Corporate Social Responsibility

1. Corporate Social Responsibility Principles Metrics & Standards Reporting

2. Contents • Principles • Sustainability, Responsibility and Accountability • UN, EU, WEF • Standardization of Corporate Social Responsibility • Global Compact Sustainability Leadership Blueprint; GRI; ISO 26000 • National codes • Reporting

3. Sustainability – Responsibility and Accountability A core set of recognized principles and guidelines : • For companies seeking a formal approach to CSR, especially large companies, authoritative guidance is provided by internationally recognized principles and guidelines, in particular : • The recently updated OECD Guidelines for Multinational Enterprises, • the Ten principles of the United Nations Global Compact, • the ISO 26000 Guidance Standard on Social Responsibility, • the ILO Tri-partite Declaration of Principles Concerning Multinational Enterprises and Social Policy, and • the United Nations Guiding Principles on Business and Human Rights.

4. 4 definitions of Accountability

5. Sustainability – Responsibility and Accountability “CSR is about commitment to strive for the best economic development for the community …” UK: Community involvement DK: Inclusive Labour Market The Issues Approach The Stakeholder Approach Principles-based Approach “CSR is about business giving back to society” US: Philanthropy

6. Sustainability – Responsibility – Accountability Public perception of what CSR means is shifting from the vaguely defined good corporate citizenship to visible leadership in specific issues such as workplace health and wellness, sustainable development , human security and human rights. Ultimately a corporation’s first responsibility has to be to itself. The challenge is for the corporation to understand its place, and the responsibilities that go with it, in the broader scheme of things.

7. Sustainability – Responsibility and Accountability Why a renewed E.U. Strategy ? “A strategic approach to CSR is increasingly important to the competitiveness of enterprises. It can bring benefits in terms of risk management, cost savings, access to capital, customer relationships, human resource management, and innovation capacity. Through CSR, enterprises can significantly contribute to the European Union’s treaty objectives of sustainable development and a highly competitive social market economy. CSR underpins the objectives of the Europe 2020 strategy for smart, sustainable and inclusive growth, including the 75% employment target” A renewed E.U. strategy for Corporate Social Responsibility

8. Sustainability – Responsibility and Accountability The key factors for a renewed E.U. CSR strategy • The need for a balanced multi stakeholder approach that takes account of the views of enterprises, non-business stakeholders and Member States. • The need to better clarify what is expected of enterprises, and to make the EU definition of CSR consistent with new and updated international principles and guidelines. • The need to promote market reward for responsible business conduct, including through investment policy and public procurement. • The need to consider self- and co-regulation schemes, which are an important means by which enterprises seek to meet their social responsibility.

9. Sustainability – Responsibility and Accountability The key factors for a renewed E.U. CSR strategy • The need to address company transparency on social and environmental issues from the point of view of all stakeholders, including enterprises themselves. • The need to give greater attention to human rights, which have become a • significantly more prominent aspect of CSR. •  The need to acknowledge the role that complementary regulation plays in creating an environment more conducive to enterprises voluntarily meeting their social responsibility.

10. “Redefining the future of growth : The new Sustainability Champions”

11. “Redefining the future of growth : The new Sustainability Champions” • Proactively turn constraints into opportunities through innovation To innovate effectively “New Sustainability Champions” :  Address lack of resources  Educate customers  Provide customers with appropriate financing

12. “Redefining the future of growth : The new Sustainability Champions” • Embed Sustainability To embed sustainability in their culture, “New Sustainability Champions” :  Define a bold sustainability vision  Integrate sustainability into operations  Engage workforce in sustainability

13. “Redefining the future of growth : The new Sustainability Champions” Shaping Business Environment To shape business environment, “New Sustainability Champions”:  Influence policies and standards  Partner to achieve mutual goals  Build awareness of the importance of sustainability STAKEHOLDER ENGAGEMENT

14. Leadership for sustainability

15. Leadership for sustainability

16. The “ladder” of engagement Step 1 Information: Providing information / gathering information Step 2 Consultation: Asking opinions Step 3 Involvement: Seeks more than just opinions; participants may be part of the solution Step 4 Partnership: Direct involvement in decision-making and action Step 5 Devolved power: Giving away decision making, resources and control

