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The State of CSR in Australia and New Zealand

ANNUAL REVIEW2012/2013

SPECIAL FOCUS: LEADERSHIP IN CSR

In collaboration with

[ 2 ] THE STATE OF CSR IN AUSTRALIA AND NEW ZEALAND ANNUAL REVIEW 2012/2013

Welcome to the State of CSR in Australia and New Zealand Annual Review 2012/2013. Our Annual Review is based on survey research and has been running since 2007. Each year, we have examined the issues that are important to improving practice in CSR. This forms part of our commitment to creating and sharing knowledge that helps firms and their stakeholders achieve sustainable relation-ships and supporting the professionalisation of the CSR management function. One of our core competencies is the practical application of theory, or praxis. Another is robust, empirical research. The State of CSR in Australia Annual Review allows us to combine both core competencies in a project that contributes to our social purpose.

Topics we have examined over the years include CSR workers’ job satisfaction and remuneration, the business outcomes of CSR, CSR management capabilities in organisations, and innovation in CSR. This year, we turn the spotlight on leadership and CSR.

Corporate scandals and the global financial crisis have highlighted irresponsible leadership in the last few years. But there are other important questions about leadership and CSR, such as what are the attributes of responsible leadership? What is the effect of leadership on CSR performance? What kinds of leaders will support and drive CSR in their organisations?

As with all big questions at ACCSR, we began by consulting the scholarly research. There are big bodies of research on CSR and on leadership, but comparatively little that looks at their intersection.

One of the most useful contributions comes from a special issue of the Journal of Leadership, Accountability and Ethics (8/4, 2011)1. The introduction to the special issue reviews the major leadership theories and how they influence CSR in empirical research. The results are tantalising.

Some of the areas for future research highlighted include the role of integrity in leadership as it pertains to CSR, whether good CSR leadership is simply good leadership, and the role of participa-tive leadership in CSR. ‘Praxis points’ throughout this report offer insights from scholarship relevant to our results.

While our report cannot definitively answer these questions, we hope that our results will stimulate further discussion among our peers and a greater focus on leadership for CSR.

We are delighted this year to extend our State of CSR Annual Review to New Zealand, in partnership with Wright Communica-tions. Our results show some interesting differences between CSR in Australia and New Zealand that will be of particular interest to organisations operating on both sides of the Tasman.

© 2013 Australian Centre for Corporate Social Responsibility. All rights reserved.

WELCOME

I would like to thank the team that worked on the State of CSR in Australia Annual Review 2012/2013, led by ACCSR’s Senior Consultant Colette Einfeld, and including Senior Consultant Rick Lambell, and Consultants Soraya Dean and Miguel Oyarbide. They have produced a thorough and thought-provoking analysis, and dis-played inspiring initiative, passion and commitment to this work.

I would also like to thank those who completed the survey for the State of CSR Annual Review, on which this report is based.

Please share your comments and questions about this work with us at ACCSR by emailing [email protected] or by posting comments to our LinkedIn page, CSRConnected.

Dr Leeora D Black

MANAGING DIRECTORAustralian Centre for Corporate Social Responsibility

February 2013

1 Strand, Robert (2011) Exploring the Role of Leadership in Corporate Social Responsibility: A Review. Journal of Leadership, Accountability and Ethics, 8 (4), 84-96.

CONTENTS

Welcome 2

Snapshot 3

Foreword 4

The CSR Leaders 5

How Companies Show CSR Leadership 7

Challenges for the Year Ahead 8

Tactics that Work 12

CSR in New Zealand 14

About ACCSR 16

Method and Respondents 16

[ 3 ]THE STATE OF CSR IN AUSTRALIA AND NEW ZEALAND ANNUAL REVIEW 2012/2013

NEIGHBOURS HAVE DIFFERENT

PRIORITIESTOP PRIORITY:Reducing or eliminating any negative

environmental impacts of our businessSINGLE GREATEST OBSTACLE:

Time constraints

TOP PRIORITY:Building internal understanding/support for our CSR/sustainability approachSINGLE GREATEST OBSTACLE:Lack of organisational buy-in/ commitment to CSR

DIFFERENT ENVIRONMENTS, DIFFERENT IDEAS?

WHAT MAKES RESPONSIBLE LEADERSHIP?

“WHEN IT’S ABOUT OTHER COMPANIES...” Demonstrate and integrate CSR

“WHEN IT’S ABOUT OUR COMPANY...” Philanthropy and Community Investment

VERY DIFFERENT VIEWS ON

LEADERSHIP

SNAPSHOT: THE STATE OF CSR 2012/2013SINCE 2007 ACCSR HAS EXAMINED THE ISSUES THAT ARE IMPORTANT TO IMPROVING PRACTICE IN CSR. THIS YEAR, WE TURNED THE SPOTLIGHT ON LEADERSHIP AND CSR - AND ASKED 160 PROFESSIONALS IN AUSTRALIA AND NEW ZEALAND WHAT THEY THINK.

WHAT IS THE GREATEST SINGLE OBSTACLE TO SUCCESS IN CSR?

BUY-IN IS STILL A

CHALLENGELack of organisational buy-in/commitment to CSR

Lack of financial resourcesTime constraints

Difficulties in evaluating and measuring CSRLack of non-financial resources

Short-term focus/risk-aversion

23%16%15%12%9%8%

Introducing CSR Champions

Identifying organisational

performance indicators and measurable targets

WHICH CSR TACTICS WORK BEST?

