Microsoft Power Point Csr 2009 091104110512 Phpapp02

8/9/2019 Microsoft Power Point Csr 2009 091104110512 Phpapp02

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Corporate ResponsibilityCorporate Citizenship

Corporate SustainabilitySustainability Reporting2009

Reana RossouwNext Generation Consultants


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Overview The basics and definitions

Responsibility vs Irresponsibility

Sustainability Trends

Sustainability in Practice Case Studies

Strategy Development, implementationand integration

Reporting

Frameworks and Compliance


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The Basics


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Organisations today faces a threefold pressure to succeed:

To be:More

innovative andcompetitive

Moreproductive andprofitable

Moreresponsible

andsustainable


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Sustainability Reporting

is an organisationspublic account of itseconomic,environmental andsocial performance inrelation to its

operations, productsand services.

Note: Organisation

includes corporate,governmental and non-governmentalorganisations

*www.krikor.info


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Doing well by doing good - CSIDoing well by being good CSR

Ensuring survival Sustainable Development


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Sustainability FrameworkCorporate ResponsibilityManaging risks and impactsacross Economical, Social,Environmental dimensions

Corporate Governance:Compliance, Standards,Frameworks, Principles,Guidelines

Corporate CitizenshipValues, Beliefs, Principles,Policies, Contexts,Definitions

CorporateSustainability


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CS and the different interpretations Different strokes for different folks:

To Chinese consumers, the hallmark of a socially responsible

company is safe, high quality products For Germans, it is secure employment

In Thailand, sustainable development is defined as holisticdevelopment which involves six dimensions: economic, social,environment, politics, technology and knowledge, and mentaland spiritual balance.

In Bolivia, there is a particular emphasis on political dimensions(e.g. good governance and participation) and on the cultural andspiritual identity of diverse indigenous peoples

For Africans it is about proving legitimacy and credibility andensuring poverty is alleviated

In South Africa what matters most is a companys contributionto social needs such as healthcare and education


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The Definitions


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Theoretical Model

www.naturalstep.com


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What drives businesssustainability?

Changing Supply:

Natural ResourcesEmployeesCapital Markets

Changing Rules:

Policy &Regulation

Changing Demand:

ConsumersStakeholders


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Sustainabilitys Influence on

Corporate Functions

The very markets in which companies compete are poised for further

change. In some industries, the adaptation of sustainability isparamount to corporate survival

Strategy

New regulations with which to comply.Legal

Need to minimize the energy inefficiencies in older technologies.Developing technologies to minimize the need for virgin materialsused to provide value to consumers.

Information Technology

Eliminating energy inefficiencies in owned operations.Ensuring suppliers compliance with a code of conduct.Ensuring access to needed (and limited) resources, such as waterand energy.

Operations

Stakeholders demand for increased transparency.Financial markets growing evaluation of companies sustainability

efforts.

Finance

Talent pools growing interest in working with companies that attendto sustainability.

Talent Management

Changing consumer interests might lead to missed opportunities.The need to align sustainable consumption and production.

Marketing

ImpactFunction


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Lets Define

Sustainability

Meeting the needs of thepresent withoutcompromising the ability offuture generations to meettheir own needs

Triple-bottom-line (TBL)

Considers, measures andrefers to achieving a

balance betweenintegrated (economical)financial, social andenvironmental contributionsand performance to society

www.deloitte.uk


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Definitions (contd) Corporate sustainability

A business approach to createlong term shareholder value

by embracing opportunities andmanaging risks derived fromeconomic, environmental andsocial developments

Sustainability reporting Generic term for extra-non-

financial reporting. Refers tothe account an organisation

gives to describe itsperformance on a number ofsustainability dimensions suchas economic, environmental,social, ethics, governance,product and market

responsibility, performancesand impacts.


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Corporate Citizenship (CC) Considers the rights and responsibilities of companies within a

broader societal context relating to:

Managing the enterprise how efficiently and ethically thecompany governs, controls and manages its operations

Workplace practices how it manages its employees, workplaceconditions and employment practices

Third party interactions how it engages external stakeholders inthe company supply chain, marketplace, government and community

Environment how it controls its impact on the environment

Transformation how South African companies meet theirobligations to help all citizens become meaningful economicparticipants

Product and market stewardship how it markets, what it

produces, how it goes about taking product to market and owning upto the promises made in marketing and product development

Definitions (contd)


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Definitions (contd) Corporate governance

Generally refers to the process by which organisations aredirected, controlled and held to account. It encompassesauthority, accountability, stewardship, leadership, direction andthe control exercised in the organisation

Corporate (Social) Responsibility (CSR) (CR)

A good corporate citizen (a responsible one) is one that has

comprehensive policies and practices in place. These enable it tomake decisions and conduct its operations ethically, meet legalrequirements and show consideration for society, communitiesand the environment.

Corporate Social Investment (CSI) Refers to a companys contributions to society and community

that are extraneous to its regular business activities.


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Definitions (contd)

Integrated Sustainability Reporting (ISR)

Relates to non-financial reporting as suggested andoutlined in the King Report on CorporateGovernance for South Africa namely reporting onthe nature and extent of a companys social,

transformation, ethical, safety, health andenvironmental management practices and policies.

Most companies in South Africa use the GRI GlobalReporting Initiative as the benchmark for their reportingstandards


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Definitions (contd)

In South Africa, it is expected that the Companies Actwill be passed into law on July 1, 2009. The Act will beeffective from March 1, 2010.

The new provisions (in the Act) will be based on King IIIwhich applies to all entities, regardless of the manner

and form of incorporation and establishment. King III recommends that sustainability reporting should be focussed on substance over form and should transparently

disclose information that is material, relevant, accessible,understandable and comparable with past performance of the

company be formalised as part of the companys reporting processes

have independent assurance


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The Concept It is no longer just about being ethical and fair inour dealings, nor just about managing our socialor environmental impacts, nor just about being agood neighbor in our local communities,although all of these are important

It is about turning social, economic and

environmental challenges into opportunitiesfor brand/product/process innovation, businessdevelopment and competitive advantage.

CR is not only central to business strategy

but is increasingly becoming a critical driverof business growth


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The DriversThe Business Case


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Key Drivers Key driving forces include:

Investor and consumer demands and governmental and publicpressure

Particularly important is the support from Socially ResponsibleInvesting (SRI) Indices .

The corporate responsibility movement is now entering amainstreaming phase aided by standardisation activities such as

the GRI, the AA1000 series and the ISO2600 guide. The field of responsible business strategy and practice is

becoming one of the most dynamic and challengingsubjects corporate leaders are facing today and possiblyone of the most important ones for shaping the future of our

world.


