Awakening Social Responsibility A Call to Action
By Rossella Derickson and Krista Henley with Cindy Campbell Heather Connors and Almaz Negash
20660 Stevens Creek Blvd. Suite 210 Cupertino, CA 95014
Awakening Social Responsibility: A Call to Action Guidebook for Global Citizens, Corporate and Non-Profit Organizations Copyright © 2007 by Rossella Derickson & Krista Henley All rights reserved. No part of this book shall be reproduced, stored in a retrieval system, or transmitted by any means electronic, mechanical, photocopying, recording, or otherwise without written permission from the publisher. No patent liability is assumed with respect to the use of the information contained herein. Although every precaution has been taken in the preparation of this book, the publisher and author(s) assume no responsibility for errors or omissions. Neither is any liability assumed for damages resulting from the use of the information contained herein. First Printing: October, 2007 Paperback ISBN: 1600050654 (978-1-60005-065-7) Place of Publication: Silicon Valley, California, USA Paperback Library of Congress Number: 2007937601 eBook ISBN: 1600050662 (978-1-60005-066-4)
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Praise for Awakening Social Responsibility "Organizations that provide meaning and service attract people who want to find meaning and deliver service. If these are the people you would like to attract, read this book!" Marshall Goldsmith - author of 'What Got You Here Won't Get You There', a New York Times best seller and Wall Street Journal #1 business book.
"The Social Responsibility of most of our institutions needs to be awakened, for it has been dozing on the drug of minimum standards for years. I hope this book will be an awakening; it has all the tools you need." Peter Block, Bestselling author of 'Flawless Consulting: A Guide to Getting Your Expertise Used' and 'Stewardship: Choosing Service Over Self-Interest'
"Environmental protection and economic prosperity can, must and shall go hand in hand. This book will guide you to find the protection / prosperity intersection in your company." Hunter Lovins, Co-Author, 'Natural Capitalism: Creating the Next Industrial Revolution'
Dedication This book is dedicated in gratitude to all the people, businesses, and organizations that are committed to create a sustainable world. We thank you.
Acknowledgements Special thanks go to Susan Collin-Marks and John Marks from the Search for Common Ground for their kind but direct push to step in to lead in this vitally important territory of social responsibility. Almaz Negash, Cindy Campbell and Heather Connors formed our interview and writing team for this project. We are grateful for their wisdom, creativity and support. They are much more than contributing authors, they are the inner circle which made this project possible. We thank our publisher Mitchell Levy for his support and encouragement to broaden our mission to bring wisdom to the workplace through this book. We appreciate beyond words our editor, Alis Valencia, for her guidance, writing skill, and knowledge in the area of social responsibility. We also acknowledge Kathryn Hall, whose many years as a top book publicist, gave us the insights needed to move this project forward. Finally, thank you to each individual highlighted in this book, for your purpose and passion, and for aligning with us to make a difference in how companies engage in Corporate Social Responsibility. Rossella Derickson and Krista Henley
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C o n t e n t s Preface Book Use
Preface How to Use this Book
Part I Perspectives on Social Responsibility . .5 Chapter 1
Silicon Valley Watcher Tom Foremski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Chapter 2
Forty Years of Corporate Social Responsibility James O'Toole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Chapter 3
Survey Trends Salvatore V. Falletta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Chapter 4
Raise the Bar Alis Valencia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Chapter 5
From Corporate Citizenship to Global Citizenship Dinesh Chandra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Part II Implementing Social Responsibility . . .35 Chapter 6
Heed the Challenges Kirk O. Hanson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Chapter 7
Consider Ethical Issues Marvin Brown . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Chapter 8
Assess the Opportunities Azure Kraxberger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Chapter 9
Exercise Influence B. Kim Barnes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Awakening Social Responsibility - A Call to Action
vii
Chapter 10
Integrate CSR into Business-As-Usual Pravir Malik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Part III Corporate CSR Initiatives . . . . . . . . . . . 69 Chapter 11
Authentic CSR Christine Arena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Chapter 12
Getting Started Sun Microsystems: Marcy Scott Lyn and Rich Lang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Chapter 13
Ethical Sourcing from Suppliers Gap Inc.: Dan Henkle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Chapter 14
Sustainable Business Cisco Systems, Inc.: Adrian Godfrey . . . . . . . . . . . . . . . . 83
Chapter 15
Investing in the Future Intel Corporation: Dave Stangis . . . . . . . . . . . . . . . . . . . . 87
Chapter 16
Pro Bono Services Cooley Godward Kronish LLP: Maureen Alger and Ashley Kanigher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Chapter 17
Responsible Business Processes Symantec Corporation: Cecily Joseph. . . . . . . . . . . . . . . . 97
Chapter 18
Empowered to Do the Right Thing Adobe Systems Inc.: Michelle Mann . . . . . . . . . . . . . . . 101
Part IV Ways to Take Action on Social Responsibility. . . . . . . . . . . . . . 105 Chapter 19
Become a Beacon of Sustainability Act Now: Adam Werbach . . . . . . . . . . . . . . . . . . . . . . . . 107
Chapter 20
Incorporate CSR from the Beginning Entrepreneurs Foundation: Sean Foote . . . . . . . . . . . . . . 111
Chapter 21
Recruit Immigrant Professionals Upwardly Global: Jane Leu . . . . . . . . . . . . . . . . . . . . . . . 115
viii
Contents
Chapter 22
Volunteer on Your Terms One Brick: Dave Shefferman . . . . . . . . . . . . . . . . . . . . . 119
Chapter 23
Contribute to Global Peace and Well-Being The Dalai Lama Foundation: Tony Hoeber. . . . . . . . . . . 123
Chapter 24
Good Capital: Invest in Social Enterprise Right Reality: David Batstone. . . . . . . . . . . . . . . . . . . . . 127
Chapter 25
Become an Internet Philanthropist Bring Light: Drew McManus . . . . . . . . . . . . . . . . . . . . . 131
Chapter 26
Engage in One-on-One Philanthropy Human Connexus Foundation: Cindy Campbell and Heather Connors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Chapter 27
Reuse and Recycle Surplus Items iReuse LLC: Ken Kurtzig . . . . . . . . . . . . . . . . . . . . . . . . 135
Chapter 28
Promote Economic Independence Kiva Microfunds: Premal Shah . . . . . . . . . . . . . . . . . . . . 139
Chapter 29
Help Nonprofits with their Training Needs Community Outreach Program: Kris Schaffer . . . . . . . . 143
Chapter 30
Support Collaborative Solutions to Conflict Search for Common Ground: Jane Shaw . . . . . . . . . . . . 145
Chapter 31
Find Core Competitive Advantage ATDynamics, Inc.: Andrew Smith . . . . . . . . . . . . . . . . . 149
Chapter 32
Empower Women Entwine Global: Almaz Negash . . . . . . . . . . . . . . . . . . . 153
Chapter 33
Raises Living Standards Village Enterprise Fund: Nicholas Imparato . . . . . . . . . . 155
Awakening Social Responsibility - A Call to Action
ix
Part V The Human Resources Leadership Role in CSR . . . . . . . . . . . . . . . . . . . . . 159 Chapter 34
Corporate Social Responsibility: HR's Leadership Role Society for Human Resource Management (SHRM): Nancy Lockwood. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Part VI Resources . . . . . . . . . . . . . . . . . . . . . . 183 Chapter 35
x
CSR Global Resource Links
Authors
About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . 189
Books
Other Happy About Books . . . . . . . . . . . . . . . . . . . 193
Contents
P r e f a c e
Preface
We live in an unprecedented time where there are remarkable changes in our society, economy, and environment. We can no longer avoid the impact that individuals, corporations, and organizations have in a community. What can we do to help? What is our responsibility? There are pivotal times in our lives when we are called to action; when we are called to make a difference. Our team of five committed professional women answered the call to make a difference by interviewing experts in social responsibility, and bringing the wisdom back to you, our readers. The result is a quick guidebook for global citizens who are interested in creating socially responsible programs but have little or no idea where to begin within their own companies. Our team makes no effort to be comprehensive but instead offers a glimpse of what is possible. Our intention is to help people get started on the pathway to corporate social responsibility (CSR). The concept of CSR is not new, just of greater interest now that media scrutiny, shareholder concerns, and public opinions have heightened the value placed on socially and environmentally
Awakening Social Responsibility - A Call to Action
1
beneficial business practices. The benefits, however, will be greater when initiatives are well integrated with business strategy and, as a result, companies “do well while doing good.” By just picking up this book, you have joined us as a change agent to support the evolution of a more sustainable world. As you read, we hope you are inspired by each contributor to the book. We trust you will gain insights on how to leave a positive global footprint, and through CSR programs, bring meaning into the workplace. Please join us by awakening members of your network to the importance of CSR, and together, answer the call to take action! Rossella Derickson, Krista Henley, Almaz Negash, Cindy Campbell and Heather Connors
2
Preface
B o o k
U s e
How to Use this Book
The book has six sections; each gives the reader flexibility to choose what is most important to get a CSR program started, or to enhance an existing program. The guidebook includes interviews with industry leaders and CSR experts to help you understand the business case for transforming your organization and to illustrate issues that may pose challenges for implementation. There is also a compilation of resources including non-profit organizations and other socially responsible business options for you and your company to utilize while creating your own programs. Perspectives on CSR: In this section we present the observations of experienced professionals: what CSR means, the good and the bad, the trends, and the possibilities. Implementing CSR: The challenge of introducing change is heightened when a company is serious about CSR. The chapters in this section introduce some of the issues companies need to consider as they move forward with a CSR
Awakening Social Responsibility - A Call to Action
3
program: leadership, clarity of purpose, ethical concerns, procedural steps, and strategic integration. Corporate CSR Initiatives: We provide inside views of several corporate CSR programs to illustrate the sort of initiatives underway. Our examples also show how CSR can be incorporated throughout an organization, and reveal issues that can pose special challenges. Opportunities to Practice CSR: An ever-increasing number of nonprofit organizations facilitate CSR by providing opportunities for companies—and their employees—to contribute resources, time, and expertise. There are also companies formed expressly to meet social, economic and environmental needs. The companies model CSR-driven business strategies and also provide business opportunities to invest in CSR. In this section we profile a diverse array of organizations that facilitate CSR. The Human Resources Leadership Role in CSR: The HR professional can gain clarity of purpose and have the ability to influence their organization's culture by embracing the new and evolving CSR role addressed in this section. Resources: Opportunities to learn more about CSR abound. We list organizations and periodicals, all readily accessible on the Internet, dedicated to advancing socially and environmentally responsible business practices. 15% of the profits from this book will be donated to charity.
4
How to Use this Book
Part I Perspectives on Social Responsibility •
Silicon Valley Watcher—Tom Foremski
•
Forty Years of Corporate Social Responsibility—James O'Toole
•
Survey Trends—Salvatore V. Falletta
•
Raise the Bar—Alis Valencia
•
From Corporate Citizenship to Global Citizenship—Dinesh Chandra
C h a p t e r
1
Silicon Valley Watcher Tom Foremski
Tom Foremski is a former news reporter and columnist for the Financial Times. He now writes about the business and culture of Silicon Valley on his web site, The Silicon Valley Watcher (www.siliconvalleywatcher.com). We asked Tom for his views on corporate social responsibility. What are your thoughts about Corporate Social Responsibility? CSR is a topic that is about to explode. Google started igniting peoples' thinking about CSR with an article in Red Herring. In fact, the Google Foundation was almost the reason Google existed. It was inspiring. That kind of vision statement is vital here in Silicon Valley. “Google.org aspires to use the power of information to help people better their lives. We are an experiment in active philanthropy. In addition to financial resources, we are fortunate to be able to engage Google's entire family of people and partners, information technologies and other resources to address three major growing global problems: climate change, global public health, and economic development and poverty.”
Awakening Social Responsibility - A Call to Action
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People really want to change the world; they are here to make a difference. I see it time and time again with new start-ups. After several successes, the entrepreneurs want to get back in and try again, to continue to innovate. It's not about changing the world with software or chips. There has to be a place for us to give back to our societies and to our communities to make it all worthwhile. People want to be a part of a group that is doing fantastic things. The organization has to be a good corporate, community and world citizen. All companies need to have all of these elements, and you can't just give lip service and say you are doing it; leadership has to be involved. Why might Silicon Valley be the new frontier for social responsibility? Silicon Valley is a melting pot. The competition here is for the best in the world, and it's not money that competes for the best in the world. What attracts that person is more than money and stock options - it is being part of an organization that is much more than that. To make real progress, the venture capital community needs to be more involved in CSR. It is time for VCs to have CSR in their business plans. That would really help things along. Where would you start? Silicon Valley has to show social commitment in our own neighborhood. A local commitment is not evident. Schools are the fabric of a community and society, and they should be the first focus of CSR. The public schools in Silicon Valley are terrible. They should be showcases. Within a few miles of each school are resources, materials, and money. There is no excuse for such a bad school system. As a community, we need to get involved and show that we are involved locally. Some of the charity needs to start at home. One simple solution is to have the best and brightest donate time to schools. We could leverage the brilliant minds to inspire our youth.
8
Chapter 1: Silicon Valley Watcher
Silicon Valley entrepreneurs know how to build business. Why not have a social mission and be extremely profitable? One should be rewarded for doing well in the community. People shouldn't have to take a lower wage to do good work. Silicon Valley can set an example and stop the old way of thinking about good work, which is “You love what you do so we can pay you less.” The new model might be “Love your work, do the right thing, and be financially rewarded, too.” Tom Foremski 1900 Eddy Street #6 San Francisco, CA 94115 www.siliconvalleywatcher.com
[email protected]
Awakening Social Responsibility - A Call to Action
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10
Chapter 1: Silicon Valley Watcher
C h a p t e r
2
Forty Years of Corporate Social Responsibility James O'Toole
James O'Toole is The Daniels Distinguished Professor of Business Ethics at Denver University's Daniels School of Business. He has conducted research and written on leadership, ethics, corporate culture, and philosophy. Creating the Good Life, the New American Workplace, the Executive's Compass, and Leading Change are among his 18 books. O'Toole has studied what companies have done in the area of corporate social responsibility for over 40 years. In spite of recent press that puts California and the Silicon Valley at the forefront of what looks like a new movement, O'Toole considers many in the Human Resources community to be latecomers to CSR. Late or not, he seems hopeful that a tipping point of sorts might change the way Human Resources engages and commits to take action in Corporate Social Responsibility. Can you briefly describe the history of corporate social responsibility? CSR started in the 1960s. Companies as backward as GM, had CSR programs in the early 1970s. There was a tremendous amount of pioneering effort in this arena in the 1970s and
Awakening Social Responsibility - A Call to Action
11
1980s. Atlantic Richfield, Dayton Hudson, and Levi Straus put large staffs and big contributions into CSR with programs like the 10% Club, 5% Club, and 1% Club. They took innovative initiatives with regard to environmental action. Xerox gave sabbaticals to employees to donate their time (up to a year) working for local nonprofits. Hence the new interest in CSR today is almost like a rediscovery of the wheel. Put positively, there is lots of experience to draw on, even right here in Silicon Valley. In the early 1980s at Stanford, the Business Enterprise Trust, headed by Kirk Hanson (who now directs the Markkula Center at Santa Clara University) encouraged companies all over the country to engage in CSR and documented what they had done so others could learn from their experiences. What company do you admire for CSR practices? Some companies do good by doing well. For example, Patagonia does good in the Third World, which helps them to recruit top-notch people here in the United States. CSR is built into their culture - part of everything they do and stand for. How have companies with longtime investments in CSR done? Sometimes companies try to do the right thing with CSR programs, but then they back off. I did a study in 1980 of ten companies that were leaders in CSR at the time. Of the ten, only two are still leaders. The others got out of the business. Levi Strauss in 1980 was number 1. Their investment went beyond philanthropy to how they treated all employees and how they acted in the community. Their blue collar employees were a part of decisions regarding where to put their charitable donations, and those employees also put in their own time to do community service at the agencies that received company funds. Because Levi Straus was so badly mismanaged, they no longer have any blue collar workers in the United States, so the employee-led programs have all disappeared. Now there is just senior-level engagement in philanthropy.
12
Chapter 2: Forty Years of Corporate Social Responsibility
What is the prime social responsibility of every private company? Their prime responsibility is to their employees and the lives of those who work for them. This is especially true in Silicon Valley where business activities don't have a huge impact on the environment. The key ethical question that needs to be asked in high-tech industries is: How are our people treated? To have a first rate CSR program in the Valley a company must start with its own people: their opportunities for advancement, the impact of working conditions on the children of employees, and the quality of health care. All this not just for U.S. based workers but for the company's workers in the developing world as well, including their contractors and subcontractors. Does philanthropy create dependence? What is the impact if companies are not able to continue to support nonprofits? Bank of America was a generous contributor to arts and community programs in San Francisco. But when the company moved its headquarters to North Carolina, nonprofits in the Bay Area stopped getting those philanthropic donations, and they suffered for many years. Another example is Atlantic Richfield, a company that for many years supported California nonprofits. When the company started to cut back on its presence in California, they also cut off funding to local nonprofits. Companies need to be aware that they may be creating dependencies that they are unprepared to maintain. Where should companies invest in CSR? The Gates Foundation is an admirable example of virtuous giving. Bill and Melinda Gates have created a model program that is separate from Microsoft. The Gates give their money and Warren Buffet's personal wealth away, which frees them from corporate self-serving. A few years ago, Bill Gates sat back and considered who the neediest people in the world were. This was a different frame of mind from the one he had when he was thinking with his Microsoft hat on: When he first started down the CSR path, he was going to give people computers. What he later discovered is that if you make less than $1 a day, you need water, food, and medicine; and computers can come later.
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13
Unfortunately, most companies make decisions about where to invest their CSR dollars based on who makes the most noise in the community and, even more often, on the CEO's pet interests. The decisions are based on what is convenient, not on where the company can have the greatest impact on the neediest people. In Workplace Visions, the 2007 SHRM report, it is clear that CSR will be a driver and new role for HR. What are your thoughts? CSR is a way to gain competitive advantage for recruiting. If you are a responsible citizen you will want go to work for a responsible company. So, which company will a good candidate choose: Cisco or Oracle? The decision will often be made based on a company's reputation for social responsibility. At Patagonia, 200 to 500 qualified candidates apply for every job opening, so they can pick and choose the prime employees. Companies with good CSR records also seem to have lower employee turnover rates. O'Toole closed with a message about CSR to HR professionals. Everyone else is doing it, so you better get on board. If you have not started, you are already way behind. It is no honor to be 35 years behind GM! www.JamesOToole.com
[email protected]
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Chapter 2: Forty Years of Corporate Social Responsibility
C h a p t e r
3
Survey Trends Salvatore V. Falletta
Dr. Salvatore Falletta is President and CEO of Leadersphere, Inc. — a workforce intelligence consulting firm that specializes in web-based surveys & assessments. Prior to founding Leadersphere, Inc., he served as VP, Global HR and Chief People Officer for a Fortune 1000 company based in Silicon Valley and held management and consulting positions at Nortel Networks, Alltel, Intel, SAP AG, and Sun Microsystems. The Society for Human Resources Management (www.shrm.org) recently concluded a comprehensive study in the United States and abroad to determine what corporate social responsibility means to HR professionals and how it is implemented.1 The study highlights the importance of developing CSR strategies and the role of the HR professional in driving specific policies and practices. For example, respondents in the United States as well as other countries reported that HR had an active role in implementing CSR strategy within their respective organizations. Additionally, HR 1. A. Benedict, Corporate Social Responsibility: United States, Australia, India, China, Canada, Mexico, and Brazil - A Pilot Study. (Alexandria, VA: Society for Human Resource Management, 2007).
Awakening Social Responsibility - A Call to Action
15
professionals reported engaging or involving employees in CSR programs by recognizing them for participating in volunteer programs, encouraging senior management to participate in volunteer programs, providing company-sponsored volunteer events, and encouraging employees to lead volunteer programs, to name a few. To learn about CSR perspectives and practices in Silicon Valley, the South Bay Organizational Development Network (www.SBODN.com) asked Leadersphere to conduct a survey of SBODN members and their extended professional networks. Findings Of the 63 HR, training and development, and OD professionals who participated in the survey, 63.5% reported being active participants in CSR,while 17.5% were considering or planning to take action in the future. The remaining 19% had no plans to take action in CSR. Table 1:
Participation in CSR (Overall)
My company/organization is:
Frequency
Percent
An active participant in CSR
40
63.5%
Considering or planning to take action in CSR
11
17.5%
Not considering or planning to take action in CSR
12
19.1%
n=63 The majority of respondents (83%) were from for-profit organizations; the remainder represented nonprofit, public sector, and higher education organizations. As anticipated, survey participants from large organizations (50,000+ employees) reported being more active in CSR practices and activities than smaller organizations. Internal employees reported themselves as being more active in CSR than independent or principal consultants, perhaps due to larger organizations having more CSR programs and resources available to employees.
16
Chapter 3: Survey Trends
Table 2:
Participation in CSR (by Organizational Size)
My company/ organization is:
100 or less (n=19
101 1000 (n=11)
5001 - 10001 10000 50000 (n=4) (n=8)
50001 + (n=8)
An active participant in CSR
61.6% 80.0% 60.0% 80.0% 60.0%
100.0%
Considering or planning to take action in CSR
19.2%
20.0%
0.0%
Not considering or not planning to take action in CSR
19.2% 20.0% 20.0% 20.0% 20.0%
0.0%
0.0%
1001 5000 (n=13)
20.0%
0.0%
Table 3: Participation in CSR (by Internal Employee vs. External Consultant) My company/organization is:
An employee of an organization (n=46)
An independent consultant/principal for a consulting firm (n=17)
An active participant in CSR
69.6%
47.1%
Considering or planning to take action in CSR
13.0%
29.4%
Not considering or not planning to take action in CSR
17.4%
23.5%
Awakening Social Responsibility - A Call to Action
17
The results show a wide range of CSR practices being performed in organizations. The three most frequently reported practices are to: 1. Support the community through company sponsored volunteer projects, 2. Donate or collect money for charities, and 3. Consider the overall social impact of business decisions.
Table 4:
Types of CSR Practices (Overall) Frequency Percent
Support the community through company sponsored volunteer projects
47
74.6%
Donate/collect money for charities (e.g., Red Cross, United Way)
40
63.5%
Consider the overall social impact of business decisions
35
55.6%
Company matching for employee contributions/donations (e.g., dollar for dollar matching or some type of percentage% match)
31
49.2%
Donate/collect money for natural disasters (e.g., South Asian tsunami, Hurricane Katrina, earthquakes, etc.)
30
47.6%
Monitor the impact of business on the environment/eco-system
26
41.3%
Partner with woman- or minority-owned suppliers/companies
24
38.1%
Partner with environmentally-friendly suppliers/companies
23
36.5%
Cause marketing/branding (i.e., aligning product or company marketing with a particular social cause)
13
20.6%
18
Chapter 3: Survey Trends
Table 4:
Types of CSR Practices (Overall) Frequency Percent
Support global initiatives in developing countries (e.g., building water and/or sanitation systems)
11
17.5%
Monitor global fair labor standards/practices (e.g., child labor regulations, working conditions)
10
15.9%
Track sources of global raw materials/suppliers
8
12.7%
Other
7
11.1%
Note: Types of CSR Practices were adapted from 2007 SHRM CSR Report.1 1. Ibid.
