CSR Strategy and transparency voluntary and mandatory aspects · capacity for charity/philanthropic activities; Managing their stakeholder relationships (especially ... global survey

CSR Strategy and

transparency –

voluntary and

mandatory aspects

Geta Diaconu

Director, Sustainability Advisory and CSR

8 September 2015

© 2015 KPMG Advisory SRL, a Romanian limited liability company and a member firm of the KPMG network of independent member firms

affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.1

Agenda

Sustainability vs. CSR

The meaning of CSR

Why a CSR strategy?

Main steps and aspects for the

development of a CSR strategy

Case study – KPMG in Romania

The status of reporting

Mandatory reporting requirements



Sustainability vs. CSR

Shared value

“The concept of shared value

can be defined as policies and

operating practices that

enhance the competitiveness

of a company while

simultaneously advancing the

economic and social conditions

in the communities in which it

operates …” – Michael E.

Porter and Mark R. Kramer,

The Big Idea: Creating Shared

Value, Harvard Business

Review

Corporate Social

Responsibility (CSR)

"Corporate Social

Responsibility is the continuing

commitment by business to

behave ethically and contribute

to economic development while

improving the quality of life of

the workforce and their families

as well as of the local

community and society at

large.“ – The World Business

Council for Sustainable

Development (WBCSD)

Sustainable Development

(SD)

“Development that meets the

needs of the present without

compromising the ability of

future generations to meet their

own needs.” – The Brundtland

Report (1987)

1987 1995 2008 2011

Social innovation

“A novel solution to a social

problem that is more effective,

efficient, sustainable, or just

than existing solutions and for

which the value created

accrues primarily to society as

a whole rather than private

individuals.” – Phills Jr.,

Deiglmeier e Miller, Center for

Social Innovation, Stanford

Graduate School of Business

Sustainability, CR and CSR mean different things to different people

Some opinions are built

around the idea that

sustainability is a component

of CSR and that the two are

not mutually exclusive.

CSR is one of the 3 P’s

(People, Planet, Profit) –

another reference to

sustainability

Two faces of the same coin:

“CSR defines the social responsibilities of a

corporation which, if implemented, will lead

to the corporation being sustained”

(Collins and Porras, ‘Building your company's

vision’, Harvard Business Review,)

http://www.wbcsd.org/

http://www.wbcsd.org/



The meaning of CSR

SOCIETY

ENVIRONMENT Business

Human rights

Community involvement &

development

Labour

practices

GOVERNANCE

Consumer issues

Fair operating practices

Environmental

performance

“CSR is organizations obligation to

consider the interest of their

customers, employees,

shareholders, communities, and

the ecology and to consider the

social and environmental

consequences of their business

activity.” as defined by Stanford University’s Graduate

School of business

ISO defines social responsibility as

"responsibility of an organization for

the impacts of its decisions and

activities on society and the

environment through transparent and

ethical behavior…”

Corporate Social Responsibility at a glance



Why a CSR Strategy?

By taking a strategic approach, companies determine what activities they have the

resources to develop to being socially responsible and to get solutions for:

Balancing the creation of economic value with that of societal

value;

Deciding the organization’s

capacity for charity/philanthropic

activities;

Managing their stakeholder relationships (especially

those with competing values);

Identifying and responding to threats and

opportunities facing their stakeholders;

Developing sustainable

business practices.



Main steps for developing CSR Strategy

Phase 3 Define

Develop your mission,

vision, values, and

core competences.

Phase 4.1 Plan

Identify and set up the main

CSR directions, taking into

account the previous

analyze on

partners/stakeholder; do not

focus exclusively on

charity/philanthropy!

Phase 4.2 Plan

Build a realistic CSR plan,

you can actually implement.

Focus on the link to your

business strategy.

Phase 5 Implement & assess

Execute your strategy and

maintain sustainable focus.

Consistently assess and

communicate the results.

Phase 1 Analyze

Conduct a SWOT

analysis to determine

your strategic position

and resources.

Phase 2 Scale your impact

Identify your partners/stakeholders and

prioritize them according to their influence

to your business as well as according to

your business effect/influence on them.



Core characteristics of CSR

Shareholders

Employees

Professional

organizations/

associations

Clients

Strategic partners

Competitors

Suppliers/Contractors

Media

Community

Authorities

…

Education

institutions

Beyond philanthropy VoluntarilySocial and economic

alignment

Multiple stakeholder

orientation

Managing

externalitiesPractice and value



Elements for a successful CSR strategy

■ Understanding your company’s core competence, industry nuances and

stakeholders expectations;

■ Consider people as your messengers – engage employees as they are the

biggest spokespersons (ask input, share victories, etc.);

■ Support and involvement of the management creates a CSR cultural shift in the

company;

■ Identify reliable partners that complement your CSR approach (e.g.

collaboration with NGO’s, local authorities, etc.);

■ Consider your people important for your business and show them the “human”

side of your company;

■ Set measurable and preferably quantifiable goals and measure them regularly –

identify needed improvements;

■ Keeping CSR for the long run (if started keep it up).



