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CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY
CHAPTER 8
The New Business Imperatives? An International Comparison
Outline
The overwhelming movement presently driving towards corporate social responsibility
Why bridging the great divide between corporate governance and corporate social and environmental responsibility (CSR) is the next great challenge for business
The responsibilities of business corporations to shareholders, stakeholders and government
The legitimacy of corporate social responsibility The increasing sophistication of corporate reporting of social
and environmental matters
The Economics of Climate Change
Rising AtmosphericGreenhouses
GASCONCENTRATION
( Measured in CO2 equivalent)
•Rising Global Mean Surface Temperatures
(GMT)
Rising Sea Levels
Changes in rainfall variabilityand seasonality
Changing Patterns of NaturalClimate variability
Melting of Ice Sheets, Sea-Iceand Land Glaciers
PHYSICAL CHANGES IN CLIIMATE
RADIACTIVE FORCING
(Change in energy balance)
Land use change
Emissions
Feedbacks including a possible reduction in The efficiency of the land and oceans to absorb Carbon dioxide emissions and increased naturalReleases of methane
Local and global feedbacks i.e.:Changes in the clouds, the water contentOf the atmosphere and the amount ofSunlight reflected by sea ice (albedo)
RisingAtmosphericTemperatures
Rising OceanTemperatures(Lagged)
Impacts onPhysical,
Biological and
Human systems
Source: Stern Review: The Economics of Climate Change (2006:8)
Defining Social and Environmental Sustainability
Definitions of CSR and sustainability range from the basic to the most demanding
from a specific reference to a number of necessary activities to demonstrate responsibility
to a general call for a comprehensive, integrated and committed pursuit of social and environmental sustainability
The Significance and Impact of CSR
The narrow focus of corporate governance exclusively upon the internal control of the firm and simply complying with regulation is no longer tenable
Corporate objectives described as ‘wealth generating’ too frequently have resulted in the loss of well being to communities and the ecology
Trend towards monitoring not just the financial health of the company, but the social and environmental impact of the company
CSR is becoming established in many corporations as a critical element of strategic direction, one of the main drivers of business development, as well as an essential component of risk management.
CSR Responses: Investors
Capital Report 2006, a guide to the investment community on how to incorporate environmental, social and governance issues into their investment decision-making and ownership processes
The third Carbon Disclosure Project meeting, (investors representing 21 trillion dollars in assets) collectively requesting the world’s largest corporations to disclose information on greenhouse gas emissions and their approach to the management of carbon risks (UNEP FI 2005).
Banks representing more than 80% of the global project finance market, have adopted the Equator Principles, a set of voluntary principles outlining environmental, social and human rights disciplines associated with project finance above $50 million (Freshfields Bruckhaus Deringer 2005a).
CSR Responses: International Organizations by encouraging CSR
The International Finance Corporation (IFC), the private sector investment arm of the World Bank originally developed the CSR principles
The OECD Guidelines for the operations of multinational corporations (OECD 2000)
The European Union Guidelines for the business contribution to sustainable development (European Commission 2003;2004)
Global Reporting Initiative (GRI) 2002 Sustainability Reporting Guidelines
The World Business Council for Sustainable Development, and the World Economic Forum Global Corporate Citizenship Initiative has projected corporate responsibility in the minds of the international business elite (WBCSD 2002;2004 ; WEF 2005)
Leading corporations signed up for the Global Reporting Initiative and more than 2,000 international corporations now publish reports on their CSR performance
Business Leaders Initiative on Human Rights The Conference Board Business in the Community Business for Social Responsibility The new indices including the Dow Jones Sustainability Index and
FTSE4Good, are seeking to reinforce the commitment to CSR
CSR Responses: Corporations by incorporating CSR in their business
The Integrity of CSR
Questions are often addressed to the sincerity of corporate social and environmental initiatives; the legality of company directors engaging in these concerns; equally, the legality of the trustees of investment institutions attending to these interests; and the verifiability of CSR activities and outcomes
There is a place in the market economy for responsible firms. But there is also a large place for their less responsible competitors. ..Precisely because CSR is voluntary and market-driven, companies will engage in CSR only to the extent that it makes business sense for them to do
Civil regulation has proven capable of forcing some companies to internalize some of the negative externalities associated with some of their economic activities.
