Business & policy perspectives on corporate ... - APCO Worldwide

Viewpoint 

<strong>Business</strong> & <strong>policy</strong> <strong>perspectives</strong> on corporate responsibility 

APCO WORLDWIDE

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New Fortune Magazine, 2004 

About APCO Worldwide 

Founded in 1984, APCO Worldwide is an independently owned global communication consultancy 

with offices in major cities throughout the Americas, Europe, the Middle East, Africa and Asia. 

Clients include corporations, governments, industry associations and nonprofit organizations. 

Headquartered in Washington, D.C., APCO includes among its clients seven of the top 10 

companies on Fortune’s Global 500. Core services include antitrust and competition; business 

diplomacy; business-to-business communication; coalition building and grassroots advocacy; 

corporate, investor and internal communication; corporate advisory; corporate responsibility and 

strategic philanthropy; creative services; crisis management; financial communication; global trade; 

government/parliament relations; issue management; litigation communication; media relations; 

online communication; opinion research; and positioning. APCO is a majority women-owned 

business. For more information, please visit www.apcoworldwide.com. 

Margery Kraus 

President and CEO 

700 12th Street, N.W. 

Suite 800 

Washington, D.C. 20005 

USA 

Tel: +1.202.778.1010 

Fax: +1.202.466.6002 

Ellen Mignoni 

Senior Vice President 

700 12th Street, N.W. 

Suite 800 

Washington, D.C. 20005 

USA 

Tel: +1.202.778.1000 

Fax: +1.202.466.6002 

Rachel Thompson 

Regional Director, Europe, 

Middle East and Africa 

90 Long Acre 

London WC2E 9RA 

United Kingdom 

Tel: +44.207.526.3600 

Fax: +44.207.526.3699 

Felicia Pullam 

Associate Director 

9/F, Cambridge House 

TaiKoo Place 

979 King’s Road 

Hong Kong 

Tel: +852.2866.2313 

Fax: +852.2866.1917

Foreword 

Welcome to the fourth edition of Viewpoint, in which APCO professionals 

share their thoughts, ideas and market insights on issues of critical 

importance to our clients and our work. We have dedicated this edition to 

corporate responsibility (CR), one of APCO’s strongest areas of expertise 

and one that fundamentally has shaped how we have developed and 

grown our own business. I trust you will find it as interesting to read as 

we did in putting it together. 

For the past 10 years, business executives, government agencies 

and nongovernmental organizations (NGOs) have debated the value, 

importance and impact of CR. To us, that debate is over. We believe that corporate leaders now 

recognize they are an essential part of the societies in which they operate – essential for what 

they bring to the market, for the economic and social value they bring to the community and for 

how they can help transform the social and environmental challenges of our time. Whatever frame 

of reference you use – corporate citizenship; the triple bottom-line; environment, society and 

governance; or simply business in society – CR has helped to create this recognition and set the 

stage for global corporations to think differently about the nature of their institutions and their 

relationships with their publics. 

Like all business practices, CR continues to evolve, and we decided to take this opportunity to 

look ahead and ask: what’s next? In the following pages, APCO’s senior CR practitioners from our 

offices around the world and members of our International Advisory Council share their thoughts 

on how CR will continue to evolve. They have taken a look at a broad range of topics, from 

business-model innovation to consumer activism in India; from the growing role of the media 

and NGOs in the Middle East to investor relations and corporate governance. 

The common thread from all regions is that while CR has made the global business marketplace 

much more complex, it also has made it potentially much more rewarding. The competitive 

marketplace demands that corporate investments add value and produce tangible results, and 

urgent social and environmental challenges pose serious threats to a company’s ability to grow. To 

maintain a healthy growth trajectory in a global marketplace, companies need to innovate in CR 

as much as in every other part of the business. CR offers opportunities for companies to use their 

core strengths and competitive advantages to create new markets, gain new customers and allies, 

enhance employee satisfaction and create greater value for themselves, their shareholders and 

society. It is through this new lens that businesses will develop the next generation of CR. 

I hope you find this Viewpoint of interest. I invite you to learn more about APCO’s work in CR by 

visiting our Web site at www.apcoworldwide.com. 

Margery Kraus is chief executive officer of APCO Worldwide and is based in APCO’s Washington, D.C., global headquarters. 

The opinions expressed herein belong to the respective authors and do not necessarily reflect those of APCO Worldwide.

Contents 

4 Looking Ahead 

APCO experts from around the world share their views on some of the hot topics that will 

shape the next decade in CR. 

10 Beyond Reputation: How Corporate Responsibility 

Triggers <strong>Business</strong>-Critical Research 

Myriam Ugeux-Gerault and Phil Riggins deconstruct the evolving role of CR and how 

research helps determine expectations and how to address them. 

12 Rethinking Corporate Responsibility 

Trevor Neilson looks at how companies can use targeted, proactive CR to make a difference 

in global issues as well as their bottom lines. 

15 Earning the License to Grow 

Ellen Mignoni and Rachel Thompson see innovation as the key to success in a world with 

increasingly scarce resources. 

16 The Importance of “The Authentic Enterprise” 

Roger Bolton describes the challenges institutions face in the wake of changing rules for 

global business. 

18 Sustainability and the Stock Market: 

A Game Changer for Company Valuation? 

Jeff Zelkowitz evaluates the link between socially responsible investments and 

company valuation. 

20 Strengthening Your Market Entry Through 

Public-Private Partnerships 

Richard Hatzfeld offers advice for organizations looking to succeed in new markets within 

the global economy. 

22 New Approaches in Strategic Philanthropy 

Tara Greco and James Robinson discuss the past, present and future benefits 

of philanthropy. 

24 Environmental Sustainability and Social Media: 

New Technology, New Voices, New Influence 

David Wescott examines the impact of online peer-to-peer communication on shaping 

sustainability debates.

26 Lessons From Latin America: New <strong>Business</strong> 

Models for Fighting Poverty 

Jennifer Silberman makes the case that companies in Latin America can help to transform 

low-income communities without sacrificing profitability. 

28 France’s Grenelle on Sustainable Development: 

Another French Revolution? 

Véronique Ferjou and Pazanne Le Cour Grandmaison observe how this sustainable 

development framework is changing how business is conducted in France. 

29 Viewpoint From the Arab Region 

Cleopatra van de Winkel and Tamara Saeb evaluate the rise of CR in the Arab world and 

how it is affected by regional culture. 

31 Viewpoint From Israel 

Daniela Prusky-Sion views the evolving world of CR in Israel and how it is changing based 

on cultural norms. 

32 It Is Great – But, Is It Good for Us?: 

Looking a Gift Horse In the Mouth 

Noma Faku explores what it means to be a responsible corporate citizen in Africa’s volatile 

political climate. 

33 Consumer Activism in India 

Dev Dasgupta probes the rise in consumer consciousness in the increasingly global 

Indian marketplace. 

35 Corporate Responsibility in Indonesia in the 

Era of Reformasi 

John Arnold provides insight into the historical significance of CR in Indonesia and how it 

came to be widely adopted. 

37 Corporate Responsibility in Vietnam: 

Don’t Waste Lessons from China 

Felicia Pullam and Claas Schaberg shed light on the similarities between CR conducted in 

China and Vietnam.

4 

APCO EXPERTS 

What are some of the most significant 

changes that you have seen in CR over 

the last few years? What has been the 

catalyst for those changes? 

Ellen Mignoni: The greatest change has been the 

increasing number of public-private partnerships. 

Moreover, engagement between companies and 

NGOs has become more substantive and transparent. 

Companies, governments and NGOs all realize that the 

issues we are dealing with are too big for any one entity 

to address successfully in any sustainable manner. 

Working in partnership is the only way to go. 

Trevor Neilson: Companies are recognizing that CR is 

deeply integrated into brand management – both from a 

proactive and a reactive perspective. Smart companies 

can use CR to beat the competition by appealing to the 

interests of their customers. 

Rachel Thompson: The biggest change is that the best 

companies recognize that they can’t take access to 

natural resources for granted anymore and need to lead 

by example on global solutions to resource scarcity. This 

imposes a need to earn a license to grow, not simply a 

license to operate in status quo terms. Earning a license 

to grow is a whole new level of CR strategy and practice. 

Kirk Stewart: A growing number of companies are 

embracing CR, creating a CR function within the 

company and executing broad-based initiatives. The 

driving force is largely reputational coupled with the 

growing number of consumers who take CR issues into 

account in their purchasing decisions. 

Felicia Pullam: In Asia, growth in CR is an integral part 

of the broader Asian economic growth story and the 

resulting pressures on sustainability. In China, CR has 

gone from a minor tactic to a serious strategic factor. 

CR is also a hot topic in Vietnam, Indonesia, India, 

Singapore, Thailand and Malaysia. Obviously these 

markets vary significantly, but the opportunities for 

companies to collaborate with government, media and 

civil society are diverse. The drivers include the 

Looking Ahead 

APCO experts from around the world share their views 

on some of the hot topics that will shape the next decade in CR. 

reputation– and relationship-building benefits gained by 

early adopters and recognition by governments of the 

benefits of enlisting corporations voluntarily to help 

address social problems. The commercial media – even 

when state run – also are paying attention. People are 

more aware of their rights as consumers, laborers and 

general members of society – and increasingly able to 

rally others online. 

Barie Carmichael: Two trends are driving continued and 

widespread adoption of CR initiatives as part of corporate 

governance. First, there is Generation Y’s entry into the 

workplace. Many companies have recognized that this 

generation’s focus on social responsibility and civic 

activism makes CR initiatives a prerequisite for recruiting 

the next-generation workforce. Second, there is increased 

emphasis on anticipating emerging issues as part of CR. 

Investors have a history of quickly punishing companies 

that fail to anticipate an issue that materially affects their 

bottom line. This is particularly true for failing to address 

inherent negatives in the company’s business model that 

have the potential to impact stakeholders negatively. The 

more successful the business, the more the inherent 

negatives are multiplied. In other words, inherent 

negatives are a byproduct of an enterprise’s success, 

making a business particularly ripe for criticism and 

potentially public outrage. 

Roger Bolton: The most enlightened companies have 

begun to realize the opportunity to build trust and brand 

loyalty by adopting policies that align the company’s 

interest with the public interest. This involves more 

than policies to avoid harm (e.g. pollution, child labor); 

it also means looking at the core business and finding 

opportunities to create value for customers while earning 

trust through socially responsible actions. A good 

example is the 2004 decision by insurance giant 

Aetna that all Aetna insurance policies would allow 

simultaneous payments for both palliative and curative 

treatments rather than – as had been the government 

and industry standard – requiring patients to choose one 

or the other.

Chris Murck: There have been two key shifts: first, to go 

beyond corporate charity (giving back to the community) 

to add the strong focus on HSE (health, safety and 

environmental) compliance; and second, to go beyond 

those two components through the serious attempt to 

understand sustainability and social-impact issues of 

each successful business model. 

Murray King: In China, the main changes are government 

support for CR; the creation of strategic, China-tailored 

CR programs by foreign-invested companies; and the 

recognition by Chinese companies of the need to develop 

CR programs. The catalysts for these changes include 

the government’s moves to emphasize sustainability over 

APCO EXPERTS 5 

rampant growth and the recognition that CR and civil 

society can help in delivering on government policies. 

Chinese companies are facing pressure to develop 

world-class CR programs to compete with foreign 

companies at home and, more frequently, abroad. There 

is increasing scrutiny of company practices by both local 

and global stakeholders. The Chinese public is 

particularly interested in product quality/safety and 

employee health and safety issues, and it also expects 

demonstrated commitment by multinationals to China’s 

long-term development. CR also plays an important role 

in attracting and retaining people in the midst of a war 

for talent in the Chinese business context.

6 


Can we say with confidence that CR is 

securely entrenched in business? 

Ellen Mignoni: Yes, for several reasons. First, society has 

developed a new and different set of expectations for 

global corporations – they must engage on critical social 

issues. Second, the bar on this has been raised, and I 

don’t think it is going to be lowered. Third, corporations – 

at least the smart ones – have realized that their CR 

efforts really are helping them build new markets for 

their products and services, adding to the bottom line. 

Trevor Neilson: Yes, although it may not be called CR – 

and it needs to be expanded. Regardless of what it is 

called, companies are realizing that they need to develop 

a strategy to address global issues and their role in them. 

Rachel Thompson: The idea that you need to do more 

than comply with the law is fairly well entrenched now. 

So is the concept of reporting on non-financial 

performance, although there is still too much windowdressing 

in a lot of CR reporting. But the true test of 

whether CR is really embedded is in what’s coming out 

of the product innovation cycle. How many products 

have been adapted for resource scarcity or to reach a 

billion poor people? Apply that test and it looks a lot less 

mainstream than the CR community would like it to be. 

Kirk Stewart: No, because the majority of businesses 

have not deeply integrated CR into their business 

processes. There simply are not enough enlightened 

CEOs, many of whom are faced with a myriad of other 

business challenges that must be addressed. 

Felicia Pullam: I would say that expectations for CR are 

firmly entrenched in society and therefore also in 

business. These undefined expectations change and 

evolve, but they are growing steadily, and this will 

continue. Some of the trendiness of CR likely will fade, 

and there could be disillusionment – some stakeholders 

have unrealistically high visions of what companies can 

or will do in the short term. However, I believe the hype 

will cool a bit as CR becomes a permanent part of the 

operating environment. 

Barie Carmichael: With growing evidence of a recession 

(in the United States, if not globally), the pressure to 

make the business case for CR only will increase. CR 

initiatives that cannot be linked to the core of the 

company’s business model will be at risk. 

Roger Bolton: Many companies aren’t there yet. The more 

global and consumer-oriented a company is, the more 

likely it is to be committed to social responsibility 

programs. The more local and business-to-business it is, 

the less likely. But there’s little doubt, as enlightened 

companies show that socially responsible business 

practices can be a differentiator with customers – as 

General Electric is doing with its energy initiative 

Ecomagination SM . Competitors will have little choice but 

to follow suit. 

