The world today is full of serious pressing problems, such as poor nutrition and obesity, access to water, pollution, deforestation, climate changes, lack of skills and help care. The biggest problem for governments in dealing with these problems is absence of financial resources, which can be provided by business segment. Business creates wealth when it meets needs and a profit, because that leads to taxes and incomes. Thus, only business can guarantee necessary recourses.
The first example is Volvo Group, one of the world’s leading manufacturers of trucks, buses, construction equipment, marine and industrial engines. “The Volvo Group’s strategy contributes to realizing the Group’s vision and wanted position by developing and driving strategies for profitable growth, efficiency and transformation towards sustainable transport solutions” (3).
Key challenges and solutions are the following:
1. Demographic growth and urbanization. As urban populations grow, cities face increasing social and environmental challenges, such as congestion, noise and pollution. Volvo Group's solution is a City Mobility program, which means developing and applying new technologies and transport solutions regards to public transport, such as hybrid and electric vehicles.
2. Climate change. The solution is reducing emissions. The Volvo Group joined the WWF Climate Savers program in order to look for opportunities to decrease carbon emissions from its products and production facilities.
3. Resource scarcity. The Volvo Group works with lean methodologies with a resource efficiency focus. That means manufacturing a number of components and materials so that they can be recycled or remanufactured. Lightweight materials are used in product design to exclude the use of potentially harmful substances.
4. Safety and security. Company invests in researches and collaborates with governmental and non-governmental partners to intensify vehicle safety and security solutions. Volvo Group keeps improving smart technologies and systems that protect people, vehicles and cargo, conducts traffic safety and road safety activities.
5. Competition for skills (raising skills, inspiring performance). Every year training days are dedicated to raising the skills and qualifications of the Volvo Group's employees.
CSR of the Group is predetermined by peculiarities of its performance and closely connected with the field of activity: transport, fuel, emissions, road safety.
The second example is Henkel, a multinational company, which acts both in the consumer and industrial sector. The company is founded in Germany and is known for brands such as Persil, Schwarzkopf and Loctite. The sustainability and social strategy of Henkel is "achieving more with less". Henkel and the “Fritz Henkel Stiftung” (2011) foundation support social projects around the world. Henkel created four departments as a corporate citizenship program:
1. Corporate volunteering. There are more than 11,500 volunteer projects, which are as diverse as the company itself: from providing bicycle training for schoolchildren in India to helping with reforestation in Mexico.
2. Social partnerships. Supporting equal opportunity in education through social partnerships is the main priority. In 2014, the foundation continued its partnership with Teach First Deutschland, a program that maintains university graduates who work as fellows in schools with socially disadvantaged students.
3. Brand engagement. Henkel provides support for many social projects via its brands (Persil, Schwarzkopf and Loctite). Through “Projekt Futurino” developmental and educational projects were supported, which aim to make children more aware of nature and the environment. There are other issues, such as trainings, urban revitalizations.
4. Emergency aid. The foundation provides urgent emergency aid after natural disasters around the world. For example, Henkel organized product and monetary assistance through donations for the suffered regions after flooding in the Balkans in May and in Michigan (the USA) in August 2014.
While practicing corporate social responsibility, companies can also render assistance in developing countries they operate in. There is an example of Anglo American PLC in South Africa. “It became a trend setter for other major companies operating in South Africa, thus gaining a goodwill among other companies, which can be helpful in partnering with other major companies not only in South Africa but also in other part of the world” (1). Henkel also has such experience. The company gives support for children in Africa. “In countries like Togo in West Africa, access to basic things such as proper hygiene and vaccinations are not always a given. Henkel helps to provide 505 children in the country with Henkel products, such as shampoo and soap as well as detergent and cleaning products for schools and clinics” (5).
Henkel's CSR differs from corporate citizenship of the Volvo Group for the fact that it has independent foundations, which are responsible for different spheres. From my point of view, Henkel put more attention on such urgent challenges as education, environment and social aid and less to researches, in comparison with the Volvo Group. In its turn, the Group finds solutions to social problems through a big amount of programs, which are affirmed by this company. I think, these differences can be explained by industry differences.
