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Integrating Sustainability Indicators for CSR
C orporate
social responsibility has been defined by the World Business Council for
Sustainable Development as ‘the continuing commitment by businesess to
behave ethically and contribute to economic development while improving
the quality of life of the workforce and their families as well as of
the local community and society at large.’ There are five possible
themes for corporate social responsibility which include: (1) human
rights; (2) worker rights; (3) environmental impact; (4) community
involvement; and (5) stakeholder relations and monitoring. For an
individual company, this means the integration of social (including
human rights), environmental and economic concerns into that company’s
values and culture. These values are reflected in the company’s
policies, strategies, decision making and its operations.
Components of CSR
Corporate Governance:
Good corporate governance policy enables the company to realise its
corporate objectives, protect its shareholder rights, meet the legal
requirements and create transparency for all its stakeholders.
Business Ethics: This
means transferring the core value of the company such as honesty, trust,
respect and fairness into its policies, practices, and decision making.
This also involves a company’s compliance with legal standards and
adherence to internal rules and regulations.
Workplace and Labour
Relations: Good CSR practices relating to workplace and
labour relations can help improve the workplace in terms of health and
safety, and employee relations. It includes a better human resource
policy of the company to retain its staff for longer periods of time.
Good Practices: An equal
opportunity employer and diversity of workforce includes people with
disability, people from the local community, etc. A well - thought out
gender policy, code of conduct/guidelines on prevention of sexual
harassment at workplace, prevention of HIV/AIDS at workplace, employee
volunteering, etc., are some of the practices that reflect a company’s
CSR practices.
Supply Chain: The supply
chain includes social, environment and human rights. A company should
use its strategic position to influence the entire supply chain to
positively impact the stakeholders.
Environment: CSR also
ensures that the company delivers environmental benefits. This includes
finding sustainable solutions for natural resources, reducing adverse
impacts on the environment, reducing environment-risky
pollutants/emissions as well as producing environment-friendly goods.
Community: The community
is a major stakeholder of the company. There may be direct interaction
with the community or it may be the communities living in the
neighbouring areas. This helps in delivering a community focused CSR
strategy - making positive changes to the lives of the people and
improving the brand image of the company. Involvement with the community
could be both direct and indirect, through funding and other support for
community projects implemented by local agencies.
Need for Integrating Sustainability
indicators for CSR
Nowadays, CSR is evolving
beyond philanthropy and it has more to do with the social obligation of
the company. With its extending role in the future, more and more
companies as well as governments and civil societies will assess the
social return on investment that companies make, both locally and
globally. This may involve, for example, local enterprise initiatives
linked to the supply chain; pre-employment training; local human and
institutional capacity building; or designing infrastructure – like
roads or water supplies – to ensure benefits are reaching to the local
people.
Earlier, the role of CSR was
restricted to ‘service functions’, viz., delivery of services such as
education, health and housing. Now, CSR includes other community
processes such as providing assistance for local level livelihoods to
the community based groups, ensuring effective local level governance
system for better delivery of services and assisting communities to
access their rights and entitlements.
With the change of time, more
and more companies are encouraging and involving their employees in the
numerous social activities as a result of a revolutionary change in the
attitude of the corporate sector towards the communities they are
operating in and an increasing awareness of the companies about the need
of ecological sustainability. There is also a growing desire to
establish a strategic relationship with the state by showing their
commitment towards the communities by creating a positive image amongst
the people. Thus, the company may earn special respect amongst its
stakeholders and, in many cases, also attract social investments.
These days, CSR is not limited
to ‘feel-good’, voluntary and charitable efforts. In many companies, CSR
functions are based within the human resources or public relations
departments. Companies that commit themselves to developing a
comprehensive CSR strategy can expect benefits from a number of possible
positive outcomes, like enhanced brand value, improved customer loyalty,
facilitating business in sensitive environments by getting informal
social license, and developing more employee satisfaction.
Benefits of Sustainability Reporting
There are several benefits
accruing from sustainability reporting. This strategy:
•
Provides continued
tracking and improved performance. It is easier to assess sustainability
performance with respect to laws, norms, codes, performance standards,
and voluntary initiatives
•
Provides the ability
to compare an organisation’s activities and process over a period of
time by establishing a quantified baseline of performance in terms of
economic, social and environmental sustainability
•
Generates a
sustainability discussion, which helps to create a greater awareness of
the organisation’s impacts
•
Identifies and
evaluates the consistencies between an organisation’s objectives’
policies, programme activities and internal procedures
•
Improves
accountability of the staff members or investors on the performance of
the company
•
Enhances the
reputation and relationship with investors through increased
transparency and operational funds
•
Helps in risk
management practices and integrates them transparently in the day-to-day
management
•
Provides a focal point
for the organisation’s staff, thus motivating and uniting them on the
issues of reducing environmental footprint and sustainability in general
Sustainable Reporting Tools for CSR
The different possible tools for CSR
include:
•
The Baldrige
performance excellence criteria is a framework that any organisation can
use to improve its overall performance. The different categories include
leadership, strategic planning, customer and market focus, information
and analysis, human resource, process management and business results.
