1. Corporate Social Responsibility
Class 3:
CSR Management System
Syllabus developed by Jens Trummer

2. For those interested in more detailed information:
Agenda
CSR Management System
Reading:
1. “Daimler 360, Facts on Sustainability”, 2010
For those interested in more detailed information:
- “Designing a CSR Structure”, Business for Social Responsibility, 2002
- “CSR – An Implementation Guide for Business”, IISD
Course Note: Bear with me!!!
This is the second time I’ve taught the class, now 3 credits, opened up to the Msc in E&P It’s a bit eclectic
Expect to have a number of guest lectures . . AC and EB almost for sure Deloitte, Vertis, Denso- in discussions

3. Class 3:
CSR Management System
CSR LAB

4. What is difference ?
and

5. 2 Types of Business Models:
1. “Sustainable” Business Model
= CSR???
2. Business Model with CSR Programs:
CSR Management System

6. ? CSR Management System Evolution of CSR: Stage 3:
Strategic CSR: Strategy
complimenting business activity
CSR Management System
Stage 1:
CSR non-existent
Stage 4:
Sustainability
Intrinsic business strategy/
Activity:
Still CSR ??
Stage 2:
CSR non-strategic:
- Philanthropy
- Donations
- Volunteering, etc. ?

7. CSR Management System needs
“ Framework for
‘Strategic’
‘Integration’ ”
TOOL to compliment core business activities

8. “Framework for Strategic Integration”
- ‘Theory of Practice’
- No ‘one size fits all’
- Not necessarily chronological
- Must be adaptive – Why?

9. CSR implementation on-going
Continuous adaptation to changing
‘Driving Forces’
Class 1
Class 1

10. 3 Steps + 1 Continuous Action Step 1 ???
Framework for Strategic Integration:
3 + 1 =
3 Steps + 1 Continuous Action
Step 1 ???

11. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis
2. Stakeholder Process (See Class 2)
- Stakeholder Analysis
- Stakeholder Dialogue
3. CSR-SWOT

12. Goal: Assess the whole picture Basis for “Gap Analysis”
Step 1: Analysis
1. CSR Audit
“As-is Analysis”
Goal: Assess the whole picture
Basis for “Gap Analysis”

13. 1. CSR Audit Step 1: Analysis - CSR definition - 4 key criteria ???
- Existing CSR policies, standards, values, Corporate Motivation
Nalco
- Understand current CSR commitments, external standards used
- Structures: Current departments, functional areas,
cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities

14. Re-active vs. Pro-active
External Divers/Motivation
Re-active vs. Pro-active
Nike, Gap, BP, Starbucks ??
What about Nestle???
LINK

15. 1. CSR Audit Internal Drivers/Motivation Step 1: Analysis
- Honest (‘self’-) analysis
- Philanthropic and /or(??) business incentives

16. 1. CSR Audit Step 1: Analysis - CSR definition
- Existing CSR policies, standards, values, Motivation
- Understand current CSR commitments, external standards used
- Structures: Current departments, functional areas,
cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities

17. … are not necessarily referred to as “CSR” ?
Step 1: Analysis
1. CSR Audit
Which CSR programs …
… are not necessarily referred to as “CSR” ?

18. - Health and Safety (SA 8000)
Step 1: Analysis
1. CSR Audit
- ISO 14001/EMAS
- Health and Safety (SA 8000)
ISO for CSR ???

19. 1. CSR Audit ISO for CSR ISO 26000: Launched November 1st, 2010 !
Step 1: Analysis
1. CSR Audit
ISO for CSR
ISO 26000: Launched November 1st, 2010 !
Guidance standard on social responsibility

20. 1. CSR Audit Step 1: Analysis - CSR definition
- Existing CSR policies, standards, values, Motivation
- Understand current CSR commitments, external standards used (e.g. ISO 14001, SA 8000)
- Structures: Current departments, functional areas,
cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities

21. Which departments responsible for CSR issues ?
Step 1: Analysis
1. CSR Audit:
‘I I I’
Internal ‘Intelligence’ Investigation:
Which departments responsible for CSR issues ?

