Corporate Social Responsibility in the Innovation Process. The Danish Case, as a concept

Transcription

1 Corporate Social Responsibility in the Innovation Process. The Danish Case, as a concept Complimentary work for DEA Phd. in Management and Marketing Year: Department of Management and Marketing Universidade de Vigo, Spain Author: JORGE OLIVEIRA TEIXEIRA Director : PEDRO FIGUEROA DORREGO, Phd 2010/10/05 Contents 1. Introduction to CSR 2. Corporate Social Responsibility 3. Innovation 4. Corporate Social Responsibility and Innovation 5. The Danish Case in CSR and Innovation 6. Notes for future considerations 2 1

2 2. Corporate Social Responsibility 3 2. Corporate Social Responsibility (one definition) An evolving concept, not universally accepted definition; The way organizations integrate social, environmental and economic concerns into their values, culture, decision-making, strategy and operations, and thereby establish better practices within the organization, create wealth and improve society. 4 2

3 2.1 Introduction to CSR CSR Voluntary Collective Agreements Law Regulated Relationship Between an organization its stakehoders and society 6 3

4 2.3 Corporate Social Responsibility activities Stakeholder dialogue Communic ation Employee CSR Innovation Management Visions and values Customer Environm ental Supplier Community Corporate Social Responsibility activities Communication Why What When Who Where Stakeholder dialogue Who are they Dialogue and inclusion Communication Employee activities Prevention Retention Integration 8 4

5 2.4 Corporate Social Responsibility activities Environmental activities Pollution prevention Waste minimizing Reduction of energy, water, etc Community activities Community support Contribution and sponsorship Partnerships Supplier activities Risk assessment Guidelines Codes of Conduct Cooperation Corporate Social Responsibility activities Customer activities Demands from, and dialogue with customers Product labels CSR Innovation New process New Products New Services CSR Profile Business models 10 5

6 2.5 Advantages of Business Driven Social Responsibility New products Better reputation Lower cost trough Environmental management and reduce energy consumption RESPONSIBLE BUSINESS Greater Supplier relaiability Enhanced Product differentiation More Committed staff The Big picture 12 6

7 2.7 The CSR Approach Defensive Offensive Business Handle problems Handle Requests Avoid bad publicity Focus on request Establish norms Stand out Sector Comply with sector standards Go beyond sector standards Differentiate yourself from other business in your sector Community Await agreements, collective agreements or statutory requirements Contribute to local community Market yourself on the basis of your contribution Cyclical Matrix of Corporate Social responsibility Social Accountability and Social Investment Ethics and Human Resources Community Workplace Environment Marketplace Environment Protection and Sustainability Corporate governance and economic Responsibility G.K Kanji and P.K. Chopra,

8 3. Innovation 15 Key definition An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or new organisational method inbusiness practices, workplace organisation or external relations. Innovation activities include all scientific, technological, organisational, financial and commercial steps which actually lead, or are intend to lead, to the implementation of innovations. Some of these activities may be innovative in their own right, while others are not novel but are necessary to implementation. Oslo Manual

9 Types of Innovations Types of Innovations Product Oslo Manual 2005 Process Organization Marketing Types of Innovations Radical & Incremental (Tushman & Anderson,1986) Sustaining and Disruptive Innovation (Hockerts & Morsing, 2008) User-driven Innovation (Von Hippel, 2001) represent technical advance so significant that no increase in scale, efficiency, or design can make older technologies competitive with the new Technology to new customers and so-far un served markets Innovation can also be characterized by its ability to either strengthen a firm's existing capabilities and market position or to disrupt them by rendering competencies obsolete or reaching out introduced the notion of (lead) user-driven innovation to describe the ability of user communities to initiate and develop exceedingly complex products sometimes even without any specific manufacturer involvement 18 9

10 Elements of a system Innovation Cotec, Model The Innovation measurement Framework Oslo Manual,

11 4. Corporate Social Responsibility and Innovation 21 The term corporate social innovation is increasingly taken up by practitioners. Patrick Cescau CEO of Unilever for example defines corporate social innovation as a way of "finding new products and services that meet not only the functional needs of consumers for tasty food or clean clothes but also their wider aspirations as citizens."(cited in Webb, 2007)

12 4.1 The CSR innovation objective field In a strategic CSR innovation process, business use their core competences to develop new concepts, products, etc CSR AND INNOVATION What is it? Literature bringing together CSR and innovation has emerged gradually over the past decade. One interpretation of social innovation can refer to improvements in the CSR process. Examples could be improved social reporting tools or CSR management systems. Corporate Social Innovation The term corporate social innovation was first introduced by Rosabeth Moss Kanter (1999) who argues that firms should use social issues as a learning laboratory for identifying unmet needs and for developing solutions that create new markets

13 4.4 CSR AND INNOVATION What is it? Social Entrepreneurship According to Hockerts it describes the discovery and sustainable exploitation of opportunities to create public goods. This is usually done through the generation of disequilibria in market and non-market environments. Social Entrepreneurship can in some cases lead to the creation of social enterprises. These social ventures are hybrid organizations exhibiting characteristics of both the for-profit and not for profit sector CSR AND INNOVATION What is it? Eco-Innovation The notion that sustainable development drives disruptive innovations has come quite naturally to the sustainability debate (Hockerts,1999, 2003). Sustainability innovations (also called eco-innovations, ecodesign, eco-preneurship, or cleantechnology venturing) have been proposed as a source for "environmentally benign growth" (Dyllick, 1994)

