Module 4 Flashcards
Corporate Social Reponsibility
Responsibility that a corporate organisation owes to the society in which it operates
CSR initiatives are ineffective where they are (2)
- Managing risks associated with reputation
- ‘Bolt on’ rather than ‘built in’
To realise benefits from CSR, must be
Embedded in organisation’s objectives and practices
To embed CSR successfully there are 10 main elements (5)
- Board and senior management commitment
- Understanding and analysing key sustainability drivers
- Integrating the key sustainability drivers into the organisation’s strategy
- Extensive and effective sustainability training
- Monitoring and reporting sustainable performance
Different factors motivating companies to undertake CSR activities (3)
- Compulsory
- Expected
- Desirable
CSR objectives (3)
- Considering the interests of employees
- Taking account of needs of environment and local community
- Maintaining excellent relations with all business partners
Key components to be considered when developing a CSR strategy (4)
- Defining objectives and strategies
- Assessing the risks
- Embedding actions within business processes
- Monitoring and reporting
How to identify predefined objectives for an organisation
By engaging key stakeholders in discussions
Stakeholder panels
Means of engaging stakeholders (employees, suppliers, customers and communities) in the CSR process.
Integral part of CSR process
Effective reporting (eg transparency/ monitoring of CSR KPIs)
UK Government Actions (4)
- Guidance on environmental reporting
- Supporting the GRI (Global Reporting Initiative)
- Enhanced business review requirements of Companies Act
- Requiring disclosure of greenhouse gas emissions (listed companies)
Requiring disclosure of greenhouse gas emissions (2)
- Disclosure included in Director’s report in annual report
- Material emissions for six specified gases
Greenhouse gas emissions > Scope 1
Direct emissions > activities owned or controlled by organisation that release emissions straight into the atmosphere eg company cars/ furnace
Must be reported in Directors’ report
Greenhouse gas emissions > Scope 2
Indirect emissions > from things that a company uses but not control the source of etc electricity in a factory
Must be reported in Directors’ report
Greenhouse gas emissions > Scope 3
Indirect emissions > occur as a result of company’s activities but which it does not control and are not directly used by the company eg production of materials purchased
Reporting is discretionary
International Federation of Accountants (3) priorities to embed sustainable practices
- Raising awareness
- Establishing international integrated reporting committee
- Incorporating accounting for sustainability within professional training and education
The Prince’s Accounting for Sustainability (A4S) Project established to (2)
- Minimise duplication of initiatives undertaken in isolation
- Achieve a common approach to accounting for sustainability
A4S three core aims
- Inspire financial leaders to adopt sustainable business models
- Transform financial decision making to integrate opportunities and risks posed by environmental and social issues
- Scale up action across global finance and accounting community
International Integrated Reporting Council is
Global Coalition
International Integrated Reporting Council mission
To develop a globally accepted integrated reporting framework using a principles-based approach as guidance
European Unions directive
PIEs with >500 employees must publish report on policies they have implemented in relation to:
- Environmental protection
- Social responsibility
- Respect for human rights
- Anti-corruption and bribery
- Diversity
UK legislation on CSR reporting focuses on
Strategic review required by Companies Act 2006
United Nations guidelines (3)
- UN’s Universal Declaration of Human Rights (UDHR)
- UN Global Compact
- UN Earth Summits
Financial Stability Board
Promotes global financial stability in G20 countries (+4 key financial centres)
Not legally binding just a coordinating body
Key recommendations of TCFD (task force on climate related financial disclosures) (4)
- governance
- strategy
- risk management
- metrics and targets
Global reporting initiative (GRI)
Helps businesses, governments and other organisations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption etc.
Replaced the G4 sustainability reporting guidelines
Sustainability report should
Provide a balances and reasonable representation of the sustainability performance of a reporting organisation including both positive and negative contributions
Sustainability report should consider the following (3)
- Materiality
- Reporting boundaries
- Content
To prepare a report in accordance with GRI standards, must report on two areas:
- Universal standards
- Topic specific standards (social, economic, environmental)
