The Electronic Industry Citizenship Coalition Welcomes you to Sponsored by Exhibitors
Nov 01, 2014
The Electronic Industry Citizenship Coalition
Welcomes you to
Sponsored by
Exhibitors
Boston | Geneva | San Francisco | Seattle | Washington FSG.ORG
Analysis prepared for:
Creating Shared Value
September 30, 2013
FSG.ORG
3 © 2013 FSG
Economist: “Top trend in 2012”Forbes: One of three “megatrends for 2012”
The Shared Value Concept Is Gaining Global Momentum
© 2011 FSG4
FSG.ORG
Seoul, 2011
Corporate Thinking Has Evolved Over the Past Decade
- Let’s minimize the problem and throw some money at it to show we’re contributing
- CSR & Philanthropy is about corporate reputation
“It is a problem”
- We need to add costs to fix the problem
- We need to report transparently on our results
- We can use our core business capabilities to find solutions
“Let’s solve the problem”
“It is not a problem”
- Let’s ignore or understate the problem
- Let’s minimize our responsibility
- Philanthropy is about personal values
- We can lower costs, grow revenues, or differentiate our value proposition by addressing social problems
- Even social problems we don’t usually affect pose opportunities
“It’s an opportunity to create shared
value”
© 2010 FSG5
FSG.ORG
• The long-term competitiveness of companies depends on social conditions− An educated and skilled workforce− Safe working conditions − Sustainable use of natural resources− A flourishing local economy
• Business has an essential role to play in solving social problems− Only companies can create prosperity that funds government and civil society− Companies can create solutions to many social problems in ways that governments and
NGOs cannot− Competitions fuels innovation and efficiency− For-profit models are the most scalable and sustainable
− Businesses can overcome constraints that limit their growth
The “externalities” we have ignored have substantial internal effects
Societal and Corporate Success are Inextricably Linked
FSG.ORG
6 © 2013 FSG
Companies Create Shared Value by Leveraging Core Assets to Address Social Needs In Ways That Create Opportunities for Business Growth
Social NeedsCorporate Assets and Expertise
Business Opportunities /
Constraints
Shared Value
Shared Value creates tangible business value and enhances competitiveness, and does not just ensure compliance or protect/enhance business reputation
FSG.ORG
7 © 2013 FSG
While Each Component of The Portfolio Serves a Different Purpose, Shared Value Investments Maximize Social and Business Impact
Business Impact
Soci
al Im
pact
Traditional Community Engagement
• For society:Additional resources for good causes
• For business:Goodwill, license to operate, employee engagement,
Strategic CSR / Sustainability
• For society:Better resources for company related causes
• For business:Reputation uplift; compliance with sustainability standards
Shared Value
• For society:Targeted problem solving at scale
• For business:New revenues, lowered costs, increased growth potential
FSG.ORG
8 © 2012 FSG
Companies Across the Globe Are Creating Shared Value
Enabling Local Cluster Development
Redefining Productivity in the Value Chain
Reconceiving Products and Markets
Three ways of creating shared value
© 2010 FSG9
FSG.ORG
CSV Investment
Walmart is reducing transportation costs and helping sustain the livelihoods of small-scale farmers in the US and emerging markets by
working to source produce for its stores locally and by providing training and support to farmers near store locations.
