Professional Documents
Culture Documents
September 2013
ACKNOWLEDGEMENTS
Research Lead and Primary Author: Maria Elena Baltazar Herrera, FASP, PhD
Research Team:
Maria Cristina I. Alarilla
Ryan Vincent L. Uy
Editorial Team:
Francisco L. Roman, PhD
Rosemary Anne F. Quiambao
Administrative Support:
Geraldine A. Arca
Research Organization:
Ramon V. del Rosario, Sr. Center for Corporate Social Responsibility
I am thankful to count Fil Alfonso, one of AIMs founding professors and a former AIM President himself, as
a colleague, a mentor, and a friend. His insight was invaluable and I very much appreciated the support he
freely gave. Last year, I was able to experience first-hand Fils brainchild, the Asian Forum on Corporate Social Responsibility. It was a momentous event that Fil was very involved in from planning to execution. During that time, he spoke so eagerly about the CSR manual that the RVR Center published, and it is inspiring
to see his hard work and guidance come into fruition. I had hoped to know Fil longer, but nevertheless am
grateful for the time he spent working with all of AIM to elevate the quality of executive education in Asia.
Steven J. DeKrey
President, Asian Institute of Management
Fil Alfonso was the epitome of wisdom and humility. His incredible work ethic and sincerity was explicit
to anyone he met. He was passionate about CSR, and while I am proud to be witness to his many accomplishments with both the PHINMA Group and the AIM RVR Center, I am saddened that we may never have
another like him. He oversaw the construction of this manual---a tool for CSR practitioners---for innovators
who are at a loss where to begin. Fils legacy was helping companies integrate CSR and with this manual, I
believe that his legacy lives on.
Ramon R. del Rosario
Member of the Board of Advisors,
AIM-RVR Center for Corporate Social Responsibility
Fil was nothing short of a luminary, although in his modesty, would never admit to it. His tireless drive in
leading the AIM RVR Center after retiring as AIM President was instrumental in the publication of many research projects, the production of the annual Asian Forum, and the financial provision of both. He was an
influence to most if not all he encountered, and his integrity was what especially endeared him to people.
It is that same integrity that we hold in high regard and that motivates us to press on where he left off. His
sudden departure leaves us with a sadness that cannot be measured, our only comfort is that his memory
carries on in his many works, all of them good, as he was. We are honored to continue what he started.
Oscar J. Hilado
Vice Chairman of the Board of Advisors,
AIM-RVR Center for Corporate Social Responsibility
Chairman of the Board, PHINMA Corporation
I would like to congratulate the AIM Ramon V. del Rosario, Sr. Center for Corporate Social Responsibility (AIMRVR CSR Center) in coming up with a practical manual on Corporate Social Responsibility (CSR).
This Manual entitled: Towards Strategic CSR empowers executives and CSR managers alike in crafting and
aligning their CSR programs to the core strengths of their firms. The Manual provides a no nonsense approach
on CSR and translates CSR concepts and terms into basic managerial principles.
The AIM-RVR CSR Center has championed CSR towards the improvement of society. As chairman of the RVR
board of advisors, I am proud to note that the Manual is the product of this shared vision and mission to create
a world where the business of business goes beyond profits to become an integral part of the community.
I believe that this Manual will strengthen the foundation and understanding of CSR and this is also an
important step for companies and other organizations to align their CSR programs to their core strengths.
The AIM-RVR CSR Center is the leading CSR organization in the region. Its main advocacy is to instill the value
and understanding of CSR not just to companies in the Philippines but also across Asia.
Towards Strategic CSR: Aligning CSR with the Business and Embedding CSR into the Organization (A Manual
for Practitioners) utilizes the AIM-RVR CSR Center frameworks on CSR in order to help corporations consider
the internal and external environment within which it operates. The frameworks allow companies to adapt
to rapid changes in the business environment. As a result, CSR programs become aligned to the business
operations in order to create both shareholder value and stakeholder value.
In closing, I would like to acknowledge the efforts of Prof. Felipe B. Alfonso, Prof. Francisco L. Roman, Prof.
Maria Elena B. Herrera and the rest of the AIM-RVR CSR Center research team for contributing their time and
valuable knowledge in developing this CSR Manual.
Thank you very much!
About the CSR Manual. The CSR Manual intends to help CSR practitioners align the companys CSR strategy with its
business situation and capabilities as well as help create a CSR strategy that is embedded in strategy and operations.
Specically, the CSR Manual will help the practitioner to:
Assess the companys business footprint and stakeholders concerns, issues and inuences;
Formulate a CSR strategy that is aligned with its business and social objectives, and takes communication,
engagement and partnership opportunities into account;
Create an implementation plan that includes the elements of: context, content, actor and processes; and
Develop a plan for monitoring and evaluating the implementation of CSR programs based on identied
objectives.
How to use the CSR Manual. This Manual is a comprehensive guide for responsible businesses. It can be used
simply to align CSR with strategy and values or to fully embed CSR into the organization. Each framework is followed
by a series of worksheets to help readers implement Strategic CSR. Examples are provided to help practitioners
understand how the theories can be operationalized. This CSR Manual is meant to be a practical reference guide for
practitioners in any corporate situation whatever the size, structure or industry.
Before answering the worksheets, the reader should answer the following six (6) CSR questions:
1. What type of CSR is the company currently implementing? Is it philanthropy? Is it targeted CSR programs? Is
it value chain related? Is it compliance? Is it embedded CSR?
2. What type of CSR does the company want to implement? Does it want to implement philanthropic
activities, compliance with laws, targeted CSR programs, or value chain related initiatives? Does it want to
implement a fully embedded Strategic CSR process and structure?
3. What are the important objectives that must be considered? What are the external or internal factors that
have recently affected the companys operations (e.g. new global policy, new law on the environment, new
CSR trend)?
4. Who are the companys key stakeholders? Think about the individuals or organizations or communities
affected by company operations. Also think about stakeholders that may have an interest in the organization
or operation or the companys primary stakeholders. How do they affect the company and what is the
companys impact on them?
5. What resources are currently available? What resources may be made available? Resources include financial
resources, human resources, equipment and relationships.
6. What is your purpose in using this book? Do you want to simply help align CSR with operations? Or take it a
step further by helping to more comprehensively integrate CSR into strategy and organization?
Aligning CSR with the Business means that CSR programs are aligned with core business strategy and
linked to core business strategy or operations. For example, a coffee manufacturer, which sources its
coffee beans from the local community, can focus on the training of coffee farmers to increase their
productivity (i.e. yield) and knowledge (i.e. latest farming techniques).
Fully Embed CSR into the Organization means that CSR is a coherent part of corporate strategy and
is integrated into all relevant operations. CSR is part of management objectives; and CSR is part of
management performance monitoring.
WORKSHEETS
Step 1: Environmental Influences
Assess the macro-environment that
affects the companys operations.
How do these factors affect the company: (1) locations religion, culture, and history;
(2) locations political, economic, social, corporate and market structures and dynamics;
and (3) locations social concerns, environmental regulations, regulatory structures,
stakeholder influences and concerns, and business concerns
What are the internal and external factors that affect your value chain processes? How
do company operations impact the environment and external stakeholders?
Who are internal and external stakeholders? How does the company impact them? How
do stakeholders affect operations? What are their concerns?
Step 7: Implementation
Ensure that the implementation
plan is complete and it will meet
the impact objectives of the CSR
programs.
Does the evaluation plan identify the key responsibilities of actors, metrics used and
the third-party evaluators? Are the CSR metrics aligned with the CSR objectives of
the company? Does the CSR metrics measure the CSR inputs, outputs, process, and
outcomes?
How is CSR strategy integrated into the company policies, structures and processes?
TABLE OF CONTENTS
Part I: Discussion on Strategic CSR
1-6
7-50
Reference Materials
Application Framework
Step 1: Assessment: Environmental Influences
Exercise 1-A: Influences Matrix-Details
Exercise 1-B: Influences Summary
Step 2: Assessment: Business Situation
Exercise 2: Assessment of Footprint
Step 3: Stakeholder Analysis
Exercise 3-A: Stakeholder Mapping
Exercise 3-B: Stakeholder Mapping (Summary)
Exercise 3-C: Stakeholder Mapping (Analysis)
Step 4: Assessment of Internal CSR Situation
Influences Matrix
- Exercise 4-A: CSR Typology of Intent
CSR Typology of Locus
- Exercise 4-B: CSR Typology of Locus
Evaluating Current Programs
- Exercise 4-C: Evaluating Context and Coherence of Current CSR Programs
Responsible Business
- Exercise 4-D: Responsible Business
Step 5: Assessment and Prioritization
Exercise 5-A: Assessment Summary
Exercise 5-B: Initial Prioritization of CSR Activities
Step 6: Planning and Formulating
Exercise 6-A: Creating a Foundation for a CSR Philosophy
Exercise 6-B: Approaches to Implementing CSR
Step 7: Implementation
Exercise 7-A: CSR Program Details
Exercise 7-B: CSR Structure
Exercise 7-C: CSR Implementation Plan
7
8
13
15
18
19
21
23
24
26
27
28
28
29
30
32
33
33
34
34
35
35
37
37
37
37
44
46
47
Summary Worksheet
50
39
39
40
42
49
51-54
52
53
55-72
Case Study 1: Tata Groups Initiative: Embedding CSR into Structure and Performance Evaluation
Case Study 2: Tetra Pak Pakistans Community Dairy Development Program
Case Study 3: JFCs Farmer Entrepreneurship Program
56
61
65
References
69
71
73
75
76
77
78
81
PART
Corporate Social Responsibility (CSR) involves the interface between the enterprise and its environment,
including stakeholders.
CSR can be aligned with the business when programs are developed and implemented while taking into
account the goals and resources of the enterprise as well as the reality of its business situation. CSR
can also be fully embedded in corporate strategy and operations. This involves ensuring that all of the
corporations philosophies goals, strategies and activities take into account the companys impact on its
stakeholders, the environment and society as a whole.
Hence, developing a CSR strategy begins with evaluating the enterprise in a business context that includes
both market and non-market environments.
Understanding the market environment includes evaluating the customer market as well as competition.
Understanding the non-market environment includes understanding both the companys footprint as
well as the stakeholders that the company interacts with. The footprint refers to positive and negative
impacts of the companys operations on its stakeholders, the environment and society in general. For
example, factory emissions affect local air quality and factory work schedule may upset local social culture
and norms.
Responsiveness
Effectiveness
Corporate
Core Assets
&
Capabilities
CSR STRATEGY
SOCIAL VALUE
Herrera, 2009
This section is an excerpt from the series of CSR articles of Prof. Maria Elena B. Herrera published in the Manila Standard on 29 April, 19 May, 26 May
and 03 June, 2011.
Ideally, CSR initiatives would minimize the footprints negative impact and maximize positive impact. This footprint
analysis should include the impact not only on environment but also on stakeholders. A careful analysis of footprint
often allows companies to better identify and understand stakeholders.
Stakeholders are internal and external individuals, groups and organizations with a legitimate concern about and
with influence over company operations. They include those who are directly or indirectly affected by company
operations, those who have an interest in protecting those who are affected by company operations, and those who
have a general interest in moderating or policing corporate behavior in the areas of operations or impacts of the
company.
On the one hand, the company must evaluate its market, its footprint, and its stakeholder in order to identify critical
footprint and stakeholder concerns, in addition to market realities. On the other hand, the enterprise also needs to
evaluate its key assets and capabilities in order to understand which issues and concerns it is in the best position to
address relative to capabilities of the other players and stakeholders. This provides a basis for prioritization as well
as helps the company identify potential areas of cooperation. On the one hand, the approach focuses on the firm,
its key priorities and how to best utilize its capabilities for creating positive impact. On the other hand, the analysis
should also uncover options on how to best allocate capabilities among different players in order to create the
optimum outcome for all.
Ideally, the CSR strategy would be formulated within a larger corporate strategy that is based on a realistic foundation
of long-term enterprise sustainability. For instance, a company that sustains losses each year cannot be a strong
long-term partner in addressing social objectives.
Finally, a strategic approach to CSR must involve a fit with the organizations vision, mission and core values (VMV).
An evaluation of the firms VMV helps in prioritizing footprint and stakeholder issues. A failure to link CSR philosophy
and policies with VMV could result in the marginalization of CSR within the organization. For some companies, the
re-evaluation of the new realities of the global markets have, in fact, resulted in a re-examination of corporate VMV
and a revision of VMV in order to reflect the new realities of the increased importance of non-market factors.
Responsiveness
Corporate Assets
and Competencies:
Effectiveness
Double A is a pulp and paper company in Thailand. The annual pulp production capacity of the company is 600,000
tons. The annual paper production capacity of its two machines is 600,000 tons. The leading product of the company
is the 80 GSM A4. About 60% of its products are exported to over 100 countries, while 40% serve the domestic
demand.
Business Context: Identify Footprint, Stakeholders, and Market
The footprint of pulp and paper industry has potentially significant negative impact on the environment (e.g.
deforestation, chemical waste and waste water).
Double A considers the local community as one of its primary stakeholders. From the companys perspective,
the key concerns of the local community, which can be addressed by the company: (a) safety and protection
of the local environment, (b) potential economic opportunities that can be provided by the, and (c) companys
support in social development initiatives. Located in a farming community, the key asset/resource of the local
community is the availability of agriculture land and labor.
