6 March 2013

Best Corporate Responsibility Practices – Cases

Dr. Thomas Streiff, Head Engagement Team and Andrea Gaeumann, Sustainability Expert

2

Part A

1.Methods and criteria for the evaluation of corporate responsibility

2.Best corporate practices – examples

Part B

3.Good – Bad Corporate Responsibility Practices: instruction and criteria grid for workshop

Overview

3

Methods and criteria for the evaluation of corporate responsibilityMost common methodologies (often in combination)

• Questionnaires (e.g. Dow Jones Sustainability Index)

• Surveys with consultation of experts (e.g. GlobeScan)

• Analysis of annual and sustainability reports and other information concerning the integration of corporate responsibility principles and practices published by the company (e.g. Fondation Guilé, Inrate)

• Systematic review of third-party information (e.g. RepRisk Tool)

• Interviews (mainly for verification of assessment results)

Useful links:Dow Jones Sustainability Index: www.sustainability-index.com GlobeScan: www.globscan.comFondation Guilé: www.guile.org Inrate: www.inrate.comRepRisk: www.reprisk.com

4

Methods and criteria for the evaluation of corporate responsibilityConceptual framework (1/3)

Source: Fondation Guilé / T. Streiff

Differen

tiation

Corporate philosophy: values and mission

Corporate governance

Best practice

Compliance & (sector specific) good practice

Corporate Responsibility

Ob

lig

atio

n

Regulation &standards

Stakeholderexpectations

5

Differentiation concerning

image, products, markets

Protection of opportunities

and reputation

Prevention of damages

and claims

Legal requirements

Good Practice

Best Practice

Com

plian

ce D

evelo

pm

en

tMethods and criteria for the evaluation of corporate responsibilityConceptual framework (2/3)

Source: Fondation Guilé / T. Streiff

6Source: Fondation Guilé / T. Streiff

Co

mp

any

pla

nn

ing

Co

ntro

lling

Vision

Company strategy

Mission

Communication strategy

Strategic goals and measures (BSC)and management guidelines

Individual agreement on objectives (MbO)

Values

Charta / Code

Methods and criteria for the evaluation of corporate responsibilityConceptual framework (3/3)

7Source: Fondation Guilé / T. Streiff

Methods and criteria for the evaluation of corporate responsibilityAssessment aspects

A) „Normative“ approach

Rating of depth of the ESG* criteria consideration in corporate reporting

B) „Systemic“ approach

Rating of the consideration of corporate responsibility criteria in

- Vision, value and strategy

- Management systems, organisation und processes

- Products and services

- Resource and environment management

- Stakeholder management

- Communication and reporting

8

1. Vision, values and strategyExample of Novo Nordisk

Every year, the Board of Directors reviews the company’s long-term strategy and outlook. (…)The strategy is characterized by a strong focus on a few diseases, five core capabilities and a deeply rooted values based management system. The Board remains confident that these strategic choices provide a solid basis for a continued positive development for Novo Nordisk in the coming years.

Novo Nordisk Annual Report 2012, p. 1

9

All of these investments serve one purpose: To help patients live better lives. That is what drives us. We know there are millions of people with diabetes who could be living their lives in full if only they got the necessary medical treatment and care, and weare determined to contribute to closing that gap. We have set an ambition that by 2020 we will provide medical treatment to an estimated 40 million patients..

In such difficult times, it is crucial that we – industry, politicians and payers – rethink the approach to managing diabetes and other chronic diseases, ensuring more sustainable healthcare solutions.

Novo Nordisk Annual Report 2012, p. 2Novo Nordisk

1. Vision, values and strategyExample of Novo Nordisk

10 BT Sustainability Review 2011, p. 20

2. Management systems, organization and processes:Example of British Telecom

Key indicators

11 Samsung Sustainability Report 2011, p. 45

2. Management systems, organization and processes:Example of Samsung

Samsung

Objectives and monitoring

12

Data collection

Samsung Sustainability Report 2011, p. 45-78

2. Management systems, organization and processes:Example of Samsung

13

3. Products and servicesExample of Philips

www.lighting-a-greener-future.com

141414

4. Resource and environmental managementExample of Swiss Re

Swiss Re CR Report 2011, p. 39

15

5. Stakeholder managementExample of Unilever

India: Creating rural entrepreneurs

Rojamma is a single parent living in Kurumurthy (…). When her husband left her, she earned a few rupees working in her mother's field but found it difficult to support her two daughters. Then she joined a women's self-help group and found out about Project Shakti. "From that moment my life changed", recalls Rojamma.