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Foundations of the business case

An international imperative

The power of multinational companies

Universal rights and standards across developed anddeveloping economies

A national imperative

Conscious effort to address past imbalances and exclusions

The socio economic benefits of a stable, more equitablesociety

Individual company rationale it makes business sense Strong brand and reputation

Employer of choice

Market Position

Trust of financial markets and increased shareholder value New green products/services and new markets

Both risk and opportunity management


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What should business be doing

Commit to corporate action Incorporate long-term measures into a

definition of success, targeting profitabilitythat is sustainable, and supported by aresponsible record in managing social,environmental and employment matters

Understand the issues Making operations environmentally andsocially sustainable, making societysustainable, selling products responsibly,influencing suppliers

Use precedent and best practice

Comply with standards, codes andguidelines

Embed the right managementapproach From board and executive level the

authority for sustainability must be

devolved throughout the organisationthrough all processes, systems andoperations

Convert risks and opportunities intoactions

Manage and measure performance

Communicate and reportwww.leryco.co.uk


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Benefits of Sustainability

Increased profit

Increased access to capital new sources (investment)

Reduced operating costs/increased operational efficiency

(environmental practices) Enhanced brand image and reputation

Increased sales and customer loyalty

Increased productivity and quality

Increased ability to attract and retain employees Reduced regulatory oversight

Reducing risk and increased risk management

Competitive advantage

Increased market share


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Challenges of Sustainbility Managing in an integrated manner the full lifecycle of CR strategy

formulation, implementation, evaluation and evolution incorporatingstakeholder participation

Aligning responsibility strategy to corporate strategy focusing on:

Rationalising and harmonising the economic, compliance, ethical andsustainability dimensions of corporate responsibility and sustainability in thecontext of stakeholder requirements

Managing non-financial risk, particularly brand, reputation, local licence tooperate and to performance instability as an integral part of corporatesustainability management

Integrating eco-design and other sustainability requirements into product andservice offerings

Managing the sustainability performance requirements into product andservice offerings

Managing the sustainability performance optimisation process tocontinually increase stakeholder satisfaction Developing strategic responsibility and sustainability capabilities


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Challenges for individual

companies Discussion How do we define

sustainability What is our language What matters to us most What will drive us in

future What are our (company

specific, industry specific)future risks and

challenges What is our 2020/2025

vision


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Objectives and motivations of

sustainable companies Increased transparency and improved

governance aimed at rebuilding public trust andinvestor confidence

Delivering wider societal value including supportfor health and human rights improvements andenvironmental protection

Contributing to regional development and globalpartnerships for sustainable development

Addressing in a balanced way the concerns oftheir key stakeholders


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Shareholder

Value

Company Lawand compulsoryregulation

SustainableDevelopment

Stakeholdermanagement -

reputation

Risk Management regulation andcompetitive policy

Social Innovation performance stability eco efficiency fair globalisation

SocialAccountability -ethics

Investordemands SRI philanthropycorporatecitizenship

CorporateCompetitiveness

CorporateGovernance

CorporateSustainability

Corporate SocialResponsibility

VoluntaryRegulation

Strategic Map


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Responsibility and Sustainability Pathway

Cost SavingEfficiency

ComplianceReputation

Risk

Management

ResilienceNew Future

ConnectivityStakeholders

Innovation


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Responsibility and Sustainability Pathway

Revenue Generation

Licence to OperateFreedom to Operate

New Revenue Streams

Revenue Protection

Innovation


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Framework Eight core characteristics

Understanding society: understanding the role of each player insociety government, business, trade unions, non governmentalorganisations and civil society

Respecting environment: considering the cost of natural economics,

placing a value on natural resources and calculating benefits Building capacity: participating in partnerships and creating strategicnetworks and alliances

Questioning business as usual: challenging the way of doing thingsand being open to new ideas

Shareholder relations: identifying stakeholders, building relations,

engaging in dialogue and balancing demands Strategic view: taking a strategic view of the business environment Harnessing diversity: respecting diversity and adapting to different

situations Quality control: feedback on the effectiveness of the CR process,

communication and training programs should be an integral part of CRquality management


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InvestorDemands

Consumer

DemandsPublicPressure

CorporateResponsibility

andSustainability

GreenBuying

SRI

Regulation

PublicConfidence

GovernmentPressure

Driving Forces


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CSR and Sustainability GuidesCorporate Responsibility and sustainability implementation

Corporateresponsibility andsustainabilitystrategic

management

Brand and Reputation Management

Innovation, Production, Distribution

Social Capital Management

Environmental Capital Management

Stakeholder Engagement

Corporate Responsibility and Sustainability principles, best practices case studies trendsReference sector specific CSR/CS Systems

Corporatesustainabilityperformancemanagement


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Emerging Frameworks


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TBL - CS FrameworkMarketImpact

ProductImpact

TransformationComplianceGovernance

Brand

Impact

Suppliers

Clients

Industry

SUSTAINABILITY

EnvironmentalImpact

SocialImpact

EconomicImpact

SUSTAINBILITY

TBL F k


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TBL Framework

BEE; Employment Equity and skills development; Workplaceconditions and policies; Occupational health & safety

Employee wellness; HIV/Aids; Enterprise Development

Corporate Social Investment; Ethical consumerism

Responsible marketing and advertising; Product pricing

Product access; Packaging & Waste; Preferential procurementProduct sourcing and traceability

Water Consumption

Fuel consumption

Electricity Consumption

Waste and Effluent Management

Emissions and climate change

Carbon tradingEnvironmental rehabilitation

Focus Areas:Focus Areas:

High BEE ratings

Business partner of choice

Government business opportunities

Reputation gains

Lower carbon footprints

Decreasing operating costs

Productivity gains

Reputational gains

Opportunities:Opportunities:

Loss of business due to failure to achieve scorecard objectives

Government censure and loss of business

Operational restrictions

Additional regulations

Unquantified supply and cost risks for operations

Escalating building operating costs

Penalties and sanctions

Reputational damage

Risks:Risks

Making operations socially sustainable

Making society sustainable

Selling products responsibly

Influencing suppliers

Climate Change

Escalating operating costs

National Energy Efficiency strategy and accord

Whitepaper on renewable energy

Green Building Council of SA

Key Drivers:Key Drivers: SocialEnvironmental


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Stakeholder FrameworkEmployeeRelations

CustomerRelations

SupplierRelations

BrokerRelations

ShareholderRelations

CommunityRelations

ProductAccess

ProductKnowledge

ProductManagement

ProductDistribution/

Marketing

MarketingPractices

Sales Practices

CommunicationPractices

PricingPractices

Sponsorship & PublicRelations Practices

ProductDevelopment

Investor

Relations

Product Stewardship

Market Stewardship

Brand Stewardship

Social Impact

Stakeholder issues


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Stakeholder issues

Sustainable raw materialsEmissions water/airEnergy efficiencyWaste managementReduced packagingRecycling

Environment

Tax contributionLocal economic impactTransfer pricing policiesCharity contributionsCommunity investmentCommercial sponsorship

Government and Community

Jobs sustainedPayment of bills

Technology transfer

Business Partners

Price/ValueEasy access to products/services/ distributionQuality of productAdvertising policy

Consumers

Salary & BenefitsHealth & SafetyTraining & DevelopmentEqual OpportunitiesCommunications

Employees

Return on InvestmentCorporate Governance

Shareholders

Key IssuesStakeholders


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Issues Framework

Environment Stakeholders

Products

Services

CS

Responsible InvestmentResponsible Drinking

Responsible Consumption

Medical Aid for the poorMedical Aid for retirees

Incentives for green/healthy livingEmployer of Choice

Zero Carbon footprintZero Omissions

Recycling

Reduction of electricity


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Issues Frameworks

www.labnet.co.uk & www. Parlermo.co.uk


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Industry Sustainability Frameworks

