Alan Coates

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Alan Coates Chairman, Park
Royal Partnership Ltd Account Director,
Business in the Community
The Food Club Butchers Hall, 3rd June 2004
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Presentation on Social Responsibility Small
Medium Size Enterprises
AGENDA

• Background to CSR
• Business in the Community
• Current SME Initiatives
• Park Royal Experience

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Corporate Responsibility

• Companies that embrace Corporate Responsibility
  recognise that their social and environmental
  impacts have to be managed in the same way as
  their economic or commercial performance.
• But getting started, putting corporate
  responsibility principles into practice, can be
  difficult and many companies struggle to justify
  the management of social and environmental
  affairs in terms of tangible business benefit.

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Corporate Responsibility

• Corporate responsibility should be seen as a
  journey rather than a destination, and as
  societys expectations of business continue to
  get more demanding, the sooner companies start
  out the better.
• In recent years much has been written about the
  subject and the business initiatives.

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Corporate Responsibility

• There are six commonly recognised benefits that
  can be gained from an effective business led
  approach
• Reputation management
• Risk management
• Employee satisfaction
• Innovation and learning
• Access to capital
• Financial performance

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Reputation Management

• Key messages
• 44 of the British public believe it is very
  important that a company shows a high degree of
  social responsibility when they buy the companys
  product.
• 58 of the general public across Europe feel that
  industry and commerce do not currently pay enough
  attention to their social and environmental
  responsibilities.
• Corporate Responsibility offers a means by which
  companies can manage and influence the attitudes
  and perceptions of their stakeholders.

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Risk Management

• Key messages
• There is growing pressure for companies to
  understand and act on a widening range of risks
  across their business.
• Corporate Responsibility provides a means by
  which companies better understand and manage
  risk.
• The effective management of social and
  environmental risks presents business
  opportunities.

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Employee Satisfaction

• Key messages
• Three in five people want to work for a company
  whose values are consistent with their own.
• There is increasing evidence that the proportion
  of people wanting to work for a responsible
  organisation is growing.
• 81 of young people have a strong belief in the
  power of responsible business practice to improve
  profitability over time.
• Corporate Responsibility is increasingly the key
  factor in attracting and retaining a talented and
  diverse workforce.

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Innovation and Learning

• Key messages
• Innovation and learning are critical to the long
  term survival of any business.
• Environmental constraints and societal pressure
  are narrowing the window of opportunity for
  business.
• Leaders in Corporate Responsibility are using
  innovation and learning as a vehicle to turn
  these constraints into significant business
  opportunity.

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Access to Capital

• Key messages
• Corporate Responsibility is a key factor in
  helping companies access capital.
• 86 of institutional investors across Europe
  believe that social and environmental risk
  management will have a significantly positive
  impact on a companys long-term market value.
• The investment community is increasingly
  regarding Corporate Responsibility as a proxy of
  the quality of management of a company.

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Financial Performance

• Key messages
• Corporate Responsibility builds competitiveness
  and is vital to profitability.
• Over half of Chief Executives across Europe (and
  4 in 5 in the UK) argue that the business
  benefits of Corporate Responsibility are not
  exaggerated, and 92 accept it is their
  responsibility to drive this through the
  business.
• Having a core purpose beyond making money can
  help to achieve long term financial performance.
• Corporate Responsibility offers direct
  improvements to the bottom line.

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• Business in the Community

Business in the Community is a unique movement of
companies across the UK committed to continually
improving their positive impact on society, with
a core membership of 700 companies, including
over 75 of the FTSE 100
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Commitment to Action

• Our members commit to
• Integrate responsible business practice
  throughout their business
• Impact through collaborative action to tackle
  disadvantage
• Inspire innovate and lead by sharing learning
  and best practice

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A new measure of performance..
Profitability and growth are no longer the only
measures of success in business

• The vulnerability of corporate image
• The need for local sensitivity in a global
  market
• The speed and availability of information (and
  misinformation)
• The need to win the trust of an increasingly
  cynical public