Tomorrow’s Markets
People Innovation Natural Capital Connection Roles and Responsibilities ( Democracy,
accountability, privatisation)
The Range of Environmental Costs
Tier Description
1 Conventional Costs
Includes the costs of direct raw materials, utilities, labour, supplies, capital equipment and relateddepreciation
2 Hidden Costs
Includes the up front environmental costs, such as search costs relating to environmentally conscious suppliers, initial design costs of environmentally preferable products, regulatory costs which are oftenobscured in overhead costs, future decommissioning or remediation costs
3 Contingent
Defined in probabilistic terms and includes fines for breaching environmental requirements, clean upcosts, law suits relating to unsound products
4 Relationship and Image Costs
These costs are difficult to determine and would seldom be separately identified within an accountingsystem. However they could be expected to have some influence on the value of some intangibleassets, such as goodwill, brand-names and so forth. The sum of the costs in Tiers 1 to 4 can be referredto as private costs and they can directly impact on an organization’s reported profit
5 Societal Costs
These costs are often referred to as externalities and represent costs that an organization imposesupon others as a result of their operations but which are typically ignored by the organization. Theycould include environmental damage caused by the organization for which they are not heldaccountable or adverse health effects caused by organization-generated emissions for which theorganization is not held responsible. It is difficult and sometimes controversial to put a cost on theseEffects and with the exception of a few organizations worldwide, most entities ignore these costswhen calculating profits. However, physical measures can be developed, and related KPIs can beused to assess performance.
Source: Van Berkel R. (2003)
KPMG CSR Surveys 1993-2005 (KPMG)
52% (64% including CR information in annual reports
45%35%----
G250: Percent of companies with CR reports
33% (41% including CR information in annual reports)
23%
(28% for 11countries in 1999)
24%17%13%
N100: Percent of companies with CR reports
98%96%98%69%85%Response rate
1, 600+1, 900+1, 100+1, 300810
Total number of companies included
Top 100 in 16¹countries &
Global 250
Top 100 in 19 countries &
Global 250
Top 100 in 11 countries &
Global 250
Top 100 in 13 countries
Top 100 in 10 countries
Research
Set (s)
20052002199919961993Survey year
52% (64% including CR information in annual reports
45%35%----
G250: Percent of companies with CR reports
33% (41% including CR information in annual reports)
23%
(28% for 11 countries in 1999)
24%17%13%
N100: Percent of companies with CR reports
98%96%98%69%85%Response rate
1, 600+1, 900+1, 100+1, 300810
Total number of companies included
Top 100 in 16¹countries &
Global 250
Top 100 in 19 countries &
Global 250
Top 100 in 11 countries &
Global 250
Top 100 in 13 countries
Top 100 in 10 countries
Research
Set (s)
20052002199919961993Survey year
Notes:(4) Refers to 15 of the OECD countries (Australia, Belgium, Canada, Denmark, Finland, France, Germany,Italy, Japan, Netherlands, Norway, South Africa, Spain, Sweden, UK, US) and also South Africa.
52% (64% including CR information in annual reports
45%35%----
G250: Percent of companies with CR reports
33% (41% including CR information in annual reports)
23%
(28% for 11countries in 1999)
24%17%13%
N100: Percent of companies with CR reports
98%96%98%69%85%Response rate
1, 600+1, 900+1, 100+1, 300810
Total number of companies included
Top 100 in 16¹countries &
Global 250
Top 100 in 19 countries &
Global 250
Top 100 in 11 countries &
Global 250
Top 100 in 13 countries
Top 100 in 10 countries
Research
Set (s)
20052002199919961993Survey year
52% (64% including CR information in annual reports
45%35%----
G250: Percent of companies with CR reports
33% (41% including CR information in annual reports)
23%
(28% for 11 countries in 1999)
24%17%13%
N100: Percent of companies with CR reports
98%96%98%69%85%Response rate
1, 600+1, 900+1, 100+1, 300810
Total number of companies included
Top 100 in 16¹countries &
Global 250
Top 100 in 19 countries &
Global 250
Top 100 in 11 countries &
Global 250
Top 100 in 13 countries
Top 100 in 10 countries
Research
Set (s)
20052002199919961993Survey year
Notes:(4) Refers to 15 of the OECD countries (Australia, Belgium, Canada, Denmark, Finland, France, Germany,Italy, Japan, Netherlands, Norway, South Africa, Spain, Sweden, UK, US) and also South Africa.