Economical

Environmental

SocialBrand Management

Customer Relationship ManagementInnovation Management

Piracy ProtectionSupply Chain Management

Privacy Protection

Market OpportunitiesPrice Risk Management

Business Risks & OpportunitiesClimate Change Strategy

Environmental Policy & management

Operational Environmental FootprintOperational Eco Efficiency

PackagingRaw Material Sourcing

Biodiversity

RecyclingTransport & Logistics

Emissions/Carbon

Hazardous Substances

Occupational Health & SafetyStakeholder Engagement

Standards for SuppliersAccess & Impact Products/Services

Social Integration

Product Quality & Lifecycle ManagementResponsible Marketing

Human Rights & CorruptionCapacity Building

Corporate Social Investment


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Industry Framework

Digital Inclusion

Impact of TelecommunicationServices


Standards for Suppliers

Climate Strategy

Electro Magnetic Fields

EnvironmentalPolicy/Management System

Operational Eco-Efficiency

Brand Management

Customer RelationshipManagement

Privacy Protection

Service Development

Telecommunications

Code of Ethics for Advertising

Editorial policy

Ethical Conduct

Protection of ChildrenStakeholder Engagement

Environmental managementsystems

Hazardous substances

Eco-efficiency

Volatile Organic Compounds

Brand Management

Customer Management

Lobbying Activities

Product Piracy

Media

Health & Safety

Standards for Suppliers

Environmental Policy/ClimateStrategy

Genetically ModifiedOrganisms

Reduced Packaging

Raw Material Sourcing

Customer Management

Health & Nutrition

Emerging Markets

Retailers

Code of Ethics inInvestments/Financing

Occupational Health & Safety

Financial Inclusion

Standards for suppliers

Business Risks andOpportunities

Financial Products & Services

Business Risks/ProjectFinance

Environmental PolicyCarbon Footprint

Anti Crime

Brand Management

Customer Management


Financial Services

SocialEnvironmentalEconomicIndustry


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Its not all about reporting

Its about management and

business practices.


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In the bigger scheme of things

Sustainability and Corporate Responsibility

Acts as a strategic lever

Supports marketingmessages & brandvalues

Supports and underwritesbusiness objectives,business developmentand business growth

Delivers on shareholder

value and wealth Adds strategic andeconomic value to theorganisation

Creates a new future

C


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Effective CR requires companies to:

Develop guidelines

Build collaborative

partnerships Engage with external

stakeholders

Develop indicators to

measure progress Measure results and

impacts

Incorporate CR intostrategic businessdecisions and activities

Build social capital

among management


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Sustainability Trends

Reputation vs Risk vs Compliance


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What about the recession? According to a new study from PanelIntelligence, 80 percent of sustainabilityleaders surveyed (65 execs from Fortune500 companies) in November say theyintend to maintain or increase spendingin areas related to sustainability next

year. In fact, they reported thatsustainability and clean technologyspending, as a percentage of corporaterevenues, is expected to increase 73percent through 2010.

Another recent study by A.T. Kearneyreveals that, as a result of ecoflation(based on future analysis of increases incommodity prices, environmental andgovernmental policy and climate situations),packaged goods companies may expect areduction in earnings of 19 to 47 percentin the next decade if they do notimplement adequate sustainabilitymeasures. Thats nothing short ofstartling. Thankfully, unlike much of the restof the business world of late, optimism andsound business sense do not seem to be inshort supply among corporate responsibilityleaders of some of the worlds leadingcompanies.

www.coneinc.com


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Sustainability & recession Responses from 65 sustainability executives of Fortune500 companies. Sustainability and clean technology spending - as a

percentage of corporate revenues - is expected to increase73 percent through 2010.

Eighty-two percent of respondents rated energy efficiencyas the most important area of current focus and investment.

Corporate spending on sustainable waste managementinitiatives is expected to grow by 20 percent in 2009, thehighest percentage increase of any subcategory.

Cost savings, revenue generation and brand strength arethe most important drivers of environmental and cleantechnology initiatives.

Nearly 55 percent of respondents observe no financialcriteria (i.e. ROI, payback period) when evaluatingsustainability projects for their respective organizations.

A majority of respondents believe capital remains availablefor sustainability projects.

Business practices are an additional purchasinginfluence, as today's savvy consumers are nowasking "Is this a good company?" and "What does itstand for?"

The environment and economic development areamong the top four causes consumers wantcompanies to address, along with health andeducation

Consumers may become activists if companiesengage in negative business practices; 85 percentwould consider switching to another company'sproducts/services

Relevant and compelling communication are key tobreaking through www.mckinsey.com


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Green is the new black Sustainability labels, virtual

meetings and zero waste

are the order of the day Bottomline - Six Rs

rethink, refuse, reduce,reuse, repair and recycle

Closer tie between GreenMarketing and OverallBrand Image

Environmental and socialresponsibility initiatives willbe tied into overall brandcommunications.


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CS crossing the divide Smart grid takes off consumers getting serious

and off the grid own water, own heating, ownenergy, own recycling

Year of the carbon market While the U.S. hasntadopted any federal carbon regulations, 850 U.S.cities representing all 50 states have adopted thestandards laid out by the Kyoto Protocol.

Green building sets the code More and more

cities are adjusting commercial building code tolessen the environmental impact of the building.

Banks for the new economy Motivated in part bythe failings of large financial institutions in 2008,banks, particularly smaller firms, will focus oncreating long term personal relationships and willinvest in things that matter to their members. Andright now, members want to bank with sustainableinstitutions; firms that are showing that they careabout their environmental impact.


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CS crossing the divide Green jobs hiring blitz With more focus on energyefficiency and renewable energy more qualified individualswill be needed to fill empty slots. One study estimated thatnumber to be 4.2 million over the next 30 years. Two

sectors expected to lead this job creation aremanufacturing and utilities. Tapping into water conservation Of the earths natural

resources, water is one of the most undervalued relative toits diminishing availability. The often easy, but previouslyoverlooked, water efficiency measures are gainingrecognition for their ability to save the firm money with littleextra cost.

Get on the bus According to the American PublicTransportation Association (APTA), public transit use sawa 50-year high in 2007. Another study found 76% of

individuals surveyed support public funding for theimprovement and expansion of transit and 80% considerincreased investment in public transit as an increase intheir quality of life. Millions of government funded dollarsare set to expire in 2009, if not used or specific projectsbegan.


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CS crossing the divide Solars future luster - While solar

installations have predominantly beenphotovoltaic (PV) systems for homeand businesses, utility scale solarfarms and concentrated solar thermalplants are set to surge. This growthwill be accelerated by an increase inventure capital investment and anextension on the life of federal taxcredits.

'Go green goes down Businesseswill no longer be able to say they havegone green and have little to show forit. Consumers will want to see the longterm sustainable efforts businessesare making. Being green as becomemore common, which means firms will

need to be authentic and internallycommitted to being sustainable. Biomimicry a new language, a new

future, going back to nature for futuresustainable solutions

What are people talking about the


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What are people talking about the

Buzz Trend Global Warming/Climate

change

Renewableenergy/Alternative fuels

Resource conservation

Carbon Emissions Pollution

Packaging/Plastic

Transportation

Toxins

Organics

www.greenconsumer.com


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The future

THE FUTURE. CS will continue to spread across the supply chain and across

borders. Climate change, urbanisation, and poverty are globalchallenges that require global solutions. With their capital, power,

and innovative potential, firms have a moral responsibility to helpsolve these problems. As a result, CS has to consider an everincreasing range of social and environmental factors from aroundthe globe. Finally, globalisation results in an intensified scramblefor resources, capital, labour and market share. CS helpscompanies to raise their attractiveness as a customer, partner,

employer, or supplier.


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Finding Solutions CS is no longer just about being good, managing the public image,

or improving products: Sustainability and efficiency initiatives savecosts and increase the value of the company. The FTSE4Good

Index and the emergence of external CS rankings highlight howcompanies are increasingly assessed in terms of theirsustainability and CSR activities.

