The thesis by Aude Richon explores corporate social responsibility (CSR) and its impact on financial performance, emphasizing the ethical dilemmas raised by globalization. It investigates why and how companies engage in CSR, citing stakeholders and top management commitment as crucial factors, while the quantitative effects on financial performance remain ambiguous. The study includes literature reviews, interviews with CSR professionals, and specific case analyses, particularly focusing on the automotive sector's environmental impacts.

1. Aude Richon
Academic year: 2006/2007
MASTER THESIS
CORPORATE SOCIAL RESPONSIBILITY:
Strategy and impacts on financial performance
Under the direction of Hassan El Asraoui

2. Aude Richon
Academic year: 2006/2007
MASTER THESIS
CORPORATE SOCIAL RESPONSIBILITY:
Strategy and impacts on financial performance
Under the direction of Hassan El Asraoui
«L’IÉSEG n’entend donner aucune approbation ni improbation aux opinions émises dans
les mémoires ; ces opinions doivent être considérées comme propres à leurs auteurs.»
IÉSEG School of Management
3 rue de la Digue
59000 Lille

3. Acknowledgements
I would like to thank all the people who permitted me to finish this thesis, and supported
me while writing it.
I would like to thank Hassan El Asraoui for his guidance and support during my work on
this thesis.
I thank Olivier Rayrole, who took time and advice me when I had problems with the
subject of this thesis. I would also thank the six persons who took time and accepted to
meet me for interviews. Thanks to them, I had the opportunity to better grasp the
concepts and challenges of CSR, and had the opportunity to bring valuable insight to my
work.
I would also thank Hedley Malloch for being part of my jury.
Last but not least, I thank first my family for their patience and unfailing support, then
my friends: Véro, for her advices, Clairoute and Brigitte, my roommates, for being
present during crisis moments, Maïlys, Caro, Tan, Boon, Dam, Pierrot, JB, le Bask , who
entertained me or motivated me depending on the circumstances.
i

4. Contents
1
2
3
4
5
6
7
INTRODUCTION ........................................................................................................... 1
THEORETICAL FRAMEWORK ..................................................................................... 5
2.1
Globalization’s Role in Awareness for Sustainable Development..................... 5
2.2
Evolutions and Definitions of Corporate Social Responsibility......................... 9
2.3
CSR as part of corporate strategy ..................................................................... 14
2.4
Critics and Measures to Overcome Them ........................................................ 17
2.5
Increasing expectations on MNCs .................................................................... 20
2.6
Performance...................................................................................................... 23
METHODOLOGY ....................................................................................................... 29
3.1
Research Model ................................................................................................ 30
3.2
Method of data collection ................................................................................. 32
3.3
Data analysis ..................................................................................................... 36
3.4
Methodology, hypothesis by hypothesis........................................................... 37
WHY WOULD COMPANIES ENGAGE IN CSR POLICIES?........................................... 38
4.1
Presentation of the interviewees ....................................................................... 38
4.2
Presentation of the themes and subthemes studied........................................... 41
4.3
Interviews analysis............................................................................................ 42
APPLICATION TO CONCRETE CASES ........................................................................ 60
5.1
Study on sustainable indexes ............................................................................ 60
5.2
Specific look at the automotive sector concerning the environmental pillar of
SD ..................................................................................................................... 70
ANALYSIS AND DISCUSSION ...................................................................................... 83
6.1
Hypothesis testing............................................................................................. 83
6.2
Attempts to answer secondary questions .......................................................... 87
6.3
Limits of the study ............................................................................................ 89
6.4
Managerial recommendations and avenues for research .................................. 90
CONCLUSION ............................................................................................................ 93
ii

5. Abbreviations
ACEA
ADEME
CFP
CSP
CSR
DJSI
EITI
EU
FDI
GC
GRI
JAMA
KAMA
MNC
MSCI
NGO
PRI
ROA
ROE
SD
SRI
UN
WBCSD
European Automobile Manufacturers’ Association
Agence de l’Environnement et de la Maîtrise de l’Energie
(Agency for the Environment and Energy Management)
Corporate Financial Performance
Corporate Social/Societal Performance
Corporate Social Responsibility
Dow Jones Sustainability Index
Extractive Industries Transparency Initiative
European Union
Foreign Direct Investment
Global Compact
Global Reporting Initiative
Japanese Automobile Manufacturers’ Association
Korean Automobile Manufacturers’ Association
Multinational Company
Morgan Stanley Capital International
Non-Governmental Organization
Principles for Responsible Investment
Return On Assets
Return On Equity
Sustainable Development
Socially Responsible Investment
United Nations
World Business Council for Sustainable Development
iii

6. Abstract
Society is feeling more and more concerned about the environment and social issues
caused, among other things, by relocation and environmental dumping. Globalization has
actually raised some ethical issues which peak levels were attained, socially speaking,
when apparel companies were denunciated for using sweatshops in developing countries,
and environmentally speaking, with Shell’s Brent Spar platform scandal. Consequently,
companies started to think of how they could improve their image, even their way of
doing business and started to engage in Corporate Social Responsibility (CSR).
The purpose of this thesis is to understand why companies decide to engage in CSR and
if CSR policies have impacts on firms’ financial performance. Thus, the research
problem is the following: What characterizes Corporate Social Responsibility
strategies and do they have an impact on financial performance?
In order to answer it, I will use first a review of the existing literature, then interviews
performed with persons in charge of CSR/Sustainable Development (SD) in companies
and opinion leaders will be analysed. To complement this part, a study on sustainability
indexes followed by a specific outlook at the automobile sector and its impact on the
environment will be undertaken.
The results show that Western multinational companies (MNCs) tend to be more and
more engaged, with law pushing for that as well. Stakeholders have quite an influence on
the process, but the main factor of success is the commitment of top management and the
integration of CSR in corporate culture. Quantitative results are more mitigated and it
cannot be clearly said that CSR favours or not financial performance. More prospective
is needed to be definite in the answer.
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7. IÉSEG Master Thesis – Aude Richon – 1 Introduction
1 Introduction
Society is feeling more and more concerned about the environment and social issues
caused, among other things, by relocation and environmental dumping. We can observe
this from the growing number of denunciations of companies’ practices by NonGovernmental Organizations (NGOs), but also by movies such as “The Corporation” by
Mark Ashbar, Jennifer Abbott and Joel Bakan1, or “An Inconvenient Truth” from Davis
Guggenheim and casting former US Vice-President Al Gore2. The written press
communicates as well on this growing concern for a more sustainable management of the
environment, like this June’s special report on business and climate change initiated by
The Economist3. Social concerns are also existing especially concerning working
conditions in developing countries and health and safety in general.
First, let us define a few concepts. According to the Green paper4 issued by the European
Commission in 2001, Corporate Social Responsibility (CSR) is a “concept whereby
companies integrate social and environmental concerns in their business operations and
in their interaction with their stakeholders on a voluntary basis”, which means beyond the
frame given by law. Even though the term “environment” is not mentioned in the
acronym CSR (perhaps because it is considered as obvious), I will study this component
in the thesis, and emphasize its importance in the last part.
The degree to which a firm is sustainable and responsible can be determined by the study
of its Corporate Social Performance (CSP), which is an extra-financial appraisal of its
operations. The evaluation of social performance is not really well-defined and depends
on who is evaluating it, as extra-financial rating agencies use different methods,
according to their beliefs, methods and clients’ requests. Even authors talk about it
without clearly defining it as Donna J. Wood highlighted5. She gave concepts and
attitudes to observe and analyse in order to grasp the CSP of a firm, but still, as CSP
incorporates components or concepts that are not necessarily quantifiable, it is really
difficult to give a precise definition of it.
1
Canadian documentary issued on Oct. 29, 2004, for more information: www.thecorporation.com.
American documentary issued on Sept. 15, 2006, for more information: www.climatecrisis.net.
3
Anonymous, (2007), “A special report on business and climate change”, The Economist, June 2nd,
383(8531).
4
Green papers are documents provided by the European Commission and aimed at provoking discussion
on a specific policy area.
5
Wood, D. J., (1991), “Corporate Social Performance Revisited”, Academy of Management Review, 16(4),
691-718.
2
1

