1. CORPORATE SOCIAL RESPONSIBILITY IN ENERGY INDUSTRY
Zh.S.Belyaeva
CORPORATE SOCIAL RESPONSIBILITY
IN ENERGY INDUSTRY
Ekaterinburg,
2015

2. Zh.S.Belyaeva_CSR in Energy Industry
Overview and Contents
Intro_Course Objectives, Deliverables and Grading (
Lecture 1_ Corporate social responsibility: evolution of theory
Lecture 2_ CSR Management: Standards, Audit, Reporting
Lecture 3_Internal and external dimensions of CSR in Energy Business
Lecture 4_ Managerial CSR context– responsible leadership and business ethics
Lecture 5_ How to measure corporate social responsibility?
Lecture 6_ International CSR outlook in energy business
Zh.S.Belyaeva_CSR in Energy Industry
Zh.S. Belyaeva_CSR in Energy Industry

3. Intro_Course Objectives, Deliverables and Grading
During this course participants:
will acquire knowledge about the formation of corporate social responsibility in today's Russia;
will review the practice of CSR by leading Russian and international companies,
change their mind towards sustainable leadership in managing “the good” energy companies. 

4. The Course Evaluation Parts
Lectures and Seminars - Interactivity(35%)
Essay and Group Project Research (20%)
Knowledge Quiz (10%)
Discussions and Students Presentations(15%)
Final Test (20%)

5. Expected Results & Deliverables
At the end of this session, you should be able to identify and describe:
A definition/(s) for CSR
World Models of CSR and Appropriate Standards
Reasons for having a CSR programme in Energy Business
Objections to CSR
What makes a CSR programme
How a CSR programme is communicated
Principles of reporting for CSR
Some alternative viewpoints on CSR
Interrelation of Business Ethics and (C) SR
Principles of Creating Shared Values
What makes Energy Business Sustainable.. And how to lobby it?

6. Lecture 1_ Corporate social responsibility: evolution of theory
Definitions of CSR
CSR and Related Concepts
New Approach to CSR (2.0)
QUOTES about CSR
Wealth created from society has to be ploughed back into society
- Mahatma Gandhi
The purpose of a corporation is to do as much good as we can, everywhere for everybody concerned … and incidentally to make money
-Henry Ford

7. What is CSR?
Concept of CSR often criticized because of lack of legally defined or commonly accepted definition.
Is this criticism justified? Should it matter that CSR is not legally defined or subject to a single universal definition?
By comparison, the term corporate governance is not in itself legally defined or subject to a commonly accepted definition- the term is associated with concepts, ideas and principles that evolve over time.
Arguably, CSR should never be given a fixed definition. This will foster evolution.
Despite the lack of a single definition, my own research has shown that by examining different definitions from around the world, it is clear that there are commonly held understandings about what constitutes CSR.
Let’s firstly examine some of these definitions----- then I will address the common understanding.
Zh.S. Belyaeva_CSR in Energy Industry

8. What is CSR? Canadian Government:
“CSR is generally understood to be the way a company achieves a balance or integration of economic, environmental and social imperatives while at the same time addressing shareholder and stakeholder expectations.”
Zh.S. Belyaeva_CSR in Energy Industry

9. What is CSR? UK Government:
“The Government sees CSR as the business contribution to our sustainable development goals. Essentially it is about how business takes account of its economic, social and environmental impacts in the way it operates – maximising the benefits and minimising the downsides.”
Zh.S. Belyaeva_CSR in Energy Industry

10. What is CSR? European Union:
“[CSR is] a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.”
Zh.S. Belyaeva_CSR in Energy Industry

11. What is CSR? World Business Council for Sustainable Development:
“We define CSR as business' commitment to contribute to sustainable economic development, working with employees, their families, the local community, and society at large to improve their quality of life.”
Zh.S. Belyaeva_CSR in Energy Industry