Smaller organizations (100 or fewer employees) placed greater emphasis on partnering with environmentally-friendly suppliers or companies, whereas larger companies (1001 or more employees) more often used company matching programs for the charitable donations of employees. Other types of CSR practices reported by participants included: • Promoting “green or eco” related initiatives to employees. • Helping local communities with urban planning projects for positive community relations. • Paid leave or paid time off for employees who perform volunteer work. • Assisting other companies that are planning CSR activities. • Developing eco-friendly or energy efficient products and services When participants were asked what one thing they would take action on related to CSR, the top three responses were to:
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• Drive “eco/green/environmental” awareness and meaningful practices within their organization, their community, and society at large. • Make CSR an ongoing practice in their organization rather than a single event or campaign. • Support employee volunteer programs by, for example, providing paid leave or time off or organizing volunteer programs in collaboration with groups and organizations at local, national, and global levels. Approximately 43% of the respondents reported that their organization's President/CEO had the ultimate responsibility for creating CSR strategy. This is consistent with the results found in the SHRM study mentioned earlier. Another 19% reported that the Chief CSR/ Corporate Citizen Officer are responsible for strategy development. 22% of participants did not respond. Table 5:
Primary Responsibility for CSR Strategy Creation Frequency Percent
President/CEO
27
42.9%
Chief CSR/Corporate Citizen Officer
12
19.1%
Chief HR Officer
7
11.1%
Chief Ethics Officer
2
3.2%
Chief Marketing Officer
1
1.6%
Chief Compliance Officer
0
0.0%
Chief Public Relations Officer
0
0.0%
Chief Financial Officer
0
0.0%
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Chapter 3: Survey Trends
Responsibility for implementation lies mostly with the President/CEO (25%) or HR (19%), a finding consistent with the SHRM study. Table 6: Primary Responsibility for CSR Strategy Implementation Frequency
Percent
President/CEO
16
25.4%
Chief HR Officer
12
19.1%
Chief CSR/Corporate Citizen Officer
9
14.3%
Chief Public Relations Officer
6
9.5%
Chief Compliance Officer
2
3.2%
Chief Ethics Officer
2
3.2%
Chief Marketing Officer
1
1.6%
Chief Financial Officer
0
0.00%
Notably, many respondents commented that CSR is everyone's business and that responsibility should be apportioned across the executive leadership team. Similarly, participants in the SHRM study reported that employee task forces or committees and senior management were largely responsible for implementing CSR strategies. Nonetheless, organizations often appoint or designate a primary leader to drive CSR policies and practices so that there is a single point of ownership and accountability. When participants were asked what role HR plays or should play in CSR at their organization, the following themes emerged: • HR should influence CSR strategy and participate in its implementation. • HR supports or should support the CEO on CSR policies and practices (fair labor practices, for instance). • HR should coordinate CSR-related events and activities (for example, volunteer programs or donations to charitable organizations).
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• HR instills or should instill underlying cultural values for CSR (for example, include “eco-friendly” or “environmental stewardship” as part of the organizational/company core values) and ethical behavior (for example, serve as a CSR champion and drive CSR and ethics training). • HR, training and development, and OD are or should be working synergistically on CSR implementation. An Appraisal The CSR practices most frequently adopted in Silicon Valley—company-sponsored volunteer projects, contributions to charities, and social impact as a new variable in business decisions—represent a traditional view of CSR in that they emphasize philanthropic activities. The organizations surveyed by SHRM were no different. Although volunteer programs and planned giving are noble practices, and considering that the overall social impact of business decisions is promising, organizations must push the proverbial envelope with respect to ensuring that CSR is an integral part of the overall business strategy. More importantly, organizations must do a better job of monitoring the impact of business on the environment and measure their footprint on society at large as well as the environment. Seen in this light, it is encouraging that driving “eco/green/environmental” awareness and meaningful practices was the number one theme that emerged when respondents to the SBODN survey were asked to identify the one thing they would take action on related to CSR. Cutting-edge organizations will be able to establish an “eco-advantage” by using an environmental strategy to innovate, create value, and build competitive advantage.2 Dr. Salvatore V. Falletta, GPHR, President & CEO 888-244-1594 www.Leadershpere.com
[email protected] 2. D. C. Esty and A. S. Winston, Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value, and Build Competitive Advantage. (New Haven, CT: Yale University Press, 2007).
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C h a p t e r
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Raise the Bar Alis Valencia
Corporate Social Responsibility (CSR) has entered the mainstream. Once pursued by companies at the fringes of the corporate world, it now receives the attention of executives worldwide and is viewed by the public as an important dimension of business practice. Look closely, and you can find substantive contributions designed to meet an array of important social and environmental problems. Major challenges remain, however, if business is to realize the full potential of CSR. From a business perspective, CSR is rarely integrated with corporate strategy. From a social and environmental perspective, CSR serves various needs, but none wholly. In their December 2006 Harvard Business Review article, Michael Porter and Mark Kramer point out the rather haphazard nature of CSR to date and describe how companies can make CSR an integral part of business: They can meet social and environmental needs with new products and services; model social responsibility through their business operations; and contribute money and expertise to society in ways that also benefit the business.
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These approaches seem eminently sensible. To approach CSR from a strategic, income-producing orientation reduces the role that personal whim or bias may play and keeps the focus on business. To model social responsibility is another plus, a demonstration of walking the talk; and to invest in the development of social and economic infrastructure so that company needs are met has multiple benefits. A closer look, however, reveals a fundamental conflict between the imperative to maximize profits and CSR, expressed as “to take from society with one hand and give back (less) with the other.” Wal-Mart, for example, even though late to climb on the CSR bandwagon, exemplifies the mixed signals that characterize corporate claims of social and environmental responsibility: The company has committed to reducing energy use and packaging, to recycling plastic, and to selling organic foods and buying organic cotton, but by contrast, the company continues its strategy to minimize labor costs through low wages, part-time jobs, suppliers' use of sweatshop labor, a flexible staffing program that leaves employees with unpredictable work hours, and a health plan used by fewer than 50% of qualified employees. Similarly, there is no question that Nestlé, Unilever, Philips Electronics, and other corporations contribute significantly to developing social and economic infrastructure. In doing so, they fill a role traditionally held by governments. Here in the United States, that government role has been limited by lack of sufficient public funds, a circumstance due in part to corporate efforts to gain tax relief and subsidies, pursue strategies to minimize taxable income, and negotiate reduced fines for illegal acts. A genuine commitment to CSR requires a resolution of such contradictions. Corporate leaders can do this if they pursue integrity. When a company strives to have all of its practices be consistent with one another and be designed to avoid harming society or the environment, it is pursuing integrity. When it takes responsibility for removing the harms it has caused and meets or exceeds regulatory standards, it is pursuing integrity. When it responds to a changing environment by aggressively seeking new business opportunities instead of trying to hold on to what it has, it is pursing integrity. When it considers employees a valuable asset and treats them accordingly, it is pursuing integrity.
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Chapter 4: Raise the Bar
When a company pursues integrity, it increases its likelihood of continued success. Many companies use their accounting of CSR practices to pat themselves on the back for doing what they should be doing anyway in response to changing social and environmental circumstances. Why not take a vow of integrity and lead the institution of business away from profit maximization and toward a genuine practice of doing well by doing good? Alis Valencia, Editor and Author Editor: Consulting to Management (C2M) Editor: At Work: Creating a More Enlightened World of Business & Work
[email protected]
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C h a p t e r
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From Corporate Citizenship to Global Citizenship Dinesh Chandra
Dinesh Chandra is founder of Globalcitizenship Inc. He has been an advisor to leading corporations, blending Eastern and Western values, on strategic business issues and has worked in 16 different countries. For many organizations, the focus of recent years has been on Corporate Citizenship and in performing well against a balanced scorecard. Triple score cards, as developed by the Global Reporting Initiative, measure success on economic, social and environmental areas. For most organizations the social domain has been the local community, city, or nation in which they operate. The same is generally true for environmental concerns. But the time has come for corporations to stretch their thinking further and move beyond Corporate Citizenship to the broader arena of Global Citizenship, thereby ensuring not only the success of the corporation, but also the success of the global community in which they operate. In her book Finding Our Way: Leadership for an Uncertain Time, Meg Wheatley states: “In recent years, we have been learning how the lives of those far away affect our own and how we affect theirs. We are beginning to realize that to live
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peacefully together on this planet, we need to be in new relationships especially with those far distant from us. When my children were small I had a refrigerator magnet that read 'if mama ain't happy, ain't nobody happy.' Perhaps that was my children's first lesson in systems thinking. We adults are learning this too. If others do not feel safe, we are not safe. If others are struggling, we experience the consequence of their struggle. If others are poor, no matter how wealthy we are, we experience the consequence of their impoverishment.” Systems thinking, as described by Wheatley, is essential for understanding the requirements for being a Global Citizen. As others and I have contemplated what it means to be a Global Citizen for the past decade, I would offer the following simple definition. Global Citizens are those who understand connectedness, have open minds, celebrate diversity and care for the whole. The notion of global citizenship expands our scope of concern from a singular focus on corporate success to a broader focus on the local community and the larger environment, and finally to full awareness of the need for global well-being. This broader awareness allows us to see global connectedness. Regardless of where we live or what our socio-economic status is, when there is damage to the environment, whether in the form of acid rain or ozone holes, it will eventually impact all of us. In the West, we have created enormous boundaries, ranging from organizational charts, to ethnicity, to nations, thus obscuring our inter connectedness. Although we appear to understand global issues, our actions are often more divisive than open. Hence, we hear an outcry against outsourcing as jobs are moving away from our nation,
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Chapter 5: From Corporate Citizenship to Global Citizenship
something that violates our sense of justice. However, we do not have the same reaction when jobs are relocated from Silicon Valley to San Diego or Texas, for economic or other reasons. Why? Primary Focus
Mindset
Examples
Global Citizenship
Global Well-being
HP, Understand Cystic, connectedness, Interface Open mind, Care for the whole, Celebrate diversity
Environmental Initiatives
Environment
Ecological balance, Initiatives involving employees, Organic organizations
Tom's of Maine, Body Shop
Social Initiatives
Community
Care for the community, Projects involving employees
Sara Lee
Corporate Citizenship
Economic/profit
Microsoft Mechanistic organization, Meet minimum legal requirements, Philanthropic donations generally without employees' involvement
The reason is that we have a sense of connection within our nation. Such a connection is lacking when we look beyond our national borders. Global mindset requires a shift to a broader connection where each one of us sees our planet as an organic entity, in which all parts are connected and interdependent. While there is intellectual acceptance of the idea of our connection to something larger, we find it difficult to implement, especially when we are losing jobs in our community. So why bother?
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The shift toward Global Citizenship will enable us to look at the world differently, and, in the long run, will create a more just world that benefits all. Such a world will provide fewer reasons to give birth to militants in all fields and in all forms. There is a direct correlation between the disparity in incomes and the crime rate in communities. Global citizenship will enable us to bridge the gap between the haves and the have-nots and will result in a reduction of criminal mindsets, which threaten the security of those with financial means. However, it is a larger human issue than simply finance or security. Our bodies, much like the Earth, are interconnected systems. With a health-oriented mindset, we do not punish or hurt any part of our body to satisfy another part. We strive to have balance. We might periodically slip and overindulge to satisfy our tongue, with disregard for our stomach, liver, or heart. But, this choice is usually followed by regret. Similarly, when we think of Earth as one organic system, our choices and our reactions to issues may change. For example, with outsourcing we might open our thinking and feel the pain of the vast majority of people on this planet who are surviving on meager wages. We might see their desire to improve their lot as no different from our desire to do the same. With this new mindset, we may be open to collaborate beyond limited self-interest toward a more fair global trading system. Can we imagine a world where this is possible? Even though in a free world, products/services can be generated anywhere; it is desirable to have it value-based. Given the superior value of Swiss watches, Switzerland may be one of the leaders in this field just as Japan may be considered a leader in electronics. From a global perspective, we can strive for a level playing field and a consistent set of ground rules for all players e.g. no child labor and no environmental pollution. This is not an easy task. However, there are several world forums that have taken on this challenge. Is it possible for us to agree on global environmental regulations that prevent corporations from finding the country with the weakest environmental regulations so they can pollute there? If corporations continue to find 'other places' where they can pollute, it is likely that the toxicity will come back to haunt us in the form of a tsunami or acid rain. We are beginning to understand the cost of not paying attention to the Earth and the problems inherent in our pathological compulsion to maximize profits at any cost. So what can we do?
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Chapter 5: From Corporate Citizenship to Global Citizenship
Responsible corporations are taking the lead on three key initiatives. Even though they can be taken simultaneously, some organizations have followed a three-step process. The first step is to enter the Social Initiatives phase and create more awareness, encouraging employees to give of their time to the local community. Volunteers working with Habitat for Humanity and similar organizations are a good example of this level of local social awareness. We need many more corporations to get involved in the social good of the community that they are serving e.g. efforts to ensure that suppliers in other countries are paying their employees a living wage represents a level of global social awareness. The second step might be toward environmental awareness and driving Environmental Initiatives. It is a natural step toward a global mindset. Ray Anderson of Interface, Inc. has developed a precise set of metrics to describe what his company gives and takes from the environment. They have used these metrics to make a serious commitment to create a balance. For them, “Sustainability is a process which enables all people to realize their potential and to improve their quality of life in ways that simultaneously protect and enhance the Earth's life support system.” Working on environmental issues enables us to realize our connectedness on a global level and prepares for the third step: the move toward a Global Citizen mindset. Our ability to operate as a Global Citizen takes time. It begins with small steps. But, even small steps require a fundamental change in our thinking and intentions. What if we truly felt that our intention was to care for the whole rather than just family or community or nation? That one declaration of intention could have a profound impact on our planet. Our words and actions might change over time, and soon our actions might align with our intentions. The work of a leader is to align intention and words with action. We would stop using words like “offshore” and begin using “other nations.” Symbolism and language are powerful means to communicate openness and acceptance of the ideas of others and global oneness. Language can play an important role in gaining understanding of each community's part in caring for the whole. With this awareness we start taking steps to bring prosperity to the inhabitants of our planet in a systematic manner. We begin by understanding how we are contributing to global problems. For
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example, by operating armament factories and selling F16s, we contribute to sustained conflict in countries like India and Pakistan. Perhaps we might channel these resources in a different direction such as providing food, education and water for millions who sleep on pavements night after night on empty stomachs and without access to drinking water. Instead of rationalizing that if we don't supply armaments someone else will, perhaps we can look within ourselves for more of the creative genius that established the Peace Corps. Perhaps we can shift our thinking and see abundance and not a zero-sum world. Can we turn the pyramid at the United Nations upside down, showing the money spent on destruction versus construction? We know that nations with a narrow, self-serving role have failed miserably at this challenge. But, perhaps global organizations can play a crucial role in creating this new mindset. After all, some global organizations are far more economically-powerful than many nations. In his book The Corporation: The Pathological Pursuit of Profit and Power, Joel Bakan points out that legally a corporation is treated in a fashion similar to an individual. However, corporations exist without the soul or conscience of an individual. As a legal entity, a corporation has as its edict a singular goal - to create profits for its shareholders, without legal or moral obligation to the welfare of workers or the environment, or the well-being of society as a whole. Bakan clearly details the way corporations cut corners or use creative accounting and other such means to maximize profits. Competition and self-interest dominate while other aspects of human nature, such as creativity, empathy, and the ability to live in harmony with the earth, are suppressed or even ridiculed. Bakan believes that this ideological order cannot last and that the mechanistic corporate rule must be challenged to bring balance and revive the values of democracy, social justice, equality, and compassion. Can we find an alternate model? I believe that the alternative is to create the organic organization, rooted in deep purpose, meaning and collective conscience or spirit. What is the acid test indicating that an organization is an organic organization? Answers to the following questions may show us: Who has the ownership of structure, plans and measures? A select few, or is it shared by all concerned? What is the quality of the energy unleashed by the employees' creativity and sense of belonging? Do
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Chapter 5: From Corporate Citizenship to Global Citizenship
people believe that they are making a difference in the world, or do they see themselves as part of a 24x7, workaholic, competitive machine, maximizing ROI for shareholders? How do we transform a mechanistic organization into an organic living system? We do so by empowering individuals, helping them to connect with their creative selves and to express their inner purpose in their workplaces. As we do this, we sow the seeds of organic growth and soulful living. The synergy begins when these individuals connect with others who share their passion, and create organizations with deeper roots and a global perspective. There are numerous examples of such organizations including the following: The Body Shop, Tom's of Maine, W. L. Gore & Associates and Semco (based in Brazil). In summary, understanding the crucial role of a global organization enables us to move toward caring for the whole. Working for social and environmental issues moves us further, and as we adopt a mindset of Global Citizenship, we are more open to learning about other people and their cultures, feeling neither superior nor inferior to them. We achieve a sense of connectedness with all. Imagine a world where diversity is welcome, where open, frank dialogue is possible on all issues and where we are connected by values of empathy, compassion and caring for the whole instead of narrow and divisive national or corporate interests. We can envision a world with immense possibilities and opportunities for all. Welcome to the World of Global Citizenship. Dinesh Chandra
www.GlobalCitizenship.com www.GlobalOpenSpace.org This article was first published in www.kosmosjournal.org
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Chapter 5: From Corporate Citizenship to Global Citizenship
Part II Implementing Social Responsibility •
Heed the Challenges—Kirk Hanson
•
Consider Ethical Issues—Marvin Brown
•
Assess the Opportunities—Azure Kraxberger
•
Exercise Influence—Kim Barnes
•
Integrate CSR into Business As Usual—Pravir Malik
C h a p t e r
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Heed the Challenges Kirk O. Hanson
Multinational corporations must contend not only with the scale and complexity of their operations but also with public scrutiny that can expose poor labor conditions or poor behavior of any kind, anywhere in the world. To gain perspective on the challenges multinational corporations face in implementing CSR, we posed questions for Kirk O. Hanson, executive director of the Markkula Center for Applied Ethics at Santa Clara University and University Professor of Organizations and Society. He also is an emeritus faculty member of Stanford University's School of Business and has served on the boards of such foundations as The Business Enterprise Trust and the Social Venture Network. What challenges do multinational corporations face when implementing CSR? “Companies first need to assess why they want to implement CSR,” said Hanson. What is their rationale for implementing CSR? Are they implementing CSR based on the belief that it will help their long-term profitability or is it to fend off criticism and help the reputation of their corporations? Companies that implement CSR
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simply to boost their reputations generally do not expend the amount of time and resources needed to make CSR a truly meaningful part of their organizations. Hanson views measurement as the biggest challenge of CSR. How do you measure the benefit to a company from its CSR program? Costs avoided from the implementation of CSR are hard to measure. For example, BP cut its maintenance and safety investment in the late 1990s and early 2000s. There was an explosion at one of its Texas refineries that resulted in employee deaths. This incident hurt both the company's finances and brand. A similar situation occurred when BP's negligence in maintaining its Alaskan pipeline resulted in costly repairs and significant damage to its reputation. “It is now possible to calculate that poor maintenance cost lives and tens of millions of dollars,” said Hanson, “but if BP had invested $20 million more in maintenance how would we know the cost avoided?” “Companies should be asking other questions as well,” said Hanson. For example, how do you measure the damage in value to a firm from sweat shop allegations? How do you measure greater firm productivity resulting from treating your employees better? What are the preventive measures that companies can take to make sure that they are not involved directly or indirectly in unethical businesses in often distant places? Hanson advocates that companies implement CSR in order to create strong and sustainable management practices and not in response to public pressure. He believes that CSR is profitable in the long term if it is fully integrated. However, “successful CSR integration will happen only if the CEO of the corporation believes in it.” The CSR program needs to become a part of the corporate culture, and the development of a CSR action plan should be the responsibility of an executive who can coordinate its implementation across the entire company. A few leading companies are appointing a “Chief Responsibility Officer” who serves as a member of the top leadership team and can influence all corporate decisions. This kind of powerful position helps make CSR implementation uniform across all divisions. In order for CSR programs to be truly integrated, noted Hanson, companies should make them a part of their annual performance evaluation. Such a requirement helps companies measure the impact
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Chapter 6: Heed the Challenges
of their corporate social reasonability endeavors. Companies can set a dollar amount to be saved; for example, “Next year, we will save $1,000,000 by asking all employees to shut their computers off before leaving the office.” Or they can ask department heads to bring their operations up to a certifiable standard; for example, the environmental certification standard (ISO 14000). What are the global challenges of CSR for multinational corporations? Rightly, there is a lot of pressure for multinational corporations simply to comply with the local rules and regulations of other cultures. Simultaneously, large multinational companies face even more pressure from NGOs to conduct their global business operations responsibly and ethically. “There are societies in which U.S. corporations are expected to comply with strict government policies that challenge widely held standards of human rights,” said Hanson. How do you deal with difficult cases such as government pressure in China to censor the Web? Recently, Google and Yahoo have been criticized by human rights organizations for allowing the Chinese government to filter certain information. As a result, “Businesses must be engaged in government policy development. For example, they can engage international regimes and organizations that promote workers' rights. But how do U.S. corporations properly deal with human rights issues which go beyond simple employee working conditions and include broader societal development?” CSR is different in every country and company. Hanson noted that CSR is highly developed in European countries and that the demands on companies for responsible behavior are extensive. For example, European firms are more often expected to listen to their stakeholders' needs and fulfill them, whereas U.S. businesses prefer to “Listen to their stakeholders and then consider their needs as one input to corporate decision making.”
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Can you give an example of a company that has fully integrated CSR? Hanson said that it is very difficult to say that any company is doing all it should, but “companies have recognized that they have no choice regarding whether to integrate stakeholder concerns into the management decision-making process. The consequences of ignoring these concerns are just too great.” Kirk O. Hanson Markkula Center for Applied Ethics www.scu.edu/ethics
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C h a p t e r
7
Consider Ethical Issues Marvin Brown
Marvin Brown has spent much of his career helping to develop and design ethics, diversity and compliance training programs, working closely with Human Resources. He also teaches business ethics at the University of San Francisco and is the author of Corporate Integrity: Rethinking Organizational Ethics and Leadership. Why have an ethics program? Most ethics programs in corporations have focused on compliance, said Brown. He believes, however, that they should focus on employee training in decision making. Even though most major corporations have ethics officers, few focus on the deeper issues because their legal and auditing departments are often in charge. When HR takes the lead, the program is much stronger. But, Brown said, “The potential to promote decision making, training and the empowerment of employees has not blossomed the way we wish it would. We still have a long way to go.”