UNTAPPED POTENTIAL


Foreword by Professor David Allen Dean, School of Business, University of Surrey, UK

The State of CSR in Australia Annual Review 2012/2013 clearly demonstrates that CSR has come of age in Australia and New Zea-land. CSR has matured.

Organisations now understand that CSR must be consistent and long-term and can’t depend on just one or two committed top man-agers. Respondents know what CSR is, they know what needs to be done to build and sustain CSR programs, and they recognise the challenges. In 2012/2013, leadership is required more than ever.

In preparing this commentary, I looked at the reports starting from 2008. I was struck by one special attribute of the annual ACCSR survey and report. Each year, there is a theme and commentary on the major issues and challenges, and a dialogue between the survey and the respondents.

In 2008, enthusiasm was the byword. There was a passion to define CSR, describe how companies in Australia are getting on with the business of CSR, and the conviction that CSR was making all of us better. In 2009, the report confronted the global financial crisis and the cutbacks in CSR funding, and the commitment of CSR pro-fessionals to sustain what had been achieved.

Remarkably, by 2010/2011, the report returns to celebrating the achievements of CSR and exemplary firms are recognised. And only one year later, in 2011/2012, the report focuses on the innovation challenge and how CSR can create value for the firm as the firm cre-ates value for society.

The 2011/2012 theme resonates with my work. In Corporate Social Strategy (Cambridge University Press: 2010), my co-author Bryan Husted and I set out to help firms understand how and when to manage social action programs for competitive advantage. We recognised, as did 2011/2012 respondents, that each firm has its own CSR agenda, and that value creation through CSR is right for some firms, while for others traditional philanthropic CSR is best.

Which brings us to the 2012/2013 report. You, the respondents, clearly know what CSR is, what it takes to get it done, and you cor-rectly identify leadership and organisational commitment as the key to success.

It is clear that we have come a long way, and yet when you read the report you might get the impression that nothing has changed: “Almost every year the challenge of building internal understanding and support for CSR has remained the highest priority.”

That impression would be wrong, I believe. “Building internal understanding and support for CSR” means something very differ-ent today from what it did in 2008. In 2008, we still had to explain why CSR mattered, the upside and the risks. The managerial systems and measures that we take for granted half a decade later were still being worked out.

LEADERSHIP IS REQUIRED NOW, MORE THAN EVER

In 2013, support means convincing everyone that our CSR strat-egy is a winning strategy. We don’t have to explain what CSR is. CSR leaders must put forward a social action program that is com-petitively superior to what other firms have. We are being asked the same questions business unit managers have to answer. This explains why communicating CSR strategy is rated so highly. We are expected to achieve the reputation benefits and the internal staff commitment benefits that are the hallmarks of a successful CSR program. It also explains why there were so many respondents who couldn’t think of anything special the firm had done. No matter what the corporate activity, it is hard work to do something outstanding.

CSR has come of age. CSR has made it to the corporate board-room. The CSR leadership opportunity is there for us.

Professor David Allen

PRAXIS POINT

Visionary LeadershipAcademic research shows that visionary leadership by the CEO helps embed CSR values in managerial decision making, but consistency matters too.(Strand, 2011)


Leadership can have a transformational impact on how an organi-sation performs and navigates its economic, social and environmen-tal responsibilities. Anecdotally, we often hear that senior leaders’ support for CSR is critical to its success. But what does leadership look like in our field? What makes a company stand out as a leader in corporate responsibility and sustainability? How do our peers view leadership in CSR? These are among the questions this report seeks to answer.

Our annual survey of the State of CSR in Australia was completed by 160 people working in corporate responsibility and sustainabil-ity in Australia and New Zealand (see Method and Respondents, back cover).

Respondents were asked which companies they considered to be CSR leaders and the activities that set them apart from the pack. Well-known companies with reputations for strong CSR performance were named (see Table 1).

ANZ Patagonia

Interface Rio Tinto

Marks & Spencer Stockland

National Australia Bank Unilever

Nike Westpac

TABLE 1: Organisations nominated as top CSR leaders

What Makes a Company a CSR leader?When asked why these companies were considered leaders, the top

reason (24% of responses) was that they integrated CSR with core business activities and strategies. This included making sustainability part of the business proposition and integrating it with products and services; having strongly embedded sustainability practices in opera-tions and walking the talk – living and promoting CSR values.

Communication of CSR performance was the second reason com-panies were considered to be leaders (19%). Responses related to companies using public relations and advertising to promote their efforts, regular updates on their progress and having a willingness to share their own story. Good performance aside, it is notable that CSR professionals deemed the act of promoting CSR values, activities and commitments a sign of leadership, rather than the proven achieve-ment of these initiatives.

The third reason was setting goals and targets (15%). Compa-nies that demonstrated leadership set clearly defined targets and budgets, aligned their plans and activities and measured their CSR progress.

THE CSR LEADERS

IN YOUR WORDS COMPANIES ARE CSR LEADERS BECAUSE...

“Corporate responsibility is at the heart of their business; they have a business case, CSR delivers business value and employee engagement, which drives productivity.”

“They have a clear vision of the value of CSR, cou-pled with aligned targets, plan and activities. There is a clear demonstration of delivered value. They can be seen to take CSR seriously and adapt the business direction where required. They do not forget about CSR when making the difficult decisions.”

FIGURE 1: Attributes of companies displaying CSR leadership

PRAXIS POINT

Integrating CSRA case study of one of the world’s longest-standing leaders in corporate responsibility, Novo Nordisk, shows how a consistent and coherent management framework integrates sustainability3. The Novo Nordisk Way of Management contains its vision, values, commitments and three core methodologies:• Facilitation (internal audit and advisory teams)• Sustainability reporting, and • Balanced scorecard with 24 objectives, each

‘owned’ by one of the five executive areas.