Chris Murck: Yes. Because the pressure of civil society is 

greater and more targeted, making scale and growth 

increasingly problematic, sustaining business success 

requires CR to be placed at the center of the business 

model. That in turn supports further success. 

Murray King: In China, CR is rapidly becoming 

entrenched among foreign multinationals, although 

the focus still remains largely on CR programs which 

enhance resource efficiency, human resources 

recruitment and retention, and supply-chain 

management. Unfortunately, CR in China is somewhat 

constrained by limited public awareness and an 

underdeveloped “independent” civil society, though 

these elements are steadily improving.

How are companies thinking about and 

measuring success in relation to CR? 

Ellen Mignoni: For the most part, I think companies are 

able to define success – at least short-term success – for 

specific projects or programs. Beyond that, there is a 

long way to go. Quantifying the return on investment is 

essential to sustaining efforts. We would not expect 

anything different from other core business practices, 

so we should expect it and deliver in CR. 

Trevor Neilson: Few companies are doing a good job 

of measuring the impact of their CR strategies, 

and those who do measure are often measuring the 

wrong things. Issue-focused strategies need to include 

outcome-focused systems of measurement that are 

recognized as the best systems in the field where a 

company is working. For example, an education-focused 

CR program needs to be evaluated by the best 

impact-measurement practices in the education field. 

Rachel Thompson: A lot of companies still think about 

CR success primarily in terms of getting a boost on 

reputation, so that’s what they measure: what 

stakeholders think of them. Some also are building very 

detailed dashboards that measure program outputs: 

people reached, carbon saved, etc. The two in 

combination are effective, but I also think there is a 

fundamental test of CR success based on radical product 

innovation, and not enough companies are doing that yet. 

Kirk Stewart: There is clearly a movement toward 

measuring impact, although the number of companies 

actually doing this is still small. 

Felicia Pullam: This varies drastically from the leaders to 

the beginners. In some cases, there still isn’t much 

measurement. Emphasis on measurement and reporting 

is growing quickly, however, and more of our clients are 

interested in honing their management systems 

accordingly. As recruiting and retention are top issues for 

companies operating in Asia, there is an increased focus 

on measuring the effect on employee satisfaction. 

Roger Bolton: As Jeffrey Immeldt of GE is fond of saying, 

“Green is green.” The best CR programs build trust with 

diverse stakeholders, leading to permission to operate 

and competitive advantages in the marketplace. That 

translates directly into the bottom line, which is how 

businesses ultimately are measured. 

APCO EXPERTS 7 

Chris Murck: Measurement and reporting remain 

challenging areas, where I expect the greatest change in 

the medium term. 

Murray King: For most large multinationals in China, the 

CR focus is on human resources and staff retention. As 

CR programs focus on enhancing corporate reputation, 

employee volunteerism and community outreach have 

been shown to reduce staff turnover and save money 

on labor costs. Also, ensuring strong control over 

supply-chain labor and quality issues reduces the risk of 

crises, so this has been a second focus, particularly in 

response to the scrutiny that some industries face from 

international NGOs. Energy/environment-focused CR 

programs that reduce energy costs also generate direct 

cost-savings, while directly supporting government 

priorities. Unsurprisingly, such initiatives have grown 

in popularity. 

What changes do you expect to 

see over the next five years? What 

do those changes mean for corporations, 

both internally – for example, 

management and recruitment – and 

externally – for example, partnerships 

and communication? 

Ellen Mignoni: I think we will continue to see an increase 

in companies talking to all of their stakeholders about 

their roles in society – what they are doing and the 

impact it is having. I think we will see greater 

transparency and a greater focus on measurement and 

impact. And I think we will see a continued growth of 

public-private partnerships. 

Trevor Neilson: Corporations are going to begin to 

use CR issues to distinguish themselves from the 

competition. They will differentiate their products more 

proactively from the competition based on their social 

impact, and they will encourage initiatives that put 

pressure on competitors that don’t have a sound CR 

strategy in place.

8 


Kirk Stewart: The CR movement has gained considerable 

momentum over the past couple of years, and it seems 

to be accelerating. That, coupled with the increasing 

level of transparency and changing consumer 

preferences, is placing increasing pressure on companies 

to be socially responsible. It also has a growing 

importance to current and prospective employees, 

particularly among the millennial demographic, 

Generation Y. Companies also are growing increasingly 

sophisticated in communicating about CR. 

Barie Carmichael: I would anticipate tighter alignment of 

CR initiatives with the core operations of the enterprise, 

particularly if the economic downturn is more prolonged 

than anticipated. Philanthropy still will play a role in 

corporations, but I would see it as an addition to, rather 

than a part of, CR. 

Murray King: In my view, the main changes in China 

will be the development of grassroots community and 

consumer pressure on companies to develop CR 

programs that reflect their interests and concerns, rather 

than government-led top-down pressure, although this 

may take more than five years. Also, employees will be 

increasingly vocal in demanding CR programs that 

leverage their resources and expertise to benefit China’s 

development. This change likely will happen more 

quickly, particularly given the catalyst of the May 2008 

Sichuan earthquake relief efforts and the pressure from 

younger Chinese to see companies leverage their 

resources to do more. 

What are your key tips on CR as a 

vehicle for and an opportunity to create 

new markets? 

Ellen Mignoni: It’s pretty straightforward: when a 

company helps to address a critical social issue, it 

strengthens the community and allows people the 

opportunity to create better lives through improved 

health, education and/or greater individual economic 

empowerment that simply did not exist before. To 

paraphrase a quotation our CEO heard at Davos one 

year: “You can’t have a successful business in a failed 

society.” But you can have greater success in business 

by helping to ensure that society succeeds. 

Trevor Neilson: In the developing world, companies 

who seek to enter new markets have the opportunity to 

build positive reputations by announcing a CR strategy to 

help developing countries deal with their most pressing 

social problems. 

Felicia Pullam: There are significant opportunities for 

this in Asia. Unfortunately, some companies have tried 

to bring over green business models or other CR-related 

strategies from the West without doing the groundwork 

to build understanding and appreciation among 

Asian stakeholders. 

Kirk Stewart: We’re definitely starting to see CR serving 

as the innovation behind the development of new 

products and services for the middle and bottom of the 

economic pyramid. But again, this is limited to only a 

few companies. 

What are your thoughts on how 

government views of CR may shift, 

and on how the investment community 

might shape CR? 

Ellen Mignoni: I think we’ll see governments accessing 

innovation, research and development, management 

skills and results orientation that companies bring to the 

table. Governments certainly will see companies as 

critical partners in developing solutions to current 

problems, as well as resources on how to prevent 

new ones.

Trevor Neilson: There is no pressing global problem that 

can be addressed without partnership between the 

private and public sectors. Governments must work in 

partnership with companies to address these problems 

in order to be successful. 

Rachel Thompson: Governments increasingly will set up 

CR liaison functions and sponsor surveys and studies, 

but because governments everywhere rely on business to 

drive the growth and job creation that governments claim 

as their own achievements, they will regulate CR only if 

business’s failure to act creates public outcry. I think 

water will be such an issue in many regions in the next 

few years. We are also seeing renewed pressure for the 

inclusion of environment and labor standards in 

international trade agreements. The best way to counter 

that pressure is to improve domestic governance of these 

issues, including through greater attention to voluntary 

CR. As for the investment community, the resource 

scarcity agenda will help shock the mainstream system 

into taking a deeper and broader look at responsible 

business strategies. Goldman Sachs’ SUSTAIN 

methodology – analysis of the sustainability of corporate 

performance – is an important step. I hope they will 

extend and mainstream it. 

Kirk Stewart: There has been a lot of discussion about 

increased government regulation pertaining to CR, but I 

don’t see that happening on a very fast pace except in 

isolated cases. I also think the investment community 

has been slow to take CR seriously into consideration in 

evaluating company performance and valuation. 

However, there does seem to be some recent momentum 

in this regard. By and large, I believe the investment 

community remains largely disinterested unless CR 

directly impacts the performance of the business. 

Chris Murck: Government increasingly will legislate on 

sustainability based on best practices developed as 

voluntary CR programs. Climate change is one example. 

Felicia Pullam: Many of the governments of developing 

Asian countries have recognized the potential for CR 

to help meet some of the substantial social and 

environmental challenges they are facing. Some 

governments have shown strong interest in public-private 

partnerships, which unfortunately are extremely 

challenging due to high expectations and limited 

experience with balanced partnerships. 

How do you think CR will evolve in 

developing countries? 

Kirk Stewart: I think developing countries will benefit from 

CR initiatives undertaken by companies in the developed 

world, as well as a host of new products and services 

specifically being created to serve the bottom of the 

economic pyramid. 

Rachel Thompson: As resource scarcity increases, I 

suspect we will see the emergence of more CR-focused 

laws in resource-rich countries as a condition of 

investment. There is also a need for a larger number of 

“home-grown” companies in developing countries to 

embrace CR in order to counter ongoing pressure for 

trade protectionism on labor and environment issues. It 

would be good to see more leading companies, including 

those from emerging markets, coming forward soon with 

their own equivalents of GE’s Ecomagination; Microsoft’s 

Unlimited Potential initiative, which aims to bring 

technology to the next five billion people; and Tata 

Motors’ Nano car, an inexpensive, environmentally 

friendly vehicle. 

Felicia Pullam: Although it will obviously vary across Asia, 

I think we’ll be seeing more issue management that’s 

clearly tied to CR. There is no shortage of CR issues that 

have plagued the reputations of multinationals in the 

West for years, but have not yet “popped” in Asia. Yet 

they are there – and ripe for disgruntled consumers to 

blog about or for local journalists to dig into. There is still 

an opportunity to get ahead of these issues proactively, 

but unfortunately many managers don’t seem to be 

considering “pre-emptive” stakeholder engagement, and 

they are often not implementing relevant North American, 

European or even global corporate policies in Asia. It is 

already clear that if multinationals are caught with double 

standards in terms of CR between China and the West, 

Chinese consumers might not be quick to forget. We’ll 

likely be seeing more of that soon. Furthermore, it’s 

important to recognize that many issues related to core 

products or operations take very different cultural forms. 

Serious research into attitudes about business challenges 

could improve corporate strategy to ensure companies are 

positioned on the right side of the issues in the long run. 

Biographies of APCO’s expert contributors are available online at 

www.apcoworldwide.com. 

APCO EXPERTS 9

10 

MYRIAM UGEUX-GERAULT AND PHIL RIGGINS 

Beyond Reputation: How Corporate Responsibility 

Triggers <strong>Business</strong>-Critical Research 

Myriam Ugeux-Gerault and Phil Riggins deconstruct the evolving role of CR 

and how research helps determine expectations and how to address them. 

Research on stakeholder opinion 

always seems to have been part of 

the DNA of CR. As CR evolves from 

concepts of reporting and “talking to 

critics” to expanded concepts of 

creating business and social value, 

it is worth asking why it is critical to 

understand the expanded role that 

research must play in CR and what 

are the most relevant tools for this 

evolving need. 

The immediate answer to the 

“why” question lies in the shift in 

behaviour that CR communication implies: a responsible 

organisation first listens to its stakeholders to understand 

their expectations, then decides how best to respond, 

making changes where it can and building strong 

argumentation when it cannot. Corporations routinely 

conduct surveys about the comparative CR expectations 

of their stakeholders. They all aim at bridging the gap 

between stakeholder expectations and corporate 

behaviour. In this context, research is the initial 

step to any CR strategy, and communicators have 

a critical part to play in informing the process of 

designing that strategy. 

For some, CR continues to be about the license to 

operate, but – for the best and most innovative 

companies – it is also a license to grow. Since 

expectations of responsible behaviour are now the norm 

and the bar continues to rise, it is correspondingly 

harder to stand out and reap reputation and direct 

business dividends by following a standard template for 

good conduct without also adding an understanding of 

the relationship between innovation and risk 

management. As companies innovate, it is vital that they 

ensure these new ideas conform to ever-changing CR 

expectations in a proactive way. Not doing so runs the 

risk of innovation failure and serious damage to 

corporate reputation. This new CR reality – where 

traditional CR must align with the need for effective 

innovation – means CR must enhance its place at the 

boardroom table with new tools designed to measure 

and address stakeholder expectations. 

Stakeholders have concerns and issues that are critical 

to them. These concerns and issues will be relevant to 

companies in varying ways and degrees as they 

innovate. The purpose of effective research is not only to 

identify these concerns and issues but also to assess 

which ones are relevant and in what ways, and to 

provide strategic guidance on what the company can 

and should do to address them given its business model 

and goals. Equally important, good research should 

provide guidance on what the company cannot or should 

not do. The goal is to be successful, not always to try to 

make everyone happy. Having good predictive research 

tools makes it easier to decide when action is required to 

ensure growth does not come at the cost of reputation. 

How to determine that something is important? 

To help businesses balance innovation and CR, APCO 

has developed and continues to expand tools for meeting 

this challenge. A starting point in our thinking was the 

belief that these new CR research tools must go beyond 

reputation management to support areas such as new 

product innovation, informing the marketing function as 

products are developed and launched. Corporations are 

usually very good at understanding how customers are 

likely to react to a new product. However, rarely do they 

consider how key stakeholders such as regulatory 

bodies, NGOs, media and key opinion-formers will react. 

APCO’s Pathfinder model uses a tailored, comprehensive 

research approach to understand and help navigate the 

stakeholder landscape before and after a launch. By 

factoring in these audiences’ views, Pathfinder helps 

minimise business and reputation risk and maximise the 

likelihood of a successful launch – and maintain a 

positive corporate reputation.

The APCO Sustainability Issues Monitor (SIM) takes an 

outside-in view. SIM identifies the financial, societal and 

environmental performance issues that matter in relation 

to a specific industry and the actions being taken by the 

industry to mitigate or transform them. It measures over 

time the evolution in salience – awareness and 

importance – of a specific set of issues and reports on 

how it motivates actions within a market sector. As such, 

it leads to specific CR recommendations, risk 

management information and a benchmark for action. It 

can then link back to business objectives and reputation 

measurement to assess issue management performance. 