Solution-oriented CSR is the key vehicle to promote sustainability.CS could be the business blueprint for the future. It will reshape

business ecosystems, changing the way companies are organizedand engage with their stakeholders. In a customer-driveneconomy, CSR will be actively managed, an integral part ofcompany strategy, and a hard factor for company success. It willimpact the nature of competition, foster the development ofsustainability related innovations, and facilitate the emergence ofnew, more successful, business models. As companies are forced tobecome more socially and environmentally responsible CSR willmove into boardrooms and tighten its influence on decision-makingprocesses. For the future world of business, CS is clearly not ashort-term phenomenon, but a trend-driven necessity.


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Fad or Trend?

A new class of consumer* sustainability consumer

30% of adults in the US 40% of adults in Europe

people who value wealth, theenvironment, social justice, personaldevelopment and sustainable living

Make purchasing and charitabledecisions based on their own morals morals they expect the corporations

they buy from to respect Sustainability consumers are behind

the international expansion of organicfood sales

Sustainability investors make 50% ofall investment decisions and aredriving socially responsibleinvestments

* www.ethicalconsumer.com


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CSR Monitor 2007 Global Study*

Key Findings

Significant numbers of investors take a companys social performanceinto consideration when making investment decisions 61%

In wealthy countries, social responsibility makes a greater contribution tocorporate reputation than brand image 49% of CSR factors comparedto 35% for brand image and 10% for financial management

Companies that ignore social responsibility place market share at risk 42% will punish socially irresponsible companies

Views and behaviors of opinion leaders indicate that consumers socialexpectations of companies will continue grow

North American consumers represent the most socially demandingmarket for companies

Two distinct groups of citizens making up a third of the world areengaged in pressurising companies to assume greater socialresponsibility conventional activists and social activists

*Mckinsey Research


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2009 GlobeScan Report Consumers in India, Brazil and China scored the highest -- andthose in the U.S., the lowest -- for green behavior among thecountries included the Greendex survey conducted by Globescan

Green building is on the rise, spurring new technologies that save

energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with

every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to

rigorously assess the environmental impact of their products using

sophisticated metrics, sending signals up the supply chain thattomorrows products will need to hew to higher levels ofenvironmental responsibility.

www.greenbiz.com


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Ethical Consumers Ethical Consumers worry about

Organic meat, produce and baby food

Fair Trade coffee, tea, bananas,chocolate, honey

Paper/Timber certified as sustainablymanaged by the Forest StewardshipCouncil

Energy-efficient light bulbs andrenewable energy

Unleaded petrol and low-sulphurdiesel

Recycled paper

Landfill and the management of

natural resources such as water, theenvironment and healthy food

But seriously how serious?* Marks & Spencer Plan A


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Marks & Spencer Plan A

Business wide 500M Pound eco-plan Carbon neutral, no waste to landfill, extend sustainable sourcing,

set new standards in ethical trading and help customers andemployees live a healthier lifestyle

Tescos making sustainability a significant driver of consumption 500 MPound plan

Developing a carbon counter carbon calorie value of all products,introduce green loyalty card points for customers who buy organic,fairtrade and biodegradable products, increase range of energy-efficientgoods

MacDonalds health drives pays off sales growth of 5.8% sinceintroducing new advertising campaign introducing healthy eating and

exercise Danone, Kelloggs, Kraft, Nestle, Tesco, PepsiCo, Morrisons have

launched 4m Pound campaign to promote GDA labels (guideline dailyamount) for healthier eating committed to produce more responsible foodproducts

Kelloggs Special K products have become mega brands with over 500mPounds in retail sales per year Special K bars 286m Pounds per year 10 000 steps per day has increased brand awareness and market share bymore than 35% - being a responsible corporate citizen is working for us

* Food Review February 2007

More examples


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p

The development of an innovative new centrefor the building and construction sector toshowcase technology and products that aredesigned to address sustainability concerns.

Wolseley

Establishment of a sustainable agricultureinitiative to secure a sustainable supply of rawmaterials necessary to deliver the business andits brands.

Unilever

Reducing the number of unbanked andproviding access to affordable credit through itsFinancial Inclusion programme

Barclays

Ethical retailing From Evil Empire to jolly green

giant

Walmart

GlaxoSmithKline believes slashing prices and

sharing patents will help the one in six people inthe world suffering from a neglected tropicaldisease

GlaxoSmith

Kleine

What is a corporates responsibility?


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What is a corporate s responsibility?

What is typically corporate socially responsiblebehavior and what is not?


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Lets Talk:

What about Tiger Brands and theR100 million fine?

Sasol and the 100m fine?

Industries in the spotlightT b d Li Ad ti i ddi ti t


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Tobacco and Liquor Advertising addiction to

nicotine and alcohol (BAT, Distell) Total ban of advertising to children (Youth brands) -Kellogg's

Obesity amongst world population - McDonalds Consumer Boycotts Gillette and LOreal animal

testing

Heinz tuna fishing nets harming dolphins Lesbian/Gay rights Phillip Morris US electioncampaigns

Caterpillar War in Iraq Nestle, Nescare and Nescafe from babies to

mothers

Starbucks from coffee to drugs Nike and Gap child labour Coke anti globalisation more precious than water Sarah Lee food porn Enron, Worldcom, Parmalat internal corruption Cape plc exploited mineworkers in unhealthy

asbestos mines De Beers Blood diamonds in Africa Saambou, Masterbond. Fidentia and Leisurenet

defrauding investors Banks excessive credit, exorbitant fees Telkom - monopoly

How may liters of water does it


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take to make one hamburger?Or 1 tin of coke/beer?


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Determining Sustainability

What best describes SustainableDevelopment/CR/CC in your company?


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e e op e t C CC you co pa y

Stage 1Elementary

Stage 2

Engaged

Stage 3Innovative

Stage 4Integrated

Stage 5Transforming

Credibility

Capacity

Coherence

Commitment

Just the basics:Jobs, Profit, Taxes

Functionality:

Philanthropy, community relationsEnvironmental protection

StakeholderEngagement and Management

An integrated concept:TBL, + economic, social and

environmental Factors

The way we define business:Embedded in the corporate DNA

Strategic

Path to Corporate Responsibility(Harvard Business Review)


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(Harvard Business Review)1

Defensive StageUnexpected Criticism

Activists, Media, CustomersResponds via crises communications

strategy

4Strategic Stage

Realign strategy to addressbusiness practicesCompetitive Edge

5Civil Stage

Collective actionsAdvocacyEducation

Practices

2Compliance Stage

Policies, Reputation Management,Risk Management

King II, JSE SRI, GRI, BEE, etc.

3Managerial Stage

Standards Past PR &Communication

Development of Citizenship


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Outside In/Inside Out

Mainstream:BusinessDriven

Organisationalalignment

Crossfunctionalcoordination

Functionalownership

Marginal:Staff Driven

Structure

Visionary,ahead of thepack

Champion, infront of it

Steward, ontop of it

Supporter, inthe loop

Lip service,out of touch

Leadership

MarketCreation or

Social change

ValueProposition

BusinessCase

ReputationLegalCompliance

StrategicIntent

Change theGame

Sustainabilityor TripleBottom Line

ResponsibletoStakeholders

Philanthropy,EnvironmentalProtection

Jobs, Profits &Taxes

CitizenshipConcept

Respondingto society:

Inside Out

Full ExposureAssurancePublic

Reporting

Public

Relationships

Flank

Protection

Transparency

Multi-OrganisationalAlliances

PartnershipMutualInfluence

InteractiveUnilateralStakeholderRelationships

DefiningPro-Active

Systems

Responsive

Programmes

Reactive

Policies

DefensiveIssues

Management

Relating to

society:Outside In

Stage 5Transforming

Stage 4Integrated

Stage 3innovative

Stage 2Engaged

Stage 1Compliant


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Defining Sustainability Discussion non-negotiables

Senior Management

commitment and understanding Establishing sustainability

objectives Leadership on key issues Establishing partnerships

Integration of sustainabilitythroughout the Organisation

Sustainability managementsystems , measurement andreporting

Framework for stakeholderengagement

Enabling innovation Building capacity

Effective corporate governance

What is good citizenship?