12. What is CSR?
The Kennedy School of Government (Harvard University), CSR Initiative:
The term [CSR] is often used interchangeably with others, including corporate responsibility, corporate citizenship, social enterprise, sustainability, sustainable development, triple-bottom line, corporate ethics, and in some cases corporate governance. Though these terms are different, they all point in the same direction: throughout the industrialized world and in many developing countries there has been a sharp escalation in the social roles corporations are expected to play.
Zh.S. Belyaeva_CSR in Energy Industry

13. What is CSR? A reflection..
What do these definitions tell us about CSR?
What are some of the common understandings that emerge?
How does CSR relate to other concepts?
What other issues arise?
Zh.S. Belyaeva_CSR in Energy Industry

14. What is CSR?
CSR is an idea whereby companies integrate economic, social and environmental concerns in their business operations
CSR can be defined as a system of corporate actions including its players (owners, agents and employees) directed to achieve positive effects for a society and the business.
CSR can be represents three blocks: social responsibility of business, social responsibility of corporate governance (in the broad sense) and socially responsible execution of functional duties.
Zh.S. Belyaeva_CSR in Energy Industry

15. Stakeholders (Freeman, et al, 2004, 2010)
CSR relates to the idea whereby a business addresses and balances the needs of stakeholders.
Who/what are stakeholders? “Individuals and groups who may affect or be affected by the actions, decisions, policies, practices or goals of an enterprise.”
Examples:
Shareholders and other investors
Employees
Customers
Governments
Local communities
NGOs
Environment
Zh.S. Belyaeva_CSR in Energy Industry

16. Corporate Social Responsibility (CSR)
Corporate Citizenship Concepts
Corporate social responsibility – emphasizes obligation and accountability to society
Corporate social responsiveness – emphasizes action, activity
Corporate social performance – emphasizes outcomes, results

17. Multistekeholder Approach to Business in the 21st Century
Consumer Confidence
Exchange Rates
Interest Rates
Regulation/Policy
Governance
Corruption
Climate Change
Communities
Waste
Labour/ Workplace
Biodiversity
Human Rights
Resource Use
Zh.S. Belyaeva_CSR in Energy Industry

18. Corporate Social Responsibility (CSR)
Business Criticism/ Social Response Cycle
Factors in the Societal Environment
Criticism of Business
Increased concern
for the Social Environment
A Changed
Social Contract
Business Assumption of Corporate Social Responsibility
Social Responsiveness, Social Performance, Corporate Citizenship
A More Satisfied Society
Fewer Factors Leading
to Business Criticism
Increased Expectations Leading
to More Criticism
2-7

19. Corporate Social Responsibility (CSR)
Historical Perspective
Economic model – the invisible hand of the marketplace protected societal interest
Legal model – laws protected societal interests

20. CSR and Related Concepts: Sustainable Development
Many definitions describe CSR as the business pursuit of sustainable development.
Sustainable development: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” (1987 Brundtland Report).
Zh.S. Belyaeva_CSR in Energy Industry

21. CSR and Sustainable Development
2002 World Summit on Sustainable Development (Johannesburg) confirmed link with CSR.
Paragraph 49 of the Johannesburg Plan of Implementation calls for action at all levels to:
“Actively promote corporate responsibility and accountability, based on the Rio principles, including through the full development and effective implementation of intergovernmental agreements and measures, international initiatives and public-private partnerships and appropriate national regulations, and support continuous improvement in corporate practices in all countries.”
Zh.S. Belyaeva_CSR in Energy Industry

22. CSR and Related Concepts: Corporate Governance
Many definitions highlight the link between CSR and corporate governance.
Is CSR a subset of corporate governance or is corporate governance a subset of CSR?
Zh.S. Belyaeva_CSR in Energy Industry