Source: KPMG CSR Surveys 1993-2005. KPMG International Surveys of Corporate Responsibility Reporting 2005, KPMG International
Drivers for Corporate Social Responsibility (KPMG)
11Other
9Improved relationships with governmental authorities
9Cost saving
13Strengthened supplier relations
21Market position (market share improvement)
27Reputation or brand
39Access to capital or increased shareholder value
47Risk management or risk reduction
47Employee motivation
53Innovation and learning
53Ethical considerations
74Economic considerations
%Driver
11Other
9Improved relationships with governmental authorities
9Cost saving
13Strengthened supplier relations
21Market position (market share improvement)
27Reputation or brand
39Access to capital or increased shareholder value
47Risk management or risk reduction
47Employee motivation
53Innovation and learning
53Ethical considerations
74Economic considerations
%Driver
Source: KPMG (2005) International Survey of Corporate Responsibi lity Reporting. KPMG international.
Key Stakeholders According to Corporate Executives
0
10
20
30
40
50
60
70custo
me
rs
Em
plo
ye
es
Oth
er
Inve
sto
rs a
nd
Sh
are
ho
lders
Bo
ard
of
Dir
ecto
rs
Insti
tutio
nal In
vesto
rs
Go
vern
me
nt
and
Re
gula
tors
Ve
ndors
Local com
mun
itie
s
No
n G
overn
men
tal
org
aniz
ation
s
Oth
er
Source: Adapted EIU (2001)
CSR Stakeholder Model Driving Enlightened Shareholder Value
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate Governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Community investment
Community involvement
COMMUNITY
SOCIAL RESPONSIBIL ITY
Public Reporting
Cultural considerations
Community investment
Community involvement
COMMUNITY
Waste
Resource use
Energy
Biodiversity
Product life cycle and design
PHYSICAL ENVIRONMENT
Waste
Resource use
Energy
Biodiversity
Product life cycle and designPHYSICAL ENVIRONMENT
ECONOMIC PARTNERS
ENVIRONMENTALRESPONSIBILITY
SOCIALRESPONSIBILITY
WORKPLACE
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate Governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Community investment
Community involvement
COMMUNITY
SOCIAL RESPONSIBIL ITY
Public Reporting
Cultural considerations
Community investment
Community involvement
COMMUNITY
Waste
Resource use
Energy
Biodiversity
Product life cycle and design
PHYSICAL ENVIRONMENT
Waste
Resource use
Energy
Biodiversity
Product life cycle and designPHYSICAL ENVIRONMENT
ECONOMIC PARTNERS
ENVIRONMENTALRESPONSIBILITY
SOCIALRESPONSIBILITY
WORKPLACE
Source: Mays S. (2003). Corporate Sustainability _ An Investor Perspective.The Mays Report. Department of Environment and Heritage Commonwealth of Australia. p11-16.
