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What’s important to you? Finding the best from the rest in CSR reporting

September 30, 2009

It used to be you could tell a leader by seeing who is out in front.

Nowadays, it seems there’s a herd mentality when it comes to reporting on CSR. Everyone’s got a “great” CSR program that respects our environment, employees, and communities. “My company cares,” each company says at the most basic level. CSR reports are thick, glossy, and picture filled. It seems everyone has a CSR report and everyone is trying to get everyone else to read them.

There’s clutter. A lot of it. So how do you break through? How do you see who is really making a deep commitment to CSR?

In looking to form a research project for http://www.CitizenPolity.com, I decided to try to answer just that.  So I dove into the G3 framework with the goal to whittle down the list of indicators to the absolute most important indicators. I’d then evaluate the data and see which company in a given industry would boil up to the top as leaders in their field.  Hopefully this would become an objective look at the impact companies are having

Yikes.

After downloading the GRI and creating an Excel spreadsheet, I’m exhausted.

Making subjective judgments about the G3 indicators is an exercise filled with danger.  Moreover, trying to decide what is an acceptable level of NOx or SOx emissions for a given industry is beyond my expertise.

So, I went rogue. I’ve made my own spreadsheet – one that respects the GRI and incorporates it, but also takes in other signs that company is serious about CSR.  You can view spreadsheet below and see for yourself. Your comments are most welcome.

Some highlights:

  1. Emphasis on climate change – companies that acknowledge the existence of climate change and that they have a role to play in reducing its impact on climate change
  2. Emphasis on management – successful companies in CSR actively manage their programs. Does the CSR report identify how the company manages its programs outside of a core “CSR” group? Is there dedicated staff and dedicate senior staff that is directly responsible for CSR management?
  3. Emphasis on measurement – what gets measured, gets done. Is the company holding itself accountable through time-measured and specific goals?
  4. Multiplier – some information is a stronger sign than others, so we’ve added a weight to the scores.  Example: it’s probably more important for a company to acknowledge its role in climate change that it is to acknowledge the difference between strategic philanthropy and philanthropy.

Post comments, let us know what you think.  This isn’t a perfect process, but hopefully we’ll be able to identify companies that are doing things differently and doing them better than their peers.

If we like your suggestions, we’ll incorporate them. We’ll then use this matrix to evaluate various industries and identify the leaders in those industries.

So… more to come…

RAW SCORE SCALE (OTHER THAN YES / NO)
0 – Not at all
1- Discusses issue very little
2 – Discusses issue in broad / overview strokes
3 – Discusses issue with details & examples
4 – Is very specific and detailed in discussing issue
MULTIPLIER SCALE
1 – Important issue that is expected of companies doing CSR
2 – Important issue that is above “entry” level
3 – Important issue that shows very deep commitment & understanding
4 – Exceptional sign of highly advanced program

CATEGORY METRIC

SCALE

POSSIBLE VALUE

MULTIPLIER

TOTAL POSSIBLE SCORE

BUSINESS OVERVIEW

Basic stats on size of company

Employees

N / A

N / A

Revenues

N / A

N / A

REPORTING AND COMMUNICATION

Strength of report & transparency (subtotal)

Use of the GRI
A -level reporting

Yes / No

4

4

16

B – level reporting

Yes / No

3

3

9

C – level reporting

Yes / No

2

2

4

Uses the GRI

Yes / No

1

1

1

External review…

0

included commentary, review, and audit

1

4

4

included commentary & review

1

3

3

limited to commentary

1

2

2

Core indicators transparency Percentage of *core* indicators reported

Percentage

100

1

100

Communication

Direct link to CSR section on front page of co’s web site

Yes / No

1

1

1

Has issued press releases related to CSR w/in past year

Yes / No

1

2

2

Has used social media (Twitter, FB, etc.) w/in last 3 months

Yes / No

1

3

3

Openly discusses difficult issues that have neg. effect on comp.?

Yes / No

2

4

8

Taking climate change seriously

Acknowledges climate change exists

Yes / No

1

4

4

Acknowledges comp. has role to reduce impact on climate change

Yes / No

1

4

4

CSR STRATEGY & MANAGEMENT

Focus

Has CSR focus?

