Placing emphasis on SROI

If your answer is positive, then positively you belong among a vast majority of corporations that wish to plan strategies and suggest solutions, which truly cater for society’s needs, giving thus added value not only to society but also to the corporation themselves. As expected, the year 2013 made Social Return on Investment (SROI) stand out as key measurement tool for responsible companies operating locally or internationally, as it assists to understand, manage and communicate the social value that your work creates in a clear and consistent way with customers, beneficiaries and funders.

With the New Year 2014, quickly approaching and making crystal clear that SROI is here to stay, CSE being its basic scope to keep up with its groundbreaking actions in order to deliver correct and substantial information on Corporate and Social Responsibility issues, conducted with great success a Roundtable posing the next critical and begging question:

‘How can we measure the social effect of CSR strategies?

During the Roundtable emphasis was placed upon the challenges, which corporations confront regarding the investments in CSR actions and programs as well as upon the use of tools and international strategies like SROI, which could form the framework that measures Society coherent value.

Nikos Avlonas, CEO, stated: ‘With the existing economic climate, which is gradually recovering from recession, every contribution through corporate responsibility initiatives is of utmost importance not only for society but also for the survival of each and every corporation. Coherent value measurement of every social action managed with international standards will fundamentally contribute not only to  society, but also to the corporations themselves and Non- Profit Organizations, which will make their benefits more transparent.’

The most valuable component for the round table and CSR as a whole, was the willingness of CSR representatives from companies like Coca- Cola Hellas, Novartis and Mamidoil Jetoil S.A. wishing to showcase their own corporate best practices. Why? Because when you are doing the right thing for the right reason at the right time, you will undoubtedly want to shout it out loud!

Clearly the combination of companies promoting and reinforcing principles of corporate social responsibility, and the eagerness to discover how SROI is measured in order to enhance or alter their strategies, represents a massive step towards standardizing sustainable development.

Since CSE establishment in 2005, it has supported and realized groundbreaking actions regarding corporate responsibility and also planned strategies that reinforce innovation and responsible business both on a national and international level as well. For this very reason CSE new Advanced Certified Sustainability (CSR) Practitioner Training (IEMA Approved), to be launched for the very 1st time in Dubai 2014, March 10 & 11, includes a module on SROI, the latest CSR trends in the region and best practices.

Keen to join? Find out more here or simply contact Elisabeth Lincoln – Training & Marketing Coordinator ([email protected])

On the 22-24 of May, CSE attended the Sustainability Leadership event of 2013, the Global Conference on sustainability and Reporting in Amsterdam! At the conference the new global guidelines for Sustainability Reporting, namely GRI G4 were launched followed by 1500 leaders and practitioners discussing key challenges and opportunities in making sustainability practical reality! Being at the G4 launch and having the opportunity to interact with the GRI managers and its interpretation for the new guidelines but also talking with other GRI Training partners from North America, Europe and Middle East we came into the following practical Q&A(s)  :

Positive Changes

Q(1): Why do companies need the G4?

A(1): Last year (2012) the GRI became the leading framework for global reporting for the majority of companies wishing to disclose annually their Sustainability performance. Consequently, a sustainability report should be a powerful stakeholder tool supporting companies to communicate their sustainability achievements visions, policies and achievements based on the structured global framework of GRI Guidelines.

As a result, disclosure based on GRI Reporting Guidelines is becoming a must for most organizations operating globally. Even Bloomberg has included GRI and External Assurance as one of the ESG Risk criteria whilst providing information to investors.  However the time and resources required gathering data and preparing a Sustainability Report is still a complex process for GRI users and many organizations are still pondering over the value they get from this process.

Q(2): Why are application levels replaced by core and comprehensive ‘’ in accordance’’ criteria?

A(2): Current application levels (A, B and C) have been replaced with ‘in accordance’ criteria for core or comprehensive GRI compliance. Frankly? it was time to solve this issue with the A, B, C application level confusion, hence, ‘In accordance’ criteria are more strict and you cannot use the terms partial or no compliance to any of required criteria in the GRI Index for core or comprehensive Sustainability Reporting any more. At the same time companies should disclose their performance in all or some  criteria if they consider them material related to its business.

Q(3): what are the impacts on companies about the change in disclosure on Management Approach (DMA)?

A(3):  G4 requires disclosure on Management Approach (DMA) information in any Category, Aspect or even Indicator level. Hence, companies should spend resources in Stakeholder Materiality Assessment based on the new DMA approach in order to disclose Sustainability data directly related to key impact areas related to its stakeholders. This may bring a reduction and flexibility in the Sustainability Reporting content but also a good understanding for all companies for its material related key impacts and being able to improve their sustainability Strategy

Q(4): is the G4  demanding more  governance and remuneration , Supply Chain and GHG emissions disclosure?

A(4): G4 requires more  disclosure around governance and remuneration, supply chain sustainability ,ethics and integrity, GHG emissions scope 1,2 and 3 . The impact on companies is that GRI’s greater attention on responsibility in all above mentioned issues could be a useful wake-up call for Boards of Directors and Company Executives. Additionally the inclusion of all these topics in the Sustainability Report  will probably  facilitate better sustainability integration top down to reporting companies and may force some to include all the new  ‘’hot sustainability topics’’ in their business  strategy.

