CSR Intro Presentation Slides

1st CSR Training Workshop for Industries
1st Corporate Social Responsibility Training Workshop for Industries
– Cost Cutting and Performance Improvement through CSR –

March 2009, Hanoi, Vietnam
As part of the European Commission supported SME business development project on

Empowering Asian Business Intermediaries through Knowledge-based Networking
Focused on Sustainability Management (EMPASIA)
Frank Müller (ASEP)

Ralf Opierzynski (Fraunhofer IFF)
1st CSR Training for Industries, Hanoi, 2009

CSR – Just a trend or a substantial change in doing business?
What is it?
What drives the development and what do we want?
How can we do it?
Are there some tools to help us?


CSR – is it new?
I think many people assume, wrongly, that a company exists simply to make money. While
this is an important result of a company’s existence, we have to go deeper and find the real
reasons for our being.
As we investigate this, we inevitably come to the conclusion that a group of people get
together and exist as an institution that we call a company so that they
are able to accomplish something collectively that they could not accomplish separately –
they make a contribution to society,
a phrase which sounds trite but is fundamental.
Dave Packard, Co-founder of Hewlett Packard Company in 1939


What does CSR stand for?
“Humanity has the ability to make development sustainable - to ensure that it meets the needs of
the present without compromising the ability of future generations to meet their needs.”
Sustainability Way of managing all our resources and its impact in an environmentally friendly,
Management socially responsible and economically wise way (The triple Bottom Line)
Corporate Approach to give a frame for businesses to express their commitment to society.
Social Support to voluntarily integrate social and environmental issues into all business
Responsibility activities beyond regulations
Internal perspective External perspective
• health and safety at work • social handling of community,

• management of human resources customer and stakeholder
• responsible use of resources relations
• adaptation to change (innovation) • focus on human rights and
global environmental protection
•…
European framework, Green Paper on corporate social responsibility


Social Responsibility – working draft 4.1 ISO 26.000

responsibility of an organization for the impacts of its decisions and activities (products, services
and processes ) on society and the environment, through transparent and ethical behavior that:
• contributes to sustainable development, health and the welfare of society;
• takes into account the expectations of stakeholders;
• is in compliance with applicable law and consistent with international norms of
behavior;
• is integrated throughout the organization and practiced in its relationships
(an organization’s activities within its sphere of influence).
www.sustain-asia.org/pg/bookmarks/Frank/read/337/iso-draft-26000
Dow Jones Sustainability Index definition of CSR

“a business approach that creates long-term shareholder value by embracing
opportunities and managing risks deriving from economic, environmental and social
developments”
http://www.sustainability-index.com/


Other CSR definitions - example
CSR encompasses not only what companies do with their profits, but also
how they make them. It goes beyond philanthropy and compliance and
addresses how companies manage their economic, social, and
environmental impacts, as well as their relationships in all key spheres of
influence: the workplace, the marketplace, the supply chain, the community,
and the public policy realm.
In order for corporate social responsibility programs to work, government and

the private sector must construct a new understanding of the balance of
public and private responsibility and develop new governance and business
models for creating social value.
Harvard CSR Initiative, 2004


What is it?


What drives the development, risks – opportunities – values?
The Future of CSR, How to Align Values for Profit, Canadian

Manufacturers & Exporters, 2007, David Crawford


Market forces that are driving the need for organizations to address CSR
1. Economic considerations
2. Ethical considerations
3. Innovation and learning
4. Employee motivation
5. Risk management or risk reduction
6. Access to capital or increased shareholder value
7. Reputation or brand
8. Market position or share
9. Strengthened supplier relationships
10. Cost savings
KPMG's International Survey of CSR Reporting (2005). This report surveyed more than 1,600 companies worldwide and
documented the top ten motivators driving corporations to engage in CSR for competitive reasons.


