Environmental Reporting &

Sustainability Group 14th Mar 2001Mallen Baker

Impact on Society Director

“Business has never operated against a background in which there has been such immense potential.

Equally, however, it has never faced such rapid change, such intense competition, such uncertainty - and so many risks.”

Source: Chatham House Forum- Uncharted Waters 1998

Growing expectations on business

Business

CustomersGovernment

NGOs

Society

Employees

Shareholders

• Increased pressure from stakeholders ranked second most important issue facing business by 750 CEOs surveyed“Most Respected Companies Survey” Financial Times / PwC Dec 7th 1999

Business Case focus

ImproveBuild

Protect

Competitivenessthe WorkforceReputation

Business Competitiveness

• Strengthened relationships with customers and suppliers

• The ability to recruit and retain key staff

• Efficient use of natural resources and energy and reduction of costs

Customers - Millennium Poll on CSR

• 2 in 3 want companies to contribute to broader societal goals

• 1 in 2 paying attention to social behavior of companies

• 1 in 5 rewarded / punished corporate behaviour past year

Building the people

• Maximising the contribution and effectiveness of all your staff (managing diversity)

• Becoming an employer of choice, able to attract the best staff

• Providing continual development within a framework of respect for work-life balance to retain the staff you have

Employees - attracting and holding on to the talent

• A study conducted by McKinsey, “The War for Talent”, published in 1998 found that only 3% of companies responding believed they had enough talent to reach their objectives in five years.

• MORI research throughout the 1990s consistently found that the vast majority of people believed that a company that supports the community is a good company to work for.

• Bain & Co found that those companies that have the highest employee retention also have the greatest customer retention.

Protecting Reputation

• Managing the key stakeholder relationships that could affect the business

• Minimising risk of exposure to environmental accidents or human rights violations

• Developing a positive relationship with local communities

Reputation may be your biggest asset

• Intangibles can represent a large part of your market capitalisation (96% for Coca Cola, 83% for IBM)

• Last year, a poll of 25,000 citizens across 23 countries on 6 continents showed that perceptions of companies around the world are shaped more by corporate citizenship (56%) than either product quality (40%) or business fundamentals (34%).

Impact on Society

• Marketplace

• Environment

• Workplace

• Community

The Issues

MarketplaceImpact on society of core productsand servicesIssues around buying and sellingSupply chainVulnerable customersCause related marketing

WorkplaceWorkforce diversityWork-life balancehealth and safetyhuman rightstraining and lifelong learning

EnvironmentEmissions to air, land and waterUse of natural resourcesEnvironmental riskTransport impactsImpact on environment of core products and services

CommunityImpact on local operations onthe communityBusiness investment in community

What does the report cover?

• The best business case arguments

• Consistent view of what constitutes quality of management

• Recommended impact indicators - an essential core

Impact Indicators

MarketplaceCustomer satisfaction levelsAdvertising complaints upheldUpheld cases of anti-competitive

behaviourAverage time to pay billsSocial impact of goods / services

WorkplaceWorkforce profileStaff absenteeism / grievancesPay and conditions compared against local equivalent averagesPerception measures

EnvironmentEnergy consumptionWater usageSolid waste producedGreenhouse gas emissionsImpact of goods / services

CommunityCash value of community supportValue of staff time and in kind

supportLeverage of other resourcesPerception measures - company as good neighbour

Community Impact

• Cash value of community investment as a percentage of pre-tax profits

• Value of individual time and in-kind support

• Value of combined time and in-kind support• Project progress against milestone targets• Leverage of other resources

• Perception measures of company as good neighbour

• Assessment of community investment outcomes

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2

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What happens next?

• The Business Impact Review Group• The corporate social responsibility index• The CSR review• A new relationship between member

companies and Business in the Community.• Developing an approach for a strategic

approach to social responsibility • BQF benchmarking

Places to go

http://www.bitc.org.uk

http://www.business-impact.org

For a copy of this presentation go to

http://www.mbkr.demon.co.uk/csr/