8. IÉSEG Master Thesis – Aude Richon – 1 Introduction
Looking for larger markets, lower costs, even lower environmental standards, many
companies have become multinational. First they have expanded to other countries
through exportations, to enlarge their market, then they intervened to help other countries
develop more quickly (like investments from the USA to Europe after WWII, or from
Germany to Eastern European countries after the fall of the Wall) and be able to reach
them with their products. Later, companies were trying to produce at a cheaper cost and
went to developing countries with less regulation (both social and environmental).
Nowadays not only production is concerned but also other activities like R&D which
makes qualified workers from developed countries feel threatened to lose their jobs.
Globalization is not a new phenomenon, however now we are facing a financial
globalization as well as a globalization of knowledge and technologies6.
Globalization has raised some ethical issues which peak levels were attained, socially
speaking, when most of the big apparel companies (like Nike, Gap, Reebok…) were
denunciated for using sweatshops in developing countries, because of the non respect of
Human Rights, pressure imposed on employees and the subsistence wages these workers
earned; and environmentally speaking, with Shell’s Brent Spar platform scandal. That is
how companies started to think of how they could improve their image, even their way of
doing business and started to engage in CSR.
This business approach is inextricably linked to the concept of Sustainable Development
(SD) which has been, first, tied more closely with environment. However the scope of
SD has gotten larger and larger in the last years and it is really a broad concept, difficult
to define precisely. The original definition (and the most commonly used one) comes
from the Brundtland Report issued in 1987 stating that “sustainable development is
development that meets the needs of the present without compromising the ability of
future generations to meet their own needs”. Thus, companies now have to take into
consideration all the stakeholders they are dealing with (not only the shareholders).
CSR really is an actual matter as nowadays companies are communicating about it as a
component totally integrated to their activities. Indeed, society as a whole, and local
communities in which companies are settled feel more and more concerned about the
impact companies have on their physical and human environment. Moreover we can
notice a growing awareness from companies (mostly managers) and from the main
audience concerning environmental issues. Maybe a game of imitation is also going on
between companies, which do not want to be left behind by their competitors or rating
agencies. Stakeholders have an influence also and can sometimes even expect that big
corporations play a more comprehensive role.
6
Mouhoub, E.M., (2006), Mondialisation et délocalisation des entreprises, La Découverte, 8.
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9. IÉSEG Master Thesis – Aude Richon – 1 Introduction
Growing needs in energy, especially in emerging countries, limited oil reserves (non
renewable energy will necessarily become more expensive and renewable energy will be
more and more used, then comparably less expensive), waste management and
demographic growth at the global level (we are 6.5 billion and the last population
doubling only took 37.5 years) are factors requiring that we take care of the environment
and natural resources, and that we modify our consumption modes. The decrease in
natural resources, demographic pressure and climate change, the increasing volatility and
high prices of energy resources, are present and future constraints that put the emphasis
on energy and environmental issues, and place them in the heart of companies’
sustainable development policies. Sooner or later, businesses will have to consider them
while elaborating their corporate strategies. Thus, working on companies’ strategies and
CSR is relevant also because environmental responsibility has to be more clearly defined
and should be set up in the long run at an international level. If only one country is
setting standards to respect and all the others do nothing, then actions taken by the
environmentally-friendly country will have no impact. For the moment, only listed
companies have to publish a sustainability report in France, still not all of them are
complying with this law7. Nevertheless some MNCs demonstrate a strong commitment.
Some charts have also been elaborated but usually more as recommendations (like the
UN Global Compact) and do not have a mandatory value. An important aspect also is the
respect of Human Rights.
The purpose of the investigation is to understand why companies decide to engage in
CSR, and if it is a real concern or just a short-term fashion. For this purpose, it is also
important to have a critic look at CSR and SD more generally, starting by the lack of
clear definition and the underlying expectations companies might have (better reputation
for instance). I will attempt to demonstrate whether companies’ commitment to
sustainable practices has a positive impact on their performance, and the reasons of this
impact. I will bring to the fore the urge for MNCs to act in favour of CSR and determine
where it is coming from: stakeholders? managers? Collaboration between NonGovernmental Organisations (NGOs) and companies, in the frame of CSR, will be
evoked as well. Moreover, I will try to determine whether MNCs are really doing what
they are saying and promoting in their reports and advertisements. Another point
addressed will be the example leading companies can be for the others, and which
mechanisms are at stake when firms decide to develop corporate social responsibility
policies. Finally, I will verify if pushy environmental objectives and international
competition can be consistent and sustainable in the long run. For this purpose, I will
study the automotive sector and its impacts on the environment more specifically. More
generally, the thesis aims at answering the following research problem: What
7
Law n°2001-420 related to new economic regulations (Art. 116), 2001.
3