14 4.5 Base of the Pyramid (BOP) An important subtheme of corporate social innovation is the focus on low-income markets. Prahalad and Hart (1999) talk in this context of the potential of the bottom or base of the pyramid (BOP). Ex: reverse innovation The BOP premise is that by focusing on the unmet needs of lowincome populations firms can create profitable markets while also helping the poor address some of their most urgent. Prahalad s most notable assumption is that BOP markets have to pay a poverty premium (This means that many poor have to pay more for products and services such as food, water,medication, credit, or telecommunication, than their middle or upper class compatriots CSR and Innovation How Does It Happen? 28 14

15 5. The Danish Case in CSR and Innovation General Principles UN GLOBAL COMPACT General principles UN PRI OCDE Guidelines 30 15

16 5.2 Key Specific Principles UN Environment Programe Financial Iniciative (UNEP FI) The Equator Principles Key specific principles Global Reporting Iniciative ( GRI) Transparency International Business Principles for Countering Bribery ( BPCB) Carbon Disclosure Project (CDP) UN Caring for Climate The Danish model for CSR in innovation Business CSR Process Product Customer Contact 32 16

17 5.4 Key Action Areas Wants the marketing of Denmark for responsible growth to help Danish business reap greater benefits from their S R work The government wants to underpin large business CSR reports The government wants business to contribute actively to tacking global climate challenges The state sector also has a number of options for aiding in disseminating S R through its own activities Clarification through 12 types of innovation Type of Innovation Explanation CSR Example 34 17

18 5.5a Clarification through 12 types of innovation Type of Innovation Explanation CSR Example Notes for future considerations Greater attention to political accountability in the innovation process More informed consumers Global brands The noticeable increase of socially responsible brands New consumers trends Measure of Corporate Social Performance (CSP). Aplication to SME Public concern about Corporate Social Responsibility 36 18

19 Q & A 37 Thank you for your attention Jorge Oliveira Teixeira jorgeteixeira@accelperiberia.com

20 Appendix 1 39 Appendix

21 Appendix 3 41 Appendix

22 Appendix 5 KEY ACTION AREA 1: PROPAGATING BUSINESS-DRIVEN SOCIAL RESPONSiBILITY The Government wants to: encourage Danish companies and investors to continue and develop their commitment and CSR work make it mandatory for large business to report on CSR in the management s review of the annual report make it mandatory for institutional investors and unit trust to report on CSR in the management s review of the annual report set up to the Social Responsibility Council charged with making recommendations for the Government, the corporate sector and associations establish a new social responsibility communication portal ( organize international conference Danish Business innovating for World Challenges to identify innovation areas for Danish business set up a knowledge network among organizations, researchers and advisors on businesses-driven social responsibility and responsible supplier management advise business though Danish representations in other countries work to ensure a transparent market that promotes social responsibility considerations in consumer purchasing. The Government will launch a study of consumers role in CSR prepare a biennial progress report on Danish businesses observance of and commitment to Global Compact and PRI, first time in Appendix 6 KEY ACTION AREA 2: PROMOTING BUSINESSES SOCIAL RESPONSIBILITY THROUGH GOVERNMENT ACTIVITIES The Government wants to: ensure that, in the future, joint state supply contracts will systematically embed requirements for social responsibility as articulated in the conventions that provide the foundation for the UN Global Compact ensure that all state procurement officers can access the guidelines for embedding social responsibility open up dialogue with local authorities and regions with a view to disseminating experience in embedding social responsibility in their areas make it mandatory for state-owned public limited companies to report to CSR in the management s review for the annual report ensure that all major state-owned public limited companies accede to the UN Global Compact ensure that the Vækstfonden accedes to the UN principles for responsible investment (PRI) ensure that the Eksport Kredit Fonden (EKF) accedes to the UN Global Compact continue its work for embedding social responsible in Danish development work ensure that the Industrialiseringsfonden for udviklingslande (IFU) and the Investment Fund for Central and Eastern Europe (Iø) accede to the UN Global Compact organize conferences on businesses social responsibility in developing countries jointly with Danish representations outside Denmark, local players and businesses ensure that the regional trade and industry development system contributes to propagating business-driven social responsibility strive to ensure that international investment banks embed social responsibility in their business and investment strategies 44 22

23 Appendix 7 KEY ACTION AREA 3: CORPORATE SECTOR S CLIMATE RESPONSiBILITY The Government wants to: encourage businesses to include sections of climate responsibility in their reports on CSR in the management s review of the annual report (see the mandatory requirement in key action area 1) jointly with Confederation of Danish industries develop the Climate Compass - a webbased climate tool aimed at helping businesses prepare climate accounts and climate strategies initiate four partnerships on climate responsibility in relations to investors, in the retail sector, the construction sector and the maritime sector KEY ACTION AREA 4: MARKETING DENMARK FOR RESPONSIBLE GROWTH The Government wants the marketing of Denmark for responsible growth to help Danish businesses reap greater benefits from their social responsibility work. The Government wants to: promote Danish tools and competences in the area of corporate social responsibility head up a 2010 international summit on international standards for social responsibility in Copenhagen (ISO 26000) organize an international conference on responsible investments aimed at creating the basics for better targeted and usability oriented research 45 Credits Draft international Standard ISO/DIS Oslo Manual, Guidelines for Collecting and interpreting Innovation Data Action Plan for Corporate Social Responsibility, The Danish Government, May 2006 Modelling The Firm in its Markets and Organizational Environment: methodologies for Studying Corporate Social Respnsibility, Gopal K. kanji and Parvesh K. Chopra, Total Quality Management. Project People & Profit, The Danish Commerce and Companies Agency 46 23