Introduction Prevailing Justifications for CSR Integrating CSR with Strategy RTC s Four-Step Approach Conclusions

Transcription

1 Migrating to Strategic CSR RTC Advisory Services Ltd* *formerly Resources and Trust Company Ltd August Outline Introduction Prevailing Justifications for CSR Integrating CSR with Strategy RTC s Four-Step Approach Conclusions 1

2 3 Introduction RTC Advisory Services Ltd (formerly Resources and Trust Company Ltd) is a strategy, economy and policy consultancy founded and led by Opeyemi Agbaje, a leading strategist, economic analyst and policy expert. We offer these few slides to provide some insight into how your firm might optimise its CSR agenda and spending by seeking synergy between CSR and business strategy Migrating to Strategic CSR PREVAILING JUSTIFICATIONS FOR CSR 4 2

3 Prevailing Justifications for CSR Moral Obligation 5 Companies have a duty to be good citizens and to do the right thing The US Business for Social Responsibility nonprofit urges businesses to achieve commercial success in ways that honour ethical values, and respect people, communities and the natural environment Prevailing Justifications for CSR (contd.) Sustainability Emphasized environmental and community stewardship 6 Former Norwegian Prime Minister Gro Harlem Brundtland (and adopted by the World Business Council for Sustainable Development) defined it as meeting the needs of the present without compromising the ability of future generations to meet their own needs 3

4 Prevailing Justifications for CSR (contd.) License to Operate Every company needs a tacit or explicit permission from governments, communities and numerous other stakeholders to do business Reputation 7 CSR improves a company s image, strengthens its brand, organisational morale and even raises its stock market value Migrating to Strategic CSR INTEGRATING CSR WITH STRATEGY 8 4

5 9 No Link with Strategy! All those arguments while sound on a stand-alone basis, were not linked with organisational strategy! They merely encouraged corporate philanthropy, without conferring or attempting to confer any strategic advantages on the firm. Often there was no discernible strategic rationale behind the choice of beneficiaries of corporate gifting! It was an ad-hoc, emotion-driven (or sometimes guilt or blackmail-induced!) act of giving away money! 10 No Link with Strategy! (contd.) The top global strategist, Professor Michael Porter and notable CSR practitioner Mark R Kramer in their famous HBR article Strategy and Society argued that:- Prevailing approaches to CSR are so fragmented and so disconnected from business and strategy as to obscure many of the greatest opportunities for companies to benefit society Their prescription- If instead, companies were to analyse their prospects for social responsibility using the same frameworks that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deed-it can be a source of opportunity, innovation, and competitive advantage 5

6 Integrating CSR with Strategy! Porter and Kramer call for integrating business and society i.e. integrating CSR with business strategy as a healthy society needs successful companies 11 They advocate a principle of shared value - both business decisions and social policies must integrate business and society and corporate choices must benefit both sides 12 The Intersection of Social and Economic Benefit 6

7 Migrating to Strategic CSR RTC S FOUR-STEP APPROACH RTC s 4-Step Approach RTC s 4-Step Approach helps take your firm from responsive CSR or pure corporate philanthropy to strategic CSR that incorporates social impact with your firm strategy and produces a responsibility and sustainability strategy that doesn t just amount to giving money away. We help you:- Identify Points of Intersection between your commitment to society and your business strategy Choose Which Social Issues to Address Create a Corporate Social Agenda, and Create a Social Dimension to the Value Proposition 7

8 RTC s 4-Step Approach (contd.) In the process of applying the model, we help you identify linkages between your business and societyinside-out linkages; outside-in linkages; and the social aspects of your competitive context 15 In helping you select which social issues to address, we identify areas in which there exists an opportunity to create shared value -a region in - both business decisions and social policies integrate business and society and corporate choices benefit both sides i.e. in which you create value both for society and your business! RTC s 4-Step Approach (contd.) We help you move away from generic social issues and help identify those aspects of the competitive context and your industry and firm value chain that present an opportunity for strategic CSR..i.e. moving beyond good corporate citizenship and mitigating harmful side effects to pursuing initiatives whose business and social benefits are large and distinctive 16 8

9 17 Society and Strategy 18 RTC s 4-Step Approach (contd.) Finally, we help you decide whether, when and how to create a social dimension to your firm value proposition. According to Porter and Kramer, the most strategic CSR occurs when a company adds a social dimension to its value proposition At this level, social impact is a core element of the business model and firm strategy, yet the business is organised to be commercially viable and successful. Notions such as triple bottom-line, profits at the bottom of the pyramid, impact investing, and business inclusiveness typify this mindset. 9

10 19 Conclusion Most corporate philanthropy or CSR is a responsive and adhoc activity-budgets are provided and anyone with some proximity to the company can lobby for a share for his favourite NGO or cause. There is often no thinking about how this connects or derives from firm strategy and from the strategic point of view, such spending is essentially wasted or at least non-reproductive. More substantial benefits can be derived from corporate social spending by integrating thinking about society with strategic frameworks and benefiting both society and businesses 20 Conclusion (contd.) RTC Advisory Services Ltd offers to help your company through this transition from mere corporate philanthropy or responsive CSR to strategic CSR and multiple bottom-lines. If you would like to have a conversation around these issues please call Opeyemi Agbaje on or send an e- mail to opeyemiagbaje@resourcesandtrust.com or opeyemiagbaje@yahoo.co.uk. You could also write to RTC Advisory Services Ltd at MEDIFE HOUSE, 5 th Floor, 58/60 Broad Street, Lagos, Nigeria. 10