Presentation focusing on assisting corporate social investment practitioners on publishing information on community investment and development in sustainability reports.
2. What is sustainability?
• The term sustainable development means different things
to different people:
– But in essence - it is concerned with meeting the needs of
people today without compromising the ability of future
generations to meet their own needs:
• Sustainable Development therefore involves:
– A broad view of economic, social and environmental risks,
challenges, and opportunities
– A long term future perspective concerned with the interests
and rights of current and future generations
– An inclusive approach to action that recognises the need of all
people to be involved in the decisions that affect and impact
their lives
3. Key Drivers of Sustainability
• Competition for resources
– Population growth, finite resources (water,
energy, forests, ecosystems)
• Climate change
– Fossil-fuel based economy lead to a
concentration of greenhouse gases that is
driving extreme weather patterns
• Regulation
– Reporting compliance, industry sector
compliance and resource (water/carbon)
regulation and taxes have a greater impact
on licence to operate conditions.
Companies now need to comply, apply or
explain why they don’t
• Economic globalisation
– Companies operating/sourcing in multiple
countries with wide disparities of
environmental and social standards
• Connectivity and communications
– Reputation can be built and destroyed in
seconds and is increasingly disaggregated
across multiple social networks –
considering all stakeholders requirements
and expectations not only shareholders is
becoming more important
4. Driving value • Companies that adopt
sustainable business
from strategies and practices drive
sustainability value by:
– Growing revenue through new
products and services
– Reducing costs through
efficiency gains
– Managing operational and
regulatory risk more effectively
– Building intangible assets such
as their brand, reputation and
collaborative networks
5. The Sustainability Pathway
Cost Saving Resilience
Efficiency New Future
Revenue Protection New Revenue Streams
Compliance
Reputation Connectivity
Risk Stakeholders
Management
Licence to Operate
Revenue Generation
Freedom to Operate
Source: Next Generation Consultants – www.nextgeneration.co.za
6. Integrating Sustainability
• Go Deep
– Integrate and embed sustainability
into the company strategy and
standard operating practices
• Go Wide
– Engage and leverage the value chain
• Go Long
– Short-term focus – long-term
objectives
• Go Local
– Shared responsibility that needs local
action and commitment
Model: UN Global Compact
6
7. Sustainability Reporting
• Sustainability Reporting is the
practice of measuring, disclosing
and being accountable to
internal and external
stakeholders for organisational
performance against specific
environmental, social and
governance goals and metrics
that support sustainable
development, and for how
sustainability is incorporated into
the company’s overall strategy
and policies.
7
8.
9.
10. HAND OUT: GRI 3.1 SUMMARY
PRACTICAL: EVALUATING REPORTS
15. GRI Indicators for CSI
• EC1
– Direct economic value generated and distributed,
including revenues, operating costs, employee
compensation, donations and other community
investments, retained earnings, payments to capital
providers and government
• EC6
– Policy, practices, and proportion of spending on locally
based suppliers at significant locations of operation. –
Enterprise development
• EC8
– Development and impact of infrastructure
investments and services provided primarily for public
benefit through commercial, in-kind or pro bono
engagement
• SO1
– Percentage of operations with implemented local
community engagement, impact assessments, and
development programs
• SO9
– Operations with significant potential or actual
negative impacts on local communities
• SO10
– Prevention and mitigation measures implemented in
operations with significant potential or actual negative
impacts on local communities
16. Disclosure on Management Approach
(DMA) (1)
• A statement from the most senior executive :
– This person will have operational responsibility for Society aspects explaining how operational
responsibility is divided at senior management level.
– Also explain the division of responsibility for impacts on local communities in the highest governance
level.
– Inform if and how work councils, occupational health and safety committees and/or other
independent employee representation bodies are empowered to deal with and have dealt with
impacts on local communities.
• Provide a contextual introduction to the social/community section: Inclusive of:
– Training and awareness – in relation to community /society aspects
– Monitoring and follow up – procedures related to monitoring and corrective and preventative actions,
including those related to the supply chain
– List of certifications for performance or certification systems or other approaches to auditing/verifying
the reporting organisation or its supply chain
– Procedures related to assessing the risks and managing impacts on local communities.
– This should also include information on how data was collected, and the process for selecting the
local community members (individual or group) from whom data was collected
• Provide organisational goals pertaining to communities
• Use specific organisational indicators as needed in conjunction with GRI indicators to
demonstrate the results of performance against goals
• Address the extend to which organisational goals contribute to or interfere with the collective
rights of communities
17. Disclosure on Management Approach
(DMA) (2)
• Provide or describe the organisational policy that define the
organisation’s commitment related to communities, with
specific reference to:
– References/statements regarding the collective rights of
communities
– Risk assessment for impact on local communities, through the
whole life cycle
– Mitigation of impacts on communities
– Engagement with both men and women in local communities
– Application of policy within or throughout the organisation
• Additional contextual information:
– Key successes and shortcomings
– Major organisational risks and challenges
– Major changes in the reporting period to systems or structures to
improve performance
– Key strategies and procedures for implementing policies or
achieving goals
18. Indicators in Detail (1)
EC1 – Voluntary donations and investment of funds in the broader community where the
Community target beneficiaries are external to the company.