.all meanResponsibility is the new kind of
bottom line
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A new measure of performance..
The Corporate Responsibility Index
A new kind of balance sheet to help you
benchmark your performance in four critical areas

• Responsibility in the workplace
• Responsibility in the marketplace
• Responsibility in the community
• Responsibility in the environment

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A new measure of performance..
The rewards you can expect

• Develop stronger bonds with the communities in
  which you work
• Attract more customers and increase their
  loyalty
• Recruit, retain and re-energise your people
• Enhance the reputation of your brands
• Build fruitful partnerships
• Reassure and reinforce investors and
  stakeholders
• Maximise innovation and competitiveness

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A new measure of performance..
The rewards you can expect

• Attract more customers and increase their
  loyalty
• Develop stronger bonds with the communities in
  which you work
• Recruit, retain and re-energise your people
• Enhance the reputation of your brands
• Build fruitful partnerships
• Reassure and reinforce investors and
  stakeholders
• Maximise innovation and competitiveness

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The Small Business Consortium
Objective- To raise the profitability of small
and medium sized businesses in the UK by
encouraging, developing and supporting social,
environmental and community best practice in
business
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www.smallbusinessjourney.com

• All information businesses will need on
  responsible business practice including a
  national case study library.
• Can be filtered by location, sector and provides
  information on corporates, procurement and supply
  chain

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DTI CSR Steering Group

• CSR Academy Programme Partners
• To be launched in July 2004
• Competency Framework
• SMEs
• Loading companies
• UK business schools, management schools and
  training colleges

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What is CommunityMark?
CommunityMark is a unique and innovative standard
that has been designed to-

• Recognise the work that many small and medium
  sized businesses do in their local community
• Provide a model enabling businesses to maximise
  their impact on the community, whilst drawing out
  the commercial benefits of their community
  involvement

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Random Examples of Community Activity-

• Painting decorating a community creche as part
  of team-building exercise
• Sitting on steering group of a
  voluntary/community organisation
• Allocating staff time to support work of
  voluntary/community org.
• Work Placements
• Sponsorship in kind as well as financial
• Mentoring
• Matched Fundraising
• Donation of equipment that is surplus to
  requirements

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Park Royal Partnership
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Park Royal Partnership
A few key facts-

• 1,981 firms, 4,000 residents, 3 local
  authorities
• Central Middlesex Hospital employs c1,500
  people
• Food Processing, ICT and Media are growth
  sectors
• 56 of firms employ gt10 people
• Almost 90 employ gt50 people
• gt2 of firms with lt 250 staff account for c30
  of total employment
• 40 of businesses are ethnic minority owned

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Park Royal Partnership

• Park Royal Partnership (PRP) stated in its Ten
  Year Strategy for Park Royal document launched
  in Autumn 2002 that
• With our partners we will build up a culture of
  corporate social responsibility that greatly
  increases support for activities in local
  schools, colleges, community and voluntary
  organisations, sports and youth clubs.
• And
• We will work with Business in the Community to
  develop and apply their Community Mark
  Programme. This helps small and medium sized
  companies develop relevant social responsibility
  programmes and provides recognition for their
  commitment and achievement.

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Park Royal Partnership

• Furthermore PRP set itself very challenging ten
  year targets for its Business and the community
  programme
• 700 businesses benefiting directly from PRPs
  support services
• 100 firms with an exemplary approach to
  environmental sustainability
• 50,000 sq m of incubator and growth space
  developed
• A workforce development strategy for Park Royal
• 12,000 training opportunities
• 200 companies involved in PRPs sponsoring local
  community and education projects
• A 50 increase in the number of people from the
  surrounding area working in Park Royal

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Results and Analysis of SME Research
47 have been in Park Royal for gt5 Years
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Results and Analysis of SME Research

• Are you familiar with the concept of CSR?
• Fully 11
• A Little 43
• Not Sure 27
• Never Heard of it 13.5
• No Response 5.5

