Kreutzer Flashcards
Corporate Social Responsibility (CSR)
refers to businesses bearing a responsibility to society and a broader set of stakeholders, companies integrate social and environmental concerns in their business operations and interactions
Pyramid of CSR (from top to bottom)
Be a good corporate citizen
Be ethical
Obey the law
Be profitable
Social Washing
Promote oneself as more socially responsible than one actually is
Shareholder vs Stakeholder Value
Shareholder perspective
The company has no social responsibility to the public or society, only to shareholders
Stakeholder perspective
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4 Steps to measure and manage impact
1) Set Strategy 2) Integrate Strategy 3) Optimize 4) Reinforce
1) Set Strategy
define target SDG outcomes in a way that align with overall objectives, Set ABC classification labels for the goals
2) Integrate
Assemble ressources, tools & processes, set performance targets, choose indicators and decide how to track them
3) Optimize
collect data & make decisions based on analysis of data, make further improvement decisions
4) Reinforce
Shape process & deepen governance, disclose impact measurement and management performance
Five Dimensions of Impact
1) What are the outcomes of the investment? 2) Who experiences the outcome 3) How much of the what outcome is actually occurring? 4) Contribution on enterprise/ investor level 5) Risk: How could the outcome turn worse than expected?
1) What are the outcomes of the investment?
Q: What specific outcomes do we expect?; Is it a positive or negative change?
2) Who experiences the outcome?
Group of people or entire planet
Define key characteristics of the group (PERSONA)
Q: How underserved is this population?
3) How much of the what outcome is actually occurring?
Show that measurable change happens due to the investment
Q: Scale? Duration? Depth (Degree of Change)?
4) Contribution on Enterprise/ Investor Level
Q: What do we add with our investments?
Developments happen only because of the investment or would they happen anyway?
5) Risk: How could the outcome turn worse than expected?
Investors often think about financial risk only BUT they should also add “impact risks” (social or environmental goals)
Risk types
1) Evidence Risk 2) External Risk 3) Stakeholder participation risk 4) Drop-off risk 5) Efficiency Risk 6) Execution Risk 7) Alignment risk 8) Endurance risk 9) Unexpected Impact Risk
1) Evidence Risk
probability that insufficient high-quality data exists to know what impact is occurring
2) External Risk
probability that external factors disrupt our ability to deliver our impact
3) Stakeholder participation risk
probability that the expectations and/ or experience of stakeholders are misunderstood or not taken into account
4) Drop-off risk
probability that the positive impact does not endure and/or that negative impact is no longer mitigated
5) Efficiency risk
probability that impact could have been achieved with fewer resources or at a lower cost
6) Execution Risk
probability that the resources are not delivered as planned and do not result in desired outcomes
7) Alignment Risk
probability that impact is not locked into business model
8) Endurance risk
probability that required activities are not delivered for a long enough period
9) unexpected impact risk
probability that significant unexpected positive and/ or negative impacts are experience by people and planet
- Set SDG Strategy
Five Step Process
1) Define Purpose 2) Identify SDG outcomes 3) Prioritize SDG outcomes 4) Set ABC-Goals 5) Define impact Thesis
1) Define Purpose
What is enterprise purpose and key strategic objectives? -> Align SDG objectives with business objectives
- ground impact strategy in mission and business objectives
- create mission statement with stakeholders to understand how key stakeholders articulate goals and values of enterprise
- time frame: short/ long-term goals
2) Identify SDG outcomes
What sustainable development issues are most relevant to stakeholders?
- SDG outome: define WHAT (->Value Chain (raw materials, suppliers, inbound logistics, company operations, distribution, product use, product end life) analysis - who is enterprise impacting and in what way?) and the WHO (-> Definition of Stakeholders: people or organizations that experience change as a result of your activity), Directly or Indirectly affected with intended or unintended consequences
3) Prioritize SDG outcomes
Which SDG outcomes are priorities for enterprises?
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4) Set ABC-Goals
What ABC goals are targeted for each SDG outcome?
A - Act to avoid harm
B - Benefit stakeholders
C - Contribute to solutions
Step ABC goals
Definition of threshold: societal norm or ecological level deemed “good enough” by stakeholders
Treshoold can be designed by stakeholders, polity, industrial standard or by SDGs
5) Define Impact Thesis
What is your theory of change to achieve each SDG outcome?
Theory of Change model: Ergänzen
- Integrate
Consists of 3 Steps: 1) Develop mindset 2) Decide what to measure 3) Get process in place
1) Develop mindset
developing data for decision making mindset - what/ who combination connected to a what/ if theory of change
-> focus on collecting data
-> on what will be actively managed and measure and be able to make trade-offs
> align incentives and processes for success
Five Principles of Data for decision-making mindset
1) Align impact measurements with actionable decisions
2) Align data quality to decision importance
3) Consider trade-offs to get “good-enough” data (Quality, Credibility, Timeliness, Consequences)
4) Start with imperfection and get better (Data risks - Quality, Gasps, Unexpected Outcomes)
5) Strive to collect data across more of the five dimensions over time to improve analysis
2) Decide what to measure
Select metrics across the five dimensions of impact and set baselines and targets
1. What - Outcome Level, Importance to Stakeholder, SDG Target
2. Who - Stakeholder, Geogr. Boundary, Outcomelevel at baseline
3. How much - Scale, Depth, Duration
4. Contribution - Depth counterfactual, Duration counterfactual
5. Risk - Risk type, risk level
3) Get process in place
put financial and Human Resources in place for strong impact management practice
Checklist for integration: Create data collection plan (Qualitative vs Quantitative, Survey vs Interview, Free from bias)
Put in additional training if needed, put incorporate impact measurement responsibilities into job descriptions
- Optimize
Optimize SDG impact through active management
- monitor and analyze SDG impact data making/ performance decisions (meet? exceed? fallen short?)
Why did It happen? Learning from underperformance celebrating overperformance
What next? Optimize SDG impact through new decisions and actions, adjust future targets, align resources
- Reinforce
Embed SDG commitments into governance practices and internal reporting
- SDG commitment integrated at board level
- how have sustainable development issues influenced overall strategy?
- align internal operations, inventive and resources
- disclose to key external stakeholders how to measure and manage impact
- how to create long-term value for the organization and society?
- work with independent 3rd party to verify impact reporting -> create additional layer of confidence in what to report
- Making it real through CEO commitment and annual letter, board composition and commitment, business model alignment, etc.
3 Sector - Model of Society
Social enterprises at the interface between market and civil society
social Enterprise is a spectrum, not only black and white
social business model canvas
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