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CSR implies that ethical concerns guide practices. What areas pose special challenges for companies? “Corporate responsibility should balance responsibility to customers, workers, managers, suppliers, community, workers, and the environment,” Brown responded. “What a lot of corporations do is emphasize one stakeholder at the expense of others. In the current economy, the stakeholder view is that of low price to the consumer or high profit for the investor. Often the work force does not get the attention it needs. Decreasing costs increases profit, so companies let go of people, their workforce. HR is supposed to serve the workforce and they don't get what they need to train and support the people to live more fulfilling lives.” In essence, said Brown, “Resource allocation needs to be restructured.” “An important ethical question is the distribution of the income that comes into the corporation. If you distribute good salaries, benefits, and training, you'll have a more meaningful work place. If you cut prices like Wal-Mart, the distribution becomes unbalanced with too much focus on the customer and not enough on the work force.” “StoneyField Farm Yogurt is a good example of a balanced company. It makes an organic yogurt so their product is of high quality. They support dairy farmers and treat their employees well. Such companies are models of corporate responsibility, much more than Chevron, for instance, which uses one hand to give money to various philanthropic causes and the other hand to spend millions defeating legislation that would protect the environment.” What are your thoughts concerning sustainability? “In the natural world, everything is reused. Nature is 100% efficient. Our current economy is 4% efficient. How can we transform an economy based on consumption and growth to be sustainable? Given the current rate of consumption, if China and India develop to live as we do, we'll need four earths and we only have one.” Brown recommends that we look to The Natural Step as one way to develop more sustainable practices. The Natural Step is a program for sustainability developed by Karl-Henrik Robert, one of Sweden's
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Chapter 7: Consider Ethical Issues
leading cancer researchers. Several U.S. companies have become committed to the program. “This is the kind of movement that can make a huge difference,” said Brown. 3
The Natural Step Imagine the following3: The scientists of an entire nation come to consensus on the roots of our environmental problems and the most critical avenues for action. The nation's head of state then gives his or her endorsement to the consensus report. An educational packet based on that report is prepared and sent to every household and school so that citizens and students can learn the basics of sustainability. Then a roster of famous artists and celebrities goes on television to promote and celebrate the birth of this remarkable national project - a project that, in the long run, promises to completely reorganize the nation's way of life to bring it into alignment with the laws of nature. This scenario may read like a fairy tale, but it actually describes the course of events when The Natural Step program was adopted in Sweden. The Natural Step (TNS) framework is grounded in natural science and serves as a guide for businesses, communities, educators, government entities, and individuals who select the path toward sustainable development. To become sustainable, society must meet four conditions: 1. Nature is no longer subject to systematically increasing concentrations of substances extracted from the earth's crust. 2. Nature is no longer subject to systematically increasing concentrations of substances produced by society. 3. Nature is no longer systematically impoverished by physical displacement, over-harvesting, or other forms of ecosystem manipulation. 4. People are no longer subject to conditions that systematically undermine their capacity to meet their needs.
3. From the Context Institute www.ortns.org/framework.htm
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What about education? “Twenty years ago the public schools in California were in better shape. We went from being at the top of the list to close to the bottom, largely because of less money for public schools. One reason there is less money is that corporations are paying less taxes. This is not just a problem for California, but for the nation. In 2000, for example, Microsoft did not pay any income taxes because of tax shelters. Most corporations today pay no more than half of the 35% tax rate. So it is impossible to maintain the quality of our public institutions. And then, people like Bill Gates give money to the schools that they want to support, but behind such actions there is a disempowerment and a weakening of public education due to the withdrawal of tax dollars.” Brown continued, “From this perspective, CSR can be looked at as a privatization of taxes. Instead of the government deciding what a corporation's contribution should be, the company's foundation decides what to give schools and which schools to give it to. This disempowers the civic dimension of schools. Instead of elected representatives running our schools, wealthy people are deciding the future of public education. This school gets a grant; this school does not. The grant even defines how the money will be used.” If multinational corporations fail to have all their practices consistent with CSR, what is left? “In the San Francisco area, about 70% of jobs are people who work for family businesses. Maybe only 16% of jobs in SF are in multinational corporations. Sustainability can be a local initiative and have a huge impact given these numbers.” “The company I like best is Chez Panisse. Alice Waters started Chez Panisse. Her father was an organizational development consultant, and he helped her start the restaurant. She has an organic garden run by kids in the court systems and is now working to educate school children in Berkeley about healthy food. She could have a Chez Panisse in every city, but she doesn't. Growth does not have to mean expansion. Sustainability requires a look at local successes.” Dr. Marvin Brown, 2736 Derby Street, Berkeley, CA 94705 www.WorkingEthics.com
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C h a p t e r
8
Assess the Opportunities Azure Kraxberger
Conducting assessments is an important part of integrating CSR into your business. It involves taking a thorough look at how the business is doing today, identifying areas that could be changed or improved, prioritizing those areas, and then incorporating the highest priority areas. Whether you are new to implementing CSR practices or have been doing so for years, assessment provides a baseline and ongoing framework. The Assessment Tool 4 The following assessment tool has been organized into six stakeholder categories: Employees, Environment, Customers, Community, Suppliers, and Shareholders. Use the following numbers to answer each question: 2: Always 1: Sometimes 0: Never Add up your scores at the end of each section.
4. Format and questions from the Canadian Business for Social Responsibility (2004)
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Employees Assess your current employee practices, which could include prioritizing employee health and safety or being an equal opportunity employer to having creative benefits programs that allow employees to fund personal development work. Employee practices can also include providing complimentary day care for working parents or facilitating job training for employees who have to be laid off. How is your business involved with Always Sometimes Never employees? Ensures prompt payment to all employees and contractors. Places a high priority on employee health and safety and ensures that procedures reflect this. Ensures all employees have access to and understand the company employee policies; rights and legislation, including payment, bonus, benefits, professional development, and termination policies; and clearly define all employee policies at the time of hire. Offers each employee and contract worker a performance and contract review at least annually. Provides equal access to employment and promotion to all employees regardless of gender, ethnicity, religion, sexual orientation, age, or language. Provides benefits to both full - and part-time employees
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Chapter 8: Assess the Opportunities
How is your business involved with Always Sometimes Never employees? Provides opportunities to share in the growth and profitability of the firm through initiatives such as bonus packages and share ownership plans (if applicable). Practices an “open book” management philosophy, making company financial statements available to all employees and reporting the financial position in plain language to employees annually. Fosters a culture that encourages employee and management communication and feedback, creating opportunities and providing mechanisms for it. The company rewards employee suggestions that provide both small and significant advantages to the business. Supports employees to balance work, family, and personal development commitments. These programs may include flexible working hours, job sharing, parental and family leave policies, and telecommuting options. Supports professional and personal development through initiatives such as training programs, financial assistance, or flexible work hours for programs outside the organization. Encourages employees to develop real skills and long-term careers (e.g., via a performance appraisal process or a training plan).
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How is your business involved with Always Sometimes Never employees? There is a process to ensure that adequate steps are taken against all forms of discrimination both in the workplace and during recruitment (e.g., against women, ethnic groups, disabled people, etc.). Employees are consulted on important issues. There are suitable arrangements for health, safety, and welfare that provide sufficient protection for your employees. The company has clearly defined values and rules of conduct. Employees are made aware of the company's values and rules of conduct. Employees are trained on the importance of the company's values and rules of conduct. Total
Environment The environment consists of the elements that make up our natural surroundings such as water, air, earth, non-human life, and the complex relationships and ecological systems that connect them all. Environmental practices include minimizing waste and maximizing materials, process and energy efficiencies, as well as looking at the environmental impact of the materials used in products and processes.
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How does your business utilize environmental resources?
Always Sometimes Never
Complies with all environmental laws and regulations in the jurisdictions in which we operate. Attempts to reduce water usage, for example through ongoing maintenance to reduce leakages, spills, etc. Applies measures to reduce energy use and monitors progress. Encourages all staff to reduce waste by providing recycling facilities for office materials including paper, bottles, and cans. Encourages staff to select environmentally-friendly products when purchasing for the organization (i.e. green purchasing policy or checklist). Provides a facility to compost food waste from staff and operations. Encourages staff to use alternative transportation (carpool, transit, bike) to and from work, and for work travel through programs (i.e. providing bus tickets, bike storage, showers).
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How does your business utilize environmental resources?
Always Sometimes Never
Encourages broad employee participation in environmental initiatives through training. This includes ensuring that employees understand the company's commitment to the environment and are adequately trained to assist in implementing the company's environmental procedures and programs. Designates one person in the organization to be responsible for seeing that environmental programs and goals get implemented. Identifies opportunities in the production or service delivery process to use inputs that have less impact on the environment. Identifies opportunities in the production or service delivery process to reduce or reuse waste. Reduces your enterprise's environmental impact in terms of: Energy conservation Waste minimization and recycling Pollution prevention (e.g., emissions to air and Water, effluent discharges, or noise) Protection of the natural environment Sustainable transport options
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How does your business utilize environmental resources?
Always Sometimes Never
The company considers the potential environmental impacts when developing new products and services (e.g., assessing energy usage, recyclability or pollution generation). The business supplies clear and accurate environmental information on its products, services, and activities to customers, suppliers, local community, etc.
Customer Customer practices range from ensuring customer satisfaction to facilitating customer giving through innovative business or community partnership programs. It can be about developing long term relationships with customers rather than one-offs and communicating to customers about the responsible use and disposal of your product.
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How does your business interact with customers?
Always Sometimes
Never
Markets products and services in a truthful way, avoiding false claims; advertises products with a sensitivity to the impact on different groups (for example, children, women, or minorities), and does not generate or perpetuate stereotypes or negative advertising images. Commits to customer satisfaction (for example, through return policies, exchange policies, product guarantees, or a customer service telephone number). Displays commitments prominently and makes them easily available to clients. Monitors the quality, safety, and environmental impacts of products and services, informing customers of the social and environmental impacts of products, and taking responsibility to ensure that customers use products in a responsible way. Ensures that all customers are aware of any risks relating to safety, quality, improper use of products, and product disposal.
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How does your business interact with customers?
Always Sometimes
Never
Promptly advises customers and authorities of any significant health concerns or safety issues associated with products or services (for example, by promptly issuing recalls in the case of faulty products). Has a mechanism for gathering and promptly responding to customer complaints and responding to issues that have been raised. Total Community A business's community encompasses all the people it touches directly and indirectly. Community practices range from philanthropy programs to employee volunteerism and strategic community partnerships.
How is your business socially responsible to the community?
Always
Sometimes
Never
Provides support to a range of good causes in response to the needs and appeals of charitable and community organizations. Donates to charitable organizations, which may include contributing volunteer time and donations in kind. Gives priority to local employment and local suppliers when feasible.
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How is your business socially responsible to the community?
Always
Sometimes
Never
Has a board and management team that understand and integrate community interests into their decision making processes. Encourages and supports employee voluntarism in the community. Offers training opportunities to people from the local community (e.g., apprenticeships or work experience for the young or for disadvantaged groups). Has an open dialogue with the local community on adverse, controversial, or sensitive issues that involve your enterprise (e.g., accumulation of waste outside your premises, vehicles obstructing roads or footpaths). Tries to purchase locally. Encourages employees to participate in local community activities (e.g., providing employee time and expertise or other practical help). Gives regular financial support to local community activities and projects (e.g. charitable donations or sponsorship). Customers are aware of your enterprise's values and rules of conduct. Total
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Suppliers Supplier practices include incorporating social and environmental values into purchasing decisions to working with suppliers on their own social and environmental practices. Does it screen the conditions under which its supplies were made? Those businesses that are more advanced in this area start to look not only at the suppliers that sell products and services directly to them, but also those businesses further down the supply chain.
How does your business interact with your suppliers?
Always
Sometimes
Never
Incorporates social and environmental values into our purchasing decisions, communicating the company's ethics and standards that apply to the supplier relationship and advising suppliers that the company will give priority to those suppliers whose practices are compatible with these ethics and standards. Makes fair and prompt payment to all contractors and suppliers invoices. Ensures that all qualified businesses have an opportunity to supply and service contracts, with preference given to local firms. (Equal opportunity can be achieved through mechanisms such as a fair bidding policy and social purchasing policy).
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How does your business interact with your suppliers?
Always
Sometimes
Never
Does not enter into business relationships with companies that use any form of compulsory labor (child labor or involuntary prison labor) or allow substandard working conditions. Develops an environmental and social procurement policy and ensures that all employees understand and follow this policy. Has a policy to ensure honesty and quality in all its contracts, dealings, and advertising (e.g., a fair purchasing policy, provisions for consumer protection, etc.). Supplies clear and accurate information and labeling about products and services, including its after-sales obligations. Has a process to ensure effective feedback, consultation, and dialogue with customers, suppliers, and the other people you do business with. Registers and resolves complaints from customers, suppliers, and business partners. Works together with other companies or other organizations to address issues raised by responsible entrepreneurship. Total
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Shareholders Shareholders include any individual or business that owns equity in the business as well as lenders to whom the company has fiscal accountability. Shareholder practices range from implementing sound fiscal policies to involving shareholders in defining the financial and non-financial direction of the company.
How is your business responsible to your shareholders?
Always
Sometimes
Never
Implements fiscal policies, financial management systems, and accounting controls that help to ensure fiscal responsibility and long-term viability and practices good governance. Reports to our shareholders on our financial status and non financial initiatives in a clear, timely, and accurate way. Identifies non financial environmental and social objectives and affirms a mission that includes these objectives. Supports financial and non financial objectives with staff training and communication. Incorporates social and environmental targets into senior management's performance measurements and compensation plans. Total
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How to Use the Assessment Results Use the results of your assessment to pick your focus areas by conducting such activities as the following: 1. Review your strengths and weaknesses. There will be some stakeholder groups for which you have many current CSR practices and there will be some areas in which you have very little activity. Look through each stakeholder group in the Assessment Tool to identify your strong and weak areas. 2. Conduct a group brainstorm. Bring together staff and employees to generate ideas based on your strengths and weaknesses. Address such questions as: a. How can you build on your strengths? b. What are some of the ways to make them even stronger? c. How can you overcome your weaknesses? d. What are some initiatives you could undertake to address them? 3. Clearly identify your outcomes. Specify in detail what CSR will look like from a tangible and practical perspective. Ask the following questions: a. What are you trying to achieve with CSR in your business? b. How does it fit into your overall business objectives? c. What is the end result you would like to achieve in the next year?
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4. Pick a strategy that will best achieve your outcome. Based on the outcome that you want to achieve and knowing your CSR strengths and weaknesses, you may want to focus on one or more of the following strategies: a. Focus on filling gaps. In what areas of CSR is your company weak? Look at the lowest scores from the assessment and focus on those stakeholder groups. These are the areas where you will be able to see the most improvement. b. Focus on strengths. In what areas of CSR is your company excelling? Look at the highest scores from the assessment and focus on ways to build them even further. These are the areas where you are strongest and can build deeper CSR commitments. c. Focus on one or two stakeholder groups. Which stakeholder group has the most impact on your business? You know your business best. For retail businesses with face-to-face relationships with customers, the customer stakeholder group is important. For manufacturers, suppliers are key. For most businesses, employees are usually one of the most important stakeholder groups. d. Focus on low-hanging fruit. Your low-hanging fruit are CSR practices you can pursue with the most bang for your buck; that is, initiatives that have significant impact but don't require too many resources to implement. For those companies just beginning on the CSR path, you should start with the low hanging fruit. CSR is a continuous journey and one that requires a sustained effort. If you do not start out with successes, it is very difficult to build and maintain momentum for the long run. Assessing the many elements of your organization's current and future objectives in CSR will help to speed decision making, adoption and implementation. Azure Kraxberger, PsyD 510-387-5091
[email protected]
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Exercise Influence B. Kim Barnes
B. Kim Barnes specializes in helping individuals to gain the skills and the processes needed to move ideas to action in a competitive and interdependent environment. We talked with her about the use of influence in an organization. In most companies, CSR teams rarely have direct authority over the people who will actually undertake new initiatives. As a result, team members need to be skillful and flexible in the way they influence others to support, champion, and participate in their projects and initiatives. People feel influenced rather than coerced to take an action when they are treated with respect and offered a choice. Barnes has defined two sets of skills that help CSR team members to get things to happen through others: Expressive skills get your ideas out to others and help to generate energy. Receptive skills invite ideas from others and stimulate them to take action. To model expressive skills, you might suggest ideas, express a need, provide a rationale, demonstrate benefits, offer an incentive, or describe a vision. Alternatively, you might use receptive skills first and ask questions to
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stimulate thinking, listen actively to key ideas that move the process along, identify with the other or disclose information, and then invite the other to make a commitment to action. Some opportunities for exercising influence are spontaneous; others can be planned long in advance. In either case, keep an observable goal in mind and consider what is needed to create the conditions for success. What, for example, do you need to know about the person or group, the organization, the culture? Once you engage others, you will see if the individual or group leans toward support for or toward resistance to your effort. Getting clear on when to step back and disengage is also critical. When there is resistance, you may want to disengage, use the new information you have gained to rethink your approach, and then re-initiate the conversation. The key to exercising influence is to use what you want to achieve, as well as key information about the person you seek to influence, to guide the conversation. To increase your success in influencing others, Barnes offers 12 Principles for Exercising Influence: 1. Have a clear goal, and make sure that achieving that goal will meet your needs. 2. Keep your goal in mind and do not accept invitations to diverge unless you see an alternate path to achieving your goal. 3. Remember that influence happens in the mind of the other person. Focus most of your attention on the other person, not on what you are going to say next. 4. Maintain an overall balance between expressive and receptive behaviors. If you experience resistance or avoidance, switch to the “other side.” 5. Do not assume that the first issue or problem is all there is. Be sure to explore using receptive skills before you respond with expressive behaviors. 6. Allow time for your efforts to have an impact by giving the other person time to think and respond. Avoid using “but” or “however” to link two messages.
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7. If you put the other person on the defensive, be aware that it will be costly in time, effort, and achievement. 8. Treat resistance as an opportunity to learn rather than as an obstacle. Think of it as a source of information and use the information you gain to be successful in influencing the other person. 9. If what you are doing is not working, stop doing it even if you think it is “the right way.” Disengage before you get an absolute “no,” and then rethink your approach. 10. If you want to influence a person, never do anything that requires him or her to admit being bad, wrong, or stupid. 11. Use your skills to promote your ideas rather than demolishing those of others. Remember that sarcasm does not work as a direct influence behavior. 12. Be persistent and flexible. Err on the side of lightness. Barnes & Conti Associates, Inc. 940 Dwight Way, Ste. I5 Berkeley, CA 94710 www.barnesconti.com
[email protected]
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Integrate CSR into Business-As-Usual Pravir Malik
Companies are recognizing that compliance-based activities and codes of conduct and guiding principles represent just the first step in pursuing CSR. Ultimately, CSR agendas will need to span environmental, social, and human rights issues, which means that CSR must be integrated into business-as-usual. To help companies meet this challenge, Business for Social Responsibility has identified 11 key issues to address when formulating CSR strategy and plans. 1. Clarity of Intent Is the intent of the initiative well understood? The importance and goals of the initiative must be clear if there is to be buy-in and a mobilization of time, money, and resources. The bigger the initiative, the more important it will be that this clarity of intent originates at the top of the organization. 2. Business Alignment Does the CSR initiative align with what the business must do in the next two years? Organizational commitment for any initiative is the key driver of its success. Commitment usually depends on how important the initiative is
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for meeting the critical business goals of the immediate future. A simple rule of thumb establishes whether a goal is critical: Does maintaining the current business reality have a prohibitively higher cost than pursuing the goal? If the answer is yes, then the goal must be critical. Being in alignment with the goal will increase the probability of commitment and hence success in integrating the initiative. 3. CSR Structure and Reach Is the CSR team well positioned to ensure successful execution of the initiative? The CSR department may create a progressive CSR policy or even embed social and environmental responsibility into such processes as manufacturing, distribution, or procurement. If, however, the department cannot ensure that the new requirements are met, there is a poor likelihood that they will be. The relationship between CSR and procurement is a good example: Usually these departments report to different executives so that when push comes to shove and procurement goals have to be met, CSR policies and procedures can easily take a back seat. 4. Executive Ownership How strong is executive-level ownership and support? Executive ownership is generally a requirement for the success of any initiative. This is especially true of initiatives like CSR, which tend not to be viewed as business-centered. Executive ownership implies a complete understanding of why an initiative has to succeed and what people in the organization are being asked to change as a result. There must be an understanding of the personal, political, and organizational costs incurred by an initiative and also a willingness to pay the costs required for the initiative to succeed, even by diverting resources and assets that may be required elsewhere. This willingness must be constantly reinforced with peers and subordinates in public and private settings and through rewards to those parts of an organization that show commitment to making the initiative succeed. 5. Employee Ownership Has ownership of the initiative been sufficiently cascaded down the organization?
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Ownership of the initiative must be assumed at each level of the organization, all of the way down to the front lines. This is no trivial task and requires well-thought-out planning, leveraging of sufficient resources and assets, and a gestation period designed to bring about the required shifts in ownership. 6. Employee Resources Do individuals and departments have the capacity to design, implement, and execute the initiative? Every new initiative requires the use of intellectual, emotional and physical resources at the individual and departmental levels. Dysfunction may result when demand exceeds the available supply of resources and be signaled by whining, frustration, unwillingness to take risks, conflict, poor communication and decision making, and ineffective teamwork. Such conditions will easily compromise the success of the initiative. Individual and departmental capacity can be managed by having an approach to prioritization that ensures that only the most critical initiatives are undertaken. 7. Supportive Organizational Culture Do the organization's key behaviors, beliefs, values, and assumptions support CSR and the initiative in question? Organizational culture is represented by the behaviors, beliefs, values, and assumptions that have made a company successful in the past. An assessment is needed to determine whether those same features will hamper the success of a new initiative. If not, then the price needed to create a new culture must be paid. Otherwise, integration will fail. 8. Resistance to Change Will the initiative upset people's expectations? Resistance can be a formidable force that easily undermines the success of any initiative, even at the planning stage. It usually results when people's expectations are upset by the thought of or knowledge of an impending initiative. It is important to plan for managing the resistance in order to ensure successful integration. This is always expensive, but it is even more costly to try to heal from unmanaged resistance.
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9. Synergy Does synergy among key leaders exist? There are many ways to counter or even obfuscate the success of an initiative in order to bring about its demise. In the face of this commonplace reality, synergy is a source of directed energy that works to bring about the success of an initiative. It is often the result of the realizations that leaders or departments have common goals that can only be achieved by true interdependence and that organizational efforts must be structured to allow pockets of genuine leadership to guide and track an initiative's development and execution. 10. Management Capabilities Does the organization have people with the expertise and skills needed to manage a company-wide initiative? Large initiatives require a maturity in governance. This means having the ability to plan in detail what is to be done, to track corresponding metrics, and to create the right instruments to bring in a continuous, efficient stream of information. Mature management is also able to mobilize assets and resources as required. 11. True Intent Will the intent, as well as the structure and processes of the initiative, be achieved? One of the biggest shortfalls in achieving integration is the belief that an initiative has been successfully completed when the processes, structures, and associated systems have been put into place. Integration is not likely to occur, however, unless the true intent, or spirit, of the initiative has been achieved as well. It is like having all the wires and switches in place but no current to bring the structure to life. Plans for a CSR initiative will address the key issues: clarity of intent, business alignment, CSR structure and reach, executive and employee ownership, employee resources, organizational culture, resistance to change, synergy, and management capabilities. Pravir Malik Managing Director, Advisory Services Business for Social Responsibility © 2007 Business for Social Responsibility www.bsr.org
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Part III Corporate CSR Initiatives •
Authentic CSR—Christine Arena
•
Getting Started—Sun Microsystems: Marcy Scott Lyn and Rich Lang
•
Ethical Sourcing—Gap Inc.: Dan Henkle
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Sustainable Business—Cisco Systems, Inc.: Adrian Godfrey
•
Investing in the Future—Intel Corporation: Dave Stangis
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Pro Bono Services—Cooley Godward Kronish LLP: Maureen Alger and Ashley Kanigher
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Responsible Business Processes—Symantec Corporation: Cecily Joseph
•
Empowered to Do the Right Thing—Adobe Systems Inc.: Michelle Mann
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Authentic CSR Christine Arena
Christine Arena has a highly pragmatic approach to corporate social responsibility (CSR). She first became interested in the topic during the dotcom era of the 1990s, a time when CSR was largely marginalized. After attending numerous conferences on corporate social responsibility and noticing the lack of real-world case examples, she seized an opportunity to help prove the business case and move the practice to the mainstream. Ironically, Arena began her career developing marketing strategies for some of the world's least ethical companies, including manufacturers of cigarettes and alcohol. Shortly after she saw Michael Moore's film The Big One where Moore accosted Phil Knight of Nike regarding the company's use of sweat shops in Malaysia, she became convinced that watchdogs and the press would only become more relentless in their pursuit of “bad” companies, while corporations engaged in unethical practices of any kind would need to proactively respond. Furthermore, she decided that she had had enough of marketing for companies that sold $100 sneakers to poor, inner-city children; toilet paper manufacturers
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that ravaged virgin forests; and fast food companies that marketed to obese children. It was time for a change. Realizing that she would need more than a wish and a moral argument to convince corporate chiefs to invest deeply in the practice, Arena began her search for the most compelling business case studies. For her first book, Cause for Success, Christine personally interviewed CEOs and leaders who linked CSR to corporate performance, including BP's Lord John Browne, The Body Shop's Anita Roddick, Avon's Andrea Jung, and Interface's Ray Anderson. Her goal was to determine how “win-win” strategies were structured and executed, and the book provides ample information in its profiles of ten “High-Purpose Companies” (those integrating CSR into their core business strategies) and in-depth commentary from the executives responsible for the CSR initiatives. Cause for Success demonstrates how CSR can improve corporate health, growth and competitive edge. For her second book, The High Purpose Company, Arena worked with a class of 10 MBA students and professors from McGill University's Desautels Faculty of Management to analyze 75 well-known corporations from major industries. They developed objective standards to distinguish the firms creating the most environmental, social and financial value. Rather than simply focus on the general question: “Does corporate responsibility pay?” Arena and her team worked to understand: • Precisely when does CSR pay? and, • Under what specific conditions does CSR work best - and worst? Arena and her research team dug deep, interviewing hundreds of executives, shareholders, employees, consumers, experts and activists. They ultimately discovered that authentic CSR is a matter of value not values, and about change rather than charity. The companies producing the best results for society, the environment and shareholders alike approached CSR as a form of innovation. They developed solutions that were strategically responsive to emerging market conditions and the pressing needs and demands of stakeholders. On the other hand, the companies producing the worst results approached CSR as merely a form of marketing or philanthropy.