MYRIAM UGEUX-GERAULT AND PHIL RIGGINS 11 

These predictive research tools and others demonstrate 

that as CR evolves, practitioners and researchers must – 

and can – go beyond the traditional communication 

fields of perception, opinion or reputation to show how 

public affairs and strategic communication directly 

influence business outcomes. 

Myriam Ugeux-Gerault is an associate director based in APCO Worldwide’s 

Paris office, a counselor on crisis and sensitive communication services 

in France and EMEA and a coordinator of multi-office accounts in the 

EMEA region. 

Phil Riggins is a director with APCO Insight ® , the opinion research group 

at APCO Worldwide, and is based in London.

12 

TREVOR NEILSON 

Rethinking Corporate Responsibility 

Trevor Neilson looks at how companies can use targeted, proactive CR 

to make a difference in global issues as well as their bottom lines. 

One sad fact about CR is that CR 

offices are often small, underfunded 

and somewhat powerless. They are 

departments that might be 

rewarding to work in, but which 

have no direct relationship to the 

company’s core business and where 

no ambitious career path makes a stop. It’s often only 

after a problem occurs that the average CEO might focus 

on CR issues and, by then, it is often too late to repair 

the reputational damage that can come with a crisis. 

Part of the problem is the name “corporate 

responsibility” itself. For too long, CR has been seen as 

something companies “have to do” in response to 

external pressure. The majority of companies think of 

issuing an annual CR report, making a token local 

donation and generally staying out of trouble as the 

primary roles of their CR teams. Reporting alone is 

increasingly becoming the CR focus of many companies, 

and efforts such as the Global Reporting Initiative 

(created by NGOs and the United Nations) have helped 

companies embrace the need for transparency in 

communicating about their environmental, economic and 

social impact, but have, in some cases, given the 

involved companies an “out,” saying that they have done 

their part even if they have not made real changes or 

created real impact. 

It’s often only after a problem occurs that 

the average CEO might focus on CR issues 

and, by then, it is often too late to repair 

the reputational damage that can come 

with a crisis. 

Another underlying problem with CR is that NGOs and 

the United Nations agencies that created and have 

championed this concept are not focused on sales or 

market share. They don’t understand the business world, 

generally distrust corporations and think of CR as 

making companies “less bad.” 

To the consternation of many activists, companies are 

motivated by profit and, in an era where missing 

earnings estimates by a few cents can send a stock 

plummeting, companies have little room to do anything 

that doesn’t directly help the bottom line. 

The good news is that an increasing body of evidence 

shows that companies that embrace strategic, proactive 

CR efforts can use those efforts to help address global 

problems – but also increase profits, build shareholder 

value and beat the competition. When used strategically, 

CR should help sell more products, motivate personnel 

and be applauded by shareholders. When used 

creatively, CR can be far more effective than traditional 

marketing techniques. 

There are three major reasons why CR is becoming more 

important to companies: sustaining corporate growth, 

increasing public trust and acknowledging consumer 

concern about global issues. 

It’s good for sustained growth 

A company that seeks only short-term profitability has 

little concern with the impact it has on the world around 

it. Companies that want to build long-term shareholder 

value need to ensure that the processes through which 

they produce their goods or services do not harm the 

customers they seek to serve or the issues those 

customers care about. As the brilliant architect William 

McDonough has observed, “a system that takes, makes 

and wastes” is not sustainable in the long term. 

A good example can be found in the toy recalls of the 

last two years. During those two years, the U.S. 

Consumer Product Safety Commission issued 59 recalls 

of lead-tainted toys. The experience of one of these 

companies helps illustrate the impact on shareholders.

RC2 Corporation sells Thomas & 

Friends toys – wooden train sets 

and other items that are popular 

with young children. The 

company’s stock was trading 

above US$40 in June 2007. 

When its toy trains were recalled 

due to a lead poisoning hazard, 

its stock dropped below US$30 

by August of 2007 – and that 

was just the beginning. 

The following February, RC2 

announced its annual financial 

results and disclosed that the 

overall cost of the recall was 

US$17.6 million. At that point, 

the stock dropped below US$20 

per share, where it has remained 

ever since – half its price from a 

year earlier. 

While this example may seem 

like a statistical outlier to some, 

today’s world of increased 

shareholder activism, improved 

supply-chain practice norms and 

global whistle-blowing make 

getting “caught” for harmful 

practices increasingly likely. 

Public trust in corporations 

has declined 

Never in American history have 

institutions had lower levels of 

trust with the public. A January 2008 Gallup poll found 

that 68 percent of citizens want corporations to have 

less influence, up from 52 percent in 2001. Consumers 

have watched Bear Stearns, Enron, WorldCom and 

assorted other scandals and bailouts and have developed 

a view that companies in general are not interested in 

doing the right thing, regardless of who gets hurt. 

But when a company gets involved in a pressing social 

issue, and works side-by-side with governments and 

NGOs, it is able to build a level of trust with the public 

that is far deeper than that which is built through any 

old-fashioned marketing or advertising effort. Through 

work on social issues, companies build broad networks 

of allies who validate them and communicate on 

their behalf. 

Consumers care more about global issues 

TREVOR NEILSON 13 

The last five years have seen a dramatic increase in the 

number and effectiveness of issue-centered movements 

involving corporations and large numbers of everyday 

consumers. Millions of people have joined the ONE 

campaign, which works to address African poverty.

14 TREVOR NEILSON 

Millions more have joined Save Darfur and other 

organizations working to stop the violence in Sudan. 

Al Gore’s “An Inconvenient Truth” and the movement that 

it catalyzed have millions of people changing their light 

bulbs and looking at their carbon footprints. 

It’s easier now for a consumer to Google the 

words “global warming” than it is to watch the 

evening news and, as a result, Americans have 

a growing interest in the world around them. 

Consumers today can log on to YouTube and see video 

of Zimbabwe President Robert Mugabe’s security forces 

attacking protestors in Harare, the aftermath of the 

cyclone in Myanmar and battles filmed by American 

soldiers and Iraqi civilians using camera phones in Iraq. 

It’s easier now for a consumer to Google the words 

“global warming” than it is to watch the evening news 

and, as a result, Americans have a growing interest in 

the world around them. 

The Anglo American Example 

The experience of the mining company Anglo American 

fighting AIDS in South Africa is a classic example of how 

companies can turn crisis into opportunity. Anglo 

American has more than 120,000 employees, most 

operating in parts of the world with a high prevalence 

of HIV/AIDS. In 2005, Anglo estimated that 

approximately 30,000 – or 25 percent – of its 

employees had the virus. 

Many companies would simply have ignored the 

problem – if workers became sick and didn’t show up 

for work, many others could be hired to do the job. 

But under the leadership of Anglo’s CEO Sir Mark 

Moody-Stuart, the company took the opposite approach, 

deciding to save the lives of its employees by helping 

them access life-saving antiretroviral treatment. 

Anglo’s AIDS initiative has proven extraordinarily 

effective, not only in terms of keeping HIV-infected 

workers healthy and AIDS-free but also in terms of 

reducing absenteeism and improving productivity. At the 

end of 2005, Anglo had more than 3,000 employees on 

AIDS treatment. More than 90 percent of those were 

healthy enough to be able to continue with their 

normal work. 

An economic study of the program has proven that it 

was a wise investment. The study evaluated the overall 

impact of HIV/AIDS on the company, the impact of 

HIV and AIDS on Anglo American without its AIDS 

initiative and the economic impact of having 

implemented the initiative. 

The results of the study show that the HIV/AIDS 

programs’ costs to Anglo companies would constitute 2 

percent of overall payroll costs if the initiative had not 

been implemented. When the initiative was 

implemented, absenteeism dramatically declined. 

Workers were healthy and able to return to being 

productive. Savings resulting from these absenteeism 

declines were 20 to 60 percent of the initiative’s cost. 

The cost of employee health care also dramatically 

decreased and produced additional savings of 45 to 70 

percent of the costs over the first 18 months of the 

AIDS initiative. 

Anglo American’s AIDS program has won numerous 

awards, earned the praise of heads of state, the media 

and United Nations leaders. But more important, it has 

saved lives – and saves money in the process. 

It’s time to stop talking about corporate “responsibility.” 

It’s time to stop thinking in terms of being a little “less 

bad.” Instead, companies should set out to beat the 

competition by creating products and services that have 

a positive impact on their customers, employees and 

communities – all while increasing profits. This isn’t a 

responsibility – it’s an opportunity – and the smartest 

companies will find a way to use it to increase profits 

relentlessly. In the process, they also will do a lot 

of good. 

Trevor Neilson is a senior advisor at APCO Worldwide and a member of 

APCO’s International Advisory Council. He is the former executive director 

of the Global <strong>Business</strong> Coalition on HIV/AIDS, Tuberculosis and Malaria.

Earning the License to Grow 

The years ahead will be defined by 

competition for access to increasingly 

scarce resources – including oil, 

water, agricultural and mineral 

products, as well as highly educated 

young people. This “scarcity agenda” 

creates a new dimension to CR: the 

need to earn a “license to grow” in a 

resource-constrained world – not 

simply a “license to operate” in 

status quo terms. 

Companies will earn the license 

to grow through responsible and 

strategic innovation – using resources much more 

carefully and strategically, creating alternative or 

additional resources, working in partnership with others 

in the public and private sectors and doing so in ways 

that also bring material benefit to the billions of people 

who still do not have access to many basic resources, 

products and services. 

This means that, increasingly, CR will involve taking a 

hard look at the business innovation cycle: how many 

products and services have been adapted for resource 

scarcity or to reach a billion poor people – or both? 

Seen in these terms, responsible business innovation 

involves directing innovation to “the point of need” – in 

this case defined as the need to reduce usage of scarce 

natural resources while at the same time reaching a 

much greater number of poor people with the basic 

products and services that improve lives and build 

sustainable markets. This requires a greater emphasis by 

businesses on identifying, targeting and monetizing 

societal and consumer needs as well as their “wants.” 

It is already apparent that there are three main channels 

for such innovation: 

• Product innovation – developing new products and 

services that enable customers to reduce their 

resource use and/or enable billions more people to 

meet basic needs while reducing the resource impact 

per product unit. General Electric’s hybrid locomotive 

engine is an example of the former, and Tata Motors’ 

Nano car project is an example of the latter. It also 

means more corporate social entrepreneurship: 

ELLEN MIGNONI AND RACHEL THOMPSON 15 

Ellen Mignoni and Rachel Thompson see innovation as the key to success in a world with increasingly scarce resources. 

working and co-investing with nonprofit groups to 

bring solutions to market that will work in very 

difficult conditions in the field – such as the 

incubator made of car parts developed by doctors 

from Massachusetts General Hospital. 

• Process innovation – inspiring employees to adapt 

existing methods or devise new methods to be more 

resource efficient. Here, some of the large-scale 

retailers and freight companies already are adapting 

well-honed; lean operations tools to the challenges of 

resource scarcity. 

• <strong>Business</strong> model innovation – developing new pricing 

models, new delivery channels and new forms of 

innovation collaboration, including with the nonprofit 

sector. This channel is possibly the least advanced to 

date – having so far focused mainly on micro-sized 

products in the food sector, micro- or shared-access 

models in the technology sector and some 

commercial efforts in micro-finance. 

Earning the license to grow through business innovation 

presents a range of operational and communication 

challenges: from effective stakeholder consultation and 

partnership to inspiring the workforce, including but not 

limited to the research and development teams; from 

mobilizing resources for long-term investment to 

communicating effectively about science, technology 

and society – and all along the line, ensuring 

go-to-market credibility. 

The next decade of adjustment to resource scarcity will 

be highly disruptive for global business. It also will likely 

be characterized by increasing resource regulation – 

of which the growing calls in Western Europe for 

compulsory corporate reporting on carbon use 

are but one harbinger – making it all the more 

imperative to embrace the license to grow through 

business innovation. 

Ellen Mignoni is a senior vice president in APCO Worldwide’s Washington, 

D.C., office, where she helped build APCO’s global CR practice. 

Rachel Thompson is a regional director in APCO Worldwide’s Europe, 

Middle East and Africa region and practice manager for CR and global 

trade. She is based in London.

16 ROGER BOLTON 

The Importance of “The Authentic Enterprise” 

Roger Bolton describes the challenges institutions face in the wake of changing rules for global business. 

It’s abundantly clear that the global 

business environment is changing 

rapidly, creating new challenges. A 

new report from the Arthur W. Page 

Society, called “The Authentic 

Enterprise,” provides a template for 

global institutions to thrive in the 

face of massive change. 

The Page Society interviewed 31 CEOs, who describe a 

seismic shift in how the public sees corporations and a 

corresponding rise in demands on the chief executive. 

The CEOs, in turn, are placing increasing demands on 

their chief communications officers (CCOs), who must be 

more strategic and business savvy. 

“The Authentic Enterprise” makes the case that three 

trends – globalization of the economy, the information 

technology networking revolution and the rise of 

disparate stakeholder groups – are changing the playing 

field for global business. 

The nearly universal access to virtually free means to 

gather and disseminate information has given rise to 

new stakeholders, who are generating demands for 

transparency and CR, along with the threat of increased 

regulation. Their influence has the power to weaken trust 

in companies and their brands. 

“The Authentic Enterprise” makes 

the case that three trends – 

globalization of the economy, the 

information technology networking 

revolution and the rise of disparate 

stakeholder groups – are changing 

the playing field for global business. 

At the same time, the rise of new 

stakeholders is opening vastly expanded 

opportunities for global enterprises to build 

new relationships that can strengthen 

brands and build trust. It is a classic 

disruptive moment. Enterprises that 

understand the threats and opportunities 

and respond effectively will thrive; 

those that don’t will experience 

increasing resistance.

The paper issues a call to action for institutions to: 

1. Define and activate core values. 

2. Build and manage integrated, multi-stakeholder 

relationships. 

3. Enable their people with “new media” skills 

and tools. 

4. Build and manage trust consciously in all 

their dimensions. 

…the rise of new stakeholders is opening 

vastly expanded opportunities for global 

enterprises to build new relationships that 

can strengthen brands and build trust. 

