CSR Frameworks and Ratings (1)

8/13/2019 CSR Frameworks and Ratings (1)

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CSR FRAMEWORKS

AND RATINGS


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Why is CSR important for

businesses? A way of easily establishing and keeping trust with

customers, communities and regulators

Mitigating the social risks and problems Improving the public image of the firm

Cut down business costs

Attracts investors and many more

For achieving these long term goals, businessescreate strategic plans and structured models, what is

called as CSR Frameworks


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Stages of CSR

Civil

Strategic

Managerial

Compliance

Defensive

Need to involve all in sector, collective action

Realigns strategy to use CSR as competitive advantage

Moves CSR to core business managers &

functions

Cost of doing business, do just as much asneed to

Company faced with pain, criticism,

defensive


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Stages of CSR

Civil

Strategic

Managerial

Compliance

Defensive

Value Creation Current Trend

Risk Mitigation Historical Focus


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Implementing CSR

Make business case (relevance)

Engage stakeholders (internal & external)

Map potential vulnerabilities/risks

Develop CSR strategy

Align with organizational culture/ change

Monitor, measure, report

Communicate to ALL stakeholder groups


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Make a Business Case

A business case captures the reasoning for

initiating a CSR model

In a business case, the CSR or corporategovernance policies are effectively defined,

documented and communicated within an

organization

A case includes the commitment to conform allthe requirements to implement the framework


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Engaging Stakeholders

The organization identifies its stakeholders and

describes its relationship with each individual

group

Organizations engages by continuous

interaction with stakeholders on issues of

significant concerns

And also demonstrates an approach to expresstheir views and opinions

Finally organizations evaluate the

stakeholders expectations


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Identifying risks/vulnerabilities

Organizations identifies the business risks,

which includes regulatory risks, risks associated

to stakeholder involvement, damage to firms

image etc.

Organizations:

Assess the likelihood and consequences of the

risks Transform these risks into CSR objectives

Establish control mechanisms

Maintain records of risk management policy


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Develop CSR Strategy

A strategic planning includes the following

steps:

Evaluation of the stakeholders expectations

Evaluations of the impacts of the organization

Risk Management Policy

Documenting the CSR objectives, targets and

indicators Board Supervision


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Monitor, Measure and Report

The organization shall establish methods formeasurement of: Stakeholder satisfaction and development

Brand value and reputation

Access to capital Environmental performance

Risk profile

These measures are continually monitored andreported to the Audit committee which determinescriteria that are best suited for the relevantcircumstances of the organization


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Communication with

Stakeholders

Communication takes place between various

employee levels and functions of the

organization

Receiving, documenting and responding to

relevant communication from external

interested parties

Organization considers processes for externalcommunication on its significant economic,

social and environmental impacts

Organization establishes and maintains

monitoring activities and procedures to


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CSR Framework


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LG Electronics

CSR Vision and Strategy:

To earn the trust of the stakeholders as a

responsible and ethical corporate citizen

To become a healthy organization in the marketecosystem and assume a proactive role in

making the system healthier with our products

and services

To take care of our communities, help those in

need become self-reliant, interface and

communicate with a variety of stakeholders

throughout this process, and form a trust-based

relationship with them


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LG CSR Principles

CODE OF

ETHICS

SUPPLIE

R CODE

OF

CONDUC

T

COMPLIA

N-CE

CODE OF

CONDUC

T

GLOBAL

EESH

POLICY

GLOBAL

LABOR

POLICY


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CODE

OF

ETHIC

S

Creating values for customers

Respect Based Management

Winning by the rules

Compliance with local laws and regulations, completely

fairly and uphold the highest standards of business

conduct

GLOBA

LLABOR

POLICY

Respecting Human Dignity Uphold human dignity and value of all employees in terms of

labor

1. Labor and Human Rights 2. Health and Safety

3. Environmental Impact 4. Ethics

5. Materials not obtained through illegal ways6. Management System

COMPLIA

-NCE

CODE OF

CONDUC

T

SUPPLIE

R CODE

OF

CONDUCT

GLOBA

L EESH

POLIC

Y

Considering effects on stakeholders and community

Contribute to reducing non-financial risks and increase company

values

Observe International agreements and rules Reduce energy use, save and recycle resources and improve


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CSR Framework


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CSR - SUZLON

It means living our corporate values with the

goal of:-

Having minimal impact on the natural

environment; Enabling local communities to develop their

potential;

Empowering employees to be responsible civil

society members; and

Committing ourselves to ethical business

practices that are fair to all the stakeholders


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Framework

A higher degree of sus tainabi l i ty can be ach ieved

in bus iness by balancing growth in al l aspects o f

development


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Transformative

Suzlon aspires to embody ethical standards

that are not limited by legal compliance.

Business policies, practices and procedures,

from the perspective of sustainability are

reviewed.

Integrating the Corporate Social Responsibility

perspective in Supply Chain Management. Minimizing footprints and engaging employees

to be responsible civil society members are

the goals of Transformative Corporate SocialRes onsibilit Pro rams.


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Responsive

Responsive initiatives includes:

Environment initiatives to improve and conservenatural resources

Livelihood initiatives to enhance livelihoods Education initiatives to impart literacy , vocational

and life skill training

Health initiatives to not only treat diseases but

also ensure physical, social, psychological andspiritual well being

Civic Amenities initiatives to improve availability torightful amenities and services


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Proactive

Guided by the corporate vision of 'Powering a

Greener Tomorrow', it aspires to champion the

cause of renewable energy.