17. United Nations Global CompactOverview • The United Nations Global Compact is a voluntary international corporate citizenship network initiated to advance responsible corporate citizenship and universal social and environmental principles in the areas of human rights, labour standards, the environment and anti-corruption. • It is the world’s largest corporate citizenship and sustainability initiative with more than 8000 signatories and stakeholders from over 135 countries The Global Compact is… …a voluntary initiative to promote and advance responsible business. …a universal value framework to help business get organized. …a global network of like-minded businesses and other stakeholders. …a platform for innovation. The Global Compact is not… …a regulatory body. …a substitute for regulation at the national or international level. …a PR exercise.

18. UN Global Compact Management Model Step 1 – Commit COMMIT Company leadership publicly signals its commitment to stakeholders. Specifically, leadership commits to supporting the Global Compact and making the ten principles part of the strategy, culture and day-to-day operations of the company, with oversight provided by transparent governance structures. Take Action • Leadership Commits to: • Global Compact and its ten principles • Engaging in partnerships to advance broad UN Goals • Annual submission of the Communication on Progress (COP) 18

19. UN Global Compact Management Model Step 1 – Commit • Getting Started • CEO and Board (if applicable) sign the UN Global Compact Letter of Commitment • Leadership commits to adhering to the ten principles, submitting a Communication on Progress (COP) annually, and taking action in broader UN goals • Leadership plans to put resources aside to carry out commitment • Leadership Practices • Leadership team commits to adopting and promoting sustainability within its industry and communities • Company promotes its commitment by communicating it to shareholders and other stakeholders 19

20. UN Global Compact Management Model Step 2 – Assess ASSESS The company assesses its risks and opportunities on an ongoing basis—in financial and extra-financial terms—as well as the impact of its operations on the issue areas, in order to develop and refine its goals, strategies, and policies. Take Action • Assess Risks • Forecast Opportunities • Calculate Impact 20

21. UN Global Compact Management Model Step 2 – Assess • Getting Started • Company makes sure it understands the ten principles and reviews appropriate issue area information and tools • Considers owned operations at a high level to see if it is in alignment with the principles • Prioritizes risks and opportunities to address • Leadership Practices • Prioritizes risks, proactively identifies opportunities, and calculates impacts at both the enterprise and product level regularly across issue areas • Forecasts future operating context scenarios, based on review of data and trends • Engages stakeholders in assessments and shares best practices with business partners 21

22. UN Global Compact Management Model Step 2 – Assess Stakeholder Engagement Government Employees CustomersSuppliers Investors Civil society Community Reflection • Who are your most important stakeholders? 22

23. UN Global Compact Management Model Step 3 – Define DEFINE Based on its assessment of risks, opportunities and impacts, the company develops and refines goals and metrics specific to its operating context to meet its goals, and creates a roadmap to carry out its program. Take Action • Establish Clear Goals • Develop Strategy • Refine Policies 23

24. UN Global Compact Management Model Step 3 – Define • Getting Started • Starts by prioritizing high-level and achievable goals to address top risks, impacts, and opportunities identified in the Assess step • Sets high-level strategy and action plan to achieve goals • Leadership Practices • Integrates sustainability into corporate strategy planning process • Develops strategy in consultation with stakeholders • Develops roadmap of actions and investments to improve sustainability performance • Encourages or requires suppliers and business partners to operate in ways consistent with the ten principles 24

25. UN Global Compact Management Model Step 4 – Implement IMPLEMENT The company establishes and ensures ongoing adjustments to core processes, engages and educates employees, builds capacity and resources, and works with supply chain partners to address and implement its strategy. Take Action • Adjust Core Processes • Engage and Empower Employees • Leverage Information Technology (IT) • Suppliers and Business Partners 25

