Sustainability analysis in companies Flashcards
Why should companies care about sustainability?
- increasing pressure to report transparently
by government, society, media - increasing use of environmental management systems, standards, reporting guidelines, labels
- increasing initiatives with influence on policys (e.g. PEF)
Why is the life cycle perspective relevant for companies?
sustainable impacts often occur in early stages of the supply chain
(tier 3 & 4: raw material processing & raw material production)
these impacts have a significant influence on environment & society
What is CSR?
Corporate Social Responsibility
- concept whereby COMPANIES (not products) integrate social & environmental concerns in their business operation & interaction with stakeholder
Goal is to embrace responsibility for the company’s actions and encourage a positive impact through its activities on:
– Environment (e.g. pollution prevention, resource efficiency)
– Consumers
– Employees (e.g. training, human rights, equality, health)
– Communities (e.g. community development)
– Stakeholders etc.
What are challenges of CSR and sustainable ratings?
Lots of guidance is available (e.g. GRI for reporting)…but implementation varies significantly, e.g. because:
- it is voluntary & flexible
- data is missing for the whole supply chain
- greenwashing risk
- reporting can become burdensome because value chain assessment is too complex
- not enough transparency i.e. not all methods for the rating calculation are disclosed
What are the benefits of CSR and sustainability ratings?
for enterprises:
- more informed decision making
- better risk management
- increasing safety & health of workers
- better reputation
- investments
for society:
- sustainable companies
- sustainable economic system
- increased transparency
- communication
Who provides important tools and guidelines for CSR?
Global Reporting Initiative (GRI)
–> International, independent organization who Helps businesses, governments etc. to understand and communicate the impact of business on critical sustainability issues, such as climate change or human rights
- Produce standards for sustainability reporting, the GRI standard
- Strategic partnerships with international organizations, UN Global Compact,
What aspects does CSR cover?
- human rights
- labour
- employment practices
- combating bribery
- corruption
- environmental issues
For whom is CSR reporting done?
for different stakeholders:
company
government
consumers
…
Are CSR reports mandatory?
For companies in the EU with a size of > 500 employees
What is corporate sustainability performance?
Measures the extent to which the companies implement the:
- environmental
- social, and
- economic
factors in its operations and their impact on the business and society.
Give examples of sustainability ratings of companies.
Dow Jones Sustainability Indices
- Benchmark for sustainability,
- tracks the stock performance of the world’s leading companies in terms of sustainability criteria
–> different ratings consider different aspects and have different rules
How does the criteria definition work in CSR?
Criterias are defined for all three dimensions.
- 50% general criteria for all sectors
- 50% industry specific criteria
how does the weighting function of CSA function?
- Dimensions: consists of 6-10 criteria
* Criterion: 2-10 questions
What is the question score of CSA?
number of points received (questions)
- question weight (within the criterion)
- criterion weight (within the questionnaire)
Summer der question scores = total score
What are general criteria for the environment?
environmental reporting