60 stated that CSR was not responsibility of
large companies alone
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Results and Analysis of SME Research
Everyone should take responsibility then it
would be better for everyone - Raj Radia,
Managing Director, Raj Foods CSR is spread
throughout the business spectrum everyone has a
responsibility to trade ethically regardless of
size Carl Ernsting, Director of La Maison des
Sorbets
60 stated that CSR was not responsibility of
large companies alone
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2,000 companies in Park Royal - a corporate
mosaic Not possible to produce a CSR plan with
a one size fits all solution - information that
is clear straight forward - help in complying
with/embracing legislative requirements - an easy
low cost way to engage disengage as time
resources permit - want recognition - a kite mark
Tony Barnard/Carolyn Macdonald Research January
2003
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Results and Analysis of SME Research



Fear of bureaucracy, time and cost are the main
barriers to further engagement, but interestingly
this is not the experience of most of the SMEs
who are engaged DTI Report 2000
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Results and Analysis of SME Research
What are the most important business issues to
you?
Recognition is not the priority but it would be
great if it gives us competitive advantage
Philip Staff, Director of Immaculate Conceptions.
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Results and Analysis of SME Research

• Other-
• Business Planning Finance
• We need help in developing a rolling
  business plan, accounts management financial
  planning in order to take our business to the
  next level
• Paul Mohammad, Managing Director,
  Interactive X
• 2. Business Development
• I need advice on how to approach the
  National and Local Government sectors whom I know
  would be receptive to our products because of
  their high quality competitive price
• Tariq Dar, Business Development Director,
  PRactivewear

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• Other-
• 3. Marketing
• Marketing is a science I do not understand I
  need to know more about how the end consumer buys
  and the role of advertising packaging
• Lisa Madsen, Proprietor, Honeyrose Bakery
• 4. Staff Training
• The gap between the owner of a SME and your
  staff is too wide, you have no management
  potential to delegate to which limits the
  potential for growth
• Vivienne Roberts, Proprietor, Supreme Foods

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Results and Analysis of SME Research
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Results and Analysis of SME Research

• Overall high receptiveness to the concept of
  business mentoring amongst Park Royal SMEs-
• As a small company we have finite resources
  cannot afford expensive consultants to help grow
  our business Zoeb Bhujwalla, Director, American
  Muffin Company
• The principle of business support is excellent
  we had some input on process mapping and it
  proved highly successful Mike Faulkner,
  Operations Manager, RLSBIS

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Mentors and Corporates

• 2 mentors each for pilot phase
• Discussions taken place to-
• Conduct benchmarking exercise
• Engage commitment to the pilot
• Establish criteria for type of mentor
• Input for legal mentoring agreement

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Business Schools

• Research into types of mentoring programmes
• None fitted the brief
• 3 Specific business schools approached
• Accreditation a lengthy process 18 months

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Business Schools
Partnership established with EBS why?

• Highly interested in SME research/keen on
  partnership
• Convenient location
• Flexibility in timing of course/range of schools
  on site
• Can accredit the course/new management
  qualification
• Can provide matched funding for pilot

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RECOGNITION
Community
Marketplace
Environment
Workplace
Sponsoring street furniture and Improving area
visual appearance Matched fundraising Work
Placements Mentoring Integration of
community commitment into org. values Cause
related marketing
Level 3 Level 2 Level 1
S M E B U D D Y C L U S T E R S
P R P S U P P O R T
Waste management recycling Employee
Volunteering Schools link projects Graffiti
removal Donation of surplus office space for
community use Joining steering group of
voluntary or community organisation
Voucher raffle donations Donation of goods
services Donation of office equipment and
computers no longer required Responsible
business practice in relation to staff,
customers, suppliers and environment introduced
Appointment of community champion
SME Engagement Model
SMEs
COMMITMENT
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The Deliverables of the Project
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• SUMMARY
• Importance of Partnerships
• Importance of Memberships