Mapping CEO Definitions of CSR

CommitmentsKelly Kollman - Glasgow University

Overview

Main Findings

• Over the 20 year period (1995-2013), CEOs have increased:

• The number of areas for which they claim responsibility

• The external groups to which they hold themselves to account.

• Still, CEOs from all countries emphasize ‘the big three’ in each time period:

• Environment

• Community

• Employees.

• Clear country differences in how CSR is defined and why CEOs state it is important, but convergence over time.

2

Expanding CSR Commitments: % CSR Area Mentioned Over Time

3

Corruption Environment Giving/ Community

Human Rights Labour/ Employees

Remuneration0

25

50

75

100

0

95

29

0

48

0

11

77

69

9

69

2

16

86

63

24

70

6

1995-99 2005-06 2012-13

Expanding Commitments: % Stakeholders Mentioned Over Time

4

Bus. Partners Customers Employees Int. Organi-zation

NGOs Pol. Regu-lators

Shareholders Suppliers Unions0

25

50

75

100

43

76

62

14

5

38

24

14

0

37

6369

39

16

2623 24

1

1995-99 2012-13

% of Reporting Firms across Areas

Convergence within National Traditions

5

Germany UK USA

1995-99 2012-13 1995-99 2012-13 1995-99 2012-13

Corruption 0 22 10 14 0 11

Environment 100 88 100 87 90 84

Giving/ Community

0 34 30 71 60 87

Human Rights

0 36 0 26 0 13

Labour/ Employees

36 78 60 68 60 63

% of Reporting Firms across Areas

Motivation

6

Germany UK USA

1995-99 2012-13 1995-99 2012-13 1995-99 2012-13

Ethical

Community 0 16 20 29 50 74

Corruption 0 1 0 3 0 0

Environment 70 68 70 24 50 49

Human Rights 10 26 0 18 0 0

Labour Rights 20 45 30 32 20 23

Legal Compliance 0 0 20 3 0 3

Market-Driven 60 45 70 71 80 76

Social Pressure 10 45 20 42 0 26

Thank You

Best Practices in CSRKelly Kollman - Glasgow University

Overview of Best Practices

CSR/ Sustainability

• CSR / Sustainability Best Practice:

• Identified best practices through global CSR schemes (Global Compact, GRI) and management research.

• Established Best Practices:

• Measure social, economic and environmental impact in ‘material issues’ including impact along supply chain

• Set improve targets for material issues

• Audit progress

• Report and verify data on comparable issues to increase transparency and dialogue with stakeholders

9

Overview

Main Findings

• Top reporters implement these best practices, but levels of engagement varies across CSR / sustainability areas.

• Best and most detailed reporting in the environment area.

• Companies applied best practices to social areas much later and in a less consistent way.

• Cross-national differences:

• Substantial convergence in environmental area across three countries.

• UK and German companies have better quality reporting in social areas; US in community.

• Emerging issues of cutting edge reporters: responsible lobbying; human rights compliance in supply chain; living wage.

10

Reporting Trends over Time

11

1995-99 2005-06 2012-130

25

50

75

100

125

150

50

102

132

33

68

88

Germany UK USA Aggregate No.

Report Verification by External Auditors

12

Germany 1999 Germany 2013 UK 1999 UK 2013 USA 1999 USA 20130

25

50

75

100

2

50

6

56

30

1

8

1

19

0

5

Partial Audit Full Audit

Environmental Impact Measures Over Time

13

Biodiversity GHG Emissions Compliance Energy Pollution Product Impact Resource Use Transport Waste0

25

50

75

100

0

80

23

70

33

63

53

27

67

28

90

26

83

53

64

78

37

80

1995-99 2012-13

Environmental Improvement Targets Over Time

Biodiversity GHG Emissions Compliance Energy Pollution Product Impact Resource Use Transport Waste0

25

50

75

100

0

40

3

33

17

33

20

7

30

10

75

6

59

25

34

47

13

45

1995-99 2012-13

Social Impact Measures Over Time

14

Child Labour Coll. Bargain Compliance Diversity Forced Labour Health & Safety HR Due Diligence Living Wage0

25

50

75

100

03 3

10

0

47

0 0

20

43

29

88

17

87

17 16

1995-99 2012-13

Social Improvement Targets Over Time

Child Labour Coll. Bargain Compliance Diversity Forced Labour Health & Safety HR Due Diligence Living Wage0

25

50

75

100

0 0 0 0 0

27

0 005

9

43

0

57

3 1

1995-99 2012-13

Environmental Impact Measures Across Countries

Biodiversity GHG Emissions

Compliance Energy Pollution Product Impact

Resource Use Transport Waste0

25

50

75

100

39

97

36

89

75 7278

31

75

28

89

17

88

5156

75

44

83

19

84

26

74

37

65

81

35

81

Germany UK USA

Environmental Improvement Targets Across Countries

Biodiversity GHG Emissions Compliance Energy Pollution Product Impact

Resource Use Transport Waste0

25

50

75

100

8

89

14

64

47 47 44

14

33

11

74

0

72

28 28

47

17

50

9

72

5

44

5

28

49

9

51

Germany UK USA

Social Impact Measures Over Time

Child Labour Coll. Bargain Compliance Diversity Forced Labour Health & Safety HR Due Diligence Living Wage0

