The triple bottom line not a zero sum game by cb bhattacharya

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Conference KeyNotes

The Triple Bottom Line: Not a Zero Sum Game

from the 2012 Corporate Citizenship and Sustainability Conference

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Introduction

Thomas Singer is a researcher in corporate leadership at The

Conference Board. His research focuses on corporate social

responsibility and sustainability issues. In addition to his work

at The Conference Board, Singer serves as an independent

consultant advising on corporate sustainability strategy. Prior

to joining The Conference Board, Singer worked with Blu

Skye Sustainability Consulting and SustainAbility, helping

clients embed sustainability into their core business. Over his

career, he has supported engagements with industry leaders

across sectors, focusing on strategy development,

opportunity assessment, competitive analysis, and

stakeholder engagement. He began his career as a

management consultant with Kaiser Associates, advising

clients on white space opportunities, competitive analysis,

and benchmarking. Singer is a graduate of Tuft University.

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Introduction

CB Bhattacharya is Dean of International Relations and

E.ON Chair Professor in Corporate Responsibility at

ESMT European School of Management and

Technology in Berlin, Germany. He is an international

expert in business strategy innovation aimed at

increasing both business and social value. His

research and teaching focuses specifically on how

companies can use underleveraged “intangible assets”

such as corporate identity and reputation, membership

and brand communities, and corporate social

responsibility and sustainability to strengthen

stakeholder relationships.

CB Bhattacharya, Dean of International Relations E.ON Chair in Corporate Responsibility ESMT, European School of Management and Technology

The Conference Board

Corporate Citizenship & Sustainability Conference

Keynote Webcast

October 9, 2012

The Triple Bottom Line:

Not a Zero Sum Game

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Doing Well

Doing Good

Doing well by doing good

Doing Well Doing Well

Doing good

CR

Doing well

Strategic CR

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“A company’s long-term success, and sometimes even existence, is

inextricably tied to its stewardship of not just its own well-being but also of the

natural and social environment in which it operates.”

Triple Bottom

Line

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Stakeholder

Reactions

CR

Inputs

Business

Outcomes

Societal

Outcomes

CR

Value (Economic,

Social,

Environmental) ?

Two routes to CR value: direct & indirect

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Direct route to CR value

“Reducing your emissions goes hand-in-hand with reducing your costs.” (Bob Gordon, British Retail Consortium) Marks & Spencers Plan A Investment £40 million Revenue £50 million http://www.youtube.com/watch?v=aIrHzxkiaeE&feature=related

• Reduced total carbon emissions by 8 percent

• Improved store energy efficiency by 19 percent

• Reduced store refrigeration emissions by 18 percent

• Improved general merchandise delivery fleet efficiency by 30 percent

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Domain

Investment

Level

CR INPUTS CR VALUE

Business

Social

Environmental

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Stakeholder reactions to CR

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Research overview

• Mix of qualitative and quantitative methods

− Focus groups, depth interviews

− Surveys, experiments

− Secondary data analysis

• Multiple companies

− Procter & Gamble, General Mills, Walmart, Target, Danone, more

• Stakeholder groups: consumers and employees (several 000’s)

• Geographic focus: U.S. and Europe

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How stakeholders interpret CR

Unity

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Understanding

Awareness

Attributions

Participants perceive both intrinsic (care for the community) and extrinsic (way to market products) motives

“It’s a form of marketing to get their products out but it also helps the community.”

“They want to help the community but also to make a name for themselves and gain popularity.”

Endorse extrinsic motive

“It‘s good because they are going to help us along with themselves.”

Effectiveness

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CR initiatives that fulfill “customer” needs create more value

• Functional benefits

• Identity related benefits

Leads to well-being, loyalty, positive word of mouth

• “One of the things that keeps me here is some of the positive things that we do in

the community.”

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Usefulness

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Unity

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Intent to Leave

Loyalty

CR Associations

CR Self-esteem

Identification

Understanding

Unity

CR Value

Usefulness

CR Efficacy

CR Work-Home Integration

Work Effort

.11**

.05**

.12**

.08**

-.94**

.19**

.98**

Test of 3U’s framework - employees

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Test of 3U’s framework - customers

Identification

Purchase intent

Resilience to Negative

Information

CR

Efficacy

Self-esteem

Understanding

Unity

CR Value

Usefulness

CR

Genuine Concern

Premium

Yogurt study

.14**

.04**

.51**

.66**

.40**

.16**

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0

1

2

3

Tobin

's q

High InnovativenessCapability

Low InnovativenessCapability

2 4 6 8 2 4 6 8

CR Ratings CR Ratings

Mar

ket V

alue

CR integral part of business strategy

0

1

2

3

Mar

ket V

alue

High Product Quality

Low Product Quality

Luo & Bhattacharya (2006)

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Overall insight

Does it pay to be good?

- Two words:

“It Depends”!

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Mainstreaming sustainability: Sustainable Business Roundtable (SBRT)

Why SBRT?

• Managers unclear how to use sustainability to their advantage

• Sustainability department “outshouted” by other departments with shorter term pressures

Value Proposition

• Pair-up sustainability officers with other departments (Procurement, HR, IR…) to foster collaboration

• Develop shared understanding to mainstream sustainability

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Thank You!

Professor CB Bhattacharya

E.ON Chair in Corporate Responsibility

Dean of International Relations

ESMT European School of Management and Technology

Schlossplatz 1 10178 Berlin

Phone: +49 (0) 30 21231-1528 Fax: +49 (0) 30 21231-1281

cb@esmt.org www.esmt.org

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