CORPORATE SOCIAL RESPONSIBILITY IN THE GLOBAL SUPPLY CHAIN
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1 CORPORATE SOCIAL RESPONSIBILITY IN THE GLOBAL SUPPLY CHAIN 1 John K. Visich, Ph.D. Bryant University 2014 Supply Chain Management Summit August 21, 2014
2 Title: Company: Dr. John Visich John K. Visich is a Professor in the Management Department at Bryant University where he teaches courses in operations management, supply chain management, and international operations. He has a Ph.D. in Operations Management from the University of Houston, and his research interests are in supply chain, corporate social responsibility and sustainability. He has published in a variety of academic and practitioner journals including Decision Sciences Journal of Innovative Education, International Journal of Operations and Production Management, Production and Inventory Management Journal, DC Velocity and APICS: The Performance Advantage. He is on the editorial review board of International Journal of Integrated Supply Management and he was a co-winner (with Professor Bryant University jvisich@bryant.edu Dr. Chris Roethlein) of the DSI 2011 Best Teaching Case Award Competition for Narragansett Brewing Company: The Rebirth of a Brand. And, he has received 4 Outstanding Professor awards from Bryant MBA students.
3 Corporate Social Responsibility (Operations Supply Chain) Risk Management Ethics in Ops Disasters Mgt.: readiness, relief, recovery Sustainability People, Planet, Profit (P 3 ) Outsourcing Product Recalls readiness, responsiveness, recovery Humanitarian SC LeAgile SC Closed-Loop SC LEED Buildings and Materials Environmental Audit Tool for SMEs ISO GRI FLA Workers, Wages, Way Forward MVT Standards, Frameworks, Indexes, Rankings
4 ARE YOU ON THIS LIST? CR Magazine s Best Corporate Citizens 1. Bristol-Myers Squibb 2. Johnson & Johnson 3. Gap 4. Microsoft 5. Mattel Environment (19.5%), Climate Change (16.5%), Human Rights (16.0%), Employee Relations (19.5%), Corporate Governance (7.0%), Philanthropy (9.0%), Financial (12.5%) 4
5 OR THIS LIST? The 5 Worst Corporate Citizens in the U.S. 1. Comcast 2. Monsanto 3. Sea World 4. Wal-Mart 5. JP Morgan Chase 5
6 WINSLOW GREEN GROWTH FUND eral/fact%20sheet.pdf Morningstar Rating The Fund seeks to invest in small and mid-sized growth companies that consider, manage and improve the environmental implications of their business activities. Some portfolio holdings focus exclusively on providing environmental solutions, such as companies in the organic food industry, or within the renewable energy sector. Using thorough environmental research, the adviser seeks to ensure that all of the companies in the portfolio responsibly manage their environmental impacts.
7 DOW JONES SUSTAINABILITY INDEXES Key competence characteristics Strategy Financial Customer and Product Governance and Stakeholder Human Family of 19 indices.
8 OR THIS WEB SITE? U.S. Consumer Protection Safety Commission Gree Expands Dehumidifier Recall to Include GE Brand Dehumidifiers Due to Serious Fire and Burn Hazards The dehumidifiers can overheat, smoke and catch fire. Fires reported. Consumers should stop using this product unless otherwise instructed. It is illegal to resell or attempt to resell a recalled consumer product. Recall date: January 30, 2014 Recall number:
9 Car was top-heavy and unstable Equipped with Firestone Tires that had tread separation problems 200 deaths 13 million vehicles million tires recalled Ford faced $590 million in lawsuits Ford spent $3 billion Explorer was completely redesigned in 2002 but failed in sales
10 40% market share in pain-relief market Extra-Strength Tylenol bottles laced with cyanide 7 people killed Fast and effective response 31 million bottles recalled $100 million spent New tamper-resistant seal created Johnson & Johnson recovered reputation and market share
11 88% have experienced a recall Recalls are inevitable and therefore companies must be prepared to handle them
12 Have You Received a Similar Letter? Dear Quality Manager: You are receiving this letter because you are a supplier to XXX or one of its Business Units (listed below) and we need you to provide us with certain critical pieces of information which we need to have on file. In order to make the process most efficient, we are combining three requests in this single communication: 1. Conflict Minerals Disclosure 2. Certificate of Insurance 3. Toxins in Packaging Certificate of Compliance 12