Q(5). Is more in depth External Assurance suggested for the G4?

Indeed, the G4 pushes organizations to consider more the importance of external assurance than the G3.1.Although G4 does not require external assurance as its previous version G3.1, it appears that there is more emphasis for detailed external assurance for all criteria covered by GRI. Nonetheless, at the end of the Report in the GRI Index a table should indicate all areas got external assurance by a third party organization.GRI still remains flexible to external assurance, however, it requires more in depth assurance for all companies deciding to do so.

It is important to be mentioned that GRI has not decided yet if they will continue providing a third party assessment check to all guideline users.

Regarding the gaps of GRI guidelines our conclusions suggest that:

1. The G4 seems to still be non user friendly and complex for Sustainability Reporting beginners. Thus, GRI should create a simplified version of the guidelines for those want to move on into Sustainability Reporting

2. G4 does not provide more detailed information or refer to widely used guidelines for external assurance like AA1000 and other guidelines. Therefore, even if the original objectives of G4 were to make it more compatible with other guidelines  there is no specific guidance or reference to other Standards as it should be.

3. G4 terminology is still complex and different professionals may have different interpretation of criteria and approach. We most certainly feel that GRI should provide a Q & A guide for all Sustainability Professionals in order to avoid confusion to its audience

Conclusions

Nonetheless, we would like to emphasize that the G4 is a great opportunity for companies to rethink reporting processes and how to integrate Sustainability within their business Strategy. In the upcoming months you will undoubtedly hear many different interpretations of the G4 guidelines; however, it does seem that the G4 can be a way forward for Sustainability Reporting with new criteria including accountability, supply chain management and ethics in a more flexible manner regarding key impact areas in meeting stakeholder expectations, but it requires more detailed disclosure in all criteria.

If you would like to be one of the first to  learn more about the developments and the practical application of the G4 Framework and its impact to your business , join CSE round table held in Dubai after the Certified Sustainability (CSR) Practitioner Training on the 19-20 of June, or in New York also to be delivered after the Certified Sustainability (CSR) Practitioner Training, 13-14 of June

It is widely known that Corporate Social Responsibility (CSR) is the way that leading companies nowadays do business, not only because it is clearly the right thing to do, but also because it is accompanied with long term benefits. One of the benefits CSR is reputable for is its ability to enchase, if not build, your business’s image and reputation. On this note it is important to emphasis the difference between image and reputation! A business’s reputation is something that is build and developed throughout its establishment, essentially how a company is perceived by its stakeholder. On the other hand a company’s image refers more so to how you want to emerge to your existing and potential customers. More specifically, Bloomberg Business Week states “it’s what you want to convey about yourself, your business, your product, your work ethic, and your professionalism combined with the strategy you’ve developed to reach your target audience”. Consequently, a company’s image is also very important to its success but can be altered in a more flexible manner in comparison to its reputation! Consequently, having and sustaining a good reputation is an absolutely fundamental asset for businesses success, due to the fact that a great part of consumers’ decision making is placed on image and reputation. Consider for instance, the damage done to Nike’s reputation from using child labor in the 90s! So, the lullaby of “sticks and stones might break your bones but words will never hurt me”, does not always apply in the business arena, word of mouth will hurt you!

So how are companies utilizing CSR towards their brand image and reputation? Well, by browsing through how companies are communicating to their stakeholders today, you will quickly find that the triple bottom line of Sustainability is transpired in the way brands are communicating and consequently how they want to be by perceived! An international taste of what is going on can be seen through Coca-Cola wishing to contribute positively towards the obesity issue taking place in the United States, as just last week  Coca-Cola launched its new anti-obesity campaign. The campaign draws attention to their drink choices having low calories and made with natural sweeteners, in order to get young people active and take obesity seriously. Now, this might seem to some a “common sense” fact, but nonetheless the heart of the campaign is dedicated to help minimize obesity, hence society. The Hershey Company on the other hand, well aware of the calories captured in chocolate and knowing there is nothing you can do but indulge, came up with a different way of contributing positively to society, the company stated to source 100 percent certified cocoa for its global chocolate product lines by 2020, and help eliminate child labor in the cocoa regions of West Africa. On a greener note, P&G (Procter & Gamble) launched a campaign last week to inform its vast amount of stakeholders that they are doing their bit for the environment as they continue to give preference to Forest Stewardship Council (FSC) certification, and aims to reach at least 40 per cent of the pulp used in P&G’s tissue-towel products to be FSC-certified. Marks & Spencer’s is also a good example, in 2007 it announced wanting to become the world’s most sustainable major retailer, and since then its business strategy changed to Plan A. So far, their efforts are doing tremendously well, and rank 238 in the Global 500 for 2013.

The above examples are just a small sample of how businesses are communicating their brands today and the image they wish to portray of themselves towards their stakeholders! With Walmart announcing this week that it aims by 2017, to buy 70 percent of the goods it sells in U.S. stores only from suppliers using the Sustainability Index, undoubtedly we will witness an increase in CSR as companies will need to stay in the league with their competitors as well as sustain their corporate image!

Have you intergraded Sustainability into you business strategy yet?