In 2011, Double A was in the process of expanding operations in globally (e.g. Europe and Africa). Raw materials
that will be used in the new mills acquired by the company will be sourced from Thailand. The nature of the
European market meant that sustainable sourcing is an expectation of both customers and business partners.
AIM - RV R C SR C ente r, 2 0 1 3
Core Competencies
Double As core competency is its ability to acquire the latest farming and paper manufacturing technologies that
efficiently produces and manufactures pulp and paper, as well as employ agricultural scientists that can develop the
paper tree species that is suited to Thailands soil and climate conditions.
CSR Strategy and Programs
Double As CSR strategy is focused on environmental sustainability initiatives as well as sustainable sourcing of
raw materials. To mitigate the environmental impact of its operations, Double A has implemented environmental
sustainability initiatives focused on using and developing technology and processes such as the construction of its
own water reservoir called Emerald Lake, generation of biomass technology, and the use of bacteria cultivation
for water treatment. Its supplier program, called Double Khan-Na Program, is a bottom-of-the-pyramid (BOP)
partnership initiative with local farmers. The program sought to maximize the utility of unused sections of the
farm land. This BOP partnership does not only ensure that its paper trees are sourced sustainably, but it also offers
economic opportunities for local farmers.
Source: Materials from the 2011 Asian CSR Awards.
*In 2011, Double As entry on Double Khan-Na Program was the winner of the Governance and Society Category of the Asian Forum on Corporate
Social Responsibility.*
EMBEDDING RESPONSIBILITY
Corporations who are committed to CSR are increasingly coming to an understanding that responsibility needs to be
embedded in all aspects of operations and in all layers of the organization. CSR should neither be a solitary silo nor
an umbrella overlay.
More and more companies are coming to believe that CSR is good business. However, there are still companies
that fail to understand that true responsibility requires sustainable CSR. Sustainability is unlikely to result from CSR
initiatives that are limited to occasional projects or are considered as something extra. A true strategic approach to
CSR embeds responsibility in the companys objectives, operations and values.
The concept of a triple bottom line is itself essentially an attempt to articulate the importance of measuring a
companys performance not only in terms of financial performance as measured by return to the shareholder but
also in terms of its non-financial performance. However, merely acknowledging the importance of non-financial
performance does not necessarily result in results. If social performance integrated into the mechanisms for creating
financial performance then enterprise operations can be designed to create both social and financial value.
Figure 2: Integrating Social Performance shows how social performance can be embedded into the traditional market
only based view of corporate strategy formulation and implementation. In this framework and for purposes of this
book, social value is deemed to include impact on all stakeholders, society and the environment.
Shareholder value measures financial performance and is the traditional primary concern of firms. Social value is
determined partially by the consequences of the firms footprint. Both require performance metrics. Corporate
Strategy is affected by business context (external situation), corporate mission and core values, and current enterprise
assets and capabilities (internal situation).
In this strategic approach to CSR, the integration of CSR into the business begins with strategic analysis. The process
begins with reviewing whether key social responsibility philosophies are appropriately articulated and reflected in the
corporate mission and core values. Evaluation of the external context of the business would include the evaluation
of the non-market considerations of footprint (what Porter and Kramer call value chain social impacts) and of
stakeholders. The analysis of internal realities would include the acknowledgement and evaluation of social assets.
Social assets are particularly important in understanding why strategic CSR makes business sense. In the current
business environment of escalating use of technology and increasing connectivity, the most important assets of
organizations are slowly moving away from tangibles towards intangible assets. For most companies, the most
important of these intangible assets are social assetscorporate image, community support, investor confidence,
strong market acceptance, strong dealer networks, reliable suppliers, a loyal and talented workforce. Therefore, by
pursuing both economic and social performance, companies create a virtuous cycle, one in which social performance
feeds back to the company in the form of enhanced social assets.
STRATEGY
PERFORMANCE
METRICS
(including CSR
Strategy)
Mission and
Core Values
SOCIAL VALUE
Current Enterprise
Assets & Competencies
Social Assets
Strategy
Engine
Hardware
Software
SHAREHOLDER
VALUE
Liveware
Herrera, 2007
Embedding CSR into the strategic management process ensures that business strategy is aligned with social realities.
In this manner, CSR becomes a natural part of business strategy and operations. The companys CSR policies and
activities can then be embedded in the strategic decisions and choices of the company with respect to the different
components of the strategy engine of: Hardware (infrastructure and equipment of the company), Software (systems
and processes of the company) and Liveware (organization design, policies and governance).
Finally, integrating CSR into the core business strategy and operations means that companies can ensure that the twin
goals of social value and shareholder value are taken into account in all business decisions and activities.
Figure 3: Responsible Business shows that sustainable CSR means the embedding of CSR not only into formal processes
and structures but also deep into the psyche and culture of the organization.
True integration and embedding of CSR into an organization involves not just the formal process of developing a
philosophy, integrating into strategy, operations, structure, processes, monitoring and evaluation. It also involves the
softer process of embedding CSR into the culture of the company.
Just as the formal process requires several steps from articulating the philosophy to evaluating results, a culture of
responsibility requires a progression from awareness to commitment. As most managers know, formal structures
are not enough by themselves. In order for any philosophy or policy to be consistently implemented, the underlying
values must seep into corporate culture and become an integral part of the companys way of doing things.
AIM - RV R C SR C ente r, 2 0 1 3
Steps:
Formal Structure & Process
Philosophy
Strategy
Operations
Ownership
Structure
Indicators
Evaluation
Ineffective
Little
Weak
Strategic
Advantage
Neutral
Steps:
Awareness
Understanding
Involvement
Engagement
Commitment
Culture of Responsibility
Strong
Herrera, 2010
Culture
PART
WORKSHEETS
The CSR Manual intends to help CSR practitioners align the companys CSR strategy with its business situation and
capabilities as well as assist practitioners in helping create a CSR strategy that is embedded in strategy and operations.
Specifically, the CSR Manual will help the practitioner to:
Assess the companys business footprint and their stakeholders concerns, issues and influences;
Formulate a CSR strategy that:
- Aligns business and social objectives; and
- Takes communication, engagement and partnership opportunities into account;
Implement CSR strategy by developing the elements of implementation (context, content, actor and
processes); and
Develop a plan for monitoring and evaluating the implementation of CSR programs based on identified
objectives.
The target readers of the CSR Manual are executives of responsible companies. The CSR Manual contains both
theoretical frameworks and practical exercises for its readers.
REFERENCE MATERIALS
Following the framework on Integrating CSR, the readers can use the following sources of information as a reference
for assessing the companys business situation and environment.
Current Business Situation
Business Vision-Mission-Values (VMV)
Business Organization
Structure)
Structure
(and
CSR
Current Environment
List of Government Regulations (National and
Local Level)
List of Industry Standards
Community Relations Surveys (i.e. Perception
Surveys)
News clippings (as appropriate)
Environmental and Social Impact Assessment (if
available)
APPLICATION FRAMEWORK
The framework on Integrating CSR is an alignment framework. It is based on the principle that a managerially
effective and efficient approach to developing and implementing CSR must address both context and coherence.
Moreover, these two factors must be considered through all the steps of: assessment, formulation, implementation
and evaluation.
Context refers to the external and internal environment of the corporation. Consideration of context in developing
and implementing an approach to CSR ensures alignment with external and internal realities of the corporation as
well as its aims and values. The CSR strategy should take into account the (a) companys stakeholders, their situation,
concerns, and capabilities as well as the (b) footprint, concerns, capabilities and values of the organization.
Coherence refers to the internal consistency of CSR programs. Completeness refers to elements that would enable
the company to carry out its activities in every stage in order to achieve the desired outcome. The CSR strategy
and programs should be consistent across the four stages-- from assessment, formulation, implementation, and
monitoring and throughout the organization.
COHERENCE
Consistency, Completeness
Current Programs
Situation, Programs and Climate
Philanthropy; Compliance;
Targeted Program;
Value Chain Management;
Fully Embed
Context
Content
Actor
Process
Issues, Objectives,
Priorities
Stakeholders Concerns,
Issues, Influence,
Situation & Capabilities
CSR STRATEGY
Communication, Giving,
Engagement, Partnering
Elements &
Implementation
Consistency of Policies,
Accountabilities,
Indicators
Evaluation
Players, Owners,
accountabilities,
Indicators
FORMULATION
Business Footprint
IMPLEMENTATION
CONTEXT
Alignment
ASSESSMENT
Macro Environment
EVALUATION
Herrera, 2010
ASSESSMENT
Macro Analysis of the political, social,
cultural and economic realities
An analysis of mission, values, assets and capabilities allows the company to prioritize needs and opportunities by
matching social needs with corporate priorities and capabilities.
Assessing current CSR programs allows the company to match external needs and opportunities and gaps in the
market with currently implemented programs. This provides the company with a gap analysis and provides a basis
for streamlining current programs and developing new programs.
Part of the coherence assessment is also an analysis of the current structure and internal climate within which CSR is
being implemented. This provides the company with an understanding of the relative readiness of the organization
for the different approaches to CSR implementation. Clearly, fully embedding CSR in operations would require a
certain readiness in the organization both structurally as well as culturally.
The assessment stage provides a foundation for the formulation of CSR strategy. At the end of assessment, the
company will have a list of issues and objectives as well as a basis for prioritization.
Formulation. The next step is the formulation of CSR strategy.
From an internal point of view and in terms of the level of integration into corporate operations, at least four generic
approaches can be taken: corporate giving or philanthropy, compliance, targeted program, value chain management,
and fully embedded.
Philanthropy would involve activities that are designed primarily to create value for identified beneficiaries. Within this
framework, philanthropic activity would be strategic if it is aligned both with the business context of the corporation
as well as with its corporate capabilities. Hence, strategic philanthropy would typically involve stakeholders as either
beneficiaries or partners and also would involve the application of corporate competencies or assets, especially
those that are unique. A corporate giving approach would allow CSR activity to exist only in certain aspects or
pockets of the enterprise.
AIM - RV R C SR C ente r, 2 0 1 3
FORMULATION
Identify the generic CSR Approach: Corporate
Giving, Compliance, Targeted Program,
Value Chain Mgmt, Fully Embedded
Formulate a Strategic Plan: Program Objectives,
Target Beneficiaries, Communication,
Engagement, and Partnerships
Did you align business interests, corporate
resources and stakeholders' concerns in
developing a CSR strategy and CSR initiatives?
How do the CSR programs meet stakeholder
concerns and business interests? Are the
appropriate stakeholders engaged?
Step 6: Planning and Formulating
Exercise 6-A: Creating a Foundation for CSR
Exercise 6-B: Approaches to Implementing CSR
Targeted programs are similar to philanthropy in that they can be isolated for specific beneficiaries or purposes.
However, they are not necessarily designed simply for creating stakeholder value and hence, are not always strictly
philanthropy. These would, for example, include a program targeted at managing air emissions.
Value chain management is similar to compliance in that it is not an approach that would allow CSR activity to be
isolated only to certain aspects of operation. Value chain management allows full management of the companys
footprint. Full management of the impact of a companys footprint is only truly possible with a value chain approach
to CSR. The value chain approach can be limited only to the companys primary supply chain. An enhanced approach
would extend the CSR strategy to the extended supply chain the full value chain. This value chain, for example,
would include the supply chains of subcontractors and distributors. A value chain approach to CSR also allows the
company to engage stakeholders at each point in the supply chain and even beyond it.
A fully embedded approach to CSR means that CSR is embedded in the companys mission, vision and values. Social
and environmental considerations become a standard part of situation analysis in every business situation. Social
assets are explicitly identified and evaluated. A commitment to CSR is part of the corporate culture and social value
metrics become part of the leadership performance metrics in the same manner that financial and operating metrics
are. This is the most integrated approach to CSR and requires the most care in terms of systems, structures, standards
and processes.
In selecting the generic approach, the readiness of the organization is an important consideration.
In addition to the generic approach, the CSR strategy would include an identification of objectives with respect to
each stakeholder or footprint concern. Protocols for prioritizing beneficiaries and needs would need to be articulated.
In addition, CSR strategy must also include the selection of the types of interaction to be used with different
stakeholders. Communication is important in order to avoid confusion and misinterpretation. Key messages must be
crafted as part of strategy. Finally, objectives in terms of establishing relationships with each key stakeholder must be
crafted. The level of planned stakeholder engagement can include partnering.
10
IMPLEMENTATION
Identify the CSR projects and
implementation plan, which includes
Context, content, actors and process
Internal Mechanisms: Consistent
policies, Clear accountabilities and preidentified indicators
Are the CSR implementation plans
consistent with the CSR strategy and
business objectives? Is the implementation
plan complete?
Step 7: Implementation
Exercise 7-A: CSR Program Details
Exercise 7-B: CSR Structure
Exercise 7-C: CSR Implementation Plan
Internal processes and policies (related to CSR or developed specific to CSR programs) must be aligned with the
business strategy. Internal and external accountabilities must be clearly set in order to identify would be affected
and who should be consulted and/or take responsibility in case problems arise. Finally, key success indicators
(both outcome and output) must be identified to ensure programs are aligned with the needs of the community
and capabilities of the company.