The role of communications 

“The Authentic Enterprise” concludes that CCOs are best 

positioned to provide leadership to global institutions 

across the full range of these actions. However, 

suggesting that CCOs assert leadership is not the same 

as staking out ownership. Clearly, other staff and line 

business leaders share responsibility; and if there’s an 

ultimate owner, it’s doubtless the CEO. But the CCO is in 

the best position to lead a companywide effort to define 

and activate values, build relationships, enable the 

organization with new media skills and build trust. 

Roger Bolton is a member of APCO Worldwide’s International Advisory 

Council. He is the former senior vice president of communications for 

health care benefits provider Aetna. 

Values 

ROGER BOLTON 17 

Global companies have extended organizations and 

outsourced functions. Because interested stakeholders 

have ready access to information about companies, 

along with the ability to distribute it widely and 

instantaneously, it’s easy for them to expose corporate 

actions that are inconsistent with stated objectives and 

beliefs. The antidote is not to attempt to control the flow 

of information, which is impossible, but rather to 

strengthen value systems and operating principles so as 

to make an institution authentically consistent with its 

stated purpose. 

Relationships 

Constituent relationships always have been important 

for businesses, but the proliferation and empowerment 

of new kinds of stakeholders have altered the landscape 

profoundly. <strong>Business</strong>es today are in an acute, 

high-stakes battle for their identities and global 

reputations. Key to winning this battle is building 

support among multiple stakeholders and across civil 

society at large, while defending the company, its 

principles and its reputation against misguided attacks. 

“New Media” 

It is in the corporation’s best interest to empower its 

workforce with new collaborative tools – the same ones 

that are being used by external constituents. By using 

these capabilities internally, the organization and its 

people can build understanding and consensus on core 

values. Externally, they can build influence and 

relationships of trust. 

Trust 

Trust is no longer a function only of compliance with 

the law and business ethics. With the emergence of 

empowered, distributed and technology-enabled 

stakeholders, the challenge of building trust is more 

acute than ever. Successful enterprises must have a 

conscious strategy for building trust internally and 

externally by operating in the public interest.

18 

JEFF ZELKOWITZ 

Sustainability and the Stock Market: 

A Game Changer for Company Valuation? 

Jeff Zelkowitz evaluates the link between socially responsible investments and company valuation. 

When former Vice President Al Gore 

teamed up with David Blood of 

Goldman Sachs to launch 

Generation Investment Management, 

their intention was to create a new 

model for socially responsible 

investment (SRI). Instantly 

nicknamed “Blood & Gore,” the firm is part of an 

evolving trend of financial institutions seeking to 

incorporate environmental, social and governance factors 

into the traditional company valuation framework. 

This is not your father’s SRI. Bringing sustainability 

(often referred to as nonfinancial or extrafinancial factors) 

into the mainstream of institutional investment is a 

potential game changer for company valuation. And it 

has major implications for corporate strategy, reporting 

systems and communication. 

SRI funds have grown into a US$2.7 trillion sector that 

now represents 11 percent of institutionally managed 

assets in the United States. The two main types of SRI 

investing have been social screening and shareholder 

advocacy. Social screening accounts for about 75 

percent of SRI funds and typically relies on screening 

out “sin stocks,” such as alcohol, tobacco and gaming 

companies, or screening in stocks from an approved list 

of companies that meet positive criteria, such as the 

Dow Jones Sustainability Indexes. Advocacy attempts 

to encourage managements to alter company conduct 

or business practices, or to adhere to standards 

and guidelines. 

Numerous studies attempt to understand whether SRI 

funds outperform other investment styles over time, and 

whether companies with a strong reputation for CR gain 

a valuation premium in their stock prices. It is difficult to 

prove causation, and this statistical approach does not 

consider the actual investment process by which 

financial-market participants analyze and value stocks. 

Ultimately, the question must be how they view longterm 

sustainability factors in valuing public companies. 

Investors and analysts have been trained to analyze 

financial data that is also the basis for company 

information disclosure. They have trouble valuing 

intangibles, and this is an accounting problem not 

limited to CR but also encompassing intellectual 

property, brands and reputation. The level and quality 

of corporate reporting on sustainability issues is widely 

seen to have improved, and voluntary standards such as 

the Global Reporting Initiative are attempting to make 

information more consistent. Yet, we are still at an early 

stage of developing the systems and metrics for reporting 

nonfinancial factors, and the mainstream financial world 

has done little to process what data is available into the 

investment equation. 

The challenges are both cultural and structural. Most 

equity investors and research analysts tend to look 

askance at social compacts as a basis for corporate 

organizations, but they also have lacked the professional 

experience and training to deal with sustainability issues; 

the financial and managerial incentives to focus on 

them; and the regular, timely and consistent reporting 

of information from company to company needed to 

incorporate long-term sustainability factors into 

traditional investment analysis. Short-termism is 

hardwired into the system, lessening the weighting 

of long-term issues. 

The level and quality of corporate reporting on 

sustainability issues is widely seen to have 

improved…Yet, we are still at an early stage 

of developing the systems and metrics for 

reporting nonfinancial factors… 

Generally speaking, corporations are ahead of financial 

markets in their strategic understanding of and 

investments in CR. Markets do a good job of penalizing 

the stock prices of companies hit with major liabilities 

arising from a pollution or health risk or those with 

governance problems – and they can also reward a 

company that can capitalize profitably on the “green” 

preferences of consumers. But they are much slower to 

recognize and connect the dots on long-term 

sustainability impacts.

Yet, corporate sustainability 

is in many respects the 

foundation for earnings 

sustainability – and the 

latter means everything to 

pension funds, insurance 

companies and other 

investors seeking to cover 

their long-term liabilities. 

Billionaire investor Warren 

Buffett is one who is 

recognized as successfully 

valuing earnings 

sustainability as the basis 

for long-term investing – 

and for going beyond what 

can be captured on income 

statement or balance sheet 

accounting for uncovering 

long-term value. 

That’s the information 

arbitrage opportunity that 

the new generation of 

investors is seeking to 

exploit. Work is being done 

to develop the use of 

nonfinancial factors in 

mainstream investment 

research, particularly in 

Europe. For instance, major institutional investors are 

grouping together to incentivize investment banks 

financially to devote resources to new kinds of analysis. 

Standards for materiality of nonfinancial information 

linked to environmental, social and governance factors 

are also progressing. Several of the firms involved in 

these efforts often do not fit the classic SRI profile. 

They are looking at major economic trends where 

sustainability is becoming a mainstream phenomenon in 

order to find new sources of alpha – the information 

edge that drives superior investment returns. 

Given the vastly increasing role of sustainability in the 

development of corporate strategy, it is clearly in the 

interest of corporate leaders to educate the financial 

markets on how these factors are linked to business 

value. Chief financial officers and investor relations 

officers are rarely involved in these efforts and will need 

JEFF ZELKOWITZ 19 

to develop approaches for tracking and communicating 

material information related to sustainability, so that it 

can be effectively digested by financial constituencies 

and reflected in the market’s opinion of the stock. 

Likewise, CEOs can help by spending more time 

discussing long-term strategic issues with the financial 

markets. Specifically, they can set the tone by 

demonstrating how their sustainability commitments 

factor into shareholder value creation and protection. 

Managements that figure out how to communicate 

successfully on these issues will be in the best position 

to secure the long-term buy-in of shareholders – and 

to achieve the maximum sustainable valuation for 

their businesses. 

Jeff Zelkowitz is a senior vice president at APCO Worldwide and is based 

in New York.

20 RICHARD HATZFELD 

Strengthening Your Market Entry 

Through Public-Private Partnerships 

Richard Hatzfeld offers advice for organizations looking to succeed in new markets within the global economy. 

We are in the midst of an historic 

shift in the world’s economic 

balance of power, as traditionally 

poor or middle-income countries – 

nations whose citizens make 

between US$1,500 and 

US$20,000 per year – are 

gaining prominence on the global economic stage. 

“The rise of the rest,” as author Fareed Zakaria calls 

this phenomenon, captures the growth of the group of 

low- and middle-income countries that now contribute 

nearly US$13 trillion to the global economy, more than a 

quarter of total worldwide output. To highlight the 

tremendous pace that developing countries have set over 

the past decade, consider that real gross domestic 

product (GDP), as reported by the International 

Monetary Fund, increased 69 percent between 1997 

and 2006 among developing economies, compared with 

30 percent growth for advanced economies during the 

same 10-year period. 

The emergence of lower-income consumers as a major 

market force offers tremendous opportunities for 

companies that are able to retool their marketing mix 

from a model that traditionally has targeted the most 

affluent one billion people on the planet to one that 

efficiently reaches the next five billion people – the 

so-called middle- and bottom-of-the-pyramid consumers. 

As incomes rise in more than 100 countries throughout 

Africa, Asia and Latin America, so too will the demand 

for better health care, convenience products, electronics 

and household staples, to name a few categories. How 

then can organizations most effectively and sustainably 

succeed in this new landscape? 

In evaluating strategies for entry and sustainable 

management in a developing country, companies 

would be prudent to consider establishing alliances 

with an unlikely resource: leading NGOs operating in 

the local market. 

Building public-private partnerships between corporate 

and nonprofit organizations can yield excellent benefits 

for both groups working in the developing world. NGOs 

often are able to provide sharp insight into consumer 

habits and access to government influencers, as well 

as opportunities to build significant goodwill, brand 

recognition and loyalty among local communities through 

the effective sponsorship of CR projects. A strategic 

alliance between nonprofits and companies also offers a 

less threatening means for global firms to operate in a 

new country than through the development of a venture 

with a local company in the same industry, a potential 

competitor that could receive protection from a host 

government down the road. 

International and locally based NGOs have operated 

in developing countries for decades and have learned 

through tough lessons what works and what often 

will lead to failure. Working with lean budgets 

and staff, many of these organizations have 

succeeded in grassroots outreach, communication, 

mobilization and behavior change within segments of the 

population often well outside of conventional marketing 

channels. Those segments define the middle- and 

bottom-of-the-pyramid consumers that are now sought 

after by multinational firms. 

International and locally based NGOs have 

operated in developing countries for decades 

and have learned through tough lessons what 

works and what often will lead to failure. 

At the same time, many nonprofit organizations now 

view partnership with the private sector as an essential 

element to their long-term ability to fulfill their mission of 

serving local populations. Highly effective CR programs 

have become mainstream in emerging markets, as 

companies work with NGOs as a way of contributing 

goodwill to needy populations while also meeting 

operational interests, such as improving employee and 

community health or safeguarding valuable natural 

resources that drive local economies.

The power of public-private partnerships can offer three 

areas of strategic advantage to firms entering developing 

markets, particularly in Africa and South Asia: 

• 360 o market data: Rather than relying solely on 

outside research firms, companies can work with 

NGO partners to round out their understanding of the 

consumer landscape in a new country, particularly 

when strong economic and cultural elements are in 

play. By operating in poorer communities and 

managing customer research and outreach operations 

over several years, NGOs often have a ready-built 

network of communities for private companies to 

engage as part of their market scoping. These 

communities may deliver a more representative study 

sample, and the methodology for any consumer 

research efforts will be more informed through the 

input that NGOs and local community representatives 

can offer. At the same time, NGOs are in need of 

more sophisticated marketing and outreach tools, 

particularly in segmenting populations to deliver more 

relevant messaging. These are areas of technical 

expertise that private-sector partners can share. 

• Access to government influencers: The emergence 

of mainstream consumerism in developing countries 

alters how some governments can support 

private-sector development and direct foreign 

investment. Both local and international NGOs 

have valuable insights to share regarding which 

government contacts are most appropriate to engage 

and how best to work with them. Money may talk in 

emerging markets, but transparent relationships with 

key government decision-makers are paramount for 

long-term operational success and competitive 

advantage. NGOs are an integral resource for helping 

companies to forge these government relationships. 

Correspondingly, the changing world of international 

aid requires NGOs to develop multilateral funding 

streams. Public-private partnerships offer a means for 

NGOs to build greater credibility and differentiation by 

demonstrating that they have the project scope and 

capacity to appeal to a broad base of donors. 

• Brand equity development: CR programs offer a 

platform for companies to create brand awareness 

and loyalty in new markets while building goodwill in 

under-resourced populations. A partnership with an 

NGO operating in a developing country provides the 

RICHARD HATZFELD 21 

opportunity to identify projects that meet the social 

needs of a community and the interests of the 

sponsoring company. NGOs undertaking projects 

also may gain positive recognition through such 

partnerships, particularly in countries where the 

reputations of development organizations have 

suffered from aid fatigue. 

The risks are significant for firms venturing into 

developing markets. Market data, local relationships 

and flexible operating models are indispensible 

resources, as are the right alliances. Before relying on 

traditional approaches for assessing new market 

opportunities, consider how successful engagement 

and communication with NGO partners may provide 

organizations with essential insights for understanding 

and reaching the poorer segments of the 

world’s population. 

Richard Hatzfeld is a senior associate with APCO Worldwide and is based 

in Washington, D.C. He has extensive experience working in both the 

private and public sectors throughout Africa and Asia.

22 TARA GRECO AND JAMES ROBINSON 

New Approaches in Strategic Philanthropy 

Tara Greco and James Robinson discuss the past, present and future benefits of philanthropy. 

“Venture philanthropy,” “creative 

capitalism,” “social entrepreneurship” 

and “philanthropy 2.0” are just 

some of the buzz words that have 

burst into public consciousness over 

the past few years. As these terms 

become more common among 

C-suite executives, it is important to 

recognize that at their core they all 

describe new approaches to running 

a socially responsible and socially 

engaged business, but they are 

approaches that build from 

philanthropic practices that have 

been employed by companies, both large and small, 

for centuries. 

Strategic philanthropy serves as the historical foundation 

for most CR programs and is itself big business. Indeed, 

in 2006, The Conference Board estimated that 

U.S.-based corporations donated US$12.72 billion, or a 

median of 1.16 percent of pretax income, to social 

causes. Organizations such as the International <strong>Business</strong> 

Leaders Forum, <strong>Business</strong> in the Community and the 

Clinton Global Initiative encourage smart corporate 

philanthropy. Others, such as <strong>Business</strong> Week magazine, 

the FTSE4Good index series and Socially Responsible 

Investment (SRI) Funds – such as Domini and Calvert – 

eagerly track the giving of the world’s largest and most 

profitable companies, hoping to spot industry trends 

and opportunities. 

<strong>Business</strong> responding to social issues is nothing new. In 

the early 1800s, Robert Owen began the cooperative 

movement, which sought to end the exploitation of poor 

Scottish millworkers by passing on the savings of bulk 

food purchases to employees. Later in the 19th century, 

John D. Rockefeller’s Standard Oil made him the world’s 

first billionaire but also one of the world’s greatest 

philanthropists. His generosity was closely followed by 

Andrew Carnegie, who invested in the education of his 

workforce and the steel communities that facilitated the 

success of his business. 

Each of these individuals made his wealth through 

ownership of for-profit enterprises. Yet, each realized that 

social responsibility and social opportunity helped foster 

their success. For these men, philanthropy was 

conducted to “do the right thing” with the understanding 

that a healthy community, where all citizens are thriving, 

reaps long-term benefits for everyone but without the 

explicit expectation that the business would reap a 

direct benefit. 

Many successful companies today realize the benefits of 

strategic philanthropy as a means to ensure a healthy 

pool of potential workers, achieve social stability in areas 

of operation, and grow new and viable consumer 

markets, among many other business benefits. In fact, 

many companies find that strategic philanthropy 

provides the best opportunity to innovate within the 

realm of corporate responsibility. For example, many 

companies now are building philanthropic programs that 

go beyond monetary donations to include investments of 

intellectual capital and staff time through skills-based 

volunteerism and pro bono service to address human 

resource development goals as well as help address 

community needs. 

We also see modern-day tycoons such as Bill Gates, Eli 

Broad and Warren Buffett applying billions of dollars – as 

well as the skills and lessons they learned in the private 

sector – to help solve some of the world’s greatest 

challenges through new approaches to philanthropy. 

These corporate visionaries are blazing a new trail in 

bringing business and society together, and leaders from 

every sector around the world are watching closely. 

These new approaches are gaining traction and yielding 

exciting results. Each model is subtly different, but all 

respond to a realization that the relationship between 

business and society (and the environment) has never 

been so interdependent, and the players in each offer 

unique value and <strong>perspectives</strong>. Some of the most 

notable strategies include: 

• Social entrepreneurship – Using entrepreneurial 

principles to organize and manage a venture focused 

on social changes, social entrepreneurship has 

engaged entities in the government, nonprofit and

private sectors. This so-called “social business” is 

central to the vision of 2006 Nobel Peace Prize 

winner Muhammad Yunus for corporate engagement 

in society. Dr. Yunus’s Grameen Bank, which 

provides loans to the poor; his Grameen Danone, 

which provides poor children with key nutrients; the 

numerous social and environmental efforts of China 

Mengniu Dairy; as well as popular online vehicles 

such as the person-to-person microlending Web site 

www.kiva.org, all seek market approaches to solving 


• Venture philanthropy – Borrowing from the concepts 

and techniques of venture capital finance and 

applying them to philanthropic goals, venture 

philanthropy capitalizes on investors’ willingness to 

experiment with new approaches, focus on 

measurable impact, devote funding to the 

organizations that are proven to be most successful 

and have high involvement of donors with their 

grantees. The work of the Gates Foundation, the 

Acumen Fund and the Robin Hood Foundation, 

funded largely by wealthy Wall Street bankers, are all 

good examples of venture philanthropy at work. 

• Creative capitalism – A term coined by Bill Gates 

earlier this year, creative capitalism calls for a new 

form of capitalism that generates long-term profits for 

investors while addressing the world’s inequalities 

through market forces. By using business acumen, 

resources and experience of business, corporations 

can discover new and innovative ways of solving 

the most basic challenges around water, health 

and education of the world’s poorest people. 

Microsoft, Coca-Cola, Pfizer and many others 

have thrown their weight behind this 

business-meets-philanthropy strategy. 

The opportunities offered by these philanthropic and 

business innovations are exciting for corporations and 

nonprofits alike. As Melinda Gates has said, and many 

businesses are now realizing, “Helping people doesn’t 

have to be an unsound financial strategy.” 

Tara Greco is a vice president in APCO Worldwide’s CR practice and is 

based in Washington, D.C. 

James Robinson is a vice president in APCO Worldwide’s New York office. 

TARA GRECO AND JAMES ROBINSON 23 

Best practices and trends: 

1) Leverage core corporate assets in philanthropy – the 

time and talent of employees, corporate facilities, or 

the financial capital of the company. 

2) Embed philanthropy and CR within operations rather 

than treating them as an appendage. 

3) Involve the CEO and senior executive to gain traction 

and recognition. 

4) Look for business benefits from philanthropy, such 

as cost savings, securing the supply chain, 

expanding the recruitment base or establishing a 

license to grow. 

5) Establish a global framework for philanthropy, but 

allow flexibility for local subsidiaries – at least 30 

percent of spending should be directed by those on 

the ground. 

6) Link cause-related marketing to a corporate 

philanthropic cause that concerns customers and 

employees. 

7) Don’t think philanthropy is only for premium brands; 

it can bring value for all types and sizes of 

companies. 

8) Match the corporate footprint; the more diffuse a 

company’s operations, the more contributions should 

be managed at a local level. 

9) Unleash employee enthusiasm to volunteer their 

time and skills. 

10) Be aspirational by moving beyond that which is 

required or merely responsible.

24 DAVID WESCOTT 

Environmental Sustainability and Social Media: 

New Technology, New Voices, New Influence 

David Wescott examines the impact of online peer-to-peer communication on shaping sustainability debates. 

Not long ago, a common complaint 

from environmentalists was the lack 

of attention paid to sustainability 

issues from businesses, <strong>policy</strong> 

leaders and the mainstream media. 

Today, this community has found a 

powerful voice through online social 

media. The leaders in the sustainability community are 

currently discussing what business and <strong>policy</strong> elites will 

debate six months from now. They’re also transforming 

the way the mainstream media cover sustainability 

issues and how the public responds. This new influence 

is already having an enormous impact on CR initiatives – 

one I suspect only will continue to grow. 

“Social media” is the term commonly used to describe 

online, peer-to-peer communication. Advocates publish 

their ideas and voice their concerns on blogs – Web sites 

that include dated entries and provide opportunities for 

discussion with readers through online comments. 

Communities gather and converse virtually on social 

network utilities such as Ning, MySpace or Facebook. 

The names of the technology tools are often odd, but the 

conversations they facilitate are growing in importance. It 

is estimated that there will be more than one billion 

broadband Internet users actively participating in social 

media by 2012. Roughly 80 percent of journalists say 

they use blogs and other social media sites for story 

ideas and sources. Thus, any company that ignores this 

audience not only misses a significant outreach 

opportunity but also may lose its seat at the table to help 

shape environmental debates. 

Social media technology has attracted new advocates, 

prompted a renaissance of green ideas and advocacy, 

and demonstrated the diversity and richness of the 

sustainability and CR communities. CR and sustainable 

development advocates from across the globe come 

together on their own online social network, 

Development Crossing. The School for Social 

Entrepreneurs tracks the latest on CR programs in the 

United Kingdom. Bjorn Stinson, president of the World 

<strong>Business</strong> Council for Sustainable Development, shares 

his thoughts on a personal blog. For those interested in 

green technology, Hank Green explains how solar cells 

work at EcoGeek. There’s a little bit of everything 

at online portals such as the French-language 

site ecoloPop. 

Social media technology has attracted new 

advocates, prompted a renaissance of green 

ideas and advocacy, and demonstrated the 

diversity and richness of the sustainability 

and CR communities. 

The influx of new green leaders represents a variety of 

opinions and positions. It’s by no means a stereotypical, 

angry group of rabble-rousers. This next generation of 

online advocates may call out a company for overselling 

a sustainability initiative, but they’re equally willing to 

work with companies on programs and ideas. Since the 

community depends on technology to communicate 

effectively, it understands the value of innovation and 

won’t begrudge the company its profits from new 

green technologies. 

“Greenwashing” and “pollution” are four-letter words to 

this crowd, but “profit” isn’t. In fact, many of them – 

such as Jeff McIntire-Strasburg, a community leader and 

the founder of Sustainablog – go as far as offering 

consulting services to companies to help them develop 

sustainability policies and communication plans. 

This unprecedented access to an enormous community 

of educated and passionate advocates provides an 

important opportunity for businesses. The advocacy 

community has opened a channel for businesses to 

speak directly with it. And since the advocates already 

have taken the time to build the lines of communication, 

businesses can start these conversations without making 

excessive investments in new technology themselves. 

This means CR officers and those responsible for a 

company’s environmental practices and policies easily 

can find the right partners for new initiatives. They can 

gain an understanding of attitudes toward their

companies and chart a course through a community, 

identifying the right relationships to build and strengthen 

along the way, to promote their work and enhance their 

reputations. While the social media space does not 

replace traditional communication, it offers exceptional 

value as part of an integrated strategy and cannot 

be ignored. 

Of course, the “green-o-sphere” has had an impact far 

beyond environmentalism and development – these 

entrepreneurial content-producers and advocates are 

essentially building the news and information networks 

of the future. 

Internet technology has reduced the cost of content 

production and distribution so much that anyone has the 

potential to compete with the largest corporate media 

network. Trends in advertising revenue suggest many 

consumers are passing over newspapers and television 

for a much more customized and specialized selection of 

content from online sources. These trends are already 

apparent. Newspapers such as the Boston Globe and 

networks such as BBC and CNN have closed costly 

foreign bureaus, while in August 2007 Discovery 

Networks purchased Treehugger, an online green portal 

similar to Green Options (GO). GO is a global network of 

DAVID WESCOTT 25 

blogs that examines every aspect of sustainability – 

technology, <strong>policy</strong>, lifestyle and business. 

This tight-knit and passionate sustainability community 

values collaboration. It’s expected, even encouraged, for 

thought leaders to contribute content under a single 

banner such as GO. Each contributor is a multimedia 

“beat reporter,” often with a personal Web site as well as 

an online home at GO. Its model provides a diverse mix 

of credible content with very little overhead. To look at 

the media network of tomorrow, just look at GO today. 

<strong>Business</strong>es must embrace social media and social media 

tools if they want the attention of savvy consumers and 

to attract the best and brightest to their workplaces. 

Since consumers have the power to personalize the 

information they receive, businesses can’t rely on people 

to seek out and visit their Web sites and read their press 

releases. Instead, businesses must make their content 

more relevant, more accessible and more portable. 

More important, businesses must build strong 

relationships with the leaders in this online community, 

earning the community’s trust and respect along with 

increased attention. 

David Wescott is a vice president and directs the social media team at 

APCO Worldwide.

26 JENNIFER SILBERMAN 

Lessons From Latin America: 

New <strong>Business</strong> Models for Fighting Poverty 

Jennifer Silberman makes the case that companies in Latin America can help to 

transform low-income communities without sacrificing profitability. 

During the 20th century, growth 

from developed economies 

generated the most wealth ever in 

the history of humanity; it also 

created the situation of extreme 

inequality that we currently see 

around the world. According to the 

World Bank, Latin America is the region with the greatest 

economic inequality in the world in terms of income. 

Vast segments of the population not only are cut off from 

the benefits of globalization and economic progress but 

also are unable to contribute to the 

development of their societies in sustainable 

ways. According to the World Resources 

Institute, 70 percent of the population of Latin 

America – or close to 360 million people – 

has per capita income of less than US$3,260 

and are unable to satisfy even their most basic 

needs. Even more striking, only 0.6 percent 

of the region’s population is considered 

high income. 

This environment, along with lackluster 

economic performance throughout the region, 

puts Latin America well behind North 

America, Europe and even emerging 

economies in Asia. While governments are 

pursuing policies to help reduce income 

inequality, there is widespread agreement that 

most Latin American governments are unable 

to meet the most pressing social needs. With 

limited tax resources and growing public 

deficits, the most critical social programs 

cannot be delivered to the region’s 

most vulnerable. 

At the same time, democracy is now the 

prevalent form of government throughout the 

region. Civil society and the media are more 

influential than ever and are calling for 

increased accountability and transparency 

from their leaders. They also are calling on the 

private sector to take a more active and direct 

role in helping to meet the region’s enormous 

social obligations and promoting economic 

and democratic stability. 

All of these factors have contributed to a growing 

recognition by the corporate sector that its involvement in 

addressing pressing social and environmental issues is 

critical to supporting a stable business environment as 

well as protecting their long-term financial interests. Many 

companies throughout the region have undertaken new 

social investments to expand their customer bases by 

bringing the poor into the market – providing access to 

products and services and contributing to the long-term 

sustainability of their communities.

There are several examples of Latin American companies 

that have embraced “bottom-of-the-pyramid” strategies. 

These examples show just how the private sector can 

help transform poor and marginalized communities, 

generating social transformation, while at the same time 

increasing profitability. 

Chilean-based GrupoNueva changed its business model 

to respond to the explosive population growth in the 

region coupled with widespread economic disparity. A 

wood-products conglomerate with operations in 15 

countries, the company changed its approach to 

revenue-growth forecasting, looking 15 years ahead to 

predict how to produce profitable goods and services for 

a larger base of poorer consumers. One of its companies, 

Masisa, already works throughout the Americas to 

provide basic furniture for low-cost housing among 

lower-income segments of the population and conducts 

furniture-making training for micro-entrepreneurs. 

This approach to business is driven by the most 

senior-level executives of the company. GrupoNueva’s 

founder, Swiss billionaire Stephan Schmidheiny, is 

regarded as one of the leading social entrepreneurs 

known for applying business approaches to address 

social and environmental development challenges. 

Mexican building-materials giant CEMEX is one of the 

early pioneers of creating innovative business models to 

meet social needs. In 1998, the company developed a 

micro-credit program offering fixed-priced materials and 

technical assistance lending for low-income earners. Over 

the past nine years, more than 180,000 families have 

received more than US$67 million in loans, and since 

2004 the program has turned a profit thanks to its 

innovative business model and loan repayment rate of 99 

percent. In addition to profitability, the program’s success 

has created a sustainable new market for the company, 

with many of its customers using the credit programs to 

expand their homes and businesses. 

Brazilian companies have long been regarded as the 

most sophisticated practitioners of responsible business in 

the region. The social, economic, ethnic and cultural 

diversity of the country has provided Brazilian businesses 

with unique opportunities to test new approaches 

and solutions. 

JENNIFER SILBERMAN 27 

However, with almost one-third of the population living 

below the poverty line, Brazil has the second-worst 

income distribution of wealth in the world. It is a country 

of great contradictions – on the one hand, Brazil occupies 

a place on the world stage as one of the most dominant 

emerging economies, yet, at the same time, the 

International Labor Organization estimates that more 

than 25,000 Brazilians work under slave-like conditions. 

This reality presents tremendous opportunities and 

challenges for Brazilian enterprises to reduce the 

country’s disparities. 

Working with government and civil society, 

businesses can accelerate development in the 

region and inspire new models for addressing 

social inequities, while at the same time creating 

new markets and value for shareholders. 

Natura, the Brazilian cosmetics company, shows how 

enabling social development can create good business 

opportunities. The company sources many of its 

ingredients from poor indigenous communities in the 

rainforests and supports an entrepreneurial workforce of 

independent resellers of its products. Natura’s business 

model has earned the company a place as one of the 

most admired companies and valuable brands in Brazil. 

The Latin American private sector plays an important role 

in addressing the region’s social and environmental 

challenges. Working with government and civil society, 

businesses can accelerate development in the region and 

inspire new models for addressing social inequities, 

while at the same time creating new markets and value 

for shareholders. 

As global multinationals look for examples of business 

approaches that address key societal challenges, perhaps 

Latin American companies offer creative examples of how 

companies that bring impoverished communities into the 

marketplace can create a new form of social capital. And 

maybe that’s just smart business. 

Jennifer Silberman is a vice president in APCO Worldwide’s CR practice and 

is based in Washington, D.C. She has more than 12 years of experience 

working throughout Latin America.

28 VÉRONIQUE FERJOU AND PAZANNE LE COUR GRANDMAISON 

France’s Grenelle on Sustainable Development: 

Another French Revolution? 

Véronique Ferjou and Pazanne Le Cour Grandmaison observe how this sustainable 

development framework is changing how business is conducted in France. 

In the early 2000s, a push by civil 

society and NGOs began to bring 

sustainable development issues to 

the forefront of the French political 

and economic agenda. In 2005, 

under President Jacques Chirac, 

France became the first country to 

include an environmental charter in 

its constitution. During the 2007 

French presidential campaign, 

Nicolas Hulot, a leading French 

environmental activist, published 

the Ecological Pact, a call for action 

for sustainable development to 

become a national priority, which was signed by all the 

leading presidential candidates. 

Following the election, President Nicolas Sarkozy – 

having signed the Ecological Pact and following up on 

his promise of “rupture” (break with the past) – 

announced the creation of an overarching minister for 

ecology and sustainable development, symbolically 

holding the number two position in the government, 

second only to the prime minister. He also called for a 

national convention on the environment called the 

“Grenelle de l’Environnement.” 

This convention and its first output already are 

transforming the way business is done in France. The 

Grenelle de l’Environnement took its organizing 

principles from the Grenelle agreements that were 

negotiated among the government, trade unions and 

employers to end the May 1968 riots. Accordingly, the 

Grenelle de l’Environnement brought together 

stakeholders who had not previously engaged in 

systematic dialogue on sustainable development: the 

administration, locally elected officials, business, trade 

unions and NGO representatives. Six working groups 

focused on climate change and energy demand, 

biodiversity and preservation of natural resources, health 

and the environment, sustainable production and 

consumption, democracy and governance, and 

competitiveness and employment vis-à-vis ecological 

development. Furthermore, the convention was brought 

to the general public through a series of debates 

organized both across France and online (with more than 

200,000 online contributions by French citizens). 

After four months, the convention reached a first set of 

conclusions, to provide a general framework for future 

French legislation on sustainable development-related 

issues. In October 2007, President Sarkozy made these 

conclusions public in the presence of European 

Commission President José Manuel Barosso and climate 

activist and Nobel Peace Prize winner Al Gore. President 

Sarkozy called for an “ecological New Deal” and a “green 

revolution” to be supported jointly with the European 

Union. He added that environmental <strong>policy</strong> was not a 

cost, but an investment, and invited all stakeholders to 

move away from “the deadlock that permanently consists 

in opposing economic growth to the preservation of 

the environment.” 

Over the last six months, a new governance of the 

French political and economic decision-making process 

has emerged, “le dialogue à cinq” (five-way dialogue), 

adding civil society/NGOs to the four traditional 

stakeholders: administration, locally elected officials, 

business and trade unions. This is the Grenelle 

revolution, as President Sarkozy restated in a speech on 

May 28, 2008, when he said he “wanted this five-way 

dialogue to become one of the principles of public 

decision-making in France.” 

Criticism has emerged on the consultation process itself 

(in terms of representativeness, expertise and objectives), 

and difficulties already have arisen as talks of 

implementing these recommendations move forth. It is 

too early to tell how the Grenelle conclusions will be 

translated in the draft bills that will be presented before 

Parliament in the autumn, but there already is a “before” 

and an “after” Grenelle in terms of what is expected of 

businesses. With the official recognition of NGOs as new 

and critical stakeholders in the public decision-making 

process, businesses will need to revisit their CR activities 

and rely on expert advice to address these new 

stakeholders and engage in this new dialogue. 

Véronique Ferjou and Pazanne Le Cour Grandmaison are both associate 

managers at APCO Worldwide and are based in Paris.

In the Arab region, CR awareness is 

growing due to economic reform 

and the emphasis on 

competitiveness and future 

economic sustainability. For 

example, in countries such as Egypt 

and the Gulf Cooperation Council 

members (Saudi Arabia, United 

Arab Emirates, Qatar, Bahrain, 

Oman and Kuwait), leading local 

businesses see CR as increasingly 

important to internal operations, 

business expansion and the need 

to align with 

international best practices to access 

new markets, particularly considering 

the existing perceptions about Arab 

businesses. 

While local awareness and 

commitment are growing, CR 

engagement is still at an early stage, 

practiced mainly by multinationals 

and large local businesses. It remains 

strongly rooted in corporate 

philanthropy and community 

initiatives mainly due to the region’s 

cultural traditions. This aspect of CR 

is also important for multinationals 

operating in the region, many of 

which have made it their main CR 

focus here. It has become the 

business imperative for introducing 

international brands to domestic Arab 

markets, which requires building 

understanding, engagement and 

grassroots support into brand values. 

In addition, we are seeing increased 

regional focus on gaining knowledge 

and expertise in business ethics, 

corporate governance, reporting and 

transparency, and environmental 

sustainability. 

CLEOPATRA VAN DE WINKEL AND TAMARA SAEB 29 

Viewpoint From the Arab Region 

Cleopatra van de Winkel and Tamara Saeb evaluate the rise of CR 

in the Arab world and how it is affected by regional culture. 

<strong>Business</strong> philanthropy and social duty are deeply rooted 

in the region’s culture; for example in Sharia – Islamic 

law – and Islamic finance principles. There is growing 

awareness that those principles need to be aligned and 

applied with corporate governance in the context of 

operational excellence. Hawkamah – the Dubai 

International Financial Centre’s corporate governance 

institute – and the World Bank are launching an 

initiative to assist Arab business growth through 

operational excellence and corporate governance, which 

includes a CR dimension. This will be an interesting 

space to watch in the next few years.

30 CLEOPATRA VAN DE WINKEL AND TAMARA SAEB 

In the Arab region, the motivation arises from 

the need to adopt international best practices 

as a key differentiator in an increasingly 

competitive environment. 

In the United Arab Emirates, large local developers such 

as Masdar, Nakheel and Emaar are adopting green 

targets to reduce carbon footprints in their high-profile 

projects. In 2006, the Dubai Centre for Corporate 

Values, in cooperation with the Dubai International 

Financial Centre, TECOM Investments and the Dubai 

Airport Free Zone Authority, issued its first CR report 

using Global Reporting Initiative (GRI) guidelines. 

Looking ahead, a conducive <strong>policy</strong> and regulatory 

environment, further investment, guidance and building 

local capacity to implement CR initiatives will be the 

necessary ingredients. 

Drivers of CR – international best practice and 

institution-building 

In the Arab region, the motivation arises from the 

need to adopt international best practices as a key 

differentiator in an increasingly competitive environment. 

The Department of Planning and Economy in Abu Dhabi 

recently made a strong statement about the private 

sector’s lack of “tangible contribution” in its “social duty” 

to the United Arab Emirates. Several institutions have 

been established to provide services or create dialogue 

platforms on CR; for example, Hawkamah, Mudara and 

the Centre for Responsible <strong>Business</strong> linked to the Dubai 

Chambers of Commerce and Industry. 

NGOs and media have not played major roles so far, but 

the development of private media, increased openness 

and more investigative journalism are leading to more 

scrutiny of businesses and government activities. The 

issues tackled primarily relate to corporate financial 

performance (particularly listed companies) and to 

consumer protection and product-related quality control. 

The NGO community is still developing, with existing 

NGOs mainly focused in the charity sector and on 

specific issues such as health and environment. There is 

still a tendency to view NGOs as beneficiaries or partners 

for corporate philanthropy rather than as proactive 

advisers. A few examples are emerging, such as the 

Emirates Environmental Group in Dubai, which is 

playing a more active advocacy role in defining 

regulatory and <strong>policy</strong> frameworks or calling for 

implementation of standards. 

…the development of private media, increased 

openness and more investigative journalism are 

leading to more scrutiny of businesses and 

government activities. 

The role of government is also important – there is 

genuine commitment and keenness to learn about and 

adopt globally recognised guidelines and best practices. 

These include certification from the International 

Organization for Standardization ISO and GRI guidelines, 

and leading businesses have started to use them. In 

some countries (particularly the Gulf Cooperation Council 

members), it is actually government officials who have 

taken the lead in placing these standards on the agenda 

and engaging the private sector on them. 

Cleopatra van de Winkel is a regional director in APCO Worldwide's Europe, 

Middle East and Africa region and is based in Brussels. 

Tamara Saeb is an associate manager in APCO Worldwide’s Arab region and 

is based in Dubai.

Key global macro trends recently 

highlighted at the World Economic 

Forum in Egypt are shaping the 

region and its approach to CR and 

are also applicable in Israel: 

• Rising awareness by public 

and private sectors regarding the 

need to collaborate and pool resources targeted at 


• Growing investments in social enterprises and 

creation of social venture networks by corporations. 

• Increasing investment in renewable energy and 

sustainable solutions by all sectors. 

In Israel, which draws its knowledge and expertise 

mainly from the United States and Europe for 

geopolitical reasons, the CR learning curve is constantly 

evolving, becoming more sophisticated and adapted to 

local culture. This stems from the increased flow of 

knowledge into the corporate sector, a visible rise in 

media attention, high-profile conventions, setup of CR 

think tanks and promotion of responsible business 

practices by various NGOs. In the past few years, 

companies across many sectors have devoted more 

interest and resources to issues that transcend traditional 

CR activity, such as community projects and 

philanthropy, and they are now taking into account 

corporate governance; ethical supply chain; ethical 

production and trade; diversified workplace; and – above 

all – sustainability and green issues. These moves reflect 

a strong statement of Israeli corporate intentions to put 

themselves on par with the world’s largest corporations, 

which already have taken significant steps toward more 

responsible conduct. 

Drivers of CR – stakeholders and international 

best practice 

Recent Israeli studies show that publicly traded 

companies have a growing understanding of the need to 

answer increasing demand by stakeholders to be socially 

involved. For example, 90 percent of companies in a 

2007 McKinsey Quarterly survey believe that 

responsible business conduct and corporate philanthropy 

will promote business by enhancing corporate reputation 

while solving social issues. Government only recently 

joined this trend and is currently facilitating a 

Viewpoint From Israel 

DANIELA PRUSKY-SION 31 

Daniela Prusky-Sion views the evolving world of CR in Israel and how it is changing based on cultural norms. 

stakeholder dialogue among the corporate sector, civil 

society and governmental institutions, producing <strong>policy</strong> 

papers and outlining the desirable cooperative framework 

among the sectors. 

Although corporate action on these issues is still 

commonly viewed as voluntary, the need to create 

common standards for CR practices, adapted to Israeli 

culture, is widely accepted. For example, issues such as 

workplace diversity have strong meaning in an Israeli 

society comprised of multi-ethnic groups struggling to 

ascend from the margins and achieve deserved 

recognition. Unique sociocultural attributes such as 

mandatory military service, Jewish-Arab coexistence, 

center-periphery gaps and geopolitical implications 

typically underlie the CR decision-making process of 

Israeli firms. As in many other countries, Israeli 

companies are slow to adopt voluntary practices, unless 

there is regulatory demand. Fortunately, public scrutiny, 

media attention and stockholder demands are all 

changing this rapidly. 

The role of media and NGOs 

A few Israeli NGOs have started scrutinizing corporate 

behavior, attempting to ensure companies implement 

equal opportunity policies and uphold ethical work 

standards. But this trend is far from common; since 

many organizations depend on private-sector funding, 

there can be an inherent conflict. 

Israeli NGOs and media in many instances have joined 

forces to address their similar concerns. Unsurprisingly, 

the majority of Israeli media outlets have a more handson 

approach in their mission to shed light on issues 

such as fair trade, carbon footprint and social marketing. 

An example of effective cooperation between media and 

NGO sectors is the alliance between Ma’ala, Israel’s 

main CR advocacy NGO, and Globes, a leading financial 

newspaper. Their joint annual CR convention, which 

draws top decision-makers from all sectors, allows for 

public debate and heavy media attention. Nevertheless, 

Israel has much to learn from countries such as the 

United Kingdom and United States, where watchdog and 

ombudsman organizations take a more proactive role in 

monitoring corporate behavior. 

Daniela Prusky-Sion is a senior associate at APCO Worldwide and is based 

in Tel Aviv.

32 NOMA FAKU 

It Is Great – But, Is It Good for Us?: 

Looking a Gift Horse In the Mouth 

Noma Faku explores what it means to be a responsible corporate citizen in Africa’s volatile political climate. 

The diversity of economies, markets 

and consumers in Africa challenges 

accepted notions of CR. Any claim 

of good deeds by a corporation 

operating in the African continent – 

with its myriad of needs and 

associated images of poverty, war 

and famine etched in our minds – has tended to be met 

favourably. However, Africa itself is beginning to look at 

these with some disdain and raise questions about 

whose interests these good deeds serve. 

For example, a tire company in Liberia, a country with 

an 85 percent unemployment rate, provides 15,000 

jobs. The company is known for harsh working 

conditions and the squalid living conditions of its 

workers. When Liberian President Ellen Johnson Sirleaf 

made an unannounced visit to the company’s premises 

during filming of a Public Broadcasting Service 

documentary, she pointedly and publicly criticised a line 

manager about the workers’ housing conditions. 

This raises the question: would providing decent housing 

qualify this tire manufacture as being responsible, 

notwithstanding its 50 years of operation in Liberia? In 

most mature democracies, the state plays a role in 

financing public housing for the poor, but housing is not 

generally considered part of CR. In Africa, where local 

governments, especially, lack such resources and where 

foreign investors often invest in workers’ housing, 

how should the boundaries of expectation and practice 

be drawn? 

For decades, corporations’ social responsibilities have 

been conditioned largely by sympathy for the difficulties 

involved in operating in volatile political environments. 

As a result, we have not raised – or perhaps fully 

understood – the essential question of what it means to 

be a responsible corporate citizen in these situations. 

Does operating during a civil war or dictatorship 

constitute a reason to ignore CR in that country – or 

does it instead require location-specific CR that diverges 

from a global template originating in stable markets? 

Some organisations have developed a competitive 

advantage from the ability to run successful businesses 

in politically volatile environments. This is not unique to 

Africa, although it is particularly pertinent to it. For 

example, amid the increased calls for sanctions on the 

government of Zimbabwe, there are some companies 

which see a responsibility to continue operating in that 

country in order to sustain livelihoods for their workers 

and suppliers. At the same time, expertise in operating 

in volatile political environments that has been 

developed in African operations is being exported to 

other parts of the world such as the Middle East. 

South Africa provides an example of how business 

conduct during difficult political times affects corporate 

reputation long afterward. South African corporations 

who operated during apartheid, for instance, can 

testify that their conduct during apartheid is inseparable 

from their corporate reputation in a post-apartheid 

South Africa. 

The South African example shows the need to be 

responsible at all times in all areas of operation. These 

include the lifecycle of the product from source to shelf 

and the corporation’s treatment of its employees in line 

with – and sometimes exceeding – globally accepted 

standards. It also includes responsible interaction with 

consumers and citizens, because the quest for freedom 

in South Africa involved a level of activism that remains 

in the public and institutional memory. This means that 

even when needs are dire, the intent of a gift will be 

scrutinised and even questioned. This is particularly true 

in other new democracies across Africa that have 

accepted “gifts” – whether tied to aid, corporate 

investment or philanthropy – and later came to 

understand that such gifts may not be structured to the 

needs and interests of their citizens. The transition that 

is sought is from beneficiary to partner – with the 

recognition of mutual respect and mutual benefits that 

this entails. 

Given the vast needs of the African continent and the 

daily manoeuvres one must make to produce profit in 

politically volatile environments, being a responsible 

corporate citizen requires local relevance – using local 

insights to respond to the needs of the local 

communities, economies and markets – within the 

parameters of globally accepted norms. 

Noma Faku is the managing director of APCO Worldwide’s 

Johannesburg office.

Over the past few decades, with the 

advent of liberalization and the 

entry of global brands in the 

marketplace, the adage that the 

consumer is king has taken hold. 

There are more goods, more choices 

and more competition, but 

consumer protection often has been weak. Nonetheless, 

Indian consumers are increasingly conscious of their 

rights and of the vulnerability of companies to public 

pressure. The media now highlight lapses by 

multinational corporations in particular, so that 

corporations need not only to be confident of their 

product quality, but also to be prepared to communicate 

effectively about it. 

Because no organization is infallible and quality flukes 

and supply-chain lapses have happened to even the 

most well-managed corporations, managers need to take 

steps to mitigate the tremors of public censure in India 

before it’s too late. 

India’s legacy of activism 

Historically speaking, it’s generally recognized that Indian 

activism has inspired activists globally. It should 

therefore not be surprising that proactive consumer 

activism has been around in India – albeit in a limited 

way – since the 1960s. Over the years, it has grown 

with the quiet but sustained initiatives of individuals, 

organizations and public-spirited groups. 

Consumer Activism in India 

Dev Dasgupta probes the rise in consumer consciousness in the increasingly global Indian marketplace. 

Certain names come immediately to mind: 

DEV DASGUPTA 33 

A customer is the most important visitor on our premises. He is not dependent on us. We are 

dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an 

outsider in our business. He is part of it. We are not doing him a favour by serving him. He is 

doing us a favour by giving us an opportunity to do so. 

– Mahatma Gandhi 

• H.D. Shourie of the public-interest group Common 

Cause was a relentless crusader for the rights of the 

common man, using public-interest litigation to 

aid pensioners and widows, fight corruption, 

campaign for proper blood banks and advocate for 

consumer courts. 

• M.C. Mehta took on the government and forced the 

closure of polluters whose emissions were turning the 

Taj Mahal yellow or whose effluents were poisoning 

the Ganges. Mehta almost single-handedly has 

obtained around 40 landmark judgments and 

numerous orders from the Supreme Court against 

polluters, a record that may be unrivaled. 

• CUTS International (Consumer Unity & Trust Society) 

is recognized for its research, advocacy and 

networking in relation to several areas of public 

interest, consumer protection, international trade 

and development, competition, investment and 

economic regulation, human development, and 

consumer safety. 

As has often been the case internationally, consumer 

activism has been led by educated elites, while the 

general public has not been widely aware of rights or 

avenues for redress. However, this is now changing, as 

civil society and the government have been working to 

build public awareness. 

For example, the government of India has passed 

legislation and increased education to help consumers 

avoid schemes and understand how to approach the 

consumer courts. The formalities and “legalese” at these 

courts have been minimized to prevent confusion. The

34 DEV DASGUPTA 

Department of Consumer Affairs has been assigned the 

task of developing a “National Action Plan for Consumer 

Awareness and Redressal and Enforcement of Consumer 

Protection Act, 1986” using audio, video and print 

media with the campaign slogan “Jaago Grahak Jaago” 

(Wake Up Consumers). 

Taking on the corporate sector 

In the past, the government and public-sector 

organizations were the main targets for activists, but 

multinationals are now recognized as more symbolic 

and potentially vulnerable. The increasing availability of 

internationally branded products in the 

consumer goods sector, as well as greater 

democratization of communication channels, 

have contributed to the rise in attacks on 

multinational corporations. 

In October 2003, the confectionery company 

Cadbury was confronted with worms in its 

chocolate bars. The media and public outcry 

forced the company to demonstrate efforts to 

improve packaging and pack sizes while also 

launching a massive advertising campaign. 

Controversies related to industrial water use 

and pesticide residues affected the 

reputations of Coca-Cola and Pepsi beyond 

India. Sunita Narain, director of the advocacy 

group Centre for Science and Environment, 

took the battle to the streets and the 

international media with laboratory data 

alleging that the appropriate quality standards 

had not been met. Although these companies 

appear to have recovered from the 

allegations, it wasn’t easy. 

These landmark cases indicate that the 

products of multinational corporations are no 

longer given a free pass due to presumed 

safety and international-level quality. 

Furthermore, although most activism to date 

has focused on issues related to food, the 

environment and water, other industries 

should not be complacent. 

Firms operating in India need to consider 

crisis management and civil society 

engagement in the same manner as in the 

West. Proactive CR programs that build 

credibility and understanding of operational best 

practices can go far to strengthen trust and create 

third-party advocates before an alleged or actual incident 

occurs. Finally, multinational corporations should 

examine their policies and implementation to ensure that 

there are no double standards between the West and 

Asia in the way they operate. A scandal that implies that 

Indian consumers have not been treated as fairly as 

Westerners could be particularly devastating. 

Dev Dasgupta is the managing director of APCO Worldwide’s India 

operations and is based in New Delhi.

Corporate Responsibility in Indonesia 

in the Era of Reformasi 

It has been just 10 years since 

Indonesia experienced profound 

political change with the end of the 

authoritarian Suharto regime after 

32 years of unchallenged rule. 

Indonesia has emerged from that 

period of turmoil to become one of 

the world’s largest democracies. But it is not only the 

political landscape of Indonesia that has altered radically. 

<strong>Business</strong> also has had to respond to change, as 

Indonesia’s citizens have developed a much more critical 

stance toward the wider responsibility of business to the 

general population. 

After all, it was the Asian economic/financial crisis of 

1997 that was the precursor to the political crisis that 

enveloped Indonesia a year later. Many would assert that 

during the previous era of strong government, business 

enjoyed a high degree of political protection. Cynics 

would argue further that once a business venture had 

achieved political protection, it had little to worry about 

should it ravage the environment or ride roughshod over 

local community issues. Poor corporate governance was 

attributed as being at the root of the multitude of 

business failures that occurred along with the collapse of 

the currency. The concepts of CR or sustainability were 

little understood and much less practiced. It is not 

surprising that business, especially the private sector, 

found itself in its time of greatest crisis, unloved and 

viewed with intense suspicion. 

Indonesia has yet to develop and implement fully the 

soft infrastructure required to establish an optimally 

efficient and competitive market economy. Nevertheless, 

the economy has been growing consistently at more than 

6 percent per annum in recent years. Foreign investors 

are returning, and the Indonesian Stock Exchange has 

been among the most buoyant of emerging markets. 

After years of restructuring, many corporate assets 

have changed ownership and returned to profitability, 

while new businesses have developed to seize the 

opportunities provided by a fast-changing 

global economy. 

JOHN ARNOLD 35 

John Arnold provides insight into the historical significance of CR in Indonesia and how it came to be widely adopted. 

In parallel, there have been fundamental shifts in 

opinion regarding how business should operate together 

with the development of political institutions, with the 

will and the teeth to enforce change. <strong>Business</strong> ignores 

this new paradigm at its peril. Even privately owned 

businesses find they have to respond to the community’s 

heightened expectations of transparency and 

accountability. Financial profitability alone can no longer 

be a guarantee of long-term sustainability. Reputation 

management has become critical, but for many it will 

mean little without the existence of a strategically 

conceived CR program. 

Prior to 1998, CR – to the extent it was adopted at all – 

was implemented primarily by multinationals and by 

state-owned enterprises, which are statutorily obligated 

to spend a percentage of their annual revenues on CRrelated 

activities. Expenditures were typically directed at 

religious, educational and community health activities. 

Financial profitability alone can no longer be a 

guarantee of long-term sustainability. Reputation 

management has become critical, but for many 

it will mean little without the existence of a 

strategically conceived CR program. 

<strong>Business</strong>es operating in remote areas, especially mining 

companies, were early leaders in recognizing the 

importance of appropriately focused CR. Environmental 

issues that were previously ignored also grabbed 

headlines. Managing the expectations of local 

communities generated by the sudden arrival of new 

industrial enterprises was now a critical success factor. 

This was even more the case when basic law and order 

and security began to break down during the early years 

of Reformasi, as the era of reform emboldened by 

Suharto’s downfall has been coined. Increasingly, 

anecdotal examples began to circulate that demonstrated 

the contribution of good CR programs to a company’s 

ability to manage local community issues. During the 

height of the mayhem that infected Indonesia’s major

36 JOHN ARNOLD 

cities during May 1998, many business premises were 

wantonly looted and destroyed. Even during that terrible 

period, it was possible to observe that the destruction 

was not as indiscriminate as is often assumed. 

Regardless of the ethnic origin or religious devotion 

of business owners, those who had established 

good relations with local communities often were 

left unscathed. 

Other events that accelerated the adoption of CR as a 

core business activity have been natural disasters. The 

tsunami that struck Aceh and other coastal areas along 

the eastern Indian Ocean at the end of 2004, and the 

earthquake that devastated the city of Yogyakarta in 

central Java in 2006, galvanized the creation of 

corporate disaster-relief programs. Those businesses that 

had operations at or near the stricken areas were in the 

forefront, but numerous others followed. Sometimes the 

offering simply may have been charitable giving, but 

there were also many examples of businesses providing 

logistical support by mobilizing core competencies and 

skills inherent to their business models. Support of 

employee volunteerism is becoming an increasingly 

common manifestation of CR. 

Today the CR bar is being raised ever higher by 

stakeholder expectations, whether it is the government, 

media, academia, or community and consumer groups. 

More and more organizations are being established for 

the promotion of best practice, which also is entering the 

curriculum of business study courses. Sustainability 

reporting is now being adopted by corporate CR leaders. 

<strong>Business</strong> awards that specifically recognize CR 

achievements also have become the vogue. Related 

conferences and seminars are now established features 

of the business calendar. The Indonesian parliament 

enacted the Law on Companies 2007 to revise and 

update the previous 1995 legislation. Albeit 

controversially, an article of the new legislation 

seemingly mandates virtually all companies to put aside 

a certain percentage of their annual profits for CR 

activities. Companies additionally are required to report 

their CR activities on an annual basis. 

No doubt many businesses still view CR as no more 

than public relations. However, those that take CR a step 

further and have embedded it as a core value within 

their organizations will be those that are better able to 

manage the reputational challenges of the second 

decade of Reformasi. 

John Arnold is the managing director of APCO Worldwide’s Jakarta office. 

He was previously a senior partner at Ernst & Young in Indonesia and 

chairman of the British Chamber of Commerce.

It may be clichéd to compare the 

business environment in Vietnam 

with the rise of China, but there are 

instructive parallels in the 

development of CR movements 

between the two countries. 

