Future Trends in CSR

October 2, 2009

Introduced as the “rock star of CSR,” Jane Nelson took the stage at BCLC’s 2009 Global Corporate Citizenship “UnConference” to discuss “Achieving Transformative Impact: From Individual Business Models of Collective Action.” Nelson’s comments were based on 15 years of observing and analyzing what business, NGOs, governments and students have done in the corporate social responsibility arena.

In her comments, Nelson tackled how we can move beyond individual projects to produce sustainable impact that more fully increases the leverage and innovation of private business scope. Why? Results will be more significant and sustainable if a balance can be struck between business requirements, competencies and values and the capabilities, aspirations and needs of communities in underdeveloped countries.

How can a greater overlap of these two seemingly polar concepts be achieved?

First, innovation in core business models and supply chains must be employed, if we are serious about incorporating CSR into mainstream investment, trade and business linkages. When this is accomplished, the return can be significant for the business bottom line and for developing countries. Nelson cited examples of the scale that be achieved through harnessing core business networks and activities. Microsoft, for example, has an ecosystem of over 700,000 business partners around the world, and together with other ICT companies such as Cisco, Intel and SAP is playing a vital role in leveraging information technology for development. Coca-Cola is one of the largest private employers in Africa and along with several thousand small distribution businesses and some 900,000 retail outlets, this is helping to generate income and create small enterprises on the African continent. Heinz, with its development of 4,000 Eygptian farmers, has helped to create jobs by adding to its tomato supplier base.

The question then becomes: How do companies create models that fully leverage their knowledge, resources and operations in a way that contributes to global welfare and moves people out of poverty by providing access to salary/wages or entrepreneur opportunities within the existing supply chain?

Next, improving access to affordable goods and services, such as housing, energy, health, nutrition and clean water, can be considered as another opportunity to build more inclusive business models. In the evolution of CSR, providing access to these basic needs has often not been accomplished by the individual or stand-alone efforts of private-commercial delivery, NGO philanthropic efforts or government initiatives. The challenge is to work more effectively across these systems in a collaborative manner that generates value for the supply chain while addressing basic poverty issues.

A critical component to accomplishing this second point is funding. Innovative new financing mechanisms must be developed as the approaches used during the past 10 to 15 years have not been sufficient. Nelson cited the British government’s establishment of challenge funds, and Dow Chemical’s venture capital funds as creatively tackling and more fully leveraging dollars to help fund market-oriented programs that address basic human needs. Another example is the Rockefeller Foundation, which has recently launched the Global Impact Investing Network to support innovation in public/private investment hybrids.

Nelson also made the case that, if you combined the philanthropic dollars contributed by the top 50 corporations and their corporate foundations, you have financial resources that are almost equal to the annual UNDP operating budget. Consequently, tackling the need for funding can produce more significant results if collaboration is used to more fully leverage the dollars, resources, people, and business competencies available. Such collaboration will achieve scalable capacity that has a greater likelihood of improving quality of life.

In addition to common platforms, where groups of companies and development partners work together to address a common challenge (such as the NetHope alliance between ICT companies and nonprofit organizations to leverage technology for development or the Partnership for Quality Medical Donations bringing together healthcare companies and humanitarian agencies), geographic clusters in a particular country or region, such as the Angola Partnership Initiative or South Africa’s Business Trust, can also be a way to achieve scalable results by pooling multiple contributors rather than a single initiative by one organization.

Nelson cautioned the audience not to forgot the “talent and treasure” component, so frequently referenced in philanthropic circles. But her call to tap into this proven approach was not to rely only on past operational practices for gathering support. Instead, she noted the potential of harnessing new social networking capabilities such as Facebook, which alone has 170,000 causes that 25 million individuals have signed up to. Consequently, social media tools offer enormous potential for philanthropy by linking individual donors, who make small contributions to causes for which they care.  Business is also perfectly positioned to use social networks to mobilize customers, retirees, suppliers, and their work force in a manner that could produce significant results by the sheer number of participants.

The third key point, which Nelson identified, was the importance of working together to improve government and corporate accountability and public diplomacy. She recognized there are some countries that are difficult in which to operate. For that reason, she called upon the audience to work collectively to improve transparency and accountability and role modeling these ethical attributes through individual sector initiatives such as the Extractives Industry Transparency Initiative and the Equator Principles in the banking sector.

Summarizing her presentation, Nelson emphasized the need for collaboration, innovation and fully leveraging resources as a way to produce results in the “new age” of CSR.
 
Ruth Kinzey is a corporate reputation strategist and a blogger from the Global Corporate Citizenship Conference.