OECD, The Interface between

Responsible Business and Corporate

Governance
Recession
impacts
Responses to
Corporate Responses
investors to Responsible
Responses to
stakeholders Investors and other
Embedding Stakeholders
responsible
practices

7 December 2009
Pam Muckosy, Ethical Corporation
Pam Muckosy pam.muckosy@ethicalcorp.com
07 12 2009
 - Impact of the recession

Shrinking
Recession
impacts CSR
Responses to
investors teams
Responses to
stakeholders
Embedding
responsible Charity
practices donations Short
and term
community
gains
Pam Muckosy programmes
07 12 2009
 - Impact of the recession

Recession
impacts
Responses to
investors
Responses to
stakeholders
Embedding
responsible
practices

Pam Muckosy
07 12 2009
 + Impact of the recession

Recession
impacts
Responses to
investors
Responses to
stakeholders
Embedding
responsible
practices

Pam Muckosy
07 12 2009
 + Impact of the recession
•13% companies focused on CSR stated a
major cut in CSR budgets (Ethical Corporation)
Recession • UN PRI increased to 500 companies; US$18
impacts trillion of assets
Responses to • Greater integration of ESG criteria into
investors mainstream investing (BSR)
Responses to
• More Equator Principles signatories : 66
stakeholders
financial institutions in 26 countries; 71% of
Embedding new project finance debt in emerging markets.
responsible
practices • > 3,000 companies in ’07 reported on enviro.
and social performance (Bloomberg)
• 1/3 UK businesses continue to do nothing to
Pam Muckosy
reduce environmental impact & 1/5 say climate
change is not on the agenda ()
07 12 2009
 Business responses to
ethical investors

Recession
impacts
Equator Principles, PRI, etc.
Responses to
investors ESG (Environmental, Social &
Responses to Governance) reporting
stakeholders
Embedding
responsible Reporting criteria in
practices financial exchanges

Merging CSR and financial

Pam Muckosy reports
07 12 2009
 Other stakeholder pressures
for responsible business

Recession
impacts Embedding Modelling Leaders
Responses to Natural resources at risk
investors
Responses to Social regulation Business case
stakeholders
Embedding Growing multistakeholder initiatives
responsible
practices Community NGOs 2°

Footprinting Energy use

Pam Muckosy Consumer D Population Biodiversity

07 12 2009
 Ethical Corporation findings

Recession
impacts
Responses to
investors
Responses to
stakeholders
Embedding
responsible
practices

Pam Muckosy
07 12 2009
 Ethical Corporation findings

Recession
impacts
Responses to
investors
Responses to
stakeholders
Embedding
responsible
practices

Pam Muckosy
07 12 2009
 Research findings – CSR in
practice
Interviewed and surveyed a sample
Recession
impacts of some big companies driving best
Responses to
practices in responsible businesses.
investors
Responses to Some examples from:
stakeholders
Embedding J&J Lloyds TSB
responsible
practices P&G Novo Nordisk
Cadbury’s BP
Pam Muckosy Starbucks HP
07 12 2009
 Where we see the most
progress in business
development and CSR
Recession
impacts Niche brands: Innocent, Seventh
Responses to Generation, and many others
investors
Responses to Big Industrial companies: GE,
stakeholders Siemens, Toshiba, Nissan, Toyota
Embedding
responsible Consumer brands: P&G, Unilever, Mark
practices & Spencer, Cadbury

Companies with sensitive

Pam Muckosy
reputations: Pharmaceuticals, heavy
industry, extractive industry firms
07 12 2009
 Areas challenged by CSR
Hospitality /Travel (All hotels
greenwash together now!)
Recession
impacts Low cost retail: Primark, Lidl, Aldi (Still
Responses to cheaper to source unsustainably)
investors
Responses to Finance: Banks and insurance
stakeholders companies poor communicators (not
Embedding
all!)
responsible
practices Professional services: consultancies,
Law firms

B2B manufacturing: Lower exposure.

Pam Muckosy Changing slowly but accelerating in
07 12 2009 pace
 Requires overarching
framework

Recession
impacts
Responses to
investors
Responses to
stakeholders
Embedding
responsible
practices

Pam Muckosy
07 12 2009
 CSR in modern business
New opportunities for products:
Certification, Wind turbines, industrial
Recession technology (i.e. Unilever, Kraft, Mars,
impacts Cadbury, GE, Siemens, Toshiba)
Responses to
investors Preferred partner for leading
Responses to companies: Big firms expect more
stakeholders
Supporting diverse supplier base,
Embedding
responsible develop loyal SME suppliers
practices
Increased likelihood of government
contracts: Over time…

Pam Muckosy Closer and more trusted relationships

07 12 2009 with customers, NGOs
 Recommendations for
embedding CSR
Create pride in CR achievements
Recession
impacts Engage employees, listen & retain
Responses to Persuade suppliers & promote the financial benefits
investors for sustainable sourcing
Responses to Measure and record data design CSR metrics & use
stakeholders tools (gets finance and accounting buy-in)
Embedding Focus on things that employees in operational
responsible departments can do
practices
Work with outsiders with expertise in specific areas,
such as NGOs
Report effectively and seek credible assurance!
Pam Muckosy
07 12 2009 Source: “How to embed corporate responsibility across different parts of your company” Ethical Corporation, 2009
WWW.ETHICALCORP.COM/REPORTS

Thank you

Pam Muckosy
Head of Research
Pam.Muckosy@ethicalcorp.com