23. CSR and Corporate Governance
Zh.S. Belyaeva_CSR in Energy Industry

24. CSR and Corporate Governance
Related in definition:
Principle 4 of The OECD Principles of Corporate Governance (2004) underscores the need of a corporate governance framework to “encourage active co-operation between corporations and stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises.
Related in Management:
Many companies are now using company codes of conduct to address conduct issues that relate to both corporate governance issues (conflict of interest, market disclosure, whistleblowing, corruption, fraud & accounting) and CSR issues (human rights, environment & labour standards)
Related in Investment:
Mainstream investors now consider environmental, social and governance issues (known collectively as ESG issues) in their investment decisions.
Zh.S. Belyaeva_CSR in Energy Industry

25. CSR and Other Related Concepts
The term CSR is often used interchangeably with the terms corporate responsibility, corporate citizenship and triple bottom line.
Companies choose the terminology they feel comfortable with.
Zh.S. Belyaeva_CSR in Energy Industry

26. Evolving Viewpoints
CSR considers the impact of the company’s actions on society (Bauer)
CSR requires decision makers to take actions that protect and improve the welfare of society as a whole along with their own interests (Davis and Blomstrom)

27. Evolving Viewpoints
CSR mandates that the corporation has not only economic and legal obligations, but also certain responsibilities to society that extend beyond these obligations (McGuire)

28. Evolving Viewpoints
CSR relates primarily to achieving outcomes from organizational decisions concerning specific issues or problems, which by some normative standard have beneficial rather than adverse effects upon pertinent corporate stakeholders. The normative correctness of the products of corporate action have been the main focus of CSR (Epstein)

29. Carroll’s Four Part Definition
CSR encompasses the economic, legal, ethical and discretionary (philanthropic) expectations that society has of organizations at a given point in time

30. Pyramid of CSR
Philanthropic Responsibilities Be a good corporate citizen.
Ethical Responsibilities Be ethical.
Legal Responsibilities Obey the law.
Economic Responsibilities Be profitable.
Source: Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,” Business Horizons (July-August 1981).
Zh.S. Belyaeva_CSR in Energy Industry

31. Corporate Social Responsibility (CSR)
CSR in Equation Form Is the Sum of:
Economic Responsibilities (Make a profit)
Legal Responsibilities (Obey the law)
Ethical Responsibilities (Be ethical)
Philanthropic Responsibilities (Good corporate citizen)
CSR

32. Responsible Competitiveness
Late 2000s
Responsible Competitiveness
Early 1990s
Corporate
Governance
Early 2000s
Accountability
1970s
Shareholders
1980s
Philanthropy
Late 1990s
Stakeholders
Engagement

35. The Failure of CSR (and its rebirth)
Copyright CSR International / Wayne Visser 2010
Creativity
CSR 1.0 Curses
Scalability
Responsiveness
Uneconomic
Peripheral
Incremental
CSR 2.0 Principles
Glocality
Circularity
Why has CSR failed so spectacularly to address the very issues it claims to be most concerned about? It is because of the Triple Curse of Modern CSR
We need a revolution that will, if successful, change the way we talk about and practice CSR and, ultimately, the way we do business
Zh.S. Belyaeva_CSR in Energy Industry 35

36. Web 1.0 and CSR 1.0 Web 1.0 Information source Advertising push
Innovators like Netscape
Mainstreamers like Microsoft
Standardized PC hardware & software
CSR 1.0
Glorified brochures
Greenwash
Innovators like Traidcraft
Mainstreamers like Walmart
Standardized CSR codes & guidelines
Zh.S. Belyaeva_CSR in Energy Industry 36

37. Web 2.0 and CSR 2.0 Web 2.0 Collective intelligence
Collaborative networks
User participation
Social media
Knowledge syndication
Beta testing
New philosophy
CSR 2.0
Global commons
Innovative partnerships
Stakeholder involvement
Stakeholder panels
Real-time reporting
Social enterprise
New business model
Zh.S. Belyaeva_CSR in Energy Industry 37

38. CSR 2.0: The New DNA of Business
Copyright CSR International / Wayne Visser 2010
Environmental Integrity
Societal Contribution
Good Governance
Value
Creation
CSR 2.0
CSR can only be resilient if it is part of the DNA of an organisation, i.e. CSR will only survive the vagaries of fickle markets, fluctuating profits, financial crises and leadership whims if it is totally embedded in the corporate culture, strategy and governance systems”
– Wayne Visser, 2008
Zh.S. Belyaeva_CSR in Energy Industry 38

