The Role of Business Beyond Its Traditional Borders

1
The Role of Business Beyond Its Traditional
Borders

• Messages
• The planet will face major challenges in the next
  20 years
• Governments will find it hard to tackle them
  alone
• Business must increasingly engage beyond its
  borders

2
The planet will face major challenges in the next
20 years

• Poverty affects one person out of two on this
  planet
• By 2025, the world could become even more unfair
• The Millennium Development Goals promise to cut
  poverty by half by 2015. yet a lot remains to be
  done

3
The planet will face major challenges in the next
20 years

• These fall into 3 groups

• Few of them are being solved by the current
  international system and by the nation-states

4
Governments will find it hard to tackle these
global challenges alone
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• The model under which government, business and
  civil society remain in separate corners is
  running out of steam, for the following reasons

• Civil society
• Business
• Government

5
Governments will find it hard to tackle these
global challenges alone

• Civil society
• Is becoming more powerful, acts increasingly
  globally
• Creates NGO swarms around issues, in part
  through a deft use of the new technologies
• Can acquire vast knowledge, especially when it
  networks
• Wins the highest rankings in public opinion
• Business
• Government

6
Governments will find it hard to tackle these
global challenges alone

• Civil society
• Business
• Also has an advantage of globality over
  governments
• Has often an advantage of means and expertise
  over them
• Is ironically more prone than them to look
  long-term
• Can act as an enforcer of norms (e.g. green
  investing)
• Government

7
Governments will find it hard to tackle these
global challenges alone

• Civil society
• Business
• Government
• Is increasingly overwhelmed by the complexity of
  issues
• Suffers as the best and the brightest shun public
  service
• Is impeded by its territorial ambit, and by the
  short-term nature of electoral cycles
• In rich countries, government will face severe
  budget stringency due to aging of the population

• It is therefore inevitable that tri-sector
  partnerships will multiply and expand to global
  issues

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8
Business must increasingly engage beyond its
traditional borders

• Over the last two decades, large companies have
  moved through five stages

9
Business must increasingly engage beyond its
traditional borders

• First, some companies had small charity
  department
• Those often reflected the founders or the CEOs
  interests
• Creating foundations often went with this
• Today, most companies are eager to move beyond
  philanthropy

10
Business must increasingly engage beyond its
traditional borders

• Arose as companies got attacked on their
  environmental and social practices
• They took remedial action, adopted codes, set up
  larger CSR departments
• Examples
• Large retailers closing sweatshops and
  eliminating child labor
• Pharmaceutical companies lowering drug prices
• Companies integrating basic CSR measures in their
  operations

11
Business must increasingly engage beyond its
traditional borders

• Many companies went quickly beyond stage 2
• Examples
• BP and renewable energy
• BMW and the hydrogen economy
• Daimler/Chrysler, Lafarge and others treating
  employees with AIDS
• Companies adopting environmental best practice
  worldwide
• ExxonMobil and human rights
• Companies adopting 1,300 voluntary labor codes
• Danones 130 CSR indicators

12
Business must increasingly engage beyond its
traditional borders

• Now many corporations begin to help out where
  governments are falling short
• Examples
• Ciscos network academics
• Oil and mining companies and community
  development
• Coca Cola becoming a major player in the
  education field
• Merck and river-blindness
• ExxonMobil and malaria
• Danone, Nestle, Unilever and sustainable
  agriculture
• World Banks Business Partnership Development
  (BPD) program
• Most Type 2 Partnerships in Johannesburg were
  stage 4

13
Business must increasingly engage beyond its
traditional borders

• As the current international setup fails to
  solve major global issues, some companies engage
  beside government and civil society to nudge
  global problem-solving along
• Companies as global policy makers
• Companies as global enforcers
• Companies as global lobbyists
• Companies as global thought-leaders

14
Business must increasingly engage beyond its
traditional borders

• Companies as global policy makers
• World Dams Commission
• Sustainable Forestry Alliance
• Companies as global enforcers
• Companies as global lobbyists
• Companies as global thought-leaders

15
Business must increasingly engage beyond its
traditional borders

• Companies as global policy makers
• Companies as global enforcers
• Unilever and sustainable fisheries
• Diamond companies and the Kimberley process
• Exxon, Mobil and its specifications for cargos
• EITI
• Companies as global lobbyists
• Companies as global thought-leaders

16
Business must increasingly engage beyond its
traditional borders

• Companies as global policy makers
• Companies as global enforcers
• Companies as global lobbyists
• ExxonMobil and maritime safety
• 50 multinationals militating for Kyoto Protocol
• Nestle and Danone advocating sustainable
  agriculture
• Companies as global thought-leaders

17
Business must increasingly engage beyond its
traditional borders

• Companies as global policy makers
• Companies as global enforcers
• Companies as global lobbyists
• Companies as global thought-leaders
• Shells scenario analyses

18
Business must increasingly engage beyond its
traditional borders

• Over the last two decades, large companies have
  moved through five stages

19
Conclusion

• Stages 4 and 5 are the really interesting ones
• Stage 2 and 3 (CSR) are about how companies
  behave
• Stage 2 and 3 wont change a world in which the
  principal laggards are often governments
• Stage 4 and 5 are more likely to help change the
  world they are about what companies can do.

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So the agenda is not just about CSR. Its broader
Its about BUSINESS BEYOND ITS TRADITIONAL
BORDERS.