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What are corporate responsibilities?* Ethics, governance and acting

responsibly

Responsibility towards society Serving broader stakeholderinterests

Good HR Practices andemployment equity

Good environmental practices Product and market

stewardship

Focus wider than the pursuit of

profits Assist government with socio-

economic agenda

Ensuring long term businesssurvival

*Corporate Citizenship Handbook

Inhibitors of Good Citizenship


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b to s o Good C t e s p

Lack of financial resources

Lack of time to understand and implement

Poor awareness and knowledge of the

subject area Lack of skills and understanding of the

subject area

Poor management buy-in in the importanceof responsible business practices

Employees not interested see it as aburden

No real business benefit evident toexecutive management

Poor executive support

Its really very simple . sustainable and


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responsible business practices means Discontinuing product offerings that are considered harmful but not

illegal Selecting suppliers based on their sustainable business practices

Choosing manufacturing and packaging materials that are the mostenvironmentally friendly

Providing full disclosure of product content Developing programs that support employee well being

Establishing guidelines for marketing to children Providing increased access for disabled populations Respecting privacy of consumer information Developing process improvements such as eliminating the use of

hazardous waste materials

Ensuring everybody can afford your product

Is this serious stuff?Is anyone paying attention to this?


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Is anyone paying attention to this? Sustainability strategy and management

Anglo American, Anglo Platinum, Exxaro, Kumba, Liberty, Mondi, Pick &Pay, Santam

Stakeholder engagement Engen, Sasol, Exxaro

HR management and development, skills development and training,BEE & Transformation Old Mutual, Rand Merchant Bank, Liberty Group, Absa, Engen

Enterprise Development Anglo Plat & American

Customer Care and Satisfaction Nedbank & Liberty Supply Chain Management Metropolitan, SAB Emissions, air pollution and carbon footprint ArcelorMittalo, Exxaro,

Mondi CSI Absa, Engen

Energy use, efficiency and renewables Anglo American, Engen,Exxaro


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If its any consolationIts a journey.

Some of us are starting out

Some of us are re-aligning and re-focusing, re-adjusting

Some of us are perfecting

Some of us are benchmarking already.


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Standards & ComplianceFrameworks & GuidelinesIndustry Initiatives

Refer to Handout

Laws and compliance

SA Constitution & Bill of RightsUniversal Declaration of HumanPrescribed laws,

LocalInternational


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Broad Based BEE ActEmployment Equity Act

Skills Development ActIndustry ChartersPreferential Procurement Act

Region-specific InitiativesTransformation Initiatives

King IIJSE Listing Requirements

JSE SRI Index

New Partnership for AfricasDevelopment (NEPAD)

Global Reporting InitiativeAA 1000 Series

SA8000 Standard

UN Global CompactSigma Guidelines

Dow Jones Sustainability IndexFTSE4Good Index

Guidelines

SA Constitution & Bill of Rights

Companies ActBasic Conditions of Employment Act

Labour Relations ActOccupational Health & Safety Act

National Environmental Management ActMineral & Petroleum Resources Dev. Act

National Water ActDirectors Fiduciary DutiesCommon law & judicial precedent

NOSA gradingNational Small Business Act

Environmental Management Act

Universal Declaration of Human

RightsInternational Labour Organisation(ILO) StandardsISO 9000

ISO 14001OHSAS 18000

OECD GuidelinesEcocertFairtrade and Ethical Trading Initiative

Kyoto ProtocolEquator Principles

AA1000

Prescribed laws,

aspirational principlesconventions andstandards

Dont let it scare you Select appropriate standards by asking


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What material challenges face your company? Are there any codes or standards that you cannotavoid?

What are the expectations of the marketplace andyour shareholders in relation to the management ofnon-financial issues?

Categorise the standardswhich standards relateto the different stages of business management i.e.planning, implementation, accounting and reporting or categorise according to functional business uniti.e. HR, marketing etc?

Which business strategies and management

practices, add value and economic growth andcontribute to social cohesion?

In choosing a standard, companies may need totake in more than one context, i.e. the industry,geography, political context, regulatory

environment The chosen standards should further businessgoals and strategy and improve business efficiency


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One step at a time

IT DEPENDS ON WHAT YOUWANT TO DO/ACHIEVE

IT DEPENDS ON WHO YOU ARE

(Industry)

Equator Principles (financial)

Ethical Trading (retail)

Forest Stewardship (paper)

Industry Standards

www.cdproject.netCarbon Disclosure Project

AA1000 Assurance Standard

AA1000 Stakeholder EngagementStandard

Issues Management Tool

www.accountability.org.uk

Assurance

GRI www.globalreporting.orgReport

JSE-SRI; King III, Companies ActGovernance


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Industry Based Initiatives The rise of industry based initiatives in CSR is one of the major

transformations in the landscape of CSR Momentum is growing in developing countries around sustainability issues,

and industry initiatives provide an architecture that allows for consultationbetween Developed and developing countries Private and public sectors Producers, buyers and retailers

Industry based initiatives can be useful in

Establishing collective to-do lists Identifying comparative advantages of individual companies Defining roles for individual companies Distributing CSR activities by working in partnership Stakeholder engagement is easier

Providing common systems for monitoring, verification, certification and reporting Building consumer confidence and managing reputation risk better than a singlecompany can on its own

Providing economies of scale and access to public funding for structural changeswithin an industry, within supply chains or regions

Serving as portals for dissemination of information in a coordinated manner

Global Compact


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p

The UNGC is a multi-stakeholder platformrooted in universally accepted conventions Human Rights Labour Standards

Environmental Principles Anti Corruption Principles

More than 6000 participants in 120 Countries SA Sasol, Nedbank, Eskom, etc. 40

signatories SA Part of GRI and Sustainability Reporting

process

UNGC Membership


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Commitments Leadership commitment (board & management) Letter

to UN

Willingness to engage in continuous performanceimprovement (set strategic & operational goals,measuring results, communication internally andexternally)

Openness to dialogue and learning around critical issues(participate in events local and global, engage instakeholder engagement and dialogue)

Commitment to transparency, accountability and publicdisclosure (annual COP Communication on Progress)

COP Report against at least 2 indicators Labour, environment, human rights, anti corruption

UNGC COP Reports


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p

CEO Statement of commitment

Description of practical implementation of10 principles (1st year only 2 indicators)

Definition of performance indicators &

measurement of outcomes (GRI/ETHOS) Post on GC website and own plus

communication to stakeholders

Verification external consultants,stakeholder feedback, peer review

Case Study Global Sports


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y p

Case Study Danisco


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(2 indicators 1st report)


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Where do we start

What is the process

In summary


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Allowing external stakeholders toInfluence corporate strategy toensure the future sustainability

of the company and all its stakeholders.

