INTERNATIONAL CONFERENCE ON CSR AND COMBATING MALNUTRITION: OBTAINING MILLENNIUM DEVELOPMENT GOALS (MDGs) IN INDONESIA Keynote Address Mrs. Sri Urip Former President Director Unilever Indonesia Commissioner PT CIMB Niaga Bank Grand Sahid Jaya Hotel, 13 – 14 December 2010
INTERNA ERNATIO TIONAL AL CONFERENCE FERENCE ON CSR AND D COMBA MBATING TING MALNUT LNUTRITIO RITION: N: OBTAINI AINING NG MILL LLENIU ENIUM M DE DEVELOPMENT OPMENT GOALS LS (MDG DGS) S) IN INDON DONESIA ESIA 13 13-14 4 December 2010 Grand d Sahid d Jaya ya Hot otel, Jaka karta ta Par Partner ersh ship p bet etween Speci cial Envoy on MDG s for the Preside dent nt of the Republic c of Indonesi esia a and PA CSR Sri Urip Indep epen endent dent Commissioner ioner CIMB Niaga ga Bank Writer er of CSR Strategies gies as a Competi titi tive e Edge in Emerging ing Market ets 2
TH THE GL GLOB OBAL AL CHAL ALLE LENGES NGES 3 3
THE CHANGING WORLD OF INDUSTRY The ongoing revolution on communication, technology and travel, underpinned by broader political, economical and social changes has made all businesses in any country becoming part of a wider Global Market. Hence, it is becoming very important to ensure the ongoing support and understanding of the local community in which a company is operating. The ultimate aim of any business should be value creation both to the business as well as the wider society This would mean a fundamental internal change, which is integrating CSR into the business processes , as CSR could provide an effective mechanism to create, preserve and enhance the company’s reputation and image. Note: There are few examples of companies struggling to withstand damaged reputation, not because they have breached the law, but mainly due to the lack of trust and acceptance from the community or lack of company’s understanding of the local community’s needs. 4
THE HE GLOBAL AL MARKET KET Opportunity New Market opportunity Outside home base opportunity Global /regional sourcing and innovation centers. Challenges More demanding consumers Complexity of market and environment Emergence of NGOs Internet Social Network (face book, twitter etc.) Government policy and regulation 5
THE CHALLENGES more demanding Globalization capability consumers competition competitive differentiation the importance of HR dev. emergence of Corporate NGO’s Challenges convergence & complexity of consolidation market & environment government The importance tightening of policy & regulation of GCG & CSR margin 6
THE EVOLVING BUSINESS PARADIGM (1) Profit was previously the most important issue of being in Business. Entering the 21 st century the new mantra of Business are: Profit - People – and Planet (3 Ps) - People issues ranging from workers health and safety, employees morale / engagement & development (=Company Culture / Good Corporate Governance)- People -internal - Social issues on community building & education (issues on entrenched poverty) – People -external - Environmental issues e.g. global warming, disturbance of ecosystems etc.- Planet are coming to the fore as core business issues . All these activities are included in the Corporate Social Responsibility of the Company both within and outside the core Business operation . 7
THE EVOLVING BUSINESS PARADIGM (2) Business globally has transformed their “Key Business Processes ” into “Strategic Capabilities ” to facilitate the change from “Product” to “ Services Capabilities” competition. This has made People becoming the Corporations ’ main asset to ensure sustainable growth and profit. Given the high complexity and challenges of the above , it is a must for a business to survive, to define the optimum balance between social, environmental and economic factors for short and long term performance / profit (meaning GCG / CSR activities should be embedded into the company’s culture and should be part of the short / long term strategy of the company) To ensure sustainability of Growth and Profit, Businesses should adopt sustainability related values, principles, strategies and practices. 8
THE BOUNDARIES OF GOOD CORPORATE GOVERNANCE & CORPORATE SOCIAL RESPONSIBILITY Spheres of influence adopted from World Business Council for Sustained Development (WBCSD) to accommodate the unique environment in Indonesia 9
GC GCG G AND CSR (1) GCG CG is is the incorporation of hi high gh st standar ndards ds of of co corpora porate beh ehavi vior or as a culture within thin the the core ore busi sine ness ss operati tion CSR CSR is is the the inter eracti ction on of th the Cor Corpora orati tion on an and th the ext xterna ernal en envir vironm onment ent outside outside the the cor ore bus usiness ness op opera erati tion on, which involves the interdependent relationship between its core operation, its business partners, the environment and the market including the wider community and the government. Both th GCG GCG an and CSR CSR are are now bec ecom oming ng an an incre ncreas asingly ngly impor ortan tant par part of of th the bus usiness ness strat trategy gy: Good od Cor Corpor orat ate Culture Culture and Hum uman an Res esour ources ces Cap apab ability ty ar are maj major or determ ermina nant nt of of a company‟s succ success ess or or fail ailure ure an and CSR CSR activ activities es are are impor portan ant tools ols to to suppor support the the Company‟s Stra rateg egy and Image / Reputati ation 10
GCG AND CSR (2) CSR CSR an and GC GCG can an be be see een as as intangib ngible el eleme ments nts that contribute to Corpor porat ate Repu eputation tation - hence Corporate Success. It has equal importance but different perspective from that of the financial measures Peop ople, pr proc ocess, ess, sys system / techn echnolo ology an and event ent ar are basi asica cally com ompo ponen nent of of the the core ore bus usiness ness oper perations ations which are within the close control of the company which GCG tak takes es a major major par art of of building ding the Comp mpany Reputa tati tion. From the macro perspective busi usine ness ss has little or no no con ontr trol ol over er the the govern ernmen ent, t, indu ndustr stry, so soci ciety ty, espe especi ciall ally now with with the the glob obaliza zati tion on and the Int nterna ernati tion onal al com ommun munity ty, but well def defined ned and nd str strat ateg egic CSR CSR acti ctivities es wil will ens ensure ure the the optimum optimum balan ance betwee een so soci cial, al, en envir vironm onmental ental an and economic mic fa factors for short and long term profit sustain tainability. nt ” Well managed GCG GCG and CSR is is equ qual to to good “Risk Management 11
CSR SR (CORP ORPORA ORATE TE SOC OCIAL IAL RE RESPONSIBILIT SPONSIBILITY) Y) 12
CSR IN IN COUNTRIES NTRIES WIT ITH DIF IFFERE ERENT NT STAGE GES S OF DEV EVEL ELOPM OPMEN ENT Though the princi cipl ples es of CSR are essentially ially the e same globally ally, but each ch countr ntry/l y/loca ocatio tion still calls for differe erent nt emphas asis is in its implementa entati tion on pro roces ess. s. The e success ssfuk fuk applicati cation on of CSR pricipl ples es is directl ctly y influen enced ced by the busines ess under ersta tandi nding g of its busines ess strategy egy in pro ropor orti tion on to the needs of the local commun unity ty. Develo eloped ped Countri ries es , in which most states assume primary responsibility for social welfare of the community , - CSR concentrate on care for environment, green issues etc. Develo eloping ping Countries ries : CSR activit ities es is a necess ssar ary part of doing business, in countries which is still lacking ng in basic asic infrastr structu ucture e and the capacit city to build social capit ital - build infrastructure, tructure, emp mployme yment nt & wealth h creation ion - community unity developmen opment t & involvemen ement, t, training ng /voc ocat ationa onal study & emp mpowermen erment. - create e social al capita tal - imp mprove lifestyl tyle - care for environme onment nt /green n issues es 13
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