25

50

75

100

33

67

33

92

31

94

14

28

14

46

6

86

9

83

1420

1421

44

86

14

84

23

2

Germany UK USA

Social Improvement Targets Over Time

Child Labour Coll. Bargain Compliance Diversity Forced Labour Health & Safety HR Due Diligence Living Wage0

25

50

75

100

0

11 14

64

0

67

600 0 0

43

0

57

3 305

12

28

0

49

0 0

Germany UK USA

Emerging Issues

• Living wage (included in 20% of UK 2013 reports)

• Human rights along the supply chain

• Responsible / transparent lobbying

• 35% of 2013 sample included information on public policy

• Integrated reporting

Discussion Points

• Results in keeping with your experience or surprising?

• Is environmental sustainability easier to measure than social sustainability? Why?

• Why the earlier engagement with environment?

• Is environmental sustainability better aligned with stakeholders than social sustainability?

• Other emerging issues that we missed?

Thank You

Community EngagementAlvise Favotto - Glasgow University

Overview

Main Findings

• Expanding scope of community engagement

• Growing community activities in host countries (vs. home country)

• Increasing and increasingly varied involvement of workforce

• Certain trends taper off in the most recent period

• Attention to home-country initiatives

• Expanded attention to employability initiatives

• Managerial approach to community from 2005/06:

• Use of Performance Management Systems

• Emphasis on short-term/ more ‘visibile’ projects21

Location of Community Initiatives: % of community initiatives in host-countries

22

1999 2006 20130

25

50

75

100

38

59

49

Areas Addressed by Community Projects over Time

23

Disaster Relief Education Employability Environment HR Awarness People in Need

0

25

50

75

100

0

40

25

80

0

10

55

67

4650

21

70

17

88

58

33 33

63

1995-99 2005-06 2012-13

Avg. Number of Areas Addressed by Community Projects over Time

24

1999 2006 20131

2.25

3.5

4.75

6

1.6

2.9

2.4

Sainsbury’sCase Evidence

We anticipate further increases in the Landfill Tax, currently at £7 a tonne, a further incentive for us to reuse and recycle waste. Working with the charity Crisis FareShare, we have developed a programme to donate

food, from Sainsbury’s, which is about to pass its display-until date.

[CSR Report 1998]

25

We have a strong local focus supported by a clear national framework and strategy. We aim to be a positive force in society – from being a good employer offering jobs for local people, to paying our fair

share of tax; and from supporting local charities and community groups to national initiatives.

[CSR Report 2013]

Each of our stores plays an important role in its local community — that is where our customers and our colleagues live and where our

reputation is made or lost. We aim to make sure we are good neighbours, welcomed for our contribution to the community and for

our efforts to make sure we minimise any disturbance.[CSR Report 2005]

Sainsbury’sCase Evidence

1Community Projectin 1998

13Community

Projectsin 2005

9Communit

y Projectsin 2013

Sponsored Training

Employee Found-rising

Employee Found-rising

Charitable Giving Charitable Giving

Volunteer work Volunteer work

Food Donations Food Donations Food Donations

1998 2005 2013

1

1108

21 1

Sainsbury’sCase Evidence

1

[CSR Report 2005] [CSR Report 2013]

Thank You

Mandatory vs. Voluntary CSR Kelly Kollman - Glasgow University

30

A concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.

EU Commission, 2001

The responsibility of enterprises for their impacts on society.

EU Commission, 2011

New focus on ‘co-regulation’ and complementary regulation

Increasing requirements for CSR disclosure and management

• UK: Companies Act 2006 (Strategic Report and Directors Report) 2013 Regulations; Modern Slavery Act 2015.

• EU: Disclosure of Non-financial Information Directive (2014/95/EU)

• US: Dodd-Frank Act Section 1502 on Conflict Minerals Disclosure (2010)

• India: Companies Act of 2013 / Circular No. 21 / 2014

• Inter/National Lobby registers:

• USA (1998)

• EU Joint Transparency Register (2011)

• Scottish Parliament (proposed)

31

Voluntary vs. Mandatory: A real difference?

• Despite trend towards increasing requirements new regulation allows companies significant flexibility in how they manage and report on their CSR / sustainability activities

• e.g. EU Directive allows companies to choose among different reporting frameworks

• Regardless of binding regulation, travel of direction is clear. Increased public pressure to:

• Report on environmental and social impacts / risks

• Monitor supply chain

• Use transparent and comparable metrics.

32

33

I don’t understand the point of debating about the importance of keeping something voluntary that in reality is no longer voluntary in any real sense

German CSR NGO Representative, 2015

Thank You