39. CSR 1.0 versus CSR 2.0 Corporate Social Responsibility Philanthropic
Risk-based
Image-driven
Specialized
Standardized
Marginal
Western
Corporate
Sustainability &
Responsibility
Collaborative
Reward-based
Performance-driven
Integrated
Diversified
Scalable
Global
Source CSR International / Wayne Visser 2010
Zh.S. Belyaeva_CSR in Energy Industry 39

40. The New DNA of Business: CSR 2.0
Copyright CSR International / Wayne Visser 2010
Goal
Economic development
Indicators
Beneficial products
Inclusive business
Environmental Integrity
The CSR 2.0 Model
Institutional effectiveness
Stakeholder
orientation
Sustainable ecosystems
Transparency
Ethical conduct
Philanthropy
Fair labour practices
Renewable resources
Zero-waste production
Societal Contribution
Good Governance
Value
Creation
DNA Code
Zh.S. Belyaeva_CSR in Energy Industry 40

41. CSR 1.0 versus CSR 2.0: Shifts CSR premium Charity projects
CSR indexes
CSR departments
Ethical consumerism
Product liability
CSR reporting cycles
Stakeholder groups
Process standards
Base of the pyramid
Social enterprise
CSR ratings
CSR incentives
Choice editing
Service agreements
CSR data streams
Social networks
Performance standards
Source CSR International / Wayne Visser 2010
Zh.S. Belyaeva_CSR in Energy Industry 41

42. The Challenge Ahead for CSR 2.0
As with Web 2.0, the success of CSR 2.0 will depend on:
C = CREATIVITY
S = SCALABILITY
R = RESPONSIVENESS
2 = GLOCALITY
0 = CIRCULARITY
Source CSR International / Wayne Visser 2010
Zh.S. Belyaeva_CSR in Energy Industry 42

43. CSR 2.0 as the new DNA of Business
Source CSR International / Wayne Visser 2010
Zh.S. Belyaeva_CSR in Energy Industry 43

45. Business advantages of CSR:
Business Development
New markets, products and services
Resources Management
Better management and conservation of strategic assets
Stakeholder Management
Better internal and external relationships
Freedom of operation: reduce government, public, NGO intervention in organisation

46. Corporate Social Responsibility (CSR) Arguments Against
Restricts the free market goal of profit maximization
Business is not equipped to handle social activities
Dilutes the primary aim of business
Increase business power
Limits the ability to compete in a global marketplace

47. Corporate Social Responsibility (CSR) Arguments For
Limits future government intervention
Addresses issues by using business resources and expertise
Addresses issues by being proactive
Addresses social issues business caused and allows business to be part of the solution
Protects business self-interest

48. Business Responsibilities in the 21st Century
Demonstrate a commitment to society’s values and contribute to society’s social, environmental, and economic goals through action.
Insulate society from the negative impacts of company operations, products and services.
Share benefits of company activities with key stakeholders as well as with shareholders.
Demonstrate that the company can make more money by doing the right thing.

49. Corporate Social Responsibility:
adds value

50. Why not CSR?
May take management focus away from core business activity
May appear cosmetic – without genuine social benefit
May make organisation more vulnerable to revelation of bad / unethical business practice
A restriction to free trade?

51. Economist, Milton Friedman says:
“The social responsibility of business is to increase its profits.”
“What does it mean to say that "business" has responsibilities? Only people can have responsibilities.”
“…in a free society there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

52. CSR in Energy Directions
Specialist ‘adopted’ projects
Corporate charitable donations
Voluntary schemes for staff
Staff fundraising activities
Changes to organisational operations
Environmental Rescue Schemes
Transparency in operation
MultiStakeholder Approach in Strategy

53. Questions and Discussion