3 Morsing, Mette & Oswald, Dennis (2009). Sustainable leadership: management control systems and organizational culture in Novo Nordisk A/S. Corporate Governance 9 (1) pp. 63-99.

0% 5% 10% 15% 20% 25%

24

19

15

12

11

10

10Allocate resources

Pay attention to stakeholders

Leadership committed to CSR

Transparency and reporting

Set goals and targets

Communicate CSR performance

Integrate CSR with core business

Percentage of respondents


NRMA Insurance and the State Emergency Services developed an innovative partnership that addresses material risks for both organisations.

LEADERSHIP

Building partnerships is a critical element of NRMA Insurance’s approach to managing risk and making communities safer.

NRMA Insurance’s community investment strategy includes ini-tiatives, programs and partnerships that promote safety and resil-ience at home, in business and on the road.

One of NRMA Insurance’s key strategic partnerships is with State Emergency Services (SES) in New South Wales, the ACT and Queensland and is aimed at reducing the impact of severe weather events on the community and decreasing preventable SES callouts and insurance claims.

NRMA Insurance employees and SES volunteers work together on community education and awareness initiatives to help resi-dents and communities better prepare for storms, including public information events, social marketing campaigns and the provision of a range of online resources and safety tips.

NRMA Insurance also provides support to build the capacity of the SES agencies to respond to the impact of storms and engage with local communities. This includes the provision of local unit grants for operational and community engagement equipment,

and sharing claims-related data to enable more targeted aware-ness campaigns. Equally, sharing SES callout response data is enhancing NRMA Insurance’s planning and strategy.

Understanding each other’s needs and knowledge sharing has been a key to the success of the partnership, says NRMA Insurance Community and Sustainability Specialist, Lee McDougall.

“Taking the time to really understand each other’s business in the formative stages of the partnership has been critical in build-ing trust. We hold regular meetings between relevant stakehold-ers at all levels of our organisations and have developed a shared framework to ensure both parties are achieving benefits from the program.”

The partnership is working to identify further opportunities to encourage communities to take safety prevention measures, as well as looking at ways to quantify and measure the social impact and organisational benefits of the initiatives.

NRMA Insurance operates in NSW, the ACT, Queensland and Tasmania as part of Insurance Australia Group (IAG).

CASE STUDY: Strategic Partnering at NRMA Insurance

As one of the first government agencies in Australia to adopt GRI, Main Roads Western Australia has taken a leadership position on sustainability reporting in the public sector.

LEADERSHIP

Main Roads is responsible for the operation and maintenance of Western Australia’s highways and main roads, and is one of the largest geographically spread road agencies in the world, cover-ing 2.5 million square kilometres.

Its sustainability reporting journey began in 2009. After devel-oping a sustainability policy, Main Roads integrated its annual report with the Global Reporting Initiative (GRI) framework as a way to further embed sustainability in the organisation and to demonstrate continuous improvement.

The organisation uses the GRI guidelines as a strategic man-agement tool. It provides a framework to benchmark sustain-ability performance, identify gaps, and drive business planning and strategy. The framework complements other diagnostic tools used by the organisation to measure and manage sustainability

performance including the recently launched AGIC Infrastructure Sustainability (IS) rating scheme.

Main Roads has received a number of rewards and recognition for its commitment to sustainability reporting and accountability.

During its first year of GRI reporting in 2009, the agency was awarded the prestigious WS Lonnie Memorial Trophy by the Western Australia Institute of Public Administration (IPAA) for the state’s best annual report. In awarding the prize, the judges com-mented that Main Roads had taken a ‘bold step forward’ in public accountability in the WA public sector.

In 2011, Main Roads became the first Australian Public Sector agency to attain both third-party and GRI-checked ‘B-level’, an achievement the organisation repeated in its 2012 Annual Report.

CASE STUDY: Public Agency Reporting at Main Roads Western Australia


Reflecting on their own organisations, respondents were asked to share their experience of a time when their company displayed CSR leadership.

Community InvestmentThe most-cited examples of CSR leadership related to community

investment, volunteering and philanthropy (26%). This invokes a more traditional understanding of CSR, focused on corporate giving and an allocated discretionary spend. Despite the evolution of CSR in Australia over time, it seems that corporate/community investment remains the most common way to demonstrate leadership.

“[We demonstrated leadership through] continuing to invest in long-term partnerships with nominated charities/not-for-profits; discounted services to families in fire or flood stricken areas; company-directed volunteer days and workplace giving initiatives.”

CSR StrategyThe second highest response (22%) related to the development

of a flagship sustainability initiative or an ongoing major strategy. Examples of internal programs included the development of regional strategies, action plans, overarching CSR strategies and supporting governance structures.

“Setting a bold public strategy (for the time), four years ago, with public targets, just as the world was heading into the GFC. Then delivering the strategy and meeting eight of ten targets, while exceeding most of them. Finally, going on to develop a more ambitious strategy in order to continue leading the agenda.”

Setting TargetsSetting targets and commitments was regarded as an impor-

tant way of demonstrating sustainability leadership (12%). It was often related to environmental, such as goals for carbon neutrality, renewable energy and waste management, zero-harm environmen-tal impact, adopting sustainability standards and setting targets for emission reductions for customers.

Us and ThemRespondents had very different views on leadership in CSR when

considering their own organisations, compared to others. When oth-ers have displayed leadership it has been recognised because of strategic CSR activities like embedding CSR practices into how a company is organised and run or setting bold targets and goals.