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Several of the companies Arena highlights for their superior social, environmental and financial performance are rarely highlighted on “Most Ethical” or “Best Citizens” lists. GE and DuPont, for instance, have a history of environmentally-harmful practices, yet they are staking their business growth and future on environmental and social goals. For instance, attaining a critical mass for GE's growth and revenue depends on its ability to deliver products with environmental and social value. The company is investing $2 billion a year on environmental technologies that lead to a myriad of profitable products ranging from solar water purifiers to energy saving kitchen appliances. By 2010 GE aims to produce $20 billion in annual revenue from products that fall under its “Ecomagination” banner. In other words, GE has passed what Arena characterizes as a “point of no return,” in that it cannot afford to stop investing in strategic CSR. Similarly, by 2015, 25% of DuPont's revenues will come from what the company calls “non-depletable” or renewable resources. As with GE, DuPont's higher purpose of creating “sustainable solutions essential to a better, safer, healthier life for people everywhere” manifests in the form of a range of products and technological breakthroughs, such as Bio-PDO, an innovative polymer made from corn that uses less energy to make and also produces less waste. In the near and medium term DuPont will rely upon innovations like this in order to be prosperous, so it too has passed the point of no return. As Arena points out in her book, neither DuPont nor GE invest in CSR because it is moral or trendy. Rather, they invest because it is the right thing for their shareholders. That is why their strategies stand the test of time and make such a difference. When you calculate the social and environmental impact that GE and DuPont create through their investments—reducing CO2, wasting less and also helping to solve serious problems like climate change and water scarcity through profitable solutions—it becomes clear that this is all about far more than feel-good philanthropy. There is undoubtedly a substantive business case for CSR.
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Still, though, many companies in Arena's study, like Exxon and Merck, appear not to see this. They approach CSR as a marketing issue or simply try to cut down on their more damaging practices. The key to success, says Arena, is to forget about trying to do a little “less bad” and instead concentrate on building the right kinds of solutions from the start. While companies might temporarily save money or bolster their brand image by cutting down on waste or talking the CSR talk, they will profit far more and make a much bigger difference to the world by selling “better things in better ways.” This is what authentic high-purpose companies do. According to Arena, “High-purpose companies prepare themselves for inevitable turns. They are the first to market with solutions that are vital and necessary, not frivolous or easily replicated. They use the creativity in their own minds combined with the power of collaboration to invent something totally original.” Arena's advice to companies is to develop innovative and marketable solutions with a purposeful edge. From her perspective, a seismic shift is occurring, and technology companies are in a great position to create value and deal with the relevant issues. The companies producing the very quality social, environmental and economic returns from their CSR investments, including GE, DuPont, JetBlue, IKEA, Patagonia, Eileen Fisher, Wegmans and Food Markets, have highly collaborative workforce cultures. HR understands the workforce link and the importance of catalyzing diverse groups to discuss and work together toward innovative “high purpose” solutions. As HR gets more involved, CSR can move to a different level though engaging the whole workforce rather than a few individuals. In summary describing the pragmatic need for CSR, Arena quotes Ray Andersen of Interface, “We can't conduct business on a dead planet.” Christine Arena Author: Cause for Success, The High Purpose Company www.high-purpose.com
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Getting Started Sun Microsystems: Marcy Scott Lyn and Rich Lang
Sun, a global supplier of network computing solutions, is setting new industry standards with its eco-responsible server-line with CoolThreads(TM) technology, which delivers the most power-, space-, and cooling-efficient servers in the world. Though corporate responsibility has long been embedded in Sun's business operations, the company issued its first Corporate Social Responsibility report in January 2007. For the business partners at Sun, it was time to decide what public commitments to key corporate responsibility goals they were willing to make. Rich Lang, Vice President, Human Resources, points to Sun's employee surveys that demonstrate employees want the company to be a socially responsible company. What was less clear to the employees is how they could help make it so. The company is now engaged in multiple initiatives, including the following: Protection of privacy: One of Sun's goals is to assure that its network solutions will protect the privacy of everyone who participates in a network. Sun has established a goal that by 2010 all products will include privacy checks and balances throughout the product lifecycle. This
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means that any product or service that manages or allows access to personally identifiable information (PII) must be conceived, designed, developed, tested, and sold with privacy principles and standards embedded into the process. CSR advisory board: In an effort to build employee engagement, Marcy Scott Lynn, who is responsible for the strategy and execution of CSR initiatives across Sun, created a volunteer advisory board that involves employees from all areas of the business and all corners of the globe. The group meets regularly, in person and virtually, to share information about company initiatives as well as general CSR trends. Lynn hopes that over time, more and more employees will join the volunteer board and share their ideas for ways to integrate CSR into everyone's job. Stakeholder engagement program: To ensure that Sun's efforts are aligned with the company's external constituents, Lynn also created a stakeholder engagement program. In May 2007, investors, customers, employees, and a variety of social and environmental NGOs were invited to provide feedback on the company's Corporate Social Responsibility Report, as well as on the content of the upcoming report, slated for release in the Fall of 2007. A number of Sun staff and executives participated in the day-long meeting, including CEO Jonathan Schwartz. There was much discussion around transparency—everything from Sun's energy use to how many people call the ethics hotline for information on violations of policy. Thousands of Sun employees post to unfiltered blogs, as does CEO Schwartz, who blogs his personal messages in order to emphasize the openness of Sun's culture. Diversity was also a hot topic in the May session. “Stakeholders want to know - what does the workforce look like? We can't be afraid to report that there are low numbers in technology of women and people of color, but we need to be able to set it in context,” Lynn said. The open dialogue around these difficult issues led to discussion of redefining how we talk about diversity in global companies. For example, if Sun were to apply statistics across the globe, the Latin America division would record more Hispanics and fewer Caucasians, but that would not tell the true story of the challenges of recruiting a diverse workforce.
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Eco-responsibility: Sun is committed to a 20% reduction of greenhouse gas emissions (GHG) over 2002 levels by 2012 while still growing as a company. David Douglas, Sun's Vice President, Eco Responsibility, has been leading the company's Eco Responsibility initiatives. Plans are to reduce energy usage in datacenters by converting them into eco-responsible facilities and making them smaller and more energy efficient. The company is also developing an alternative energy strategy, including solar power and other renewable energy options. The OpenWork program: enables Sun employees to work effectively anywhere, anytime, using any device. Through this program, more than 55 percent of Sun employees around the world work from home or in a flexible office at least one day a week. OpenWork has led to greater employee satisfaction and continued high productivity, as well as reduced costs and carbon emissions from Sun's operations. Sun Microsystems, Inc. 4150 Network Circle Santa Clara, CA 95054 USA www.sun.com
[email protected]
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Ethical Sourcing from Suppliers Gap Inc.: Dan Henkle
Dan Henkle, Gap Inc.'s Senior Vice President of Social Responsibility, ensures that Gap is sourcing ethically from garment factories that maintain good working conditions. Gap doesn't manufacture its own goods but monitors garment suppliers against its code of vendor conduct. The code covers four key areas; health, safety, labor and wages. Naturally, Gap expects vendors to follow the law, but in some cases, country law is not highly developed. Gap will compare the law of the land to their code and expect the vendor to follow the higher standard. Many people on Henkle's worldwide team of more than 90 employees have a labor background (HR, trade unions, NGOs), and their job is to work with Gap's suppliers to improve working conditions. They often deal with HR issues like employee complaints about management decisions and behaviors. Gap has found that factories with HR policies and HR staff have a better track record on quality, productivity, on-time delivery, and innovation than factories that do not. Several studies point to the business case for maintaining good working standards. For example, Tufts University did a study in India of
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50 factories (14 were Gap vendor factories), looking at varying levels of sophistication among HR management systems and how they contribute to running a business. A factory with an unsophisticated HR system typically experienced higher absenteeism, lower productivity, higher turnover rates, and more accidents. As HR management systems improved, so did factory conditions and productivity and quality. Turnover rates decreased as well. In 2004 and 2005, Gap piloted an integrated sourcing (vendor) scorecard for factories to help the buying team make performance-based decisions on where to place garment orders. Factories received an overall rating based on the following performance factors: quality, innovation, strategic capability, speed-to-market, cost, and labor standards. The labor standards score is derived from Gap's factory rating tool, which uses a five-level rating system to measure overall compliance. Level 5 indicates that a factory is “excellent” and that the Gap team has found few or no documented violations. Level 1 signifies that the team has found many violations, including core and habitual ones, and that “immediate attention is required.” A Level 1 factory is in danger of losing Gap business if management does not demonstrate immediate improvement in its compliance practices. Gap ran a correlation analysis on the vendor scorecard to answer a question: When factories upgrade working conditions (which can be costly), do the six performance factors get better or worse? Data showed that when vendors took steps to improve working conditions, performance factors, including cost competitiveness, improved, thus bolstering the business case for improving vendor factory working conditions. Today, Gap's staff business partners seek to hire the factories that reach higher standards. To monitor factories, Henkle's team members act like detectives, sleuthing to determine if factories are indeed in compliance with the Gap vendor code. In China, double bookkeeping is an issue. Many factories keep two sets of books: one set has the hours worked out perfectly in line with codes, but the book in the drawer tells another story.
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The Gap compliance team has several ways to find out if a factory is keeping two sets of books, such as checking cleaning records or the broken needle log. When a needle breaks, the worker logs it and gets a new needle. The log records the date and time. So when the log shows a broken needle on a Sunday, and the factory claims that no work is being done on Sundays, the team knows there is a double bookkeeping system. The factory is told that if they keep double books, Gap will not do business with the factory. Indeed, over a two-year period, the Gap team revoked the contract of about 200 out of 464 factories in China. After that, the factories understood that Gap meant business. In 2006, the compliance team revoked only 26 out of approximately 2000 factories, which points to improved understanding and adherence to Gap's code. Gap's decision to publish its 2003 CSR report was an important step for the company. The report provides an overview of the company's CSR programs and also information on Gap's goals for the future. For the company, it serves less as a PR document than a public notice of its desire to be accountable for its vendor practices. The Gap management prides itself on evolving standards and transparent reporting. Each year since 2003 they have added systems and metrics that raise the bar for Gap and its many factories around the globe. Henkle encourages companies to get their first report completed because public reporting on internal activity requires increased internal awareness of the social impact of corporate goals and initiatives. Gap Inc. www.gapinc.com/socialresponsibility
[email protected]
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Sustainable Business Cisco Systems, Inc.: Adrian Godfrey
When most people think of Cisco, they have in mind its massive Silicon Valley and global networking operation. But Cisco is also a company that operates on the principle of the triple bottom line. “At Cisco,” said Adrian Godfrey, Director of Corporate Citizenship, “CSR is about good, sustainable business.” We recently interviewed Godfrey to learn how CSR is implemented and integrated into the overall business of Cisco. How did Cisco decide to become involved in CSR? “We have a very strong culture of giving, trust, fairness and integrity—values instilled in Cisco from the beginning. Cisco has maintained its commitment to giving back and being a good citizen in order to be a good steward to the communities in which it operates, lives, and works. At Cisco, giving back is part of the culture, a culture that is driven from the CEO and that thrived under John Morgridge and John Chambers. Each believes in philanthropic work, which made it relatively easy to have the conversation about CSR at Cisco. In the past, companies looked strictly at the bottom line and measured their success by the amount of
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financial return they brought to their investors. However, society now expects corporations to consider the impact they have on the lives of their employees, their community, and the environment. CSR for Cisco is about doing better business by taking into consideration the needs of all our stakeholders.” “We believe in building a sustainable enterprise, and our strategy for CSR is to mainstream it, define, explain, and adapt it. For example, stakeholder concerns relating to our supply chain would be addressed by the manufacturing team, which takes on any operational responsibility and business improvements. In my experience, managers in Cisco play an active role in implementing and defining CSR for their own operation. They do this by engaging not only employees and other stakeholders, but also by getting feedback from independent organizations such as Business for Social Responsibility. The company also seeks stakeholders' input and demands transparency and disclosure from its suppliers and partners.” What is the ROI for CSR in your organization? “Strong corporate citizenship is an integral part of Cisco's overall business strategy; CSR is about competitive advantage. CSR initiatives are measured by their impact and social return on investment. The bedrock to the success of Cisco is its continuing emphasis on ethics, transparency, morality, and giving back to the community. Consequently, sustainability is not about 5 or 10 years but about how to remain a successful global corporation for the next three to four generations. In this respect, CSR keeps us looking into the future. What initiatives is Cisco undertaking and what are the strategies? All employees at Cisco commit to responsible business practices, and the company is committed to empowering its workforce, said Godfrey. Cisco also is committed to improving the communities in which it operates and to being environmentally responsible. Examples of initiatives include:
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Workplace. Employee satisfaction, flexibility, productivity, well-being, training, diversity, and health are key to retention as well as attracting talent. Cisco is considered a leader in providing good and safe workplace for its employees. Cisco's HR Civic Council facilitates volunteering at nonprofit organizations, and in the early 2000s during the downturn of the high-tech industry, the HR and the corporate philanthropy group gave some high-performing employees an opportunity to work at a reduced salary in such organizations. Society. Cisco is involved in global social and economic development programs. The company provides both cash and grant funds and arranges partnerships, employee volunteerism, and relief efforts. The company's Networking Academy provides IT educational services in more than 150 countries, many located in Africa, Southeast Asia, and Latin America. One of its key attributes is encouraging women in underdeveloped countries to attend a Cisco network course to prepare them for jobs. The Cisco Network course is focused on increasing opportunities for people in parts of the world where opportunity has traditionally been scarce. Environment. To address emerging issues and form industry-specific guidelines, Cisco collaborates and builds coalitions with other businesses and organizations. In 2004, for example, Cisco, Intel, and Microsoft started a CSR Supply Chain Working group that began to address complicated issues. The group later joined other like-minded industry groups and endorsed the Electronics Industry Code of Conduct (EICC) to harmonize the industry's effort toward a more socially-responsible supply chain. Within its own business operations, Cisco promotes best practices in designing products that are environmentally friendly and energy efficient and also promotes minimal packaging and recyclable components. To reduce greenhouse gas emissions, Cisco provides employees with the flexibility to work from home or on the go and offers programs that encourage the use of public transportation. Recently, Cisco entered into a five-year partnership with the Clinton Global Initiative (CGI) program to specifically address environmental issues. The Clinton Global Initiative focuses on practical solutions for global problems including pollution caused by carbon emissions.
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How does Cisco deal with global challenges to CSR? The challenge of CSR is not only how to engage employees and how to integrate CSR within the company, but also how to integrate it globally, said Godfrey, because every country Cisco does business with has distinctive business practices and cultural norms. The company strives to understand other cultures while upholding its business values and ethics. Cisco business practices are based on a code of ethical conduct, employee guidelines, and policies that are reviewed every year to assure transparency and accountability. Adrian Godfrey Director, Corporate Citizenship Cisco Systems, Inc. www.cisco.com
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Investing in the Future Intel Corporation: Dave Stangis
At Intel, Corporate Social Responsibility (CSR) means achieving business success while acting with uncompromising integrity in everything the company does. Intel is the world's largest semiconductor manufacturer based on revenue and a leading innovator of advanced digital technology platforms and components. The company has 94,100 employees worldwide and is located in 25 countries (country employee base greater than 50). Intel's revenue in 2006 was $35.4 billion dollars. Intel strives for excellence in delivery products and services along with making every effort to achieve a high quality work environment. In the early part of 2007, Intel was ranked #5 by Business Ethics Magazine in their search for the Top 100 Best Corporate Citizens. Business Ethics Magazine's listing based their analysis on companies that are proving that good corporate citizenship and good business go hand in hand. Companies are compared on environmental responsibilities, corporate governance and ethics, fairness toward employees and accountability to the local communities. Intel truly believes CSR is good management practice. To Intel this means listening to, learning from and communicating openly in every aspect their operations.
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Intel has six distinctive CSR categories and each one of these has specific focus areas. This report will spotlight the area of Education. More information about Intel's CSR activities and progress reports can be found at www.intel.com/intel/index2.htm
Education is at the heart of Intel's engagement with communities around the world. Intel's investment in education is an investment in the future. To continue to be the largest semiconductor manufacturer and a leader in innovation, a highly skilled workforce is required. Excellent education that fosters curiosity and learning is essential. “Giving a child hands-on access to computers and the Internet can change the course of his or her life. Equipping a single teacher with the skills and resources to increase the effective use of technology in the classroom can affect hundreds of students. Providing university faculty members with a cutting-edge curriculum can alter the impact that their students will have on technological advancements for years to come,”
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says Dave Stangis, Intel's CSR Director. Intel is committed to helping people around the world use technology effectively to better their lives and improve their local communities. In 2006, Intel contributed over $100 million for worldwide educational initiatives. Intel's Education initiatives are broken down into three focus areas: • Improving Teaching and Learning with Technology • Advancing Math, Science and Engineering Education and Research • Advocating for Educational Excellence Improving Teaching and Learning with Technology The scope of this initiative is to help elementary and secondary students worldwide along with educators in developing technology literacy, critical thinking, problem-solving and collaboration skills. Intel established several programs to meet this objective. The Intel Teach Program goal is to teach 10 million teachers in developing countries how to integrate technology effectively into their classrooms and teachings by 2011. So far, Intel has provided professional development to 3.9 million teachers in over 40 countries and they are on track to meet their goal. Eighty-nine percent of those teachers who participated in the program feel they are using technology more effectively as a result. Intel partnered with the Boston Museum of Science and MIT Media Lab to build and support 100 Computer Clubhouses. The Intel Computer Clubhouse Network is a community-based after school education program that offers a safe environment where young people can develop technology and collaboration skills. Intel provided technology infrastructure and leadership guidance and sponsored the introduction of new technology tools. Each year, Intel also sponsors the Intel Computer Clubhouse Network Conference where program coordinators and leaders from around the world come together to exchange ideas, learn to use new tools, discuss resource development and provide input.
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The Intel Learn Program is an after school program that offers hands-on activities for learners in developing countries. This 30-hour course focuses on technology literacy, collaboration and critical thinking skills. The program targets students from 8 - 16 years of age. Over 465,000 learners successfully completed the program. In 2006, Intel announced the Intel World Ahead Program, which supplies a low-cost mobile learning-assistant computer to students in developing countries. The purpose of the program is to speed access to uncompromised technology and education for people in the world's developing communities. Intel has a five-year objective to reach out to the world's next billion users by driving progress in accessibility, connectivity and education. Advancing Math, Science and Engineering Education and Research The objective of this initiative is to help advance education and research in the areas of math, science, and engineering. These areas are critical to developing a highly skilled engineering and innovator workforce. The Intel Higher Education Program has three components: Research, Curriculum and Entrepreneurship. In the area of Research, Intel grants funds for research and student fellowships to expand the boundaries of science and technology that are vital to the semiconductor industry (i.e. microprocessor technology, high-volume manufacturing, and computer science). In the past year, Intel provided over 700 grants totaling $24 million to universities around the world to conduct such research. In the area of Curriculum, Intel works with leading universities around the world to create and disseminate advanced curricula. In 2006, Intel offered 42 universities, at no cost, a new curriculum focused on multi-core technology, the latest processor architecture. In the area of Entrepreneurship, Intel created and delivered entrepreneurship educational workshops to faculty members for the purpose of developing a capacity for entrepreneurial innovation. Intel and The Haas School of Business at the University of California, Berkeley, hosted a global competition where students received seed funding for their projects.
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For the past 10 years, Intel has been the primary sponsor of the Intel International Science and Engineering Fair (Intel ISEF), the world's largest pre-college science competition. Sixty-five thousand students from 45 countries participate in over 550 Intel ISEF affiliated fairs worldwide. Young scientists enter the competition to demonstrate their innovative projects and compete for more than $4M in awards. In addition to sponsoring the fairs, Intel provides funding for teachers to attend and incorporate research activities into their curricula. The Intel Science Talent Search is a science competition where U.S. senior high school students present an original research project. The grand prize is a $100,000 scholarship. Semifinalists and their schools each receive a $1,000 scholarship. The Intel School of Distinction Award provides grants to U.S. schools that excel in academic achievement in the areas of science, math, technology and literacy. The grants range from $10,000 to $25,000 for each school. The skool Learning and Teaching Technology program is a worldwide program designed to support math and science learning for students 13-15 years old. Intel developed and deployed the skool program which is a web-based e-learning portal containing learning modules that can be used in a class or in a stand-alone program. Advocating for Educational Excellence Intel realizes that they cannot make systemic change in education without the help of others. Intel has engaged in numerous partnerships with government and multilateral organizations to support educational initiatives. Organizations that have played a vital role in worldwide initiatives include the United Nations Global Alliance for ICT and Development; World Economic Forum (Global Education Initiative); United Nations Education, Scientific and Cultural Organization; U.S. Agency for International Development; Inter-American Development Bank; and the Academy of Education Development. Intel has a rigorous evaluation process for its CSR initiatives and uses independent evaluators to review and receive input on the programs and activities. For example, in its Education initiatives, Intel uses SRI International to evaluate the Intel Computer Clubhouse and the Intel
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Learn Program. By using an independent evaluator, Intel is able to receive honest, objective feedback about its programs so it can make continuous improvements. Intel's commitment to excellence goes back to its founding fathers: Andy Grove, Gordon Moore and Robert Noyce. The company values are built to achieve exceptional results in all operations. Through the education initiatives, Intel strives to provide opportunities for the next generation of innovators while at the same time ensuring Intel's future success. As Intel Chairman Craig Barrett states, “So why do we care? We care because education is a long-term investment for us, just like our Research & Development program. Mathematics is the language of our business, the language of innovation and invention—the language of the modern, global economy—and, the language of anyone who wants to participate fully in this great democracy.” Intel Corporation 2200 Mission College Blvd. Santa Clara, CA 95052 Dave Stangis, Corporate Social Responsibility Director www.intel.com
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Pro Bono Services Cooley Godward Kronish LLP: Maureen Alger and Ashley Kanigher
Cooley Godward Kronish LLP is a national law firm that serves the converging worlds of high technology, high finance and high-stakes litigation. The firm has approximately 600 attorneys and represents clients in more than 20 industries. Cooley attorneys employ a team-based approach, drawing upon a broad base of expertise to provide clients with high-quality, cost-effective legal advice tailored to their particular needs. Pro bono legal services are one of the primary ways the firm fulfills its commitment to “give back” to the communities in which its offices are located. The pro bono practice is an integral part of the firm, and pro bono cases receive the same level of attention, resources and staff as do billable matters. The commitment to pro bono has been demonstrated by the appointment of a partner who is dedicated full-time to managing and developing the pro bono practice across the firm. Maureen Alger has been with Cooley since 1999 when she joined as a litigation associate specializing in appellate matters. She helped coordinate the pro bono practice for several years in conjunction with her other practice.