CSR at KPMG in Romania

Why?

Because we believe in our values:

■ We lead by example

■ We work together

■ We respect the individual

■ We seek the facts and provide insight

■ We are open and honest in our communication

■ We are committed t o our communities

■ Above all, we act with integrity

What?

Integrate CSR into the core business

How?

HOW

KPMG’s new vision of CSR

Community■ Volunteering

■ Pro Bono

■ External support

■ Engaging employees

Environment

■ Environmental policy

■ Carbon footprint

reporting

■ Carbon footprint

reduction

■ Engaging Employees

Workplace

■ Being an Employer of

Choice

■ Wellbeing

■ Engaging our

Employees

■ Valuing Diversity

Marketplace

■ CSR in Proposals

■ Joint Community

Programs

■ CSR Awards

■ Sustainable

Procurement Program




KPMG Survey of CR Reporting

■ The first KPMG Survey of CR Reporting was

published in 1993

■ It is widely acknowledged as the most extensive

global survey on CR/sustainability reporting trends

■ The 2013 Survey covers the world’s largest 250

companies (the G250) and top 100 companies

(N100) by revenue across 41 countries (4,100

companies) - 15 industry sectors

■ The 1st part of the survey focuses on Quantity:

Who is reporting by country/region/sector

Format, assurance, integration, guidelines

■ The 2013 edition also explores, for the first time, the

quality of G250 CR reports ( 2nd Part of the Survey):

7 criteria for best practice reporting

Interviews with top scoring G250 companies (14

companies interviewed)




Worldwide

1218

2428

41

53

6471

35

45

64

83

95 93

0

20

40

60

80

100

1993 1996 1999 2002 2005 2008 2011 2013

N100

G250

CR reporting standard business practice worldwide

■ To report or not to report? The debate is over

■ Boards need to get behind integrated reporting

■ Assurance is no longer just an option

■ Risk and opportunity needs to be linked to value

■ Supply chain reporting needs more focus

93% of G250 issue CR reports

Of those:

■ Most include CR information in

annual financial reports.

■ 79% identify material CR issues

■ 87% identify social and

environmental “megaforces” that

affect the business.

■ 81% identify business risks from

megaforces

■ 87% identify commercial

opportunities.

■ Innovation is the most commonly

cited opportunity (72%)

■ Only 10% link CR performance to

remuneration

■ Only 5% of G250 CR reports discuss

financial value at stake




Romania (N100)

2013 2014*2011 Year

Nu

mb

er

of

rep

ort

ing

co

mp

an

ies

69

53

■ 33 local companies (out of 69) report

information on their sustainability

performance, either as a separate CR report

or as a section of the annual report. 36

companies (part of multinationals) submit CSR

information for the Group report.

■ The reporting principles of the GRI Guidelines

(the most used non-financial reporting

guidelines) are taken into consideration by

only 3 out of the 33 companies above

mentioned. None of these reports is

assured by a third party.

■ The results of the Survey also point to a

difference between multinational companies

operating in Romania, which are more active

in CR reporting and 100% Romanian capital

companies, which are less interested in

voluntary disclosure of non-financial

information.

N100

CR/sustainability report

Annual reports

Interactive online CR reports

Website information

Sources of information

available for the year 2012

Results

68

* Preliminary results

12©2015 KPMG Advisory SRL, a Romanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International

Cooperative("KPMG International"), a Swiss entity. All rights reserved. PDC no.8229.

Mandatory reporting requirements

Application

■ European public interest entities

■ Large (turnover > 40mln Eur, balance

sheet > 20mln Eur)

■ Average # of employees > 500

■ Subsidiaries exempted if group reports

Requirements

■ In management report (countries may

accept separate reporting)

■ Comply or explain

■ National, EU-based or international

reporting frameworks

Assurance

■ Not required, Member States may require

this

■ Statutory auditor has to assess that

reporting requirement has been fulfilled

Effective date

■ 2017

In October 2014 the Directive on disclosure of non-financial information was published.

Specifically, more than 6,000 companies across the EU and approximately 600 in Romania fall

under this Directive.

Thank you

Geta Diaconu

Director, Sustainability Advisory

Tel: + 40 372 377 776 Fax: + 40 372 377 700 [email protected]

© 2015 KPMG Advicory SRL, a Romanian limited

liability company and a member firm of the KPMG

network of independent member firms affiliated with

KPMG International Cooperative (“KPMG

International”), a Swiss entity. All rights reserved.

The KPMG name, logo and “cutting through

complexity” are registered trademarks or trademarks

of KPMG International Cooperative (“KPMG

International”).

Documents

CSR Strategy and transparency voluntary and mandatory aspects · capacity for charity/philanthropic activities; Managing their stakeholder relationships (especially ... global survey