1. Professor Kellie A. McElhaney 7 April 2009

2.  Recovering banker  Professor at UC Berkeley (Haas School of Business)  Founding Director, Center for Responsible Business  Ranked #1 in world by Financial Times  Extensive corporate consulting: Gap, HP, Nokia, Ulster Bank, eBay, Ernst & Young, Frontline, McDonalds, Blue Cross, Statoil, Nvidia, Kimberly-Clark, Yum! Brands, Twitter  Research focus areas: Strategies of CSR; Branding & CSR; Diversity & CSR  New book called Just Good Business

3. BSR/ Cone Corporate Responsibility in a New World Survey, 2009

4. ….of HOPE.

5.  Consumer Interest in Environmental Purchasing Not Eclipsed By Poor Economy  Purchasing:  34 % of American consumers indicate they are more likely to buy environmentally responsible products today  44 % indicate their environmental shopping habits have not changed as a result of the economy  Interest:  35 % of Americans have higher interest in the environment today than they did one year ago  Expectations:  35 % of Americans have higher expectations for companies to make and sell environmentally responsible products and services during the economic downturn

6.  220 directors at U.S. companies with $1 billion or more in revenue  79% have a strong or moderate understanding of the business risks associated with CSR and climate change  76% have a strong or moderate understanding of the business opportunities associated with CSR and climate change  50% think their boards and management are committed to addressing CSR and climate change  50% think their companies’ response to CR&S is integrated into business strategy and risk management  41 % report no such integration Deloitte Survey /White Paper, The Growing Role of the Board in CSR and Climate Change, 2009

8. CSR Has Gone Mainstream

10. A business strategy that: ◦ Creates wealth ◦ Protects wealth It is about using the power of business to improve the world.

11. My Definition of CSR  A corporate strategy that is integrated with (1) core business objectives & (2) core competencies to create financial and social/environmental returns, and is embedded in corporate culture and day- to-day business operations. McElhaney, 1998

12. Strategic CSR CSR Strategy must fit two things: ◦ Core business objectives:  Increase sales, penetrate new markets, engage employees, reduce operating expenses, improve reputation, protect brand, beat competitors ◦ Core competencies:  Technology, financial products &services, making markets, natural food, automobiles and transportation systems, travel & tourism.

13. Global Citizenship/ CSR/ Sustainability Employee Engagement Community Investment Philanthropy Government & Public Relations Governance & Ethics Environmental Footprint Supply Chain/ Sourcing Social/ Environmental Impact of Products & Services

14. C SR

15. A Typical Corporate Strategy Hewlett Packard, 2006

16. A Typical CSR Strategy Philanthropy Non-Profit partnerships Health & Nutrition Product give-aways Sponsorships Workplace diversity Human rights Employee volunteerism Cause marketing Corporate governance Ethics Fair employee treatment Environment Public Affairs Community investment Supply Chain

17. A Lost Opportunity… …to utilize CSR as a powerful integrated business strategy, not an add on.

18. CSR is not about how you spend the money you make. It’s about how you make the money you spend.

19. A Company Who Gets It: Whirlpool

20. Whirlpool & Habitat for Humanity  $25M commitment in 1999  Given $34M, plus 73,000 refrigerators, ranges, household items to 36,000 homes  Pledged to give appliances to every house built through 2011  Launched Building Blocks initiative in 2006, sending over 1000 employees & more volunteers to neighborhood for 1 week to build an entire block  From onset, was philanthropy; in 2004, became brand message ◦ “We make very large, very heavy metal machines, often with big motors. This puts a human face on what could be a very cold metal category.”  Sponsored 2006 Reba McEntire Habitat for Humanity Tour

21. Business Impact

22.  Inspires/ attracts employees  Enhances/ redefines the brand  Enhances value proposition  Fosters distinctiveness / differentiates  Tells a story  Opens access to new markets  Increases license to operate  Improves efficiencies  Increases trust and loyalty The Role of CSR in Business

24. Going Green? Hudson Gain Corp., 2009

25. Cost savings achieved through reduction of waste Reduced liability derived from more responsible handling of materials and pollutants Performance of a business based on their ability to attract & retain the most qualified employees Long-term viability of a business due to its access to sustainable resources and customer bases

26. To be supplied 100% by renewable energy To create zero waste To sell products that sustain our resources and environment Wal-Mart’s Sustainability Goals

27. Wal-Mart’s Global Environmental Impact Packaging Agriculture Water Marine Factories Indirect Impact = 92%

28. CSR can turn around a brand’s image and make money In 2 short years, Walmart has gone from one of the most hated companies to one of the most admired.

29. Flat noodles/ Smaller boxes = 900,000 lbs. less paper/yr GHG emissions decreased by 11% 20% more boxes on shelf Concentrated liquid = 400M gallons less water consumed 95M lbs. less plastic used 125M lbs. less cardboard

30.  C-suite commitment  CSR/ business strategy alignment  CSR impact metrics  CSR organizational structure  CSR in supply chains  CSR/ cultural alignment  CSR innovations  Engagement with activists/ NGOs

31. Thank You