Its about owning up to yourresponsibilities

Its about the learning in the processof becoming more responsible

It is a new awareness and consciousness

Changing and adapting businessstrategy and operations to support

the new responsibilities

Managing CR the process


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Engaging Stakeholders

Embedding citizenship in organisation

Structures and resources for managingcorporate citizenship

CEO involvement

Management commitment

Communicating citizenship

Reporting

Referencing codes and standards

Verifying reports

Elements of integration


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ManagementSystems

Reporting and

Verification

StakeholderEngagement

Lets make it work!


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Engaging with stakeholders

By obtaining input and feedback, managementsystems can be developed and changed

Embed management systems and actions

Developing a framework to translate policy intomanagement systems and actions, and to entrenchresponsible and considerate behavior across allmanagement structures

Reporting should follow performance Reporting becomes a logical extension of responsible

citizenship practices, using it as a tool to support theprocess, focusing on issues that are material, settingtargets derived from action plans and tracking

performance

Sustainability Process


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10.

Assess, Redefine and re-map

9.Measure, monitor

And assess performance

8.Operationalise

And internalise learnings

7.Understand material

Aspects, identify opportunitiesAnd risk 6.

Build and strengthencapacity

5.

Determine and defineWays of engaging that work

4.

Establish engagementPlan & period schedule

3.Determine and define

Engagement, objective andscope

2.

Initial IdentificationOf material issues

1.

IdentifyStakeholders

Stakeholder

Engagement

Sustainability Process (1)


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http://www.wbcsd.org/web/images/case/Alcoa/sustainability-process.jpg



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www.fmcg-sustain.com.au/.../approaches/



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Sustainability Process (4)www melbournewater au


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www.melbournewater.au

Case Study: SAP


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StrategicSustainability

Strategic Sustainability is: integral to the business model and fundamental

to the business

a source of differentiation, builds organisationalreputation with key stakeholders and helps


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p y pbranding

gives a leading edge through innovation,patents, licences, low cost, speed to market andfirst mover advantage

hard to copy builds margin and returns via increased prices,

lower costs, lower assets; and importantly

it is likely to be specific to the company, in theorganisations upstream business processesand is often externally focused

Tactical Sustainability, on the other hand, is: an add on and does not impact core business

every company can do it. It is not a source ofdifferentiation; it offers no real leading edge (andin the case of carbon will become purely acompliance issue), and is easy to copy bycompetitors. It does not build margin because allfirms use it and customers can compare andbargain. Tactical Sustainability is likely to begeneric to the industry, in the organisationsdownstream processes and often internallyfocused.

What Should You Do? Develop Capability: Sustainability is becoming more important. Organisations need to develop the


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p p y Sustainability is becoming more important. Organisations need to develop thecapability to scan the external environment for changes in legislation, pressurefrom key customers, consumers and competitors, cost increases in key inputs,technology opportunities, etc.

Bottom Line Focus: During this economic crisis, economic performance is even more important. Set

sustainability strategies with higher expectations of economic benefits andfocus on those sustainability initiatives that attract customers and consumers,and address costs, without being capital intensive.

Link to Business Strategy: Consider how your approach to sustainability aligns with your overarching

business strategy and differentiates your offer and market position from your

competitors. The more strategic your approach, the greater the benefits will be. Set Targets:

Research / develop targets, measures and controls and report regularly.

Resource Appropriately: If you have a sustainability strategy, allocate good people, assign clear

responsibilities, clarify priorities, coordinate/simplify the multiple initiatives ,and share/replicate successes.

Build Capacity: If you dont have a sustainability strategy, educate managers and seek out best

practice (including results), pilot various approaches and demonstrate results,audit key areas to identify improvement opportunities, prepare a strategy toprioritise and coordinate the overall approach.

Design and execute an implementation plan

Develop objectives and communicate objectives (communications)

Review organisational structure to provide for new processes andsystems (human resources)


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g p psystems (human resources)

Create committees for specific development areas, and ensure it is part ofjob descriptions. Reward systems should also be developed.(management)

Business planning must be modified to reflect new priorities

Management information systems must be enhanced to reflect newinformation requirements (information technology)

Marketing activities require enhanced market research efforts, whichinfluence the way products are designed, produced, packaged, marketedand promoted (marketing & sales)

Production processes and operating procedures must be assessedagainst regulations, industry practices or new standards (production)

Regulatory requirements must be identified (corporate affairs) Managers responsible for procurement must reassess (buyers) their

choice of suppliers, to ensure sustainable and responsible objectives arebeing met right throughout the supply chain

Financial planning should consider capital requirements for processchanges and the effect of new mechanisms (finance)

It involves the whole organisation!

Implementation Groups Define governance structures and

management systemsThe Board + Committees


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The Board + Committees Board structure, accountability, remuneration Board composition

Stakeholder management Identify stakeholders Engaging stakeholders Identifying stakeholder requirements Responding to stakeholders concerns

Reputation Management Identify and assess issues influencing

reputation Conduct Corporate Reputation Audit Evaluate shareholder and stakeholder

activism issues Risk Management

Identifying, evaluation, managing and

monitoring material risks pertaining tosustainability Implementing governance and risk

management plan Reporting on material risks and progress on

measures

www.volkswagen.com

Process


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Sensitising becoming aware of the issues

Discovering becoming aware through experimentalism small

projects and concrete projects Embedding linking structure and strategy with systems

Routinising linking CR to the companys core competencies

Develop a supportive corporate culture


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Re-training may be required

Exposure to new stakeholder

groups may be required

The importance of change and

the impact of change needs to

be explained to all levels withinthe organisation

The lead must come from

senior executives and theboard

Develop measures and standards of

performance


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performance Industry charters, BEE scorecards are

already public measurement tools, others

will have to be developed

Other compliance issues both global andlocal reporting initiatives need to be studied

to ensure relevance and appropriateness of

reports

Industry specific sustainability initiatives

need to be evaluated: Clothing Industry (Ethical Clothing)

Retail Industry (Fairtrade)

Mining Industry (Kimberly Process)

Petrochemicals & Manufacturing Industry

(Kyoto Agreement)

Liquor Industry (Dublin Principles)

Embedded Sustainability For CR and sustainability to

become part of the business,company leadership must Take ownership of the

consequences of corporatebehaviour and the


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company's inter-connectedness in society

Understand the broadsocial and environmentalrisks, challenges,opportunities

Understand the possibleprogression andconsequences for the

company of economic,environmental and socialimpacts

Drive appropriateresponses as an integral

part of the core businessstrategy and long-termvalue

Embed CR into corporatevalue systems

Developing a strategy Benchmark locally


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y

Benchmark globally

Benchmark against industry

Benchmark against

competitors

Benchmark outside the

industry

www.cadbury.com

Effective Sustainability Management

Be sure to get approval and buy-in from the executive Appoint a champion to drive the process


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Appoint a champion to drive the process Engage senior management and make them understand the rational for

the companys sustainability agenda Make sustainability issues relevant for the management team in the

context of their business operations Ensure that they are involved in co-creating the companies sustainability

policies, criteria and measures Fine-tune, with management a population of sustainability measurement

indicators that are appropriate and relevant for the business Agree on targets against which to be measured in relation to each

sustainability indicator Embed the process in the organisations management system in a rigorous

and structured way Measure, monitor and provide feedback on a regular basis

This is going to cost money

Indicators of performance Realistic levels of


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Realistic levels of

expenditure (how much?)

