August 31, 2007   

Max Oliva, Associate Director, Social Impact Management

We’re back from the summer break and eager to continue the conversation on corporate responsibility and sustainability. As last year, I include a list of events and topics which took place in the month of August:

The winner’s of the “Disruptive Innovations in Health and Health Care” have been announced.

5 new Ashoka fellow’s in Mexico

Echoing Green has announced their 2007 Fellows

Cemex is considered as one of the leaders in BoP space both through Construmex and Patrimonio Hoy

Harvard Business Review’s article on the dangers of Microcredit

GE Money and their Earth Rewards credit card

The 2007 Global Development Awards and Medals Competition is now open

$100 laptop production launched

Take a look at people who live in Manhattan and yet receive agricultural subsidies from the US federal government

Interesting initiative of “Executives Without Borders” shared by Pablo Halkyard

Snapshot at Global Migration

Upcoming Social Venture Conferences

Social Enterprise Competitions

J.Pozuelo-Monfort, MPA candidate at Columbia University

Michael E. Porter, Mark R. Kramer (2007)

· Myriad organizations rank companies on the performance of their corporate social responsibility (CSR).
· If, instead, corporations were to analyze their prospects for social responsibility using the same framework that guide their core business choices, they would discover that CSR can be much more than a cost, a constraint, or a charitable deed – it can be a source of opportunity, innovation, and competitive advantage.
· In 2005, 360 different CSR-related shareholder resolutions were filed on issues ranging from labor conditions to global warming.
· Of the 250 largest multinational corporations, 64% published CSR reports in 205, either within their annual report or, for most, in separate sustainability reports – supporting a new cottage industry for report writers.
· This proliferation of CSR reports has been paralleled by growth in CSR ratings and rankings.
· Companies should operate in ways that secure long-term economic performance by avoiding short-term behavior that is socially detrimental or environmentally wasteful.
· You can continue reading more of Porter and Kramer's paper by following this link.

J.Pozuelo-Monfort’s comments

Michael Porter is a renowned scholar in the field of competitive advantage. In this piece he introduces the rationale behind the adoption by multinationals of corporate social responsibility.

Multinationals have the choice in today’s world of incorporaring CSR into their agendas, a choice that nobody imposes, a choice tha nobody questions, that nobody judges. A choice that should become an obligation in a world needy of enhancing, of stressing the ethical component, the social and environmental dimensions.

Corporations have to be judged by external, independent units, on their ethical manners. Corporations need to withstand the pressure of the consumer market that will (penalize) reward them accordingly for (not) being socially engaged.

Michael Porter doesn’t find a clear connection between a firm’s adoption of CSR and its success in the consumer and capital markets. Whether or not this is true, consumers have to change the current trend where multinationals with their advertising power seek to influence and impact consumer’s choice. Consumers ought to believe that their purchasing power is a weapon that has not been used in the real world thus far. Purchasing power is so powerful that is likely to push unengaged firms out of the market, and force others to become sustainable.

Society doesn’t need multinationals to prosper. The same role can be played by NGOs or Government.

Sustainability is the word of this century. Everything has to turn sustainable. There is no other way around today’s problems. There is no other way around.

Continue reading 'The link between competitive advantage and corporate social responsibility'