13 Governments, activists-ngos, and the media Holding companies accountable for social consequences Organizations rank companies Emergence as a priority Effort not effective enough Business vs. Society Pressure companies to think of CSR in generic ways More appropriate manners for each firm s strategy 13
14 Public response to issues not previously part of business responsibility Activist organizations Who are they? Much more aggressive Effective in bringing public pressure Source of opportunity, innovation, competitive advantage Corporations awakened Less clear about what to do 14
15 FOUR JUSTIFICATIONS FOR CSR Moral Obligation Reputation CSR Sustainability License to Operate 15
16 INTEGRATING BUSINESS & SOCIETY Interrelationship between corporation and society Successful corporations need: Healthy society Education Health care Equal opportunity productive workforce Healthy society needs successful companies Creation of jobs Wealth Innovation to improve standards of living Must choose which social issues to address 16
17 THE PATH TO CSR: ORGANIZATIONAL LEARNING Defensive Stage Compliance Stage Managerial Stage Strategic Stage Civil Stage 17
18 THE CIVIL-LEARNING TOOL 18
19 SUSTAINABLE OPS BUSINESS DRIVERS Profit People Planet Triple Bottom Line 19
20 Business Drivers - 3Ps People Planet Profit 20
21 What to Do? ISO SA ewpage&pageid=937 CA Supply Chain Transparency Act Global Reporting Initiative 21
22 GLOBAL REPORTING INITIATIVE Mission To make sustainability reporting standard practice for all organizations Current Priorities Developing Guidelines G4 Report or Explain Integrated Reporting (PPP) Accounting Firms Sustainable Development (Newly Emerging Countries)
23 GLOBAL REPORTING INITIATIVE Sustainability Reporting Framework Sustainability Reporting Guidelines General Standard Disclosures (58 total) 1. Strategy & Analysis 2. Organizational Profile 3. Material Aspects and Boundaries 4. Stakeholder Engagement 5. Report Profile 6. Governance Structure and Composition 7. Ethics and Integrity
24 GLOBAL REPORTING INITIATIVE Specific Disclosures Indicator Protocols Set 1. Economic 2. Environment 3. Labor Practice and Decent Work 4. Human Rights 5. Society 6. Product Responsibility Items 3-6 are Social
25 SUSTAINABILITY REPORTING FRAMEWORK Economic Economic Performance Of Society / Community NOT THE COMPANY Market Performance Indirect Economic Impacts
26 SUSTAINABILITY REPORTING FRAMEWORK Environment Materials Energy Water Biodiversity Emissions, Effluents, and Waste Products and Services Compliance, Transport, Overall
27 SUSTAINABILITY REPORTING FRAMEWORK Labor Practices and Decent Work Employment Labor/Management Relations Occupational Health and Safety Training and Education Diversity and Equal Opportunity Equal Remuneration for Women and Men
28 SUSTAINABILITY REPORTING FRAMEWORK Human Rights Investment and Procurement Practices Non-Discrimination, Freedom of Association and Collective Bargaining, Child Labor, Forced and Compulsory Labor, Security Practices, Indigenous Rights, Assessment, Remediation
29 SUSTAINABILITY REPORTING FRAMEWORK Society Local Communities Corruption Public Policy Anti-Competitive Behavior Compliance
30 SUSTAINABILITY REPORTING FRAMEWORK Product Responsibility Customer Health and Safety Product and Service Labeling Marketing Communications Privacy Compliance
31
32 PEOPLE Growing pressure from environmental groups, customer organizations, investors, and other stakeholders People want to associate with companies that are good corporate citizens Directly or indirectly related to environmental concerns and sustainable environments 32
33 PLANET Confrontation with growing populations Increased requirements for natural resources Higher standards of living China Example Global markets will force more countries to enact laws stimulating or forcing companies to close their supply chains Unsustainable rich shoving waste upon the poor Increasing legislation Imposition of minimum requirements 33
34 PROFIT Offering a reliable service or functionality More important than just selling a product Increasing confrontation with returns More emphasis upon leasing/renting Allows for re-use Market and brand protection Concerns protection of new product markets Scarcity of raw materials Important drivers to encourage companies to close the loop 34
35 COURSE TOPICS (n=33) Avg. σ Differences 1. Sustainability ,8,7,6,5,4,3,2 2. HSC ,8,7,6 3. CSRinGSC ,8,7 4. Indexes Offshoring CLSC Recalls RiskMgmt LEED
36 SOMETHING TO THINK ABOUT I Got Hired at a Bangladesh Sweatshop. Meet My 9-Year-Old Boss Raveena Aulakh, Toronto Star, October 11, /i_got_hired_at_a_bangladesh_sweatshop_meet _my_9yearold_boss.html 36
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