•
ISO 14000 series which
mainly focuses on effective environment management.
•
Total Quality
Environmental Management – The Primer. This short manual shows how to
use the classic TQM tools such as process maps, run charts and cause and
effect diagrams to improve EHS performance. Most of the GEMI companies
claim to use this approach in EHS.
•
Sustainable Balanced
Scorecard is a concept popularised by a group of European researchers
and industrialists. This is a simpler version of the Baldrige
performance system.
•
Accountability’s
AA1000 standard, based on John Elkington’s triple bottom line (TBL
standard) reporting, is aimed at supporting organisational learnings,
performance and progress towards sustainable development by improving
the quality of social and ethical accounting, auditing and reporting.
•
Social Accountability
International’s SA8000 standard is used by some corporate to focus on
specific issues such as human rights.
•
The Environmental
Sustainability Index (ESI) also provides a useful source of data. ESI is
a measure of overall progress towards environmental sustainability.
•
Global Reporting
Initiatives (G3 Guidelines) is a sustainable reporting guideline which
reports on the economic, social and environmental performance (both
negative and positive) and contains general and sector specific content
which has been agreed upon by a wide range of stakeholders.
Economic Indicators Measuring Sustainability in
CSR 1(Footnotes)
General issues:
•
Develop financial
planning processes that include budgeting and forecasting
•
Budget for a surplus
to ensure sustainability of the organisation’s services, which is
essential for good governance
•
Business/revenue
generation
•
Possible Indicators:
•
Flow of capital among
different stakeholders
•
Main economic impacts
of the organisation throughout society
•
Investment for
humanitarian causes
•
Reporting on the funds
generated from donations other community invest-ments
•
Development and impact
of infrastructure investments and services provided for public benefit
through commercial, in kind or pro bono engagement
Environmental Indicators Measuring
Sustainability in CSR
General issues:
•
Monitor energy use
associated with running the organisation’s sites
•
Implement strategies
to reduce energy consumption. This would include energy efficient
features
•
Waste minimisation
•
Compliance with local
legislative requirements
•
Encourage the use of
email and teleconferencing, provide access to such tools and training
for staff
•
Encourage the use of
train travel and minimise air travel in a way that still allows the
organisation to achieve its goals
•
Engage proactively
with the organisation’s suppliers to increase the purchase of goods and
services that have been produced using sustainable practices
•
Procurement, use,
recycling and/or disposal of products such as paper, office supplies and
equipment
•
Brief and encourage
the staff on how to reduce energy use
Indicators used:
•
Total greenhouse gas emissions (CO2 metric
tonnes), (CO2
metric tonnes)
•
Direct and indirect
energy consumption by primary energy sources
•
Total water withdrawal
sources
•
Total water discharge
by quality and destination
•
Location and size of
land owned, leased, managed in, or adjacent to, protected areas and
areas of high biodiversity value outside protected areas
•
Habitat protected and
restored
•
Systems for renewal
energy, reduction of the use of non-renewable resources, conserving the
ecosystem and biodiversity, water management and controlling atmospheric
emissions
•
Initiatives to
mitigate environmental impacts of products and services and extent of
impact mitigation - forest areas, landscape, freshwater and wetland
ecosystems
•
Reporting on impacts
and mitigation
Social Indicators Measuring Sustainability in
CSR
General issues:
•
Ensuring that those
closely engaged in the organisation’s activities come from a diverse
array of geographic and cultural backgrounds
•
Providing a safe and
healthy working environment that supports individual development, team
working, positive work – life balance, and job satisfaction
•
Ethical policies and
systems determine how the organisation works with the corporate sector
•
Retaining staff
•
Donation of staff time
to community projects (on a voluntary basis)
•
Human rights -
investment and procurement processes, non discrimination, freedom of
association and collective bargaining, child labour, forced labour and
indigenous rights
Indicators used:
•
Ratio of highest to
lowest wage
•
Gender diversity of
staff
1. Overall administrative,
accounting and technical services
2. Research and reporting
services
3. Corporate management and
programme directors
4. Boards of Directors
•
International
diversity of staff
•
Ethnic diversity of
staff
•
Turnover of staff
•
Days lost to injuries
•
Policies to protect
human rights and action reporting
•
At the community
level:
- Investment on the number and types of
community welfare programmes (health, education, counseling centres,
etc.), innovation
- Community participation –
contingency planning measurement, disaster management, community as a
shareholder of the company
- Rehabilitation and
resettlement policy
- Impact assessment on the
number and type of community asset built, increased livelihoods
option, approach to manage the impact of involuntary displacement
- Human rights, child labour
and worker’s exploitation q
Poonam Mehta
pmehta@devalt.org
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