If full embedding is the goal, support programs for implementation would probably include crafting or reviewing
CSR philosophy and organization structure.
Monitoring and Evaluation. The last stage is evaluation. In order to
MONITORING &
ensure that CSR programs are achieving desired objectives and also
EVALUATION
not creating unforeseen, undesirable results, companies must create
a monitoring and evaluation system that would become part of
Evaluation plan should include behaviour
implementation.
Such a system would ideally include contingency plans that would
ensure that CSR programs result in both social and financial value. The
program should allow the company to assess the behavior of all the
players, review accountabilities, and assess whether the key success
indicators are achieved.
AIM - RV R C SR C ente r, 2 0 1 3
11
Macro Analysis
Value Chain Assessment
Stakeholder Analysis
Identifying Social Issues and
Concerns
Business footprint
Stakeholders: concerns, issues
and influence
ASSESSMENT
2 FORMULATION
4 MONITORING &
EVALUATION
12
IMPLEMENTATION
Outline the execution elements of
CSR strategy
Effective communication of
responsibilities and accountabilities
Program Design: Context,
Content, Actors, Processes
Consistent policies,
accountabilities and indicators
STEP 1
Macro concerns and trends such as local laws as well as industry standards and practices influence the companys
operations. The Influences (Hexagon) Framework specifically considers formal and informal structures that affect
and influence the companys operations based on its location and area of operation.
The Framework is divided into three pillarsFundamental Influences, Institutional Dynamics, and Business Landscape.
The Fundamental Influences, outer most layer, refers to the traditional and environmental factors that affect CSR
practice. This includes history, culture, natural resources, and geology and geography. These four factors influence
the institutional dynamics and structures within a location. Since these factors are relatively permanent, it is difficult
for the company to change or influence these factors. Culture and history can only be changed through time. Natural
resources, together with geology and geography, can be influenced by companies through its operationsthis is
particularly true for those in the heavy footprint industries.
The Fundamental Influences are important when formulating CSR strategies and programs. Culture and history helps
in understanding the mindset and perception of the local community and its stakeholders; while natural resources
and geology and geography help in identifying possible threats and opportunities in relation to environmental
protection or potential for economic impact and country partnering.
Basis of Economy
(Key Sector and
Industries)
(2) Institutional
Dynamics
Political
Structure
History
(1) Fundamental
Influences
Regulatory
Environment
Issues and
Concerns
Labor
Structure
(3) Business
Landscape
Company
Key Business
Concerns
Social
Structure
Stakeholder
Influence and
Concerns
Natural
Resources
Market
Structure
Corporate
Structure
Culture
AIM - RV R C SR C ente r, 2 0 1 3
13
The Institutional Dynamics, the heart of the Framework, refers to the formal and informal structures and institutions.
These factors are based on the formal and informal agreements of members of society. These include the basis of
economy, social structure, market structure, corporate structure and culture, labor structure, and political structure.
These factors can affect corporate behavior through regulations, policies, and laws at the global, national and local
levels. These institutions can provide implicit and explicit guidelines and standards for corporate behavior, e.g.
these include policies concerning labor, environmental policies, corporate governance and accountability, reporting,
manufacturing practices, as well as consumer and public safety.
Understanding the Institutional Dynamics can help companies assess the institutional requirements and expectations
in terms of environmental, labor, social, and market activities.
The Business Landscape, the inner most section and the layer which most closely influences the enterprise, refers
to the interests and concerns of the company and its key stakeholders. This is the most dynamic since stakeholder
interests and business situation change over time. The Business Landscape can help companies identify the important
players as well as the interplay between stakeholders.
Please refer to the appendix for the complete description of each influence.
14
EXERCISE 1-A
Fill-in the matrix below based on the Influences Research Frame from the perspective of the company.
COMPANY LOCATION
Example: Head Office, Makati City
FUNDAMENTAL INFLUENCES
Example: The plant site in Laguna has a low-level terrain and is bordered by the neighboring
province of Batangas.
Example: There is a river beside the factory. The river is being used as a source of potable
drinking water and source of livelihood by the surrounding communities.
Natural Resources
Example: The plant site is located in Laguna. The city is one of the oldest provinces in the country.
Recently, the province has established its own industrial eco-park.
History
Example: Community has a strong catholic background and is strongly influenced by the
Catholic Church.
Culture
AIM - RV R C SR C ente r, 2 0 1 3
15
INSTITUTIONAL DYNAMICS
Example: Agriculture and manufacturing are the major industries in Laguna. The products
produced include pineapple and papaya, which are exported to other Asian countries.
Basis of Economy
Example: Community is a third class municipality. The highest level of educational attainment is
high school. Malnutrition is present in the poorer segment of the population.
Social Structure
Example: A new mayor was elected. His economic policy differs from the previous administration.
He is pro-labor union.
Political Dynamics
Example: There is a local chapter of the Philippine Chamber of Industry. The eco-zone enjoys tax
benefit and incentives.
Market Structure
Example: The company is the major employer of the community. Employees have high skill level,
but low educational background. No labor union. However, there is an employee cooperative
that provides microfinance.
Labor Dynamics
16
Example: The company is one of the 10 MNCs operating in Laguna. Majority of other businesses
registered in Laguna are MSMEs. Since the company is operating in the eco-park, it is subject to
the rules of the eco-park.
BUSINESS LANDSCAPE
Example: Education, health and environment are key social and environmental concerns. There
is a need to maintain the river system and prevent the cutting of trees in the neighboring forest.
Regulatory Environment
Issues and Concerns
Example: The environmental agencies do not have sufficient equipment to monitor the
environmental compliance of companies. As a result, the company provides assistance to the
local government in monitoring the river condition (e.g. lending of equipment).
Example: Company participates in LGU-led river clean-up campaign. Company also donates
school supplies and building materials.
Example: High industry standard; high global policy standard; low/limited issue with the local
government.
AIM - RV R C SR C ente r, 2 0 1 3
17
18
History
Labor
Structure
Political
Structure
Regulatory
Environment Issues
and Concern
Culture
Corporate Structure
Company
Basis of Economy
INFLUENCES summary
EXERCISE 1-B
Stakeholder
Influence and
Concerns
Market
Structure
Social
Structure
Natural
Resources
STEP 2
This portion covers the assessment of the companys footprint by reviewing its value chain. A sample value chain
may include the following support processes: Firm Infrastructure, Human Resource Management, Technology
Development, Procurement, Inbound Logistics, Operations, Outbound Logistics, Marketing & Sales, and After Sales
Service
In evaluating the companys footprint, the following would be considered:
PROCESS refers to the key processes in the companys value chainfrom sourcing of its raw materials, reporting
to investors, manufacturing of products, and distribution of products to end consumers.
INPUT refers to the resources needed in completing the value chain process.
OUTPUT refers to the output created in the value chain process that is an important component to the
succeeding processes.
BY-PRODUCT refers to the other products created in the value chain process that are not used as the main
component. These may refer to waste products that affect the companys environmental footprint.
POSSIBLE ALTERNATIVE PROCESS, ALTERATIONS AND POTENTIAL IMPACT refer to alternative processes that
might be used to replace or alter the current process. The reason for considering changes in the current
process is to allow the manager to evaluate the effect of a change in process in such things as community or
environmental impact. Alternative processes might produce less waste, less harmful waste or utilize less toxic
ingredients. Of course, costs and productivity effects should be evaluated as well. Adjustments to allow re-use
of waste matter could also be considered.
LOCATION refers to the area where the value chain process takes place. This may be affected by the local laws
and regulations on taxes, social demands, and environmental regulations.
ENVIRONMENTAL IMPACT refers to the business operations effect on the environment. This may refer to
waste discharges, water use/utilization, and land degradation.
STAKEHOLDER IMPACT refers to the business operations impact on related stakeholders. The companys
impact may include economic, social, cultural or political. These stakeholders may include (but are not limited
to) the following:
- Primary internal stakeholders are those that are part of the company. These include shareholders and
employees.
- Primary external stakeholders are those individuals or organizations that are part of the companys supply
chain such as suppliers or consumers.
- Secondary stakeholders are those that are not directly linked to the corporate supply chain but are
nevertheless affected by or have an interest in the firms operations such as the host community or the
surrounding environment.
- Moderating or mediating stakeholders serve as a proxy for general society, indirect and direct stakeholders
(Church, NGOs, Media, Government).
- International stakeholders include foreign markets of investors or consumers that serve as touchstones
for acceptable business behavior.
AIM - RV R C SR C ente r, 2 0 1 3
19
CSR INITIATIVES AND IMPACT refers to the current programs and activities and impact of CSR.
OPPORTUNITIES AND NEEDS refer to potential areas in the value chain process that can be improved through
CSR.
For mining, the value chain analysis must be done for each stage of the mine life cycle (i.e. pre-exploration,
exploration, operations and decommissioning and rehabilitation).
20
AIM - RV R C SR C ente r, 2 0 1 3
Example 1A:
STAKEHOLDER IMPACT
ENVIRONMENTAL IMPACT
Minerals
Actual Product
Raw Materials
Example 2:
Processing of Minerals
(Processing Plant)
Raw Materials
Example 1A:
---
ALTERNATIVE PROCESSES,
ALTERATIONS AND POTENTIAL
IMPACT
BY-PRODUCT
OUTPUT
INPUT
Assembly/Production
(Plant Site)
assessment of footprint
Draw the companys value chain and include the details below:
EXERCISE 2
21
22
STAKEHOLDER IMPACT
ENVIRONMENTAL IMPACT
ALTERNATIVE PROCESSES,
ALTERATIONS AND POTENTIAL
IMPACT
BY-PRODUCT
OUTPUT
INPUT
(Location)
(Location)
(Location)
STEP 3
Critical stakeholders influence the companys operations and can either aid or impede achievement of objectives. As
a result, it is important to identify and analyze the concerns of various stakeholders and identify their potential roles
in promoting the achievement of CSR objectives.
The stakeholders can be analyzed based on the following:
What are their objectives? What do they want to accomplish?
What is their level of interest?
What is their level of influence?
What are their assets and competencies?
What are their impacts on the companys operations and local community?
What are their perceptions about the company and the companys operations?
What would we like from them?
How are we performing based on their interests?
How do other companies deal with them at the local and industry level?
EXAMPLES OF STAKEHOLDERS
Primary internal stakeholders
Primary external stakeholders
Secondary stakeholders
Moderating or mediating
stakeholders
Global stakeholders
AIM - RV R C SR C ente r, 2 0 1 3
23
24
Local Government
STAKEHOLDERS
Tax Revenue
Employment
Enforcement of law
Company is the
Good taxpayer,
Power of taxation
largest tax payer
complies with enviPower to close
and employer in the ronmental and local
operation
area
laws
Approval of permits
STAKEHOLDERS PERSPECTIVE
EXERCISE 3-A
5
*strong support of
local community
AIM - RV R C SR C ente r, 2 0 1 3
Local Government
STAKEHOLDERS
What does
the company
need from the
stakeholder?
Ease of doing
business
What is the
stakeholders
impact on the
company?
Local government
is supportive and
mediates with local
community
How are we
performing
based on the
stakeholders
interests?
Good-based
on awards and
recognition
How do the
other companies
deal with the
stakeholder at the
local and industry
level?
STAKEHOLDERS PERSPECTIVE
What is the
What is the comcompanys level
panys level of
of interest in the
influence on the
stakeholder?
stakeholder?
1 lowest and 5
1 lowest and 5
highest
highest
(Provide comments) (Provide comments)
25
Local Government
Stakeholder
Company Objective
Stakeholder
Objective
3
INFLUENCE
3. Characterize the relationship of the stakeholder to the company by coloring the appropriate circle and box. For example, green for
good relationship (i.e. willing to participate in company programs, meets regularly, initiates updates, open to suggestions); red for bad
relationship (i.e. against the companys operations, does not participate in meetings); blue for neutral relationship (i.e. passive participant
to companys initiatives).
Using Stakeholder Mapping Part 2 (Companys perspective): for every stakeholder create a circle.
Using Stakeholder Mapping Part 1 (Stakeholders perspective): for every stakeholder create a box.
INFLUENCE
26
1. Based on your answers in Exercise 3-A, fill in the table based on your list of stakeholders, their objectives and the companys objectives.
EXERCISE 3-B
STAKEHOLDER
CURRENT SITUATION
(Performance and Perception)
STAKEHOLDER
CAPABILITIES
OPPORTUNITIES
NEEDS
Fill in the table below by identifying the current situation, stakeholder capabilities, opportunities for working with and needs of every stakeholder.
EXERCISE 3-C
AIM - RV R C SR C ente r, 2 0 1 3
27
STEP 4
In this step, current programs and CSR climate are analyzed in relation to results of Steps 1 to 3.
