CSR Ratings CORPORATE SOCIAL RESPONSIBILITY RATINGS Is business
CSR Ratings CORPORATE SOCIAL RESPONSIBILITY RATINGS Is business able to demonstrate its contribution to progress of societies ? How to identify and assess companies social responsibility performances? Second OECD World Forum "Statistics, Knowledge and Policy" www. vigeo. com Istambul 28 juin 2007 Nicole Notat CEO - Vigeo Fouad Benseddik Head of Methodologies
Evaluation of the CSR level of commitment 2. Corporate social responsibility looks at a company’s level of commitment on the integration of stakeholders expectations. REPUTATION HUMAN CAPITAL Managing impacts on stakeholders is a means to mitigate risks (reputation, efficiency, legal, …), and ultimately is a source of opportunities and continuous improvement for the company. OPERATIONS LEGAL Level of commitment MARKET TRANSPARENCY Risks Performance OECD – Istambul 29/06/07
Un référentiel d’objectifs opposables 3. 6 evaluation fields / 37 criteria UN, ILO, OECD, (Conventions, Recommendations, Statements, Guidelines) Critérium management performances evaluation and rating For States For Companies Actions steps for management CSR principles and goals for universel respect and promotion • • Human Rights Human Resources Environment Business Behaviour • Community Involvment • Corporate Governance OECD – Istambul 29/06/07
The methodology: Criteria of evaluation 4. Human Resources HRS 1. 1 Promotion of labor relations HRS 1. 2 Encouraging employee participation HRS 2. 3 Responsible management of restructurings HRS 2. 4 Career management and promotion of employability HRS 3. 1 Quality of remuneration systems HRS 3. 2 Improvement of health and safety conditions HRS 3. 3 Respect and management of working hours OECD – Istambul – 29/06/07
5. Sector-specific criteria weighting system Sensitivity of the sector’s stakeholders to the CSR issue under review in the criterion Nature of impact on stakeholders 3 X Fundamental / vital rights 2 Essential rights or interests 1 Legitimate interests and expectations Exposure of stakeholders to these impacts 3 X 2 X High exposure Average exposure Risks run by companies failing to manage these impacts 3 = REPUTATION Weight given to criterion 3 HUMAN CAPITAL X 2 OPERATIONS LEGAL = 2 MARKET 1 Low exposure 1 TRANSPARENCY 1 OECD – Istambul – 29/06/07
The analysis process: scale of scoring 6. Each of these 8 L-I-R questions is scored on a scale from 0 to 100. Scale Points 1 0 2 30 3 65 4 100 Level of company’s CSR engagement and management of associated risks Little evidence of commitment -> Poor to very poor guarantee of risk management Commitment initiated -> Poor to moderate guarantee of risk management Consolidated commitment -> Reasonable guarantee of risk management Advanced commitment -> Social responsibility objectives actively promoted OECD – Istambul – 29/06/07
A management reference model focused on continuous improvement 7. Visibility – Types of polices in place ? LEADERSHIP Content – Content of these policies ? Ownership – Responsibility for these policies ? Means and Resources – Programs and tools in place ? IMPLEMENTATION Scope – Aspects addressed by these tools ? Coverage – Parts of the company covered by these tools ? Indicators – Quantitative data ? RESULTS Controversies – Stakeholder information ? OECD – Istambul – 29/06/07
A progressive management reference model focused on continuous improvement : from visible commitments to material performances 8. Leadership review Relevancy of vision, strategies, and missions Implementation review Implementation efficiency Results review Materiality, acceptability and strength of Results Visibility Content Ownership Process Means Controls/Reporting Indicators Stakeholders opinion Controversies OECD – Istambul – 29/06/07
9. OECD – Istambul – 29/06/07
10. Conclusions Corporate Governance is the unhoped-for baby of globalisation. Regarding international principles and targets in term of regulation results are still modest but they are getting better in every sector. Commitments are not only determined by… National and local factors Sectorial stakes …stakeholders and institutions’ role is also to take into account… Legal authority Trade Unions, NGO, Media, Customers, Financial markets and hedge funds. …moreover, managers with their concrete commitments represent an independent and decisive part of the process. OECD – Istambul – 29/06/07
VIGEO Les Mercuriales - 40 rue Jean Jaurès 93170 Bagnolet - France CORPORATE SOCIAL RESPONSIBILITY RATINGS T: +33 1 49 72 46 00 - F: +33 1 49 72 46 10 www. vigeo. com PARIS BRUSSELS MILAN CASABLANCA Contact information Nicole NOTAT Présidente T: +33. 1. 49. 72. 46. 01 nicole. notat@vigeo. com Fouad BENSEDDIK Directeur des Méthodes et des Relations Institutionnelles T: +33. 1. 49. 72. 46. 33 fouad. benseddik@vigeo. com
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