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Climate Change and Social Responsibility A Reality Check Dr James Bellini 20 April 2008 CSR Defined CSR is about corporate behaviour That behaviour includes: ◦ What you do or say ◦ What you do not do or say CSR is not only about climate change It’s All In The Mind The successful companies of the future will base their strategies on a healthy corporate psyche founded on clarity, integrity and authenticity The New Scarcities Time Attention Trust ‘The pressure to deceive is felt everywhere in business and deceptions are ethically justifiable … departing from the strict truth and the golden rule is part of the strategy of business.’ Albert Z Carr Is Business Bluffing Ethical? Harvard Business Review Building The Company ‘Trust Bank’ What ‘Trust’ Is Not Familiarity Heritage Low cost Local Availability Who trusts whom? 100 90 80 70 60 50 40 30 20 10 0 trusted to tell truth - % of sample Doctors Business leaders Journalists MORI Govt ministers Future Conditional Blueprint for Tomorrow? The Millennials’ Agenda Authentic companies Courageous leaders Sustainable future Millennium Poll Public opinion on the changing role of companies 25,000 citizens worldwide Most important corporate values by rank: 1. Social responsibilities 2. Brand quality / reputation 3. Financial success The World in 2032 % Key Issues Oil famine Climate change impact Future Leaders Survey 2007 The New Agenda 86% agree material consumption must reduce 66% think 4x4s should be banned from city centres 41% support personal carbon quotas Future Leaders Survey 2007 - 08 ‘This world cannot continue to function the way it is if we wish to live out the next hundred years. Not only do both government and the individual’s perspectives on the environment need to change, but also the way we relate to each other’ Camilla van Klinken, 18, Netherlands Future Leaders Survey 2007- 08 ‘There is no trade-off between economic growth and responding to climate change. Either we do something about it, or all our growth will go to waste when climate change begins to wreak havoc with markets, international relations and the world in general…’ Matt Bardley, 18, Cardiff University Future Leaders Survey Corporate Denial Casebook ‘The national science academies of the G8 nations and Brazil, China and India, three of the largest emitters of greenhouse gases in the developing world, have signed a statement on the global response to climate change...and call on world leaders to ... acknowledge that the threat of climate change is clear and increasing’ June 2005 Case Study in Denial “We in ExxonMobil do not believe that the science required to establish this linkage between fossil fuels and warming has been demonstrated” Lee Raymond Chairman/CEO ExxonMobil 2002 ‘In September 2006, the Royal Society wrote to ExxonMobil to express concern that some of its corporate publications were presenting a misleading view of the scientific evidence about climate change The Society raised concerns about Exxon's position on climate change and the company's funding of lobby groups that misrepresented the science Although we have exchanged further letters with ExxonMobil, it has still not addressed this issue’ Royal Society press release EXXON VALDEZ Good Friday 1989 1100 miles Alaskan coastline affected Clean-up bill $3.5bn + private lawsuits Two years after 70% believed still polluted 34th largest spill in history - not large but effects on reputation critical Case Study in Denial Alaska Oil Spill: “An Act of God” ExxonMobil management Case Study in Denial On oath before Congress 1994: “The presence of nicotine does not make cigarettes a drug or smoking an addiction” Q: “Does smoking cause lung cancer? A: “I do not know.” The Badvertising Backlash A Crisis of Trust The 21st Century Corporate Agenda Dishonesty Pandemic Enron WorldCom Tyco Qwest Global Crossing Arthur Andersen ........... Dishonesty Pandemic HIH -- $4 billion Parmalat -- €10 billion Ahold -- €500 million Mannesmann – six execs tried for ‘breach of trust’ over €57 million bonuses Multiple scandals in Japan THE MAP OF CORPORATE MISCONDUCT 10 of the 15 biggest bankruptcies in history have occurred since 2001 All have been driven by massive corporate dishonesty Corporation n. artificial person created by charter; an entity unto itself under the law. ‘The corporation’s legally defined mandate is to pursue, relentlessly and without exception, its own self-interest, regardless of the often harmless consequences it might cause to others.’ Traditional ‘Mistrust’ Model You are here Virtual Trust-based Model Contingent specialist Knowledge broker Customer The Company – A Living Organism A company has ‘psychological verities’ Corporate psyche can be analysed Psyche can develop dysfunctions Dysfunctions block clarity Lack of clarity ◦ imperils psychological contract ◦ threatens corporate survival Doing Business in 2020 The successful organisation of 2020 will have no HQ, no CEO, own no IT and will have one-tenth the fixed assets it has today It’s most vital competitive resource will be the authenticity and trust it has built with its stakeholders CSR – A Progress Report CSR Value Curve Growth platform Efficiency Value-based self regulation Strategic philanthropy Legal and compliance IBM Institute for Business Value The Future Company? HYPER-ORGANISATION ‘Win’ Strip out unnecessary Ps ◦ ◦ ◦ ◦ Positions Processes Purchases People Order workplace lives to match corporate goals The Future Company? HYPER-ORGANISATION ‘Win’ Align with personal values Mirror individual identities Flatten hierarchies Integrate workplace lives with non-work goals Strip out unnecessary Ps ◦ ◦ ◦ ◦ DISORGANISATION Positions Processes Purchases People Order workplace lives to match corporate goals Lost Opportunity % % engaged in CSR activities IBM Institute for Business Value Exploring Corporate Psyche What drives corporate behaviour? A New Psychological Contract We are moving from the Industrial Age to the Connected Age Business needs a new mental model of how to engage in relationships with its stakeholders Trust and truthfulness are key ‘The central theme of The Bullshit Factor is that organisations and people inhabit the same psychological universe and that, like people, organisations can have psychological issues. These issues are manifested in patterns of behaviour that reflect levels of ‘untruthfulness’, misperceptions, delusions or some other deceit.’ The Bullshit Factor p 171 What Makes A ‘Healthy’ Psyche? Objective perception of reality Naturalness; simplicity; spontaneity Empathy for humanity Democratic characteristics Goodbye Gordon Gekko A New Business Ethos Healthy Corporation Civilised Workplace Nice Company ‘No-jerks rule’ “Our people are hired and fired for attitude” SouthWest Airlines Companies On The Couch Case Study in Arrogance [ Caught with their pants down?] Case Study in Arrogance Food Is Survival Portrait in Courage: GE’s Jack Welch Routinely fired worst-performing 10 per cent ‘Neutron Jack’ 100,000 jobs disappeared during his tenure Portrait in Courage: GE’s Jack Welch Took GE in 20 years from $26.8 bn to $130 bn Company share price rose 4000 % ‘I want bosses to have more candour, less bullshit’ Semco: A ‘Maverick Corporation’ KEY PRINCIPLES Be dependable and reliable Value honesty and transparency above all Encourage creativity; support the bold Question decisions imposed from the top Pleasant and informal environment No dress code; voluntary meetings; mandatory vacations Employees set hours and wages, choose IT Principled Leaders – A Checklist Personal humility, not ego Ambitious for organisation, not themselves Defend beliefs with courage Nurture core values – ‘integrity’ Hire people of right character Elements of Courage Consumers, employees, leaders ◦ New consumer equation / precision markets ◦ Optimum talent mix ◦ Metanoia for business decision-makers Virtuous circle in the workplace ◦ Clarity, honesty, integrity ◦ End to ‘workplace schizophrenia’ ◦ Principled leaders Climate Change and Social Responsibility A Reality Check Dr James Bellini 20 April 2008 Please take 2 min now to fill your feedback survey! • From the main menu select Messaging • Select Inbox and open the survey • Make your selection for each of the questions • Select “submit” at the bottom of the survey and push OK. 19 September 2007 | Slide 56