valuecsr
The Role of benchmarking tools
in driving CSR management and performance
A Case Study
Agenda
1. Introduction – Why Benchmarking2. Legal & General3. Benchmarking tool – CR Index4. Benchmarking Results5. Observations & Assumptions6. Recommendations
Introduction – Why Benchmarking
Introduction - Why Benchmarking?
Source: Achieving High Performance: The Value of Benchmarking, Accenture, 2011
Analysis of past performance
Current-state assessment
Identification of areas for
improvement
Can benchmarking tools drive
improvement in CSR management
and performance?
Introduction - Why Benchmarking?
Positive correlation between managing CR and Total Shareholder Return
Introduction - Why Benchmarking?
2002 2003 2004 2005 2006 2007 2008 2009-40
-30
-20
-10
0
10
20
30
40
50
CRI Companies All-Share Index FTSE 350
Me
an
TS
R
For full report see: http://www.bitc.org.uk/resources/publications/the_value_of.html
How can multinational corporations ensure that global CSR
policies are consistently
applied in all countries of
operations?
Global challenge
Legal & General
Legal & General
Leading provider of risk, savings and investment management products in the UK
Over 10 million customers in the UK, Netherlands, France
and the USA
The biggest single Investor in the FTSE 350 All-Share with around 4% control on behalf of their client
£442.7bn funds under management (including more
than 2,800 UK pension schemes
Employer for more than
10,000 employees
One of Europe’s largest institutional asset managers
Legal & General - History
1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
L&G established
1836
international expansion (South
Africa, France, Australia, USA)
1930Acquisitions (now L&G America and L&G Netherlands)
1980
Established Legal & General (Pensions
Management) and Legal & General
Group plc
1970Acquisition (Legal
& General France)
1934
Joint venture Legal & General Gulf and India
First
2009
Joint venture CIL
2010
Legal & General - International
Legal & General America
IndiaFirst Life Insurance Company Ltd
Commercial International Life
Insurance
Legal & General France Legal & General
Netherlands
Legal & General Group
Legal & General Gulf
Legal & General – CR Strategy
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
CR Strategy and first reports
2005
basis for CR strategy comes
from
Legal & General – CR Strategy
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
L&G Group starts annual participation
in the CR Index
2006
CR Strategy and first reports
2005
Benchmarking Tool – CR Index
Benchmarking Tool – CR Index
Benchmarking Tool – CR Index
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
International growth
2009L&G Group starts
annual participation in the CR Index
2006
CR Strategy and first reports
2005
2007 2008 2009 20100
20
40
60
80
100
120
140
160
180
86
59
170Total International operating
profit [£m]
Benchmarking Tool – CR Index
90
10
L&G Group International operations
Prospect of international growth caused a need to engage with and understand what the international business units are doing on the
responsible business agenda.
Benchmarking Tool – CR Index
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
International growth
2009L&G Group starts
annual participation in the CR Index
2006
CR Strategy and first reports
2005First internal
benchmarking
2010
Benchmarking Tool – CR Index
CR Index in L&G America
CR Index in L&G
NetherlandsCR Index in L&G France
16%
33%39%
Benchmarking Results
Benchmarking Results
L&G France L&G America L&G Netherlands L&G Group0%
20%
40%
60%
80%
100%
16%
33%39%
94%
Benchmarking Tool – CR Index
CR Index in L&G America
CR Index in L&G
NetherlandsCR Index in L&G France
16%
33% 39%
Baseline Assessment(1st use of the benchmarking tool)
Progress Review(2nd use of the benchmarking tool)
18 months
• Methodology
Benchmarking Results
Results 18 months later
L&G France L&G America L&G Netherlands0%
20%
40%
60%
80%
100%
16%
33%39%
63%60%
54%
2010 2012
Benchmarking Tool – CR Index
CR Index in L&G America
CR Index in L&G
NetherlandsCR Index in L&G France
16%
33% 39%60%54%
63%
What can we interpret from
the improvement in scores?
Benchmarking Results
Benchmarking Results
Corporate Strategy and Integration
Board member responsibility for CR Implementation of new policies: Business
Ethics Policy, Code of Conduct Introduction of CSR programme Enhanced stakeholder engagement e.g.
work with NGOs and trades bodies to develop responsible investment policy
Benchmarking Results
Community Management
Identification of material community issues
Establishing and formalizing relations with charity partners
Development of targets and monitoring system
Better management of volunteering programmes
Benchmarking Results
Environment Management
Identification of key environmental impacts
Development of environmental policy Introduction of measurement and
monitoring system for managing environmental impacts
Benchmarking Results
Marketplace Management
Supply chain: Introduction of sustainable procurement
policy Set target for managing supply chain
Products and services Social and environmental considerations
included in product development Improved communication with customers
Benchmarking Results
Workplace Management
Regular employee engagement survey New employee wellness programmes Developed and implemented Diversity
and Inclusion policy
Observations and Assumptions
Legal & General’s Own Observations
Participation in benchmarking project:
• New co-operation
• Employee Engagement
• Better Group-think
• Group support BU’s
• Better Reporting
• More consistent behaviours (and better branding)
Observations and Assumptions
Observations as Assessor (Quasi-Audit role)• Increased resources for CSR• Increase CSR awareness• Increased Employee Engagement• Increased Engagement of board members • Improved transparency• Better external stakeholders engagement• More clarity about business strategy
Observations and Assumptions
What triggered the improvement
actions?
Observations and Assumptions
I. Based on the fact that weakens areas identified through the first benchmark have improved, it is possible to attribute some of these improvements to the use of benchmarking tool and competitive forces it created
II. It is not possible to accurately confirm what was the actual trigger of each action of improvement and therefore separate impacts of the benchmarking tool from other factors that could have stronger influence on the participants
Observations and Assumptions
III. Internal competition was only created by the CR Index as based on the information from L&G, subsidiaries did not participate in any other benchmarks assessing management and/or performance of CSR and were aware that the benchmark will be repeated in 18 months
IV. It is also possible that certain improvement would naturally happen, without the use of benchmarking tool
Observations and Assumptions
Legal and General – Future Plans
• In 2012 joint ventures from Egypt, India and Gulf participated in the benchmark
• 2014-2015 all subsidiaries and joint ventures will be benchmarked again
Discussion
Recommendations
Further research is recommended to:• Verify if other benchmarking tools have
similar effects on participants• Analyse market circumstances that could
influence company management decisions
• Compare improvement rates of companies using benchmarking tools and those that don’t
• Assess the effect of cultural variables, particularly management approaches
Recommendations
Further research is recommended to:• Determine if benchmarking tools makes
change happen faster• Assess the influence of public recognition
in external benchmarks on the participants
• Identify the role of external influence from benchmarking assessors
• Verify to what extent external benchmarking tool is effective when used internally
Recommendations
• Following the use of benchmarking tool, positive changes in the CR management and performance have been observed in all participating companies
• Whether all improvement actions are causally related to benchmarking, or only some, is not possible to verify without further research
Recommendations
Your Thoughts ! ?
Recommendations
“Everything that can be counted does not
necessarily count; everything that counts cannot necessarily be
counted.” Albert Einstein
Thank you
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