Measuring and managing corporate social responsibility
by Emily Albert
St James Ethics Centre acts as trustee for the Corporate Responsibility Index in Australia, a tool developed by UK charity Business in the Community in consultation with eighty leading UK businesses. Emily Albert reflects on the results of the Index in its second year in Australia.
The Corporate Responsibility Index was developed in response to the call for a reliable and standardised tool to examine how companies are managing, integrating and reporting on their impact on society and the environment, and to enable them to benchmark their performance against their peers.
There is a lot of truth behind the old adage “what gets measured gets managed”. That is why St James Ethics Centre, in conjunction with media partners The Sydney Morning Herald and The Age, saw to introduce this initiative to Australia in late 2003.
With corporate responsibility 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, and this is precisely what the Corporate Responsibility Index provides.
On 4 April 2005 The Sydney Morning Herald and The Age published the results of the second Corporate Responsibility Index in Australia. Results showcased the work of twenty-seven leading companies undertaking a public self-examination of their corporate responsibility practices.
Particular recognition should go to Westpac, who with its score of 99.53%, topped not only the Australian Index for the second time but also the Index in the UK. Westpac achieved this result despite competing against companies operating under an environment of greater regulation in the UK. This lends encouragement to other Australian companies who may be daunted by their ability to perform competitively on a global scale. BP came in second (93.21%), followed by BHP Billiton (92.71%), Rio Tinto (92.04%) and Toyota (91.54%).
The best scoring section of the Index was again Corporate Strategy, reflecting the importance placed on responsible business practices at the highest level. The challenge to Australian companies however remains translating these high-level values into everyday business practices by integrating them throughout their organisations.
The areas requiring greatest attention in Australian organisations were management of supply chain issues, particularly in relation to human rights, and environmental management and impact. Whilst Australian companies are more on top of their social than environmental impacts, with strong performance in community investment and OH&S, areas such as human rights are not yet at the forefront of the agenda.
Interestingly, despite the bar being raised in a number of areas to provide an additional challenge to participants, the average overall score was 5% higher this year than in the inaugural Index. However, we should bear in mind that the pool of participants also changed slightly, with the seven new entrants achieving an average score 10% higher than that of the six companies who chose to withdraw.
Executive Director of St James Ethics Centre, Dr Simon Longstaff, said that the greatest accolade should be reserved for those companies that have stuck with the Index process – even though they are not (yet) at the top end of the table.
It's far easier to participate when general acclaim is the most likely result than to do so knowing that the results will reveal a daunting list of further challenges. The companies that persist demonstrate gritty leadership of a kind that will hopefully inspire others to embrace this measurement as the first step to improving performance.
Special thanks should be extended to our partners, without whom this project would not be possible: Business in the Community, The Sydney Morning Herald and The Age, Ernst & Young, the Business Leaders Forum on Sustainable Development and project catalyst Pilotlight Australia.
The next Corporate Responsibility Index will be launched in September 2005 and participants will again have a ten week period to complete their submissions.
For further details of this year's results, or to register for the next Index please visit www.corporate-responsibility.com.au or contact Emily Albert, Manager Corporate Responsibility Index on +61 (0)2 9299 9566.
discuss this articleEmily Albert is Manager, Corporate Responsibility Index at St James Ethics Centre
This article was first published in Living Ethics, issue 60, winter 2005
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