26. UN Global Compact Management Model Step 4 – Implement • Getting Started • Adjusts relevant processes and educates employees on the actions and behaviors that will help the company achieve its goals • Leadership Practices • Adjusts core processes to align with Global Compact principles and drive value for shareholders, stakeholders, and society • Equips and empowers subsidiaries, value chain partners to carry out its sustainability strategies • “Sustainability mindset,” is adopted throughout the organization 26

27. UN Global Compact Management Model Step 5 – Measure MEASURE The organization adjusts its performance management systems to capture, analyze, and monitor the performance metrics established in the Define step. Progress is monitored against goals and adjustments are made to improve performance. Take Action • Measure and Monitor – Develop ability to measure, monitor, and interpret impacts and progress towards goals (e.g., calculate performance of each operational facility) 27

28. UN Global Compact Management Model Step 5 – Measure • Getting Started • Starts to measure and monitor corporate sustainability metrics set up in the Assess and Define steps • Collects all available data, noting source of data and data it does not yet have; data will be refined and expanded over time to extract insights that will enable the company to continuously improve • Leadership Practices • Implements system to measure and report performance towards achieving goals • Makes performance broadly visible, regularly uses performance data to guide decisions and investments, and seek to translate sustainability impact to financial impact • Works within industry and government to develop industry standards for impact metrics 28

29. UN Global Compact Management Model Step 6 – Communicate COMMUNICATE The company communicates its progress and forward-looking strategies for implementing its commitment by developing a Communication on Progress (COP), and engages with stakeholders to identify ways to continuously improve performance. Take Action • Communication on Progress • Stakeholder Dialogue for Continuous Improvement 29

30. UN Global Compact Management Model Step 6 – Communicate • Getting Started • Documents progress toward completing action plan in its COP • Reconfirms commitment to the Global Compact • Leadership Practices • Documents sustainability goals, strategies, and performance into annual financial report and supporting documentation • Receives Board approval and third party verification of COP • Engages stakeholders to capture feedback to improve sustainability performance and promote alignment with current and emerging regulations and trends 30

31. Communication on Progress Requirements • The COP is a tool for transparency and disclosure on the internal management steps companies have taken to implement the principles. • It is required every year from every business participant. • The COP has no prescribed format so long it is broadly communicated with stakeholders and includes: • A statement of continued support by the chief executive • A description of practical actions addressing all four issue areas • A measurement of outcomes. • COP should be fully integrated in the participant’s main medium of stakeholder • Communications and should be written in the language of the stakeholders.

32. Communication on Progress Differentiation In order to promote continued progress, the Global Compact is categorizing companies at different levels of performance and disclosure

33. Sustainability Reporting trends and challenges

34. Sustainability Reporting trends and challenges (1) Directory (2013). U.S. Green Building Council. Retrieved on June 23, 2013 from http://www.usgbc.org/projects(2) Sustainability Disclosure Database (2013). Global Reporting Initiative. Retrieved on June 23, 2013 from http://database.globalreporting.org/

35. Why reporting ? LEVEL OF INTEREST ABOUT WHAT COMPANIES DO TO BEHAVE RESPONSIBLY TOWARDS SOCIETY

36. Why Reporting ? • Corruptionis considered by European citizens to be the main negative effect of companies on society, followed by reducing the number of employees and environmental pollution • Excessive influence on government policy is considered to be the main negative effect of companies on society by US citizens • Citizens in both EU and the US are the only ones who are more likely to think that small and medium companies are making efforts to behave responsibly towards society compared to large companies • Finance and banking, and mining, oil and gas companies are the least likely to be seen as making efforts to behave in a responsible way towards society Flash Eurobarometer 363 HOW COMPANIES INFLUENCE OUR SOCIETY: CITIZENS’ VIEW, October-November 2012

37. Who cares? Why Reporting ? • The UN-supported Principles for Responsible Investment (PRI) is a portfolio investor coalition of more than 1,200 signatories who collectively manage $34 trillion in assets. • Growth in PRI signatories and Assets under Management

38. Outlook: UNGC and GRI COP, Differentiation and GRI

39. Reporting principles • Materiality • Stakeholder inclusiveness • Sustainability context • Responsiveness • Completeness • Quality • Comparability • Accuracy • Timeliness • Clarity • Reliability