The Volvo Group signed the UN Global Compact in 2001 and supports the aims of the UN’s Guiding Principles on Business and Human Rights. As for these issues due to its Code of Conduct, the company supports the following principles: non-discrimination, non-tolerance of forced labor, non-tolerance of compulsory or child labor, freedom of association, the right to collective bargaining, the right of employees to a safe work environment, working hours and compensation. For example, collaboration with unions complies with the laws and regulations in each country as affirmed in the Code of Conduct. The Volvo Group also maintains the following aspects of anti-corruption: not to participate in any corrupt practices, employees of the Group are prohibited to make any rewards or benefits in violation of applicable laws to potential customers or suppliers; workers of are not to accept payments (bribes) or gifts from a third party.
Based on the concept of respect for nature and the environment, Volvo's designers seek to reduce cases of collisions cars with animals on the roads in order to preserve the life of animals and the integrity of the vehicle. This is achieved by improving the brake system of the vehicle. “Volvo has been carrying out research in Europe on encounters with cows and moose. Volvo claims that there are more than 20,000 collisions between kangaroos and cars in Australia each year. This results in serious damage to vehicles, animals and humans involved, so as part of the company's vision to have no one killed or seriously injured in a new Volvo car by 2020” (3).
The Volvo Group tries to identify measure and manage risks. As for risks of the Volvo Group, they can classified into three categories: external-related risks (intense competition, changes in prices, political risks), financial risks and operational risks (market reception of new products, reliance on suppliers, protection of assets). Studying the concept and policy of the company Volvo, we can conclude that risks connected with health and human rights inside the company are practically absent. There are all possible conditions for safe and fair work.
Henkel also develops products, services and business models that contribute to United Nation’s goals. “Issue Area Coverage (self-assessed) of Henkel is disposed by the following percentage: Human Rights – 62% (written company policy on human rights, specific commitments and goals for specified years, reference to relevant international conventions, e.g. the Universal Declaration of Human Rights, grievance mechanisms, communication channels); Labor – 62% (reference to ILO Core Conventions, risk and impact assessments in the area of labour, regular stakeholder consultations in the area of labor); Environment – 70% (reference to Rio Declaration on Environment and Development); Anti-Corruption – 45% (written company policy on anti-corruption which is included in the Code of Conduct)” (2).
All the mentioned standards are included in contracts. There is monitoring to improve performance of suppliers in the supply chain. When Henkel chooses suppliers, the company considers their interaction with reference to the notion of sustainability. Henkel has five-step Responsible Supply Chain Process (risk-assessment, self-assessment, analysis, audit and further development) to improve their performance in the supply chain. Due to Henkel’s Code of Conduct, corporate compliance performances are based on antitrust law and the fight against bribery and corruption. Corruption, bribery, anticompetitive agreement or other offense against the law is enough for Henkel to break business relations with its partners. Therefore, making career in the company and also cooperation with Henkel has a safe character. Risks of unhealthy conditions in workplaces, violations of the laws or something like that is close to “zero point”.
“Henkel is responsible for safety, health and environmental matters relating to the production, distribution and use of its products” (2). To guarantee high quality of Henkel's output, components and finished products are went through tests and assessments. The company is committed to avoiding animal testing. The only situation when Henkel uses such tests is legal regulations of the state to obtain the necessary safety data, which are impossible to get without testing on animals. The European Partnership for Alternative Approaches to Animal Testing (EPAA) collaborates with Henkel to develop alternative methods and tests.
References:
“Anglo American PLC in South Africa: What Do You Do When Costs Reach Epidemic Proportions,” pp. 425-428.
2. “Henkel Sustainability Report 2014”, Henkel AG & Co. KGaA.
(http://sustainabilityreport.henkel.com/fileadmin/Downloads/20150302_He_NB2014_EN.pdf)
3. “The Volvo Group Annual Report 2014”, AB Volvo
(http://www3.volvo.com/investors/finrep/ar14/eng/ar_2014_eng.pdf)
4. Bhattacharya, CB; Sen, Sankar; Korschun, Daniel (2011). Leveraging Corporate Social Responsibility: The Stakeholder Route to Business and Social Value. Cambridge: UK:
Cambridge University Press.
5. “Together – The magazine for social engagement by Henkel”
(http://www.henkel.com/blob/330650/488b871b58da226ddfa702ec8a797cad/data/2014-corporate-citizenship-magazine-en-com.pdf)