To expand its markets, the challenge for Hindustan Lever (Unilever's business in India) was how to reach millions of potential consumers in small remote villages where there is no retail distribution network, no advertising coverage, and poor roads and transport.The solution was Project Shakti, launched in 2000 in partnership with non governmental organisations, banks and government. Women in self-help groups across India are invited to become direct-to-consumer sales distributors for Hindustan Lever’s soaps and shampoos. The company provides training in selling, commercial knowledge and bookkeeping to help them become micro-entrepreneurs.

http://www.unilever.com/sustainable-living

16 Unilever Sustainable Living Plan, Progress Report 2011, p. 35

5. Stakeholder managementExample of Unilever

17

6. Communication and reportingExample of Telefónica

Our reporting model has evolved this year under the perspective of the triple results account – the economic, environmental and social dimension. With the new scheme, in the Corporate Sustainability Report for 2011 we have responded integrally to the Dow Jones Sustainability Index or DJSI and to the indicators included in the GRI A+ guide.

http://www.crandsustainability.telefonica.com/en/transparency_dialogue/cr_report.php

18

Principles for defining report quality:-Balance-Comparability-Accuracy-Timeliness-Clarity-Reliability / assurance

According to AA1000 (APS)-Inclusivity-Materiality-Responsiveness

Telefónica 2011 Sustainability Report, p. 9Telefónica

6. Communication and reportingExample of Telefónica

19 Telefónica 2011 Sustainability Report, p. 9Telefónica

6. Communication and reportingExample of Telefónica

Good – Bad Corporate Responsibility Practices: Exercise

20

Methodological instruction for assessment•All 6 main assessment components are equally weighted (each 16.6 %)•For the ranking of the individual criteria the following scores will be applied:0 = no information found: aspect / criteria seems not

to be of relevance for company1 = general information found: unclear if aspect /

criteria is of relevance for company2 = comprehensive information found: aspect /

criteria seems to be of relevance for company•Max scoring: 72

Assessment component 1:Vision, values and strategy

21

Assessment criteria Ranking

Commitment CEO, Executive Board, Board of Directors

Materiality / relevance of sustainability

Embedment of sustainability in strategy of company

Balanced consideration of the three sustainability dimensions

Definition of general and specific sustainability goals

Consideration of sustainability goals and measures in in BSC, roadmap or similar action plans

………………

………………

………………

………………

………………

………………

Subtotal 1

Assessment component 2:Management systems, organi za tion and processes

22

Assessment criteria Ranking

Sustainability responsibilities are defined

Visibility and integration of sustainability in core processes (objectives and measures)

Visibility and integration of sustainability in support processes (IT, HR incl. internal training, facility management)

Sustainability related feedback culture (e.g. whistle blowing / suggestion system / frequent employee and client surveys)

Incentives (bonus, additional training etc.) adjusted with sustainability criteria

Monitoring / review process and corrective measures

………………

………………

………………

………………

………………

……………..

Subtotal 2

Assessment component 3:Products and services

23

Assessment criteria Ranking

Systematic integration of sustainability principles/criteria in products and services as well in their promotion [double counting]

Transparency concerning impact of products and services over their life-cycle [double counting]

Support of clients and other key stakeholders in achieving their sustainability objectives [double counting]

……………… ………………

……………..

Subtotal 3

Assessment component 4:Resource and environmental management

24

Assessment criteria Ranking

Quantitative and comparable information on consumption of energy (per source), water and other main sector relevant resources such as steel, rare earth compounds [double counting]

Quantitative and comparable information on main emissions such as CO2 and discharged waste (waste water, toxic waste, recyclable waste) [double counting]

Information on measures to reduce consumption of resources and negatively impact natural environment [double counting]

……………… ………………

……………..

Subtotal 4

Assessment component 5:Stakeholder management (internal & external)

25

Assessment criteria Ranking

Commitment for engaging with internal and external stakeholders

Identification of sustainability issues jointly with stakeholders

Existence of strategic partnerships / memberships aimed at developing and implementing of industry specific sustainability practices

Management of controversial issues and critical stakeholders

Active involvement of employees in corporate sustainability measures (do not count training / capacity building)

Volunteering and philanthropic contributions

……………..

………………

……………… ………………

………………

………………

Subtotal 5

Assessment component 6:Communication and reporting

26

Assessment criteria Ranking

Degree of integration of sustainability understanding in corporate communication (excl. sustainability / CSR report)

Degree of formalisation / standardization of sustainability reporting e.g. applying GRI framework [double counting]

Frequent communication on sustainability engagements (including concerning product and service related sustainability)

Independent review of sustainability measures (verification, audit)

Results of sustainability engagement including those related to products and services are communicated

………………

……………… ………………

………………

………………

Subtotal 6

TOTAL ………………