CSR as a Concept With Special Regard to Core Business

Transcription

1 CSR as a Concept With Special Regard to Core Business Erzsebet Szegedi Member of Executive Board of Hungarian National Committee for EOQ 1 Background Contents Focus on core business, strategic CSR A tool for communicating with stakeholders: reporting How to measure ESG performance? Guidelines, standards d 2

2 CSR: a voluntary concept The European Commission's s definition (2001): CSR is a concept whereby companies integrate social iland environmental tlconcerns in their thi business operations and in their interaction with their stakeholders tkhld on a voluntary basis. Source: CSR relates to what enterprises can do in the social and environmental fields over and above what they are required to do by law. 3 European law European law makes the following requirement on companies: (Directive 2003/51/EC) To the extent necessary for an understanding of the company's development, performance or position, the analysis [in the annual review] shall include both financial and, where appropriate, non-financial key performance indicators relevant to the particular business, including information relating to environmental and employee matters. 4

3 Carroll (1991): CSR pyramid Be a good global corporate citizen Be ethical Obey the law Be profitable Philanthropic responsibility Ethical responsibility Legal responsibility Economic responsibility Desired Expected Required Required 5 CSR pyramid & Kano Model SATISFACTION EXCITEMENT DELIGHTERS ABSENT NEUTRAL FULLY IMPLEMENTED MUST HAVES DISSATISFACTION As delighters become must haves, desired d responsibility becomes required responsibility 6

4 Positive contribution to society Raises social welfare Reduces social welfare Raises profit Good management Pernicious CSR Reduces Borrowed Delisional profit virtue CSR Source: Economist Integrating society & strategy Responsive CSR Act as a good corporate citizen Mitigate harm from value chain activities Strategic CSR Identify a small number of social impacts where you can make a significant contribution to society while improving the long-term competitiveness of your business Create a social dimension to the value proposition 8

5 M. E. Porter: Value Chain Model (1985) Source: Michael E. Porter (1985) The term Margin implies that organizations realize a profit margin that depends on their ability to manage the linkages between all activities in the value chain. 9 Identifying Shared Value Source: Michael E. Porter, Mark R. Kramer: Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility, Harward Business Review, Dec 01, 2006, page 5. 10

6 Corporate growth or social welfare? 11 Communicating with stakeholders The reporting process itself is a good opportunity to build relationships with stakeholders and understand their needs better. 12

7 Reporting Contents Quality completeness balance materiality ili comparability stakeholder accuracy inclusiveness timeliness sustainability context t clarity reliability Integrated report part of financial disclosure 13 How to measure ESG performance? ESG: Environmental, Social, Governmental performance Triple Bottom Line, 3P: People Planet - Profit Companies are at different e stages of CSR maturity Even the same firm may be more mature in certain parts of the business or on particular topics CSR is not the privilege of MNEs CSR in SMEs is less formal and more intuitive 14

8 Guidelines, standards Regulatory framework SOX, EU Modernisation Directive Normative framework UN Global Compact, OECD Guidelines, ILO Management systems ISO 14001, SA 8000, ISO Reporting standards GRI G3, national laws Assurance standards AA1000AS 15 GRI Sector Supplements Final version released Pilot version Under development 16

9 GRI application level, assurance 17 Useful links social responsibility/index_en.htmen.htm g g g g g an.htm