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Alger became partner in 2006 and has continued to manage the firm's pro bono practice across all offices. She also takes on her own pro bono cases and supervises other attorneys on their pro bono matters. Commitment to pro bono work is important to Cooley for many reasons but, says Alger, “First and foremost, it is part of how we identify ourselves as a firm. It is an element of the firm's core values to give generously of our time, talents, and resources, and pro bono work is one of the key ways we fulfill this commitment.” It is also a matter of individual professional responsibility; under the model rules of professional conduct, attorneys have a duty to perform pro bono work, and the firm believes it is essential to facilitate its practice. Cooley also realizes that this work benefits the firm and its attorneys by facilitating recruiting, providing training opportunities, and increasing associate morale and retention. Moreover, says Alger, when we evaluate “each attorney's contributions to the firm, pro bono matters are given equal weight and credit as compared with work on billable matters.” The firm has the expertise to take on a variety of pro bono cases, including but not limited to matters involving capital punishment, civil rights, consumer law, contract law, employment law, entity formation, environmental litigation, First Amendment issues, government benefits, guardianship, immigrant rights, intellectual property, human rights, landlord-tenant disputes, micro-enterprise advising, non profit advising, political asylum, and prisoners' rights. In 2006, over 400 Cooley attorneys and paralegals contributed over 25,000 hours on more than 350 pro bono matters. Pro bono practices at Cooley have led to numerous honors and awards. For example, The National Law Journal recognized the firm's victory in a national class action matter, Santillan, et al. v. Gonzales, et al., as one of the country's top pro bono cases of 2005. That same year, Cooley was presented with the “National Public Service Award” by the ABA Business Section for the firm's overall commitment to pro bono work. Other groups, such as The Legal Aid Society of New York, The Asian Pacific Islander Legal Outreach and Bay Area Legal Aid, have also honored Cooley and its attorneys' efforts.
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If your company would like to partner with a socially responsible law firm, visit www.cooley.com to find an office near you. Individuals and non-profits can also request pro bono legal services through our website. Maureen Alger Partner, Pro Bono Counsel www.cooley.com
[email protected]
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Responsible Business Processes Symantec Corporation: Cecily Joseph
Symantec is the world's fourth largest independent software company with more than 17,500 employees and offices in more than 40 countries. The company is a signatory of the U.N. Global Compact, created to bring private corporations together with U.N. agencies, labor, and civil society to support universal environmental and social values. Symantec was also added recently to the FTSE4Good, an index that guides investment in socially responsible companies. Symantec's CSR program is directed by Cecily Joseph. She oversees its global corporate social responsibility program which includes policy development and integration, stakeholder engagement, and program communication. How did Symantec decide to become involved in CSR? Like many multinational corporations, Joseph said, Symantec saw an opportunity to enhance and strengthen its brand with a well-defined CSR strategy. They were also beginning to see more inquiries about Symantec's CSR practices from customers and a certain segment of socially responsible investors. Moreover, employees
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were asking more pressing questions about the company's CSR practices. “We were starting to realize that employee candidates were often basing their employment decisions on CSR factors, including commitment to environmental responsibility, diversity practices, and even quality of life issues such as transportation. Given the current competitive recruiting landscape we soon realized the value a strong CSR program brings to our portfolio and how we might make ourselves an employer of choice by strengthening our program.” What focus did you choose and why? Symantec initially chose business-related focus areas that were clearly linked to “our business, such as privacy, cyber awareness, and funding for science and math education. We soon realized, however, that our stakeholders expected us to reach further and address social and environmental concerns such as housing and climate change.” Joseph added that Symantec was being challenged to determine what CSR initiatives would truly allow the company to have an impact. As a result, “Our focus also turned to the opportunity our global workforce presented and how harnessing that diversity could produce a culture of inclusiveness and give us a competitive advantage.” In addition, the company implemented prudent practices to reduce energy consumption within its facilities. As a result, Cecily said, “Symantec became a thought leader on energy efficiency in the IT environment. As a software company we were not seen as having a large environmental footprint, but we began to realize that we were expected to do our part and how this might present some business opportunities for us.” What initiatives has Symantec undertaken? Who championed them? Symantec's major initiatives include: Sustainable Silicon Valley: In May 2006, Symantec joined Sustainable Silicon Valley's Carbon Dioxide Emissions Reduction Initiative. This collaborative effort between the public, private, and nonprofit sectors aims to reduce CO2 emissions throughout Silicon Valley 20% below 1990 levels by 2010. As part of our commitment to this initiative, we have set 10% energy and CO2 emissions reduction
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targets at our worldwide headquarters and Mountain View facilities. This program is championed internally by the vice president of Facilities and Real Estate. Silicon Valley Leadership Group “Cool Commute” Program: This initiative encourages companies to track and reduce employee commuting. Symantec has collected detailed information on the commute patterns of its Bay Area employees and has established a baseline of miles traveled per year and the related carbon emissions. In partnership with our employees, we will attempt to reduce their commutes through carpooling, public transportation, biking and teleworking. The program is championed by Symantec CEO John Thompson. Responsible Software Packaging: Software packaging is another area in which Symantec demonstrates environmental responsibility. Changes in the company's packaging processes include: • Online sales promotion • Maintenance updates and licenses distributed electronically • Multilingual CDs • Fewer pages in user manuals • Recycling of more than 70% of the waste generated at the company's manufacturing site This initiative is being championed by the company's vice president of Global Supply Chain. Cyber-awareness and Education: Symantec has a program focused on keeping kids safe online. Symantec has partnered with nonprofit organizations such as iKeepSafe and has also coauthored a set of tips for parents on how best to keep their kids safe when they are navigating the Internet. The company has also published materials for parents and teens that are available on their dedicated Family Resource Website. This program is championed by the group president of Symantec's Consumer Business Unit.
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Diversity and Inclusion: Symantec recently established a Global Diversity and Inclusion Steering Committee composed of executives from across the company's different divisions and locations. The purpose of this committee is to ensure that diversity awareness becomes embedded in the fabric of our organization. At the local level, employee volunteers participate in Site Diversity and Inclusion Councils, devoting their time and talents to help achieve diversity goals. This initiative is being championed by the executive vice president and chief human resources officer. What is the ROI for CSR in your organization? How has it affected your business? Symantec is in the early stages of implementing its CSR program and evaluating its impacts, said Joseph. “We expect cost savings due to our focus on issues like energy efficiency and paper conservation. We also expect that CSR will enhance our brand and open business opportunities for us.” CSR is a way to demonstrate “how our business values align with those of our customers. It also is a way to demonstrate to our shareholders that our company looks at long-term progress in these areas and measures their impact.” How is HR helping to drive CSR initiatives? At Symantec, HR is responsible for developing and driving certain initiatives that are part of the CSR scope, including diversity and inclusion, employee learning and development opportunities, and quality-of-life policies such as teleworking, flex time and benefits. Like many companies, Symantec recognizes the value of CSR for recruiting and retaining qualified and competent employees, which is a primary function of HR. HR also helps to define CSR priorities through data gathering, employee interviews, surveys, and recruiting trends. Cecily Joseph Director, Corporate Responsibility www.symantec.com
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Empowered to Do the Right Thing Adobe Systems Inc.: Michelle Mann
As a global company that develops leading business, creative and mobile software solutions, Adobe is committed to providing economic, intellectual, and social benefits to each country and community in which it operates. Defining and addressing corporate social responsibility (CSR) is an ongoing process and learning experience. Business practices at Adobe are shaped by a set of core values that have been in place since the company was founded 25 years ago. Adobe believes it is essential to conduct business according to the highest ethical standards; foster a culture of innovation; deliver high-quality, high-value solutions for customers; generate superior return for investors; and share success by supporting charitable causes in the communities where Adobe operates. The Adobe leadership team recognizes the growth of the business is in large part dependent on the growth and development of Adobe employees. In addition to highly competitive benefits packages, professional training and development is a cornerstone of the Adobe culture. On average, each employee receives
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approximately 40 hours per year of professional and career-enhancing training provided through hundreds of classroom-based and on-line classes. Adobe strives to create a diverse, exciting, productive and creative work environment for the company's more than 6,400 employees worldwide. They have been extremely successful. Since 1999, Adobe has been consistently named on Fortune magazine's “100 Best Companies to Work For” list and has received many other similar accolades, including #24 Great Places to Work India (Grow Talent Company Ltd./Businessworld, 2006). As with many large companies, the components of CSR at Adobe are complex and multifaceted. “There is not one owner of CSR; it is a collaborative process. Guided by the company's values, each group is empowered to do the right thing,” says Michelle Mann, Senior Group Manager of Corporate Affairs. Some elements include corporate governance; commitment to employees; environmental sustainability; supply chain practices; community involvement; and the impacts of products and services. The cross-functional team shaping Adobe's CSR consists of representatives from human resources, operations, product development, supply chain, corporate affairs, marketing and other business units. A concern for both the physical environment where its employees work and the natural environment that sustains the planet are core reasons why Adobe actively seeks out and implements programs that increase efficiencies, conserve energy and water, improve air quality, and reduce waste. In 2006, Adobe's West Tower became the first building in the world to be certified by the U.S. Green Building Council in its permanent Leadership in Energy and Environmental Design (LEED) program for Existing Buildings at the Platinum level, the highest level attainable. Adobe now has three buildings certified at the Platinum level. Being an active community and philanthropic citizen is another critical piece of how Adobe lives its values. In 2006, Adobe contributed close to $39 million in cash and software to 136 community organizations, schools, and universities worldwide. The company participated in 23 distinctive volunteer activities, which gave Adobe employees the opportunity to impact the community in which employees live. Through
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the company's “Dollar for Doers” program, employees earn grants for their qualified nonprofits and schools based on their time spent volunteering. Adobe Youth Voices (AYV) is Adobe's global signature philanthropy program designed to provide youth in underserved communities with the critical skills they need to become active and engaged members of their communities and the world at large. The program enables young people in and out of the classroom to use video, multimedia, digital art, Web animation and audio tools to communicate and share their ideas, demonstrate their potential, and take action where they live. AYV was launched in seven geographies around the world including the United States, India and Great Britain. Adobe has numerous other CSR-related business practices. Consistent across all activities is a values-based approach focused on innovation and continuous improvement. Every day Adobe strives to strengthen its role within society. Adobe Systems Incorporated 345 Park Avenue San Jose, CA 95110-2704 www.adobe.com Michelle Mann at
[email protected]
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Part IV Ways to Take Action on Social Responsibility •
Become a Beacon of Sustainability—Act Now: Adam Werbach
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Incorporate CSR from the Beginning—Entrepreneurs Foundation: Sean Foote
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Recruit Immigrant Professionals—Upwardly Global: Jane Leu
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Volunteer on Your Terms—One Brick: Dave Shefferman
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Contribute to Global Peace and Well Being—Dalai Lama Foundation: Tony Hoeber
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Good Capital: Invest in Social Enterprise—David Batstone
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Become an Internet Philanthropist—Bring Light: Drew McManus
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Engage in One-on-One Philanthropy—Human Connexus Foundation: Cindy Campbell and Heather Connors
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Reuse and Recycle Surplus Items—iReuse LLC: Ken Kurtzig
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Promote Economic Independence—Kiva Microfunds: Premal Shah
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Help Nonprofits with Their Training Needs—Community Outreach Program: Kris Schaffer
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Support Collaborative Solutions to Conflict—Search for Common Ground: Jane Shaw
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Find Core Competitive Advantage—ATDynamics, Inc.: Andrew Smith
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Empower Women—Entwine Global: Almaz Negash
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Raises Living Standards—Village Enterprise Fund: Nicholas Imparato
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Become a Beacon of Sustainability Act Now: Adam Werbach
Act Now provides expertise in HR/Outreach, Creative Services, and Sustainability Consulting. Its signature HR program is the Personal Sustainability Project. Unlike traditional HR programs that are top-down and fully designed centrally, the Personal Sustainability Project is a bottom-up, grassroots initiative that focuses on educating, inspiring, and empowering employees around sustainability. The touchstone of the project is the Personal Sustainability Practice (PSP), which consists of the small actions individuals choose to help them improve their own quality of life while also creating a “win” for the community and planet. From energy conservation to recycling to eating healthier, there are limitless kinds of PSPs, all of which connect the individual to the community and to the planet. Act Now started its work with Wal-Mart stores and Sam's Clubs in Indiana, Florida, and Colorado. While applying their PSP programs, it quickly became apparent that associates did not have time or did not know how to care about personal, societal or environmental issues. “Folks are just focused on paying the bills,” says
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Adam Werbach, CEO of Act Now. An investment by Wal-Mart with paid time to focus on personal sustainability was a requirement for successful implementation of the PSP program. Wal-Mart has become Act Now's largest workforce development client. They are committed to being a leader in sustainability. Part of their vision is to bring sustainability to every one of their 1.3 million U.S. Associates. From the very beginning, the company knew that winning the hearts and minds of the Wal-Mart Associates would be integral to the success of the broader sustainability initiative. Beginning in June of 2006 and lasting through August 2007, Act Now's field trainers worked across the country from Buffalo, New York to Anchorage, Alaska, including every state in between, to help Wal-Mart Associates make a difference in their own lives and in the overall health of our planet. The Wal-Mart PSP project began with a daylong sustainability retreat to train staff using a “train the trainer” approach. Each store was represented in the training by a Lead Captain (an hourly store Associate) and the Store Manager. The Lead Captains returned to their home stores to recruit nine other captains for a total 10 captains in each location. Captains were allocated four hours per week to coordinate the store-level PSP framework and to help the store's Associates to choose their own PSPs and to get involved with the development of the Project within the store. Captains, not management, decided how their store was going to become more sustainable as well as a beacon of sustainability in the local community. The PSP framework revealed issues centered on environmental impact, losing weight, financial savings, quitting smoking, work/life balance, and getting stress under control. The store Associates began adopting personal ecological behaviors, with an emphasis on caring for their own health and well being. In some stores, individuals brought their family together to have an organic meal once a week. Thousands of Wal-Mart Associates began biking or walking to work - something that fosters good health and saves people money with soaring fuel costs. Others began parking far away from the building in order to “walk to work.” Some individuals did food substitutions like adding fish so that one meal a week consisted of fresh or healthy food. Changes such as these have made a huge impact on the quality of life for the workforce at Wal-Mart.
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Once the PSP programs are in place at the local store level, the Captains help Associates to take a broader look at their community. For example, a Sam's Club in Florida adopted a school and worked with the children to clean up the surrounding wetland and transform it into a park that has a nature trail for kids. Wal-Mart employs approximately 1 in every 125 people in the United States, so the PSP program has a massive impact. Act Now Adam Werbach, CEO 501 York Street, San Francisco, CA 94110 415-871-2000 www.actnowproductions.com
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Incorporate CSR from the Beginning Entrepreneurs Foundation: Sean Foote
Entrepreneurs Foundation (EF) helps startup companies create, manage, and implement their corporate foundations and community involvement programs. Sean Foote, Chairman of EF's Development Council and a venture capitalist with Labrador Ventures, advises his portfolio companies on the value of combining teambuilding with community involvement to build strong cultures. It is never too soon for a company to think about building a strong corporate culture. In start-ups, often it is really hard for executives to think beyond making investors money. But the concept of introducing community involvement to the workplace resonates strongly with CEOs when they tie it to teambuilding. Community involvement can help foster relationships across and within teams, and CEOs and their teams have directly transferable skills to solve social problems. For employees searching for meaning and purpose beyond making a product, there is an opportunity to apply skills to solve social problems and build camaraderie. Start-up companies sign up with EF through a donation of equity. By setting aside stock early on, the company is seed-funding its corporate
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foundation so that it can make strategic grants when it has the financial resources to do so. Until liquidity, EF acts as a community involvement consultant and helps the company develop a strategic community involvement plan. One of the first steps in partnering with EF is to survey employees to determine their attitudes toward community involvement. After an hour-long conversation with the CEO about his or her goals and objectives for a community involvement program, EF then helps the company to identify the causes it will support and to develop a game plan for the first year. For a relatively small cost, a startup builds a great place to work while also giving back to the community. Sean shared some background on CenterBeam, Inc., one of the companies that has partnered with EF. Kevin Francis, president and CEO, is quoted, “A critical success factor for CenterBeam is not only how well we do in business but that we do business well. That includes corporate philanthropy and community involvement, which helps us develop successful professionals and recruit people who share our passion and our compassion for doing the right thing in business and in the community.” Entrepreneurs Foundation proved to be the perfect vehicle to help CenterBeam. “Two of the directors on our board introduced me to Entrepreneurs Foundation, and I immediately saw the value of its mission,” said Francis. “The founder of EF saw around him a tale of two communities in Silicon Valley in the late 1990s—great wealth but also great need—and realized something had to be done to alleviate that need.” “It took us about two minutes to say yes to EF. We always had a deep commitment to employee involvement in community service and it was easy to see how EF could help us set up the program and find the projects that worked for us. Employees at CenterBeam participate in Food Drives, Dress for Success Clothing Drives, Habitat for Humanity home building, reading programs, matching gift programs and The United Way. The company makes a point of engaging employees at both its U.S. and Canadian locations by allowing employees local leadership, a local identity, and local commitment.”
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“We wanted to be sensitive to the work load and the family needs of our staff,” said Kirstin Burke, vice president of corporate communications & HR at CenterBeam. “But we also wanted an aggressive program. For a small company, we have had great success with the number of programs in which we participate because Entrepreneurs Foundation helped us strike a balance between those activities which demand employee time and those which only demand employee contributions. This gives our employees the flexibility they need to balance job demands and community service.” Sean believes EF has a positive impact on his VC investments - a successful company has more desire to give and it adds to employee morale, recruitment, and retention. EF collaborates with companies to create community programs that mirror their unique business and community interests. Through strategic planning and hands-on implementation, EF ensures that the program works within the specific considerations of a company's life cycle in order to support its goals. Customized corporate community programs can include corporate giving, education, employee volunteerism, business practices and employee giving. In the Bay Area, Entrepreneurs Foundation has had over 200 companies join since its inception in 1998. The foundation has affiliates located in Atlanta, Austin, Boston, Boulder, Dallas, Hawaii, Portland, Sacramento, and Tel Aviv; and more than 400 companies have joined EF worldwide. Entrepreneurs Foundation 60 South Market Street Suite 1000 San Jose, CA 95113-2336 408-278-2241 www.efbayarea.org
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Recruit Immigrant Professionals Upwardly Global: Jane Leu
When working on refugee resettlement in 1996, Jane Leu noticed that a number of the people fleeing persecution had sophisticated professional backgrounds but were being funneled into low-wage jobs upon entering the U.S. workforce. Companies were not looking at foreign degrees and experience when recruiting, and these candidates did not “fit the mold” in the U.S. job market. Leu decided that this gap in the system could be bridged by bringing together highly-qualified immigrants and progressive employers. The job seekers needed a network to expose them to these progressive companies, and the employers needed a partner to assist them in adjusting their hiring efforts to include this diverse workforce. Seven years ago, she started Upwardly Global to meet these needs. At any given time, there are nearly 250,000 immigrants in the US who earned a BA/BS in their home countries, possess an average of 10 years of work experience, and have the legal right to work. Upwardly Global has two programs to integrate these highly-skilled foreign-born workers into the mainstream professional workforce: Jobseeker Services Program, which
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provides individuals with the skills and resources needed to reclaim their careers in the United States; and the Employer Network Program, which helps businesses put the right people in the right jobs and shows them how to reap the benefits of diversity. The Jobseeker Program is tailored to assist foreign-born professionals who have immigrated to the United States within the past five years from a developing country and who already have attained permanent U.S. work authorization. All of the candidates working with Upwardly Global have completed a four-year university program and have significant work experience outside the United States. In addition, all speak English and are comfortable with Internet and email technology. This program provides candidates with access to job leads for professional positions, connections to American colleagues and networks, and assistance with resume and cover-letter writing. They may also attend workshops, including Job Search Strategies, Interviewing Skills, Networking Skills, and Surviving in the American Workplace. All of these services are provided free of charge. The Employer Network Program helps companies recruit and retain high potential, qualified talent and thus increase the diversity and experience of their workforce. The program includes three elements: education, engagement and employment. Education includes providing cross cultural recruitment training to a company's Human Resources Department and hiring managers. The training is an important step in building cross-cultural competence and identifying ways in which the hiring process can be adjusted to be more inclusive to foreign-born candidates. Emphasis is placed on developing interviewing skills that respect cultural differences, aligning resume screening criteria to US standards in order to understand and translate the degrees and professional experience these candidates possess, and gaining a better understanding of who these individuals are and the value they can add to the business. Engagement is the second step in the process, which involves other employees within the organization. Employees are encouraged to participate in such volunteer programs as mentoring and mock interviewing. These direct interactions with job seekers provide valuable experience and increase employees' cross-cultural competencies. Employee volunteers help to support the diversity
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initiatives on a grassroots level and often refer job seekers internally for open positions because they get to know them during the volunteering process. Employment entails the presentation of qualified Upwardly Global candidates for important talent gaps. Based on the established partnership, these candidates enter the recruitment process through the company's internal hiring process, which allows for greater visibility and opportunity to demonstrate their skills. Leu explains, “This program is not just another diversity training. Our holistic and practical approach results in small, but measurable steps towards true global diversity.” Companies have begun to realize the benefits of these programs within their organizations and immigrant workers are now becoming an “internal bridge” as businesses expand globally. It is becoming possible to reach local ethnic markets with these cross-cultural managers because they understand the US business strategy and are able to help transfer this knowledge into the new markets. Currently, Upwardly Global has partnerships with several Fortune 1000 companies and has trained over 1,000 employer representatives from more than 70 companies including Google, BearingPoint, and JPMorgan Chase. Upwardly Global Rachel Diller Manager, Employer Partnerships 415-834-9902 www.upwardlyglobal.net
[email protected]
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Volunteer on Your Terms One Brick: Dave Shefferman
After the dotcom bust, Dave Shefferman cast about for constructive things to do while unemployed. He tried volunteering and quickly realized that the work uplifted him. He was able to get friends to volunteer too. It was a way to engage in no-frills social activity and then go for pizza and beer. In June 2001, Dave, Brian Gee, and Charlotte Rayne were volunteering at the San Francisco Food Bank. The trio recognized that while many nonprofits need volunteers and many people are interested in volunteering, there are still barriers that prevent people from actually stepping up and getting involved. They created a volunteer network that is organized around done-in-a-day volunteer projects rather than long-term commitments. At volunteer events, they put name tags on the volunteers, give them a chance to meet one another, and create a social experience instead of a “volunteer chore.” By offering one-off projects, One Brick enables people to get involved, have an impact, and have fun without the requirements of individual long-term commitments.
