' stemming from suppliers are more negative than those caused internally.
- Between 2002 and 2007 companies consistently participating in the BITC's CR Index outperformed, in terms of total shareholder returns, the FTSE 350 by 3.3% to 7.7% each year.
- Nearly 80% of the largest 250 companies worldwide (G250) issued reports, and an additional 4% integrated corporate responsibility information into their annual reports.
- GRI reports that over 75% of people who read a company's sustainability report perceive the company more positively after reading it.
- There are about 100 different CSR standards that can be distinguished based on their geographical, sectoral, and workforce coverage.
- 22% of German and Spanish people take environmental aspects of products into account when shopping; in the UK, ethical consumer spending grew more than threefold between 1999 and 2006, from 9.6 to 32.2 billion GB£; in France, 83% of consumers approve of no longer using plastic bags in retail shops.

Social issues

- Around 1 in 3 Europeans report witnessing discrimination or harassment in the past year, and 48% think that not enough is being done to fight discrimination.
- In 2005 the overall pay gap between men and women was 15% in the EU-27 and 25% in private sector companies.
- Women represent 59% of European Union university graduates, but almost a third of women in the EU work part-time, compared to less than 1 in 10 for men.
- Only 12% of directorships in FTSE 100 companies are held by women.
- The WHO estimates that by 2020, depression will become the greatest cause of work-related disability, second only to heart disease as the leading cause of disability in general.
- Each case of stress-related poor health leads to an average of 30.9 working days lost. Employment costs related to mental health disorders in the EU were approximately €132 billion in 2004.

[...]


[1] The momentarily probably most eminent case in CSR is the oil spilling scandal of BP showing that an ecological catastrophe can shatter the existence of a whole company as the following headline shows: „BP oil spill threatens environmental catastrophe on US Gulf Coast. Company Loses $25 Billion In Market Value.“ BP shares tumbled more than 8 percent Thursday, and the company has lost roughly $25 billion in market value since an offshore rig it hired in the Gulf of Mexico exploded on April 20, 2010 and started spewing huge amounts of oil. The New York Times wrote: "Oil Spill’s Blow to BP’s Image May Eclipse Costs".

[2] Further examples how companies are hit be negative headlines are Goldman Sachs or the child labor problematic: „Goldman Sachs scandal a 'turning point' for bank regulation“: Financial experts speculate that the Goldman Sachs fraud allegations will lead to harsher banking regulation and the enforcement of higher capital requirements. Worldwide, immediately the prices of bank shares crashed. Within minutes one company share of Goldman Sachs lost 13% of its value. Also, the government has accused Goldman Sachs of defrauding investors by failling to disclose conflicts of interest in mortgage investments it sold as the housing market was faltering. Investors in the mortgage securities are alleged to have lost more than $1 billion according to the US Securities and Exchange Commission. An example for an economic downturn affecting a whole industry is the following: „Child Labour Scandal Exposes Gross Corruption. An unfolding national scandal on the large-scale abuse of child labourers in the brick kiln industry raises questions on the adequacy of planned labour laws that are supposed to take on sweatshops and protect workers' rights.“ See http://ipsnews.net/news.asp?idnews=38212

[3] The raid was the biggest related to a fraud that may have tainted an estimated 7 percent of carbon trades in the $125 billion market. www.businessweek.com/news/2010-04-28/deutsche-bank-rwe-raided-in-german-probe-of-co2-tax-update2-.html

[4] www.nytimes.com/2009/04/22/us/22chemical.html

[5] online.wsj.com/article/SB124885576726689577.html

[6] Considering demographic change and the need for increasingly well educated and trained employees, there might arise a war for talents. Companies applying employer branding seek to improve working conditions to attract more and better educated staff, respective high potentials, which is particular important for globally operating companies. This can be more effective and cost-efficient than advertising. In order to provide greater transparency there now are “top employer” competitions where companies can apply if they comply with certain criteria. Among them are soft and hard aspects such as market position and image, salary, job security, development potential, corporate culture, and work-life balance. According to Great Place to Work (see www.greatplacetowork.de) current German top employers are Google, Microsoft, Porsche, Audi, and Henkel, Caritas, INGDiBa, SolarWorld AG, Timberland, or Seniorenwohnheim Löffler. BMW, Deutsche Bank and Bayer are ranked high by the the employer branding firm Universum or by Trendence Employer Branding Awards where students can vote. (see www.trendence.com; Trendence is a European research institute specialized in employer branding). The latter ranked BMW second to Audi.