CSR Stakeholder Model Driving Enlightened Shareholder Value
EnlightenedShareholder Value
Reducedregulatory intervention
Enhanced reputation andstronger brand
Allianceswith business
partners
Betterstakeholders
relations
Minimize risksoperations and
M&ACost savings
New businessopportunities
Customer satisfaction
loyalty and highersales
Access to andlower cost of capital
Attractive employer
Source: Mays ( 2003: 11 )
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate Governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Community investment
Community involvement
COMMUNITY
SOCIAL RESPONSIBILITY
Public Reporting
Cultural considerations
Community investment
Community involvement
COMMUNITY
Waste
Resource use
Energy
Biodiversity
Product life cycle and design
PHYSICAL ENVIRONMENT
Waste
Resource use
Energy
Biodiversity
Product life cycle and designPHYSICAL ENVIRONMENT
ECONOMIC PARTNERS
ENVIRONMENTALRESPONSIBILITY
SOCIALRESPONSIBILITY
WORKPLACE
EnlightenedShareholder Value
Reducedregulatory intervention
Enhanced reputation andstronger brand
Allianceswith business
partners
Betterstakeholders
relations
Minimize risksoperations and
M&ACost savings
New businessopportunities
Customer satisfaction
loyalty and highersales
Access to andlower cost of capital
Attractive employer
Source: Mays ( 2003: 11 )
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate Governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Human Rights
Value chain management
Commitment to sustainability
Codes of conduct
Corporate governance
SHAREHOLDERS/ VALUE CHAIN
ECONOMIC PARTNERS
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Employee development
Employee conditions
Health and Safety
Employee rights
EMPLOYEES
Community investment
Community involvement
COMMUNITY
SOCIAL RESPONSIBILITY
Public Reporting
Cultural considerations
Community investment
Community involvement
COMMUNITY
Waste
Resource use
Energy
Biodiversity
Product life cycle and design
PHYSICAL ENVIRONMENT
Waste
Resource use
Energy
Biodiversity
Product life cycle and designPHYSICAL ENVIRONMENT
ECONOMIC PARTNERS
ENVIRONMENTALRESPONSIBILITY
SOCIALRESPONSIBILITY
WORKPLACE
Source: Mays S. (2003). Corporate Sustainability _ An Investor Perspective.The Mays Report. Department of Environment and Heritage Commonwealth of Australia. p 11-16.
Legal and Moral Liability are Converging
Legal Liability Moral
Compliance Driven
Accountability Driven
Source: SustainAbility 2004
Goodwill/ badwillMoney
AssociationOwnership
Compliance to spiritCompliance to letter
Time- unlimitedTime- limited
Court of public opinionCourt of law
Emerging (Moral)Existing (Legal)
Goodwill/ badwillMoney
AssociationOwnership
Compliance to spiritCompliance to letter
Time- unlimitedTime- limited
Court of public opinionCourt of law
Emerging (Moral)Existing (Legal)
Source: SustainAbility 2004.
Source: SustainAbility 2004:4
Legal Liability Moral
Compliance Driven
Accountability Driven
Source: SustainAbility 2004
Goodwill/ badwillMoney
AssociationOwnership
Compliance to spiritCompliance to letter
Time- unlimitedTime- limited
Court of public opinionCourt of law
Emerging (Moral)Existing (Legal)
Goodwill/ badwillMoney
AssociationOwnership
Compliance to spiritCompliance to letter
Time- unlimitedTime- limited
Court of public opinionCourt of law
Emerging (Moral)Existing (Legal)
Source: SustainAbility 2004.
Legal Liability Moral
Compliance Driven
Accountability Driven
Source: SustainAbility 2004
Goodwill/ badwillMoney
AssociationOwnership
Compliance to spiritCompliance to letter
Time- unlimitedTime- limited
Court of public opinionCourt of law
Emerging (Moral)Existing (Legal)
Goodwill/ badwillMoney
AssociationOwnership
Compliance to spiritCompliance to letter
Time- unlimitedTime- limited
Court of public opinionCourt of law
Emerging (Moral)Existing (Legal)
Source: SustainAbility 2004.
Source: SustainAbility 2004:4
The Legitimacy of CSR from a Governance Perspective
Corporations enlightened shareholder value?
The duty to promote success of the company
Investment Institutions Effective Portfolio management: The duty to address ESG issues?
Fund Trustees Fiduciary Duties
DUTY TO ACT FORA PROPER CAUSE
DUTY TO ACTPRUDENTLY
Carry out the items Of the trust
Act in the best interestsof the beneficiaries as
a whole
KEY FIDUCIARY DUTIES
Act reasonablyApply special
Knowledge and skill
Act with care, skill andDiligence regarding
Someone else’s investment
Consider the suitability Of investments
Consider relevantconsiderations
Australia (FiduciaryDuties set out in case
Law and statute)
DiversityTake proper advice
Canada and UK(fiduciary duties setOut in case law andstatute
US (fiduciary duties case law and federalAnd state statute
MODERN PRUDENTINVESTOR RULE
SOLE PURPOSE LAST
Source: Freshfields Bruckhaus Deringer (2005:15); “Duties Diagram 1-Pensions” Geneva: UNEPFI.
