Defining Targets - Companies focusing on social targets that are beneficial for the society and the company will be able to gain a competitive advantage through differentiation and branding of corporate social responsibility (CSR). New product development (NPD) is an excellent starting point to define CSR targets and to address them through the various departments involved, as well as to external partners during the development process.

CSR Strategies Today and Tomorrow

In the past, CSR strategies were often an accumulation of different initiatives, like sponsoring; philanthropy; employee volunteers; cooperation with nonprofit organizations (NPOs); and environmental protection and energy efficiency schemes. The activities were fragmented and disconnected from the core business activities and often called "feel-good" PR. Several factors, such as activist activities and increased transparency and legislation, have forced companies to establish a systematic business-aligned CSR strategy. Extensive media coverage about natural disasters has led to a higher level of individual responsibility in the general public, triggering a readiness to donate. At the same time, there has been a public demand for more detailed information from corporations about their economic, social, ethical and environmental performance.

Upgraded CSR is no longer a corporate activity to balance direct or indirect negative effects (sometimes called greenwashing); it has become an integrated part of the business strategy. Today, CSR covers all aspects of corporate governance. It includes ethical, economical, social and environmental impact, as well as the principle of respecting human rights. Besides the traditional business stakeholders - like shareholders, suppliers and customers - it also involves communities, both locally and in the supplier or cooperation partner territory. CSR lives as a result of relationships between people, employees, customers and cooperation partners.

Three Dimensions of CSR

Advanced CSR strategies combine three different categories of activities. The first category targets internal effects and performance indicators. Some of them, like energy efficiency, reduction of emissions and reduction of water consumption, can be applied to every company. In addition, company specific investment in innovative NPD and technologies are included. For example, Kraft and Nestlé developed technologies to reduce trans fatty acids within their food product lines before it was mandatory. By supporting the public's healthy diet aspirations, they confirmed their positions as responsible, innovative food suppliers.

The second category targets external effects, where co-responsibility for consequences can be identified. Many companies establish a supplier codex, setting requirements such as environmental targets or banning child labor. Cooperation with an external partner to scout new ideas or to identify natural resources for NPD also fall into this category, such as the benefit of traditional know-how, which could give ideas for the screening of efficacy and applications.

The third category includes donation and organizational support for philanthropic activities within the same business area. These activities are expected from corporations, not only because they have the financial capacity, but also because they have the skills and experience to structure and steer these kinds of activities. A good example is the Sight & Life initiative of DSM, which fights malnutrition in underdeveloped countries with food supplementation as well as education programs.

Strategic Advantages of CSR Strategy Integrated With NPD

CRS and NPD have something in common: Even if corporations consider themselves to be socially conscious and innovative, they often classify these activities only as cost drivers and not as strategic measures to generate opportunities, innovation and competitive advantages. NPD includes several internal departments and cooperation with external supply and research companies as well as, in case of open innovation partnerships, potential customers. Therefore, NPD is the perfect platform from which to analyze the CSR aspects of a new product and, during the development process, to target the identified internal and external effects. The results will be CSR principles for future product specifications and supply chain.

Many aspects of NPD and CSR are the same for the development of any product, such as in energy and water usage; environmental protection; human rights; development of valuable products; fair product communication; and pricing (fig. 1). Special emphasis is given to NPD and access and benefit sharing (ABS), referring to natural raw materials with traditional food use or traditional medicinal applications. These resources are often used to identify new flavors or to introduce exotic fruits to new markets. In addition, the cosmetic and food industry is screening such raw materials for the development of active ingredients.

NPD and Access and Benefit Sharing

The Convention on Biological Diversity (CBD), under the United Nations, has three objectives, which were first identified during the Earth Summit in Rio in 1992: the conservation of biological diversity; the sustainable use of the biological diversity and its components; and the fair and equitable sharing of benefits arising out of the utilization of genetic resources and associated traditional knowledge, also called access and benefit sharing (ABS).

CBD formalized ABS through the Bonn Guidelines on Access to Genetic Resources and Fair and Equitable Sharing of Benefits Arising out of their Utilization. To date, the guidelines have only voluntary status and execution depends on national law. The objective is to establish a mechanism that puts the developing countries in a position to market "their" genetic resources profitably in future - and to create through ABS an economic incentive for conservation and the sustainable use of local biodiversity.

Nevertheless, the commercial development of genetic resources is time consuming, costly and a risky business. Guidelines have to be implemented that respect the rights of the owner of the genetic resource or traditional knowledge, without raising unrealistic expectations of revenue. At the same time, the investment of the industry partner who invests in initial research with a low probability of success has to be honored, rather than looking for innovation options with a less complex cooperation environment.

Advice and case studies are necessary to support companies and communities through the process, starting with assistance for the empowered partner in the drawing up of an agreement which regulates the development process and future use of natural resources. Collaborations with NPOs or governmental institutions can be beneficial. These institutions can act as mediator to steer the set up process of ABS and help to protect the investing party from accusations of biopiracy even when that party is trying to follow the guidelines.

Conclusions

Corporate social responsibility can be summarized as meeting the needs of the present without compromising the ability of future generations to meet their needs. NPD is an excellent starting point for the establishment of a CSR strategy which targets internal and external effects linked to the product development and the later supply chain. The corporation can establish and implement CSR performance indicators during the NPD process and in parallel influence the mindset of the stakeholders, employees and potential customers towards the support of activities which are beneficial for the business as well as for the community.