Proactive initiatives support national and

international programs to deal with global

issues such as climate change/global

warming, natural disasters, internationalpeace, youth development, cultural diversity,

human rights, equity and justice.


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CSR Ratings


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Introduction

In terms of business history, this idea of

measuring socially responsible behavior is a

comparatively new concept. Obviously, the idea

draws heavily on prevailing credit ratings andsecurities analysis.

Since CSR includes the socio-culturalparadigms, it is difficult to create a universal

rating mechanism. Therefore, in spite of

similarities between different frameworks, we

have to provide for diversity and heterogeneity


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Understanding CSR Ratings

CSR ratings, i.e. the assessment of companies on

social,

environmental and economic issues.

The majority of the analyzed rating systems are based

on the stakeholder-model.

Still alive and getting stronger.

P di f S t i bilit


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Paradigms of Sustainability

Ratings

Corporate Citizenship

Business ethics

Corporate Governance

Corporate Social Responsibility (CSR) Sustainable development

Eco-efficiency.


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CSR Reporting

Stakeholders today are holding companies responsible for non-financial performance on issues such as product quality, employeeequity, community engagement, and environmental stewardship

Many stakeholders are demanding that companies provethemselves by openly sharing information on social andenvironmental policies, programs, and performance

Effective CSR reporting and communication programs can buildtrust by sharing successes, challenges, risks, opportunities andstrategic vision with consumers, employees, communities andinvestors

Reporting can also act as a management framework tosystematically track, evaluate and improve a companys CSR

performance over time


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Characteristics of CSR Reports

Goal of CSR rating is to build trust of the

stakeholders

Format is generally varied

More qualitative

Verification is optional

Targeted both externally and internally

Static and forward view Voluntary

Is more engaging, interesting and creative than

annual reports


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Global Reporting Initiative

A sustainable global economy where organizationsmanage their econom ic, environmental, social andgovernance performance and impacts responsiblyand report transparently

Generally accepted framework for reporting an organizationseconomic, environmental, and social

Convened by CERES, with UNEP in 1997, first used in 2001

Multi-stakeholder focused

Continuous improvement Allows comparisons across sectors

Designed to elevate CSR reporting to same level as financialreporting

Sector-specific reporting standards to allow for comparability

Partnership with ISO 26000


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Global Reportin


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Global Reportin

Initiative:G3


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GRI: G3

Launched in 2006

Guidelines features sustainability disclosure that organizations canadopt flexibly and incrementally, enabling them to be transparentabout their performance in key sustainability areas

G3s sustainability Performance Indicators are organized into

categories: Economic, Environmentand Social The Social category is broken down further by Labour, Human

Rights, Societyand Product Responsibility subcategories

Indicator Protocols provide definitions, compilation guidance, andother information to assist report preparers and to ensureconsistency in the interpretation of the Performance Indicators

Technical Protocol provides process guidance on how to define thecontent of a sustainability report

It proposes a generic approach on how to apply the ReportingGuidance for Defining Content and the Reporting Principles forDefining Content that are outlined in GRIs Guidelines


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GRI: G4

Launched in May 2013

Focus of G4: Reflect significant economic, environmental and social impacts

Influence the assessments and decisions of stakeholders

Organizations influence on upstream and downstream entities

The guidelines offer International reference for all thoseinterested in the disclosure of governance approach and ofthe environmental, social and economic performance andimpacts of organizations

These guidelines are developed through a global multi-stakeholder process involving representatives from business,labor, civil society, and financial markets, as well as auditorsand experts in various fields; and in close dialogue with

regulators and governmental agencies in several countries

Wh i i ti f


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Why companies are migrating from

G3 to G4

G4 is more user-friendly for beginners andexperienced reporters

Improvement in technical quality and clearer

definitionsAligns with other reporting frameworks

Offers guidance which leads to material reports(materiality)

Offers guidance on how to link thesustainability reporting and integrated report

Provides support to improve data search


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CSR Rating Case Study

Microsoft in terms of CSR rating ranks number1 in Asia Pacific, number 2 in Latin Americaand number 4 in North America and globally toit ranks 1st

Microsoft has been awarded this ratingsbecause due to its strong citizenship,workplace and governance practices, turning

around the bad will generated in the early2000s when it was criticised for using itsmarket dominance to drive up consumer pricesand put pressure on the competition with unfair

business practices, the report says.


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Contd...

Senior director of corporate citizenship atMicrosoft, Dan Bross , puts the turnaround downto increased engagement in public policydiscussions and transparency in the companys

public policy agenda. Overall, Microsoft placed first in terms of

governance and second in both workplace andcitizenship behind Google and Walt Disney

respectively. Of the 100 companies evaluated,only 22 were considered ethically strong, with theremaining 78 deemed average in terms oftransparency and openness

*(ref: http://www.marketingmag.com.au/as on 31st

january 2013)
http://www.marketingmag.com.au/http://www.marketingmag.com.au/


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THANK YOU!!!

Arkaprava Sadhu (505)

Sourabh Verdia (523)

Sridhar Swamy (524)

Aakash Goyal (557)

Archan Thakker (569)

Documents

CSR Frameworks and Ratings (1)