Abstract
In 2010, Wood, renowned in corporate social responsibility (CSR) discourse for her definition of corporate social performance (CSP), called for a “ceasefire” to further research analyzing the relationship between CSP and financial performance (FP), (Wood, International Journal of Management Reviews 12:50–84, 2010: 76). Her frustration arose after concluding that CSP literature had developed away from the foundation of CSR theory and its central contribution towards stakeholders and society. Indeed there have been more than three decades of CSP-FP literature (Bird et al., Journal of Business Ethics 76:189–206, 2007; Garcia-Castro et al., Journal of Business Ethics 92:107–126, 2010; Van der Laan et al., Journal of Business Ethics 79:299–310, 2008), and still a conclusive relationship is yet to be defined (Barnett, Academy of Management Review 32:794–816, 2007; Murray and Vogel 1997). By shifting focus back onto stakeholders, this essay aims to explore the non-financial value of CSP. Through qualitative research, this essay empirically analyses feedback from senior CSR managers who have published CSR reports following one of the most renowned CSR reporting frameworks in the industry; the Global Reporting Initiative (GRI) framework. Multiple case-studies were conducted with semi-structured interviews to explore whether the current GRI framework; the ‘third generation’ GRI guidelines, allows its adherents to measure the non-financial value of its social and environmental outcomes; otherwise known as CSP. Not one of the respondents felt that GRI allowed them to measure the non-financial value of their CSP. If internal stakeholders are unable to measure this value with assistance from the framework, the report will also fail to expose the real value of CSP on society, and external stakeholders will remain blind, ill-informed and unable to interpret CSP and appreciate its worth for themselves. This is worrying because the inability to identify the true worth of CSP limits accountability capabilities, and will allow organisations, if they so wish, to continue to pay lip service to CSR, with CSR operations that have no non-financial value.
Inspector: We don’t live alone,
We are members of one body.
We are responsible for each other
J. B. Priestley (1947: 56)
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Notes
- 1.
Discretionary responsibilities were later referred to as philanthropic responsibilities; they are entirely voluntary and go beyond legal responsibilities.
- 2.
Allouche and Laroche (2005), Artiach et al. (2010), Berman et al. (1999), Coffey and Fryxell (1991), Cochran and Wood (1984), Griffin (2000), Hillman and Keim (2001), Mahoney and Roberts (2007), Maron (2006), McGuire et al. (1988), Moskowitz (1972), Orlitzky et al. (2003), Schnietz and Epstein (2005), Waddock and Graves (1997), Wahba (2008); Wu (2006), Yang et al. (2010).
- 3.
Abbott and Monsen’ (1979), Alexander and Buchholz (1982, 1978), Arlow and Gannon’s (1982), Aupperle et al. (1985), Bowman and Haire (1975), Griffin and Mahon (1997a, b), Leipziger (2001), McWilliams and Siegel (2000), Shane and Spicer (1983), Sturdivant and Ginter (1977), Surroca and Tribo (2008), Surroca et al. (2010: 463), Ullmann (1985), Vance (1975).
- 4.
“Values-based management is defined as managing through shared visions, values and goals” (Ernst & Young, KPMG, PricewaterhouseCoopers, House of Mandag Morgen 1999: 115)
- 5.
- 6.
For G4 developments see http://www.globalreporting.org/CurrentPriorities/G4Developments/, accessed August, 2011.
- 7.
Sincerity is defined in their study as the proximity of a firm true to their values and mission statement, as opposed to how ethical a firm is.
- 8.
Social and Environmentaloutcomes is used instead of the term ‘CSP’, in order to ensure understanding, since CSP is not widely applied outside of academic circles.
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Appendices
Appendices
1.1 Appendix 1: Performance Indicators Reproduced from the GRI Content Index
Available at http://www.globalreporting.org/ReportServices/GRIContentIndex/ -accessed August 28th, 2011.
