Valuing CSR in Economic Uncertainty

At Haworth, we believe that as business changes and workstyles evolve, workspaces' must adapt, too. After all, the office of today looks very different from the office of twenty, ten, or even five years ago. That's why we've become a champion of adaptable workspace solutions. In addition to being more user-focused and economical, they are also more sustainable, responsible choices. And they help bridge aesthetic objectives and business needs. Adaptable Workspace Solutions are:

• User-focused. People are at the heart of every business. By increasing satisfaction and comfort, and supporting a variety of user needs, Haworth products help attract and retain top talent. At the same time, they can effectively enhance performance, helping achieve other business goals.
• Economical. By making moves, adds, and changes faster and easier, minimizing downtime, reducing the need for new product with every change, and building in energy efficiency, Haworth products make economic sense throughout their lifetimes.
• Sustainable. There's no "tear it out and start over" mentality here. We look at manufacturing processes, materials sourcing, and opportunities to recycle. But the heart of our philosophy is re-use. Making every component work in multiple ways diverts massive amounts from landfills.
• Integrated. Our complete dimensioning and materials integration across product lines provides exceptional design freedom while ensuring that every space attains a cohesive aesthetic that retains its integrity with every configuration.

You'll see adaptable solutions in action in our showrooms and our new headquarters, in both Shanghai and Beijing, because designed-in flexibility is at the heart of everything we do. As a leader in office furniture and architectural interiors with a worldwide presence, Haworth products are informed by a lifetime of global learning. We have nurtured a corporate culture committed to superior customer service, environmental responsibility, and engineering innovation.

B&Q is a member company of Kingfisher plc - Europe’s leading home improvement retail group and the third largest in the world, with nearly 900 stores in eight countries in Europe and Asia. Its main retail brands are B&Q, Castorama, Brico Dépôt, Screwfix. Kingfisher also has a 50% joint venture business in Turkey with Koç Group, and a 21% interest in, and strategic alliance with Hornbach, Germany’s leading large format DIY retailer. Kingfisher plc is included in two of the main socially responsible investment indexes – the FTSE4Good and Dow Jones Sustainability indexes and has market-leading positions in the UK, France, Poland, Turkey and China.

B&Q entered the China market on June 6, 1999, with the opening of its Shanghai Hutai store. B&Q China consolidated its position as market leader in 2005 with the purchase of OBI’s stores in China, which have all since been converted to the B&Q brand. In its expansion, B&Q has leveraged its advanced international management experience to become the leading home improvement brand in the domestic home improvement market, and provided a “customer-focused” strategy offering customers an exciting retail environment and unique shopping experience. The company now has dozens of stores in cities including Beijing, Shanghai and Guangzhou.  

I hold the Chapple Chair Professorship of Business and Social Responsibility at Northland College in Ashland, located at the shore of Lake Superior in Northern Wisconsin, USA. My research program has focused on investigating corporate social responsibility in the forest products industry. Past work has appeared in Journal of Public Affairs, UNSYLVA of the United Nations, Management Decision, and Forest Policy and Economics.  The current focus of my research program is to develop a measure for assessing International Corporate Social Orientation (ISRO) of multi-national companies.

HAWORTH

Our major areas of impact are in the demand for metal, wood, plastics and fabrics. A second major area of impact is in our disposal. To Haworth, our demand for timber is particularly important to watch and take responsibility. We understand that demand on forests also equals strain on water, air and soil. We see the big picture and how a tree is the route (excuse the pun) to the solution to many problems.

B&Q CHINA

We have an opportunity to take advantage of our unique market position and help make sustainable living easy and affordable for our customers as well as a responsibility to embed sustainability into all aspects of our own operations.

Our business sells a high volume of timber and products made from or containing wood. Therefore the choices we take regarding which wood products to stock can help protect the world's forest resources while reducing our impact on climate change. Our long-term policy aim is to ensure all our timber is sourced from proven well-managed forests or recycled sources. We recognize the key role that forests play as a carbon sink and our work on timber is therefore part of our overall strategy on climate change. 

NORTHLAND COLLEGE

It really depends on where. Speaking from a global platform, I would say bio-diversity, habitat loss, and climate change. These issues compound together with other environmental issues and what we get is an environmentally unsustainable forest products sector. CSR and sustainability focus has resulted in some perception change in the Western world but the environmental impact of forest products sector continues to remain high. I often quote Dr. Rob Kozak of University of British Columbia. Rob says that the forest industry has to move from a consumption based to a conservation based paradigm. Re-cycling, sustainable forestry initiatives, chain of custody certification, all these mechanisms push the industry toward that direction, but what we really would want to see is the increase in value-added services to the forest products for enhancing their longevity or re-usability. Increasing the harvests for meeting the increasing demand is not a viable option for the long-run. 