UNRELATED
Employee
training
*only for
technical
employees
SHARED VALUE
company and
community
benefits from CSR
CREATING
STAKEHOLDER
VALUE
community
benefits from CSR
PRIMARY
Internal External
Philanthropy, cash
donations, relief aids
*donations given to
host communities
during typhoons,
sportsfest
28
Supplier
programs
*based from
global policy
MEDIATING
INTERNATIONAL
Capacity building
initiatives
Livelihood programs
for the local
community
*once a year training
for women
MINIMIZE HARM
beyond
compliance
(e.g. reducing
carbon footprint)
COMPLIANCE
SECONDARY
Waste Management
Labor laws
*different
national and
local laws
Environment laws
ILO standards
AIM - RV R C SR C ente r, 2 0 1 3
COMPLIANCE
MINIMIZE HARM
beyond compliance
(e.g. reducing carbon
footprint)
CREATING
STAKEHOLDER VALUE
community benefits
from CSR
SHARED VALUE
company and
community benefits
from CSR
INTENT
UNRELATED
PRIMARY
Internal
External
SECONDARY
STAKEHOLDERS
MEDIATING
INTERNATIONAL
Fill in the matrix with the current CSR programs of the company. Place an asterisk (*) on your remarks; this may include specific information
about the program or current problems experienced.
EXERCISE 4-a
29
30
AIM - RV R C SR C ente r, 2 0 1 3
Consider local communities
as beneficiaries of CSR
programs
Unrelated
Partners with
government and
development
partners in
CSR research
programs
Adopts
international
development
agenda and
aligns it with
their business
and community
strategies.
Others
*The contents of this table are adapted from the AIM-RVR CSR Center report entitled, Corporate Social Responsibility in Southeast Asia: An Eight Country Analysis, which was
partially funded by Deutsche Gesellschaft fr Internationale Zusammenarbeit (GIZ), August 2011.
Internal
Value Chain
Company
Location
Extended
Supply Chain
Member of a
business association
that promotes
capacity building
to the extended
supply chainto
increase competitive
advantage of local
companies.
Ensure that it
complies and/
or goes beyond
the regulatory
environment
Implementing
employee
volunteerism
programs which seek
to increase employee
morale and social
consciousness.
*employees want
more benefits/
training
Participate in business
association that in
turn provide members
with avenues for the
sharing of knowledge
*company is a
member of the CSR
council
Institutional
Adhere to global
policies concerning
labor standards
and workplace
environment.
*due to global policy
Member of business
associations that
provide capacity
building for employees
and CSR awards.
Mediating
Stakeholders
Participate in
government CSR
initiatives
*based on the
invitation of local
environmental
council
Business
Associations
International
Government
Established
partnerships with
the government and
aligned their CSR
programs to the
MDG and UN Global
compact
*due to global policy
CSR LOCUS
STAKEHOLDER INVOVLEMENT
Primary
Secondary
Stakeholders
Stakeholders
31
32
Unrelated
Internal
Value Chain
Extended
Supply Chain
Company
Location
Institutional
International
CSR LOCUS
Government
Business
Associations
STAKEHOLDER INVOVLEMENT
Primary
Secondary
Stakeholders
Stakeholders
Fill in the matrix below based on the frame of the CSR Typology of Locus.
EXERCISE 4-a
Mediating
Stakeholders
Others
AIM - RV R C SR C ente r, 2 0 1 3
CSR ACTIVITY
OBJECTIVE
CONTEXT
REMARK
exercise 4-c
step 4-3
33
Steps:
Strategic
Advantage
Philosophy
Strategy
Operations
Ownership
Structure
Indicators
Evaluation
Neutral
Awareness
Understanding
Involvement
Engagement
Commitment
Ineffective
Little
Weak
Steps:
Strong
Culture of Responsibility
Herrera, 2010
34
Little
1
1
1
1
1
1
1
Comprehensive
2
2
2
2
2
2
2
3
3
3
3
3
3
3
4
4
4
4
4
4
4
Weak
1
1
1
1
1
5
5
5
5
5
5
5
Strong
2
2
2
2
2
3
3
3
3
3
4
4
4
4
4
5
5
5
5
5
AIM - RV R C SR C ente r, 2 0 1 3
Zero waste management,
recycling program, ISO
certification, EMS
Employee
Community, employees
CSR PROGRAMS
STAKEHOLDERS
*Please refer to Appendix 2: ISO 26000 on Social Responsibility for definitions of concerns.
HUMAN RIGHTS
ENVIRONMENT
LABOR PRACTICES
CONCERNS*
Lack of participation,
lack of partnership
with community and
environmental projects
GAPS
aSSESSMENT SUMMARY
exeRCISE 5-a
New technology in
reducing waste
Incorporating employee
during management
decision
OPPORTUNITIES
THREATS
Identify opportunities for improving CSR activity (Start, Stop, Continue as is, Continue with improvements, etc.)
Classify these into the following categories (Note: These are the ISO 26000 categories.)
Use this information in order to:
Evaluate the consistency of and coherence of CSR programs;
Taking into account results from the previous sections on Assessment, Environment and Stakeholder Analysis:
Summarize concerns, gaps and opportunities that can be addressed by CSR programs
STEP 5
35
36
OTHERS:
OTHERS:
GOVERNANCE AND
COMPLIANCE
COMMUNITY
INVOLVEMENT AND
DEVELOPMENT
CONSUMER
FAIR OPERATING
PRACTICES
CONCERNS
STAKEHOLDERS
CSR PROGRAMS
GAPS
OPPORTUNITIES
THREATS
EXERCISE 5-b
What CSR activities do you suggest your company STOPS, STARTS and CONTINUES? Please list activities and check
the appropriate box. Provide comments for improvement as applicable.
CSR ACTIVITIES
ACTION
Deprioritize
Full Stop
Employee volunteerism
STEP 6
Start
Continue
X
The CSR philosophy will become the guiding principle for all of the companys CSR activities. It will also provide a
basis for consideration of social concern in business decision and operation.
One or more of the following approaches can be chosen:
PHILANTHROPY refers to philanthropic activities (or donations) to individuals or associations that do not
necessarily have a direct impact on the companys operations. (i.e. dole-outs to NGOs, disaster relief,
blood drive, etc.) The primary purpose is to create stakeholder value.
COMPLIANCE refers to the companys compliance with local laws, industry codes and international
regulations (i.e. environmental management regulations, mining codes, international labor laws).
VALUE CHAIN MANAGEMENT refers to the companys initiatives that address all of its upstream and
downstream activities (i.e. procurement of raw materials from suppliers, developing a supplier program,
creating livelihood to MSMEs through a distribution chain, etc.)
TARGETED PROGRAMS refer to CSR programs related to the business operations aimed at a specific
concern, beneficiary or stakeholder (e.g. providing computer training to students by an IT company)
FULLY EMBEDDED CSR PROGRAMS refer to the companys commitment to ensuring that its CSR strategy
is embedded into strategy formulation, all relevant operations, all departments, management objectives,
and corporate and management performance monitoring.
AIM - RV R C SR C ente r, 2 0 1 3
37
EXERCISE 6-A
Example: The company aims to provide products that are of quality and integrity. It also aims to be the strategic partner of tomorrows
generation.
Example: The company ensures that all its products are ethically sourced. It also promotes a good work-life balance among its employees.
Finally, it engages with the government in developing green tech for a sustainable future.
EXERCISE 6-B
Based on the CSR approaches explained in p. 34, decide which approaches make sense for the company to adapt.
Fill in the matrix below based on the selected CSR strategy approach selected above.
APPROACHES CHOSEN
Compliance
38
GOALS
POLICIES/PHILOSOPHIES
STEP 7
Implementation
In implementing CSR, companies need to ensure that all components of the programs are identified and available
to accomplish the impact objective. An important aspect to ensure the success of programs is a CSR structure that
supports CSR across the CSR process.
EXERCISE 7-A
Enumerate your CSR programs and specify whether these are continuous or special projects. Please include the
objectives, goals, beneficiaries and benefits, as well as the partners (and their roles) for every CSR program.
PROGRAM NAME AND
DESCRIPTION
PROGRAM OBJECTIVES AND
GOALS
BENEFICIARIES
Identify the programs target
beneficiaries, reason for selecting
the, and how the program
addresses their needs
IMPLEMENTATION PLAN
Identify the key activities, resources
needed, expected outputs (refer
to the intended results: i.e.,
quantitative results) and outcomes
(refer to the overall impact of
the project for the intended
beneficiaries)
PARTNERS AND ROLE
Identify the partners involved in
implementing the program as well
as their roles and responsibilities.
EVALUATION PLAN
Identify the evaluation framework,
indicators used in assessing the
programs progress, person /
department involved, as well
as frequency in evaluating the
program.
AIM - RV R C SR C ente r, 2 0 1 3
39
40
aSSESSMENT SUMMARY
Designation:
Department:
Coordinates concerning:
Corporate Foundation
Marketing Team
HR Team
Finance Team
Top Management
Designation:
Department:
Coordinates concerning:
Designation:
Key Responsibilities as CSR Champion:
CSR CHAMPION/LEADER
Designation:
Reports concerning:
exeRCISE 5-a
Designation:
Department:
Reports concerning
Designation:
Department:
Reports concerning:
Remarks:
CURRENT STRUCTURE
AIM - RV R C SR C ente r, 2 0 1 3
Designation:
Department:
Coordinates concerning:
Corporate Foundation
Marketing Team
HR Team
Finance Team
Top Management
Designation:
Department:
Coordinates concerning:
Designation:
Key Responsibilities as CSR Champion:
CSR CHAMPION/LEADER
Designation:
Reports concerning:
Designation:
Department:
Reports concerning
Designation:
Department:
Reports concerning:
41
42
*Include Stakeholder
Engagement Plan
Surveys, consultation of
employees
Flexi time and improve medical health plan, increase accident insurance
Outcomes: The
changes expected
to result from the
projectchanges
within programs,
organizations,
communities or
systems
Reduce absences,
increase
productivity,
Produce the actual
wants and needs of the increase morale
employees
External Factors: Other influences on program results, circumstances beyond project control
to improve working condition, to reduce accidents and absences and improve employee productivity
Goal: The intended aim or impact over the life of the project
Work-Life Balance
EXAMPLE: Title of the CSR Program and the issue it seeks to address
There must be an implementation plan for each program. Just like for business programs.
exeRCISE 7-C
AIM - RV R C SR C ente r, 2 0 1 3
External Factors: Other influences on program results, circumstances beyond project control
Goal: The intended aim or impact over the life of the project
CSR PROGRAM: Title of the CSR Program and the issue it seeks to address
Outcomes: The
changes expected
to result from the
projectchanges
within programs,
organizations,
communities or
systems
TOWARDS STR ATEGIC CSR
43
STEP 8
In this step, companies are expected to develop a plan for evaluating CSR strategy and monitoring initiatives.
Evaluation and Monitoring begins with the development of a plan for monitoring and evaluation (M&E).
The M&E plan has multiple components. There would be an M&E plan for each program, as well as an M&E plan
for the entire CSR strategy and portfolio of initiatives.
Each M&E plan is developed taking into account the following:
Goals and Objectives, which should include clear impact objectives
Premise of Strategy, Program or Program Portfolio
Implementation Plan, which should include Required Resources, Planned Activities and Planned Outputs
Monitoring and Evaluation has multiple uses:
Evaluating the effectiveness of a strategy or program
Monitoring progress
Evaluating the efficiency of a strategy or program
Evaluating the validity of the premise upon which a strategy or program is developed
The monitoring of progress is particularly important in the efficient roll-out of programs. This monitoring should
include a review of availability of resources (including manpower and information) at the correct points in the
implementation. Ideally, it should also include the monitoring of mid-program interim results.
It should be clear at this point that a good M&E plan is entirely dependent on the completeness and clarity of the
implementation plan. The implementation plan must be clear concerning the initial evaluation and premise, about
the desired impacts, and about the mechanism for achieving impact e.g. that education concerning personal
hygiene will result in practice of good personal hygiene which would result in decreased incidence of infectious
diseases.
There must be clear metrics for the final impact goals (disease incidence) as well as intermediate goals (practice of
hand-washing, etc.) and initial goals (e.g. understanding of lessons).
The implementation plan must be detailed, with clear targets for activities, with clear input requirements
including activity dependencies (e.g. secure an event permit prior to hosting an event), if any; clear accountabilities;
and clear intermediate outputs. Each input or output requirement must be precisely defined, with any minimum
characteristics or features adequately documented. There must be a clear plan for testing outputs and impacts.
For example, one intermediate impact requirement for a personal hygiene program would be ensuring that
children can remember proper hand-washing techniques. The requirement (e.g. hand washing steps, amount of
time spent, use of soap).
44
AIM - RV R C SR C ente r, 2 0 1 3
45
46
What is the
rationale behind the
CSR strategy?
(5)
(4)
(3)
(2)
(1)
ACTUAL
BASELINE
EVALUATION
TOOLS
Who is in charge
of conducting the
evaluation of the CSR
strategy and programs?
ACCOUNTABILITY
RATIONALE
How does the program address the CSR
objective?
(indicate timing)
TARGET
BASELINE
CSR PROGRAMS
Identify and describe the program. (Note:
Program can connect to multiple objectives)
PLAN METRICS
VALIDATION
PROCESS
PREMISE
ESTIMATED
BASELINE
exeRCISE 8-A
AIM - RV R C SR C ente r, 2 0 1 3
Metrics
Actual
Baseline
Target
Others
Partners
Money
Manpower (internal)
Types
Resources Required
STEP 1:
Please describe each step.
Actual
Tools
Tools
Target/
Actual
Tools
Output
Target/
Actual
Who is in-charge
of conducting the
evaluation of the CSR
programs?