Managers could apply lessons from 

China to gain a strategic head start 

in developing a strong reputation for 

sustainability in Vietnam, potentially 

earning tangible returns and 

strengthening relationships with 

key stakeholders. 

Attitudes about CR among the diverse stakeholders in 

China and Vietnam vary greatly and continue to evolve 

beyond simple generalizations; however, there are many 

areas where practices can be shared. In particular, there 

are four signs that now may be the most auspicious time 

to start “doing good” in Vietnam: the early trickle of 

corporate leaders, support and openness of government 

officials, development of civil society and urgency to 

improve sustainable business practices. 

The pack leaders 

From 2002 to 2004, a handful of multinationals were 

“the” CR leaders in Beijing. Initially, programs often 

involved simple donations to government agencies or 

“government-organized NGOs,” but the leading 

companies began to develop higher-profile signature 

programs, some of which also highlighted sustainable 

business practices. When academics, officials or other 

business leaders wanted to know about CR in China, 

managers from these companies were usually at the 

table. Their programs were praised and leveraged by 

government, NGOs and the United Nations to encourage 

other companies to follow suit. 

The opportunities for reputation and relationship building 

were unique during that window of time – a company 

could get widespread credit as a corporate leader simply 

by having a decent program and actively participating in 

dialogue. One good case study would be shared far and 

wide. In China, this window now has closed. 

Competition for positioning as a corporate citizen is 

fierce, although there are still ample opportunities for 

leadership and differentiation in specific subject areas. 

FELICIA PULLAM AND CLAAS SCHABERG 37 

Corporate Responsibility in Vietnam: 

Don’t Waste Lessons from China 

Felicia Pullam and Claas Schaberg shed light on the similarities between CR conducted in China and Vietnam. 

In Vietnam, there is still time to be an early mover. The 

global spotlight has been focused on China for the past 

few years, but eventually audiences may tire and more 

attention will focus on Asia’s last rising tiger. By then, CR 

programs will be overdue. Although many managers of 

multinational corporations in Vietnam consider CR as “a 

nice thing to do once we are settled,” this is the right 

time to get involved in the dialogue that will define and 

set the benchmarks for corporate citizenship. 

Government support 

In China, it took the government a while to warm up 

to the idea of CR. In part this was due to a lack of 

understanding and awareness of the concept, as well 

as a pervasive distrust of anything that involved civil 

society. Many officials also saw the term “corporate 

responsibility” as basically synonymous with “trade 

barrier,” because it was often associated with attacks 

on multinational corporations for sourcing in China. 

By 2005, some officials had begun to recognize the 

potential benefits in enlisting companies to help meet 

urgent social needs and voluntarily improve 

environmental performance. The Ministry of Health, the 

State Environmental Protection Administration (now 

Ministry of Environmental Protection), and even the 

National Development and Reform Commission were 

asking companies to step up and take on additional 

responsibility. President Hu Jintao called on the people 

to build a “Harmonious Society,” and CR was the natural 

corporate correlate. Western and Chinese companies 

happily adopted the slogan to demonstrate their 

alignment with government priorities. 

Nonetheless, the Chinese political environment for CR 

remains far from perfect. Expectations for multinationals 

are unrealistically high, especially when compared with 

domestic companies. Officials are still uncomfortable 

with NGOs, and some social issues still must be handled 

gingerly. A handful of companies announced long-term 

initiatives with government agencies, skipping the pilot 

program stage, only to discover that – regardless of what 

may be said in the negotiation phase – few officials 

anticipate or want genuine partnerships.

38 FELICIA PULLAM AND CLAAS SCHABERG 

The Vietnamese government has thus far been more 

open and accessible than its Chinese counterpart. In a 

climate of limited financial resources, the Vietnamese 

government recognizes the social and economic benefits 

of private-sector involvement. Now is an opportune time 

to initiate dialogue and partnerships with agencies that 

are important to business. However, proper due diligence 

and pilot projects will be critical to avoiding the risk of a 

longer-term commitment that backfires. 

The development of civil society 

The political control of civil society in both countries 

has been similar in many ways; domestic NGOs tend to 

keep their heads down, avoiding confrontational or 

controversial positions. Official and public trust of 

independent organizations remains much lower than in 

the West. Project, organizational and financial 

management skills are relatively weak. 

Although the lack of capacity and limited public trust 

complicate partnerships with NGOs, there is significant 

opportunity for managers who are willing to put in the 

extra effort. Programs that leverage corporate skills to 

support NGOs with information technology, financial or 

communication functions could have a greater impact 

than a simple monetary donation. Furthermore, the 

current nonconfrontational nature of Vietnamese and 

Chinese NGOs means that frank dialogue may be easier 

to initiate. 

<strong>Business</strong>es also can assist by playing a convening role 

that is often underestimated. In China, where interaction 

between genuinely independent NGOs and government 

is rare, a few companies have created programs that 

bring them into the same room in a nonthreatening 

manner. These uncommon interactions have helped 

improve the comfort levels of both officials and NGO 

representatives in dealing with each other. Companies 

benefit by creating stronger, positive associations among 

their stakeholders, while also eliminating any unease 

their government partners may feel regarding corporate 

support for NGOs. 

The importance of higher standards 

Worldwide, CR is often looked upon as something 

peripheral to the core business. This is no different in 

China or Vietnam, where many stakeholders view it as 

an opportunity to be on the receiving end of 

philanthropy. However, businesses that operate 

responsibly and innovate to improve environmental 

impact should be actively communicating these efforts 

as part of their contributions to society. 

Both countries face the mammoth challenge of building 

a system based on the Rule of Law, and neither 

government is capable of fully enforcing regulations at 

the local level. The needs of society and the environment 

are thus often sacrificed by companies operating well 

below national standards. Responsible operations are 

therefore more important to most Chinese and 

Vietnamese stakeholders than any external 

partnership, because meeting basic standards 

is not an automatic expectation. 

Through a variety of perception audits that APCO has 

conducted, NGOs and government officials alike have 

expressed a strong desire to learn best practices from 

multinational corporations. There is an eager audience 

among key stakeholders for information about 

operational responsibility, and there are ample 

opportunities for communication. 

Conclusion 

The environment in Vietnam is by no means a carbon 

copy of China, but the challenges and opportunities are 

similar enough that the Chinese experience can be 

instructive. Some companies have learned hard lessons 

in China. Others missed the chance to become “early 

movers.” The development of the Chinese CR movement 

provides clear evidence that corporate leaders can reap 

reputational rewards and strengthen critical stakeholder 

relationships. The unique period of time during which 

stakeholders are most receptive and supportive already 

has passed in China, but in Vietnam it is happening 

right now. 

Felicia Pullam is an associate director in APCO Worldwide’s CR practice 

and is based in Hong Kong. 

Claas Schaberg is an associate director and chief representative of APCO 

Worldwide’s Hanoi and Ho Chi Minh City offices.

APCO Worldwide’s Corporate Responsibility Practice 

We Make a Difference in How You Make a Difference 

New research shows that CR has surpassed all other factors to become the most important 

criterion consumers and opinion-leaders use to form views about a company, according to APCO 

Insight ® , in-house opinion research and message development team of APCO Worldwide. 

CR today goes well beyond philanthropy, community investment and earning the “license to 

operate.” Now, the “third generation” of corporate responsibility – CR 3G – means determining how 

to earn the “license to grow,” especially in a world facing increasing natural resources constraints, 

and major economic and societal challenges. 

Triple bottom-line accountability is now the standard. Investors, customers and employees 

evaluate companies not only on profitability but also on environmental and social impact. 

Information technology and interconnectivity make it possible for local problems to escalate 

quickly to become global stakeholder issues. Advocacy groups and NGOs monitor every action 

and demand increasingly greater transparency. 

CR has made business more complex, yet potentially more rewarding. To maintain a healthy 

growth trajectory in a global marketplace, companies need to innovate in CR as much as in every 

other aspect. In communities around the world, corporations are increasingly expected to play a 

leadership role in addressing social issues and creating transformational change. 

CR offers opportunities for companies to use their core strengths and competitive advantages to 

create new markets; gain new customers and allies; enhance employee satisfaction; and create 

greater value for themselves, their shareholders and society. Ultimately, CR can help corporations 

stay ahead of the competition. Corporate leaders are being challenged to think differently about 

the nature of their institutions and their relationships with their stakeholders. This is the lens 

through which CR 3G is being shaped, implemented and judged. 

Since its inception in 1984, APCO has worked in the field of CR. We integrate decades of 

experience in the worlds of business, government and civil society to help clients: 

• Align CR activities with business goals 

• Engage and inspire employees on behalf of the company and the community 

• Develop results-oriented partnerships with public sector and nonprofit organizations 

• Increase investor and stakeholder confidence 

• Understand stakeholder expectations and build effective relationship models 

• Address issues strategically and responsibly 

• Communicate effectively and credibly to gain recognition and competitive advantage 

• Evaluate impact and design next-generation strategies across the triple bottom-line 

For more information, visit www.apcoworldwide.com. 

39

OCTOBER 2008 

Corporate Responsibility 

Calendar 2008-2009 

October 1-2: SustainCommWorld The 

Green Media Show 

Boston, Mass., United States 

October 2: 5th Annual <strong>Business</strong>women’s 

Sustainability Leadership Summit 

New York, N.Y., United States 

October 2: Intertek 4th Annual Ethical 

Sourcing Forum Europe 

Paris, France 

October 5-14: International Union for 

Conservation of Nature World 

Conservation Congress 

Barcelona, Spain 

October 6-8: Ethical Corporation 2nd 

Annual European Anti-Corruption Summit 

The Hague, Netherlands 

October 8-10: Institute for Management, 

Humboldt University 3rd International 

CSR Conference Corporate Responsibility 

and Governance 

Berlin, Germany 

October 9-11: World Forum Lille How to 

Feed and Protect the Earth 

Lille, France 

October 13-14: Ethical Corporation 

Central and Eastern Europe Corporate 

Responsibility Summit 

Angelo Hotel, Prague 


Stakeholder Engagement Summit 2008 

Barcelona, Spain 

October 14: Haymarket Green Marketing 

London, United Kingdom 

October 15-19: Society of Environmental 

Journalists 18th Annual Conference 

Roanoke, Va., United States 


Ethical Supply Chain Summit 2008 

Berlin, Germany 

October 20-21: United Nations 1st 

General Meeting of Caring for Climate 

Signatories 

Geneva, Switzerland 

October 20: Canadian <strong>Business</strong> for Social 

Responsibility 6th Annual Summit 

Toronto, Canada 

October 21-22: Conference Board 

Corporate Reputation and Communication 

Conference 

Chicago, Ill., United States 

NOVEMBER 

DECEMBER 

October 22-23: Executive Reach Solar, 

Bio-Fuel, Hydro Technologies and 

Financing; Carbon Trade Summit 

Abuja, Nigeria 

October 23: Ethical Trading Initiative 

10th Annual Conference 


October 26-29: Social Investment Forum 

and First Affirmative Financial Network 

19th Annual SRI in the Rockies 

Whistler, Canada 

October 28: Maala – <strong>Business</strong> for Social 

Responsibility Conference 

Tel Aviv, Israel 

November 2-4: 2nd Annual Middle East 

Corporate Social Responsibility Conference 

Dubai, United Arab Emirates 

November 3-4: CSR Asia Summit 2008 

Bangkok, Thailand 

November 4-7: <strong>Business</strong> for Social 

Responsibility Conference “Sustainability: 

Leadership Requred” 

New York, N.Y., United States 

November 5-7: University of Madras and 

Cultural Dynamics & Emotions Network 

International Conference on CSR 

“Development with Equity” 

Chennai, India 

November 12: Satellite – The Green 

Agency 2008 Green Awards for Creativity 

in Sustainability 


November 18-19: Economist Intelligence 

Unit Corporate Citizenship Conference: 

Building a Sustainable <strong>Business</strong> 

San Francisco, Calif., United States 

November 20-21: Asian Institute of 

Management Asian Forum on Corporate 

Social Responsibility 

Singapore 

November 27-28: Future of Europe 

Summit - Economic Sustainability: New 

Opportunities for Europe 

Andorra 

December 4: CSR Europe Equipped for 

CSR – European Alliance 2008: 

Launching CSR Europe’s Toolbox for a 

Competitive and Responsible Europe 

Brussels, Belgium 

December 4-5: The Multilateral 

Investment Fund VI Inter-American 

Conference on CSR: The <strong>Business</strong> of 

Inclusion 

Cartagena de Indias, Colombia 

JANUARY 2009 

MARCH 

APRIL 

MAY 

JUNE 

December 4-5: International 

Seminar on <strong>Business</strong> and 

Human Rights 

Paris, France 

December 8: The Corporate 

Responsibility Officer Conference – 

Winter 2008 

Washington, D.C. 

December 8-10: The National 

Government Technical Skills 

for Africa 

Johannesburg, South Africa 

December 11-12: Confederation of 

Indian Industry’s 3rd Annual 

Sustainability Summit: Asia 2008 

“Competitiveness Redefined“ 

Delhi, India 

December: Maala – <strong>Business</strong> 

for Social Responsibility Workshop 

on Managing CR Efforts in 

Multinationals 

Tel Aviv, Israel 

January 19-21: Masdar World 

Future Energy Summit 2009 

Abu Dhabi, United Arab Emirates 

January 28–February 1: World 

Economic Forum Annual 

Meeting 2009 

Davos, Switzerland 

March 15-22: World Water Council 

World Water Forum 

Istanbul, Turkey 

April 15-16: Ceres Conference 2009 

San Francisco, Calif., United States 

April 22-24: Global Philanthropy 

Forum 8th Annual Conference 

Washington, D.C., United States 

May 3-5: <strong>Business</strong> Civic Leadership 

Center National Conference on 

Corporate Community Investment 

Chicago, Ill., United States 

June 2: Leadership Foundation for 

Higher Education Ensuring Corporate 

Social Responsibility: The Role of the 

Governing Body 


June 15-16: CORE - The potential of 

Corporate Social Responsibility to 

Contribute to the Implementation 

and Integration of EU Strategies 

Darmstadt, Germany

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