CORPORATE SOCIAL
RESPONSIBILITY
(6013B0525Y)
Lecture, Tutorial, and Book Notes
,Week 1, Lecture 1: Introduction to CSR and Sustainability
CSR and Sustainability
CSR → targets opinion formers → balancing stakeholder interests
Sustainability → holistic approach → considers social, environmental, and economic impacts
ESG → Reporting frameworks
Trends in CSR
Moving from → to…
Company Supply chain
● increasingly mandated by government
bodies/stock exchanges
● Drives adoption among large companies
(especially in sectors with large environmental
impacts - eg. mining, oil).
Environment Social impacts
Check the box Making an impact
Top down Bottom up
Nice to have Need to have
CSR CFO and CEO
Corporate Social Responsibility Hierarchy
Economic Responsibility: produce an acceptable return for investors
Legal Responsibility: act within the framework of laws and regulations drawn up by the government
and judiciary.
Ethical responsibility: to do no harm to stakeholders and within its operating environment
Discretionary responsibility: companies have proactive, strategic behaviors, that benefit
themselves/society
→ Business is assumed to voluntarily have this
→ Unilever, Tony Chocoloney, Patagonia
, Four Archetypes
The four archetypes describe how companies engage with sustainability based on their risk profile,
industry characteristics, and strategic priorities.
Traditional ● High (inherent) risk profile
● Limited sustainability initiatives
● Focus on compliance and using regulations to justify their license to operate
● Sustainability is a defensive tool, not a driver of growth
● Industries like tobacco/weapons
Key takeaway: they see sustainability as a necessary obligation, not as an opportunity
for innovation or competitive advantage
Communicative ● High compliance with ESG standards
● Capturing opportunities is difficult due to high costs
● Focus on risk reduction and compliance
● Industries like automotive industry, insurance
Key takeaway: they comply to sustainability norms and talk about efforts but face
challenges translating sustainability into business
Opportunistic ● Recognize sustainability but have uneven progress across their portfolio
● Creates situations of ‘sustainability schizophrenia’
● Industries like energy, renewables, diversified conglomerates
Key takeaway: try to embrace sustainability but struggle with inconsistencies and high
risk areas in their portfolio
Transformational ● Companies that embrace sustainability in a holistic fashion
● Sustainability programs closely ties to business operations
● They generate new opportunities
● Integrated sustainability into core activities
Key takeaway: companies use sustainability as a holistic strategy for business growth,
risk management, and industry leadership
Materiality Assessment
→ Helps identify and prioritize the sustainability issues that matter most to a business, and the
stakeholders
→ keeps businesses alert to stakeholder concerns and expectations, and issues with greatest risk and
opportunities for the business
Move first where it matters most
, Materiality Assessment Matrix
→ material aspects
X-axis: significance to business (potential impact)
Y-axis: significance to stakeholders (their motivation)
Six Steps Approach to Generate a Materiality Matrix (exam question)
1. Select and assess relevant stakeholders
2. Define a long list of sustainability topics (risks)
3. Rank the topics and create a short list
4. Rate the business impact in terms of risks and opportunities
5. Construct a concept of materiality matrix
6. Get sign off by senior management and document the process
RESPONSIBILITY
(6013B0525Y)
Lecture, Tutorial, and Book Notes
,Week 1, Lecture 1: Introduction to CSR and Sustainability
CSR and Sustainability
CSR → targets opinion formers → balancing stakeholder interests
Sustainability → holistic approach → considers social, environmental, and economic impacts
ESG → Reporting frameworks
Trends in CSR
Moving from → to…
Company Supply chain
● increasingly mandated by government
bodies/stock exchanges
● Drives adoption among large companies
(especially in sectors with large environmental
impacts - eg. mining, oil).
Environment Social impacts
Check the box Making an impact
Top down Bottom up
Nice to have Need to have
CSR CFO and CEO
Corporate Social Responsibility Hierarchy
Economic Responsibility: produce an acceptable return for investors
Legal Responsibility: act within the framework of laws and regulations drawn up by the government
and judiciary.
Ethical responsibility: to do no harm to stakeholders and within its operating environment
Discretionary responsibility: companies have proactive, strategic behaviors, that benefit
themselves/society
→ Business is assumed to voluntarily have this
→ Unilever, Tony Chocoloney, Patagonia
, Four Archetypes
The four archetypes describe how companies engage with sustainability based on their risk profile,
industry characteristics, and strategic priorities.
Traditional ● High (inherent) risk profile
● Limited sustainability initiatives
● Focus on compliance and using regulations to justify their license to operate
● Sustainability is a defensive tool, not a driver of growth
● Industries like tobacco/weapons
Key takeaway: they see sustainability as a necessary obligation, not as an opportunity
for innovation or competitive advantage
Communicative ● High compliance with ESG standards
● Capturing opportunities is difficult due to high costs
● Focus on risk reduction and compliance
● Industries like automotive industry, insurance
Key takeaway: they comply to sustainability norms and talk about efforts but face
challenges translating sustainability into business
Opportunistic ● Recognize sustainability but have uneven progress across their portfolio
● Creates situations of ‘sustainability schizophrenia’
● Industries like energy, renewables, diversified conglomerates
Key takeaway: try to embrace sustainability but struggle with inconsistencies and high
risk areas in their portfolio
Transformational ● Companies that embrace sustainability in a holistic fashion
● Sustainability programs closely ties to business operations
● They generate new opportunities
● Integrated sustainability into core activities
Key takeaway: companies use sustainability as a holistic strategy for business growth,
risk management, and industry leadership
Materiality Assessment
→ Helps identify and prioritize the sustainability issues that matter most to a business, and the
stakeholders
→ keeps businesses alert to stakeholder concerns and expectations, and issues with greatest risk and
opportunities for the business
Move first where it matters most
, Materiality Assessment Matrix
→ material aspects
X-axis: significance to business (potential impact)
Y-axis: significance to stakeholders (their motivation)
Six Steps Approach to Generate a Materiality Matrix (exam question)
1. Select and assess relevant stakeholders
2. Define a long list of sustainability topics (risks)
3. Rank the topics and create a short list
4. Rate the business impact in terms of risks and opportunities
5. Construct a concept of materiality matrix
6. Get sign off by senior management and document the process