Tools
Other Concerns
Target/
Actual
Target/
Actual
Tools
Accountabilities
Accountabilities
KEY STEPS
What is the basis in selecting the CSR program? How will it impact the company? How will it impact the target beneficiaries?
RATIONALE/PREMISE
Estimated
Baseline
Target
will
What are the long-term What indicators
in monitoring
impact objectives of the be used
the programs
program?
success?
GOALS
exeRCISE 8-B
47
48
Target
Target
Others
Partners
Money
Manpower (internal)
Types
Resources Required
STEP 3:
Please describe each step.
Others
Partners
Money
Manpower (internal)
Types
Resources Required
STEP 2:
Please describe each step.
Actual
Actual
Tools
Tools
Tools
Target/
Actual
Tools
Output
Tools
Target/
Actual
Tools
Output
Target/
Actual
Target/
Actual
Tools
Other Concerns
Target/
Actual
Other Concerns
Target/
Actual
Tools
Target/
Actual
Tools
Accountabilities
Target/
Actual
Accountabilities
STEP 9
The last step is to validate whether the new or improved companys CSR strategy and initiatives are aligned with the
business and embedded into the organization.
The six questions below can help companies assess whether they have integrated or embedded CSR into their
business and organization:
Is the companys CSR philosophy apparent in the companys Vision-Mission-Values?
Are all critical policies and manuals of the company aligned to its CSR philosophy? Examples of policies
and manuals are: Employee Handbook, Operations Manual, Risk Management Manual, Compliance
Policy, and Code of Ethics.
Does the company have an embedded strategic plan that (a) includes formulation of CSR policies and
plan, and (b) includes CSR in the corporate performance metrics?
In terms of operations, does the company have a clear standard procedure for identifying and engaging
stakeholders?
Is CSR embedded into each employees job description, key result area, and key performance metrics?
Is there a process for evaluating programs and initiatives and identifying those worth replicating? Is there
a process and structure for replicating successful initiatives?
AIM - RV R C SR C ente r, 2 0 1 3
49
SUMMARY
CSR PHILOSOPHY
KEY ELEMENTS OF
FOOTPRINT
AND CURRENT SITUATION
KEY STAKEHOLDERS
AND CURRENT SITUATION
CSR STRATEGY
SUPPORTING PROGRAMS,
ACTIVITIES AND OTHER
RESOURCE REQUIREMENTS
50
PART
In integrating CSR into the business, the AIM-RVR CSR Center suggests that the entire executive team (including the
top and middle managers) identify the most important driver for its CSR strategy. Ideally, initial research that includes
surveys of the organization could be conducted before the actual workshop takes place.
Moreover, the pre-workshop preparations include the following tasks:
Prepare a list of the companys current CSR programs together with its objectives and targets;
Identify the current status of the CSR programs; and
Roll-out a climate survey assessing the employees perception on the companys current CSR involvement
and strategy.
The climate survey acts as an evaluative tool in gauging the level of CSR integration of the company with regard to
(1) the level of importance of CSR on its employees and operations; and (2) the effectiveness of the present CSR
programs in attaining the companys goals. A sample copy of the climate survey is included in this report.
The workshop helps the company make informed decisions concerning current CSR efforts and to measure its
effectiveness for continuous improvement on CSR practices. Furthermore, the workshop will (1) review, measure and
evaluate the companys current CSR efforts and (2) get a buy-in of the business head units, who would ensure key
result areas for CSR in their respective plans.
The following pages describe the tools used for an actual intervention with a company.
DOCument 1
THEME
Introduction to CSR
Day 1
Step 1: Assessment
Step 2: Formulation
Step 3: Implementation
Day 2
Day 3
TOPICS
Program introduction and overview
Identifying stakeholders concerns, issues and influences
Guide Questions
52
Strongly agree
In your observation, which of the following stakeholders do you believe has the most interest in the operations of your
company? (Please encircle the appropriate number, where 5 has the most interest in the operations, and 1 has the least
interest.)
Least interest
Most interest
Customers
Employees
Shareholders
Suppliers
Local Community
Society in General
Environment
Government
Given what you know of your companys resources and capabilities, in which of the following areas do you think your
company can contribute the most? (Please encircle the appropriate number, where 5 has the greatest contribution and 1
has the least contribution)
Least contribution
Most contribution
Health
Education
Environment
Poverty Alleviation
AIM - RV R C SR C ente r, 2 0 1 3
53
Yes
No
What CSR activities can you suggest that company should stop, start or
continue? Please list activities and check the appropriate box.
Start
Continue
1
2
3
3
Who comes to mind when you hear the term CSR? (You may give more than one name.)
In your opinion, is there a need for your company to practice CSR?
Please complete the sentence:
A company practices CSR if
(Please mark only those that apply. You may mark more than one item.)
Yes
No
Yes
No
Not a Benefit
Highest Benefit
Motivates employees
Satisfies customers
Develops communities
CSR is (Please encircle the appropriate answer, where 5 is most applicable, 1 not applicable)
Not
Applicable
Most
Applicable
IV. DEMOGRAPHICS: Name of Company, Type of Industry, Job Grade and Department
54
AIM - RV R C SR C ente r, 2 0 1 3
55
56
AIM - RV R C SR C ente r, 2 0 1 3
57
58
PART
CASE STUDIES
Samples of CSR Initiatives and Programs
This section contains three case studies that present the CSR initiatives and programs of companies based on two
worksheets of this manual
Case Study 1: Tata Groups Initiative: Embedding CSR into Structure and Performance Evaluation
This case study presents Tata Groups initiative of embedding CSR into its organizational structure as well as
its performance evaluation through the adoption of the Tata Index for Sustainability Human Development.
Case Study 2: Tetra Pak Pakistans Community Dairy Development Program
This case study presents the implementation plan of Tetra Pak Pakistans Community Dairy Development
Program. It highlights the companys initiative to develop the dairy industry of Pakistan. The scale and
scope of the program can positively contribute to the countrys economic development.
Case Study 3: JFCs Farmer Entrepreneurship Program
This case study presents the implementation plan of Jollibee Foods Corporations Farmer Entrepreneurship
Program. It highlights the partnership between the company, its corporate foundation, and implementation
partners.
CASE STUDY 1
TATA GROUPS EXPERIENCE: EMBEDDING CSR INTO THE COMPANYS STRUCTURE AND PERFORMANCE
EVALUATION
Tata Sons was established by Jamsetji Nusserwanji Tata in 1868. Tata Sons and Tata Industries are the holding
companies of the Tata Group. The Tata Group consists of more than 100 operating companies in seven business
sectors, including communications and information technology, engineering, materials, services, energy, consumer
products and chemicals. The Group has over 450,000 employees, 3.9 million shareholders, and operates in more than
80 countries across six continents. The major companies of the group are Tata Steel, Tata Motors, Tata Consultancy
Services (TCS), Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and
Indian Hotels. In 2011-2012, the total revenue of the Group was $100.09 billion, 58% of which came from businesses
outside India (Tata Website, 2013).
The founder of Tata Group believes that companies exist for the community. Tatas commitment to CSR is presented
in the eight statements following:
Serving the Community is the purpose of our business.
Enhancing human excellence and Improving the Quality of Life is our endeavor.
Conserving the Environment, Restoring Biodiversity and Social Development are integrated into one.
Core Competence, Expertise and Technology reach the common people especially the underprivileged.
Tata Companies are Partners in Development.
The culture of Volunteering is pervasive throughout the Tata Group.
Working with People brings Organizational and Personal Learning.
Tata Companies and their business process are environmentally and socially sustainable.
Tatas CSR commitment is evident in the organizational structure and revenue stream of the Tata Group. About twothirds (or 66%) of the equity of Tata Sons is held by philanthropic trusts. The Tata Trust consists of non-profit, nonsectarian philanthropic organizations that implement the CSR initiatives of the company in relation to community
development. The Tata Trust also provides funding assistance to partner organizations. It is estimated that 3% of the
Tata Groups 2011 net profit were funneled to development-related expenditures (Tata Website, nd). For 2011-2012,
about US$81 million was used to implement social programs (Tata Website, 2013).
Tata companies and Tata trusts are involved in community development and sustainability initiatives through
implementing programs in health, education, women and child development, training of youth and building
sustainable livelihoods, and environmental conservation. The Tata Trusts also built learning and training institutions
such as the Indian Institute of Science, Tata Institute of Fundamental Research, Tata Institute of Social Sciences (Tata
Website, 2013).
Aside from social development initiatives, Tata companies have also adopted CSR-related policies and initiatives for
its employees and to mitigate the potential negative environmental impact of its operations. Tata Steel was the first
Indian company to introduce 8-hour work day in 1912, and provided free medical aid to all employees and dependent
family members in 1915. Tata Steel has also implemented sustainability programs, such as initiatives to reduce raw
materials consumption, waste water management, and greening the supply chain (Tata Steel, 2010).
60
Sir Dorabji
Tata Trust
66% Shareholding
RD Tata Trust
JRD Tata Trust
MK Tata Trust
Partner Organizations
The Group has also implement CSR programs that capitalizes on the core competency of each company: (a) TCS
developed a functional literacy program, (b) Tata Interactive created e-learning modules for children with learning
disability, and (c) Tata Teleservices helps fishermen with communications technology (Tata Website, 2013).
The Group has also developed innovative products and services that address the needs of the larger part of the
pyramid. These include Tata Chemicals Swach water purifier and Salt/Kisan Sansar (Farmers World), IHCLs
Ginger Smart Basic Hotels, Tata Housings Shubh Griha Project, and Rallis/Tata BP Solars Agro products and
services/Rural energy sources (Tata, nd).
61
INTERNAL SUPPORT
Cross-Functional Team
Composed of Corporate
Heads of HR, Quality, Ethics,
Communications, Community
Development, Environmental
Management, and Industrial
health/safety
Role: (a) set direction and
implement CSR initiatives, (b)
conduct internal and external
assessmentidentify gaps
and opportunities, and (c)
develop non-financial goals
Corporate Head-Social
Responsibility or Chief Sustainability
Officer
Role: (a) works with the cross
functional team to develop CSR
strategy with 3-5 yr perspective; (b)
develop a matrix of company
requirements to address stakeholder
needs; (c) annually conducts
stakeholder assessment and design
stakeholder engagement strategy
EXTERNAL SUPPORT
Third Party Assessors
Role: (a) help in conducting
internal and external
assessment; (b) provide
expert opinion for CSR
program design
External and Internal
Stakeholders
Role: provide inputs in
developing CSR program
design
Source: Tata Council for Community Initiatives. 2007. Tata Protocol-Corporate Social Responsibility. http://www.tata.com/pdf/Tata_CS_
Protocol.pdf
To assist the CSR structure, the Tata Corporate Sustainability Leadership Profile guides the company in identifying
CSR leaders and managers as well as how the company can encourage CSR leadership within the organization. All
senior executives of the Tata group are evaluated using a system that includes their efforts and performance in CSR.
Tata Index for Sustainable Human Development: Integrating CSR across the Institution
The Tata Index for Sustainable Human Development was developed by TCCI in collaboration with United Nations
Development Programme. The index provides guidelines for Tata companies looking to fulfill their social
responsibilities, and is built around the Tata Business Excellence Model, an open-ended framework that drives
business excellence in Tata companies. (Tata Website, nd)
The Tata Index identifies three assessment levels of CSR(a) Systems Response; (b) People Response; and (c) Program
Responsein terms of process and outcome.
62
The CS CrossFunctional
Team
Fast Track
Managers
Establish a
Convention for
Brainstorming
Brainstorm
through a Book
discussion
Build
Perspectives &
Customize
Document
Outcomes
(Parameters)
Processes for
Identifying
Leaders
Use Parameters
for
assessments
Determine
Levels
Aligning for HR
(Recruitment)
HR Processes
Impact
Selection level
initiative
Management
Selection
Initiatives
Training and
Induction
CS Leadership
Development
Induction and
Training
Experiential
Learning Labs
Volunteering
and Outcomes
Stories on CS
Impact
How CS
impacted
product features
How CS impacted
behavior of
employees
Induction of
Trainees
Source: Nadkarni AG and Branzei O. (2008). The Tata Way: Evolving and Executing Sustainable Business Strategies. In Strategy (March/April
2008) http://iveybusinessjournal.com/topics/strategy/the-tata-way-evolving-and-executing-sustainable-business-strategies#.UjasusZkO6M
Process refers to the requirements for addressing a parameter. Process factors may refer to the use and appropriateness
of the methods, the effectiveness of the methods, the degree to which the Processes are repeatable, integrated and
consistently applied, reliability of information and evidence of beneficial innovation and change. Outcomes refer to
the specific result/impact of the process. Outcome may refer to data and information showing performance levels,
relevant comparative data and improvement trends for key measures / indicators of performance. (TCCI, 2003)
Systems Response refers to the companys organizational structure. Looking at the internal processes, it
takes into consideration (a) leadership commitment, (b) management structure, (c) strategy development,
(d) evaluation and reporting mechanisms as well as (e) communication strategies.
