10 Measurement of CSR Flashcards
Social Performance Auditing (Lawrence & Weber 2011)
10
systematically evaluating the organization‘s social, ethical and environmental performance
Typically compared to two benchmarks:
The company’s own mission and goals
Social norms, e.g. from based on global standards Get a verification/certification by a third party
Concept of Triple Bottom Line (Lawrence & Weber 2011)
10
Bottom line refers to the figure at the end of the company‘s performance reporting
Triple bottom line (also „3BL“ or „people planet profit“) means extending the traditional accounting ‘bottom line’, which shows overall net profitability as a money figure to measures of the overall performance of a company based on its combined contribution to
economic prosperity,
environmental quality, and social capital.
Published Standards of CSR (Blowfield & Murray 2019)
10
Beijing Declaration
International declaration on the rights of women
CERES Principles
Model corporate code of environmental conduct
Global Reporting Initiative (GRI)
Framework for reporting on social, environmental, and economic performance
Marine Stewardship Council
Standards for sustainable fishing and seafood traceability
Organisation for Economics Co-operation and Development (OECD) guidelines for multinational enterprises
Government recommendations on responsible business conduct
Principles for Responsible Investment
Principles on environmental, social, and corporate governance issues pertaining to investors
Social Accountability 8000
Workplace standard against which to assure worker rights and welfare
Wolfsberg Anti-Money Laundering Principles Principles for private banks to counter money laundering
Overview of different types of CSR standards (Rasche & Waddock 2017)
Principle-based standards
10
Broadly defined guidelines to steer participants’ behavior with regard
to social and environmental issues; foundational values and
guidelines that businesses can use as a starting point for initiating
actions around CSR, e.g., UN Global Compact, OECD Guidelines for
Multinational Enterprises, Principle for Responsible Investment, Global Sullivan Principles
Overview of different types of CSR standards (Rasche & Waddock 2017)
Certification standards
10
Focused on verified compliance; verification rests on certification procedures in which auditors assess a single factory or farm; producers that pass the audit are awarded a seal of approval for a specified period of time, e.g., Forest Steward Ship Council, Fairtrade,
Marine Stewardship Council, Social Accountability 8000, Fair Labor Association, Rainforest Alliance, Ethical Trading Initiative, Worker Rights Consortium, Clean Clothes Campaign
Overview of different types of CSR standards (Rasche & Waddock 2017)
Reporting standards
10
Frameworks for disclosing information on a firm’s social,
environmental and economic performance; reports are usually not
verified by standard setters, e.g., Global Reporting Initiative, Carbon
Disclosure Project, International Integrated Reporting Framework, Greenhouse Gas Protocol
Overview of different types of CSR standards (Rasche & Waddock 2017)
Process standards
10
Give guidance on how to understand key terms that relate to CSR;
outline management processes in relation to activities that impact
social or environmental issues; some standards allow for certification,
e.g., ISO 14001, ISO 26000; AA1000 Stakeholder Engagement Framework; AA1000 Assurance Standard
Global Reporting Initiative (GRI)
10
- Boston 1997
- aim: to create the first accountability mechanism to ensure companies adhere to responsible environmental conduct principles –> broadened to include social, economic and governance issues
Measuring Sustainability at a country level
10
The Transitions Performance Index has been proposed by the European Commission to assess progress regarding the current challenges
It is based on four transitions: the economic, the social, the environmental, and the governance transitions.
It is measured at a country-level, ranks countries based on this index
CSR and Company Performance (Blowfield & Murray 2008, 2019)
10
No strong correlation between financial performance and doing good for society
However, many anecdotes that various stakeholders value CSR
One could argue that CSR helped companies to prevent costs and problems like boycotts or punishments due to environmental pollution, such that CSR might rather prevent harm to a brand than promoting a positive image
Also possible to report business opportunities foregone due to ethical principles as done by Cooperative Financial Services, UK
CSR activities are relative to company and its environment (industry, country etc.) and often only marginal to overall business performance
Even if impact on company performance cannot be clearly identified a change in awareness of companies (see e.g. risen trend in social reporting) and other stakeholders like customers (see reports in internet, calls to participate in boycotts of certain products) has been taken place
Engagement of one company puts pressure on other companies in industry to do something
Enormous effect of CSR on environmental problems
Ten common Measures of Business Performance (Blowfield & Murray 2019)
10
Shareholder value: Changes in stock price and dividend
Revenue: Changes and also market share
Operational efficiency: cost-effectiveness from input to output
Access to capital: access to equity and debt capital
Customer attraction: attract and retain customers
Brand value and reputation: value assigned to brand
Human capital: knowledge and skills of workforce (attract, develop, retain) Risk management: exposure to short and long-term risks
Innovation: innovative products, business models etc.
Licence to operate: acceptance of stakeholders to operate
Authenticity of CSR (Cizmeli & Friedman 2015)
10 siehe VL
Expectation is often that companies have a genuine and intrinsic interest in being responsible and not a materialistic one
Companies are then supposed to be authentic
