Orientation of CSR as a System/Process & Assessment Indicators

Presented byPrabhdeep Singh Virdi (215) Ankit Mehta (217) Krutik Dedhia (218) Atharva Oswal (219) P. Balagopal (301) Harbir Singh Banga (302) Chirag Chauhan (303) Aditya Vikram Cheema (304) Rishabh Chopda (305)

Table of Contents
Introduction to CSR Drivers of CSR & Span of CSR Evolution of CSR Rise in CSR Industry Theoretical Positions Current Trends in CSR Dow Jones Sustainability Index FTSE4Good Share Impact Indicators

WHAT IS CSR?
Corporate Social Responsibility encompasses the economic, legal, ethical and philanthropic expectations placed on organizations by society at a given point of time Corporate Social Responsiveness refers to the capacity of a corporation to respond to social pressures

SOME FACTS
While 94% of the companies believe that development of CSR strategies can deliver real business benefits only 11% made any significant progress in implementing strategy in the organization CEOs are failing to recognize the benefits of implementing CSR strategies despite increasing pressures to do so CSR programmes influence 70% of all customer purchasing decisions

EMERGING TRENDS
Drivers are philanthropy, image building, employee morale and ethics(in that order) CSR an extension of philanthropy

Four models co-exist in India- the ethical model, the statist model, the liberal model and the stakeholder model
CSR has now moved on from being a philanthropy to a system/process.

Present Drivers of CSR

Stakeholder Management Corporate Environment Management Consumer Pressure Risk Management & Sustainability Business Ethics Attracting Employees Personal Values

Drivers of CSR in Developing Nations

Source: http://www.waynevisser.com/article_waynevisser_csr_drivers.pdf

The Broad Span of CSR

At one end corporate policies required for
Good management practice within and outside the organizations At the other hand
Charitable activities ethical investments Environmental protection

Former do not need any CSR defense Latter can be critical for a company

Rise of CSR Industry

Rise of CSR Industry

Major contribution by consultancy giants like PWC and KPMG. Developed the concept of sustainability in the year 1992. Sustainability-The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere and thus a sustainable business.

CSR EUROPE 1996

Founded in 1996 CSR Europe has been acting as a driver for corporate social responsibility among the European business community.

The network brings together 64 major corporate members and reaches out across the continent through 18 national partner organizations with a total membership of more than 1500 companies. Econsense - forum for sustainable development is an initiative of leading German companies and that share a common vision on the concept of sustainability and its integration into their business strategies.

CSR Europe Contd.

The forum is designed to offer a platform for stakeholder dialogue. It addresses a wide range of companies and business networks, politicians as well as NGOs, the scientific community and the general public.

Evolution of voluntary codes

Social Accounting-a concept describing the communication of social and environmental effects of a company's economic actions to particular interest groups within society and to society at large, is thus an important element of CSR. Social Auditing-The social audit is a business statement published every year to present a set of information about the social projects, benefits and actions addressed to employees, investors, market analysts, shareholders and the community at large.

Dow Jones Sustainability Index (DJSI)

Tracks Performance of Companies that lead the field in terms of Corporate Sustainability Sustainable Asset Management (SAM) Indexes GmbH publishes and markets the indexes.

The DJSI family consists of a set of geographically focused indexes.

Companies Generating Revenue from alcohol, tobacco, gambling, armaments & firearms, & adult entertainment are excluded from the index.

Indices in the Family

Dow Jones Sustainability World Indexes Dow Jones Sustainability World Enlarged Indexes Dow Jones Sustainability Europe Indexes Dow Jones Sustainability North America Indexes Dow Jones Sustainability Asia Pacific Indexes Dow Jones Sustainability Korea Indexes

Corporate Sustainability Concept

Business approach to create long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments. Leaders harness the market's potential for sustainability products and services while at the same time successfully reducing and avoiding sustainability costs and risks.

As a result, investors are increasingly diversifying their portfolios by investing in companies that set industry-wide best practices with regard to sustainability.

Corporate Sustainability Assessment

Assessment Criteria
General
Standard management practices and performance measures applicable to all industries, Corporate governance, human capital development, risk and crisis management, talent retention and labour practices. Forty percent of the assessment.

Assessment Criteria
Industry Specific
Challenges and trends affecting specific industries Reflect the economic, environmental and social forces driving the sustainability performance of a particular industry Sixty percent of the assessment

Dimension

Criteria
Corporate Governance

Sub Criteria
Board structure Non-Executive Chairman/Lead Director Responsibilities and Committees Corporate Governance Policy Audit Conflict of Interest Diversity: Gender Board Effectiveness Entrenchment provisions Senior Management Remuneration Risk Governance Risk Optimization & Risk Map Risk Review & Risk Strategy MSA: Risk & Crisis Management Codes of Conduct: Focus Codes of Conduct: Systems/Procedures Corruption and Bribery: Scope of Policy Codes of Conduct: Report on Breaches Codes of Conduct/Anti-Corruption & Bribery: business relationships MSA: Codes of Conduct/Compliance/ Corruption & Bribery

Economic

Risk & Crisis Management

Codes of Conduct, Compliance, Corruption and Bribery

Dimension
Economic (contd.)

Criteria
Industry Specific Criteria

Sub Criteria
Brand Management, Customer Relationship Management, Innovation Management, Gas Portfolio, Grid Parity, etc. MSA: Selected Industry Specific Criteria Assurance Coverage Environmental Reporting; Qualitative Data Environmental Reporting; Quantitative Data Environmental Management Systems, Climate Strategy, Biodiversity, Product Stewardship, Eco-efficiency, etc. MSA: Selected Industry Specific Criteria Human resource skill mapping and developing process Human Capital performance indicators Personal and organizational learning and development

Environmental Reporting

Environment
Industry Specific Criteria

Social

Human Capital Development

Dimension

Criteria
Talent Attraction & Retention

Sub Criteria
Coverage of employees through predefined performance appraisal process Percentage of performance related compensation for each employee category Balance of variable compensation based on corporate and individual performance Corporate Indicators for performance related compensation Type of individual performance appraisal Communication of individual performance to upper management Payout type of total performance-related compensation Trend of employee satisfaction MSA Talent Attraction & Retention

Social (Contd.)

Labor Practice Indicators Grievance Resolution Labor KPIs MSA: Labor Practice Indicators

Dimension

Criteria
Corporate Citizenship and Philanthropy Social Reporting*

Sub Criteria
Group Wide Strategy financial focus Input Measuring benefits Type of Philanthropic activities Assurance Coverage Social Reporting; Qualitative Data Social Reporting; Quantitative Data Social Integration, Occupational Health & Safety, Healthy Living, Bioethics, Standard for Suppliers, etc. MSA: selected Industry Specific Criteria

Social (Contd.) Industry Specific

Sources Of Information
Company Questionnaire
Most Important Source of Information & used to decide Score Filled by CEOs and Head of Investor Relations

Sources Of Information
Company Documents
Sustainability reports Environmental reports

Health and safety reports

Social reports

Annual financial reports

Sources Of Information
Media and stakeholder Analysis (MSA)
Allows SAM to identify and assess issues that may present financial, reputational and compliance risks to the assessed companies. makes use of media coverage, stakeholder commentaries and other publicly accessible sources.
This information is currently provided by environmental and social dynamic data supplier Reprisk.

Sources Of Information
Contact with Companies
SAM analysts personally contact individual companies to clarify any open points that may arise from the analysis of the MSA, the questionnaire and company documents. Contact via telephone, company visits or meetings with the company This allows SAM to respond in due course to exceptional events.