However, when respondents’ own organisations have displayed leadership in CSR, it was through corporate philanthropy, volunteer-ing or the development of a particular program. We can speculate about the reasons for this discrepancy.

Perhaps we are seeing an example of “the grass is greener on the other side”, with respondents believing others’ positive CSR commu-nications. This may also be related to a respondent’s closer under-standing of their organisation’s challenges and barriers, while the challenges of others are often less visible.

Defining CSR LeadershipWe were also interested in the type of language used to define

leadership in respondents’ own organisations. The words used included ‘support’, ‘strong’, ‘first’, ‘public’, ‘award’, ‘ongoing’ and ‘new’. This language is more pragmatic and action-based, reflecting a more grounded understanding of leadership. This is in contrast to more aspirational or values-based language, such as trailblazing or pioneering, which may be more commonly associated with leader-ship and reflective of more bold and ambitious goals.

On Not Being a LeaderNotably, the third highest ranked answer to the question, ‘can you

describe a time when you believe your company displayed CSR lead-ership?’ was that the respondent’s organisation had no such instances of leadership (14%). This is interesting, given that the survey partici-pants were arguably the more engaged CSR professionals working in Australia and New Zealand. If the more engaged and committed members of the CSR workforce are not able to cite an example of their own company displaying leadership, perhaps many organisa-tions are shying away from the responsible leadership challenge.

REASONS FOR NOT DISPLAYING CSR LEADERSHIP:

“[My organisation] took a leadership position in the sustainability space early on, however this leadership is no longer with the organisation and so it is no longer a top priority.”

“We are always in the second row and fear standing out.”

“No – my company has clearly decided that it will not be a leader in CSR.”

HOW COMPANIES SHOW CSR LEADERSHIP


Organisational Buy-In Remains an Ongoing ChallengeSince 2008, we have asked respondents about their priority issues

for the year ahead. Asking this provides a reflection on new and emerging issues and challenges, and also allows us to track those which have changed in priority.

As seen in Figure 2, ‘Building internal understanding and support for our CSR/sustainability approach’ was rated as the highest prior-ity; nearly two thirds of survey respondents (65%) rated it as high or very high.

Almost every year the challenge of building internal understanding and support for CSR has remained the highest priority.

The second highest priorities (59%) were managing regulatory impacts and measuring/quantifying impacts and outcomes of CSR initiatives, which was a new question in this year’s research. Manag-ing regulatory impacts fell compared to last year, potentially because the carbon pricing scheme management is now becoming business as usual, and has declined in priority. Measuring CSR activities was highly correlated with building internal understanding and support (r = .672 p < .001), which suggests that practitioners are increas-ingly grappling with the challenges of capturing the value (monetary or otherwise) of CSR.

CHALLENGES FOR THE YEAR AHEAD

Human Rights and CorruptionDespite some recent much-publicised incidents relating to human

rights and corruption (think allegations of child labour in the supply chain of Sherrin footballs and the bribe allegations against the Reserve Bank company, Securency), addressing human rights issues and work-ing to combat business corruption remained low priorities (27% and 17%). This is a slight drop in priority compared to last year.

These priorities were highly correlated, suggesting that the organi-sations that are addressing one area are more likely to also address the other.

The Biggest Challenge in CSREach year, we ask respondents about the challenges they face

working in CSR (see Figure 3). The 2012 results are notable for the reported increase in all types of obstacles listed. This is possibly due to the general softening in market conditions in the second half of 2012 when this data was collected, with reduced budgets for CSR. Our respondent base also contains strong representation from pro-fessional services and mining, two industries that reported slowing conditions at this time.

Where There’s a Will, There’s a WayThe single greatest challenge to CSR success remains unchanged

since 2010: lack of organisational buy-in and commitment to CSR (see Figure 4). The results reveal two baskets of problems faced by CSR practitioners.

We then created two new variables for analysis: the ‘resources problem’ and the ‘strategy problem’. While our analysis cannot pro-vide a definite cause-and-effect explanation, only the strategy prob-lem was significantly and positively correlated with lack of organisa-tional commitment (r = .578, p < .001).

It seems that having the know-how to build a business case or suggest logical links between CSR and the business strategy is much more important to success in CSR than having more money or time. In other words, addressing the business case and strategy problem is more likely to improve organisational support for CSR than a simple increase in resources. FIGURE 2: Top CSR priorities for the year ahead

2012 High Priority 2012 Very High Priority

2011 High Priority 2011 Very High Priority


0% 20% 40% 60% 80%

28

26

24

23

13

14

13

8

15

13

16

9

7

6

37

33

35

29

29

28

26

31

21

23

14

20

20

11

25

31

23

18

18

12

17

24

12

12

8

33

36

37

30

30

31

29

27

21

18

15Working to combat business corruption

Addressing human rights within our sphere of in�uence

Working to address labour relations issues

Addressing the impact of the carbon pricing scheme

Managing the implications of technology (eg. data security, privacy)

Managing the impact of climate change in our organisation

Improving supply chain policies or practices

Waste reduction and recycling initiatives

Developing new products or services with environmentally responsible attributes

Improving or beginning our organisation's sustainability reporting

Reducing or eliminating any negative environmental impacts of our business

Measuring/quantifying impacts and outcomes of CSR initiatives

Managing regulatory impacts

Building internal understanding/support for our CSR/sustainability approach


0% 10% 20% 30% 40% 50% 60% 70%

48

39

31

36

25

29

30

20

15

46

40

31

43

25

36

27

24

17

61

52

46

44

42

39

37

27

25Di�culties integrating CSR with

organisational values and practices

Lack of clear government regulations concerning CSR

Di�culties making the 'business case' for CSR

Lack of non �nancial resources

Managing the impact of short-term focus/risk aversion

Di�culties in evaluating and measuring CSR actions/outcomes/performance

Lack of organisational buy-in/commitment to CSR

Lack of �nancial resources

Time constraints

FIGURE 4: Single biggest obstacle to CSR in 2012

FIGURE 3: Comparison over time of changes in obstacles to CSR

2012

2011

2010

LACK OF ORGANISATIONAL BUY-IN/COMMITMENT TO CSR

•Senior management buy-in is a key problem•CSR is not seen as core to the business’

profitability.