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The “commitment-free volunteering” allows individuals to choose when, where, and with whom they volunteer. Whereas nonprofits often expect volunteers to make commitments for a certain number of volunteer hours or to agree to be available every week at a specific time, One Brick is more nimble and able to meet diverse needs as they arise. One Brick began to build its pool of volunteers by posting ads on Craigslist: “Come and help out the community.” People got involved and brought others with them. The organization hit a critical mass in San Francisco in no time. Nine months after founding One Brick, San Francisco, they launched chapters in New York and then in Chicago and Washington DC. They are building a franchise of sorts and expect to continue expanding and to share best practices from chapter to chapter. Each chapter has its unique characteristics, but the overall volunteer experience will be the same from one chapter to another. For the first five years, One Brick was 100% volunteer run. The organization operated on less than $10,000 a year until the fourth year, when its budget increased to $35,000. With the expansion into four cities, and plans for more, One Brick has decided to add their first, part-time Executive Director. By structuring the organization to be run by volunteers, One Brick delivers an hour of volunteer labor for less than $3. By contrast, Independent Sector estimated that the value of an hour of volunteer time was $18.77 in 2006. One Brick not only offers a way for busy employees to engage in volunteer activity but also provides companies with an opportunity to supplement their employees' contributions with matching donations, say $5, $10 or $20 an hour for each hour of volunteer time. A few companies, including Amgen, Gap, CitiBank, and Wells Fargo, have such matching programs.
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Today, One Brick has a web site with a calendar of the volunteer activities within each of the cities in which they operate. By mid 2007, One Brick's volunteers had helped more than 500 organizations and delivered over 110,000 hours to the communities served. One Brick www.OneBrick.org San Francisco
[email protected] New York
[email protected]. Chicago
[email protected]. Washington DC
[email protected]. Donations
[email protected]
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Contribute to Global Peace and Well-Being The Dalai Lama Foundation: Tony Hoeber
Tony Hoeber is a user interface designer who has 25 years' experience working at startup companies in Silicon Valley. In 2000, at the height of the dotcom boom, he read a New York Times article that portrayed the area as populated by thousands of engineers who pursued dreams of fabulous wealth with a single-minded passion. The implication was that Silicon Valley had not yet developed a broader sense of culture or community. As someone who had grown up in the area and also had come to love and appreciate its vibrant business culture, Hoeber decided to prove the New York Times wrong. He figured that with so many people finding themselves suddenly wealthy at a young age, many would begin to look for new ways to create a sense of challenge and meaning in their lives. He learned that a local group had invited the Dalai Lama to come to the Bay Area in May 2001 and contacted the organizer of the event. They talked about bringing the Dalai Lama together with Silicon Valley leaders, an event that might direct some of the “can do” Silicon Valley spirit and expertise toward the social benefit sector.
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Tenzin Tethong, a Palo Alto resident who worked closely with the Dalai Lama for several decades and had recently stepped down from his position as the head of the Tibetan Government in Exile, responded to this idea by saying, “You could arrange a one-off luncheon with Silicon Valley leaders, but why not aim higher and do something that would have a more sustained effect?” Tethong had close connections to a number of scholars, artists and activists who had worked with the Dalai Lama for many years, and they met with Silicon Valley entrepreneurs to explore options. The idea of creating a foundation resulted, even though serious questions were raised about the wisdom and appropriateness of forming such a foundation and of asking for permission to use the name of the Dalai Lama. Finally, after much discussion, the group decided that the risks were outweighed by the good that could come out of the effort. They approached the Dalai Lama, who gave the green light. The focus of the Dalai Lama Foundation is education for ethics and peace. The Foundation is international in scope, with a growing network of national chapters that includes Japan, Canada, Russia and Nigeria. All programs are initiated by individuals who have an idea, are motivated by a desire to share, and are willing to act on their dreams. Examples of ongoing programs include the following: • In 2002 a small group of friends began meeting at the home of Los Altos resident Karen Jacke to discuss the Dalai Lama's book Ethics for the New Millennium. After completing the book they decided to produce a study guide for others to use. The study guide was made available on the Dalai Lama Foundation's website, and soon other study circles formed. Now the guide is available in English, Japanese, Chinese, Spanish and Portuguese and is used by more than 20 study circles around the world. • Palo Alto resident Darlene Markovich, President of the Committee of 100 for Tibet, had the idea of asking artists to create works inspired by the life of the Dalai Lama. She got on the phone, and every artist she called responded with an enthusiastic “Yes.” Markovich, a former Human Resources executive at Alza Corp., put together a group of volunteers, and together they created a major art exhibition featuring works from 88 artists who represented more than 25 countries. The Missing Peace—Artists
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Consider the Dalai Lama had its premier in 2006 at the Fowler Museum at UCLA, continued on to Chicago and New York, and will tour internationally for the next several years. The Dalai Lama Foundation has developed curriculum materials based on the exhibition for both middle school and high school students. • Portola Valley resident and filmmaker Randy Taran dreamed of bringing children around the world together through the medium of video. She began working with the Foundation in 2003 and is now the director of Project Happiness, a collaborative initiative involving high school students from the United States, India and Nigeria who are engaged in a year-long exploration of the question “What is happiness?” In the summer of 2007, they completed the first version of a curriculum that will be shared with schools and teachers around the world. Dalai Lama Foundation projects are approved in advance and must fall within the broad area of education for ethics, peace, altruism and compassion. Explicitly political or religious projects do not qualify for consideration. The Foundation can provide only limited financial support but can offer support in other ways, including organizational development, technical support, introductions to potential collaborators and supporters, and promotion via the Foundation's website and newsletter. Tax-deductible donations to the Foundation are used to strengthen outreach so that increasing numbers of social entrepreneurs can launch projects for peace. Tony Hoeber, Board Member The Dalai Lama Foundation 61 Renato Court #24 Redwood City, CA 94061 USA 650-368-4435 www.dalailamafoundation.org
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Good Capital: Invest in Social Enterprise Right Reality: David Batstone
David Batstone is President of Right Reality and author of “Saving the Corporate Soul.” In 2007, he published “Not for Sale: The Return of the Global Slave Trade and How We Can Fight It,” and launched an international campaign to fight human trafficking. Most of us who consider ourselves worldchangers place our personal financial assets into two buckets: investment capital and philanthropy. Investment capital includes money that we put into real estate, pension funds, stocks, bonds, and the like. When we make these investments, we weigh the risk and the potential reward and balance the two to maximize return. Then we set aside philanthropy dollars to donate to those organizations that we believe in and hope can make a difference. Typically, we donate our money with a completely different set of criteria from what we use to invest. A third category of personal asset management is emerging, and it blends our concept of investment capital and philanthropic giving. On the cutting edge of this trend sits Good Capital, a fund management firm increasing the flow of capital to good by blending investment, business, and philanthropy.
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Good Capital is raising a $30 million Social Enterprise Expansion Fund this year to make investments in about a dozen for-profit and nonprofit social enterprises. It offers a financial return to investors who want to fund social change and are willing to sacrifice conventional market rate yields to do so. The three principals behind the fund have solid backgrounds in social enterprise. Timothy Freundlich is the director of strategic initiatives for Calvert Social Investment Foundation (which is interested in Good Capital for its R&D value and has given Freundlich license to grow the enterprise while he keeps his Calvert post). Kevin Jones is a serial entrepreneur who is best known for founding Net Market Makers and who has also been on the boards of Social Venture Partners International and Social Enterprise Alliance. Joy Anderson, president of Criterion Ventures, has worked for over a decade to launch social purpose ventures. Anderson does not shy away from the unique features of a risk capital social enterprise fund. “Doing good often costs something,” she says. For that reason, Good Capital does not promise its investors returns expected by traditional venture funds. Nevertheless, the fund is looking to return principal plus an “appropriate return” to its subscribers. “We want to enable individuals to recycle their philanthropic gifts,” Anderson explains. She compares the fund favorably to the increasingly popular microfinance funds that allow investors to see the impact of their investment, and then watch it get recycled for ongoing virtuous benefit. It also picks up where Calvert Community Investments leaves off. Good Capital is on target to close $12 million in 2007, and will invest those funds immediately in a diverse portfolio. When asked the kind of enterprises that will be the recipient of its funds, Freundlich points to Evergreen Lodge, a for-profit resort lodge located just outside of Yosemite National Park that places a priority on hiring at-risk low income youth. Evergreen is seeking a capital investment to replicate its successful operations - it created nearly four million in revenue with an EBITDA of $1.1 in 2005 and grew those numbers in 2006, closing with $4.4 million with EBITDA of $1.35.
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As the Evergreen Lodge example suggests, Good Capital targets enterprises that are generating healthy revenue streams and offer a sound business model that ensures the sustainability of their operation. But where Good Capital really diverges from the pack as a venture fund is its willingness to invest in nonprofits. Freundlich emphasizes that, at the moment, nonprofits have a hard time finding capital to fuel their expansion plans because this is considered too audacious for most philanthropic foundations and too risky for debt from foundation program-related investments or social investment capital from funds like Calvert Community Investments. An example of a nonprofit that Good Capital likely would fund, according to Freundlich, is Commonwealth Care Alliance, a nonprofit health care system operating in several regions of Massachusetts. Its mission is to provide personalized care to people with special health care needs, primarily low-income elderly populations. Commonwealth generated $12 million in revenue in 2005, with an EBITDA of $856,000. It is projecting a four-year revenue growth of 140%. Investing in a nonprofit raises the obvious question: How will the investor ever see an exit? Good Capital expects to play the role of a niche merchant bank down the line, refinancing their positions to foundations and/or private investors once much of the expansion risk has been eliminated. “Admittedly, we're counting on a trend of maturity and adoption of new investment models in the philanthropic community,” Freundlich says. Good Capital is as much a symbol of a new wave of investment as it is a catalyst. Expect to see both individuals and investment funds blend their values with their asset management. “I expect to see this concept of a ‘third pocket’ — as Anderson describes it — that blends savvy investment with passionate enterprise. I will have my market-yield investments for personal security, philanthropic gifts to aid the vulnerable and urgent, and my social enterprise investments to build sustainable institutions in the middle. If this third pocket proves viable, it would be a godsend to enterprises who use innovation to better the environment and social living.”
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David Batstone, Ph.D. President, Right Reality - www.RightReality.com Author, Saving the Corporate Soul (Jossey-Bass) & Not for Sale (HarperOne) Professor of Ethics, University of San Francisco President, Not for Sale Campaign - www.NotforSaleCampaign.org
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Become an Internet Philanthropist Bring Light: Drew McManus
While working together at Adobe, Melissa Drydahl and Drew McManus were impressed by how civic-minded and socially-conscious the next generation (Generation Y - individuals who are not yet 30 years old) appeared to be. Here was an opportunity to inspire a new generation of philanthropy and to build a community of millions of people who care about giving to charity. BringLight.com was launched in May 2007 as a donation service where individuals can find a cause they care about, dialogue with charities, and fund specific projects collaboratively. “Gen. Yers grew up with the Internet so why not use the tools they are accustomed to using in their every day lives?” asks Drew McManus. “Through Bring Light,” McManus says, “we provide on-line tools for non-profits to raise money for specific projects and we provide tools for donors to discover their causes and get others involved.” Donation process is simple: Donors go to the website and search for a specific cause they wish to support. Then they make a contribution via credit card. Alternatively, they can establish a Giving Account, which allows the donor to set aside money to use for charitable causes. Contributions are immediately deposited in the Bring Light Giving Account at the American
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Endowment Foundation (AEF), which ensures that 100% of the donation goes directly to the charities.
Charitable organizations not only get a tool to raise funds for special projects but also benefit from the creation of Giving Groups, formed when individuals invite their friends, family members and coworkers to contribute to a particular cause. The Giving Groups magnify the impact of the charitable cause by giving the nonprofit organization a broader base of donors to market. Bring Light is starting to work with companies to incorporate giving into the organizations' culture in a fun way. For example: A company may rally around a specific project to make a tangible difference or two divisions within a company can hold a funding competition to help their charity of choice. Results for Bring Light are exceeding expectations. As of mid summer 2007, 80 charitable organizations are listed on the website, and donation traffic is increasing daily. “People are finding that it is addicting,” says McManus. “They make small donations that can help and it is a lot of fun.” www.bringlight.com, 19925 Stevens Creek Blvd., Cupertino, CA 95014 Drew McManus, President
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Engage in One-on-One Philanthropy Human Connexus Foundation: Cindy Campbell and Heather Connors
Cindy Campbell and Heather Connors have been best friends for over eight years and both have not only donated their personal finances but have been actively involved in volunteering and working with various charities. In their experience, the most successful nonprofit organizations have some common characteristics: they were created with simple ideas by people who were passionate about their cause; they were founded on, and operated within, their core values; and they provided tangible results to donors and volunteers. Campbell and Connors believe that most people are looking for purpose in their professional and personal lives and that they seek ways to give back to their communities. They have observed, however, that many are unsure of where to turn and what steps to take in order to make a difference and it is challenging to find time to research nonprofits or charities that embody the qualities they seek. Understanding this, Campbell and Connors decided, in January 2007, to co-found their own nonprofit called Human Connexus Foundation (HCN). HCN is a customized donation service that channels charitable assistance from a personal donor directly to an individual recipient. HCN is
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designed to allow a donor to give to a personally valued cause—for example, homelessness, education, or health related issues—and in so doing, have a direct impact on the life of another individual. After identifying a donor's personal philanthropic passion, HCN presents profiles of individual recipients who have needs matching the donor's cause. Tax-deductible contributions are made to HCN, which gives all of the funds directly the recipient's vendors. The recipient receives the benefit of the contribution through the vendor providing the service or support - for example, HCN pays the recipient's monthly rent directly to the landlord with the donor's funds. Unlike typical practices, HCN's administrative and operational costs are separated from the donation and funded by personal and corporate sponsors. This allows 100% of the donation to go to the recipient with only a separate administrative fee for the customized service. Campbell and Connors appreciate how critical human connections are to realizing success and personal empowerment. Tangible results are seen by donors because recipients are required to provide updates to HCN, which communicates the recipient's progress periodically to the donor. The continued follow-up by HCN creates recipient accountability and offers them a greater chance for success. HCN believes that such one-on-one philanthropic connections will establish sustainable results and encourage future giving. Human Connexus Foundation Cindy Campbell, Co-founder Heather Connors, Co-founder 1177 Branham Lane #325 San Jose, CA 95118 www.humanconnexus.org
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Reuse and Recycle Surplus Items iReuse LLC: Ken Kurtzig
Ken Kurtzig was inspired while having lunch at a local taco shop that was paying a tremendous amount of money to dispose of their old cooking oil. Ken was familiar with biodiesel and knew that there were many people who could certainly use the old vegetable oil for their vehicles, but it was too difficult to match the supply and demand. He researched a myriad of other items and what happened to them after they were no longer needed. His discovery that reusable items like desks, chairs, tables, computers, windows, car supplies, toys, and children's gear were going straight to the landfill or in some cases being shredded and then recycled, prompted the simple question, “How do I make reuse easy?” Kurtzig's desire to have fewer items go into a landfill spawned iReuse. Its Business Services division helps medium to large companies deal with all their surplus material. iReuse manages internal redistribution, sales, donation, recycling, and disposal (only as a last resort) to ensure that as much material as possible is reused and managed in the most cost-effective method possible.
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For example, a recent iReuse client, Pell Development Company, found themselves with a three-story 69,000 square foot office building chock full of perfectly usable office equipment left by their tenant. They were given an estimate of $40,000 to dismantle and dump everything. Out of frustration, they turned to iReuse to find out if there was a more socially-responsible and cost-effective way to handle the material. iReuse was able to sell and donate 93% of the office equipment. An additional 4% was recycled and 3% was disposed. This translated to 89 tons being reused. Instead of paying to dump the material, Pell received a $9,000 check and $100,000 in tax receipts. With clients like Charles Schwab, Birkenstock, Adobe, PG&E, and Autodesk, iReuse now manages reuse programs for some of the largest companies in the Bay Area. Birkenstock was recently preparing to move its 150,000 square foot corporate headquarters and distribution facilities for the first time in almost 40 years. They hired iReuse to coordinate an internal sale to employees and then to manage the sale, donation, reuse, recycling and disposal of all remaining surplus materials. A corporate client like Birkenstock is given an iReuse account manager as the lead after the initial consultation. iReuse provides full reporting on every project, so clients can communicate back to their employees and the public with tangible data on their sustainability efforts. Through iReuse, a client is connected to a network of buyers. Birkenstock had some heavy equipment from their warehouse that was sold through iReuse channels. iReuse also works with nonprofits and small businesses to maintain a database of wish lists. Autodesk, for example, has been able to donate excess office furniture and equipment to over 30 local nonprofits through iReuse's network of nonprofits. The sales and donations sometimes go to some unlikely places, such as a police station that would not have the funds for a slightly-used $500 ergonomic chair. iReuse even donated to hospice patients thousands of dollars worth of wedding flowers that were destined for the trash.
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In addition to corporate clients, iReuse works with the Environmental Protection Agency (EPA). With the EPA, iReuse tracks how much greenhouse gases are decreased because surplus materials are not going into a landfill. In addition, when material is reused, there is less demand for natural resources to produce new products. iReuse headquarters are in Marin County, and the company currently serves the entire San Francisco Bay Area. There is a new office in Los Angeles, and iReuse plans to roll out several other offices in California before the end of 2007, and to expand nationally the following year. iReuse Performance September 2005 - mid 2007 Total reuse: 1,373,157 pounds Total recycling: 183,159 pounds Greenhouse gases eliminated: 3,166.22 metric tons iReuse LLC 500 Tamal Plaza, Suite 520 Corte Madera, CA 94925 888-IREUSE-1 www.ireuse.com
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Promote Economic Independence Kiva Microfunds: Premal Shah
During his six-year career at PayPal, Premal Shah drove a number of key initiatives, including a year-long project defining eBay's role in economically empowering the global working poor. After asking himself, “Do I really matter?” he requested and received a sabbatical that allowed him to test his theories about the viability of microfinance. Shah thought it would be “cool” to lend to the poor online, and while researching the field of microfinance, he discovered that Matt Flannery was working on the same thing in Africa. They joined forces and started Kiva Microfunds, designed to help the world's working poor make great strides toward economic independence. People make loans to small businesses in the developing world by choosing to sponsor a business highlighted on the Kiva website. Throughout the course of the loan (usually 6-12 months), donors receive email updates from the sponsored business, and as loans are repaid, they can get their loan money back or decide to reinvest.
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Kiva relies on microfinance companies (field partners) in developing countries to assist in their business model. Currently, 57 microfinance companies in over 30 developing countries are on the ground screening entrepreneurs, taking photos, and administering the loans. Thanks to rapidly growing awareness, Kiva is expanding by 30% a month. Fourteen thousand micro-businesses have been started in 36 countries by over 80,000 Americans on the Internet, all using Kiva. Letty Cantos in Guayaquil, Ecuador, is an example of a micro business supported by an American using Kiva. Letty owns a carpentry and furniture-making business, Ebanisteria Tito. While she was living with her husband at his mother's house, she learned the business from her brother-in-law. When he left to start his own business on the other side of the city, Letty bought all of the equipment from him so she could run the business herself. She hired two workers and brought her husband into the business to help her as well. She knows the trade well, although most of her job entails purchasing the materials and finding buyers for the finished product. Letty needed a loan in order to buy a tool that would allow her to give her products a more professional finish. She hoped that with this investment she could improve the quality of her work and increase sales. Through Kiva, she received a loan for about $500. Letty was able to buy the tool that she needed for her workshop and had money left over to invest in wood and other materials. Her ability to increase the quality and quantity of her work has made her products very popular in the area and even in other areas on the Ecuadorian coast. Corporate sponsorship and strategic philanthropy are important sources of support for Kiva. eBay and PayPal were involved when Shah founded Kiva, and they have continued to support his efforts with free payment processing. Advanta credit card is also a supporter, donating 1% of revenues to Kiva.
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Lenovo, a Hong Kong based company, has donated 30 laptop computers so that Kiva can increase the number of its field partners. Lenovo has also contributed generously for research and development and has further expanded its giving to Kiva by involving employees in the giving process. Each employee receives a “Kiva bucks” gift certificate, connected to their periodic bonus and compensation plan, and uses it to sponsor a business abroad. Lenovo has about 30,000 employees, so this is a huge contribution. Kiva is just the beginning. Recently Shah co-founded the Silicon Valley Microfinance Network which is a grass roots microfinance organization for people interested in learning about microfinance and micro credit (www.svmn.net). He continues to work to refine Kiva.org's model of person to person micro-lending. In 2006, Premal was a featured speaker at the Clinton Global Initiative and Global Micro Credit Summit. Kiva Microfunds 2180 Bryant St. Suite 106 San Francisco, CA 94110 www.kiva.org
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Help Nonprofits with their Training Needs Community Outreach Program: Kris Schaffer
Training professionals have found a way to provide community service by working through their local associations. The Golden Gate Chapter of the American Society for Training and Development (ASTD) is one of the oldest and largest chapters in the nation. In 1976 its members started the Community Development & Training Project, a grassroots program to provide training services to small nonprofit organizations. The Community Project later merged with CompassPoint, leaving the Golden Gate Chapter without a community service group. To fill that gap, members created the Community Outreach Program (COP). COP serves small Bay Area nonprofits with custom learning solutions to meet their specific training needs. Workshops are conducted on site, solely for nonprofit organizations, and are designed to improve their effectiveness and soft skills. COP trainers are members of the Golden Gate Chapter and volunteer their services. Some have extensive professional expertise, while others are less experienced. All work in teams lead by a pro.
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Volunteers meet with nonprofits seeking help and perform a front-end needs analysis to determine whether COP will be able to provide the training needed. If COP can help, two volunteers with backgrounds that fit the issues are assigned to the nonprofit. They conduct data-gathering meetings with the organization in order to learn the special needs of the group, develop a customized training solution, and then conduct a workshop. The entire organization gets trained at the same time so that everyone receives a consistent message. COP workshops cover topics such as management, supervision, diversity, conflict resolution, and customer service. COP has worked with many local organizations. For example, they have helped CompuMentor design their own PC training; used Appreciative Inquiry to help Habitot Children's Museum with their reorganization; and trained management at the Bay Area Ridge Trail Council. Volunteers enjoy working with nonprofits whose advocacy matches their own interests. The Golden Gate Chapter sees an enthusiasm for community service, and the COP trainers are able to validate their mastery and use their professional skills to give back. Partnering on a COP project helps build mentoring relationships and provides sole practitioners with an opportunity to collaborate with others. The program also provides in-service training to its own volunteers in order to further their skills in front-end analysis and the design and development of training. Companies can help COP through sponsorships or by providing in-kind services such as workshop facilities and other business-related services. Also, HR professionals on staff can volunteer to be a trainer with COP. Kris Schaeffer COP Outreach Manager 415-474-0618 www.astdgoldengate.org/03_getinvolved/cop.html
[email protected]
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Support Collaborative Solutions to Conflict Search for Common Ground: Jane Shaw
Search for Common Ground (SFCG) was founded 25 years ago by John Marks, president of the organization. It was the height of the Cold War, and SFCG focused then on building bridges between East and West. The world is a different place today, but there is still a tremendous amount of work to be done to bring together people from different beliefs and positions. The mission of SFCG—to transform the way the world deals with conflict, away from adversarial approaches to collaborative solutions—is as relevant today as 25 years ago, perhaps even more so. The current problems facing us, whether ethnic, environmental or economic, are simply too complex and interconnected to be settled on an adversarial basis. Currently, SFCG is represented on four continents with programs in 17 countries: Angola, Burundi, DR of Congo, Guinea, Indonesia, Ivory Coast, Iran, Liberia, Macedonia, Middle East (offices in Jordan and Jerusalem), Morocco, Nepal, Nigeria, Sierra Leone, Ukraine, and USA. One of the key features of SFCG's work, whatever the issue, is to bring everyone to the table. Media is a powerful way to do this, and
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over the years SFCG has become well known for its work with media; for example, radio in many parts of Africa and television in the Middle East. In Sierra Leone, a country recovering and healing from 11 years of bloody civil war, SFCG's local studio has an 89% listening rate over the whole country. SFCG plays an important role in encouraging the use of “common ground” journalism to counter the dangerous polarities that can be caused by biased reporting. SFCG encourages the involvement of young people, and its Child and Youth Program works in many countries to encourage young people to understand and promote the common ground approach from an early age. It is very important to give young people an equal platform in the rebuilding process. To take a stand to deal with conflict by finding peaceful solutions, organizations and individuals have several options: Become a Common Ground partner. SFCG is funded by governments, foundations, and many, many individuals - at all different levels. Just as the organization works to bring together all parties involved in conflict, SFCG also works to gain funding from many different groups. Take part in a Common Ground workshop. Everyone can choose to deal with conflicts in their lives in a way that allows “the other” to be heard and respected. The Common Ground Approach workshop teaches simple principles and practices that are as appropriate to us in our daily lives as they are in the villages of West Africa. You can bring the workshop to your company. Join an investor trip. SFCG leads trips to West Africa or Nepal so financial partners can see the organization's work. Investors go in a spirit of partnership and learn from the people on the ground who undertake the ongoing work to transform conflict and bring about a sustained peace. The trip in Nepal in particular is designed to enhance corporate leadership skills. These trips are life-altering experiences.
