A presentation by Charities Aid Foundation Australia John

A presentation by Charities Aid Foundation Australia John Winkett Deputy Director Charities Aid Foundation Australia

Corporate Social Responsibility The Business Case This presentation will: § § Determine the meaning of Corporate Social Responsibility Present the business rationale for companies to engage in Corporate Social Responsibility

Corporate Social Responsibility The Business Case Business does not exist in isolation from the rest of society. With this growing realisation comes a rising tide of expectation about responsible business behaviour. Successful companies are meeting this expectation by introducing socially responsible management practices and making social responsibility an integral part of their business. In so doing, they are able to demonstrate that social responsibility really does make good sense

Corporate Social Responsibility The Business Case Thailand’s first study into consumer behaviour and attitudes towards Corporate Social Responsibility was carried out in 2005 by the KIAsia Institute and the Dhurakij University § § The key findings were encouraging 60% of the respondents would consider buying products or services from companies that were socially responsible 59% would consider buying goods or services from socially responsible companies even if their prices were more expensive.

Corporate Social Responsibility The Business Case § § 73% said they would buy goods and services from companies that do not pollute the environment 87% said they would advise their relatives to buy goods and services from companies that do not pollute the environment Consumers also indicated that Thai companies should focus their Corporate Social Responsibility activities on the following areas: 1. Environment

Corporate Social Responsibility The Business Case 2. Education and sport 3. Consumer and worker safety 4. Production of quality goods and services 5. Anti drug activities There was a general belief amongst consumers that within the next three years business would develop Corporate Social Responsibility Strategies and that these would become an important factor in their purchasing decisions

Corporate Social Responsibility The Business Case What do we mean by Corporate Social Responsibility (CSR)? It is a blueprint for conducting all aspects of business using professional, moral and ethical standards § § § Workplace Workforce Community Environment Human Rights Governance

Corporate Social Responsibility The Business Case There are several different ways of describing Corporate Social Responsibility: § § Corporate Citizenship Corporate Community Investment Corporate Community Involvement Corporate Community Engagement In Australia and other parts of the world there doesn’t seem to be any common agreement on which term to use!

Corporate Social Responsibility The Business Case I find the following description helpful: “ CSR refers to a range of practices that a business might adopt to ensure that it operates in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. CSR is larger than corporate community involvement or strategic corporate philanthropy and extends to a range of management practices and business initiatives”

Corporate Social Responsibility The Business Case BHP Billiton, the world’s largest mining company has incorporated its CSR strategy into its Sustainability Initiative and it uses the following graphic to illustrate this:

Corporate Social Responsibility The Business Case Healthy people + Safe workplaces + Environmental commitment + Social responsibility + Economic contribution + Sound governance = Licence to operate

Corporate Social Responsibility The Business Case CSR can provide business benefits in eight areas 1. Reputation management 2. Risk profile and management 3. Employee recruitment, motivation and retention 4. Investor relations and access to capital 5. Learning and innovation 6. Competitiveness and market positioning 7. Operational efficiency 8. Licence to operate

Corporate Social Responsibility The Business Case Reputation Over 70% of a company’s value is derived from intangible assets such as reputation Risk The London Stock Exchange has informed its members that they must implement environmental, reputation and probity issues when considering internal controls

Corporate Social Responsibility The Business Case Employee recruitment, motivation and retention Employees are the most valuable asset of a company Investor relations and access to capital Evidence is emerging to suggest that there is a strong link between CSR and good financial performance. Investors are now starting to question the CSR performance of companies

Corporate Social Responsibility The Business Case Learning and innovation CSR objectives encourage creativity and innovation Competitiveness and market positioning The results from the KIAsia study suggest that companies that adopt a CSR strategy will gain the competitive edge through consumer support

Corporate Social Responsibility The Business Case Operational efficiency Motivated and valued employees will have a positive impact on productivity Licence to operate Companies with poor environmental records, poor reputation and poor employee relations will find it increasingly difficult to receive support from consumers.

Corporate Social Responsibility The Business Case Companies that take CSR seriously can improve their reputations and operational efficiency while reducing their risk exposure and encouraging loyalty and innovation. Overall they are more likely to be seen as a good investment and as a company of choice by investors, employees, customers, regulators and joint venture partners.

Corporate Social Responsibility The Business Case While there may be a lack of consensus as to the extent of a company’s moral responsibility for CSR, the range of business benefits that can result should be sufficient to make any forward thinking organisation see increasing CSR as an integral part of good management

Corporate Social Responsibility The Business Case Thank you very much for your attention Questions and Discussion John Winkett Deputy Director Charities Aid Foundation Australia