Expenditure within the

definition of CR & CS Continuity of expenditure

Staff participation

Partnerships

Stakeholder participation Application of non-cash

resources

Reporting on outcomes

Reporting on businessbenefits

www.dfic.co.uk


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Stakeholders

Customers

MediaOwners


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Consumers

Shareholders/Investors

Financiers

LocalAuthorities

ProvincialGovernment

National

GovernmentFutureGenerations

Environment

Lobby Groups

Society

LocalCommunities

Suppliers

Employees

Corporation

Stakeholder

Engagement andManagement

Identify all stakeholders


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Identify all stakeholders

Find out what are the

imperatives

Define the key drivers

(needs and expectations)

Enter into dialogue

Understand the challenges,

obstacles and conflicts

Develop indicators of

performance

*www.stakeholdermap.com

Coca Cola

Stakeholder Engagement Methodology


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g g gy

*www.cocacola.co.uk

Key Challenge1. Failure to identify and engage with stakeholders is likely to result in sustainabilityreports that are not suitable and, more damaging, that lead to poor performance by (a)damaging customer satisfaction and perceptions, (b) adversely affecting employee

motivation and morale, (c) damaging relationships in the supply chain, and (d) possiblycompromising an organization's reputation with the wider community.


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compromising an organization s reputation with the wider community.

2. Balancing stakeholder expectations in a way that does not compromise the long-termsustainability of the organization.

Stakeholder engagement should inform

future business strategies It assists with priority


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It assists with priority

determination

Confirms material risks

Set sustainable development

policies and objectives

Developed by internal

stakeholders in response toexternal stakeholder

expectations

Responses to stakeholder

issues through policies andstrategies must be clear,

concise and measurable

determine level of aggregation

www.gsk.com


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Determining Risks, Impacts,Targets

Materiality

Determine Risks


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Materiality, Impact & Risk


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www.kovet.hu

Materiality (1)


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www.segro.com


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Materiality (3)


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www.intel.com

Materiality (4)


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www.omron.com

Risk Profiles (5)


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www.gtnews.com

AIG Risk Profiling (6)


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www.aig.com

Working with indicators (1)MarketplaceComplaints about late payments of billsAverage time to pay bills to suppliers

Proportion of suppliers and partners screened for human rightscompliance

Proportion of suppliers and partners meeting expectedstandards on human rights

MarketplaceCustomer complaints about products and servicesAdvertising complaints upheld

Upheld cases of anti-competitive behaviourCustomer satisfaction levelsProvision for customers with special needsEnvironment

Specific - BasicCore - Basic


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standards on human rights

Perception of the company's performance on human rights byits customers

Proportion of companys managers meeting the companys

standards on human rights within their area of operationPerception of the companys performance on human rights byits employeesEnvironmentUse of recycled materialPercentage of waste recycledWorkplacePay and conditions compared against local equivalent averages

Workforce profile compared to community profile for travel towork area for gender, race, disability and age

Perception of the company's performance on human rights byits employeesCommunity

Perception of the company's performance on human rights bythe local community

EnvironmentOverall energy consumptionWater usageSolid waste produced by weight

Upheld cases of prosecution for environmental offencesCO2/greenhouse gas emissionsOther emissions (eg Ozone, Radiation, SOX, NOX etc.)Net CO2/greenhouse gas measures and offsetting effectWorkplaceWorkforce profile by GenderWorkforce profile by RaceWorkforce profile by Disability

Workforce profile by AgeStaff absenteeism

Number of legal non-compliances on health and safety andequal opportunities legislationNumber of staff grievancesUpheld cases of corrupt or unprofessional behaviourNumber of recordable incidents (fatal and non-fatal)including

sub-contractorsStaff turnoverValue of training and development provided to staffPerception measures of the company by its employeesExistence of confidential grievance procedures for workersCommunityCash value of company support as % of pre-tax profitIndividual value of staff time, gifts in kind and management

costs

Working with indicators (2)

SpecificCore


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MarketplaceCustomer loyalty measuresRecognising and catering for diversity inadvertising and product labelling

CommunityProject progress and achievement measuresLeverage of other resources

MarketplaceSocial impact, cost or benefits, of the companyscore products and services

Environment

Environmental impact over the supply chainEnvironmental impact, costs or benefits ofcompanies core products and services

WorkplaceImpact evaluations of the effects of downsizing,restructuring etc.

Community

Impact evaluations carried out on communityprogrammesPerception measures of the company as a goodneighbour

pAdvancedAdvanced


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Fast Track Learning


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Corporate Responsibility Mistakes Lacking vision

It is not about where are we now and what might we do about CR.

It is about where do we want to be in 10 years time

Then its about what and how do we need to change to bring about our vision for the


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Then it s about what and how do we need to change to bring about our vision for thenext ten years

Oblivious to the scale of required change

The magnitude of change, the required new creative and innovative thinking is notabout selectively modifying existing business practices

It is about new, more responsible and smarter ways to create shareholder value andwealth

Sub strategic

It is not a staff function at a sub-strategic level with little connection to the strategy of thebusiness, its core competencies and capabilities or management know-how

It requires an understanding of the significance of the range of issues that contribute toCR and the ways that it may affect business. This means to address the possibility ofchanging systems in the core of the business, changing incentive systems,changing the focus of decision-making, and management systems in the core of

the business while implementing CR projects in specific business units

CR Mistakes (contd) Unsophisticated view of CR

Many companies do not separate the two roles of CR protecting the assets of the firmand providing a basis for the creation of new value

Inability to hear outside voices


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Inability to hear outside voices

CR demands new views from a range of stakeholders. With no clear distinction betweenvalue protection and value creation, it is not easy to engage stakeholders in appropriate

ways, to ask them appropriate questions and to listen, understand and adhere to theirsuggestions

Sticking with old managerial competencies

Few have recognised that the competencies required in the past may not meet the

needs of the future. I.e. stakeholder engagement, product development, environmental

management, risk management are new management skills development areas

One worldview approach

Many CR programs, focus only or a companys home country specific compliancerequirements. This does not do justice to the real difference between CR agendas acrosscountries, or specific communities and stakeholders. Excessive uniformity is an almost

universal mistake in CR.

CR Mistakes (contd) Uneven approach

Making substantial commitment and achieving good CR performance insome divisions, or business areas, while other parts of the companymight view it as irresponsible. E.g. many companies have made carbon-neutrality pledges without tackling other big CR issues such as child labour orunsafe working conditions.


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In doing so they often create the impression that their CR are driven by imageconsiderations rather than a deep-seated conviction that requires CR as a

core business asset. Non-participative management Many CR programs have been formulated and implemented through top-

down directives, not matched by the requirements to make CR a part ofcompany culture and procedures.

Best practice requires companies to manage CR through a network of

change champions but this is rarely practiced Failure to see CR as innovation

The failure to see that CR is best practiced on a continuous innovationprocess that links CR to a companys business model. Many companiesare seeking to be more innovative for competitive reasons, yet few regard

their CR programs as directed to value protection or value creation or asinnovation in its own right.