People Response refers to the role and involvement of employees within the company. It looks not only
the role of employees in CSR initiatives but also the career development plan for employees in relation
to CSR. Components of People Response are (a) Selection, career development of key employees and
performance management; (b) Training for professional, organizational, managerial, competence and
enhancement of role in the CS; (c) Training for leadership development, enrolment of other employees,
personal learning and development and enhancing role in the CS; and (d) Volunteer scheme and evolving
degrees of volunteering
AIM - RV R C SR C ente r, 2 0 1 3
63
Program Response refers to the evaluation of the groups CSR initiatives. It looks at the whole aspect of
CSR programfrom assessment of programs in terms of output, addressing stakeholder needs, to creating
a self-reliant community. Components of Program Response are (a) Managing change and assessment
of social impact; (b) Felt needs of the key community related to core competencies; (c) Volunteering
process in the community; (d) Social concerns addressed through programs; (e) Improving attitudes/
government processes; (f) Self-reliance and sustenance; (g) Learning and innovation transfer; and (h)
Effective management and good governance
In using the Index, CS leaders score the components of each assessment level based on the pre-identified scoring
bands. Depending on the total score, Tata companies would be able to determine their level of human excellence.
Build Community
(Coherence)
Mitigate Risks
(Compliance)
Maximize Opportunities
(Credibility)
Human excellence
(876-1000)
Human development
(651-875)
Human achievement
(451-650)
Human concern
(251-450)
Human consideration
(0-250)
References:
64
Nadkarni, AG and Branzei, O. (2008). The Tata Way: Evolving and Executing Sustainable Business Strategies. In Strategy
(March/April 2008) http://iveybusinessjournal.com/topics/strategy/the-tata-way-evolving-and-executing-sustainablebusiness-strategies#.UjasusZkO6M
Nadkarni, AG. (2005). Interview during the 2005 Asian Forum on Corporate Social Responsibility in Jakarta, Indonesia.
Tata Steel. (2010). Putting Principles into Practice. http://www.slideshare.net/Gaurav1019/tata-csr-presentation
Tata Website. (2013). Tata Fast Facts. http://www.tata.com/htm/Group_fast_facts.htm
Tata Website. (Nd). Leadership with trust. http://www.tata.com/aboutus/sub_index.aspx?sectid=8hOk5Qq3EfQ=
Tata Website. (Nd). Tata Index for Sustainability. http://www.tata.com/ourcommitment/articles/inside.
aspx?artid=4k1011ilySU=
Tata. (Nd.) Improving the Quality of Life. http://www.tata.com/pdf/Tata_Group_presentation.pdf
TCCI. (2003). Tata Index for Sustainable Human Development. http://www.tata.com/taxonomy/Tata_Index.pdf
TCCI. (2007). Tata Protocol-Corporate Social Responsibility. http://www.tata.com/pdf/Tata_CS_Protocol.pdf
TCCI. (2012). A Journey towards an IdealEnhancing Stakeholder Engagement through Sustained Relationship.
TCCI. (2012). A Journey towards an Ideal-Making Development Impact through Business Processing. http://www.tata.
com/htm/downloads.htm?sectid=ecoeJ4TFYys=
A IM-RVR CSR C enter, 2013
AIM - RV R C SR C ente r, 2 0 1 3
65
66
Outputs:
Activities:
(a) Low literacy of farmers: the company customized training sessions focusing more on visuals, demonstrations and actual implementation of processes
understanding of farmers.
(b) Lack of skilled trainers: the company also established a Train-the-Trainers program.
(c) Traditional Mindset: To change the mindset of farmers from non-commercial to profit oriented, Tetra Pak constantly communicated with farmers to
gain their trust.
External Factors:
success
Assumptions:
Resources:
Rationale:
- Program tries to create a stable supply of dairy products (e.g. milk) from local farmers through training,
capacity building and providing veterinary services and vaccines for livestock
- Improve competitiveness of the local dairy industry as well as increase the income of livestock farmers
Outcomes:
Goal:
CSR PROGRAM:
Resources: Tetra Pak initially invested 60-65 million Rs. per Dairy Hub. This entailed the establishment of Milk
collection points for farmers as well as the initial training of staff and personal. Aside from this, it also covered the
cost of the training conducted to local farmers. Tetra Pak also provided for mechanized milking machines, continuous
field-service, and a one-stop-shop with farm supplies for animal welfare and feed has been set up in the central Dairy
Hub building. Engro Foods Limited (EFL) developed the key performance indicator as well as the training manual to
be used. Community Mobile veterinary clinics were also established to ensure that the farming system is sustainable.
Aside from this, Tetra Pak, in partnership with the Livestock and Dairy Development Department and University of
Veterinary & Animal Sciences also aimed to intensify milk production, knowledge and management skills of farmers
for forage production, feeding, reproduction, breeding, young stock rearing, input purchase, and prevention and
control of diseases have been managed by the Dairy Hub Program through Capacity Building.
Actors and Activities: Since Tetra Pak has no competency regarding animal husbandry and the production of milk.
The company partnered with a local milk processor, EFL, which provided the technical guidance. EFL also conducted
the assessment with regard to the capacity of local farmers to meet the target goals. Tetra Pak signed an MOU with
EFL in the implementation and the creation of key performance indicators (APP, 2009).
The government also played a critical role in the program. The creation of new policies and guidelines were important
steps in addressing regulatory issues. The development and enforcement of better food laws are some of the key
contributions of the government. One of the main issues is with regard to loose milk market. It is estimated that 97%
of Pakistans milk is produced from the loose market; this means that there were no formal process to ensure quality,
price, and access to formal markets. A change in government regulations and policies can enable local farmers
access to formal market thereby increasing their productivity and income (Sharif, 2009). The government has also
established necessary infrastructure such as access to clean water, acquiring land lease and attract local and foreign
investors.
Close collaboration with other companies were also important for the success of the program. Access to the
marketplace has been improved. This is because multinational and national dairy companies as part of the CSR
program aims to source the milk in a social and sustainable manner. As a result small scale farmers become part the
formal supply chain thereby increasing the quality standards of rural farmers.
Outputs and Outcomes: Key outputs of the program are the number of trainings conducted and farmers that have
participated, medicines and vaccines provided, and animals tested. Specifically, the outputs are: (a) 230 trainings
have been conducted benefiting about 27,000 farmers (since 2009); (b) 4,600 animals vaccinated against various
diseases; (c) 13,300 animals de-wormed; (d) 4,200 CMT tests conducted; (e) 1,200 disease cases treated; and (f)
Medicines worth 1 million rupees provided to farmers at cost price.
Key outcomes of the program included efficiency in milk production, improved animal strength, and increase in
disease-free farms. Specifically, the outcomes of the program are (a) increased the productivity of 90,000 animals, (b)
increased production from 400 litres to 8,500 litres per day, (c) total Plate Count (TPC) dropped from 5 million to less
than 1 million, (d) 54 farms free from Mastitis, and (e) Animal mortality has been curtailed, with only 8 cases reported
among 1,200 animals in 56 model farms.
External Factors: There are no external factors that have affected the program.
Risk Assessment and Contingency Plan: Factors that could affect the success of the program are (a) low literacy of
farmers and (b) lack of skilled trainers, and (c) traditional mindset of farmer. To address the low literacy of farmers,
the company customized training sessions focusing more on visuals, demonstrations and actual implementation
of processes were prepared to enhance understanding of farmers. The company also established a Train-theTrainers program. To change the mindset of farmers from non-commercial to profit oriented, Tetra Pak constantly
communicated with farmers to gain their trust. Eventually farmers were open to changes in their business operations
and were willing to take up dairy farming as a full time commercial business activity.
AIM - RV R C SR C ente r, 2 0 1 3
67
References:
68
Ahmed, R. (Nd). Tetra Pak Dairy Hub Initiative: A Community Dairy Development Programme. http://www.tbl.com.pk/
tetra-pak-dairy-hub-initiative-a-community-dairy-development-programme/
APP. (2009). Tetra Pak & Engro Foods join hands to establish dairy hub.
Materials from the 2010 Asian CSR Awards
Sharif, ZA. (2009). CSR that spells prosperity for Pakistan. The News, October 5, 2009. http://jang.com.pk/thenews/
oct2009-weekly/busrev-05-10-2009/p8.htm
Tetra Pak Pakistan. (2009). Spirit Magazine.
Tetra Pak Pakistan. (2010). Dairy Hub wins prestigious Asian Corporate Social Responsibility Award. http://www.tetrapak.
com/pk/SiteCollectionDocuments/Cluster%20Initiative%20gets%20global%20recognition.pdf
Tetra Pak. (nd). Tetra Pak and the environment. http://www.tetrapak.com/environment/pages/default.aspx
CASE STUDY 3
Jollibee Foods Corporation (JFC) is the largest fast food company in the Philippines with a network of 750 stores. It is
a dominant market leader in the country. Jollibee enjoys the lions share of the local market-- more than all the other
multinational brands combined (JFC, nd). In the Philippines, it has grown to offer six fast-food brandsJollibee,
Chowking, Burger King, Red Ribbon and ChickBoy. Other brands of JFC include Hong Zhuang Yuan, Yonghe King, and
San Pin Wang. JFCs vision is to be Asias number one restaurant company by 2014, and one of the three largest and
most profitable restaurant companies in the world by 2020 (Tiongson, 2012).
The JFC Foundation started in 2005 with the mission to make food available to more people. The Foundation
receives funding from JFC (based on its annual income). Their key focus is on food security-- a family is considered
food secure when its members do not live in hunger or fear of being hungry (Tiongson, 2012).
JFC Foundation, in partnership with local government and civil society, has implemented the Farmer Entrepreneurship
Program, which links local farmers with the companys supply chain.
Description of the Program: The Farmer Entrepreneurship Program is a partnership between Jollibee Foundation,
the Catholic Relief Services (CRS) and the National Livelihood Development Corporation (NLDC). The objective of the
program is to help farmers apply effective farming technologies and methods to ensure reliable product delivery with
a much higher income and link them to institutional markets like the Jollibee Foods Corporation (People Powered
Markets, nd).
Goal of the Program: The goals of the program are to (a) help Filipino farmers gain access to consumer market; as
well as (b) help JFC develop a stable supply provides fresh produce and quality products.
Rationale of the Program: About 80% of the poor in the Philippines live in rural areas. Small-scale farmers are
considered as part of the poorest of the poor (IFAD, 2009). Their major concerns are the lack access to capital, market
and farming technologies. Filipino farmers have historically been dependent on middlemen who act as brokers
between farmers and retailers. These middlemen act as the (a) agents/buyers that provide financing to farmers, (b)
assemblers that transport the produce in bulk, and (c) traders that pack and deliver the produce to wholesale buyers
or institutional buyers. The presence of middlemen has affected both the price (higher cost) and quality (freshness)
of agricultural products.
Aside from directly linking farmers to institutional markets, the rationale of the program is to address the demand of
the food service industry (i.e. rapidly growing industry, in need of competent manpower, and competency mismatch
of graduates) as well as the needs of Philippine society (i.e. 40% of Filipinos poor, high drop-out rate, and youth
unemployment).
Key Assumptions of the Program: Based on the existing market structure of agricultural products, JFC Foundation
assumed that by linking local farmers to institutional markets, it can increase farmers income as well as help JFC
secure stable supply (i.e. fresh produce, and competitive price).
Other assumptions considered by the JFC Foundation were:
Channels/ institutional arrangements are insufficient to link farmers into the institutional markets. Farmers
must be given access to capital, training, and skill-sets to transform them from village farmers to become
commercial farmers.
JFC Foundation needs to partner with implementing organizations (such as local government units, NGOs,
and micro-finance institutions) that have the right skills and competencies to carry-out the initiative, such
as agriculture training, microfinance, and monitoring the progress of farmers.
AIM - RV R C SR C ente r, 2 0 1 3
69
70
- financial
investment from
JFC, and
- manpower
training and
monitoring
conducted by its
partners.
Actors / Activities:
Outputs:
(a) local
community
benefits with
higher income,
access to credit
and technology,
supplemental
income to family
members
(peeling), and
better buying
price; (b) company
benefits with lower
cost of local input,
reliable supply,
quality raw
materials,
diversification of
supply sources,
and customer and
employee
endearment.
Outcomes:
Traditional mindset and gaining support of farmers: To change the mindset of farmers from non-commercial to profit oriented, the program included an agroenterprise trainingwhere farmers develop their own market, management, and financial plan.
Failure of the farmers to deliver can affect JFCs supply chain: JFC sources its vegetable from different provinces. In addition, there is constant and close
monitoring and evaluation of farmers progress and products.
Global warming and sudden changes in weather patterns affects yield and productivity of farmers in the Philippines; but this was not discussed/identified by JFC
Foundation
External Factors:
Assumptions:
Resources:
Rationale:
Goal:
CSR PROGRAM:
Key Assumptions of the Program: Based on the existing market structure of agricultural products, JFC Foundation
assumed that by linking local farmers to institutional markets, it can increase farmers income as well as help JFC
secure stable supply (i.e. fresh produce, and competitive price).
Other assumptions considered by the JFC Foundation were:
Channels/ institutional arrangements are insufficient to link farmers into the institutional markets.
Farmers must be given access to capital, training, and skill-sets to transform them from village farmers to
become commercial farmers.
JFC Foundation needs to partner with implementing organizations (such as local government units, NGOs,
and micro-finance institutions) that have the right skills and competencies to carry-out the initiative, such
as agriculture training, microfinance, and monitoring the progress of farmers.
Resources: Key resources in implementing the Farmer Entrepreneurship Program are financial investment from JFC,
and manpower training conducted by its partners.
