28 th July 2023 Patrick Reid Session Nine Sustainability Corporate Social Responsibility CSR amp Environmental Social and Corporate Governance ESG Warwick Business School July 2023 ID: 1029339
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1. SustainabilityWarwick Summer School28th July 2023 Patrick Reid
2. Session NineSustainability: Corporate Social Responsibility (CSR) & Environmental, Social and Corporate Governance (ESG) Warwick Business School, July 2023
3. Take 10 minutes to consider the following:What does CSR mean to you ?Can you identify one organisation you believe has good CSR ?Exercise: In Pairs
4. A responsibility among firms to meet the needs of their stakeholders and a responsibility among stakeholders to hold firms to account for their actions.DefinitionRef: Chandler, David. (2017). Strategic corporate social responsibility: Sustainable value creation (4th ed.). Thousand Oaks, CA: SAGE.
5. Archie Carroll outlined 4 responsibilities of a firm, outlined in the pyramid.The CSR PyramidEconomic ResponsibilitiesBe ProfitableRef: Carroll, A. B. (1991). The pyramid of corporate social responsibility: toward the moral management of organizational stakeholders. Business Horizons, 34(4), 39–48.Legal ResponsibilitiesObey the lawPhilanthrophic ResponsibilitiesBe a Good Corporate CitizenEthical ResponsibilitiesBe Ethical
6. Is CSR a corporate responsibility ?What about stakeholders ?Class Questions:
7. Bhopal, biggest industrial accident to occur so far…>3700 died, 500 000 people exposed with long term health issuesIn settlement, agreed to pay $470 million to the Indian government to be distributed, less than 2500 USD per family.Disasters Force ActionRef: 'Bhopal’s tragedy has not stopped': the urban disaster still claiming lives 35 years on | Cities | The Guardian Accessed Date: 8th July 2022
8. 1996 Life Magazine ran an article on child labour, where a 12 year old was working in a factory for NikeCompany initially blamed sub contractorsThen had to take more direct actionNike
9. In the long run, those who do not use power in ways society considers responsible will lose it.With power comes responsibility. Corporate power must always be checked by social responsibility in order for it to be maintained. History shows abuse of power often leads to regulation and control. For example, Enron and WorldCom scandals led to the introduction of the Sarbanes-Oxley Act 2002.The Iron Law of Social ResponsibilityRef: Davis, K., & Blomstrom, R. L. (1971). Business, society, and environment: Social power and social response (2d ed.). New York: McGraw-Hill. Davis, K. (1973). The Case for and against Business Assumption of Social Responsibilities. The Academy of Management Journal, 16(2), 312-322. Retrieved from http://www.jstor.org/stable/255331 The Good, the Bad, and Their Corporate Codes of Ethics: Enron, Sarbanes-Oxley, and the Problems with Legislating Good Behavior. (2003). Harvard Law Review, 116(7), 2123-2141. doi:10.2307/1342755
10. HSBC, Does Climate Change Matter ?Ref: (442) HSBC's Stuart Kirk tells FT investors need not worry about climate risk – YouTube Accessed Date: 8th July 2022
11. What is your view ?Would you do business with HSBC ?Climate Change Debate: Class Question
12. What you purchaseWhat you choose to put in the bin or recycleWhat You Do Every Day ?
13. “In the broadest sense, sustainability refers to the ability to maintain or support a process continuously over time. In business and policy contexts, sustainability seeks to prevent the depletion of natural or physical resources, so that they will remain available for the long term.”Sustainability defined:
14. Sustainability Examples:Is this Green Washing ?
15. SustainablePeoplePlanetViableProfitsEquitableBearableTriple Bottom LineRef: John Elkington. The Triple Bottom Line https://www.youtube.com/watch?v=l5MPOuhmpmk Accessed June 2018, Elkington, J. (1998), Partnerships from cannibals with forks: The triple bottom line of 21st‐century business. Environ. Qual. Manage., 8: 37-51. doi:10.1002/tqem.3310080106 Slaper, T.F., Hall, T. J. (2011) The Triple Bottom Line: What is it and How Does it Work http://www.ibrc.indiana.edu/ibr/2011/spring/pdfs/article2.pdf Accessed 7th June 2018
16. Take 10 minutes to consider the following:Select an organisation you both are familiar with.Assess the organisation against the Triple Bottom Line (3Ps) ?Exercise: In Pairs
17. What is your view ?
18. Within the next 5 years all investors will measure a company's impact on society, government, and the environment to determine its worth” - Larry Fink, BlackRock CEO Ref: BlackRock CEO Larry Fink Says All Investors Will Soon Use ESG Metrics (businessinsider.com) Accessed Date 27th June 2022UN SDGs are driving a global commitment to sustainability COVID-19 has spurred economic upheaval and The Great Reset Climate change is driving corporate strategy Inequality is driving activism
19. Take 10 minutes to consider the following:When did you become aware of CSR and ESG ?What has raised that awareness in recent year ?Exercise: In Pairs
20. What is ESG…20ESG addresses many topics and stakeholders.ESG represents the company’s efforts to systematically assess, manage, and monitor risks of material potential impact to the strategic and financial decisions of the company. The term ESG is often used as a synonym for sustainability, CSR, public relations, social investment, or environmental compliance. While some of these elements may factor into an ESG program, at the center of ESG is the management of risk and the preservation of shareholder value.
21. What is ESG…21Corporate governance issues apply universally across all industries.Good governance of corporate, environmental, and social issues creates sustainable companies Material environmental and social issues vary significantly by industry and may even be company-specific, depending on the level of materiality of each factor.
22. Investors thinking long termTransparency leads to fewer disastersPeople realising the long term impacts of bad behaviourWhy this matters…
23. Towards Net ZeroRef: Towards net zero - KPMG Global (home.kpmg) Accessed Date: 28th June 2022
24. Not assessed in this SessionOpportunity to practiceBe confident !Observe others, what they did well, what they could do betterBe prepared to ask questions of othersExercise: Some Ground Rules
25. Groups 1 & 2https://www.taylorsofharrogate.com/Groups 3 & 4Sustainability | Home (bp.com)Consider the CSR activities of the organisation and in to its supply chain. Offer a 5 minute presentation, maximum 5 slides.Exercise: In Group
26. Body LanguageContentRecommendationsExercise: Debrief
27. DebriefRef: Investors challenge concealment clauses at large tech groups | Financial Times (ft.com) Accessed Date: 13th July 2022How advocacy in one company leads to changes in other companies. Read article for more insight
28. Defined CSR / ESG and the Iron Law of Social ResponsibilityConsidered the challenges of measuring CSR / ESG effectivelyWhat we have learned today: