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Panel discussion moderated by Michael E. Porter
Clinton Global Initiative Annual Meeting
September 27, 2007
Many businesses are learning that they are able to
increase their profits by adapting models that empower consumers and workers
while reducing environmental degradation. By integrating socially responsible
principles into their corporate strategies, companies have been able to make
impressive financial gains while improving the communities in which they
operate. This panel, moderated by Michael E. Porter explores how
businesses are able to increase profitability by refining their social and
environmental practices. Panelists include Chief Executive Officer of Swiss
Reinsurance Company, Jacques Aigrain, President and CEO of the Starbucks Coffee
Company, Jim Donald, Chairman and Chief Executive Officer of MTV Networks, Judy
McGrath, and Chairman and Managing Director of Suzlon Energy Ltd., Tulsi Tanti.
See
below for Michael Porter's remarks introducing the panel discussion. A
full
transcript,
video, and
podcast of the session are
also available. Michael Porter's remarks begin at 21min 37sec on the
video.
MICHAEL PORTER: Well, it’s always hard to
go after a session like that. I have actually never been able to attend this
meeting before, and I asked President Clinton just to stop for a minute and
watch the first bit of this, but I want to congratulate him and his entire team
for putting this on. President Clinton and I used to play golf together on New
Year’s Day, a number of years in a row, and I can tell you confidentially that
he is a so-so golfer. He’s fun. He’s energetic, but you know, results so-so. But
I’ll tell you, he’s a world-class organizer and motivator and this thing is just
phenomenal. So, President Clinton, congratulations on this whole effort.
This session this afternoon is a little bit different than the other sessions
you have all attended. You have been going to sessions that have really been
organized around particular areas of social concern or social issues, health,
climate, poverty and so forth. This session aims to look across those topics and
really look at the role of the corporation as an institution in society to
address social needs. Why are we interested in this? Well, we know that
corporations have extraordinary resources with which to tackle almost any
problem. The have money. They have purchasing power. They have skills. They have
managerial capacity. They have all kinds of assets and all kinds of leverage
points with which to address social issues. The question is how to actually
mobilize the corporation and harness the corporation’s capacity in this area,
how to really use the market system to address social issues as well as
obviously create the employment and economic growth that we all depend on.
So what we have here today is a series of senior business leaders, CEOs, who are
really innovators in how to rethink and reshape the role of the corporation in
addressing the social agenda items that you have been talking about today, often
in a very different context. What I’d like to do is just introduce this panel
with just a few thoughts about how I think we are starting to transform and
reshape the whole model of how corporations engage society We’ve gone through a
long history here. I think stage one was the era which I would like to call
pressure politics. Corporations resisted addressing these issues. It’s not my
job. And there were pressure politics of various kinds to kind of cajole and
enforce and embarrass companies into doing something. That was stage one. We
moved some time ago into another stage, which I would call the CSR stage. We
want to be responsible corporations. We want to have social responsibility
departments. We want to really support a lot of charitable causes. And I think
we made tremendous headway in that stage, and many companies got much, much more
engaged in trying to be sensitive to addressing these social issues. But I think
what’s happening now is that we’re entering really a third stage, and this is
the stage of what I would call the stage of really shared value. Rather than
seeing this as something you have to pressure corporations to do, rather than
for corporations to see this as charitable, we are now starting to enter an era
where corporations are starting to rethink — the leading ones are starting to
rethink how they can better integrate their connections with society in order to
create shared value. Society benefits. The company benefits.
Now, what are some of the elements of this new model? Well, I think one of the
key elements is it starts with best practices on all the impacts the company
has. So companies have to be sensitive to energy use. They have to be sensitive
to environmental impact, to wasted packaging, to hiring practices. This new
model starts with best practice on all those impacts, but it goes far beyond
that now. The new model moves away from PR and branding, which is what a lot of
the CSR thinking was all about — how can we use this to bolster our brand image
— to actual social impact. How can we actually make a difference? How can we
actually get something done? The model moves from supporting many, many, many
social causes with little bits of money and donations and volunteer programs in
25 or 30 different areas, to starting to focus the company’s efforts on two or
three or four areas, where they actually have the tools to really make a
difference, but make a difference in an area where, again, there is this win-win
or shared value opportunity, where it benefits society but it also benefits the
business.
And then, finally, I would say that this new model requires that companies be
very strategic about what social issues they take on, and they select those
issues very carefully, based on their business, based on the tools and the
skills that they have available. I think we have a panel today that will give us
a window, a glimpse, into this new model. And I would like to thank all the
panelists for being part of today’s session.
So let’s start with Tulsi. Tulsi, can you make money doing social good?...
For additional related content,
please see the Institute website section on
Corporate
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