Institutional Investor Voting 2000-2003
0 10 20 30 40 50
2000 2001 2002 2003
Public health –AIDS, workplace coverage
Banking/ insurance
Treatment of animals
Public health – product safety
Nuclear power
CSR/ CERES reporting
Humanitarian – debt relief to poor countries
Human rights
Arctic drilling
Social community impact
Charitable giving
Public health – tobacco cigarettes
Militarism and violence
Genetically modified organisms
Climate change/ renewable energy
Public health- affordable medicines
Pollution/ Recycling
Political influence
Equal employment
Global labour standards
Public health –AIDS, workplace coverage
Banking/ insurance
Treatment of animals
Public health – product safety
Nuclear power
CSR/ CERES reporting
Humanitarian – debt relief to poor countries
Human rights
Arctic drilling
Social community impact
Charitable giving
Public health – tobacco cigarettes
Militarism and violence
Genetically modified organisms
Climate change/ renewable energy
Public health- affordable medicines
Pollution/ Recycling
Political influence
Equal employment
Global labour standards
Source: Monks, Miller and Cook (2004:322).
Full Source: Monks, R.; Miller, A. and Cook, J.(2004).
The Impact of Socially Responsible Investment Upon CSR
UK
Socially responsible investment (SRI) according to the UK Social Investment Forum (2001) “combines investors’ financial objectives with their commitment to social concerns such as social justice, economic development, peace or a healthy environment.”
France
AFG-ASFFI the association of professional fund managers, requests that corporate boards consider the concept of sustainable development, social responsibility and the environment. Also, French corporate law was amended to require listed companies to disclose in their annual reports how they take the social and environmental consequences of their activities into account in May 2001.
Australia
The Ethical Investment Association’s (EIA 2002) figures SRI in Australia has grown dramatically rising to A$13.9 billion in 2002, an increase of 31% over the previous year while managed funds as a whole declined by 0.1%
Proportion of UK Funds Taking SRI Concerns Into Account to Differing Degrees
There is no statement saying environmental, social and ethical considerations will be taken into account.
0
The Fund delegates the decision to the discretion of the fund manager, with no guidance.
1
The Fund will pursue a policy of engagement, but not primarily or necessary through the fund manager.
2
The Fund manager is requested to take account of financial implications of environmental, social and ethical considerations.
3
The Fund manager is requested to take account of financial implications and trustees associate good environmental, social and ethical performance with positive financial implications.
4
The Fund manager is empowered/ required to take account of environmental, social and ethical considerations as long as there are no negative financial consequences.
5
There is no statement saying environmental, social and ethical considerations will be taken into account.
0
The Fund delegates the decision to the discretion of the fund manager, with no guidance.
1
The Fund will pursue a policy of engagement, but not primarily or necessary through the fund manager.
2
The Fund manager is requested to take account of financial implications of environmental, social and ethical considerations.
3
The Fund manager is requested to take account of financial implications and trustees associate good environmental, social and ethical performance with positive financial implications.
4
The Fund manager is empowered/ required to take account of environmental, social and ethical considerations as long as there are no negative financial consequences.
5
40%
22%
12%
9%
30%
33%
10%
28%
8% 8%
0%
25%
50%
75%
100%
Number Capital value
Per
cen
t40%
22%
12%
9%
30%
33%
10%
28%
8% 8%
0%
25%
50%
75%
100%
Number Capital value
Per
cen
t
Source: Mathieu, E. (2000),UKSIF .
Growth of SRI Investment Assets in Australia 2000- 2006
325
18182175 2355
4500
7670
11 985
0
2000
4000
6000
8000
10000
12000
2000 2001 2002 2003 2004 2005 2006
A$
m
Source: EIA (2006) Sustainable Responsible Investment in Australia, Sydney: Ethical Investment AssociationSource: Ethical Investment Association (EIA) 2006 SRI Benchmarking Survey
The Impact of Socially Responsible Investment Upon CSR
USUS Socially Responsible Investing (SRI), according to the biennial report of The Social Investment Forum, of the overall investment through professional managers amounting to US$19.9 trillion in December 2000, over 11% or $2.3 trillion dollars is invested in a socially responsible manner.