Company - CSR Driver
Community pressure
Attraction of new investors or customers
Competitive pressure
Philanthropy
Information demand by stakeholders
Differentiation opportunities
Legal- or regulatory obligations
Environmental concerns relating to products or service
Social concerns relating to products or service
Improving Business Performance
0% 10% 20% 30% 40% 50% 60% 70% 80%
Why is your company interested in applying CSR? EU project EMIT CSR, Malaysia


Which areas are covered by CSR? – ISO 26.000, GRI
Guideline Social Responsibility – working draft 4.1 ISO 26.000 Reporting Framework for sustainability reporting,
Global Reporting Initiative

Which areas are covered by CSR? Consumer group Stiftung Warentest
Social Issues / Employees The Environment

1. Guiding principles and corporate policy 1. Guiding principles and corporate policy
2. Management and measures 2. Management
3. Implementation 3. Measures and implementation
4. Reporting 4. Reporting
Social Issues / Production and Supplier

1. Guiding principles and corporate policy
2. Management and measures Consumers and Society
3. Implementation 1. Willingness to provide information
4. Reporting 2. Community involvement


Which areas are covered by CSR? - Consulting Firm OWW, Malaysia
Data Score Data Score
Workplace % Marketplace %
Management and Governance Stakeholder engagement 3 C
Company structure and governance 3 A Supplier standards - -
Financial stability and risk management 3 A Investor relations 3 A
Transparency and reporting practice 3 A Consumer relations 3 A
Planning processes 3 A International Links 3 A
Performance measurement and monitoring 3 A Domestic Sourcing 3 A
Codes of conduct and enforcement - - Islamic Financing 3 A
Corruption and bribery policies and enforcement - - Joint Ventures & Partnerships - -
Management and Governance Score 84.4 A Marketplace Score 83.9 A
Employment Environment Data Score

Employee practice and engagement - - Environmental policy - -
Health and safety management - - Environmental management systems - -
Human capital development including: - 3 A Performance measurement and monitoring - -
Graduate Recruitment 3 Environmental reporting - -
Graduate Training 3 Environment Score - -
Graduate Sponsorship/Scholarship Programmes 3
Worker satisfaction monitoring 3 B Community Data Score
Remuneration policies - - Community and charity including:- 3 A
Knowledge management - - Adopt-a-charity 3
Tolerance and diversity in the workplace - - Contributions in kind 3
Employment Score 64.3 C Employee volunteering schemes -
Adopt-a-school -
Accreditation Key subjects sponsorships 3
Awards, acknowledgements 3 A Contribution type and quantum 3 B
Accreditation to international standards 3 A Human Rights policies - -
Membership/Signatory of international bodies 3 A Rakyat Policies 3 A
Accreditation Score 100 A Halal Accreditation 3 A
Media monitoring and reporting 3 A
Workplace Score 74.0 B Community Score 81.3 A


Which areas are covered by CSR? – Enterprise Performance Indicator Systems
e-power
energy
fuel number Holistic view:
water
Input chemicals
materials
raw materials
volume
semi products
Efficiency
OPI
products rejects cost
scrap
Output waste sludge Ecological Aspects
household rate (ISO 14000 indicators)
other
EPI waste water
legal waste water law number of

requirements air quality law offences
Social Aspects
qualification & number
training
(SA8000 indicators)
MPI
accidents number
safety complaints
downtime
maintenance costs Maintenance
number of
incidents


Which areas are covered by CSR? – Standards
• Management Standards
– Environmental Management
• ISO 14000 Family (International Organization for Standardization)
• ECO-Management and Audit Scheme EMAS (European Union)
– Quality Management
• ISO 9000 Family (International Organization for Standardization)
• EFQM model for Business Excellence (European Foundation for Quality
Management)
• Workplace Standards
– SA8000 (Social Accountability International)
– ILO-OSH-2001 (International Labor Organization)
– OHSAS 18001 (various worldwide Standardization Bodies)


• Reporting Standards
- GRI - www.globalreporting.org
• Social Standards
– ISO 26000 forthcoming 2008 (International
Organization for Standardization)
– AA1000 (AccountAbility)
– TransFair
– Fair Trade Labeling Organization
– Business Social Compliance Initiative
• Industrial Standards
– Textile
• Code of Labour practices for the apparel
industry including sportswear
• RUGMARK
• Purewear
• European Eco-Label
• Green Cotton
• LamuLamu
• ÖkoTex Standard 100Plus


Information and Networking – www.sustain-asia.org


CSR – making profit with a clear conscience!
Involves every aspect of an organization, like

• Governance
• Environmental sustainability
• Risk management
• Workplace issues
• Cultural norms
• Local laws and customs
….