[7] Carson, Rachel (1962) Silent Spring. Edward O. Wilson. New York

[8] World Commission on Environment and Development (WCED). Our common future. Oxford: Oxford University Press, 1987 p. 43.

[9] The ideas behind sustainable development, however, are much older and traceable at least back to the preservation and conservation movements of the 18th and 19th centuries. Today, sustainability remains a contested concept, which to a greater or lesser extent draws from and overlaps with notions of human development, sustainable development, corporate citizenship, social responsibility, social justice, environmental management, (business) ethics and stakeholder management.

[10] Savitz/Karl (2006) p. x

[11] Deloitte (2010) Sustainability in business today: A cross-industry view.

[12] Also business thinker Drucker suggests that organizations are far more interesting when profit is an instrumental value rather than an intrinsic value. E.g the profitable US-based pharmaceutical company Merck and Co. The intrinsic value was to help the sick, or and stated that the more they pursued this value the larger the profits have followed. Or as George Merck put it: „The better we have remembered that medicine is fort he people, the larger the profits have been.“

[13] See also Savitz, Andrew Savitz / Weber, Karl (2006) The Triple Bottom Line: How Today's Best-Run Companies Are Achieving Economic, Social and Environmental Success. John Wiley & Sons.

[14] www.harvardbusinessmanager.de/heft/artikel/a-685169.html

[15] Savitz/Karl (2006) p. xiii. See also Hansjürgens, Bernd/Antes, Ralf (2008) Economics and management of climate change: risks, mitigation and adaptation. Springer.

[16] Dr. Josef Ackermann, Chairman of the Board and of the bank's Group Executive Committee, in the Deutsche Bank CSR report of 2009.

[17] A to Z of Corporate Social Responsibility (2007) p.125

[18] Andrew Carnegie, the richest businessman of the world at his time, donated during his lifetime around 350 Mio. US Dollar. In his work, Gospel of Wealth, he outlined two principles for businesspeople. While the charity principle suggested that more fortunate people should help those less fortunate, the stewardship principle viewed the wealthy as holding their property in trust for society.

[19] Compared to the US and abroad, the CSR discussion developed later. Reasons for this are more elaborated social security systems in Germany and that responsibility is more embedded in German company traditions. In 2001 the European Union published the green paper on social responsibility that dealt for the first time with the subject. The document can be found at http://europa.eu/legislation_summaries/employment_and_social_policy/employment_rights_and_work_organisation/n26039_en.htm

[20] See http://ec.europa.eu; http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/

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Details

Title
Best Practices in Corporate Social Responsibility
Subtitle
A Cross-Industry Analysis - the Examples BMW, Deutsche Bank and Bayer
College
University of applied sciences, Duisburg
Course
Strategic Management
Grade
1,6
Author
Year
2010
Pages
100
Catalog Number
V184093
ISBN (eBook)
9783656227496
ISBN (Book)
9783656227946
File size
1799 KB
Language
English
Series
Nachhaltigkeit
Notes
Dr. Iris Pufé, MBA, ist Politologin und Ökonomin, Gesellschafts- und Wirtschaftswissenschaftlerin gleichermaßen. Sie wirkte an der Konzeption von Nachhaltigkeitsstudiengängen ebenso mit wie in der praktischen Lehre und kennt durch ihre Arbeit für Nichtregierungsorganisationen wie Unternehmen die vielfältigen Anwendungsmöglichkeiten von Nachhaltigkeit. Ihr Forschungsschwerpunkt sind Themen rund um die Bereiche Nachhaltigkeit und Corporate Social Responsibility.
Tags
Nachhaltigkeit, Nachhaltigkeitsmanagement, sustainability, sustainability management, Corporate Social Responsibility, CSR, Triple-Bottom-Line
Quote paper
Iris Pufé (Author), 2010, Best Practices in Corporate Social Responsibility, Munich, GRIN Verlag, https://www.grin.com/document/184093

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