“It is not ingrained into our business because it is not seen by executive and management as greatly contributing to the bottom line despite evidence that it can.”

“The people who care are too low down in the hierarchy to push projects through.”

“In an environment where budgets are tight, priority is given to those initiatives which assist the bottom line, not initiatives which are nice/good to do.”

DIFFICULTIES EVALUATING AND MEASURING CSR ACTIONS/OUTCOMES/PERFORMANCE

•Difficulties with benchmarking•Lack of tools (including standardised tools)•Perceived complexity of methods•Data collection/accuracy problems.

“The standards for measurement are not as developed as for purely economic/financial performance; those generating or using the standards don’t apply the same commercial acumen to the measurement and reporting process for CSR related initiatives.”

“To build the business case, clear demonstration of outcomes is needed. Data can be lacking or inaccurate. An ability to demonstrate through data and modelling that business cases stack up would help move the sustainability needle significantly.”

TIME CONSTRAINTS

•Due to small department/organisation•Other/competing priorities•Profitability takes priority.

“Small organisation - easily distracted by day-to-day business...”

“The capacity of the business to set aside designated time to strategise and focus an approach”.

“Other survival issues take priority reducing the amount of time available to work and focus on CSR activity.”

IN YOUR WORDS



0% 5% 10% 15% 20% 25%

23

16

15

12

9

8

6

5

5

2Other


Di�culties integrating CSR with organisational values and practices

Di�culties making the ‘business case’ for CSR


Lack of non-�nancial resources

Di�culties evaluating and measuring CSR actions/outcomes/performance

Time constraints




2 Quinn, Laura & Dalton, Maxine (2009) Leading for sustainability: implementing the tasks of leadership. Corporate Governance 9 (1), pp.21-38.

PRAXIS POINT

Tasks of LeadershipThe leadership behaviours that make leadership2 for sustainability different from generally effective leadership are:•Recognising and acting on the

interconnections between business, the natural environment and society, and

•Active and productive stakeholder relationships.

Intrepid Travel is a pioneer in the adoption of human rights standards in the travel industry.

LEADERSHIP

As a global operator of travel and adventure tours, Intrepid Travel recognises the impact that tourism has on local communi-ties and the environment.

Founded in Melbourne in 1989, Intrepid has expanded rapidly and now employs nearly 1,000 staff around the globe and offers over 800 tours across Europe, Asia, Africa, The Americas, The Middle East, Australasia and Antarctica.

As part of the continued development of its responsible busi-ness strategy, and commitment to UN Global Compact Principles, in 2011 Intrepid published a global human rights policy.

The policy formalises Intrepid’s commitment to supporting and respecting international human rights standards throughout its operations and supply chain, including the Universal Declaration of Human Rights and the United Nations Guiding Principles on Business and Human Rights: The “Protect, Respect and Remedy” Framework.

The company runs trips, and has operations and partners, in many developing countries where human rights are an issue. The business wanted to be sure that it wasn’t complicit in human rights abuses. The development of a human rights policy also aligned strongly with the company’s core purpose and values.

The development of the policy was a hugely valuable learning exercise for the Intrepid team, notes Intrepid CEO, Geoff Man-chester.

“Human rights can be a huge and complicated area for busi-nesses to tackle. One of our biggest challenges initially was defin-ing our scope and understanding the scale of human rights risks across our business operations.”

The business plans to roll-out ongoing training in the policy, as well as processes to measure compliance and build capacity where necessary.

CASE STUDY: Human Rights at Intrepid Travel


Know WHO you need to deal with•Who will be affected by the CSR program?•Who has experience relevant to the CSR program?•Who cares about CSR?•What groups can help in advocating for CSR?•What groups might object?•Does CSR threaten anyone or any group?•Who has decision authority relevant to CSR?•Who has the power to promote or hinder CSR

implementation?•When will people be ready to hear about CSR?

Know HOW things are done around here•What kinds of information are used, especially by important people?•How are arguments made against new programs or issues?•What kinds of protocols are followed?•What kinds of meetings are considered legitimate decision forums?•How much time does it usually take to get new programs running?•Have similar programs been sold (or failed) before?

Know WHY things are done as they are here•What are the organisation’s goals?•How does the organisation plan to achieve these goals?•What are the critical strategic issues for the organisation?•What is our broad competitive context?

TIPS FOR BUILDING SUPPORT FOR CSR IN YOUR ORGANISATION3

Wherever your organisation is in its CSR journey, answering these questions can help you develop a plan to build support for CSR in your organisation.

NAB shows how to get it right in CR governance.

LEADERSHIP

For NAB’s Head of Corporate Responsibility Strategy, Janette O’Neill, a multi-layered, robust corporate responsibility (CR) gov-ernance framework has one been of the keys to raising executive commitment to and awareness of CR issues across the business (the other is NAB’s shift to integrated reporting in 2010).