Actors and Activities: The key activities of the program included clustering of farmers, capacity building and training,
and providing credit.
The key activities of the partners are:
Catholic Relief Services clustered the farmers and provided agro-enterprise training of farmers.
National Livelihood Development Corporation coordinated with micro-financing institutions for capital
requirements.
Jollibee Foundation coordinated with JFC regarding market requirements regarding onion and other
vegetables.
Involvement and support of local government varies across the different sites. For example, the Mayor of the San Jose
City in Nueva Ecija acted as the head of the Site Working Group. He deployed agriculturists of the city government to
conduct evaluation and monitoring of the farmers progress (Victoria, 2011).
Outputs: Outputs of the program included: (a) training of more than 500 small farmers, (b) training of 60 local
development institutions such as local government units, microfinance institutions, and academic institutions
(Jollibee Foundation, 2012).
Outcomes: Outcomes of the program created value for both the company and the community. The benefits of
the local community were higher income, access to credit, access to technology, supplemental income to family
members (peeling), and better buying price for onion in the city. The benefits of the company were lower cost of
local input, reliable supply, quality raw materials, diversification of supply sources, and customer and employee
endearment.
External Factors: Global warming and sudden changes in weather patterns affects yield and productivity of farmers
in the Philippines; but this was not discussed/identified by JFC Foundation.
Risk Assessment and Contingency Plan: Risks faced by the company included the traditional mindset of farmers and
gaining their support. Farmers are often focused on the quantity of produce and fail to properly account expenditures
spent during the farming cycle. Farmers need to study the business-side as wellwhich is more than just quality and
cost.
To address this concern, the program also included the agro-enterprise trainingwhere farmers need to develop
its own market, management and financial plan. Farmers make an inventory of its product and equipment as well
as look at different market for its products. Farmers need to have a diversified list of buyers/customers. During the
training, farmers are also trained to become accountable for each produce. It is important to note that at this stage,
the training helps the farmers with its financial needs (assessment, loan, calculation, and payment)
AIM - RV R C SR C ente r, 2 0 1 3
71
Failure of the program could affect JFCs supply chain. An issue that may arise is the reliability of the farmers to be
able to commit and deliver the required quota. Failure to meet the quota could result in supply shortages for the
company. To address this concern, JFC did not solely rely on farmers from a single area for a specific vegetable. The
Farmer Entrepreneurship program was rolled-out to different provinces, which enables JFC to source its fruits and
vegetables from different provinces in the countrysuch as Ilocos Sur (Garlic, White Onions), Pangasinan (Salad
tomatoes, White Onions, Bell Pepper), Tarlac (Calamansi), Nueva Ecija (White/Red Onions, Taiwan hot Pepper, Asstd
Vegetables), Quezon (Calamansi), Bukidnon (Assorted Vegetables), Agusan del Sur (Calamansi) and Davao Oriental
(Cacao).
References:
72
International Fund for Agricultural Development. (2009). Enabling poor rural people to overcome poverty in the
Philippines. http://www.ifad.org/operations/projects/regions/pi/factsheets/ph.pdf
JFC Website. (Nd). About Us. http://www.jollibee.com.ph/about-us
Jollibee Foundation. (2012). Annual Report 2012: Farmer Entrepreneurship Program http://www.jollibeefoundation.org/
images/AR/2012-jgf-ar-fep.pdf
People Powered Markets. (Nd). Bridging Farmers to the Jollibee Supply Chain. http://peoplepoweredmarkets.ph/media/
jollibee-case-study.pdf
Tiongson, G. (2012). Stabilizing Supply and Distribution & Capacity-building Local Business. Presentation during the 2012
Asian Forum on Corporate Social Responsibility in Bangkok, Thailand.
Victoria, R. (2011). Bridging Farmers to the Jollibee Value Chain Program. Presentation during the 2011 RBAP=MABS
National Roundtable Conference-Microfinance: Facing A New Paradigm. http://www.slideshare.net/MABSIV/bridgingfarmers-to-the-jollibee-value-chain-program
REferences
AIM-Ramon V. del Rosario, Sr. Center for Corporate Social Responsibility. Corporate Social Responsibility in Southeast
Asia: An Eight Country Analysis. Asian Institute of Management: Makati City, August 2011.
Asia-Pacific Economic Cooperation. CSR in Mining for APEC Economies. Prepared by AIM-Ramon V. del Rosario, Sr. Center
for Corporate Social Responsibility. APEC: Philippines, May 2011.
Global Reporting Initiative. GRI and ISO 26000: How to use the GRI Guidelines in conjunction with ISO 26000 <http://
www.globalreporting.org/NR/rdonlyres/E5A54FE2-A056-4EF9-BC1C-32B77F40ED34/0/ISOGRIReport_FINAL.pdf>
(20
September 20, 2011).
GRI Website. GRI G3 and G3.1 Update Comparison Sheet. <http://www.globalreporting.org/NR/rdonlyres/D356E15F951F-42BC-8AB7-4A63621BC0DE/0/G31_ComparisonSheet.pdf> (20 September 2011)
GRI. GRI 3.1 Guidelines including Technical Protocol (2010-2011). <http://www.globalreporting.org/NR/
rdonlyres/7DB67FFF-81EE-402F-A218-36940C883DD5/0/G31GuidelinesinclTechnicalProtocolFinal.pdf> (03 September
2011).
Herrera, Maria Elena. DNA for Responsibility, Manila Standard, 19 May.
Herrera, Maria Elena. Embedding Responsibility, Manila Standard, 26 May.
Herrera, Maria Elena. Responsible Business, Manila Standard, 29 April.
Herrera, Maria Elena. Responsible Business: Influences and Evolution, Manila Standard, 03 June.
Herrera, Maria Elena. Some Approaches to Developing Useful CSR Metrics. AIM: Journal of Asian Management, Volume
1. Issue 1 (2009).
Herrera, Maya and Jilla S. Decena. Measuring CSR Performance. In the book Doing Good in Business Matters: CSR in the
Philippines (Volume 1: Frameworks). Asian Institute of Management and De la Salle Professional Schools: Makati, 2007.
Herrera, Maya Elena. CSR and Value Creation. In the book Doing Good in Business Matters: CSR in the Philippines (Volume
1: Frameworks). Asian Institute of Management and De La Salle Professional Schools: Makati, 2007.
ISO Website. ISO 26000 Social Responsibility: Discovering ISO 26000. <http://www.iso.org/iso/iso_catalogue/
management_and_leadership_standards/social_responsibility/sr_discovering_iso26000.htm#std-table2> (19 September
2011).
ISO. Discovering ISO 26000. <http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards/social_
responsibility/sr_discovering_iso26000.htm > (03 September 2011).
Malaysian Association of Standard Users. Training Module: ISO 26000 Made Easy. Malayan Association of Standard
Users: Malaysia, 2010.
Sheldon, Ben. Strengthening Organizations through Community Engagement. 16 November 2008 <http://www.island94.
org/2008/11/strengthening-organizations-through-community-engagement/> (01 September 2011).
The frameworks used in this CSR Manual are adapted from the article of Prof. Maria Elena Herrera entitled, CSR and
Value Creation in the book Doing Good in Business Matters: CSR in the Philippines (Volume 1: Frameworks) published
by AIM and DLSPS, 2007.
AIM - RV R C SR C ente r, 2 0 1 3
73
74
APPendix 1
DEFINITION: The Global Reporting Initiative (GRI) is a network-based organization that produces a comprehensive
sustainability reporting framework that is widely used around the world. GRI is committed to the Frameworks
continuous improvement and application worldwide. GRIs core goals include the mainstreaming of disclosure
on environmental, social and governance performance. GRI's Reporting Framework is developed through a
consensus-seeking, multi-stakeholder process. Participants are drawn from global business, civil society, labor,
academic and professional institutions.
GRI REPORTING FRAMEWORK: The Reporting Framework sets out the principles and Performance Indicators that
organizations can use to measure and report their economic, environmental, and social performance.
BENEFITS OF GRI REPORTING: Sustainability reports based on the GRI Framework can be used to demonstrate
organizational commitment to sustainable development, to compare organizational performance over time, and
to measure organizational performance with respect to laws, norms, standards and voluntary initiatives. GRI
promotes a standardized approach to reporting to stimulate demand for sustainability information benefitting
both reporting organizations and report users.
GRI Reporting covers six areas, namely: economic, environmental, labor practices and decent work, human rights,
society, and product responsibility. GRI 3.1 includes reporting guidelines on Human Rights, Local Community
Impacts, and Gender.
DEFINITION OF THE CONCEPT
ECONOMIC. The economic dimension of sustainability concerns the
organizations impacts on the economic conditions of its stakeholders
and on economic systems at local, national, and global levels. The
Economic Indicators illustrate:
Flow of capital among different stakeholders; and
Main economic impacts of the organization throughout society.
ENVIRONMENTAL. The environmental dimension of sustainability
concerns an organizations impacts on living and non-living natural
systems, including ecosystems, land, air, and water. Environmental
Indicators cover performance related to inputs (e.g., material, energy,
water) and outputs (e.g., emissions, effluents, waste). In addition, they
cover performance related to biodiversity, environmental compliance,
and other relevant information such as environmental expenditure
and the impacts of products and services.
LABOR PRACTICES AND DECENT WORK. The specific aspects
under the category of Labor Practices are based on internationally
recognized universal standards, including: (a) UN Universal Declaration
of Human Rights; (b) UN Convention: International Covenant on Civil
and Political Rights; (c) UN: International Covenant on Economic,
Social, and Cultural Rights; (d) Convention on the Elimination of all
Forms of Discrimination against Women (CEDAW); (e) ILO Declaration
on Fundamental Principles and Rights at Work; and (f) The Vienna
Declaration and Programme of Action.
AIM - RV R C SR C ente r, 2 0 1 3
DISCLOSURE ON MANAGEMENT
APPROACH
Economic Performance;
Materials; Energy;
Water; Biodiversity;
and Emissions,
Effluents, and Waste
75
DISCLOSURE ON MANAGEMENT
APPROACH
HUMAN RIGHTS. There is growing global consensus that organizations have the responsibility to respect human rights. Human rights
Performance Indicators require organizations to report on the extent
to which processes have been implemented, on incidents of human
rights violations and on changes in the stakeholders ability to enjoy
and exercise their human rights, occurring during the reporting period.
Among the human rights issues included are nondiscrimination, gender equality, freedom of association, collective bargaining, child labor,
forced and compulsory labor, and indigenous rights.
Source: GRI. GRI 3.1 Guidelines including Technical Protocol (2010-2011). <http://www.globalreporting.org/NR/rdonlyres/7DB67FFF81EE-402F-A218-36940C883DD5/0/G31GuidelinesinclTechnicalProtocolFinal.pdf> (03 September 2011).
76
APPendix 2
WHAT IS ISO 26000? ISO 26000 is a set of guidelines on social responsibility. It is intended for use by organizations
of all types, in both public and private sectors, in developed and developing countries, as well as in economies in
transition. It will assist them in their efforts to operate in the socially responsible manner that society increasingly
demands of multilateral organizations.
Pressure to do so comes from customers, consumers, governments, associations and the public at large. At the same
time, far-sighted organizational leaders recognize that lasting success must be built on credible business practices and
the prevention of such activities as fraudulent accounting and labor exploitation.
ISO 26000 contains voluntary guidance, not requirements, and therefore is not for use as a certification standard like
ISO 9001:2008 and ISO 14001:2004 deal with Quality Management System and Environmental Management System
respectively.
ISOs expertise is in developing harmonized international agreements based on a double level of consensus among
the principal categories of stakeholders, and among countries (ISO is a network of the national standards bodies of
163 countries).
ISO 26000 will distill a globally relevant understanding of what social responsibility is and what organizations need to
do to operate in a socially responsible way.
WHY IS ISO 26000 IMPORTANT? Sustainable business for organizations means not only providing products and
services that satisfy the customer, and doing so without jeopardizing the environment, but also operating in a socially
responsible manner.
There are already a number of high-level declarations of principles related to SR and many individual SR programs
and initiatives among institutions worldwide. The challenge is how to put the principles into practice and how to
implement SR effectively and efficiently when even the understanding of what social responsibility means may vary
from one program to another. In addition, previous initiatives have tended to focus on corporate social responsibility,
while ISO 26000 will provide SR guidance not only for business organizations, but also for public sector organizations
of all types.
HOW WILL ISO 26000 HELP ORGANIZATIONS? ISO 26000 will help all types of organizations regardless of their size,
activity or location to operate in a socially responsible manner by providing guidance on:
AIM - RV R C SR C ente r, 2 0 1 3
77
ISSUES
HUMAN RIGHTS
Civil and political rights
Economic, social and cultural rights
- Due diligence
- Risk situations
- Avoidance of complicity
- Resolving grievances
- Discrimination of vulnerable groups
- Civil and political rights
-Economic, Social and cultural rights
- Fundamental principles and rights at work
LABOR PRACTICES
Encompasses all policies and
practices relating to work performed
within, by OR on behalf of the
organization
- Social Dialogue
- Health and safety at work
- Environment responsibility
- Precautionary approach
- Environmental risk management
- Polluter Pays
Prevention of pollution
ENVIRONMENT
Environmental matters at the
local, regional and global level and
are inter-connected. Addressing
them requires a comprehensive,
systematic and collective approach
from governments, society and
industry
CONSUMER
Issues that are mainly appropriate
for people who purchase for private
UN Guidelines for Consumer Protection
purposes. Parts of Fair Operating
(UNGCP)
Practices and Consumer are
applicable to private purchasing and
commercial purposes.