22. Which department typically most reactive
Step 1: Analysis
1. CSR Audit
‘CSR Departments’
- Communications/PR
- Marketing
- Human Resources
- (Senior) Management
Which department typically most reactive
… or ‘slow’ on take-up ?

23. 1. CSR Audit Step 1: Analysis - CSR definition
- Existing CSR policies, standards, values, Motivation
- Understand current CSR commitments, external standards used (e.g. ISO 14001, SA 8000, ISO for CSR ???)
- Structures: Current departments, functional areas,
cross-functionality
- CSR issues currently being addressed
- Stakeholder Overview of current stakeholder ‘dialogue’
- Current CSR programs and activities
Which stakeholders almost all companies irrespective of existing CSR strategy???

24. How would you do an Audit ???
Step 1: Analysis
1. CSR Audit
How would you do an Audit ???

25. How? 1. CSR Audit Step 1: Analysis Method: Internal:
1. Desk-top study: Document Analysis
2. Executive, Management & Staff Interviews
External:
3. Reputation surveys, benchmarking, CSR Reports (GRI, AccountAbility Rating)

26. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis
2. Stakeholder Process
- Stakeholder Analysis … Components ???
- Stakeholder Dialogue
3. CSR-SWOT

27. Step 1: Analysis See Class 2! Step 1: Analysis
1. CSR Audit → Gap Analysis
2. Stakeholder Process
- Identification of Issues
- Selection of Stakeholder
- Prioritization of Stakeholders
- Stakeholder Dialogue
3. CSR-SWOT
See Class 2!
Stakeholder Analysis

28. - Identification of Issues - Selection of Stakeholder
Step 1: Analysis
2. Stakeholder Process
- Identification of Issues
- Selection of Stakeholder
- Prioritization of Stakeholders
- Stakeholder Dialogue
Stakeholder Analysis
Significance:
More adaptive to External Drivers (Social Expectations & Globalization)
Class 2

29. However: ‘Outsourcing’ CSR:
Step 1: Analysis
‘Outsourcing’ CSR:
Risking ‘hodgepodge’ of un-coordinated CSR activities and philanthropic activities?
What do you think?
However:
Class 2

30. Does Kramer & Porter Inside-Out/Outside-In Model work better ??
Step 1: Analysis
Does Kramer & Porter Inside-Out/Outside-In Model work better ??
Class 1
Inside-Out:
Impact on Society
Outside-In:
Impact on “Competitive Positioning”
Source: “Strategy and Society”, Porter & Kramer

31. How does this compares with Stakeholder Model ?
Step 1: Analysis
CSR
Impact of Society on
Company
Impact of Company on
Society
How does this compares with Stakeholder Model ?

32. Step 1: Analysis
Class 2
Both ways?

33. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis
2. Stakeholder Process
- Stakeholder Analysis
- Stakeholder Dialogue
3. CSR-SWOT
And/or
Kramer & Porter:
Inside-Out/Outside-In Model

34. Step 1: Analysis Step 1: Analysis 1. CSR Audit → Gap Analysis
2. Stakeholder Process
- Stakeholder Analysis
- Stakeholder Dialogue
3. CSR-SWOT
And/or
Kramer & Porter:
Inside-Out/Outside-In Model

35. - Putting it all together
Step 1: Analysis
3. SWOT
CSR-SWOT Analysis:
- Putting it all together
- Linkage to next part

36. Framework for Strategic Integration:
Step 1: Analysis
… Step 2 ???

37. 2. CSR Strategy 1st Step?? Strategy to compliment business activity
Step 2: CSR Strategy
2. CSR Strategy
Strategy to compliment business activity
… CSR is Business Strategy
(see EU Definition !)
1st Step??

