CSR Report（Corporate Social Resonsibility）
Section4: The Impact of International CSR Standards and Demands for International Companies
According to Fortune (October 200) approximately one in every ten dollars of assets under management in the US (an estimated 2.3 trillion out of 24 trillion) is being invested in companies that rate highly on some measure of ‘doing good’.
It’s an indication that socially responsible companies will outperform companies that don’t engage with various stakeholders, including shareholders, customers, employees and activists, to determine how things can be done better.
Fortune, for the second year in a row, ranked the world’s largest companies; according to how well they conform to socially responsible business practices.
The survey, conducted by Accountability (a London think-tank on corporate accountability) and CSRNetwork (a British for-profit consultancy) measured the top 50 companies on Fortune’s Global 500 list against six criteria, ranging from stakeholder engagement to performance management. Fourteen other large companies were included so that there were at least ten companies in each of the industry sectors.
Does a company have procedures for listening to critics?
Are its executives and board members accountable?
Has it hired an external verifier?
The 2006 top-ranked company is Britain’s Vodafone, the world’s largest mobile phone operator.
The ratings reflect whether companies address non-financial issues at the core of their business. European companies outperformed their counterparts in the US and Asia. The top 11 companies on the list are headquartered in Europe, where corporate social responsibility is the ‘lingua franca’ and according to Fortune, CSR reporting is required for a company to list on some stock exchanges.
It seems however, that truly integrating sustainability into day-to-day business practice is not easy. In his article, ‘Separating Smart from Great’, Simon Zadek questions how global corporate sustainability giants BP and Ford managed to ‘mess up so badly’.
The former which is known for advancing public debate on climate change, was responsible in early 2006 for the worst oil spill on Alaska’s North Slope, and the latter, an advocate of green cars and factories, has witnessed a decline in market share due to its failure to make its product relevant to customers in a ‘carbon-costly world’.
‘Comprehensive accountability’, accountability to stakeholders representing social and environmental interests as well as economic ones, requires companies to align their vision, strategies and innovation not only with today’s competitive markets but also with the social and environmental conditions that will share the markets of tomorrow.
Such recent converts to sustainability such as Wal-Mart’s Lee Scott, GE’s Jeff Immelt, or Richard Branson, who has pledged to plough three billion of Virgin’s profits into combating climate change, have understood that their markets are undergoing a fundamental change because of social and environmental factors.
How companies approach third-party assurance also constitutes a significant differentiator. Companies that score high in this category by taking steps to have independent auditors monitor their performance tend to score higher across the board.
Tomorrow’s Value, Sustainability’s fourth international benchmark of corporate sustainability reporting, developed in partnership with the United Nations Environment Programme (UNEP) and Standard & Poor’s, ranks 50 sustainability reporting leaders by assessing reporting by a percentage scale on four aspects: governance and strategy, management, presentation of performance and accessibility and assurance. The 2006 results placed BT first, followed by Cooperative Financial Services, BP, Rabobank and Anglo Platinum.
The leaders in sustainability reporting do not treat the exercise any differently to financial reporting. These organizations present the results to the audit committee and strive to understand the real impact of sustainability on the business. Accountability and sustainability stop at board level and it forms part of strategic planning.
In addition, those companies engaging external assurance are not merely ticking the box, they value reporting. Organizations are encouraged to start with the relevant issues include what is material, develop key performance indicators and then follow Global Reporting Initiative (GRI) guidelines.