Corporate Social Responsibility LECTURE 25: Corporate Social Responsibility MGT 610 1

Corporate Social Responsibility 2 Chapter 6 Framework For Rating Corporate Social Responsibility

Corporate Social Responsibility 3 LEARNING OBJECTIVES Understand the importance of CSR reporting Create awareness about the various reporting criteria followed to report CSR Understand how conscientious organizations are committed to the concept of CSR Learn from CSR reporting frameworks of various agencies and organization

Corporate Social Responsibility 4 CR Index Developed in consultation with businesses, the CR Index challenges and supports large organisations to integrate responsible business practices. Our approach It takes the form of an online survey and companies follow a self- assessment process intended to help them identify both the strengths in their management and performance and gaps, where future progress can be made. Business in the Community believes that self- assessment is the starting point for action and improvement, but it independently validates submissions to ensure reliability and consistency The CR Index supports companies to: Identify gaps for improvement and reinforces good practice Track progress over time and drive continuous improvement Benchmark performance against peers and leading practice Engage board members and raise awareness of CR issues internally

Corporate Social Responsibility 5 Participation Companies can choose to use the tool on either a public or private basis. Public participants are included in the annual CR Index ranking and demonstrate a commitment to transparently improving their social and environmental performance Private participation is designed for companies not ready to disclose their performance and focuses on providing guidance and feedback help organisations better integrate and improve their CR performance.

Corporate Social Responsibility 6 The CR Index follows a systematic approach to managing, measuring and reporting on business responsible business practices, companies are assessed using the framework below. Corporate Strategy looks at the main corporate responsibility risks and opportunities to the business and how these are being identified and then addressed through strategy, policies and responsibilities held at a senior level in the company. Integration is about how companies organise, manage and embed corporate responsibility into their operations through KPIs, performance management, effective stakeholder engagement and reporting. Management builds on the Integration section looking at how companies are managing their risks and opportunities in the areas of Community, Environment, Marketplace and Workplace. Performance and Impact asks companies to report performance in a range of social and environmental impacts areas. Participants complete three environmental and three social areas based on the relevance to their business.

Corporate Social Responsibility 7

8 The Index supports companies to integrate responsible business by helping them: Gap analysis, helping organisations identify both the strengths in their management and the gaps where future progress can be made Benchmarking performance against sector peers and leading practice from across the CR Index Tracking progress, reinforcing good practice and driving continuous improvement And the CR Index provides a powerful way to engage board members and raise awareness of material corporate responsibility issues

Corporate Social Responsibility 9 EIRIA or Experts in responsible Investment Solutions EIRIS is a global leader in the provision of environmental, social, governance (ESG) research for responsible investors. An independent, not-for-profit organisation, we work to help our clients develop the market in ways that benefit investors, asset managers and the wider world. Our mission is to empower responsible investors with independent assessments of companies' ESG performance and advice on integrating them with investment decisions. EIRIS provides responsible investment services to more than 100 asset owners, asset managers, banks, stock brokers and governments around the world - as well as major index providers. We bring almost 30 years' experience of promoting responsible investment and helping global investors, consumers, charities and financial advisers to invest responsibly.

Corporate Social Responsibility 10 Our research is client-driven and designed to allow investors to compare company performance. We research a range of environmental, social and governance (ESG) issues and specific ethical concerns such as involvement in arms or tobacco. Investors are increasingly factoring ESG performance analysis into their investment decisions. As a result of this it has become increasingly important for companies to engage with these issues and to report on that engagement. Completing our surveys gives companies an opportunity to provide the most up-to-date and accurate information on their ESG performance to more than 100 investment institutions.

Corporate Social Responsibility 11 EIRIS is a global market leader and our research is used by a variety of asset owners and asset managers (including pension funds), investment banks and charities throughout the world. Over 60% of the UK's responsible investment funds are managed by our clients. A not-for-profit organisation, EIRIS does not assess companies' financial status but looks at their ESG policies and practices. We do not give overall company rankings but provide assessments on over 150 individual criteria.

Corporate Social Responsibility 12 Sustainable Investment Research International (SiRi) Socially responsible investment (SRI) is one of the fastest growing investment trends This process has been driven by increasing concerns over the environmental and social impacts of companies which have raised consumer awareness and fuelled high-profile NGO campaigns. At the same time, there has been a growing understanding of the potential benefits for investment returns of companies adopting higher corporate social responsibility standards as a way of both managing risk and identifying ways of enhancing future performance.

Corporate Social Responsibility 13 With increasing pressure on both companies and investors to demonstrate that their activities are sustainable, many markets now have regulations requiring disclosure and consideration of social, ethical or environmental issues by investors. The growth in SRI represents a recognition that traditional financial analysis and investment techniques do not capture the full range of factors of concern to investors and which increasingly affect company performance.

Corporate Social Responsibility 14 The agenda of SRI issues is constantly changing as the market develops, and as our understanding of how to achieve sustainability evolves. For example, the concept of stakeholder accountability and engagement has quickly become a key theme for socially responsible investors. Equally, the types of performance metrics that can be used to report on corporate social performance are undergoing rapid development. The SiRi Group’s unique business model, global reach and wealth of specialist experience enables us to track market developments globally and identify SRI investment issues to create innovative solutions for our clients.

Corporate Social Responsibility 15 Sustainable Investment Research International (SiRi) The SiRi Group has pioneered the publication of detailed harmonised profiles of the largest global corporations These SiRi Global Profiles are researched according to consistent criteria and in a standardised format using a stakeholder-based model Each Profile contains over 350 data points and associated analysis, providing unrivalled detail and breadth of comment. All major stakeholder issues are covered including community involvement, environmental impact, employment relations, customer policies, human rights issues and corporate governance. For each issue, SiRi describes and analyses the company’s policies, management systems, reporting standards and impacts together with particular strengths and weaknesses