NAB’s Board of Directors provides ultimate oversight and direction for the CR strategy. Progress against the CR strategy is reported to the Board throughout the year.

At an executive and operational level, NAB has a range of internal committees and councils which help to review and guide the CR strategy. One of the key internal governance mechanisms is the CR Council, which is chaired by NAB’s Executive Director Finance and includes each member of the Group Executive Com-mittee. The Council meets quarterly and is an important forum to engage executives from across the business, review the CR strat-egy and provide input into key decisions. Other internal forums include the Customer Council, Group Environment Committee and the People Council.

External governance mechanisms include the Indigenous Advi-sory Group and the Advisory Council for Corporate Responsibility, a multi-stakeholder committee comprising NAB executives and a range of community, business and government leaders, which provides an external perspective on issues and trends that may impact NAB’s customers and stakeholders and provides feedback on key initiatives.

At a business unit level, NAB has a number of champion net-works, including the Green Team Community, which has grown to over 1,500 team members, to involve staff in the implementation of the strategy. A range of communication and engagement tools, including a regular CR newsletter, community blog, and NAB’s integrated Annual Review help to bring the CR strategy to life.

These actions have resulted in greater integration of CR in deci-sion making and a stronger alignment of CR to business strategy, risk management and stakeholder communication.

A key challenge for NAB in future is to further embed CR into the organisational culture by strengthening accountability. This includes plans to incorporate CR criteria into performance score-cards and individual development plans in the near future.

CASE STUDY: Corporate Responsibility Governance at NAB

CSR TIPS

3 Developed from Dutton, J.E., Ashford, S.J., O’Neill, R.M., & Lawrence, K.A. (2001) Moves that Matteer: Issue Selling and Organizational Change. Academy of Management Journal 44 (4), pp. 716-736.


We asked practitioners about the tactics they have used to over-come difficulties in building support and making the business case for CSR. We asked respondents whether a particular tactic had been used, and if it had, to rate its effectiveness from poor to excellent. We wanted to understand, from others’ tangible experiences, what really works – and what doesn’t.

All tactics were rated fair to good on effectiveness. As shown in Figure 5, on average no single tactic was either completely ineffec-tive, or completely effective. On average, respondents used nine of the 13 tactics listed, suggesting that a number of approaches or tac-tics are used in any single organisation and in many cases, success may depend on getting the balance right.

TACTICS THAT WORK

FIGURE 5: Frequency and effectiveness of CSR tactics

KEY

A We implemented KPIs for staff related to CSR performance

B We conducted internal CSR training/education

C We introduced CSR champions

D We produced a sustainability report

E I use the established and accepted processes in our organisation to promote the business case for CSR

F I show how our CSR strategy links to the concerns of decision makers in our organisation

G We identified organisational performance indicators and set measurable targets

H We increased stakeholder engagement

I I link our CSR activities to established and accepted activities in our organisation

J I talk about the risks of not undertaking CSR activities

K I show how our CSR strategy supports our business strategy

L I am persistent in advancing the business case for CSR

M I enlist the support of senior management or influential people in our organisation

45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95%

E�ec

tiven

ess

Frequency of use

(Average)Good

Fair

(Average)Satisfactory

FAC

DB

G

EJ

LK

MH

I

UNTAPPED POTENTIAL

EMERGENT PRACTICES

TRIED AND TRUE

MISSING THE MARK


Untapped PotentialThe tactics that were used least but rated relatively more effective were:• Introducing CSR champions, and• Identifying organisational performance indicators and measur-

able targetsWe speculate this tactic may be used less due to the requirement

for employees to take on more responsibility without financial rec-ognition and because of diversion of resource hours away from what may be considered more important tasks.

Mature CSR reporters recognise that implementing a CSR pro-gram requires change and for the change to be effective you need to build a coalition of CSR champions.

Setting organisational performance targets is possibly used less than other tactics because it requires some progress in CSR and robust data before this exercise can be meaningfully undertaken.

Our results suggest that both these resource-intensive and high-pro-file organisational activities could become more widespread in future as more is understood about how they improve CSR performance.

Emergent PracticesThose tactics that were less frequently used and rated less effec-

tive were (in order):•Setting KPIs for staff related to CSR performance•Conducting internal CSR training and education•Producing a sustainability report, and•Promoting the business case for CSR.Implementing KPIs for staff related to CSR performance is

regarded as good practice for building success in CSR, but this tactic is not used as widely, or rated as effectively, as others. There could be many reasons for this: perhaps the KPIs have been poorly chosen or are not enforced, without any real accountability or responsibility for their achievement. As one respondent wrote:

“The KPIs we have at the moment are meaningless.”

Producing a sustainability report should ideally be working more effectively to drive success in CSR, if processes such as those advo-cated by the Global Reporting Initiative are used well. Our experi-ence suggests that often organisations do not fully realise the poten-tial engagement opportunities inherent in producing a sustainability report. Reports are sometimes simply sent around to internal staff in an email, or employees may not even realise that a sustainability report is produced. The effectiveness of sustainability reports can be improved by using them as part of an organisation’s performance management and stakeholder engagement processes.

Internal CSR training/education can be a powerful tool for building awareness of sustainability and developing a common understanding about CSR. The reasons for the relative weakness of this approach to building CSR success need to be better understood.

