OECD Ethical Corporation - Dec 09 Pam Muckosy

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OECD, The Interface between

Responsible Business and CorporateGovernance

Corporate Responsesto Responsible

Investors and otherStakeholders

7 December 2009Pam Muckosy, Ethical Corporation

[email protected]

Recession

impacts

Responses toinvestors

Responses tostakeholders

Embeddingresponsible

practices

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07 12 2009


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- Impact of the recession

Shrinking

CSR

teams

Charity

donationsand

communityprogrammes

Shorttermgains

Recession

impacts




practices

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- Impact of the recession

Recession

impacts




practices

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+ Impact of the recession

Recession

impacts




practices

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+ Impact of the recession13% companies focused on CSR stated amajor cut in CSR budgets (Ethical Corporation)

UN PRI increased to 500 companies; US$18

trillion of assets

Greater integration of ESG criteria intomainstream investing (BSR)

More Equator Principles signatories : 66financial institutions in 26 countries; 71% ofnew project finance debt in emerging markets.

> 3,000 companies in 07 reported on enviro.and social performance (Bloomberg)

1/ 3 UK businesses continue to do nothing toreduce environmental impact &1/ 5 say climate

change is not on the agenda ()

Recession

impacts




practices

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Equator Principles, PRI, etc.

Business responses to

ethical investors

ESG (Environmental, Social &

Governance) reporting

Reporting criteria in

financial exchanges

Merging CSR and financial

reports

Recession

impacts




practices

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Consumer DPopulation Biodiversity

Footprinting Energy use

Community NGOs 2

Growing multistakeholder initiatives

Social regulation

Other stakeholder pressures

for responsible business

Business case

Natural resources at risk

Embedding Modelling Leaders

Recession

impacts




practices

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Ethical Corporation findings

Recession

impacts




practices

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Ethical Corporation findings

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practices

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Research findings CSR in

practice

Interviewed and surveyed a sample

of some big companies driving bestpractices in responsible businesses.

Some examples from:J&J Lloyds TSB

P&G Novo NordiskCadburys BP

Starbucks HP

Recession

impacts




practices

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Where we see the most

progress in businessdevelopment and CSR

Niche brands: Innocent, SeventhGeneration, and many others

Big Industrial companies: GE,Siemens, Toshiba, Nissan, Toyota

Consumer brands: P&G, Unilever, Mark

& Spencer, Cadbury

Companies w ith sensitivereputations: Pharmaceuticals, heavy

industry, extractive industry firms

Recession

impacts




practices

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Areas challenged by CSR

Hospitality / Travel (All hotelsgreenwash together now!)

Low cost retail: Primark, Lidl, Aldi (Stillcheaper to source unsustainably)

Finance: Banks and insurance

companies poor communicators (notall!)

Professional services: consultancies,Law firms

B2B manufacturing: Lower exposure.

Changing slowly but accelerating inpace

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impacts




practices

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Requires overarching

framework

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impactsResponses toinvestors



practices

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CSR in modern business

New opportunities for products:Certification, Wind turbines, industrialtechnology (i.e. Unilever, Kraft, Mars,

Cadbury, GE, Siemens, Toshiba)

Preferred partner for leadingcompanies: Big firms expect more

Supporting diverse supplier base,develop loyal SME suppliers

Increased likelihood of governmentcontracts: Over time

Closer and more trusted relationshipswith customers, NGOs

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practices

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Recommendations for

embedding CSR

Create pride in CR achievements

Engage employees, listen & retainPersuade suppliers & promote the financial benefits

for sustainable sourcing

Measure and record data design CSR metrics & usetools (gets finance and accounting buy-in)

Focus on things that employees in operationaldepartments can do

Work with outsiders with expertise in specific areas,such as NGOs

Report effectively and seek credible assurance!

Source: How to embed corporate responsibility across different parts of your company Ethical Corporation, 2009

Recession




practices

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Thank you

Pam Muckosy

Head of Research

[email protected]

WWW.ETHICALCORP.COM/ REPORTS

OECD Ethical Corporation - Dec 09 Pam Muckosy

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