COMMUNITY INVOLVEMENT AND
DEVELOPMENT
Organizations have a relationship
with the communities in which they
operate. Community involvement
to enhance the public good helps to
strengthen the community.
78
APPendix 3
The social concerns covered by ISO 26000 on Social Responsibility are similar to those covered by Global Reporting
Initiative Guidelines because GRI was actively involved in the international multi-stakeholder ISO 26000 development
process. In a publication entitled, GRI and ISO 26000: How to use the GRI Guidelines in conjunction with ISO 26000,
GRI declares:
GRI supports the recognition this guidance gives to the positive contribution that businesses and other
organizations can make through improved practices, to ensure a sustainable future for all. As part of the
worlds most widely used sustainability reporting framework, created through an international multistakeholder, consensus-based process, GRI provides the most suitable guidelines to support organizations
interested in reporting on the topics covered by ISO 26000.*
We have provided a comparison of the social concern categories of both GRI and ISO 26000 below:
GRI
ISO 26000
REMARK
Virtually Identical
HUMAN RIGHTS. Investment and Procurement Practices; Non-discrimination; Freedom of Association and Collective Bargaining; Child Labor; Forced and Compulsory
Labor; Security Practices; Indigenous Rights
Virtually Identical
LABOR PRACTICES. Employment and employment relationships; Conditions of work and social protection; Social
dialogue; Health and safety at work; Human development and
training in the workplace
Virtually Identical
Very Similar
COMMUNITY INVOLVEMENT AND DEVELOPMENT.** Community involvement; Education and culture; Employment
creation and skills development; Technology development
and access; Wealth and income creation; Health; Social investment
FAIR OPERATING PRACTICES. Anti-corruption; Responsible
political involvement; Fair competition; Promoting social
responsibility in the value chain; Respect for property rights
SOCIETY.
Local Community;
Corruption; Public Policy; Anti-competitive
Behavior; Compliance
Source: GRI Website. GRI G3 and G3.1 Update Comparison Sheet. <http://www.globalreporting.org/NR/rdonlyres/D356E15F-951F-42BC-8AB74A63621BC0DE/0/G31_ComparisonSheet.pdf> (20 September 2011) and ISO Website. ISO 26000 Social Responsibility: Discovering ISO 26000. <http://
www.iso.org/iso/iso_catalogue/management_and_leadership_standards/social_responsibility/sr_discovering_iso26000.htm#std-table2> (19 September
2011).
* Global Reporting Initiative. GRI and ISO 26000: How to use the GRI Guidelines in conjunction with ISO 26000 <http://www.globalreporting.
org/NR/rdonlyres/E5A54FE2-A056-4EF9-BC1C-32B77F40ED34/0/ISOGRIReport_FINAL.pdf> (20 September 20, 2011).
AIM - RV R C SR C ente r, 2 0 1 3
79
APPendix 4
Engaged and Orderly Approach to Ensuring Sustainable Positive Impact and Mitigation of Negative Impact
Pre-Exploration
Exploration and
Feasibility
Operations
(includes Construction
and Extraction)
Decommissioning and
Rehabilitation
Operating Activities
Laying the
Foundation for
SLTO and
sustainability
across all
stages
Orderly exit,
Sustainable
positive impact,
Mitigated
negative impact,
Capacitated
communities
Regulatory Requirements
General CSR Efforts
Environment Specific
Social and Societal Specific
The Stages Approach to Sustainable Mining Framework presents an engaged and orderly approach for ensuring
sustainable positive impact and mitigating negative impact. In order for this plan to be successful, a full plan must
be available for all the stages of mining as part of the activities for pre-exploration and feasibility. CSR activities
must be attended to through all of the different mining phases, much in the same way as operating and compliance
activities are attended to. As the particular environmental and social impact and concerns change across the
different mining stages, the CSR activities must also change in order to address changing situation and needs. The
pre-exploration stage is the starting point for companies and the goal is to lay the foundation for attaining and
maintaining social license to operate (SLTO) as well as to working towards sustainability across all stages. The end
goal is for an orderly exit, sustaining positive impact beyond mine closure, mitigating negative impact for the long
term, and capacitating communities to take over post mining closure. The post-rehabilitation plan must include
environmental rehabilitation, a new land use program and a clear continuing economic and development model for
the communities and governments who will lose access to economic benefits from mining operations.
This framework can be used by the mining sector to identify key CSR activities for each stage of mining. The key at
each stage is to evaluate the impact (economic, environmental, social) of the activities in each stage of the project
and to determine how best to act not only for the current situation but also to prepare for the eventual closure of
the mine.
Source: Herrera, Alarilla et al. In process of publication. Contact AIM for citation details.
80
APPendix 5
The Bridging Leadership Framework illustrates a multi-stakeholder approach to addressing Social Concerns and
creating Social Value. The framework was created particularly to address social issues emanating from societal
divides. The framework shows the role of bridging leaders who work with stakeholders and other bridging leaders
in analyzing the situation and creating and implementing a solution that is co-developed and hence, co-owned. The
heart of this framework lies in the idea of co-ownership of a problem, which is the foundation for a shared vision and
collective action. The framework shows that this co-creation goes beyond stakeholder engagement to the creation of
new institutional arrangements, programs and services that become part of a new way of doing things.
This framework can be used by managers and leaders who work in complex social situations requiring multiple sectors
to work together towards a mutually desirable future.
CO-OWERSHIP
Engagement
Mechanism
Bridging
Leader
Societal
Inequality/
Divide and
Stakeholders
Personal
Vision and
Mission
Personal
Response
Multi-Stakeholder
Processes/Convening
and Trust-Building
Dialogue
New
Relationships
among
Stakeholders
CO-CREATION
Empowered
Citizenry
Shared
Vision and
Mission
Collaborative
Response
New
Institutional
Arrangements
Responsive
Programs and
Services/
Social
Innovations
Social
Equity
Transformed
Institutions
Source: AIM Team Energy Center for Bridging Societal Divides. The Bridging Leadership Framework. Retrieved from
http://www.bridgingleadership.aim.edu/about-us/our-framework.html
AIM - RV R C SR C ente r, 2 0 1 3
81
APPendix 6
Following is a description of a framework for understanding the environment of CSR. It is the result of research
conducted by the RVR Center for Corporate Social Responsibility on the state of CSR in Asia. The research covered the
following countries: China, India, Indonesia, Singapore, Malaysia, Philippines, Thailand, Vietnam, Laos and Cambodia.
The research was funded by the German Society for International Cooperation (GIZ) and Intel.
In the course of its research, the Center developed the Influences (Hexagon) Framework, which maps out the different
factors that affect the development and practice of CSR in a specific location. The framework takes into consideration
both formal and informal structures that could influence company operations. The framework describes three layers
or clusters of influence: Fundamental Influences, Institutional Dynamics and Business Landscape.
Basis of Economy
(Key Sector and
Industries)
(2) Institutional
Dynamics
Political
Structure
History
(1) Fundamental
Influences
Regulatory
Environment
Issues and
Concerns
Labor
Structure
(3) Business
Landscape
Company
Key Business
Concerns
Social
Structure
Stakeholder
Influence and
Concerns
Natural
Resources
Market
Structure
Corporate
Structure
Culture
The outermost layer of Fundamental Influences is least amenable to influence by any of the stakeholders.
Fundamental Influences include geography and geology, natural resources, history, and culture. These four factors
directly affect the dynamics of the country and its various institutions. Natural resources for example would affect
the type of industries that would be dominant in the economy. History and culture could the type of government
that the country would have (e.g. Islamic states such as Malaysia).
Geography and Geology: This refers to the geographical landscape and geological make-up of the
location. It may refer to the presence of bodies of water or types of land forms, as well as the physical
characteristics of the location or area. This help companies to understand the current situation as well as
anticipatesocial structure and even the potential impact of companys operation on the land and water
forms.
82
Natural Resources: This refers to the resources (or raw material) used in the manufacturing of products.
It can be classified into mineral, soil, water and biological resources. Since somenatural resources are
finite, companies need to consider the sustainable use these resources.
History : This refers to past events (in terms of political, economic, social, or cultural)and especially
how those have influenced citizens. Past events affect perceptions and behavior of members of the
community.
Culture, including religion: This refers to values and norms that affect people-to-people and peopleto-nature relationships. Culture varies depending on the type of stakeholders and location where the
company operates. Understanding culture can help companies understand local tradition and the
attitudes and mindsets of the local community.
The heart of this framework is the hexagon of Institutional Dynamics. These six factors are: basis of the economy,
social structure, political dynamics, market structure, labor dynamics and corporate structure.
Basis of Economy: This refers to the type of industries and major products manufactured in the area. For
example, the presence of mineral resources in an area can attract mining companies, while presence
of historical sites and beautiful beaches can promote the development of the tourism industry. The
predominant industries tend to affect local regulatory priorities as well as stakeholders attitudes
and concerns. Understanding the basis of the economy can help companies identify possible social,
economic and environmental threats and opportunities.
Social Structure: This refers to social behavior, roles of individuals, social class, and institutions that can
affect interaction among members of the society. This is generally affected by income gaps, poverty
ratio as well as educational level of individuals. It is heavily influenced by history and culture. Roles of
individuals may refer to the responsibilities of women, men, elderly and youth in society. Institutions
that can affect the social structure are schools, religious groups, cause-related organizations, media
and multilateral organizations. Understanding the social structure can help companies identify relevant
institutions that can be tapped as potential partners in its CSR efforts. It can also help assess existing
efforts of local groups or organizations to address societal concerns.
Political Dynamics: This refers to the governing and regulatory bodies as well as the interaction of
political actors and institutions. This also includes non-governmental actors and situations that can affect
government behavior. Understanding political dynamics can help companies understand regulatory
priorities and processes and identify key actors in the political-legal spheres.
Market Structure: This refers to the relationship of market actors (firms and consumers). This also
includes market activities, such as thepower and influence of buyers and consumers, customer
preference, level of competition and product differentiation, as well as ease of entry to and exit from
the market. Understanding the market structure can help companies assess how to fill in the needs of
the community in terms of products and services.
Labor Dynamics: This refers to formal and informal structures and institutions relating to employment,
workers rights and labor concerns. Labor issues may include the demand and supply of labor, presence
of unions, and wages. Understanding labor dynamics can help companies in developing labor and
employee engagement initiatives that can benefit both the company and the community.
Corporate Structure and Culture: This refers to the formal and informal structures and institutions that
affect the role and dynamics of corporations within general society. It includes predominant corporate
types (e.g. mostly state-owned or mostly small, family owned enterprises) and structures, the ease of
creating and exiting from business, the ease of doing business including the compliance burden, the
general availability of capital, and the general availability of supporting mechanisms for business. It
includes the general perceptions of the role of business in society, the existence of institutions that
promote interaction and cooperation between businesses and between business and other sectors, the
general state of corporate governance and the existence (or lack thereof) of mechanisms to promote
the creation and promotion of voluntary codes.
AIM - RV R C SR C ente r, 2 0 1 3
83
In the hexagon, the Business Landscape is the innermost layer. This cluster typically has the clearest and most direct
influence on companies. The four factors are: Key Social and Environmental Concerns and Initiatives, Regulatory
Environment, Stakeholder Influence, and Key Business Concerns and Initiatives.
Overall Social, Political and Environmental Concerns: This refers to the social, environmental and political
concerns in the area. Social concerns refer to the state of the area in relation to education, health,
employment, and livelihood concerns. Political concerns refer to the political and legal issues in the area.
Environmental concerns refer to environmental sustainability and protection issues.Understanding these
concerns can help the company identify the needs of the community, regulatory and government partners,
as well as regulatory guidelines and codes.
Regulatory Environment Issues and Concerns: This refers to the national and local laws, policies and
regulations in the area. Understanding the regulatory environment can help companies to determine
and adhere to the expected corporate behavior.Sometimes these are also regulatory matters specific to
industry (e.g. in extractives) or location (e.g. protection of rare species or required approval of indigenous
peoples).
Stakeholder Influence and Concerns: This refers to the power and capability of individuals or groups
to affect business operations as well as other groups in the society. Stakeholder concerns refer to both
expressed and underlying needs. Understanding the stakeholder can help companies determine their key
interests, capabilities, concerns, situation and resourceswhich are critical in developing stakeholder
engagement initiatives.
Key Business Concerns and Initiatives: This refers to corporate interests in relation to its business, society,
and regulatory concerns. Understanding the key business concerns and initiatives can help companies in
developing a CSR strategy that is aligned with business interests, social concerns and regulatory codes.
The Hexagon Frame may be used in analyzing the development of CSR in a country. It can also be used to analyze key
drivers of CSR and how specific stakeholders can assist or hinder the implementation of a companys CSR program.
Companies can use this to identify the major factors that shape the practice of CSR in the countries they operate in.
This is especially important for multi-national corporations that need to implement a global policy across different
locations.
84
APPendix 7
AIM - RV R C SR C ente r, 2 0 1 3
85
86