Tried and TrueThe least surprising results were in the top right quadrant, which

shows five tactics that were the most popular and the most effective. They are (in order):•Enlisting the support of key management or influential people • Increasing stakeholder engagement •Showing how CSR strategy supports business strategy•Linking CSR activities to established and accepted activities in

an organisation, and •Showing how CSR strategy links to the concerns of decision-

makers in the organisation. Enlisting the support of senior management or influential people

is the most frequently used and is also rated as the most effective tactic of all those listed. However this tactic still only fell into the sat-isfactory to good range. Clearly management support is not the only tactic that is required to build support for CSR in an organisation.

Increasing stakeholder engagement is effective because it helps organisational decision-makers to better understand and internalise the societal values and expectations relevant to the business.

Showing how CSR supports business strategy, linking CSR activi-ties to established and accepted activities in an organisation, and linking with the concerns of decision-makers are classic ‘issues-sell-ing’ techniques that managers use to build support for change. These tactics may become even more important and effective with the introduction of integrated reporting, which will place more emphasis on how business creates value and therefore requires tighter links between CSR and strategy.

Missing the MarkThe tactics that were used by at least 85% of respondents but

were only satisfactory in their effectiveness were:•Being persistent in advancing the business case for CSR, and •Talking about the risks of not undertaking CSR activities. Being persistent may be less effective if the business case for CSR

is not solid, or if the language used to discuss the business is not appropriate. The importance of using the right language is high-lighted in one respondents’ use of an effective tactic.

“Using metaphors and arguments meaningful to upper management and Boards (e.g., discuss in terms of ROI, growth and dividend, risk management, pro bono principles, etc.) during presentations.”


0% 20% 40% 60% 80%

12

6

6

24

6

6

6

12

6

6

6

6

53

53

47

29

41

35

35

29

35

12

6

12

6

24

31

13

27

26

13

15

13

8

16

6

10

8

17

27

35

27

34

34

25

27

22

30

22

12

21

22

15Addressing the impact of the carbon

pricing scheme

Addressing human rights within our sphere of in�uence

Working to address labour relations issues

Working to combat business corruption

Managing the impact of climate change in our organisation

Improving supply chain policies or practices

Managing the implications of technology (eg. data security, privacy)

Developing new products or services with environmentally responsible attributes

Waste reduction and recycling initiatives

Measuring/quantifying impacts and outcomes of CSR initiatives

Managing regulatory impacts

Improving or beginning our organisation's sustainability reporting

Building internal understanding/support for our CSR/sustainability approach

Reducing or eliminating any negative environmental impacts of our business

This year for the first time, the State of CSR Annual Review was expanded to New Zealand CSR professionals. Despite a modest sam-ple size (n = 17), we are able to develop some general insights about CSR in New Zealand and comparisons with Australia (see Figure 6).

Priorities and Obstacles ComparedThe top ranking CSR priority for New Zealand respondents was

‘reducing or eliminating any negative environmental impacts of our business’. The priorities are relatively similar in both countries, but New Zealand identifies ‘improving or beginning our organisation’s sustainability reporting’ as a higher priority. This may be due to increasing recognition of sustainability reporting as a valuable prac-tice in New Zealand.

The greatest differences between the two countries relates to cli-mate change. The introduction of Australia’s carbon pricing scheme has brought climate change issues to the forefront of business con-siderations. New Zealand’s emissions trading scheme was introduced in 2008 so climate change issues have already been integrated into CSR initiatives and wider business strategies.

CSR IN NEW ZEALAND

FIGURE 6: Comparison between Australian and New Zealand CSR priorities for the year ahead

NZ High Priority

NZ Very High Priority

AUS High Priority

AUS Very High Priority

The Warehouse was one of the first in New Zealand to adapt to sustainable supply chain challenges.

LEADERSHIP

The Warehouse is one of New Zealand’s largest retailers, with over 92 stores and 9,000 team members. A large proportion of its products come from suppliers in less developed countries. The business has a clear mandate, however, that low cost is not to be achieved at the expense of basic labour, human rights and environmental standards.

In 2004 the business commenced implementation of its Supplier Factory Workplace Standards policy and program to operationalise the principles in The Warehouse Sustainability Charter. At the time, the business had very limited visibility of the working conditions in its supplier factories, or experience in managing ethical sourcing issues.

Over the past eight years the business has built capability and strengthened compliance with its policy, including the implemen-tation of independent third-party audits of supplier factories, and the integration of ethical sourcing data into purchasing systems to better inform buying decisions. While the business has seen

significant improvements in working conditions and environmental standards, challenges remain.

“The biggest challenge we have faced is expectations regarding working hours and overtime. Companies operating in China and other developing countries have their own laws and labour and industrial norms, which are very different to a country such as New Zealand,” says Sustainability Manager, Trevor Johnston.

The Warehouse’s response to these tensions is to seek collabo-ration and transparency via a more tolerant and flexible stance on working hours, while maintaining a strong focus on health and safety and adequate overtime hour compensation.

“Setting expectations too high at the outset can lead to the exclusion of partners from your supply chain, or falsification of audits, which is counterproductive in the long term,” says Johnston.

CASE STUDY: Ethical Sourcing at The Warehouse



We compared the challenges between Australia and New Zealand, as shown in Figure 7. ‘Time constraints’ was by far the single great-est obstacle facing New Zealand practitioners (35%), and nominated more often than in Australia (13%). The second largest difference was that New Zealand was more likely than Australia to nominate ‘Short term focus/risk aversion’ as their single greatest obstacle (18% cf. 6%).

When asked why they had chosen this issue as their single great-est obstacle, most New Zealand respondents answered that CSR was considered a low priority or one of many competing priorities (33%). In a resource-scarce environment, CSR remains a more discretionary activity.

