Now Reading
Measuring Corporate Social Responsibility in Australia
Measuring Corporate Social Responsibility in Australia
Published 02-20-04
Submitted by Business in the Community
Dr Simon Longstaff, Executive Director of St James Ethics Centre, says the Index is the next stage in the evolution of measuring corporate social responsibility in Australia.
"Profits are no longer the primary measure of business success - businesses today are also expected to fulfil a range of legal, ethical and social responsibilities in addition to being competitive," Dr Longstaff says.
"With CSR now a key performance indicator underpinning management practices of the world's leading companies, it is important that Australia has an accurate methodology for tracking performance in this area."
A study undertaken by the NSW State Chamber of Commerce in 2001 found that a major disincentive for Australian businesses in engaging in CSR is the complexity surrounding the measurement of returns from investment in CSR activities.
The pedigree of this new index and the structures designed to support its introduction will ensure the delivery of an index that is credible - both in terms of underlying methodology and the integrity of the process.
Dr Longstaff says the Corporate Responsibility Index will meet the highest expectations of business and the community and will encourage all businesses to engage in CSR by offering a measurement tool of proven reliability. While not being involved directly in the task of rating companies, St James Ethics Centre will act as the 'trustee' overseeing the integrity of the process. Company performance on the Index will be determined by business practices demonstrating corporate responsibility.
With 111 in-depth questions covering the areas of Corporate Strategy, Integration, Management (comprising Community, Environment, Marketplace and Workplace) and Performance and Impact, the Index will highlight the strengths and weaknesses of a company's strategy and implementation of CSR practices, whilst benchmarking it against its peers, sector and economic group. Australian companies will also be able to compare their performance against similar companies in the United Kingdom and further abroad.
The Index will act as a business management tool by providing a focus on corporate responsibility across all areas of company activity and a practical framework for improving and communicating performance. While reinforcing good work already being done by a business, the Index will also identify areas for improvement and whether a business is conducting corporate responsibility activity in a systematic and integrated way.
Australian companies and leading NGOs will now have an opportunity to contribute alongside other global partners in shaping the development of the Index as it extends into the international marketplace.
Australia's top 100 companies and Business Council of Australia members have been invited to participate and should register by 18 February, with results to be published in mid-2004. Participation in the Corporate Responsibility Index in Australia is free of charge.
The History of the Corporate Responsibility Index
The Corporate Responsibility Index was designed by over 80 UK businesses with Business in the continually improving their impact on society.
Business in the Community's purpose is to inspire, challenge, engage and support business in continually improving its positive impact on society.
Business in the Community is the largest and longest-established independent business-led UK charity with over 20 years experience. Member companies employ over 15.7 million people across 200 countries. In the UK, members employ over 1 in 5 of the private sector workforce.
The idea of an index was first raised in Business in the Community's 2000 Winning with Integrity report. The Business in the Community 2001 survey of UK businesses, Investing in the Future, then identified a need for reliable, standardised information that would enable a company's performance to be compared with that of its peers. Additional market research concluded that "there is no authoritative, voluntary, CSR initiative that is business-led and engages with companies from all sectors, publicly ranking their CSR activity, whilst consolidating information demands made on companies".
This, coupled with the success of the Business in the Environment Index, established for 8 years in the UK, indicated a new, wider index would help meet this need. The UK experience of the Corporate Responsibility Index has been highly successful, with 122 businesses participating in its first year in 2002, including 93 companies from the FTSE 350 and 53 from the FTSE 100. 139 companies participated in the second year, an 85%retention rate.
The Sunday Times, the UK media partner, will publish the results of the current index in a supplement entitled "Companies that Count" on 14 March 2004.
BITC is providing guidance and support to the application of the Index in Australia, with the intention of working with partners to establish the CR Index as a global benchmark for company practice. The project catalyst for the Corporate Responsibility Index in Australia was Pilotlight Australia.
Ms Julia Cleverdon CVO CBE CEO of Business in the Community officially launched the Corporate Responsibility Index in Australia
Took place: Thursday 19 February 2004 at 6.00pm
Government House, Sydney
For interview requests
Jackie Randles on 02 9299 9566 or 0438 429 589
or Vicki Arnold at Business in the Community on 020 7566 8767 or 07793 257200
How the Corporate Responsibility Index works:
The Corporate Responsibility Index is a self-assessment process using an on-line survey which will go live on 19 February 2004 and which participating businesses access through individual and secure usernames and passwords. Participation is free of charge.
Confidential feedback will be provided individually to participating companies, with results to be published by The Sydney Morning Herald and The Age in mid-2004.
Ernst & Young are generously donating time and expertise to the validation process and will examine all surveys submitted for completeness and consistency. Ernst & Young will also meet with selected participants to check their understanding and interpretation of the questions, seeking further substantiation when necessary. Results will be scored using the on-line database and Ernst & Young will conduct tests to confirm the proper operation of the online system in terms of generating results.