The Social Investment Forum (SIF) breaks down these figures into $1.4 trillion employing screening only on social or environmental criteria; $601 billion in screening and shareholder advocacy funds; $305 billion in shareholder advocacy only funds; and $8 billion in community investment funds
Growth of SRI Investments in the United States 1995-2005
$0
$500
$1,000
$1,500
$2,000
$2,500
SocialScreening only
ShareholderAdvocacy only
Screening andShareholderAdvocacy
CommunityInvesting
Total
1995 1997 1999 2001 2003 2005
Billions
Source: 2005 Report on Socially Responsible Investing Trends in the US.Source: SIF (2006) “2005 Report on Socially Responsible Investing Trends in United States,10 year Review. Washington DC: Social Investment Forum. Fig 1.2 p. 2.
Screens most commonly used in Screened Portfolios in the US (2005)
0 25 50 75 100 125 150 175
Other
Animal Testing
Human Rights
Pornography
Faith-Based
Equal Employment
Product/Services
Labour Relations
Environment
Community Relations
Defense/Weapons
Gambling
Alcohol
Tobacco
Total Net Assets ($ Billions)
Source: Social Investment Forum Foundation 2006
US Shareholder Actions Planned for 2003-2004 Including Key Resolutions
Proposed Withdrawn Voted On Average Vote %
Type of Proposal 2003 2004 2003 2004 2003 2004 2003 2004
Independent board chair 42 59 9 8 30 36 26.10 28.30
Limit consulting by auditors 29 35 7 16 19 12 16.10 14.20
Increase board independence 8 14 1 0 5 13 27.50 26.10
Majority vote to elect directors - 14 - 2 12 - 11.80
Cumulative voting 21 24 1 1 20 21 34.10 34.90
Restrict executive compensation 64 158 2 28 36 79 15.40 11.50
Expense option value at time of grant 115 50 27 11 69 34 47.40 53.30
Vote on golden parachutes 21 36 2 8 18 26 57.00 51.80
Cap executive pay - 15 - 3 - 7 - 7.70
Award performance-based stock options 92 8 24 1 59 5 16.10 40.20
Poison pill 107 100 1 3 84 51 60.00 61.10
Declassify board 63 59 9 11 48 39 63.40 71.60
Eliminate supermajority vote 10 11 1 1 9 7 60.50 75.80
Sell the company/maximise value 4 13 0 1 2 4 3.20 25.10
Other 215 251 38 84 75 99 - -
TOTAL 791 847 122 178 474 445
Source: SIF (2006). “2005 Report on Socially Responsible Investing Trends in the United States- 10 Year Review”, Washington DC: SIF.
Social and Environmental Investment Indices
The Calvert Social Index The KLD Broad Market Social Index (BMS Index) The Domino 400 Social Index (DSI) The Nasdaq Social Index The Large Cap Social Index (LCSI) FTSE4Good Dow Jones Sustainability Indexes (DJSI) The Ethibel Sustainability Index (ESI) ECP Ethical Global Return
Corporate Reporting of CSR
The Global Reporting Initiative (GRI) Principles aim to: Provide a balanced and reasonable representation of an organization's
sustainability performance Facilitate comparability Address issues of concern to stakeholders
The GRI reporting principles :
Transparency Inclusiveness Auditability Completeness Relevance Sustainability Context Accuracy Neutrality Comparability Clarity
Future Developments: The Redesign of the Corporation
The effective integration of corporate social and environmental responsibilities could potentially release greater value for both shareholders and wider stakeholders
Corporate Strategies to Deliver Value to Society
Comply
Obey the law
Control
Communityinvestment
Create newvalue
Collaborate
Costs, risks,liabilities,Negative impacts
StrategicPhilanthropy,Social venturecapital,Employee volunteering
New :Products & services,Processes,Alliances,Markets, andBusinessModels that Meet societal needs
To solveComplex
social&
environmentalissues
Shareholder added value
So
ciet
al
ad
ded
va
lue
Sustai
nable
added
val
ue
Long term
gro
wth
Source: Nelson, 2004.Source: Nelson J. (2004).
Conclusions
Only a fundamental redesign of corporate forms, objectives and value measures can fully meet the realities of responsibility.