What is it?
How can we do it?


Making use of data and information


“If You Don’t Measure it

You Can’t Manage it….”
What gets measured gets managed?
What gets evaluated gets managed?
What gets systematic controlled will improve?


Identification of Success Factors for Sustainability Management
Company strategy business success with high customer satisfaction, environmental

impact, employees satisfaction
Long & short-term goals market share, turnover, production costs and efficiency
Interrelated factors production, sales, storage, quality, delivery time, qualification
Side restrictions customer requirements, demands, market developments, compliance
requirements etc.
OE 1 OE 2 OE 3
OE 1.3 OE 1.X OE 2.1 OE 2.X


Success Factors and Goal System Derivation
Development of a company specific
goal system and quantification market share
Strategy
quality
strategic level profit Goals strategic level
time
flexibility social
Goals operative level
OU 1 OU 2 OU 3 OU 1.1 OU 2.1 OU 2.x
1.1 2.1 time costs

flexibility flexibility
social
time
1.1.1 1.1.2
costs environ.
operative level 1.1.1 1.1.2 1.1.X


Company - CSR Objectives (qualitatively)
Input on strategy formulation and assessment
Enabling company- / industry wide comparable performance assessments
Enhance internal and external communication tool
Issue- and risk management
Internal and external information provision
Create / adapt company wide values system
Enhance innovation potential and creativity
Establish a continous improvement process
Enhance employee commitment
Strengthening of the corporate culture
0% 10% 20% 30% 40% 50% 60% 70% 80%
What will be the objective of the CSR activities with respect to your company?


Development of a CSR Performance Assessment Systems
Assessment Plan Goal system for the company

Specific CSR Frame
Stakeholder engagement
Assessment Procedure Defined procedure (reporting cycles, assessment meetings)

Responsibilities / competences
Standard key performance indicators
Change management plan for improvements
Communication plan
Review procedure
Assessment Reports Types Monitoring, benchmarking, audit / internal/external

Content KPIs, benchmarks, goal achievement, improvement monitoring
Structure Specific definition, graphics, results
Reporting Publication, frequency, work flow


Business management and decision making
External Community Government Investors Customer, Supplier Etc.

Stakeholder
Internal Performance, Reporting Demands, Requirements

Stakeholder
Company
Demands,
Information flow
Requirements
Owner
Area 1 Area 2 Area n
Management Closed Loop
Employees
Performance, Department 1 Department 2 Department n
Reporting Material Flow


Level 1 PPT Migas
Office &
Level 2 Refinery Fire & Safety Training Educational
Utilities Administrati Maintanance Academy Hospital
Department Center Lab
on
Crude Transportatio
Basic
Distillation Power Plant Fire Ground n & heavy Housing Housing Zaal
Science Lab
Unit Equipment
General
Level 3 Wax Plant Water & Gas
Fire Brigade Mechanic Class Room Class Room Tachnical Laboratory
Supply
Lab
Proses
Electric & Emergency
QC Lab Boiler Plant Implementati
Instrument Care Unit
on Lab
Exploration
Radiography
Civil Production
Room
Lab
Logistics Chemist
Operational Monitoring and Assessment Cycles Insinerator


What is it?
How can we do it?
Are there some tools to help us?