Scale of 0-4

1

3

3

Product responsibility

Info. Only

Environmental Sustain

Info. Only

People & Community

Info. Only

Ethics

Info. Only

Generate Econ value

Info. Only

Goals & Accountability

Has time-measured goals in…

Scale of 0-4

water mgmt

Yes / No

1

3

3

sustainable packaging

Yes / No

1

2

2

recylcing

Yes / No

1

1

1

reducing landfill use

Yes / No

1

1

1

energy use

Yes / No

1

2

2

greenhouse gases

Yes / No

1

3

3

Management structure

C-Suite Exec. Dedicated to CSR?

Yes / No

1

3

3

Board-level committee specifically named dealing in CSR?

Yes / No

1

2

2

Director or above dedicated to CSR?

Yes / No

1

1

1

Existence and depth of programs

Volunteerism Has formal volunteer program

Yes / No

1

1

1

Volunteer hours /year

Info. Only

0

Volunteer #’s / year

Info. Only

0

Philanthropy Philanthropy program
Overall giving

Info. Only

Normalized giving (Overall giving divided by employees)

Top rank

4

3

12

In-Kind giving

Info. Only

Cash giving

Info. Only

IDs difference between strategic giving & philanthropy

Yes / No

1

2

2

Supply chain
Actively gaining efficiencies in dist. / mileage / fuel use

Yes / No

1

1

1

Diversity Has a diversity program

Yes / No

1

1

1

Discloses % employees at executive level

Yes / No

1

3

3

Discloses % employees at mgmt level

Yes / No

1

3

3

Discloses % employees at board level

Yes / No

1

3

3

Supplier diversity Has supplier diversity program

Yes / No

1

2

2

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3 Comments leave one →
  1. September 30, 2009 1:12 pm

    hello james, i couldnt resist responding to your post after all your hard work and thought – i work with the GRI framework on an almost daily basis as a consultant and reporter, and a reviewer of reports, so your post was naturally of great interest.Comparability has been one of the most elusive objectives of CSR reporting.

    A few comments:

    There are two very core elements of CSR reporting that i feel are missing from your evaluation: a discussion of stakeholder dialogue processes and the key points raised (and if possible, how these were addressed)and some sense of prioritization of CSR issues in the form of a materiality discussion and ideally materiality matrix.

    Use of the GRI levels is sometimes misleading. Often companies report at one level and declare at another (lower) level – to be on the safe side. Also, companies who self-declare at a certain level may not actually achieve this level. I find many many discrepancies here. So if the Level is not verified by the GRI (assurers do not necessarily pick up all the nuances here), then awarding points for the report level can present a misleading picture. The inclusion of a GRI index, however, is a key useful and important feature.

    By external review – do you mean assurance ? If so, this should address the scope of the assurance – many reports go for + level but assure only a limited part of the report.

    A GRI indicator which i find most useful is EC1 – the distribution of economic value to stakeholders – i am not sure if this fits anywhere in your analysis

    You do not refer anywhere to governance ….
    You do not refer anywhere to a CEO or Chairman statement and the quality of such a statement. These often set the tone for the report.

    I have many more points but i dont want to go on too long in one post so i will leave it at that for now and would be happy to carry on the discussion …..

    warm regards, elaine, http//.csr-reporting.blogspot.com

  2. October 2, 2009 1:21 am

    Hi James –

    Nice work identifying methods for separating the wheat from the chaff in terms of CSR leadership. The nonprofit organization I work with, The Environment Council, put together a similar but much more focused framework for evaluating companies’ stakeholder engagement. We were motivated by much the same issue – it’s popular to use the word “stakeholder” throughout your CSR report, but what does this show about how substantive a company’s efforts actually are?

    We found many of the same keys to best practice, including measurement and management, as well as transparency and assurance. I’m glad that Elaine brought up materiality and stakeholder dialogue as elements missing from your framework; I’d definitely agree. Also, given that you look at specific goals (on recycling, GHG emissions, etc.), I wonder if you will face problems accommodating companies’ different business models within your framework.

    I’m interested in what you and Elaine and any other readers think about the approach we’ve put together at The Environment Council; our evaluation tool for companies’ stakeholder engagement programs is called the Stakeholder Score and is freely available at http://www.stakeholderscore.org.

    Our first report, on the stakeholder engagement practices of the pharmaceutical sector, is due out in mid-October.

  3. James Epstein-Reeves permalink*
    October 2, 2009 12:49 pm

    Thank you both for taking time to put forward such thoughtful responses. I’m looking forward to revising my version and reposting it. Thank you also for passing along the Stakeholder Score information – I’m very much looking forward to diving into that – sounds fascinating!

    Thank you both again – I really appreciate it.

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