38. Step 2: CSR Strategy Step 2: CSR Strategy 1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget

39. - Formulation of Policy Statement
Step 2: CSR Strategy
1. Policy Formulation
- Priorities
- Core Values
- Formulation of Policy Statement

40. - Formulation of Strategy
Step 2: CSR Strategy
1. Policy Formulation
- Formulation of Strategy
How long before public starts identifying CSR strategy with company ?

41. Step 2: CSR Strategy Step 2: CSR Strategy 1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget

42. 2. CSR Structure Step 2: CSR Strategy Choose structural framework
- Size
- Corporate structure
- Sectors involved
... geographic locations, risk areas, commitment
- New or improved structure?

43. What is important for an effective
Step 2: CSR Strategy
What is important for an effective
Structure ?

44. Step 2: CSR Strategy
‘Cross-Functional’
Why so important in CSR ?

45. CSR is cross-functional:
Step 2: CSR Strategy
2. CSR Structure:
CSR is cross-functional:
- Environment
- Government
- Communities
- Employees
- Supply Chain
- Customers
- Shareholders
7 Stakeholder
Groups

46. Step 2: CSR Strategy
2003: ‘Embedding’

47. Framework for Strategic Integration
Step 2: CSR Strategy
Framework for Strategic Integration
Integrating sustainability into company’s:
… at all levels of the organization
- Values
- Culture
- Operations
- Business decisions
= ‘Embedding’

48. 2. CSR Structure: Step 2: CSR Strategy
Mechanisms for involving functional areas, departments, etc.
Roles and responsibilities of each employee and/or group (committee) involved with CSR efforts
(Board committee, executive committee, specific CSR committee, etc.)

49. Increasing level of CSR commitment
Source: Designing a CSR Structure, BSR

51. Step 2: CSR Strategy Step 2: CSR Strategy 1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget

52. 3. Staffing Plan Step 2: CSR Strategy
Identify CSR-specific staff roles and responsibilities at the different levels.

53. How would you design Daimler’s CSR Structure?
Step 2: CSR Strategy
Daimler’s Corporate Governance Structure
How would you design Daimler’s CSR Structure?

54. Daimler’s Sustainability Governance Structure
Step 2: CSR Strategy
Daimler’s Sustainability Governance Structure
(P. 16)
1. Key
Stakeholder
Groups
???
2. Cross-
Functionality

55. Daimler’s Sustainability Governance Structure
Step 2: CSR Strategy
Daimler’s Sustainability Governance Structure
(P. 16)
Core
Business
Activity
Which ones??
1. Key
Stakeholder
Groups
2. Cross-
Functionality
Notice:
‘Integration’

56. Centralized, de-centralized ?
Step 2: CSR Strategy
Centralized, de-centralized ?
Top-down, bottom-up ?

57. Daimler’s Environmental Structure p.19
Step 2: CSR Strategy
Daimler’s Environmental Structure p.19
Bottom-up, Top-down ?
Life-cycle
Analysis

58. Daimler’s CSR Structure
Step 2: CSR Strategy
Daimler’s CSR Structure
‘Hybrid’

59. Step 2: CSR Strategy
Daimler:
Committed to CSR ?

60. Increasing level of CSR commitment
Step 2: CSR Strategy
Daimler’s CSR Structure
Where is Daimler (Page 16)?
Increasing level of CSR commitment

61. Increasing level of CSR commitment
Step 2: CSR Strategy
Step 6: Daimler’s CSR Structure
Where is Daimler (Page 13)?
Board of Management
Sustainability Board
Increasing level of CSR commitment

62. ? Centralized or de-centralized ? Step 2: CSR Strategy
Daimler’s CSR Structure
Centralized or de-centralized ? ?