Source: Company websites and reports, news articles
Social Goals• Increase income of small and medium farm
suppliers by 10 – 15%• Reduce waste and carbon emissions • Provide low-cost, healthy food for Walmart
customers – goal is to sell $1B in locally-grown produce by 2015
Business Goals• Reduce transportation costs –in the US
Walmart has already cut 100 million miles from delivery routes saving the company $200M in fuel costs
• Reduce food waste - goal of 15% in emerging markets and 10% in US by 2015
Redefining Productivity in the Value Chain2
Redefining productivity in the value chain
FSG.ORG
Mars “Vision for Change” Strategy
A Revitalized Cocoa Sector in Côte d’Ivoire
Priority Goal: Improve Farmer Income
Improve Environmental Management of Cocoa
Growing Areas
Invigorate Rural Communities
Vision
Strategies
• Increase farm productivity• Promote tax/broad sector
reform• Improve quality• Promote certification• Improve access to market
information • Promote crop diversification
• Develop and promote environmentally friendly intensification methods
• Monitor environmental impacts of intensification and diversification
• Validate optimal agroforestry systems • Reclaim fallow cocoa growing areas• Conserve remaining forests
• Expand availability of rural services
• Ensure responsible child labor practices
• Improve rural infrastructure• Research rural migration
issues
Economic Environmental Social
Building a reliable supply of cocoa for Mars and improving farmer livelihoods
Goals
© 2010 FSG11
FSG.ORG
CSV
Changing ‘What’s Good for Business is Good for Society’ to ‘What’s Good for Society is Good for Business’
Philanthropy/CSR
1.Create social benefit by redistributing some of the value created by business
Creating Shared Value
1.Create social and business benefit by “increasing the size of the pie”
2. Doing good is integral to a risk management strategy
2. Doing good is integral to a successful innovation strategy
3. Businesses help solve social problems because it is their responsibility to ‘give back’
3. Businesses help solve social problems because it part of their purpose and competitive advantage
4. All profit is equal 4. Profit that is good for society is more sustainable
FSG.ORG
12 © 2013 FSG
The Electronics Industry Can Take a Portfolio Approach to Engaging with Its Supply Chain
Traditional Community Engagement
Strategic CSR / Sustainability Shared Value
Social and Business Value
Support community engagement activities
Facilities have strong disaster preparation plans in place
Basic medical care and mental health services are available to staff
Workers see employment in the electronics industry as a long-term career and limit turnover
World-class health and wellness programs reduce absenteeism and boost productivity
Natural resource consumption is optimized to reduce operational costs
Labor is responsibly sourced, especially with student workers and labor agencies
Environmental impact is minimized
Excessive working hours are eliminated
© 2013 FSG
FSG.ORG
The Conditions Are In Place for the Electronics Industry To Serve As a Model In Addressing Supply Chain Issues
Reactive to consumer pressure
No industry-led coalitions that include the entire supply chain
Unstable customer-supplier relationship
Opportunity to be proactive
EICC engages the entire supply chain and can establish a common agenda
Stable customer-supplier relationships
Apparel Industry Electronics Industry
Small, poorly managed factories Well-managed factories and operations
© 2013 FSG
FSG.ORG
EICC Leaders Highlighted Four Guiding Principles to Guide the New Strategic Direction
1 BE PROACTIVE, NOT REACTIVE 2 CREATE TANGIBLE
BUSINESS VALUE
4 IMPROVE FOCUS AND RESULTS ORIENTATION3 IMPROVE EXTERNAL
COLLABORATION
© 2013 FSG
FSG.ORG
EICC Can Evolve Its Vision to Focus on Creating Business and Social Value
EICC supports the development of a best practice value chain that other industries will want to replicate by:
Developing a common agenda across the entire supply chain
Driving measureable improvement in social and environmental issues in the electronics supply chain
Creating measurable economic value for businesses through sustained value chain investments
Vision for the EICC’s Strategic Direction
© 2013 FSG
FSG.ORG
Does This Strategic Direction Framework Capture EICC’s Key Areas of Activity Going Forward?
Update Code and hold members accountable
Provide structure & support for audits
Share audit results & improve efficiency
Support capacity building through tools & training
Assess internal data on emerging risks
Monitor external trends in issues
Engage stakeholders
Establish criteria for prioritization
Measurable improvements in S&E
conditions in the supply chain
Early warning system for emerging issues
Common baseline for S&E performance;
improvements at individual supplier levels
Solve Issues in the Value Chain
Learn from Emerging Risks
Establish Standards & Accountability
Areas of Activity Goals
Engage in differentiat-ed activities
Develop shared measures
Incorporate a platform for collaboration
Set a common agenda
© 2010 FSG17
FSG.ORG
• There is an opportunity to transform thinking and practice about the role of the corporation in society
• Shared value gives rise to far broader approaches to economic value creation
• Shared value thinking will drive the next wave of innovation, productivity enhancement, and economic growth
• Businesses acting as businesses, not as charitable givers, are arguably the most powerful force for addressing many of the pressing issues facing our society
• A transformation of business practice around shared value will give purpose to the corporation and legitimize business again
The Purpose of Business
The Electronic Industry Citizenship Coalition
Welcomes you to
Sponsored by
Exhibitors