novartis foundation for sustainable development stretching the limits of corporate responsibility...

Novartis Foundation for Sustainable Development

Stretching the Limits of Corporate Responsibility

Notre Dame Conference onPeace and Commerce

November 12 - 14, 2006

Klaus M. Leisinger


Human Rights and Business: A Zero Sum Game?


Environics, 2002/04 – 20 industrial and industrializing countries surveyed

Trust Distrust

Multinational companies

National governments

Trade unions

Large domestic companies

Press and media

Religious organizations

NGOs 65

Trust in institutions to operate in best interest of society

29

58 37

52 46

49 47

46 48

45 53

42 51


Ways and Means to bring a Corporate Responsibility Philosophy “down to earth”

Institutional Level

Use structural and organizational means to leave no doubtabout corporate insistence for morally acceptable behavior

Personnel Level

You can still govern with bad laws and good civil servants – with bad civil servants, however, even the best laws do not make a difference.

Otto von Bismarck (1884)


The Global Compact as the CSR frameworkThe Global Compact asks companies to embrace, support and enact, within their sphere of

influence, a set of core values in the areas of human rights, labour standards, the environment, and anti-corruption:

Human Rights• Principle 1 : Businesses should support and respect the

protection of internationally proclaimed human rights; and• Principle 2 : Make sure that they are not complicit in

human rights abuses.

Labour Standards• Principle 3 : Businesses should uphold the freedom of

association and the effective recognition of the right to collective bargaining;

• Principle 4 : The elimination of all forms of forced and compulsory labour;

• Principle 5 : The effective abolition of child labour; and• Principle 6 : The elimination of discrimination in respect of

employment and occupation.

Environment• Principle 7 : Businesses should support a precautionary

approach to environmental challenges;• Principle 8 : Undertake initiatives to promote greater

environmental responsibility; and• Principle 9 : Encourage the development and diffusion of

environmentally friendly technologies

Anti-Corruption• Principle 10 : Businesses should work against all forms of

corruption, including extortion and bribery.

Organisational Change

Actions, Projects

Communication on Progress

Leadership committee to embrace and enact


Corporate Citizenship “homework”

• Reflect on corporate status quo, consult internally and externally;

• Define the scope and limits set by your corporate citizenship “philosophy” and communicate, communicate, communicate;

• Implement management procedures (e.g. target setting, performance appraisals, compliance monitoring, etc.);

• External verification by independent auditors;

• Reporting about successes, failures and dilemmas


The hierarchy of corporate responsibilities

Obey all laws;adhere to regulations;

offer healthy working placesminimize emissions; be profitable

be successful in R&D; make profitablestrategic decisions

Corporatecitizenship

beyond legal duties(wise strategic decisions)

Corporatephilanthropy

Desired(can)

Expected(ought to)

Essentials(must)

Corporate responsibility excellence

Good management Practices


Measuring Misery

• About 2.5 billion people live on less than 2 US$ a day.

• The 20 richest percent of the world’s population receive 85% of the global

income, the poorest 20 percent only 1.4%.

• Average life expectancy in the poorest countries of Africa is less than 45

years.

• Every Year more than 500’000 women die in pregnancy and childbirth – one

every minute

• 14 million children die every year due to preventable diseases – 26 every

minute


There is a plausible “business case”

Applied corporate social responsibility is likely to

Reduce friction with society and hence reduce legal, financial and reputation risks

Engender employees’ motivation and identification

Enhance the attraction of the corporation (ethical investment)

Preserve corporate freedom

Provide new competitive edge in modern societies


Trespassing traditional limits

Good for the company

Bad for society

=A case for better (national and

international) law as well as corporate responsibility

Good for the company

Good for Society

=

The Business Case for Corporate Responsibility

Bad for the company

Bad for Society

=

A Question of IQ

Good for Society

No benefit for the company

=

The Case for reputation capital


BUT…

…there are limits to what companies will do - how can we stretch

them?

“market failure” and “failing states”

Economic, Social and Cultural Rights Invest beyond the “business case” in support of the

Millennium Development Goals

and, according to sectorial specificities, more


There is a plausible “business case”

Applied corporate social responsibility is likely to

Reduce friction with society and hence reduce legal, financial and reputation risks

Engender employees’ motivation and identification

Enhance the attraction of the corporation (ethical investment)

Preserve corporate freedom

Provide new competitive edge in modern societies

novartis foundation for sustainable development stretching the limits of corporate responsibility...

Documents