ICT for business management
Internal communication
Process monitoring with indicators
Internal documentation
Process / business assessment based on indicators
External reports communication
In-house gap analysis
Benchmarking
Representation and analysis of material flows
Simulation of processes
Definition of CSR orientated objectives
Preparation of material and energy balances
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55%
EC project EMIT CSR, Malaysia


Process and performance monitoring in a large number of companies is inadequate to needs! ?
IT systems used to support controlling and management tasks and real benefit (or benefit from future use)
Preparation of material and energy balances
In-house gap analysis
Representation and analysis of material flows
Simulation of processes
Process monitoring with indicator
Process/business assessment based on indicator
Internal documentation
External documentation/communication
recycling or waste exchange
35% 30% 25% 20% 15% 10% 5% 0%
in use / food in use / textile in use / general

EC project Asia ITC FORCE, Thailand


Indicator Management Process Management


www.modiconsult.com


Combining tools and services for industries


Transition of SMEs and supply chain networks in Southeast Asia

towards sustainable production processes through an active uptake of ICT
solutions for sustainability management – ICT4SM
Specific objectives:
• To develop a portfolio of efficient ICT-based sustainability management tools and solutions tailored to
the local conditions in Southeast Asia and needs of local SMEs across various industrial sectors
• To stimulate and facilitate an uptake of ICT-based sustainability management methods and tools in
significant number of regional SMEs and to improve their competitiveness and local environment
situation
• To establish a service infrastructure for fostering sustainability management culture and capacity
• To encourage uptake of sustainability management tools and practices on national/regional level

through active dissemination and promotion activities


Setting up company specific controlling systems

for continuous monitoring and assessment


What are the benefits?

¾ Creation of transparency
¾ Installing a systematic process of monitoring & reporting as well as evaluating & improving important
business aspects in a continuous way
¾ Improving decision making through an holistic view
¾ Support and integration of different management systems (EMS, Quality, OHS etc.)
¾ Efficient data management (collection and use!)
¾ ...
Consequences
¾ Cost and recource saving
¾ Improved management procedures
¾ Compliance and business enhancement
¾ Change of attitude towards learning organisations


Combining tools and services for industries - selected project references I
• Green Productivity Project (GPP I / II)

(Indonesia, Thailand, Philippines, Vietnam / 1999 - 2005)
• Training on Cleaner Production Technology (CPT I / II / III / IV)

(Indonesia, Thailand, Philippines, Vietnam / 2000 - 2004)
• Web Based Training: Life Cycle Oriented Plant Management

(LCPM) / Vietnam, Indonesia, Thailand / 2001 - 2005)
• Information Technology and Communication in the Field

of Sustainable Environmental Protection for Resource
Intensive Enterprises (ASIA IT&C FORCE)
(Thailand / 2002 - 2004)


Selected Project References Asia II
• Technology Partnership and Training Cooperation in European

Management Information Systems to Enhance the
Competitiveness of Thai SMEs
(SPF TEAMS SME; Thailand / 2006 – 2007, www.teams-sme.de)
• European-Malaysian Alliance and Capacity Building of

Malaysian Intermediary Institutions in European MIS to
Enhance Corporate Social Responsibility in Export Oriented
Malaysian SMEs (EMIT CSR (Malaysia / 2007 – 2008, www.emit-csr.de)
• Empowering Asian Business Intermediaries through

Knowledge-based Networking focused on Sustainability
Management (EMP-ASIA; Thailand, Vietnam / 2007 – 2009, www.empasia.org)


EPA Project Results - JBC Food Corporation, Caloocan, Philippines
Identified Potential Measure Savings Potential / Impact

High disposal costs Consistent and sorted separation of Savings thus far:
different waste fraction 395,000 pesos
Long downtimes on the production lines Selection of an alternative spare part for Savings thus far:
(esp. peanut line 2) vibration damping approx. 100,000 pesos (for all lines); reduction of
the downtimes (indirect savings: 91,000 pesos)
High employee dissatisfaction in individual Installation of a new ventilation system Increase of product output by 10% on average
production areas (difficult work conditions (various product groups); clear reduction of
caused by climate) employee illness and accident rate (difficult to
estimate financially)
Unusually high energy consumption in Implementation of measures for Reduction of heating time by 50% - consequently
peanut pretreatment (heating of peanuts preventive maintenance, cleaning of the reduction of gas consumption by 50% and
in a water bath on gas basis [LPG]) boiler increase of productivity; annual savings for all lines:
3.445 mil. pesos
Totel savings per year: US$ 180,000 (March 2005)