“Our business is in a fast moving, challenging market. To extract the value of our CSR work we need to be able to talk to our people and our customers and other stakeholders. Every other project in the business is trying to communicate to these same audiences - so although there is buy-in it is difficult to argue that this should have priority over other business initiatives.”

“CSR has not had a specific resource attached to it, but there is now a global mandate from our parent company. Looking at best practice, there is a lot of data not currently captured, or the perception internally is that it’s just another thing to add to the list.”

The second highest rated obstacle was limited budget and work-force capacity (13%). This aligns with the most commonly cited response about CSR as a lower priority.

“We have a network of CSR representatives and are developing a further network of CSR champions, but we haven’t yet set up a system to support their time to undertake the work needed. So some people’s roles are under more pressure and therefore their ability to lead awareness-raising, provide advice, undertake reporting and set up projects is under pressure.”

Other common explanations included difficulties in making a relevant and appropriate business case; the government and regu-latory environment are not sufficiently encouraging CSR; reactive approaches are being adopted rather than a proactive long-term vision; lack of integrated CSR approach and difficulties related to establishing and implementing CSR systems and processes (all 7%).

“In NZ there is very little media coverage/lobbying/external or governmental pressure on companies to respond to any ‘big issues’ in a significant way, which leads to a blasé attitude about many longer-term issues - and people focusing on business as usual activities.”

Different Environments, Different TacticsWe compared the usage and effectiveness of the strategies and

tactics used in Australia and New Zealand. Overall the pattern was broadly similar; enlisting the support of senior management was the most used and most effective for both countries, talking about the risks of not undertaking CSR, whilst fairly well used, was the least effective.

However there were also differences; implementing KPIs was the least used in both countries, but was considered a more effective tactic in New Zealand. Increasing stakeholder engagement, which is regarded as a highly effective tactic in Australia, is used by New Zealanders but considered much less effective. Identifying organisa-tional performance indicators and setting measurable targets is con-sidered more effective, and is slightly better used, in New Zealand.

FIGURE 7: Comparison between single greatest CSR obstacle in Australia and New Zealand

NZ AUS

PRAXIS POINT

Culture and LeadershipCould cultural differences in leadership between Australia and New Zealand partially explain the differences in CSR between the two countries? While the components of effective leadership are similar, there are different emphases.

Effective Australian leaders provide a vision and inspire followers, whereas New Zealand leaders prize operating in a team environment.4


0% 5% 10% 15% 20% 25% 30% 35% 40%

13

6

8

4

24

17

13

1

7

6

35

18

12

12

6

6

6

6


Di�culties making the ‘business case’ for CSR

Other

Di�culties evaluating and measuring CSR actions/outcomes/performance



Di�culties integrating CSR with organisational values and practices

Lack of non-�nancial resources


Time constraints

4 Trevor-Roberts, Edwin, Ashkanasy, Neal M, & Kennedy, Jeffrey C. (2003). The Egalitarian Leader: A Comparison of Leadership in Australia and New Zealand. Asia Pacific Journal of Management 20 (4) pp. 517-539.

AUSTRALIAN CENTRE FOR CORPORATE SOCIAL RESPONSIBILITY Suite G1, 10 Yarra Street, South Yarra, VIC 3141, AUSTRALIA T: +61 3 9049 9500 F: +61 3 9049 9555www.accsr.com.au [email protected]

ABOUT ACCSRACCSR helps organisations create lasting value through responsi-

ble business strategies and productive stakeholder relationships. We are Australia’s leading management consultancy wholly dedicated to building competitive advantage and stakeholder wealth through corporate social responsibility.

Our advisory services help organisations take their next steps in cre-ating value for all their stakeholders, building organisational capability.

Our learning programs underpin the professionalisation of the cor-porate responsibility management function, building individual capa-bility. Leading-edge research is the foundation of our work. Together with our clients, we create lasting value.

Printed using vegetable-based inks on Impact, made with a carbon neutral manufacturing process*, FSC COC certified and consisting of 100% post-consumer waste recycled fibre.

*Mill uses 86% renewable energy. Remaining CO2 emissions are compensated for by promoting controlled emission reduction projects, audited and certified by Climate Partner.

ORGANISATIONAL TYPE

0% 5% 10% 15% 20% 25%

211818

139

87

42

11Municipal government

Government department (Federal)Industry or professional association

Government department (State)Foreign-owned private company

Government business enterprise or agencyOther

Not for pro�t/NGOAustralian-owned private company

Foreign-owned listed companyAustralian-owned listed company

INDUSTRY

0% 5% 10% 15% 20%

1812

99

87

66

5444

33

21Hospitality/tourism

Agriculture, forestry & �shingPublic administration & safety

UnknownWholesale/Retail trade

Education & trainingConstruction/real estate

Health care & social assistanceInformation media & telecommunications

Transport, postal & warehousingManufacturing

Electricity, gas, water & waste servicesOther

MiningFinancial & insurance services

Professional, scienti�c & technical services

RESPONDENT’S LOCATION

0% 5% 10% 15% 20% 25% 30% 35%

34

31

13

11

7

3

2

1TAS

ACT

SA

WA

New Zealand

QLD

NSW

VIC

RESPONDENT’S ROLE

0% 5% 10% 15% 20% 25% 30% 35%

34

27

20

18

1Unknown

Other

Executive

Senior Manager

Manager

METHOD AND RESPONDENTSThe State of CSR in Australia and New Zealand Annual Review is

based on an online survey of people working in sustainability and corporate responsibility roles. In 2012/2013 the survey was com-pleted by 160 people.

the state of csr in australia and new zealandwrightcommunications.co.nz/media/22367/state of csr...

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