Reporting community investment and development in Sustainability Reports


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Presentation focusing on assisting corporate social investment practitioners on publishing information on community investment and development in sustainability reports.

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Reporting community investment and development in Sustainability Reports

  1. 1. Reporting CSIin Sustainability Reports Reana RossouwNext Generation Consultants
  2. 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. 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. 4. Driving value • Companies that adopt sustainable businessfrom strategies and practices drivesustainability 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. 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 OperateSource: Next Generation Consultants –
  6. 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. 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
  9. 9. The GRI
  10. 10. 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
  11. 11. 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
  12. 12. 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
  13. 13. Indicators in Detail (1)EC1 – Voluntary donations and investment of funds in the broader community where theCommunity 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.
  14. 14. Indicators continue (2)EC6 • Report geographic definition of ‘local’Policy, practices and proportion • Percentages should be based on invoicesof spending on locally based • Report the policy for preferring locally basedsuppliers at significant locations suppliers • State the percentage of the procurement budget used that is spend on suppliers • Indicate the factors that influence supplier selectionEC8 • Explain the extent of development (size, cost,Development and impact of duration) of investment and support and theinfrastructure investments and current or expected impacts (positive orservices provided primarily for negative) on communities and local economies.public benefit through Indicate whether these investments andcommercial, in-kind, or pro bono services are commercial, in-kind or pro bonoengagement • Report whether the organisation conducted a community needs assessment to determine infrastructure and other services needed, if so, explain the results of the assessment
  15. 15. Indicators Continue (3)SO1 • Identify the total number of operationsPercentage of operations • Identify organisation wide local community engagement,with implemented local impact assessments and development programs • Report the percentage of operations with implementedcommunity engagement, community engagement, impact assessments and developmentimpact assessments and programs including, but not limited to:development programs • Social impact assessments, including gender impact assessments, based on participatory processesDocument sources may include: • Environmental impact assessments and on-going monitoringBaseline studies - health, • Public disclosure of results of environmental and socialeconomic, environment, impact assessmentscultural, etc. • Local community development programs based on localSocial impact assessments, community needsgender impact assessments, • Stakeholder engagement plans based on stakeholderhuman rights impact mappingassessments, environmental • Broad based local community consultation committeesimpact assessments, social and and processes that include vulnerable groupslabour plans, resettlement • Work councils, occupational health and safetyaction plans, community committees and other employee representation bodies todevelopment plans, grievance deal with impactsand complaints mechanisms, • Formal local community grievance processespublic/ community consultationplans
  16. 16. 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 riskwith assessments - Including: • Vulnerability and risk to local communities from potential impacts due to:significant • Degree of physical or economic isolationpotential • Level of socio economic development including gender equalityor actual • State of socio economic infrastructure • Proximity to operationsnegative • Level of social organisationsimpacts on • Strength and quality of governance of local and national institutions around locallocal communitiescommuni- • Identify exposure of community to operations due to higher than average useties 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
  17. 17. Indicators Continue (6)SO10 Use the information on potential andPrevention and mitigation measures actual negative impacts reported in SO9.implemented in operations with Report whether –significant potential or actual negative • Prevention and mitigation measuresimpacts 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
  18. 18. 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
  19. 19. 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:• Web:• PLEASE NOTE: THIS PRESENTATION IS PART OF A LARGER BODY OF RESEARCH!• THIS INFORMATION IS COPYWRITED AND THE INTELLECTUAL PROPERTY OF NEXT GENERATION CONSULTANTS