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Using corporate citizenship to create business value from BCCCCConf11

How do you create value and manage risk through corporate citizenship?  After all, that’s ultimately what matters to

shareholders and stakeholders alike. Three very different companies – Verizon, Cargill and NYSE Euronext – gave some concrete examples during a conference breakout session. 

Cargill’s efforts span the globe, said Suzanne McCarty, senior director of community involvement. They include:

  • Environmental innovation, creating a new energy source by using the methane gas from meat processing plants, which reduces gas emissions by 325,000 metric tons each year.
  • Food safety, sharing  best practices and techniques for China through academia, within industries and with government officials.
  • Responsible supply chains, educating cocoa farmers in West Africa to establish UTZ Certified, which drives their incomes 30% while allowing Cargill to deliver sustainable cocoa to customers.
  • Rural development, building 40 schools in Vietnam, which are then available to Cargill employees.

NYSE Euronext is setting standards and striving to “be exemplary” with corporate responsibility. This includes employee engagement, environmental sustainability and community engagement, explained  Michelle Greene, NYSE Euronext vice president and head of corporate social responsibility

The key business question for stakeholders of any business is, “Why do Corporate Responsibility?”  Greene’s response is “to manage risk and drive revenue that ties into the broader corporate strategy. It has to be integral to the strategy of the business.” She explained that the challenge is giving financial analysts the data and metrics for corporate responsibility that are still being developed.

Corporate Responsibility at NYSE starts internally, then leverages the community of companies’ knowledge base and finally, builds a field of thought leadership through the community of companies listed on the exchange.

Verizon has operationalized corporate responsibility in several ways, said Chris Lloyd, executive director of public policy and strategic alliances. They include

  • Keeping the Verizon house in order:

-Ethics are front and center

-Minimizing environmental impact and measuring and reporting

  • Using Verizon resources to deliver business and social value:

-Technology philanthropy

-Facilitate a low-carbon economy

  • Managing risks to Verizon’s reputation:

-Online safety: educating parents and seniors, assisting teachers, helping law enforcement

-Wireless safety: “don’t text and drive,” RF emissions, conflict minerals

In conclusion, all the panelists agreed that corporate citizenship must align with business strategy, and it is important to identify what standards are relevant within your business units.

Additionally, the role of corporate responsibility in innovation should not be underestimated. McCarty stated that corporate responsibility efforts are definitely driving new business and revenue at Cargill. Greene agreed that corporate responsibility is an important tool in identifying new business opportunities. Lloyd echoed those statements.

The remaining challenge is how to measure corporate responsibility in a way that analysts can evaluate the value created and the risk mitigated. So, ultimately, it’s important to keep asking why the business is engaged in corporate responsibility, how does it impact revenue and risk, and how does it align with strategy.

 

Ellie is a spring 2011 MBA from Carlson School of Management at the University of Minnesota and a freelance brand and marketing consultant. Most recently, she has consulted SMEs in qualifying and entering new markets by providing in-depth marketing research and strategic recommendations. She also has extensive experiences in brand strategy and development in several industries.

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