EPA Project Results - Pusdiklat Migas, Cepu, Indonesia
Identified Potential Measure Savings Potential / Impact
Obsolete filter presses in the “wax plant” Successive replacement of the old filter press Savings thus far (minus investment):
segments 256,000 Rupiah
High failure rates in the “power plant” Installation of special equipment (load Savings thus far: approximately 96,000,000
shading system) in September 2004 Rupiah
High losses in the distribution of drinking Installation of new piping at the end of Annual saving: 401,760,000 Rupiah,
water (leaks in pipe system) 2003 payout time based on investment costs:
approximately 4 years
Totel savings per year: US$ 220,000 (March 2005)


Environmental Management Accounting for SME in South-East Asia
Goals ¾ Know how transfer and dissemination of EMA

¾ Adaptation of EMA methods to the specific needs of South-East Asian companies
¾ Promotion of sustainable business development by showing economical and ecological savings
¾ Strengthening of capability and institution building
Activities ¾ 12 Information workshops

¾ 16 Local case studies
¾ Development of training materials
¾ 12 Training seminars
¾ Computer-based training
¾ 5 Training of Trainers (TOT)
Target region Indonesia, Philippines, Thailand, Vietnam Duration 10/ 2003 - 10/ 2007
Main project ¾ CSM-Centre for Sustainability Management, Germany

partner ¾ ASEP- Asian Society for Environmental Protection
¾ TEI-Thailand Environment Institute
www.environmental-accounting.org

Changing direction of businesses towards Sustainability Management
What can we offer?
¾ Individual IT based performance controlling solutions for businesses based on EPA /EPI
methodology for businesses (any size: micro, SME, big sized, supply chains)
- Business performance management (e.g.KPI management)
- Compliance management & reporting (Environmental – e.g. Proper, OHS)
- CSR monitoring & reporting
- Continuous improvement process
¾ Systems implementation & qualification of industries

¾ Building up and interlinking business support infrastructure
¾ Development and operation of service provider models
¾ Individual company implementation and support projects

¾ Branch solutions
¾ Qualification and institution building
¾ Development and operation of service on demand solutions


• www.sustain-asia.org


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1st CSR Training Workshop for Industries

1st Corporate Social Responsibility Training Workshop for Industries

– Cost Cutting and Performance Improvement through CSR –

As part of the European Commission supported SME business development project on

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

What drives the development and what do we want?

How can we do it?

Are there some tools to help us?

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Dave Packard, Co-founder of Hewlett Packard Company in 1939

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Internal perspective External perspective

• health and safety at work • social handling of community,

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Social Responsibility – working draft 4.1 ISO 26.000

Dow Jones Sustainability Index definition of CSR

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

In order for corporate social responsibility programs to work, government and

Harvard CSR Initiative, 2004

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

What drives the development and what do we want?

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

The Future of CSR, How to Align Values for Profit, Canadian

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Company - CSR Driver

Attraction of new investors or customers

Information demand by stakeholders

Legal- or regulatory obligations

Environmental concerns relating to products or service

Social concerns relating to products or service

Improving Business Performance

0% 10% 20% 30% 40% 50% 60% 70% 80%

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

1st CSR Training for Industries, Hanoi, 2009

Social Issues / Employees The Environment

Social Issues / Production and Supplier

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Employment Environment Data Score

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

legal waste water law number of

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

Frank Müller (ASEP)

1st CSR Training for Industries, Hanoi, 2009

CSR – making profit with a clear conscience!

Involves every aspect of an organization, like

Frank Müller (ASEP)