Professor Kellie A. McElhaney 7 April 2009. Recovering banker Professor at UC Berkeley (Haas School of Business) Founding Director, Center for Responsible.

Professor Kellie A. McElhaney7 April 2009

Recovering banker

Professor at UC Berkeley (Haas School of Business)

Founding Director, Center for Responsible Business

Ranked #1 in world by Financial Times

Extensive corporate consulting: Gap, HP, Nokia, Ulster Bank, eBay, Ernst & Young, Frontline, McDonalds, Blue Cross, Statoil, Nvidia, Kimberly-Clark, Yum! Brands, Twitter

Research focus areas: Strategies of CSR; Branding & CSR; Diversity & CSR

New book called Just Good Business

BSR/ Cone Corporate Responsibility in a New World Survey, 2009

….of HOPE.

Consumer Interest in Environmental Purchasing Not Eclipsed By Poor Economy Purchasing:

34 % of American consumers indicate they are more likely to buy environmentally responsible products today

44 % indicate their environmental shopping habits have not changed as a result of the economy

Interest: 35 % of Americans have higher interest in the

environment today than they did one year ago Expectations:

35 % of Americans have higher expectations for companies to make and sell environmentally responsible products and services during the economic downturn

220 directors at U.S. companies with $1 billion or more in revenue

79% have a strong or moderate understanding of the business risks associated with CSR and climate change

76% have a strong or moderate understanding of the business opportunities associated with CSR and climate change

50% think their boards and management are committed to addressing CSR and climate change

50% think their companies’ response to CR&S is integrated into business strategy and risk management

41 % report no such integration

Deloitte Survey /White Paper , The Growing Role of the Board in CSR and Climate Change, 2009

A business strategy that:

◦ Creates wealth◦ Protects wealth

It is about using the power of business to improve the world.

A corporate strategy that is integrated with (1) core business objectives & (2) core competencies to create financial and social/environmental returns, and is embedded in corporate culture and day-to-day business operations.

McElhaney, 1998

CSR Strategy must fit two things:

◦ Core business objectives: Increase sales, penetrate new markets, engage

employees, reduce operating expenses, improve reputation, protect brand, beat competitors

◦ Core competencies: Technology, financial products &services, making

markets, natural food, automobiles and transportation systems, travel & tourism.

• Employee Engagement

• Community Investment

• Philanthropy

• Government & Public Relations

• Governance & Ethics

• Environmental Footprint

• Supply Chain/ Sourcing

• Social/ Environmental Impact of Products & Services

CSR

Hewlett Packard, 2006

Philanthropy

Non-Profit partnerships

Health & Nutrition

Product give-aways

SponsorshipsWorkplace diversity

Human rightsEmployee volunteerism

Cause marketing

Corporate governance

Ethics

Fair employee treatment

Environment

Public Affairs Community investment

Supply Chain

…to utilize CSR as a powerful integrated business strategy, not an add on.

CSR is not about how you spend the money you make.

It’s about how you makethe money you spend.

$25M commitment in 1999

Given $34M, plus 73,000 refrigerators, ranges, household items to 36,000 homes

Pledged to give appliances to every house built through 2011

Launched Building Blocks initiative in 2006, sending over 1000 employees & more volunteers to neighborhood for 1 week to build an entire block

From onset, was philanthropy; in 2004, became brand message◦ “We make very large, very heavy metal machines, often with

big motors. This puts a human face on what could be a very cold metal category.”

Sponsored 2006 Reba McEntire Habitat for Humanity Tour

Inspires/ attracts employees

Enhances/ redefines the brand

Enhances value proposition

Fosters distinctiveness / differentiates

Tells a story

Opens access to new markets

Increases license to operate

Improves efficiencies

Increases trust and loyalty

The Role of CSR in Business

Going Green? Hudson Gain Corp., 2009

• Cost savings achieved through reduction of waste

• Reduced liability derived from more responsible handling of materials and pollutants

• Performance of a business based on their ability to attract &retain the most qualified employees

• Long-term viability of a business due to its access to sustainable resources and customer bases

To be supplied 100% by renewable energy

To create zero waste

To sell products that sustain our resources and environment

Wal-Mart’s Sustainability Goals

Wal-Mart’s Global Environmental Impact

Packaging

Agriculture

Water

Marine

Factories

Indirect Impact = 92%

CSR can turn around a brand’s image and make money

In 2 short years, Walmart has gone from one of the most hated companies to one of the most admired.

Flat noodles/ Smaller boxes =900,000 lbs. less paper/yrGHG emissions decreased by 11%20% more boxes on shelf

Concentrated liquid =400M gallons less water consumed95M lbs. less plastic used125M lbs. less cardboard

C-suite commitment

CSR/ business strategy alignment

CSR impact metrics

CSR organizational structure

CSR in supply chains

CSR/ cultural alignment

CSR innovations

Engagement with activists/ NGOs

Thank You