Unit 2.2 Key concepts and definitions in NFIR

1. Unit 2.2 Key conceptsanddefinitions in NFIR Unit 2.2 Key concepts and definitions in NFIR

2. Target and Methodology • Target: to introduce the key concepts related to NFRI to • Help to understand the scope, contents and objectives of an NFIR • To address the global analysis of an NFIR • Methodology: • Practical exercise ü • Introduction to concepts • Discussion and final aproach about concepts Unit 2.2 Key concepts and definitions in NFIR

3. CSR and NFIR CSR definition of the European Commission: „Corporate Social Responsibility is the responsibility of enterprises for their impact on society. […] Companies can become socially responsible by integrating social, environmental, ethical, consumer and human rights concerns into their business strategy and operation“ • CSR is a corporate management approach that applies sustainability values in the companies' activities • Non-financialinformationreporting (NFIR) istheprocessofgatheringanddisclosingdata on thecompanies‘ social, environmental and human rightsimpactsoftheiractivities Key concepts and definitions in NFIR

4. Key concept: Impacts of company Key concept to: Analyze the scope and contents of NFIR. Understand most of the key concepts related to NFIR. Social responsibility of companies and their obligation to inform is determined by their impact on society. So NFIR must show to: How a company impacts in society. How a company manages its impacts. Unit 2.2 Key concepts and definitions in NFIR

5. Key concept: Impacts of company Key questions on impacts and management: Which impacts? How have impacts been determined? What are the most important? Who does the company listen to? Whom company inform to? How does company deal with its impacts? What information about performance and goals? How far company assume its impact/responsibility? Unit 2.2 Key concepts and definitions in NFIR

6. Blueprint of key concepts Unit 2.2 Key concepts and definitions in NFIR

7. Materiality “The quality of being relevant or significant”… …so materiality is what company consider important to face its impact on stakeholders and society ...and the impact of stakeholders and society in company Relevance analysis Methodology Request stakeholders Relevance of impacts (impact evaluation, LCA,…) Balance stakeholders-society . Where is the impact produced (organization, suppliers, clients, consumers? Description of the impacts and why they are relevant. Indicate what the impact consists of, where it is produced and what consequences or effects this impact has or can have (positive, negative or both). Unit 2.2 Key concepts and definitions in NFIR

8. Stakeholders “A person or group with an interest or concern in something (any decision or activity of the company)”…who can impact in company. The identification of the “material” stakeholders determines the materiality. Not all stakeholders are material, so companies have to prioritize them. But its important to check the balance among “material stakeholders” and “social stakeholder” in order to assess if “social materiality and impact” is well addressed and reflected in NFIR. List of stakeholders “ Material” or priority stakeholders Explicitly identified. Need and expectative detention and inclusion in NFIR Communication, participation, feedback,…of stakeholders (how does company deal with stakeholders) Union and Workers representatives as stakeholders Unit 2.2 Key concepts and definitions in NFIR

9. Key performance indicator (KPI) “KPI is a measurable value that demonstrates how effectively a company is achieving key “business” objectives (responsibility, impacts and management).Used to quantify the degree of compliance with the objectives”. Directive 2014/95/EU: “A company should disclosure KPIs that are necessary to understand its development, performance, position and impact of its activity” Linked to impacts of companies Linked to objectives Show the performance of company and evolution. Comparability Quantitative but also qualitative Unit 2.2 Key concepts and definitions in NFIR

10. Value chain “A value chain is the full range of activities – including design, production, marketing and distribution – businesses conduct to bring a product or service from conception to delivery. For companies that produce goods, the value chain starts with the raw materials used to make their products, and consists of everything added before the product is sold to consumers”. To ponder how far the company assumes its responsibility Analyst must also be able to evaluate the depth of the measures and procedures adopted by the company for the social evaluation of its suppliers. Impacts from value chain: value chain analysis? Information on supply chain in NFIR. Due diligence: as early as possible in the development of a new relationship with a supplier. Control over the suppliers chain (subcontractions/outsourcing) Unit 2.2 Key concepts and definitions in NFIR

11. The European Commission support for the production of this publication does not constitute an endorsement of the contents, which reflects the views only of the authors, and the Commission cannot be held responsible for any use, which may be made of the information contained therein. Unit 2.2 Key concepts and definitions in NFIR