HAWORTH

Haworth will be a sustainable corporation. We engage our employees in more sustainable practices; we initiate and use processes that are neutral or improve our environment; and we utilize our resources in ways that create adaptable and sustainable workspace solutions for our customers.  We do all of this globally to protect and restore our environment, create economic value, and support and strengthen our communities. Haworth is committed to these seven sustainability objectives and has supporting short-and long-term goals.

• Sustainable Product and Workspace Design  
• Energy Management 
• Green Transportation 
• Zero Waste and Emissions 
• Green Building and Sustainable Site Mgmt. 
• Social Responsibility 
• Stakeholder Engagement 
   

B&Q CHINA

At B&Q China, promotion of quality products which have environmental or health benefits is part of the company's overall commercial strategy. Within the Chinese market, the company has received recognition for its work in a number of areas including community investment and the introduction of FSC timber products.

Our products & services:

• A range of eco products stocked, e.g. energy-efficient appliances, water-saving devices and low VOC paints.
• Eco homes study with the British Council in China, involving students from universities in both China and the UK.
• Launch of a new FSC flooring range. In January 2011, a workshop on sustainable timber sourcing was organized for buyers and suppliers with WWF China's Forest & Trade Network.

Our stores & operations:

• Efficient lighting rolled out across stores by the end of 2010.
• Participation in WWF Earth Hour campaign – engaging employees and customers on climate change.
• 87% reduction in plastic bag usage since a fee was introduced in 2008.

Our customers:

• Posters with eco messages displayed in some stores
• Regular promotions on energy-saving light bulbs.
• Research into customer attitudes on eco products.

Our people:

• Annual CR competition to reward stores demonstrating good progress
• Product training for store employees includes an introduction on a number of eco products, e.g. energy/water-saving goods and those that carry health benefits.

Our community:

• The company has provided free decoration and installation services to help people in need.
• A new project launched to equip school libraries.
• Education sponsorship – 30 children received sponsorship to date.

Our suppliers & partners:

• 107 on-site ethical audits carried out in 2010/11.
• Ethical training workshops are run for factory managers. Over the past two years (2009–10), these have been attended by around 60 participants

Our economic growth:

• Plan to develop an eco logo to help customers easily identify eco products and increase eco product sales.

* Data correct: 30 April 2011

NORTHLAND COLLEGE

I see CSR in the forest industry as the Forest Certification 2.0. Much of the current CSR efforts are about using the sustainably harvested (or procured) raw material, although some companies are evolving to embrace a more holistic approach to CSR. Industry needs to re-define what economic role it ought to play in the current economic landscape. Multi-national companies in the sector have a even more pressing need to do so since their economic domain may spread over several countries. Similarly changed social role for the industry must be crafted out carefully. I do see a lot of open mindedness toward CSR but not really many innovative ideas coming out.

 HAWORTH

More Sustainable Products and Workspaces - Haworth is well positioned to meet the demand for more sustainable products. Our approach to product development—life cycle thinking—emphasizes the design of integrated, flexible workspace solutions in addition to stand-alone products. As technology changes how people work, Haworth’s flexible interiors are poised to evolve and help lead change. We measure success by how much pressure we put on the supply chain to behave responsibly and how much of our product we can keep out of landfill, for the next 100 years – or the entire lifetime of the product. 

 B&Q CHINA

We measure the value of our CSR activities in the following ways:

• By creating and measuring commercial opportunities e.g. growing sales of eco products and services.
• By attracting ethical investment: Investors and the financial world are now starting to understand that a truly sustainable business model over the next 20 to 50 years is ultimately more valuable and therefore a better investment.
• By retaining employees: It is clear that our employees do care about the environment and want to work for a business that is genuinely engaged in this arena.
• In a forward thinking business, future scenarios of rising energy costs and resource restrictions must be taken into account as there is of course a considerable cost to doing nothing.

NORTHLAND COLLEGE

Here starts the trouble zone. The moment we talk about measurement, the next demand is standardization, and then certification.  So far the Global Compact, Global Reporting Initiative, and SA 8000 have been some of the prominent standards to monitor and measure performance. ISO 26000 is out and many speculate it to dominate over others. I, however, think that these standards should be viewed as a bare minimum, and not something that companies must aim at. Really, if there could be any business benefits from CSR, they may be realized only through innovative, differentiating practices, not by simply adhering to any standard. Standards should only be allowed to set a cut-off performance. So, the industry must evolve from having a compliance based approach to embrace a strategic approach to CSR.