Standard disclosures: performance indicators | |
|---|---|
Economic | |
Performance Indicator | Description |
Economic performance | |
EC1 | Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. |
EC2 | Financial implications and other risks and opportunities for the organization’s activities due to climate change. |
EC3 | Coverage of the organization’s defined benefit plan obligations. |
EC4 | Significant financial assistance received from government. |
Market presence | |
EC5 | Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation. |
EC6 | Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation. |
EC7 | Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation. |
Indirect economic impacts | |
EC8 | Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement. |
EC9 | Understanding and describing significant indirect economic impacts, including the extent of impacts. |
Environmental | |
Performance Indicator | Description |
Materials | |
EN1 | Materials used by weight or volume. |
EN2 | Percentage of materials used that are recycled input materials. |
Energy | |
EN3 | Direct energy consumption by primary energy source. |
EN4 | Indirect energy consumption by primary source. |
EN5 | Energy saved due to conservation and efficiency improvements. |
EN6 | Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives. |
EN7 | Initiatives to reduce indirect energy consumption and reductions achieved. |
Water | |
EN8 | Total water withdrawal by source. |
EN9 | Water sources significantly affected by withdrawal of water. |
EN10 | Percentage and total volume of water recycled and reused. |
Biodiversity | |
EN11 | Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. |
EN12 | Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. |
EN13 | Habitats protected or restored. |
EN14 | Strategies, current actions, and future plans for managing impacts on biodiversity. |
EN15 | Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. |
Emissions, effluents and waste | |
EN16 | Total direct and indirect greenhouse gas emissions by weight. |
EN17 | Other relevant indirect greenhouse gas emissions by weight. |
EN18 | Initiatives to reduce greenhouse gas emissions and reductions achieved. |
EN19 | Emissions of ozone-depleting substances by weight. |
EN20 | NOx, SOx, and other significant air emissions by type and weight. |
EN21 | Total water discharge by quality and destination. |
EN22 | Total weight of waste by type and disposal method. |
EN23 | Total number and volume of significant spills. |
EN24 | Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. |
EN25 | Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff. |
Products and services | |
EN26 | Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. |
EN27 | Percentage of products sold and their packaging materials that are reclaimed by category. |
Compliance | |
EN28 | Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. |
Transport | |
EN29 | Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce. |
Overall | |
EN30 | Total environmental protection expenditures and investments by type. |
Social: Labor Practices and Decent Work | |
Performance Indicator | Description |
Employment | |
LA1 | Total workforce by employment type, employment contract, and region. |
LA2 | Total number and rate of employee turnover by age group, gender, and region. |
LA3 | Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations. |
Labor/management relations | |
LA4 | Percentage of employees covered by collective bargaining agreements. |
LA5 | Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements. |
Occupational health and safety | |
LA6 | Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs. |
LA7 | Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region. |
LA8 | Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases. |
LA9 | Health and safety topics covered in formal agreements with trade unions. |
Training and education | |
LA10 | Average hours of training per year per employee by employee category. |
LA11 | Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. |
LA12 | Percentage of employees receiving regular performance and career development reviews. |
Diversity and equal opportunity | |
LA13 | Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity. |
LA14 | Ratio of basic salary of men to women by employee category. |
Social: Human Rights | |
Performance Indicator | Description |
Investment and procurement practices | |
HR1 | Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening. |
HR2 | Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken. |
HR3 | Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained. |
Non-discrimination | |
HR4 | Total number of incidents of discrimination and actions taken. |
Freedom of association and collective bargaining | |
HR5 | Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights. |
Child labor | |
HR6 | Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor. |
Forced and compulsory labor | |
HR7 | Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor. |
Security practices | |
HR8 | Percentage of security personnel trained in the organization’spolicies or procedures concerning aspects of human rights that are relevant to operations. |
Indigenous rights | |
HR9 | Total number of incidents of violations involving rights of indigenous people and actions taken. |
Social: Society | |
Performance Indicator | Description |
Community | |
SO1 | Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting. |
Corruption | |
SO2 | Percentage and total number of business units analyzed for risks related to corruption. |
SO3 | Percentage of employees trained in organization’s anti-corruption policies and procedures. |
SO4 | Actions taken in response to incidents of corruption. |
Public policy | |
SO5 | Public policy positions and participation in public policy development and lobbying. |
SO6 | Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. |
Anti-competitive behavior | |
SO7 | Total number of legal actions for anti-competitive behavior, anti-trust, and monopoly practices and their outcomes. |
Compliance | |
SO8 | Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations. |
Social:ProductResponsibility | |
Performance Indicator | Description |
Customerhealth and safety | |
PR1 | Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures. |
PR2 | Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes. |
Product and service labelling | |
PR3 | Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements. |
PR4 | Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes. |
PR5 | Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. |
Marketing communications | |
PR6 | Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship. |
PR7 | Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes. |
Customer privacy | |
PR8 | Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. |
Compliance | |
PR9 | Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services. |
1.2 Appendix 2: Organisations Who Have Published GRI Reports in 2011 and Who Were Approached for Interviews
Available at http://www.globalreporting.org/ReportServices/GRIReportsList/ accessed July 13th, 2011.
Amnesty International UK |
AngloAmerican |
ArcelorMittal |
Aviva |
Barclays |
British American Tobacco (Holdings) |
BG Group |
British Land |
BT |
Crest Nicholson |
HSBC |
Land Securities |
Marks and Spencer Group |
Premier Farnell |
Segro |
Shanks group |
Thomas Cook |
TullowOil |
University of Edinburgh |
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Thomas, EA. (2019). How Useful Is the Global Reporting Initiative (GRI) Reporting Framework to Identify the Non-financial Value of Corporate Social Performance (CSP)?. In: Capaldi, N., Idowu, S.O., Schmidpeter, R., Brueckner, M. (eds) Responsible Business in Uncertain Times and for a Sustainable Future. CSR, Sustainability, Ethics & Governance. Springer, Cham. https://doi.org/10.1007/978-3-030-11217-2_3
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