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Host a Common Ground event. The common ground approach needs to be widely known and understood, so it makes sense to spread the word far and wide. One way to do this is to invite others to learn about SFCG's work by attending an introductory event held at work or at home. Attend SFCG's annual fundraising events in New York and San Francisco. The Common Ground Awards Ceremony celebrates and honors Common Ground heroes. In 2007 the heroes include TV Talk show host, Charlie Rose; Canadian Senator Romeo Dallaire, former General of the UN Peacekeeping Mission in Rwanda; and Ishmael Beah, author of Long Way Gone. The annual fundraising event in San Francisco will be a brunch on December 1, 2007 at the St. Francis Yacht Club. This event is free of charge - and everyone will be asked to become a financial investor. Individuals or companies can choose to be a table captain and invite others to fill a table of 10 people. SFCG provides the opportunity to join the many thousands of heroes around the world who are taking a stand to deal with conflict by finding peaceful solutions, even in the most difficult circumstances. Search For Common Ground Jane S. Shaw Director of Individual Giving 415-331-3123 www.sfcg.org
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Find Core Competitive Advantage ATDynamics, Inc.: Andrew Smith
Andrew Forrest Smith is an entrepreneur and business strategy consultant who has argued for over a decade that the “greatest market opportunity facing our generation is making everything we do, sell or buy more environmentally sustainable.” He compares the need for companies to develop a Corporate Social Responsibility (CSR) strategy to the requirement for companies to develop an IT strategy during the dot-com boom. “The question for business leaders,” he says, “is no longer whether or not to address environmental or social issues. The question now is to what extent your company will be able to leverage CSR as a key competitive advantage.” Smith formed ATDynamics after years of recognizing the enormous opportunity of environmentally-sustainable business. ATDynamics is an example of the number of ways that business can profit from creating a product that has a reduced environmental impact. ATDynamics is commercializing aerodynamic devices for tractor-trailers with the potential to reduce the trucking industry's fuel consumption by millions of gallons annually.
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Although still in its start-up phase, Smith designed the company from the ground up to sell products with positive environmental impact, attract a passionate workforce and demonstrate a zero-waste manufacturing, distribution and reclamation process. The flagship TrailerTail™ product will save typical fleet operator customers $2,000-$3,000 per year per trailer while reducing national oil dependency and carbon emissions. The TrailerTail™ is a four-foot extension off the back of a trailer which functions by reducing the low pressure created at the tail end of a tractor-trailer moving at highway speeds. The company has attracted employees and investors who see the opportunity to apply innovative thinking in an industry traditionally very resistant to change. ATDynamics is actively screening the materials it uses for its aerodynamic devices to reach its 95% recyclability goals. In addition, the company is designing an ATDynamics Lifecycle Program™ where customers have an easy method for upgrading, replacing or disposing of ATDynamics products. Smith has seen what happens when a company's incentive system is misaligned with global CSR objectives. In both 2001 and 2005 he led expeditions to the Arctic National Wildlife Refuge (ANWR) in Northeastern Alaska, where he witnessed the annual migration of 120,000 caribou across the Arctic Tundra as well as the retreating ice of the Arctic Ocean due to global warming. This firsthand knowledge of ANWR's tremendous value as a nationally-protected wildlife refuge piqued Smith's curiosity about the oil industry's efforts to open the refuge to oil development. Although the oil industry argued that drilling for oil in ANWR was essential to keep fuel prices low and maintain national security, Smith's research found otherwise. “In reality, the debate around the Arctic Refuge was fundamentally a human resources problem. Workers in the oil services industry feared what would happen to their jobs without an economy that depended on ongoing fossil fuel extraction. The debate about opening the Arctic Refuge to oil drilling will disappear the moment the talented labor pool trained in oil extraction can be redeployed to more socially responsible job positions.” The biggest challenge and opportunity for companies, even in the oil industry, is to realign incentive systems such that alternatives to the least environmentally-beneficial activities of the economy can be developed quickly.
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Smith makes the point that all companies must adopt CSR to some extent. Some companies will do it core to their business, such as ATDynamics. Others will be slower to adapt to the changing business climate. The companies which are slowest to respond are those whose internal incentives are misaligned with the greater good of society. The executives of the Detroit auto companies feared the financial costs and professional risk involved with re-designing their factories and product lines to produce fuel efficient cars. Therefore, no new cars were developed and the companies are now facing bankruptcy. Likewise, job security and high incomes in northern Alaska depend on oil companies continuing to drill oil. The companies and individuals involved with these industries therefore have the incentives in place to discredit global warming, encourage national dependence on fuel inefficient cars and open up every last acre of Alaska to oil drilling. Eventually the oil wells will go dry in Northern Alaska. The oil service companies which address negative incentive systems and issues of CSR earlier will have the advantage in adapting to a world which requires cleaner energy. Providing clear incentives in non sustainable industries will speed stakeholders towards creating sustainable products and adopting socially responsible, competitive, business practices. Advanced Transit Dynamics, Inc. Andrew F. Smith, CEO www.atdynamics.com
[email protected]
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Empower Women Entwine Global: Almaz Negash
Almaz Negash is the principal and founder of Entwine Global. She focuses on international trade, economic development, and the empowerment of women. She also speaks to organizations about women's economic rights, sustainability, cultural and ethical awareness and the needs of emerging women leaders in developing countries. Almaz Negash's early childhood in a well-to-do, northern East African family was tranquil. But then her homeland, Asmara, Eritrea, was plunged into war with Ethiopia. Her life was transformed; she grew accustomed to living without her siblings, who had been sent to live abroad, in a tense atmosphere of hide and seek. This experience planted the seeds of Negash's deep commitment to justice and to her drive to create opportunities for those who still live in survival mode. In 2003, Negash was asked to develop the global leadership and ethics program for the Markkula Center at Santa Clara University. The purpose of the program is to bring former heads of state to Santa Clara University in order to speak about global and ethical issues. In one year, she hosted more than 20 former heads of state. “We addressed issues related to HIV, children's education, human rights and human responsibil-
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ity,” she said. “We invited Silicon Valley community and business leaders to participate in the dialogue.” The events created awareness and led to the development of a curriculum on the ethics of globalization so future students would have access to the wisdom of the powerful group. In addition, Negash managed the Architect of Peace project (www.scu.edu/ethics/architectofpeace.org), an educational module for faculty and students on 75 individual peacemakers and the process of peacemaking. Negash helps for-profit and not-for-profit organizations to collaborate in creating strategic plans that contribute to the social, economic, and cultural infrastructure of the societies in which the organizations operate. For example, she facilitated a joint venture between the government of Eritrea and Seawater Farms to develop seawater-based farming, creating a sustainable community where more than 200 women were hired to work at the farm. Negash is especially interested in the relationship between women's economic empowerment, education and poverty reduction. “Women represent half the world's population,” she said, “and gender inequality exists in every nation on the planet. To discriminate and prevent half of humanity from reaching its full potential is economic folly. Denying women’s and girls' equality and fairness not only hurts them, but also hinders the rest of society.” “Women in countries like Kenya and Ghana are responsible for more than 50% of the work, but less than 5% of the money comes back to them,” said Negash. “If you don't support the women, poverty continues. A woman is the head of the house and takes care of the children. When the mother is poor, naturally the children are poor.” Negash uses Cisco's Networking Academy as her model—in developing countries, the policy is to have a high percentage of women participate in programs. From Negash's perspective, there must be a concerted action to educate women, to give them equal access to credit, and to empower them, all within the context of promoting greater community, environment, and societal sustainability. Almaz Negash Entwine Global 408-981-5876
[email protected]
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Raises Living Standards Village Enterprise Fund: Nicholas Imparato
Nicholas Imparato is a member of the Operating Committee at Village Enterprise Fund. He is also a Professor in the Department of Marketing, Globalization and Strategy, School of Business and Administration at USF, and a research fellow at the Hoover Institution, Stanford University. Nicholas Imparato joined the Operating Committee for the Village Enterprise Fund (VEF) “after recognizing the potential in the group's unique entrepreneurial model, one that could provide assistance to the poorest of the poor on a large scale.” Village Enterprise Fund fills a unique niche in the microfinance field by seeding startups and agricultural ventures in rural East Africa. It provides business training (using its own innovative teaching methods), initial capital and ongoing mentoring to entrepreneurs in Tanzania, Kenya and Uganda. While the United Nations considers income less than $2.00 a day below the poverty level, much of the rural population that VEF targets lives on less than fifty cents per day. Since 1987, it has helped start more than 14,000 new businesses and improve the standard of living of more than
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350,000 people. “The excitement these numbers generate is heightened when you think about what could happen if the VEF methodology were extended to other areas of high need,” says Imparato. Typical VEF businesses include vegetable kiosks, roadside cafes, bicycle repair shops, animal husbandry and small farms for cash crops. The entrepreneurs behind these businesses are largely ignored by traditional micro lending organizations because they are either risk averse and reluctant to take on debt or, often times, they simply can't meet repayment requirements. Consequently, VEF provides grants, not loans, of $100 or $150 to each business group of five individuals. VEF has 90 talented, local African volunteers who comprise its network of Volunteer Field Coordinators and who provide training and mentoring for each business. In each country there is a small paid African staff that supports the volunteers by making recommendations, solving problems and supplying such tangible resources as training materials and transportation. Business organizations that pursue a multifaceted CSR strategy have supported VEF efforts with company-wide initiatives. Hewlett-Packard's Micro-enterprise Development Program is one example. HP also, along with other companies such as Morgan Stanley, eBay and Google, has employee match programs that benefit VEF and other small NGOs. In 2006, for example, more than 7,700 HP employees participated in HP's community investment programs, contributing $14.8 million in cash and products. Small, yet effective, service NGOs could not survive without contributions of this sort. Private sector support is contingent, of course, on evidence of program effectiveness. A recent impact evaluation of VEF businesses showed that each of its small grants, combined with business training and mentoring, raises the standard of living of at least 25 people. Local entrepreneurs are able to improve their lives by increasing the quantity and quality of meals they eat, living in sturdier homes, getting access to the medical care they need and sending their children to schools they otherwise could not afford.
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Other performance data are also enviable: 88% of VEF businesses operate beyond one year. More than 75% are still operating four years after the initial, and usually only, grant. Just as impressive, one-third of VEF's beneficiaries launch second businesses. Imparato noted that “confidence and credibility bestowed by other better known organizations help boost VEF's brand and effectiveness.” This year, at the invitation of the Jane Goodall Institute, VEF began delivering programs to villages surrounding conservation areas in Uganda. The reputation of the institute and its founder bring more than cachet to the VEF effort. They expand aid opportunities to areas that were not reached before. The contributions of individual business executives and, increasingly, their firms, make the efforts of VEF and similar organizations possible. Besides financial and human resources, they offer the moral support that both volunteers and paid staff value. They share the recognition that profit making organizations, with the support of their shareholders and other constituencies, can collaborate with others to raise living standards in regions that have been among the worlds most neglected and abused. Nicholas Imparato - Professor, Department of Marketing, Globalization and Strategy, School of Business and Management, University of San Francisco; Research Fellow, Hoover Institution, Stanford University; Operations Committee, Village Enterprise Fund
[email protected];
[email protected] Village Enterprise Fund: www.villageef.org
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Part V The Human Resources Leadership Role in CSR •
Corporate Social Responsibility: HR's Leadership Role—Society for Human Resource Management (SHRM): Nancy Lockwood
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Corporate Social Responsibility: HR's Leadership Role Society for Human Resource Management (SHRM): Nancy Lockwood
Introduction Today, there are many references to corporate social responsibility (CSR), sometimes referred to as corporate citizenship5, in our workplaces, in the media, in the government, in our communities. While there is no agreed-upon definition, the World Business Council for Sustainable Development defines CSR as the business commitment and contribution to the quality of life of employees, their families and the local community and society overall to support sustainable economic development.6 Simply put, the business case for CSR—establishing a positive company reputation and brand in the public eye through good work that yields a competitive edge while at the same time contributing to others—demands that organizations shift from solely focusing on making a profit to including financial, environmental and social 5. Muirhead, S. A., Bennett, C. J., Berenbeim, R. E., Kao, A., & Vidal, D. J. (2002). Corporate citizenship in the new century: Accountability, transparency, and global stakeholder engagement. New York: The Conference Board, Inc. 6. World Business Council for Sustainable Development. (2000, January). Corporate social responsibility: Making good business sense. Conches-Geneva, Switzerland: Author.
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responsibility in their core business strategies. Despite what the phrase corporate social responsibility suggests, the concept is not restricted to corporations but rather is intended for most types of organizations, such as associations, labor unions, organizations that serve the community for scientific, educational, artistic, public health or charitable purposes, and governmental agencies. In the late 1990s, CSR began to gain momentum as pressure from consumers, the media, activists and various public organizations demanded that companies contribute to society. In large part, the increasing focus on CSR has been fueled by a number of events in recent years, such as the highly publicized financial scandals of Enron and WorldCom, alleged sweatshop labor by retail clothing and sports shoe manufacturers and the alleged “under-the-table” deals that companies such as Halliburton have received. Now, reputation, brand, integrity and trust are increasingly considered important measures of corporate social responsibility. CSR in the Business Community Worldwide, companies and their HR leadership are coming to grips with what exactly CSR means in their organizations and how to strategically include CSR within business goals and objectives. There is growing evidence pointing to the validity of and the demand for CSR. For example, 82% of companies noted that good corporate citizenship helps the bottom line and 74% said the public has the right to expect good corporate citizenship.7 However, as Niall FitzGerald, chairman of Unilever, explained in his presentation at the London Business School, “the reality of corporate social responsibility is there are no precedents to fall back on, and decisions must be based on judgment rather than tried and tested formulae.” 8
7. The Center for Corporate Citizenship at Boston College and The U.S. Chamber of Commerce Center for Corporate Citizenship. (2004). The state of corporate citizenship in the U.S.: A view from inside 2003-2004. Chestnut Hill, MA: Author. 8. Unilever. (2004). A perspective on corporate social responsibility in the 21st century. [Based on a speech by Niall FitzGerald, Unilever chairman, “CSR: Rebuilding Trust in Business,” pp. 2-3. Distinguished Speaker Series, London Business School.] London: Author.
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As the concept of CSR becomes more widely accepted and integrated in business, it is helpful in this discussion to understand that the development of CSR in organizations is in transition (see Figure 1). There are basically three “generations” of CSR in varying stages of sophistication. The first generation has demonstrated that companies can contribute to society without risking commercial success. Today, the second generation is developing more fully as CSR gradually becomes an integral part of companies' long-term business strategies. Finally, the third generation addresses significant societal issues, such as poverty and cleanup of the environment.9 Evidence of the transition of CSR will be discussed throughout this article, with suggestions of how HR professionals can take on leadership roles that can contribute to CSR initiatives in their organizations. The article will also highlight some examples of the impact of CSR and how it may link to the bottom line.
Making the Business Case for CSR In recent years, intangible assets—company values, human and intellectual capital, reputation and brand equity—have become increasingly important to organizations.10 Companies that exhibit good corporate citizenship are likely to gain a competitive edge. Below are just a few examples of today's CSR success factors that are fast becoming the primary measures of an organization's credibility.
9. Zadek, S. (2001). The civil corporation: The new economy of corporate citizenship. London: Earthscan 10. Low, J., & Kalafut, P. C. (2002). Invisible advantage: How intangibles are driving business performance. Cambridge, MA: Perseus Publishing
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Reputation and Brand Enhancement: Company reputation and brand are greatly influenced by public perception. For example, in the largest global survey of the public's expectations, the Millennium Poll on Corporate Social Responsibility documented that over 25,000 individuals across 23 countries on six continents revealed they form their impressions of companies by focusing on corporate citizenship, and two out of three people want companies to go beyond making money and contribute to broader society goals.11 Increasingly, there are success stories that show companies are listening to the public. A recent example is that of Ecolab of St. Paul, Minnesota, that quickly developed new products to address unexpected hazards with an antimicrobial disinfectant product in response to foot and mouth disease in livestock and another new product to combat SARS at the Toronto airport.12 Today, companies are also seeking avenues of public acknowledgment of their employer brand. For example, Business Ethics Corporate Social Responsibility Report publishes a list of the 100 best corporate citizens. Companies are ranked by social scores regarding environment, community and customer relations, employee relationships, and diversity. One of the 2004 winners was Proctor & Gamble, which donated funds to help disadvantaged youth in Vietnam, combat childhood malnutrition in India and provide earthquake relief in Turkey.13 Another critical aspect of reputation and brand, as a CSR success factor, is the impact on a company's sustainability—that is, the conditions or characteristics that support an organization to continue its business, including environmental, social and economic aspects of the company. Ultimately, the environmental, social and economic health of a company transfers into dollars that either directly or indirectly affect reputation and brand, and thus the bottom line. For example, a company whose product contributes to the safety of the environment will likely be favorably viewed by the public. Or, a 11. Environics International, Ltd., The Prince of Wales Business Leaders and The Conference Board. (1999). Millennium poll on corporate social responsibility: Executive briefing. Toronto, Canada: Author. 12. 2004: 100 best corporate citizens. (2004, Spring). Business Ethics Corporate Social Responsibility Report, 18, 1, 8-12. 13. Ibid
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company that supports community events may generate public approval. Both examples may yield additional applications for employment or employee referrals, thus potentially lowering the time and cost per hire. The final CSR report card is directly linked to the company's sustainability and consequently influences critical success factors such as reputation and brand. Accountability and Transparency: Open, reliable and regular reporting of a company's performance—known as accountability and transparency in CSR terminology—is quickly becoming a public issue and one that HR leaders will need to keep in the forefront (see Figure 2). As a sign of the times, large companies are beginning to publish company information, once deemed as too sensitive to release, with expectations for their suppliers and their internal human resources practices. However, few companies give robust performance measures, with fewer yet being independently verified.14 The clothing industry, for example, has been criticized for how workers are treated in factories in their supply chain. Setting an example, Gap, Inc. released its first Social Responsibility Report, emphasizing the organization's commitment to working with key players to create industry-wide change. It also took a proactive stance on employee treatment by prohibiting child labor, forced labor and discrimination and protecting freedom of association for workers.15
14. United Nations Industrial Development Organization. (2002). Corporate social responsibility: Implications for small and medium enterprises in developing countries. Vienna: Author.
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Risk Management: Managing investor confidence is another factor supporting the business case for CSR. Today, the financial community is examining organizations' CSR report cards and their risk profile. The rapid rise of socially responsible investment illustrates that corporate citizenship is becoming a key measure that investors consider when aligning ethical concerns with publicly held corporations. For example, the Dow Jones Sustainability Indexes (www.tinyurl.com/2owb6j) track the financial performance of the leading sustainability-driven companies worldwide, and the Domini Social Investments (www.domini.com) screen companies for corporate citizenship, diversity, employee relations, non-U.S. impact, environmental responsibility and safe and useful products. In view of the increasing importance placed on socially responsible investment, this is an opportunity for HR leaders to consider programs, such as community events, that may generate investor confidence linking CSR initiatives to the bottom line. The Talent War: With the anticipated labor shortage in the next 10 to 25 years, attracting, developing, motivating and retaining talent is, and will continue to be, very important. Correspondingly, CSR influences a company's competitive advantage today through two key value drivers: 1. Company reputation and brand; and 2. Human capital. HR leaders have begun to assume leadership roles to address both areas. For example, a positive CSR initiative was documented by an employee survey that illustrated the pride of employees regarding their company's contribution to a local AIDS organization. In addition, the talent war is evidenced by an influx of “best places to work” awards (e.g., Fortune magazine's “100 Best Companies to Work For,” www.fortune.com/fortune/fortune500). There are many such programs, located in communities and business organizations that highlight the company and/or the HR professional. By applying for and winning these awards, HR leaders can gain invaluable exposure for
15. Gap, Inc. (2004). Gap, Inc.: Social responsibility report, 2003. San Francisco: Author.
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their organizations and use the award as a key feature in recruiting campaigns. Thus, a strong argument for CSR is talent management in both the short and the long term. Challenges to the Business Case for CSR The business case for CSR is not necessarily a simple one. Among the challenges is that social and/or environmental impact differs across industries, complicated by the fact that the term CSR has different meanings to different industry sectors in different parts of the globe. Also, some may question if the message CEOs communicate about CSR is an add-on or part of company core business activities—or is it merely an insincere effort to boost public relations? In some organizations, CSR is still considered to mean compliance and philanthropy, although some large companies are now placing CSR in a more strategic framework. Further, there is the question of how to measure CSR. For example, a survey of 539 CEOs in 40 countries examined the strategic importance of communication regarding corporate citizenship to investors. One of the largest obstacles noted was the lack of a rigorous, credible business case backed up by performance indicators and metrics that can be quantified and benchmarked.16 Further, investment in CSR is not yet being taken seriously by some organizations. Only 30% of executives said their company increased overall business investments in corporate citizenship in the last year. The same report indicates resources and resistance as barriers to practicing corporate citizenship and CSR.17 Not all organizations may have the resources (e.g., funds, time, staff) to funnel into CSR initiatives. However, CSR programs may not be expensive or require a significant time commitment. Organizations that are interested in CSR may choose to start with small projects that 16. World Economic Forum and The Prince of Wales International Business Leaders Forum. (2004). Values and value: Communicating the strategic importance of corporate citizenship to investors. Geneva, Switzerland: Author. 17. The Center for Corporate Citizenship at Boston College and The U.S. Chamber of Commerce Center for Corporate Citizenship. (2004). The state of corporate citizenship in the U.S.: A view from inside 2003-2004. Chestnut Hill, MA: Author.