 HAWORTH

We went through the 2008 global financial crises and INCREASED our CSR programs. During an economic downturn, we knew it would be more important than ever to connect with our clients and show commitment. This kept us out of the race-to-the-bottom price wars others sank into. There will always be someone who can beat you on price, but evidence of commitment is invaluable.

 B&Q CHINA

The CSR programme in B&Q China and Kingfisher has continued during the economic downturn with Kingfisher recently announcing the next phase of the business strategy through to 2020 called 'Creating the Leader'. Sustainability is core to that strategy, featuring as one of its main drivers and also recognizing that we can't be a leader if we don't create a sustainable business model for the long term. We also believe that leadership requires focus and single-minded dedication. To deliver this, we have identified four key sustainability priorities where we can make the most difference: innovation, energy, timber and communities. A focus on minimizing energy use and waste, whilst motivated by ethical objectives has of course helped the business to save money and reduce costs. Good corporate governance, as well as making the most of business opportunities, also seeks to assure shareholders and investors that Kingfisher is effectively managing key non-financial risks, e.g. supply-chain standards and factory working conditions, timber sourcing, climate change and chemicals. Economic uncertainties only aggravate the concerns over supply chain security and companies seeking to source responsibly are well positioned to respond. 

 NORTHLAND COLLEGE

Again it depends upon how a company defines CSR. To those who view CSR as an add-on to the expense column on their balance sheet, any budgetary turbulence will mean negatively affecting CSR. Those who uphold CSR as a lens to look at defining their business, economic uncertainties may bring in an opportunity to revise the economic, social and environmental equilibrium at which a company will balance its position in a given context. Till date, most companies view CSR as a function of the availability of slack resources. The nature of the forest industry is different—it bases itself on a healthy global ecosystem, and hence needs to be more proactive about promoting the eco-systemic nature of the world wherein social, environmental and economic pursuits need to be in harmony with each other. I am convinced that CSR is not about added activities and therefore added expenses, it is about defining your companies’ role within a wider context.

 HAWORTH

Wood and timber companies are at the center of the resource management controversy, as well as the lynch pin of the solution. We see many wood product companies try to source from sustainable management forest and behave responsibly. However, we have seen the majority of them struggle to do so because of corruption, lack of a reliable track system along the supply chain, and lack of transparency of information. For our part, we have obtained the FSC CoC certificate for our factory and constantly work to ensure a consistent supply of FSC wood. We also advocate the importance responsible wood as part of our routine client communications. That means education every Haworth member on what ‘good wood’ actually means and the future significance of it. We then share this education with our clients in the hope that together –client and supplier- we can and are changing the supply chain.

 B&Q CHINA

We see 3 main hurdles:

•           The lack of an enabling regulatory environment which supports increased transparency across the industry/region.

•           The low level of consumer awareness and demand for environmentally-friendly products.

•           The cost price difference of non-certified products compared to independently certified alternatives. 

 NORTHLAND COLLEGE

The mindset. The same mindset that I mentioned above and that leads most companies to think of CSR as bunch of activities that add to overall costs. The so called enlightened ones go a bit farther and view CSR as a stakeholder management tool. I am risking repetition here but CSR is really about defining the role of your company—along three dimensions. You ought to have an economic performance plan (not just a financial plan), a social plan, and an environmental plan. In other words, you may say that there are three parameters to define your business. So, at the end you should be looking at what is called a balanced scorecard, not just a financial score card.

 HAWORTH

Over the next 3-5 years, we are positioned to take CSR to the next level by changing the fundamentals of our business. Rather than just increase the recycled content in our products, we want to make our entire business circular. Rather than make a product out of high quality, recycled material and hope that the user recycles it, we want to ensure the loop never stops by using services. ‘Services’ follow the product at each step of the way. When we first design the concept, we ensure that it is designed for disassembly and change so the client can use it and change it as much as possible, rather than throwing it away. We also design services around the product to refresh it, change it, and finally take it back to our factory to turn into a new chair again, completing the cycle.

 B&Q CHINA

As mentioned earlier, we have identified four key sustainability priorities where we can make the most difference: innovation, energy, timber and communities. Over the next five to ten years, we're going to evolve our products and services in to understand their total life-cycle environmental impact and how we can do things differently. We will continue to engage with a range of partners, as critical friends, to help drive forward our thinking. 

 NORTHLAND COLLEGE

I expect that the next 3-5 years will continue to be dominated by compliance driven approach for most companies. The nature of the industry will significantly depend upon the fate of the carbon market regime, and bio-energy prospects. Overall, I anticipate that in order to achieve sustainability, the industry will start looking at adding or enhancing its service component rather than continuing to have a product oriented path.