63. Daimler’s CSR Structure
Step 2: CSR Strategy
Daimler’s CSR Structure
Sustainability Office

64. Mobile’s CSR Structure
Step 2: CSR Strategy
Mobile’s CSR Structure

65. - Subsidiary of KBC (Belgium, Flemish) - Required CSR in 2005
Step 2: CSR Strategy
- Subsidiary of KBC (Belgium, Flemish)
- Required CSR in 2005
- Communications Intern tasked

66. What evolutionary stage of CSR – strategic, non-strategic?
Step 2: CSR Strategy
2006: Allocated budget: New CSR Policy:
1. Professional Business Ethics
2. Employees and their families
3. Attitude to the environment
4. Care for the community (“CSR-led sponsorship”)
What evolutionary stage of CSR
– strategic, non-strategic?

67. How to manage CSR?

68. 2007: CSR Expert Task Force (ETF):
Step 2: CSR Strategy
2007: CSR Expert Task Force (ETF):
1. Head of External Communications
2. Head of Retail Segment Marketing
3. Head of PSB Retail Segment
4. Head of Human Resources
5. Head of Legal
6. Head of Public Affairs
7. Head of Marketing Communications (with an advisory vote power)
8. CSR Officer
9. CSR Manager
Main focus area of ETF ?

69. 2007: CSR Expert Task Force (ETF):
Step 2: CSR Strategy
2007: CSR Expert Task Force (ETF):
Main focus areas:
- Risk Management & Compliance
- PR, Communications & Marketing

70. 2007: CSR Expert Task Force (ETF)
CSR Manger +
Problem ?

71. 2008: Country Team Sustainability Committee (CTSC)
CSR Manger +

72. 2008: Country Team Sustainability Committee (CTSC) :
Step 2: CSR Strategy
2008: Country Team Sustainability Committee (CTSC) :
1. CEO of ČSOB Pojišťovna
2. PSB and Direct Banking Business Senior executive director
3. Corporate banking Senior executive director
4. Corporate Office Director
5. External Communication Director
6. CSR Manager

73. Country Team Sustainability Committee (CTSC)
Step 2: CSR Strategy
Country Team Sustainability Committee (CTSC)
2. Votes on general budget components
(Budget: 0.5% net profit)
CSR
Manager
1. Identifies risks, proposes strategies
CSR Expert Task Force
3. Votes on specific programs
Implementation by CSR Team

74. Step 2: CSR Strategy Step 2: CSR Strategy 1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget

75. Typically, CSR Budget in EE Companies what percentage of net profit?
Step 2: CSR Strategy
4. Budget
Assess budget structure and size …
Typically, CSR Budget in EE Companies what percentage of net profit?
More effective if tied with PR Budget!

76. Framework for Strategic Integration:
Step 1: Analysis
Step 2: Strategy
… Step 3 ???

77. Step 3: Implementation Goal: Long-Term Integration
Embedding CSR management system into processes and programs

78. Reporting & Monitoring
Communication Management Tool
See Class 4

79. 3 Steps + 1 Continuous Action ?
Framework for Strategic Integration:
3 + 1 =
3 Steps + 1 Continuous Action ?

80. Building Senior Vision & Support
Continuous: Building Senior Vision & Support
Building Senior Vision & Support
Especially if
Re-active … (or not ‘-active’):
- Get clear CSR Mandate
- Educate Board, CEO and employees
- Build Board & CEO level support
- Strengthen company-wide support

81. Building Senior Vision & Support
Continuous: Building Senior Vision & Support
Building Senior Vision & Support
… it’s all about (internal) communication!
- Workshops
Training
- Personal Contact
- Etc.
Gradual Process, building on success.

82. Building Senior Vision and Support
Framework for Strategic Integration
Step 1: Analysis
1. CSR Audit
2. Stakeholder Process
- Stakeholder Analysis
(Identification, Selection and Prioritization)
- Stakeholder Dialogue OR
Kramer & Porter
Inside-Out/Outside-In Model
3. SWOT
Step 2: CSR Strategy
1. Policy formulation
2. CSR Structure
3. Staffing Plan
4. Budget
Step 3: Implementation
1. Monitoring & Reporting
Building Senior Vision and Support