1. S. Lioukas concepts CSR, Sustainability, CG the business case stakeholders and their engagement CORPORATE RESPONSIBILITY

2. What is CSR about ? Social responsibility is the responsibility of an organization for the impacts of its decisions and activities on society and the environment Including conduct: transparent and ethical behavior including health and the welfare of society Impact: positive or negative change to society, economy or the environment, wholly or partially resulting from an organization's past and present decisions and activities Accountability is the state of being answerable for decisions and activities to the organization's governing bodies, legal authorities and, more broadly, its stakeholders Definitions 2

3. Definition: Sustainable Development “Development that meets the needs of the people today without compromising the ability of future generations to meet their own needs”

4. CSR vs Sustainability CSR and Sustainability CSR: definitions vary across countries Some include more, e.g. fraud CSR: an externally imposed concern? Sustainability: Balance ENOCOMIC – ENVIRONMENTAL - SOCIAL /HUMAN It is strategy, internally determined Metrics: International, e.g. GRI, Sustainability indicators, transparency… ESG metrics (Bloomberg, Reuters – Asset 4, …) 4

5. WHO ARE THE STAKEHOLDERS Stakeholder is the individual or group that has an interest in any decision or activity of an organization refers to any group or individual who can affect or is affected by the achievement of the organization’s purpose (Freeman, 1984). Stakeholder engagement is an activity undertaken to create opportunities for dialogue between an organization and one or more of its stakeholders, with the aim of providing an informed basis for the organization's decisions Definitions 5

6. Managing the impact on society of the business basics: ethical business conduct supply chain relationships responsible marketing product life-cycle issues employee issues community issues human rights issues environmental responsibility public policy involvement Charity Sponsorship Corporate Responsibility: A way of doing business not a list of activities Source: London Benchmarking Group model (1993) adapted

7. Environmental footprint Sustainable sourcing Product life- cycle Bio- technology Animal testing Product safety Product abuse Location issues Restructuring & downsizing OutsourcingEthical business practices Briber y Money laundering Directors’ pay Workplace practices Discrimination Social exclusion Product access to poor Cultural impact Human rights Pariah regimes Indigenous tribes Security issues Conflict Health & safety Company Issues and Responses Chris Marsden, Sept 2000 Fair trade Company responses: 1. Ignore & hope 2. Crisis management 3. Anticipate issues 4. Influence issues

8. Sustainability - can business be part of the solution? Social responsibility is inefficient in a global free market and the market will not long abide those who do not avail of the opportunity to shed the inefficient’(David Korten in When corporations rule the world ‘While industry represents perhaps the single biggest threat to the natural world, it can also represent one of our greatest allies in our mission to safeguard it.’ (Dr. Robin Pellow, Director, WWF-UK).

9. Commercial returns Sustainable commercial returns * Internalised soc. & env. costs Zero-sum game Win - Win * Sustainable commercial returns: higher sales lower disruption costs neighbourhood licence to operate government licence to operate reputation employee morale better operating environment clear conscience The Business Case: zero-sum game or win-win?

10. CSR - the Ultimate Goal : create “shared value” 10 Infrastructure Products and services Employment (direct/indirect) Skills and competencies Procurement Taxes Environmental impact Business Assessment Responsible Products Economic use of resources People development, skills & capabilities Social cohesion Health & safety Human rights Transparency Sustainable development Operation Direct Impacts Indirect Impacts Creation of shared value JOINT WITH COMMUNITIES

11. What is Corporate Governance about? The system that societies use to direct and “control” the conduct of corporations  sets the rights & obligations of companies, owners (shareholders), and company obligations against other stakeholders  accountability to society and mechanisms to align the company with the “public interest” at large Includes formal laws &regulations & codes, as well as informal customs and processes  all determine to what end a firm should be run

12. CG and CSR Both concerned with ethics CG is more specific and formalized relative to Corporate Social Responsibility  There are more formal, compulsory laws and regulations in CG  CSR is more voluntary Metrics and rating is more developed in CG  CG scoreboards  Ratings industry (agencies, investment institutions…)

13. Does Corporate Governance Pays off? Companies with “good governance” have higher performance  earned 9.3% more profit that those with “bad governance” (HBS survey in USA,2002)  In Europe: 3% more (Deminor Rating, Amsterdam, 2003) Investors prefer to invest in corporations with high CG standards  75% of investors are ready to pay a higher price for good corporate governance, with premiums of 12% to more than 30% (McKinsey, 2002) Good corporate governance leads to significantly lower capital costs (FAZ, 2002)

14. In the following case study of TITAN cement, identify: What aspects of CSR are monitored? Hw the social footprint can be improved and extended? Getting info from its site, evaluate its corporate governance practices. TITAN CEMENT

15. Case study : CSR in the cement industry The business logic of CSR / SUSTAINABILITY: Cement industry 15  Economics of Sustainable Development  Develop safety culture  Build trust with key stakeholders (e.g. local communities)  Continuously renew «License to operate»  Build reputation  Preserve access to natural resources  Mitigate risk  Motivate employees  Improve competitiveness Long-Term Goals

16. Do less harm; do more good : An integrated and holistic approach Quarry Crusher Raw Materials Clinker Production Grinding and Distribution Transport Mixing bed Dust filter Raw mill Pre-heater Kiln Clinker cooler Clinker silo Cement mill Logistics

17. Raw Materials Dust Vehicle emissions Noise and vibration Ecology & nature conservation Soils Water (surface & ground) Air emissions Dust Noise and vibration Public health Labour conditions Effects on local communities (positive and adverse) Land-take ENV H&S S- F Do less harm; do more good : An integrated and holistic approach

18. Grinding and Distribution Dust Vehicle emissions Noise and vibration Materials (packaging) Waste Dust Heat Noise and vibration Physical hazards Chemical hazards and hygiene Public health Labour conditions Effects on local communities (positive and adverse) ENV H&S S-F Do less harm; do more good : an integrated and holistic approach

19. Stakeholder engagement Sphere of influence Stakeholder engagement process

20. Commit to deliver results 20