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Working with actual reportsand strategies

Practical Session


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Best Practice

Awards and Recognition

Accountability Rating

Top 10 2006 Top 10 2007BHP Billiton


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BHP Billiton

Anglo Platinum Anglo American

Nedbank Group

Sasol

SAB Miller

Anglogold Ashanti

Santam

Barloworld Kumba Resources

BHP Billiton

Sasol

Lonmin

Anglo American

Nedbank Group

Anglo Platinum Gold Fields

Barloworld

Anglogold Ashanti Santam

Accountability Rating Assessed according to

Strategy, Governance, Performance Management,


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gy, , g ,Stakeholder Involvement, Public Disclosure,

Assurance

Key Trends

Materials sector mining, chemical, metals and

glass, oil and gas best performing sector Followed by Financial sector (38%) and industrial

sector (35%), retail/FMCG sector (29%)

SA Accountability Ranking

36.4AECI3254.9Anglogold Ashanti7

37.0Firstrand Group3161.6SAB Miller6

37.4Unitrans3066.0Sasol5

38.1Investec Plc2967.4Nedbank Group4

38.1Investec Ltd2869.4Anglo American3

38.8Richemont Securities2770.1Anglo Platinum2

39.7Edgars Consolidated Stores2678.6BHP Billiton1


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13.0Remgro5040.0Sanlam25

14.5Naspers4941.1Metropolitan Holdings24

16.9The Spar Group4841.7Gold Fields23

18.9Mittal Steel4741.7Bidvest Group22

19.0Steinhoff International Holdings4643.0MTN Group21

19.3New Clicks Holdings4545.1Woolworths Holdings20

20.0Murray & Roberts Holdings4445.7Standard Bank Group19

22.5Shoprite Holdings4346.6Pick & Pay Stores18

22.6Dimension Data Holdings4246.6Absa Group17

24.0Super Group4148.0Telkom SA16

24.1Datatec4048.4Impala Platinum Holdings15

24.9Nampak3948.9Sappi14

25.2Old Mutual3849.1Aveng13

30.1JD Group3751.3Massmart Holdings12

31.7Imperial Holdings3652.9Harmony Gold11

32.8Network Healthcare Holdings3553.8Kumba Resources10

34.8Liberty Group3454.2Barlowworld9

35.5Allied Electronics Group3354.7Santam8

SRI Index High environmental impact classification

2006: Anglo American PLC, AngloAmerica Platinum Corp Ltd, ImpalaPlatinum Holdings Ltd, OceanaGroup Ltd, Sasol Ltd, Tongaat-HulettGroup Ltd

2007: Anglo American, AnglogoldAshanti, Aveng, Gold Fields, GroupFi Hi h ld St l Ill S


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Five, Highveld Steel, Illovo Sugar,Merafe Resources, Sasol, Tongaat

Hulett Medium environmental impact

classification 2006: Edgars, Medi Clinic, Telkom,

Woolworths

2007: Massmart Low environmental impact classification

2006: Liberty, Nedbank, Remgro 2007: Absa Group, African Bank

Investments Set criteria to measure environmental,

social, corporate governance andbroader economic practices - Alsoconsider policies, management,performance and reporting

Others - SA Results

SA Companies on the Dow JonesSustainability World Index


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African Bank Investments Ltd, Investec Ltd,

Nedbank Group Ltd, Bidvest Group Ltd

Good Governance Awards

Focuses on remuneration practices, corporateethics and integrity, risk management, BBBEEand transformation

Overall Winner - 2006 FirstRand Group 2007 FirstRand Group

SA Sustainability Reporting Rewards

Ernst & Young Excellence in Sustainability Reporting 2006: Sasol (1st), Anglo American Platinum (2nd), Bidvest (3rd),

BHP Billiton(4th), Kumba Resources(5th)


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BHP Billiton(4 ), Kumba Resources(5 )

2007: Sasol, Barloworld, Massmart Holdings, Nedbank Group,

Absa Group, Telkom, Kumba Resources, Anglogold Ashanti,Edgars Consolidated Stores and Aspen Pharmacare Holdings.

Focuses on sustainability context, report content and boundary,triple bottom line impacts, report quality and effectiveness,assurance and credibility

ACCA South Africa Awards Anglo Platinum, Spier (1st runner up), African Bank & Sasol

(jointly 2nd runner up), Woolworths (best improved report),Massmart (best newcomer)

Focus on completeness, credibility, communication


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Reporting

Reporting Process


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Why report? In response to pressure from advocates and communities related to specific

events or business practices It is an effort to strengthen the reputation and market competitiveness, Maintain the licence to operate

Demonstrate a serious commitment to a code of conduct to whichorganisations subscribe


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organisations subscribe Maintain and strengthen trust with community and advocacy groups,

investors, consumers and other stakeholders Link disparate functions such as finance, marketing, R&D and operations into

a more strategic vision and operation, opening new conversations that pave theway for discovery and innovation

Identify trouble spots and unanticipated opportunities, in supply chains,among customers, communities or regulators, or in the areas of reputation andbrand management

Access and measure the value of sustainability practices in theorganisation in relations to the organisations overall business strategy andcompetitiveness

Reduce share price volatility and uncertainty occasioned by surprise,

untimely or incomplete disclosure

From Annual Report to SustainabilityReport

Annual financial reports now need to include environmental, social and economic

impact and not just focus on publishing of historical financial results.

Description of commitment to economic, environmental and social goals Performance against benchmarks targets and industry norms


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Performance against benchmarks, targets and industry norms Major challenges for the organisation in integrating financial performance with

environmental and social performance Percentage of board directors that are independent, non-executive directors

Profitability

Increase/decrease in retained earnings at the end of the period, used tocalculate return on average capital employed

Total recycling and reuse of water Organisations indirect economic impacts

Taxes and subsidies Subsidies received broken down by country or region Total sum of all taxes of all types paid broken down by country or region

Reporting (contd) Corporate social responsibility policies

Externally developed voluntary charters orprinciples to which the organisationsubscribesPolicies and/or systems for managing


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Policies and/or systems for managingupstream and downstream impacts

Approaches to stakeholder consultation andfrequency

Awards received relevant to social, ethicaland environmental performance

Restrictions Descriptions of policies including child

labour Descriptions of policies, guidelines and

procedures to address the needs ofindigenous peoples

Amount of monies paid to political partiesand institutions whose prime function is tofund political parties and candidates

Reporting (contd)

Director liability and future expectations Explanation of whether and how the

precautionary approach or principle isaddressed by the organisation


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addressed by the organisation

Status of certification pertaining toeconomic, environmental and socialmanagement systems

Explanation of the nature and effect ofrestatements of information provided in

earlier reports and the reasons for suchrestatements

Description of policy for preservingcustomer health and safety during the use

of products and services

Reporting (contd)

Key performance indicators for balanced scorecards

Percentage of materials used that are wastes Direct energy use segmented by primary source Standard injury lost days, absentee rates and fatalities

Preferred supplier standardsP t f t t th t id i d ith d t


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Percentage of contracts that were paid in accordance with agreed terms Descriptions of policies, guidelines, corporate structure and procedures to deal with all

aspects of human rights Performance of suppliers relative to environmental requirements

Tradable permits Greenhouse gas emissions

Use and emissions of ozone-depleting substances

Significant environmental impacts of transportation used for logistical purposes Voluntary regulations and standards

Location and size of land owned, leased or managed in biodiversity rich habitats Changes to natural habitats resulting from activities and operations and percentage of

habitat protected or restored

Voluntary code compliance, product labels or awards with respect to social/and or

environmental responsibility that an organisation is qualified to use or has received

Linkages between sustainability and financialreporting

Sustainability reporting complements financial reports with

forward looking information that can enhance the report and theunderstanding of key value drivers such as human capitalformation, corporate governance, management ofenvironmental risks and liabilities and the ability to innovate


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Microsoft Power Point Csr 2009 091104110512 Phpapp02

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