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showcase their commitment to their workforce and the community. HR leaders can help address this challenge by considering different options and developing creative approaches to CSR to present to their company. Below are recommendations to consider: • Network with other HR professionals to learn about their organizations' CSR initiatives (ideas and information about programs; what worked and lessons learned). • Explore partnering with other organizations (e.g., co-sponsor a community event). • Contact local business organizations, such as the Chamber of Commerce, to learn what events they sponsor and how the company may contribute. • Solicit employee suggestions regarding CSR initiatives. Thus, it is at this point that HR leadership, as the eyes and ears of the organization, is key to the CSR equation. As discussed in the next section, HR has the opportunity, through well-managed programs, policies and practices, to engage the organization and its stakeholders (e.g., owners, employees, management, customers, creditors, the government and other public organizations) in the value of CSR by focusing on communications, employee relations, health, safety and community relations to provide their organizations with a competitive advantage. HR's Leadership Role With company reputation, viability and sometimes survival at stake, one of the critical roles of HR leadership today is to spearhead the development and strategic implementation of CSR throughout the organization and promote sound corporate citizenship. Attracting and retaining competent people is one of the primary business reasons for CSR.18 While strategically including CSR in the organization can begin from different points (e.g., product safety, the board of directors, 18. Olsen, L. (2004). Making corporate responsibility work: Lessons from real business [Executive Summary]. Ashridge Centre for Business and Society and the British Quality Foundation, www.acbas.com.
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business development), it makes good business sense for HR to head the process and partner with strategic leaders in the firm because human capital is arguably the number one intangible value driver. Many HR leaders are already looking ahead to the future. According to the SHRM® 2004-2005 Workplace Forecast, key HR trends are: 1. Demonstrating HR's return on investment; 2. HR's role in promoting corporate ethics; and 3. Building people management and human capital components into key business transactions. As this report documents, some HR leaders are taking action now:19 • 63% are increasing spending on learning and training initiatives. • 40% are changing company policy as a response to environmental issues. • 36% are changing company policy as a response to grassroots pressure to change specific business practices. • 32% are increasing involvement in social programs. The Status of CSR in the Organization: HR leaders can influence three primary standards of CSR—ethics, employment practices and community involvement—that relate either directly or indirectly to employees, customers and the local community, as outlined below.20 By considering these three CSR standards, HR leaders can then identify the CSR stage of their organization before making decisions to develop and implement CSR initiatives (see Figure 3).
19. Schramm, J., & Burke, M. E. (2004, June). SHRM® 2004-2005 workplace forecast: A strategic outlook. Alexandria, VA: Society for Human Resource Management. 20. Social Venture Network. (1999). Standards of corporate social responsibility. San Francisco: Author.
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• Ethics—Ethical standards and practices are developed and implemented in dealings with all company stakeholders. Commitment to ethical behavior is widely communicated in an explicit statement and is rigorously upheld. • Employment Practices—Human resource management practices promote personal and professional employee development, diversity at all levels and empowerment. Employees are valued partners, with the right to fair labor practices, competitive wages and benefits and a safe, harassment-free, family-friendly work environment. • Community Involvement—The company fosters an open relationship that is sensitive to community culture and needs and plays a proactive, cooperative and collaborative role to make the community a better place to live and conduct business.
Next, prior to launching and/or evaluating CSR initiatives in the organization, consideration of principles, implementation and employer brand will assist HR leaders in determining how and/or why to include CSR initiatives in their company (see Figure 4). First, questions of principle provide the broad view of CSR—moving from philanthropy and donations to contributing solutions to help solve the large issues such as poverty.21 Second, questions of implementation address practical issues such as incorporating CSR into the performance
21. World Business Council for Sustainable Development. (2000, January). Corporate social responsibility: Making good business sense. Conches-Geneva, Switzerland: Author.
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appraisal process and the softer issues of creating an organizational culture that supports CSR initiatives.22 And third, questions regarding employer brand provide an opportunity for HR leaders to look closely at how their current policies and programs can more positively affect recruitment, retention and talent management.
HR's CSR Checklist: Taking the long-range view, HR leaders can use a checklist to track the HR scorecard on CSR as initiatives are developed and implemented over time (see below).23As appropriate, changes in direction can be made to correspond with the organization's overall strategy. • Create a strong organizational culture around core company values. • Scan the environment to identify potential threats (e.g., competition for talent within the organization's industry sector). • Build personal and professional capability of the workforce (e.g., expand intellectual capital within the organization and in collaboration with other organizations). • Include ethical concerns in staff performance measures. • Support participative decision-making. • Ensure highest standards in workplace health and safety.
22. Ibid. 23. Ibid.
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• Encourage active engagement in community activities. Moving Forward with CSR—HR as a Change Agent: Focusing on company values, HR leaders set the tone for an organizational culture that is open to and understands CSR. HR's role as a change agent—grounded in mutual respect, and open and honest communication—is essential to educate management and employees about including CSR when setting business goals and objectives. Three practical steps to promote change regarding CSR are to: 1. Establish a workable stakeholder consultation process; 2. Use the process to understand the local culture (e.g., internal—the workforce—or external—the community) at all stages of implementing CSR; and 3. Create a sense of ownership between staff who set up a project and those who implement it. 24 Beyond including CSR in the HR management system, HR's role as a change agent continues through keeping the CEO and other members of the senior management team informed of human capital initiatives, the status of community relations, measurements of employment activities and development of partnerships for CSR programs, both inside and outside the organization.25 HR and Community Relations: One of the most visible CSR initiatives is community relations. Strong community relations can have a positive impact on company reputation and brand. Through community programs that highlight the company doing good work, HR can link critical issues—decreasing turnover, savings on cost per hire and attracting talented individuals—to CSR and the bottom line. There are many other possibilities that HR leaders could explore to match both company and community needs (e.g., cultural facilities for the community, recreational facilities for employees and their families, an educational project to help prepare tomorrow's workforce). For example, employees from high-tech companies could work with 24. World Business Council for Sustainable Development. (1999). Meeting changing expectations: Corporate social responsibility. Conches-Geneva, Switzerland: Author. 25. Dunphy, D., Griffiths, A., & Benn, S. (2003). Organizational change for corporate sustainability. New York: Routledge.
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students on science projects that require technical skills. Further, programs that affect both short- and long-term goals are also strategically advantageous as CSR initiatives. An illustration of such a program is the literacy initiative developed by Time Warner when the company saw that the reading public could have an impact on their short- and long-term goals of product sales.26 CSR in the Global Arena Internationally, CSR has a strong human rights dimension. This is evidenced, for example, by the United Nations' Global Compact that addresses 10 principles in the areas of human rights, labor and the environment with the goal to have the private sector help realize United Nations' vision of a more sustainable and inclusive global economy.27 Global companies are increasingly placing a stronger emphasis on corporate citizenship activities. The top four citizenship priorities are: 1. Employee health and safety; 2. Sustainability; 3. Equal opportunities/global diversity; and 4. Globalization of contributions.28
Further, companies worldwide are beginning to emphasize the importance of citizenship activities beyond philanthropy. For example, a recent study documents that about 60% of global managers polled indicated these activities result in an enhanced reputation with customers and goodwill that opens doors in local communities.29
26. Burke, E. M. (1999). Corporate community relations: The principle of the neighbor of choice. Westport, CT: Quorum Books. 27. The global compact. Retrieved September 27, 2004, from www.unglobalcompact.org/. 28. Muirhead, S. A., Bennett, C. J., Berenbeim, R. E., Kao, A., & Vidal, D. J. (2002). Corporate citizenship in the new century: Accountability, transparency, and global stakeholder engagement. New York: The Conference Board, Inc. 29. Ibid.
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The global CSR agenda is associated with multilateral processes and guidelines. In recent years, there has been a significant growth of “codes of conduct” worldwide, sometimes referred to as a global regime of “soft law” (see Figure 5).
These voluntary business conduct principles cover a wide range of corporate citizenship topics, from corporate social and environmental responsibility to transparency and fair business practices. Following these international codes of conduct has been shown to yield similar outcomes as domestic CSR initiatives, such as enhancement of
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company reputation, increased stakeholder confidence and higher standards of business accountability.30 For example, companies are increasingly publicly strengthening their global partnerships by joining organizations such as Social Accountability International's Corporate Involvement Program (www.cepaa.org/SA8000/CIP.htm), the Ethical Trading Initiative (www.ethicaltrade.org) and the United Nations' Global Compact (www.unglobalcompact.org). Therefore, as organizations continue to expand globally, HR leaders must be cognizant of, promote and demonstrate public support of these codes. Globally, CSR has a significant impact on HR management. For example, HR must be aware that effective CSR means respect for cultural and developmental differences and sensitivity to imposing values, ideas and beliefs when establishing global HR policies and programs.31 Externally, global organizations are publishing mission statements, such as the one below by Shell, to publicly announce their intentions of corporate citizenship, using terms such as “respect” and “cultural differences,” and focusing on CSR priorities of diversity, health, safety and equal opportunity. “We aim to treat everyone with respect. We strive to protect people from harm from our products and operations. We aim to respect and value personal and cultural differences and try to help people realise their potential.”32 Internally, HR leaders are beginning to take steps regarding CSR by developing and implementing incentives and appraisal systems that reflect citizenship vision and purpose as well as hiring personnel that reflect these traits. For example, research by The Conference Board reveals that 50% of global managers report their companies do, or plan
30. Ibid. 31. World Business Council for Sustainable Development. (1999). Meeting changing expectations: Corporate social responsibility. Conches-Geneva, Switzerland: Author. 32. Shell International B. V. (2001). People, planet and profits: The Shell Report 2001. The Hague, Netherlands: Author.
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to, include citizenship as a performance evaluation category. Additionally, 68% of respondents cite the link between citizenship and performance appraisal as “increasingly important.”33 What Does the Future Hold? The impact of CSR is under close scrutiny. There are four primary areas of concern: 1. Product responsibility; 2. Strategies for sustainability; 3. The quality of CSR management; and 4. The future of CSR overall.34 Importantly, indications are that organizations will increasingly be held accountable for their actions. According to PricewaterhouseCoopers, within the next 10 years evaluation methods used by Wall Street analysts will include new metrics—social performance and intellectual capital—to more accurately assess the net worth of a company, and within the next five years, 70% of North American and European companies will assign board responsibility for reputation and social responsibility.35 Over the next five to 10 years, one of the primary tests of how society will judge companies will be based on where corporations place their facilities, how they source goods and services and what economic impact they have on poor and disadvantaged communities.36 33. Muirhead, S. A., Bennett, C. J., Berenbeim, R. E., Kao, A., & Vidal, D. J. (2002). Corporate citizenship in the new century: Accountability, transparency, and global stakeholder engagement. New York: The Conference Board, Inc. 34. Business respect—CSR—Dispatches#13. (2001, September 22). Retrieved September 10, 2004, from www.tinyurl.com/ytxhc3. 35. PricewaterhouseCoopers. (1999, September 30). Surveys find many consumers hold companies responsible for their actions [News Release]. Retrieved September 14, 2004, from www.pwc.com. 36. AccountAbility & Business for Social Responsibility (with Brody Weiser Burns). (2003, June). Business and economic development: The impact of corporate responsibility standards and practices. Retrieved September 3, 2004, from www.tinyurl.com/3ahgbl
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Companies will increasingly adopt a comprehensive view of corporate citizenship that includes the environment and community engagement.37 A proactive and perhaps controversial recommendation regarding human capital and emerging markets is that global corporations consider putting the world's five billion or so poorest people at the heart of their profit-making strategies.38 Not surprisingly, evidence suggests that companies have a long way to go to clearly demonstrate substantive CSR performance. For example, a global ranking report notes that the world's 100 largest companies have a poor record of accounting for their impact on society and the environment. A range of measures that include strategy, governance and stakeholder involvement show these companies scoring an average of 24 out of 100 points with only five companies scoring more than 50% and only one U.S. company, Hewlett-Packard, placing among the 10 highest scorers.39 Further, the level of effort that the worldwide community is putting into the achievement of the United Nations Millennium Declaration goals is less than half the effort necessary to meet any of the goals.40 Consequently, since the CSR initiatives of most organizations tend to be peripheral and isolated from their core businesses and the initial momentum gained in the past few years appears too disjointed to make a significant impact in the world, the CSR movement must significantly shift gears in order to reach its full potential.41
37. The Center for Corporate Citizenship at Boston College and U.S. Chamber of Commerce Center for Corporate Citizenship. (2004). The state of corporate citizenship in the U.S.: A view from inside 2003-2004. Chestnut Hill, MA: Author. 38. Prahalad, C. K. (2004, August 21). Face value: Profits and poverty. The Economist, p. 54. 39. Top 100 poor on social impact. (2004, June 23). Financial Times. Retrieved September 14, 2004, from www.tinyurl.com/2e2gdv. 40. World Economic Forum. (2004). Global governance initiative: Executive summary 2004. London: Author. 41. SustainAbility. (2004). Gearing up: From corporate responsibility to good governance and scalable solutions [Executive Summary]. London: Author
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In conclusion, with the growing importance of human capital as a success factor for today's organizations, the role of HR leadership will become ever more critical in leading and educating organizations on the value of CSR and how best to strategically implement CSR policies and programs domestically and abroad. Bibliography 2004: 100 best corporate citizens. (2004, Spring). Business Ethics Corporate Social Responsibility Report, 18, 1, 8-12. AccountAbility & Business for Social Responsibility (with Brody Weiser Burns). (2003, June). Business and economic development: The impact of corporate responsibility standards and practices. Retrieved September 3, 2004, from www.tinyurl.com/3ahgbl. Burke, E. M. (1999). Corporate community relations: The principle of the neighbor of choice. Westport, CT: Quorum Books. Business respect—CSR—Dispatches#13. (2001, September 22). Retrieved September 10, 2004, from www.mallenbaker.net/csr/nl/13.html. Dunphy, D., Griffiths, A., & Benn, S. (2003). Organizational change for corporate sustainability. New York: Routledge. Environics International, Ltd., The Prince of Wales Business Leaders and The Conference Board. (1999). Millennium poll on corporate social responsibility: Executive briefing. Toronto, Canada: Author. Gap, Inc. (2004). Gap, Inc.: Social responsibility report, 2003. San Francisco: Author. Global Environmental Management Initiative. (2004). Clear advantage: Building shareholder value. Washington, D.C.: Author. International Labour Organization. (2004, February). globalization: The role of the ILO. Geneva: Author.
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Low, J., & Kalafut, P. C. (2002). Invisible advantage: How intangibles are driving business performance. Cambridge, MA: Perseus Publishing. Merrifield, M. (2003, Fall). Corporate America's latest act: Juggling corporate social responsibility. Baylor Business Review, 21, pp. 1-5, 8-9. Muirhead, S. A., Bennett, C. J., Berenbeim, R. E., Kao, A., & Vidal, D. J. (2002). Corporate citizenship in the new century: Accountability, transparency, and global stakeholder engagement. New York: The Conference Board, Inc. Olsen, L. (2004). Making corporate responsibility work: Lessons from real business [Executive Summary]. Ashridge Centre for Business and Society and the British Quality Foundation and the British Quality Foundation. Retrieved October 1, 2004, from www.tinyurl.com/3xbv7q. Prahalad, C. K. (2004, August 21). Face value: Profits and poverty. The Economist, p. 54. PricewaterhouseCoopers. (1999, September 30). Surveys find many consumers hold companies responsible for their actions [News Release]. Retrieved September 14, 2004, from www.pwc.com. Schramm, J., & Burke, M. E. (2004, June). SHRM® 2004-2005 workplace forecast: A strategic outlook. Alexandria, VA: Society for Human Resource Management. Shell International B.V. (2001). People, planet and profits: The Shell Report 2001. The Hague, Netherlands: Author. Social Venture Network. (1999). Standards of corporate social responsibility. San Francisco: Author. SustainAbility. (2004). Gearing up: From corporate responsibility to good governance and scalable solutions [Executive Summary]. London: Author.
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The Center for Corporate Citizenship at Boston College and U.S. Chamber of Commerce Center for Corporate Citizenship. (2004). The state of corporate citizenship in the U.S.: A view from inside 2003-2004. Chestnut Hill, MA: Author. The global compact. Retrieved September 27, 2004, from www.unglobalcompact.org. Top 100 poor on social impact. (2004, June 23). Financial Times. Retrieved September 14, 2004, from www.tinyurl.com/2e2gdv. Unilever. (2004). A perspective on corporate social responsibility in the 21st century. [Based on a speech by Niall FitzGerald, Unilever Chairman, “CSR: Rebuilding Trust in Business.” Distinguished Speaker Series, London Business School.] London: Author. United Nations Industrial Development Organization. (2002). Corporate social responsibility: Implications for small and medium enterprises in developing countries. Vienna: Author. Waring, P., & Lewer, J. (2004, June). The impact of socially responsible investment on human resource management: A conceptual framework. Journal of Business Ethics, 52, 1, 99-108. World Business Council for Sustainable Development. (2000, January). Corporate social responsibility: Making good business sense. Conches-Geneva, Switzerland: Author. World Business Council for Sustainable Development. (1999). Meeting changing expectations: Corporate social responsibility. Conches-Geneva, Switzerland: Author. World Economic Forum. (2004). Global governance initiative: Executive summary 2004. London: Author. World Economic Forum and Prince of Wales International Business Leaders Forum. (2004). Values and value: Communicating the strategic importance of corporate citizenship to investors. Geneva, Switzerland: Author.
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Zadek, S. (2001). The civil corporation: The new economy of corporate citizenship. London: Earthscan. Resources Business for Social Responsibility: www.bsr.org CSR Europe: www.csreurope.org Global Environmental Management Initiative (GEMI): www.gemi.org Prince of Wales International Business Leaders Forum (IBLF): www.iblf.org Sarbanes-Oxley Act of 2002: www.sarbanes-oxley.com Standards of Corporate Responsibility: www.svn.org The Center for Corporate Citizenship www.bc.edu/centers/ccc/index.html
at
Boston
College:
U.S. Chamber of Commerce Center for Corporate Citizenship: www.uschamber.com/ccc/default World Business Council for Sustainable Development: www.wbcsd.org World Economic Forum: www.weforum.org About Nancy Lockwood Nancy R. Lockwood, SPHR, GPHR, is an HR content expert for the Society for Human Resource Management. Her responsibilities include identifying topics and focus areas in need of additional human resource management research, and creating HR products of strategic and practical value for target audiences. She is certified as a Senior Professional in Human Resource Management and a Global Professional in Human Resources by the Human Resource Certification Institute.
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About the SHRM Research Department The SHRM Research Department researches and synthesizes the thoughts, practices and voices of today's HR professional, business and academic leaders on various HR topics and focus areas, and creates products of strategic and practical value for HR target audiences. The Research Department includes the Survey Program, the Workplace Trends and Forecasting Program and the Strategic Research Program. These programs provide SHRM members with a wide variety of information and research pertaining to HR strategy and practices to both serve the HR professional and advance the HR profession. (www.shrm.org)
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Part VI Resources •
CSR Global Resource Links
C h a p t e r
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CSR Global Resource Links
Stanford Social Innovation Review: www.ssireview.org Sustainable MBA: www.presidiomba.org The Corporate Responsibility Officer: www.thecro.com Blessed Unrest, Paul Hawken: www.paulhawken.com Origo Institute: www.Origoinc.com Social Enterprise Reporter: www.sereporter.com Business Ethics: www.business-ethics.com Social Venture Network: www.svn.org Markkula Center www.scu.edu/ethics
for
Applied
Ethics:
Investors and Environmentalists for Sustainable Prosperity: www.ceres.org Business for Social Responsibility: www.bsr.org
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UN Global Compact: www.unglobalcompact.org OECD Guidelines for Multinational Enterprises: www.oecd.org The Global Sullivan Principle of Social Responsibility: www.thesullivanfoundation.org Vigeo CSR Rating Agency: www.vigeo.com/csr-rating-agency Calvert CSR Rating: www.calvert.com Social Accountability International: www.sa-intl.org Acre Resources: www.acre-resources.co.uk AsRIA: www.asria.org The Burma Campaign: www.burmacampaign.org.uk Business for Social Responsibility: www.bsr.org Business Ethics Magazine: www.business-ethics.com Business in the Community: www.bitc.org.uk Business Respect: www.mallenbaker.net/csr/nl Cal Safety Compliance Corporation: www.cscc-online.com Coop America: www.coopamerica.org Copenhagen Centre: www.copenhagencentre.org CSR Data Networks: www.csrdatanetworks.com CSR Europe: www.csreurope.org CSR Wire: www.csrwire.com Ethical Corporation Magazine: www.ethicalcorp.com
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Ethical Performance: www.ethicalperformance.com Ethos: www.ethos.org.br Interfaith Center on Corporate Responsibility: www.iccr.org Institute of Business Ethics: www.ibe.org.uk Investor Responsibility Research Center: www.irrc.org Joint Initiative: www.jo-in.org MHC International: www.mhcinternational.com Prince of Wales Business Leaders Forum: www.pwblf.org Social Venture Network: www.svn.org SustainAbility: www.sustainability.com Sustainable Development International: www.sustdev.org The Copenhagen Centre - New Partnerships for Social Responsibility: www.copenhagencentre.org/main Ethical Corporation Magazine: www.ethicalcorp.com Ethical Media (Web design firm): www.ethicalmedia.com/ Forest Stewardship Council: www.fscoax.org Global Alliance for Workers and Communities (GA): www.theglobalalliance.org/main.cfm The Global Compact: www.unglobalcompact.org/ Good Money website: www.goodmoney.com Green Money website: www.greenmoney.com
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Institute of Social and Ethical AccountAbility: www.accountability.org.uk/ International Federation of Organic Agriculture Movements (IFOAM): www.ifoam.org The International Textile, Garment and Leather Workers' Federation: www.itglwf.org Marine Aquarium Council: www.aquariumcouncil.org Marine Stewardship Council: www.msc.org MGNEP Systems (Italian environmental legislation): www.mgnep.com The Nathan Cummings Foundation: www.ncf.org Social Funds website: www.socialfunds.com Social Investment Forum: www.socialinvest.org World Monitors/eMonitors: www.worldmonitors.com Empowering Teens to Go Green: www.TeenThrive.com Better World Shopping Guide: www.betterworldshopper.org Women Innovators: www.astia.org
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A u t h o r s
About the Authors
Rossella Derickson and Krista Henley, M.A., LMFT, principals of www.corporate-wisdom.com, have translated their business and organizational psychology experience into Wisdom in the Workplace, consulting, training and coaching modules that support healthy group and company dynamics. Their classes to build business and leadership skills have been taught to CEO's, executives, and entrepreneurs in High Tech, Biotech, Insurance, and many other industries including leading universities. Connecting CSR to individual and team purpose at work is a new and passionate focus area. They are the Directors of the South Bay Organizational Development Network, www.sbodn.com, a leading edge forum focused on making a difference in how organizations are run in Silicon Valley.
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Heather Connors and Cindy Campbell have combined experience of over 20 years in Organization Development and Human Resources. They partnered in January, 2007, as Co-founders to create the Human Connexus Foundation. Human Connexus is designed to be a customized donation service that provides charitable assistance from a personal donor directly to an individual identified to have qualifying needs. Cindy and Heather believe that by creating a one-on-one philanthropic connection, their approach will establish sustainable results and encourage future giving. www.humanconnexus.org
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Authors
Almaz Negash, MBA, Managing Partner, Entwine Global, is Center Fellow at Santa Clara University's Markkula Center for Applied Ethics where she spearheads the Ethics of Immigration and Migration project. Negash served formerly as the director of the Markkula Center's Global Leadership and Ethics Program. Prior to joining the Markkula Center, she was the Director of the Silicon Valley Center for International Trade Development and the California Mexico Trade Assistance Center Program. In addition, she worked as a Corporate Social Responsibility researcher for a Senior Fellow at the Hewlett Foundation. Currently, she is Managing Partner at Entwine Global, a small international business, economic and educational development firm. www.entwineglobal.com.
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