Investments These include contributions to charities, NGOs and research institutes (unrelated to
company R&D), funds to support community infrastructure and direct costs of
social programs.
The amount included should account for actual expenditures in the reporting
period, not commitments.
For infrastructure investments, the calculation of the total investment should include
costs of goods and labour in addition to capital costs. For supporting of on-going
facilities or programs (e.g. an organisation funds the daily operations of a public
facility), the reported investment should include operating costs.
This excludes legal and commercial activities or where the purpose of the investment
is exclusively commercial.
Donations to political parties are included but are also addressed separately in more
detail in SO6.
Any infrastructure investment that is driven primarily by core business needs (e.g.
building a road to a mine or factory) or to facilitate the business operations of the
organisation should not be included. The calculation of investment may include
infrastructure built outside the main business activities of the reporting organisation,
such as a school or hospital for employees and their families.
19. Indicators continue (2)
EC6 • Report geographic definition of ‘local’
Policy, practices and proportion • Percentages should be based on invoices
of spending on locally based • Report the policy for preferring locally based
suppliers at significant locations suppliers
• State the percentage of the procurement
budget used that is spend on suppliers
• Indicate the factors that influence supplier
selection
EC8 • Explain the extent of development (size, cost,
Development and impact of duration) of investment and support and the
infrastructure investments and current or expected impacts (positive or
services provided primarily for negative) on communities and local economies.
public benefit through Indicate whether these investments and
commercial, in-kind, or pro bono services are commercial, in-kind or pro bono
engagement • Report whether the organisation conducted a
community needs assessment to determine
infrastructure and other services needed, if so,
explain the results of the assessment
20. Indicators Continue (3)
SO1 • Identify the total number of operations
Percentage of operations • Identify organisation wide local community engagement,
with implemented local impact assessments and development programs
• Report the percentage of operations with implemented
community engagement,
community engagement, impact assessments and development
impact assessments and programs including, but not limited to:
development programs • Social impact assessments, including gender impact
assessments, based on participatory processes
Document sources may include: • Environmental impact assessments and on-going
monitoring
Baseline studies - health, • Public disclosure of results of environmental and social
economic, environment, impact assessments
cultural, etc. • Local community development programs based on local
Social impact assessments, community needs
gender impact assessments, • Stakeholder engagement plans based on stakeholder
human rights impact mapping
assessments, environmental • Broad based local community consultation committees
impact assessments, social and and processes that include vulnerable groups
labour plans, resettlement • Work councils, occupational health and safety
action plans, community committees and other employee representation bodies to
development plans, grievance deal with impacts
and complaints mechanisms, • Formal local community grievance processes
public/ community consultation
plans
21. Indicators Continue (5)
SO9 All data collected with GRI indicators – eg. EC9, EN1, EN3, EN8, EN12, EN14, LA8, HR6-9,
Operations PR1-2 - Actual performance data, internal investment plans and associated risk
with assessments - Including:
• Vulnerability and risk to local communities from potential impacts due to:
significant • Degree of physical or economic isolation
potential • Level of socio economic development including gender equality
or actual • State of socio economic infrastructure
• Proximity to operations
negative • Level of social organisations
impacts on • Strength and quality of governance of local and national institutions around local
local communities
communi- • Identify exposure of community to operations due to higher than average use
ties of/impact on shared resources through:
• Use of hazardous substances that impact on the environment and human health in
general
• Volume and type of pollution released
• Status as major employer in local community
• Land conversion and resettlement
• Natural resources competition
• Identify significant potential and actual negative economic, social, cultural and
environmental impacts and their rights, considering:
• Intensity and severity of impact
• Likely duration of impact
• Reversibility of impact
• Scale of impact
22. Indicators Continue (6)
SO10 Use the information on potential and
Prevention and mitigation measures actual negative impacts reported in SO9.
implemented in operations with Report whether –
significant potential or actual negative • Prevention and mitigation measures
impacts on local communities were implemented
• Prevention and mitigation measures
were implemented in order to:
• Remediate non-compliance with
laws or regulations
• Maintain compliance with laws
or regulations
• Achieve a standard beyond legal
compliances
• Prevention and mitigation
objectives were achieved or not
23. What this means for practitioners
• There is no place to hide
– You have to measure impact
• You cannot just report on
quantitative impacts
– The numbers and budgets
• You have to be transparent
– Include positive and negative
impact, intended and unintended
impact, across the triple bottom
line
• The more research and
information you have the higher
the impact and therefore your ability to
report increases
• Remember
– In future this will be assured – so
you cannot wait – learning and
testing needs to happen now so
that you are ready for the auditors
24. Contact
• Reana Rossouw
• Next Generation Consultants
• Specialists in Corporate Sustainability and Integrated Sustainability as well Socio Economic
Investment and Development
• Tel: (011) 258 8616
• E-mail: rrossouw@nextgeneration.co.za
• Web: www.nextgeneration.co.za
• PLEASE NOTE: THIS PRESENTATION IS PART OF A LARGER BODY OF RESEARCH!
• THIS INFORMATION IS COPYWRITED AND THE INTELLECTUAL PROPERTY OF
NEXT GENERATION CONSULTANTS