Measurement and Reporting of Corporate Social Performance MLI

Measurement and Reporting of Corporate Social Performance MLI 51 C 100 – SESSION #4 MAY 12, 2016 DR. MARGARET C. MCKEE

Today’s Agenda Measurement and Reporting of Corporate Social Performance Social Auditing Benchmarks Global Reporting Initiative (GRI) Channels for Reporting of Corporate Social Performance (CSP) Challenges with CSP Ratings and Rankings Check-in on Group Projects Neste CSR talk

Social Auditing Benchmarks 3 • Principles and guidelines • e. g. , CAUX Principles, CBSR Good Company • Standard setting, accreditation, and certification organizations • e. g. , ISO, Fair Trade Labeling • Reporting organizations • e. g. , Global Reporting Initiative

Global Reporting Initiative (GRI) 4 • Economic Capital flows among stakeholders and economic impact of organization at local, national and global level. • Environmental Materials; Energy; Water; Biodiversity; Emissions, Effluents & Waste; Products & Services; Compliance; Transport • Social Labor Practices and Decent Work; Product Responsibility; Customer Privacy and Compliance; Human Rights; Society Source: http: //www. globalreporting. org/Reporting. Framework/G 3 Online/DMA/

HOW DO COMPANIES REPORT ON THEIR CORPORATE SOCIAL PERFORMANCE?

Company Reporting of CSP 6 Internal Stakeholders: External Stakeholders: • Articles in newsletters • Customer invoices or • Information on employee intranet • Agenda item at meetings • Corporate reputation committees • CR officer activities • • • billings Point of purchase and packaging Advertising and publicity campaigns Sponsorship programs Corporate reports and web sites Social media

External Reporting of CSP 7 • Magazines • e. g. , Fortune, Corporate Knights, the CRO, Ethics. World, etc. • NGO Web Sites • Multinational Monitor, Greenpeace, etc. • Academic Journals • e. g. , Journal of Business Ethics, Organization & Environment, Business & Society, etc. • Blogs • e. g. , Businessethicsblog. com, craneandmatten. blogspot. com

CSR Ratings and Rankings Sustainable Asset Management 8

The Case of KLD 9 • Investment research firm generating its own CSR Ratings for clients’ use — What are the evaluation criteria? Community Diversity Employee Relations Environment Product/Customer — Who are the evaluators? Professional research analysts

The Case of Fortune Magazine 10 • Business magazine producing annual listing of Top 10 Most Admired Companies What are the evaluation criteria? “Customer satisfaction” “Corporate citizenship” “Shareholder return” Who are the evaluators? Industry leaders (CEOs) Stock analysts

Discussion 11 CSR ASSESSMENT AND REPORTING WHAT CHALLENGES DO YOU SEE WITH THESE PRACTICES?

The Integration Gap 62% of global business leaders think that integrating sustainability into business operations is their company’s most important leadership challenge. However, just 21% report that their companies are close to fully integrating sustainability into the core of their company. BSR/Globe. Scan State of Sustainable Business Poll. Based on responses from 556 representatives from business, NGOs, government, and academia, representing Africa, Asia/Pacific, Europe, Latin America, and North America.

Buying Social Enterprises to Buy CSR? ! Multinationals’ acquisitions: Loreal – Body Shop Colgate Palmolive – Tom’s of Maine Danone – Stonyfield Farm Unilever – Ben & Jerry’s Kellogg’s – Kashi Pepsi Co. – Naked Juice Other concerning trends Increasing corporate presence on regulating/certifying organizations National Organic Standards Board Co-option/dilution of organic labels

Closing Comments 14 • Many corporations actively engaged in CSR activities and making considerable investments • Concern over the authenticity of some firm commitments • Corporations have many options for assessment and reporting of CSR activity and this generates concern about authenticity of engagement • Multiple benchmarks of varying quality/validity Measures, weightings, self-report data “Halo effect” of financial performance