10. IÉSEG Master Thesis – Aude Richon – 1 Introduction
characterizes Corporate Social Responsibility strategies and do they have an impact
on financial performance?
To clearly understand the concepts used in this work, the first part is dedicated to a
review of the existing literature, it will also permit to distinguish the different opinions
on Sustainable Development (SD) and Corporate Social Responsibility (CSR) mainly
and their relation with performance. Then, the second part will be dedicated to the
presentation of the methodology I intend to use to answer the research questions.
The third part will include a qualitative analysis of interviews I made to determine why
and how companies want to implement CSR policies. It will also allow explaining the
consequences of such policies. The quantitative analysis will follow in the fourth part,
with the study of sustainability indexes, and a specific look at the automotive industry.
Finally, conclusions and managerial implications of the confrontation of the first part
theoretical framework with the qualitative and quantitative analysis will form the fifth
part.
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11. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
2 Theoretical framework
2.1 Globalization’s Role in Awareness for Sustainable Development
2.1.1 The Role of Globalization
The impacts of businesses on their social and physical environment have been
exacerbated by globalization, and these impacts have clearly boosted the ethical issues
society now has to face: we can hear daily of globalization and its bad consequences on
current society. This issue is not so easy to address as it is to be dealt with at an
international level and there is neither law nor global standard legally binding.
First, for a common understanding, let us define the concept of globalization. Mouhoud
El Mouhoub8 gives two different definitions of globalization depending on the way the
concept is apprehended:
- if we think in terms of international mobility of firms and production means then
we can define globalization as the “unprecedented acceleration of the freedom for
firms to localize in the global space”
- we can also define it thanks to its five components:
operations relocation, involving or not Foreign Direct Investments (FDI)
commercial flows of goods and services (between different firms or
between one firm’s own subsidiaries)
financial flows (short-term capital)
knowledge and technology flows
workers international migrations.
For the rest of the thesis, we will keep in mind the second definition to have a more
comprehensive approach of globalization, and in order to allow us to link the concept of
globalization more easily with corporate social responsibility.
Wage differences between developing and developed countries and lower environmental
standards in developing countries have actually led many companies to offshore their
activities. They have been going from capital intensive economies to labour intensive
ones (even though this phenomenon is now starting to reverse in some places). While the
motivation of workers in developing countries is often higher and sometimes a reason for
relocation, the main motivation to go abroad remains the possibility companies are given
to reach new markets (80% cases9).
8
Translated from French: El Mouhoub, M., Mondialisation et Délocalisation des Entreprises, 7.
Agrawal, V., Farrell, D., and Remes, J. K., (2003), “Offshoring and beyond”, McKinsey Quarterly,
Special Issue 4, 24-35.
9
5

12. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
While increasing firms’ leeway and power, globalization also assigns them
responsibilities. Thus, in 1999, in Davos, the United Nations (UN) former Secretary
General proposed the “Global Compact” (GC) between the UN and companies, asking
them to comply with 10 principles, expressing values and fundamental practices
necessary to respond to the global population’s socio-economical needs. The main
objective of the GC is to limit the negative effects of globalization. Even though
regulations are stricter and stricter, they are also sources of opportunities (boosting
innovation for instance).
From these issues, awareness started to grow and the concept of Sustainable
Development (SD) emerged as an “answer” took over by numerous authors and
researchers.
2.1.2 The Need for Sustainable Development
Sustainable Development (SD) is “development that meets the needs of the present
without compromising the ability of future generations to meet their own needs”10.
Frank-Dominique Vivien considers this definition more as a problem than as a solution11.
He points out that this statement is not very clear, as it does not develop indicators to
refer to and too many different other definitions of the concept are given by other
authors. Najib Sassenou (2006) even talked of “broadened sustainable development”12
which includes both temporal and spatial solidarities. For a company, it would mean on
the one hand the respect of all its stakeholders and on the other hand of its natural
environment, even though it is a public good. This same idea has also been put forward
by Pérez when he highlights the fact that social responsibility expresses a widening of the
management responsibility system of reference beyond its traditional meaning13. He
alleges that Responsible Management (RM) and CSR express the idea that organization
management must be “satisfying”, that is to say relevant and coherent, on a system of
reference widened both in space (geographic and societal) and in time.
As for Sassenou, SD has a theoretical justification when we look at endogenous growth
theories, these models actually aim at internalizing phenomena or behaviours which were
considered before as externalities (contamination e.g.). Externalities can be both positive
and negative: the development levels of a country or of the productivity of a plant are
10
Brundtland Report, 1987.
Vivien, F.-D., (2005), Le Développement Soutenable, Paris: La Découverte, 5.
12
Sassenou, N., (2006), “Développement Durable et Responsabilité Sociétale de l’Entreprise : Apport de la
Théorie Economique”, Revue d’économie financière, Sept., 85, 2.
13
Pérez, R., (2005), “Quelques Réflexions Sur le Management Responsable, le Développement Durable et
la Responsabilité Sociale de l’Entreprise”, La Revue des Sciences de Gestion, Jan.-April, 211-212, 29-46.
11
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13. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
positive externalities; negative ones are environmental damages for instance. The main
issues concern negative externalities as, if no action is taken, they can have an
irreversible impact (on the environment mainly, thus on the ecosystem which can affect
livelihoods and living conditions, especially in developing countries where the
population is much more reliant on crops and dependent on natural phenomena).
SD includes three “pillars”: financial, environmental and social. The concept of “Triple
Bottom Line” is often brought up and allows the evaluation of a company’s performance
according to the three pillars of SD14:
•
•
Environmental: the company’s operations must permit the preservation of
ecosystems (analysis of the impacts of the firm and its products on resources
used, waste production, pollution…)
•
14
Financial: it is the most classical conception, it also includes the capacity to
develop economically the place where the firm is settled (no corruption, respect
of competitors…)
Social: what the social consequences of the company’s operations are for all its
stakeholders – employees (working conditions, wages, non-discrimination),
suppliers, customers, local communities (cultural respect, nuisance) society as a
whole.
L’Observatoire de la Responsabilité Sociale des Entreprises, ORSE, www.orse.org.
7

14. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
The scheme below shows that to be responsible a company has to find the balance
between these three dimensions so that it can combine three objectives: economic
prosperity, social justice and environmental quality15.
Figure 2.1: CSR’s three dimensions
Social /
Societal
fair
Economical
Sustainable
liveable
viable
Environment
nature
Source: Capron and Quairel-Lanoizelée16.
The vision shown in this scheme reinforces the following conception of SD from
Quebec’s plan for sustainable development17 stating that “the stakes of sustainable
development is the capacity of concerned partners to act in a concerted and harmonious
way in order to create and maintain a balance between the benefits of an action and its
consequences, either for the environment, the mode or the standard of living. This
harmony is the result of a common will, a vision that ensures solidarity and cohesion of
actions. It is necessary to consider any action knock-on on what characterizes quality of
life. The whole society is thus concerned. The quest for sustainable development applies
to both local and national levels. Sustainable development is a question of concern for
governments, regional and local authorities, socioeconomic actors and citizens”
(translated from French, 2004). Some new interpretations of the relations between the
15
ORSE: www.orse.org.
Capron, M. and Quairel-Lanoizelée, F., (2004), Mythes et Réalités de l’Entreprise Responsable, Paris:
La Découverte, 116.
17
Gouvernement du Québec, (2004), Plan de Développement Durable du Québec,
http://www.mddep.gouv.qc.ca/developpement/2004-2007/plan-consultation.pdf, 12.
16
8

15. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
three aspects of CSR add also a fourth dimension incorporating all the three others, this
fourth dimension is the ethical one; Yamaha18 is considering it in its CSR philosophy.
Many ethical issues are raised because of relocations (like job losses in parent countries,
bad working conditions in host countries), moreover numerous NGOs are denouncing
multinational companies’ (MNCs’) practices in developing countries (too low wages,
long working days, child labour, pollution…). An example of NGOs’ activism can be the
award-giving (Public Eye Awards) by two Swiss NGOs (la Déclaration de Berne and
Pronatura) for the most irresponsible companies during the Davos Forum this year19.
They made a list of candidates in three different categories: fiscal, social and
environmental. This can create very bad advertisement for cited companies (like CocaCola which was mentioned in two categories…).
The transcription of SD into business practices gave birth to Corporate Social
Responsibility (CSR) which evolution over time has not associated all the three pillars
together from the beginning.
2.2 Evolutions and Definitions of Corporate Social Responsibility
In 2004, the World Business Council for Sustainable Development (WBCSD) gave the
following definition of corporate responsibility: “The commitment of business to
contribute to sustainable economic development, working with employees, their families,
the local community and society at large to improve their quality of life”20.
2.2.1 Corporate Social Responsibility
Now let us see how the concept evolved over time.
Robert D. Hay and Edmund R. Gray (1980) identified three phases in the development of
social responsibility, while Sethi (1975) had also previously identified three phases,
encompassing more or less the same features, but named differently:
18
Yamaha: http://www.yamaha-motor.co.jp/global/about/csr/index.html.
Stam, C., (2006), “Des ONG décernent des prix de l’irresponsabilité d’entreprise en ouverture du Forum
de Davos”, Jan. 24, Novethic, http://www.novethic.fr/novethic/site/article/index.jsp?id=98111.
20
WBCSD: www.wbcsd.org.
19
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16. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Table 2.1: Phases in the development of CSR
Robert D. Hay and Edmund R. Gray21
Sethi22
“Profit maximizing management”: the only objective of
Social obligation
managers is to maximize profits (Adam Smith, Calvinism)
“Trusteeship management”: dating back from the 1920s-1930s,
this phase recognised the importance of enlightened management
Social responsibility
towards all the people who interact with the company, not only
stockholders, but also employees, customers, suppliers, banks and
the community.
Social responsiveness
“Quality of Life Management”23: in this most recent phase, in
(proactivity) addition to their enlightened management, companies are
Frederick (1986)
expected to solve major society issues thanks to their knowledge
called this last one
and resources.
social rectitude24
Source: Newton and Ford.
As for him, Roland Pérez25 differentiated two conceptions of CSR:
•
a passive conception where the managerial model is based on the dissociation
business – off business, it is the neo liberal model in which CSR is non sense:
since the company respects the law it can do whatever it wants, if the manager is
only committed to business during the week, he can then be a good citizen the
rest of the time
•
an active conception: the managerial model is based on the integration business –
off business, professional and private life interact in this model, the manager must
be competitive but he also has to take care of his internal and external partners, as
well as the environment, keeping thinking of the future generations (which brings
us back to the definition of SD).
More generally, for Pérez, responsible management, CSR and SD represent the
integration of externalities in the company’s behaviour.
21
Newton, L. H. and Ford, M. M., (2004), Taking Sides: Clashing Views on Controversial Issues in
Business Ethics and Society, 8th ed., McGraw-Hill, 83-85. From Robert D. Hay and Edmund R. Gray,
“Introduction to Social Responsibility”, in David Keller, man. Ed., Ethics and Values: Basic Readings in
Theory and Practice (Pearson Custom Publishing, 2002). Reprinted from Robert D. Hay and Edmund R.
Gray, Business and Society: Cases and Text, 2nd ed. (South-Western, 1980). Copyright © 1981 by SouthWestern, a division of Thomson Learning.
22
Sethi, S. P., (1975), “Dimensions of Corporate Social Performance: An Analytical Framework”,
California Management Review, Spring, 17(3), 58-64.
23
Newton and Ford, (2004), Taking Sides: Clashing Views on Controversial Issues in Business Ethics and
Society, 85.
24
Amba-Rao, S. C., (1993), “Multinational Corporate Responsibility, Ethics, Interactions and Third World
Governments: An Agenda for the 1990s”, Journal of Business Ethics, 554.
25
Pérez, “Quelques Réflexions Sur le Management Responsable, le Développement Durable et la
Responsabilité Sociale de l’Entreprise”.
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17. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
From the phases identified above, different definitions of CSR have been elaborated,
depending also on economic trends. Let us mention a few of them:
•
The only social responsibility of a company is to increase shareholder value
(Friedman, 1970; Hay and Gray, 1974; Zenisk, 1979). Zenisk also insisted on the
need for congruence between managerial values and shareholders’ expectations.
•
CSR is made of corporate good citizenship and philanthropy (Epstein, 1989; Hay
and Gray, 1974; Zenisk, 1979). “Corporate philanthropy refers to the practice of
companies of all size making charitable contributions to address a variety of
social, economic and other issues as well as part of their overall corporate
citizenship strategy”26. Donaldson (1989) also included ethics as an imperative in
management.
•
CSR is corporate legitimacy and value of management.
Patrick Gabriel and Christian Cadiou then raised the question of the company legitimacy
as a moral person27.
This question is even more relevant in the current context of the growing importance of
CSR and increasing clashes of interests between stakeholders. The two authors assert that
legitimacy is often tied to the social acceptability of actions undertaken by companies.
Thus, they offer different views on legitimacy:
•
R. Laufer (2000): the legitimate action is in accordance with the imperatives
defined by the roots of the legitimate power
•
Suchman (1995): legitimacy is defined by the finality of the action (noticeable
after the event)
•
Weber (in Gabriel and Cadiou, 2005): an action is legitimate if the cause it is
undertaken for is legitimate.
To give a comprehensive definition of social responsibility and answer the question on
the requirements of corporate social performance, Carroll (1979) created a « social
performance model ». He found out that there are three types of views on CSR:
•
the most classical one, questioning whether corporate responsibility should go
beyond profit and legal obligations
•
another one listing all the points CSR should address (beyond profit and legal
obligation, like social and environmental issues for instance)
•
the last one referring to the philosophy of response from companies: reactivity or
proactivity?
26
Anonymous, (2006), “CSR and philanthropy”, Caribbean Business, Sept. 28, 52.
Gabriel, P. and Cadiou C., (2005), “Responsabilité sociale et environnementale et légitimité des
entreprises: Vers de nouveaux modes de gouvernance ?”, La Revue des Sciences de Gestion, Direction et
Gestion, n° 211-212 - R.S.E., 127-142.
27
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18. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
To give a comprehensive view of a business’ duties, he elaborated the following scheme:
Table 2.2: Categorization of Social Responsibilities
Discretionary
responsibilities
TOTAL
Ethical
responsibilities
SOCIAL
RESPONSIBILITIES Legal
responsibilities
Economic
responsibilities
Responsibilities left to the choice of
businesses (no expectations from the society,
like philanthropic donations).
To meet society’s expectations above the
legal and economic responsibilities. This
concept is not really well defined, thus
companies do not really know how to deal
with it.
Laws and regulations that businesses have to
respect as part of their “social contract”.
“first and foremost social responsibility”
The goal of businesses is to produce goods
and services that respond to the needs of
society, and sell them while making profit.
These are the bases of social responsibilities.
Source: Carroll28.
With this model, the different responsibilities can be addressed together and not
necessarily one after the other (economic and legal responsibilities are to be dealt with at
the same time e.g.).
2.2.2 Stakeholders
CSR includes taking care and addressing the claims/demands of all stakeholders.
According to Clarkson, “stakeholders are persons or groups that have, or claim,
ownership, rights or interests in a corporation and its activities, past, present or future.
Such claimed rights or interests are the results of transactions with, or actions taken by,
the corporation, and may be legal or moral, individual or collective. Stakeholders with
similar interests, claims, or rights can be classified as belonging to the same group:
employees, shareholders, customers, and so on.”29 Stakeholders can be then divided into
primary and secondary stakeholder groups depending if the survival of the company
depends on them or not. “A primary stakeholder group is one without whose continuing
participation the corporation cannot survive as a going concern”30 while “secondary
stakeholder groups are defined as those who influence or affect, or are influenced or
28
Carroll, A. B., (1979), “A Three-Dimensional Conceptual Model of Corporate Performance”, Academy
of Management Review, 4(4), 499-500.
29
Clarkson, M. B. E., (1995), “A Stakeholder Framework for Analyzing and Evaluating Corporate Social
Performance”, Academy of Management Review, 20(1), 106.
30
Ibid.
12

19. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
affected by, the corporation, but they are not engaged in transactions with the corporation
and are not essential for its survival”31. An overview of both groups can be seen in the
following scheme (with primary stakeholders in yellow and secondary stakeholders in
blue, while influencers are in light yellow):
Figure 2.2: Stakeholder groups
Unions
Media
Shareholders
Governments
Rating
agencies,
Employees
(Local/Territorial/
National
Authorities)
Certification
institutions
Civil Society
(NGOs…)
…
Firm
Communities
Special
interest
groups (that
Customers
Investors
(Banks…)
Suppliers
Environment
can influence
public opinion)
Source: Clarkson, 1995.
Secondary stakeholders do not have the power to prevent a company from performing;
however, they can mobilize the public opinion for or against a company and its acting.
There is actually a demand for social responsibility, thus companies have to create a
“level of trust among people – a feeling of security that each individual’s interests will be
taken into account”32. When people have this feeling of security they can work
productively, thus “social responsibility – that is, acting in the interest of others, even
when there is no legal imperative – lies at the base of trust”33. However acting in the
31
Clarkson, “A Stakeholder Framework for Analyzing and Evaluating Corporate Social Performance”,
107.
32
De Wit, B. and Meyer, R., (2004), Strategy: Process, Content, Context, 3rd ed., 598.
33
Ibid.
13

20. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
interest of employees is only a small part of social responsibility, which is to be extended
to all the stakeholders of the company.
2.3 CSR as part of corporate strategy
The French Observatory for CSR (ORSE)34 enumerates seven trends in determining what
kind of CSR companies are engaged in:
•
Ethical: this approach consists for a company in applying its ethical convictions
in its investments (first step in determining Socially Responsible Investments SRI), usually some sectors are excluded directly (alcohol, tobacco, nuclear power,
pornography…)
•
Environmental: companies are selected depending on their environmental
performance
•
Social: quality of the company’s social policies and respect of Human Rights
(HR)
Citizenship: around the notion of community (local community and ethnic
minorities), mainly developed in the US
•
•
SD: this approach favours companies that perform in their three sectors of
responsibility (according to the three pillars of SD), it favours a long-term view
and management systems that are looking for continuous progress and strategy
sustainability
•
Stakeholder: this approach emphasizes the dialogue with all the stakeholders of
the company and the way it takes into account their expectations, it is usually tied
with the SD approach
•
Financial: taking into account societal factors in the valuation of the company is
better to find the real value of the company rather than the only use of financial
data; however concepts of conviction and general interest are not taken into
account35.
The approach chosen by companies can depend on their activity and/or on their strategy.
“Corporate strategy is the pattern of decisions in a company that determines and reveals
its objectives, purposes, or goals, produces the principal policies and plans for achieving
those goals, and defines the range of business the company is to pursue, the kind of
34
35
ORSE, http://www.orse.org.
Anonymous, “Définition de la RSE”, ORSE, http://www.orse.org/fr/home/index.html#rse.
14

21. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
economic and noneconomic contribution it intends to make to its shareholders,
employees, customers, and communities.”36
However, it is not only a question of strategy, the adoption of CSR policies depends also
on the size and financial situation of companies, even though CSR, appearing as an
application of SD to MNCs, and also as a means to regulate their operations and
sometimes their unethical practices in their home countries and abroad, is a concept that
is spreading quite quickly. CSR first started with MNCs that implemented voluntary
codes of conduct and charters but now it is also spreading to Small and Medium
Enterprises (SMEs) because of the requirements of their business partners, or on a
voluntary basis. However, Tuzzolino and Armandi adapted Maslow’s need theory to US
companies37, and through their interpretation it is clear that MNCs are the only ones
capable of attaining the last state of need, that is realized through Corporate Social
Responsibility:
36
Andrews, K., (1987), “The concept of corporate strategy”, Article adapted with permission from Chapter
2 of The Concept of Corporate Strategy, McGraw-Hill Companies Inc., in De Wit, B. and Meyer, R.,
(2004), Strategy: Process, Content, Context, 3rd ed., Thomson, 71.
37
Tuzzolino, F. and Armandi, B. R., (1981), “A Need-Hierarchy Framework for Assessing Corporate
Social Responsibility”, Academy of Management Review, 6(1), 21-28.
15

22. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Table 2.3: Need Hierarchy – Comparison between Individuals and Companies
Maslow
Tuzzolino & Armandi
PHYSIOLOGICAL
The fundamentals of survival, including Profitability (classical model – Friedman)
hunger and thirst
SAFETY
Dividend policy, payout ratio, integration
Concern over physical survival, ordinary
(vertical and horizontal), conglomeration,
prudence
competitive
position,
closure,
organizational slack
AFFILIATION
Trade association, industry publications,
Striving to be accepted by intimate
lobby group, bargaining, huddling,
member’s of one’s family or a group
cooptation
ESTEEM AND STATUS
Market position, product leadership,
Striving to achieve a high standing relative
financial ratios and margins, market share,
to others
image creation, price leadership
SELF-ACTUALIZATION
Internal (employee relations)
Job enrichment, compensation policy,
pension plan, work centrality, goal
A desire to know, understand, systematize, alignment
organize, and construct a system of values External (community and government
relations)
Corporate philanthropy, affirmative action,
pollution abatement, product reliability
Source: Tuzzolino & Armandi, 1981.
They even go further by talking of the teleogical imperative of today’s organizations, of
the need for goal congruence within the organization, the socially responsible activities
companies should be engaged in, and the fact that firms should repair the damages they
made to the environment 10 or 20 years before they even started to engage in CSR.
If we try to apply this scheme to SMEs they would probably be in one of the first three
steps, but no further. Thus, from this, we can see that SD and CSR cannot be taken care
of by any companies, as some of them have other priorities, such as just “surviving”.
Nevertheless, some SMEs start to have CSR policies while some MNCs are not doing
anything at all (except maybe some PR). Another element to take into consideration is
that the authors wrote this article more than 25 years ago, and other issues have emerged
since then (like global warming emphasized by recent disasters). Some things have
actually evolved over the last 25 years and it is also in the interest of SMEs to engage in
16

23. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
CSR voluntarily so that whenever any regulation shows up they are prepared and they
have no additional costs to bear.
The socially responsible organization is the self-actualizing organization (even though
the categorization of needs is fairly subjective): having satisfied prepotent needs, they
have the envious position of voluntarily contributing to the welfare of all their
constituencies38.
2.4 Critics and Measures to Overcome Them
2.4.1 CSR also Raised some Critics
Different critics have been addressed towards CSR, some argue that there is no need for
it, others say that it is unnecessary as, even if companies do not do anything for it, they
will not be sanctioned, finally it is also said to give too much freedom to companies that
eventually use it as a tool to avoid confrontation with stakeholders.
The French movement Attac (Association pour la Taxation des Transactions financiers
pour l’Aide aux Citoyennes et citoyens) also highlights the fact « social responsibility »
depends on soft law, which is not binding, is freely chosen by companies, and depends on
moral commitment only, without any penalty in case of non respect. The State does not
intervene, thus CSR fosters self-regulation.39
According to Betsy Atkins40, shareholders expect companies not to be irresponsible, thus
not to spend money on unnecessary things (like social causes which do not increase
profits). Companies should comply with the laws and regulations without behaving
zealously; otherwise they would irresponsibly and deceptively squander the money of
their stockholders. Actually, if shareholders want to behave in a socially responsible way
they do not have to rely on companies to do so: they can act by themselves. Atkins also
highlights the fact that firms should use “the rhetoric of social responsibility” as a
marketing tool, so that people feel good about consuming their products and investing in
the corporation, but firms should not spend money for it. She is actually following the
direction given by Milton Friedman (1970) for whom social actions can only be made
38
Tuzzolino and Armandi, (1981), “A Need-Hierarchy Framework for Assessing Corporate Social
Responsibility”, 25.
39
Group « Economie solidaire et démocratie économique » from the scientific committee of Attac: 2003,
“Responsabilité sociale des entreprises, ou contrôle démocratique des décisions économique ?”,
L’Economie Politique, April, 18, 7-25.
40
Atkins, B., (2006), “Corporate Social Responsibility: Is It “Irresponsibility”?”, The Corporate
Governance Advisor, 14(6), 28-29.
17

24. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
keeping in mind value maximization41, thus a firm can undertake social actions if it
“[makes] it easier to attract desirable employees, it [reduces] the wage bill and [lessens]
losses from pilferage and sabotage and [has] other worthwhile effects”42 or if it would
permit to avoid corporate taxes e.g.. For him, “whether blameworthy or not, the use of
the cloak of social responsibility and the nonsense spoken in its name by influential and
prestigious businessmen, does clearly harm the foundations of a free society”.
Alexandra Petrovic recounts in La Tribune that a study from Parson Consulting showed
that companies complying with the minimum requirements in terms of CSR are not
imposed sanctions on.43 Even in spite of social or environmental scandals, some
companies keep being very profitable (Total e.g.). Nevertheless SD is not opposed to
financial performance, even though SD is too often used for marketing purposes.
As also reminded by Lionel Lévy44, in France, listed companies have a legal obligation to
issue a sustainable development report every year (or include specific indicators in their
annual report clearly linked with their enforcement of CSR). However, most of the 700
French listed companies do not respect this law45, showing that sustainable development
is only used for marketing purposes for the image of the MNCs, without the
transformation of operations it should incorporate. There are also notation agencies that
can give the main audience a good overview of MNCs’ operations; however we are not
sure they are checking for the conditions in every country MNCs operate in.
Thus, from these remarks we can draw a first hypothesis:
H1: There is no sanction imposed on companies that are not committed to CSR.
Attac also denounces the fact that, as now companies have the shield of CSR, they are
choosing the partners they are negotiating with instead of the traditional collective
bargaining. They can also choose their own instruments to measure their progress in
terms of CSR, without using any standardised tools. A pretty similar critic comes from
the fact that CSR tends to bypass unions (which can also be supplanted by partnerships
between companies and NGOs). Actually when we read about CSR, we barely read
about unions or the potential role they can have in it.
41
Garriga, E. and Melé D., (2004), “Corporate Social Responsibility Theories: Mapping the Territory”,
Journal of Business Ethics, 53, 53.
42
Newton, L. H. and Ford, M. M., (2004), Taking Sides: Clashing Views on Controversial Issues in
Business Ethics and Society, 8th ed., McGraw-Hill, 93. From Milton Friedman, “The Social Responsibility
of Business is to Increase Its Profits”, in Thomas Donaldson and Patricia H. Werhane, eds., Ethical Issues
in Business: A Philosophical Approach, 4th ed. (Prentice Hall, 1993). Reprinted from The New York Times
Magazine (September 13, 1970). Copyright © 1970 by Milton Friedman.
43
Petrovic, A., (2006), “Le choix du développement durable ne profite guère aux entreprises”, La Tribune,
Jan. 17, 34.
44
Lévy, L., (2005), “Des rapports environnementaux et sociaux encore insuffisants”, La Tribune, April 29,
35.
45
Law n°2001-420 related to new economic regulations (Art. 116), 2001.
18

25. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Likewise the French movement mentions that charters and codes of conduct are a good
means to send a signal to stakeholders however we can never know if they are really
implemented or not. Moreover, even though more and more companies seem committed
to CSR, the literature might tell us that concrete practice of CSR is limited as we can
only read always the same few examples (Shell, Nike, Adidas, Ben & Jerry’s, Body
Shop…).
Finally, Attac also says that CSR tends to take into account direct stakeholders, while
neglecting general interest.
2.4.2 Implementation of codes of conduct and reporting
As an answer to criticism on their implementation of CSR, more and more companies are
creating codes of conduct in order to make their commitment more concrete. Stefanie B.
Hiβ46 points out that systems to monitor these codes of conduct are often criticized as
they are said to be limited to few impromptu controls which are not an incentive for
sustainable improvements and efforts. Moreover controls usually cannot reach the
informal sector (impossible to check if subcontractors are complying with the codes of
conduct) which might be an incentive for relocation from the formal to the informal
sector. Finally, because of dependency structures, suppliers only comply with the least
that should be done (keeping in mind money savings).
KPMG conducted a survey47 in order to analyze trends in CSR reporting of the world's
largest corporations. For this purpose, they looked for information on the top 250
companies of the Fortune 500 (G250) and the top 100 companies in 16 countries (N100),
which accounted for more than 1600 companies.
Thanks to this survey KPMG found out that reporting has been increasing for 12 years.
Changes occurred in the information provided as before the main content was about
environment; nowadays (from 1999) sustainability reporting is also made (with still
environmental components, but also social and economic ones). In 2005, 52% of G250
and 33% of N100 companies issued separate CSR reports (45% percent and 23%,
respectively, in 2002). If we include annual financial reports with CSR information, these
percentages are even higher: 64% (G250) and 41% (N100). The sectors which have a
relatively high impact on environment are still leaders in reporting. At the global level
(G250), more than 80% companies are reporting in electronics and computers, utilities,
automotive and oil and gas sectors, whereas at the national level (N100), over 50% of
companies are reporting in the utilities, mining, chemicals and synthetics, oil and gas, oil
46
Hiβ, S. B., (2006), “Does Corporate Social Responsibility Need Social Capital?”, Journal of Corporate
Citizenship, Autumn, 23, 81-91.
47
KPMG, (2005), International survey of corporate responsibility, electronic version.
19

26. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
and gas and forestry, paper and pulp sectors. However the most remarkable increase is in
the financial sector (more than 50% growth since 2002).
Companies now need to also set up an independent external system of monitoring (in
addition to codes of conduct and internal controls), conducted by an independent
organization (NGO e.g.). It makes them more credible towards their stakeholders
(criticism of internal monitoring and the fact that codes of conduct have been
implemented in an unreliable way). Firms also have to develop these monitoring systems
in their supply chain in the developing countries in order to raise social standards there48.
‘Social standards’ is generally the “comprehensive term for minimum standards with
respect to the provision of labour contracts and labour rights”, more specifically ‘core
labour standards’ refers to the definition of the International Labour Organization (ILO)
– 8 key conventions in 4 areas49.
Nevertheless, there are complementarities between internal and external monitoring;
furthermore, internal monitoring can help to spread social standards within the culture of
the company if management feels concerned about it. There is actually a real need for
reciprocal understanding, taking into account the different cultures as MNCs are
operating in different countries with different cultures. In fact, problems can arise when
the manager has to make a choice between loyalty to the parent firm or the host nation’s
cultural values50.
2.5 Increasing expectations on MNCs
2.5.1 Should companies play the role of too weak governments?
Companies also have to understand now that there is an increase in social expectations
and that their role is being more important, it is not only about philanthropy, it is because
their power is huge (some MNCs have bigger budgets than those of some states) and for
this reason society is expecting accountability from their part. There are more and more
problems at an international level that governments fail to solve together (especially
environmental problems), thus companies are expected to commit themselves to find a
48
Hiβ, (2006), “Does Corporate Social Responsibility Need Social Capital?”.
Ibid, 82.
50
Amba-Rao, S. C., (1993), “Multinational Corporate Responsibility, Ethics, Interactions and Third World
Governments: An Agenda for the 1990s”, Journal of Business Ethic.
49
20

27. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
solution to these issues. They wanted to be more powerful and for some of them to get
more power than states, consequently they have to work on global issues.51
One of the sectors in which we can realize that governments not always play their role
any more is security as in some countries standing army supported by the state budget
tends to be out of date.52 Consequently it is noticeable that public and private sectors are
getting closer in their economic and security processes. Private sector provides arms and
techniques (legally or not), it can also offer security services (and it also has the most
dangerous technologies at its disposal) while public services (like defence departments)
are undergoing research and using technologies closed to the ones normally linked to
private sector. Furthermore, the business sphere has a more or less marked influence on
conflicts:
•
it can manipulate them, stir them up, keep them alive, even provoke them
•
and when conflicts end, the private sector is expected to provide resources for
rebuilding, to promote political or social rights, to give an orientation to new
investments53.
When conflicts are going on, companies should choose their side, or leave the country
(however this is usually quite expensive, especially if they plan to start operations over at
the same place), this would be morally the best solution. Anyhow, according to Bailes
and Holmqvist, recent analysis showed that growth and international economical
commitment more often end conflicts than produce them. Moreover MNCs often have
better knowledge of dangerous zones than national or international entities, thus they can
gain power from this situation or people can expect them to act responsibly as
governments should be doing.
2.5.2 CSR’s stakes
As mentioned in the Caribbean Business (2006)54, corporate philanthropy was first
focused on parent countries and is now expanding worldwide (even in countries firms are
not operating in, through foundations e.g.). Actually, companies found out that it can
help them reach new markets, develop better relationships with local governments and/or
business partners, and they are also improving their image. Philanthropy has thus become
51
Ruggie, J., (2002), “Comment & Analysis: Managing corporate social responsibility”, Oct. 25, Financial
Times,
http://search.ft.com/ftArticle?queryText=%22corporate+social+responsibility%22&aje=true&id=021025
000706&page=2.
52
Bailes, A. J. K. and Holmqvist, C., (2006), “Quel rôle pour le secteur privé?”, Politique étrangère,
Spring, in Problèmes économiques, May 24, 2.900, 33-38.
53
Ibid, 34.
54
Anonymous, (2006), “CSR and Philanthropy”, Caribbean Business, Sept. 28, 52.
21

28. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
a strategy by aligning charity with core business interests. Measurement tools of the
impact of charitable contributions have even been developed.
Moreover, CSR and the related codes of conduct should be an opportunity to spread
social standards in developing countries. However, “the social standards integrated into a
code of conduct convey certain values and norms. The monitoring systems used to
control the implementation of social standards have their limits because the ‘idea’ of
social standards and the values and norms incorporated in them do not trickle down into
the developing societies.”55 Thus social standards can be implemented only if they are
adapted to the context of each country, and their implementation can be sustainable if
there is “‘capital to be social’56 to bring them to life” (Hiβ, 2006).
“Increasingly companies are successfully intertwining public purpose marketing or
enlightened capitalism with their economic-oriented marketing strategies”57. Even
though marketing has been recognized as a way to promote CSR, some still think that
deciding to market socially is a trade-off with other activities (like performance
marketing). On the contrary, Attac says that nowadays thanks to CSR and
communication about it, companies can gain a competitive advantage over their
competitors and consider a long-term growth as they are now appreciated from internal
(employees) and external (consumers, governments) opinion.
According to Handelman and Arnold58, for the institutional theory, the viewpoint that
organizations attempt to meet short-term goals is incomplete. A main point in the
institutional theory is the acknowledgement of the institutional environment which
contains taken-for-granted social and cultural meaning systems defining social reality.
Thus the organization’s structure reflects the norms of the environment in which it is
immersed. Consequently in a same environment, organizations will tend to be
isomorphic as they are facing the same conditions. Organizations will try to find
legitimation which “represents a perception of how well the organization enacts and
upholds environmental norms”59. There are two elements of legitimation: pragmatic
legitimacy (egoistic motivation to increase one’s own welfare) and social legitimacy
(important for survival), based on whether the organization’s actions are consistent with
the welfare of the community and society. Organizations are looking for this legitimacy
55
Hiβ, S. B.: 2006, ‘Does Corporate Social Responsibility Need Social Capital?’, Journal of Corporate
Citizenship, Autumn, n° 23, 88.
56
Capital to be social’ is a normative quality of social capital including the use of networks, shared values
and trust in order to develop an affirmative attitude towards general interest.
57
Handelman, J. M. and Arnold, S. J., (1999), “The role of Marketing Actions with a Social Dimension:
Appeals to the Institutional Environment”, Journal of Marketing, July, 33.
58
Ibid, 34.
59
Ibid, 35.
22

29. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
from the society – word-of-mouth behaviour, avoiding boycotts (Handelman and Arnold,
1999).
They formulated four hypotheses and tested them with video scenarios shown to random
customers in a mall to collect their impressions. The results of the study indicate that
institutional theory has four specific contributions to make to the way we strategically
think about store, product and brand choice:
•
the theory and empirical results of this study strongly support the case for
institutional actions to become a strategic centrepiece, along with marketing’s
economic-oriented strategy
•
constituents have a minimum level of institutional actions that they find
acceptable, below that level, the effects of even high performative firms are
significantly impaired
•
legitimation reflects constituents’ approval of the organization, which is
necessary to obtain constituents’ support
•
institutional theory identifies support as an important dependent variable,
replacing the more specific store, product or brand choice variable if an
institutional orientation is to be adopted
Applied to CSR, this would explain that it is in the interest of MNCs to develop CSR
processes if other firms do, as their perception from stakeholders will be improved. Even
independently of what others are doing, MNCs should commit more to CSR in order to
comply with the expectations of their stakeholders; they will be able, then, to get
legitimation for their activities.
Companies are more likely to engage in CSR in a more regulated environment, either
through government regulations, collective agreements or when they partner with NGOs,
they need institutionalization to feel compelled to act responsibly. Stakeholders’ activism
is also usually required for the first move towards CSR60.
2.6 Performance
2.6.1 Socially Responsible Investment
“Socially Responsible Investment (SRI) combines investors' financial objectives with
their concerns about social, environmental, ethical (SEE) and corporate governance
issues. SRI is an evolving movement and even the terminology is still very much in the
evolving phase. Some SRI investors refer only to the SEE risks while others refer to ESG
60
Campbell, J. L., (2006), “Institutional Analysis and the Paradox of Corporate Social Responsibility”,
American Behavioral Scientist, March, 49(7), 925-938.
23

30. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
issues (Environmental, Social, and Governance). Eurosif believes both are relevant to
SRI. SRI is based on a growing awareness among investors, companies and governments
about the impact that these risks may have on long-term issues ranging from sustainable
development to long-term corporate performance.”61
SRI comes from the American business ethics, which started mostly with religious
congregations that wanted to invest in businesses respecting their Christian values.
2.6.2 Views on Performance
Meyer argues that “the performance of the firm is very difficult to measure, perhaps
impossible”62. As for him, the Western capitalistic way of thinking of performance is not
reliable as we cannot forecast future cash flows in a non-static environment. Moreover it
is also possible to cheat on figures by overstating revenues for instance. Even though we
have the possibility to add other (non financial) components to materialize performance,
those are too subjective (such as the balanced scorecard, defended by Kaplan) as it also
depends only on estimate. Thus thinking of performance seems only possible in the short
run, implying that it cannot have any academic realization.
J.P. Gond63 studied the interactions between societal and financial performances,
showing that they depend also on the interests main actors can have on the market. The
article he wrote attempts to show how interested actors construct and spread beliefs
concerning a positive relation between societal and financial performances on financial
markets on the one hand and in the business world on the other hand.
As for Gond, the choice of investing in a socially responsible way does not come from an
economic rationale but from a belief. He then tries to show how from these beliefs, the
positive relation becomes true thanks to interactions between societal and financial
performances on financial markets and in the managerial sphere. From an academic
perspective, he points out disappointing empirical results, with no concrete proof of a
positive relationship. From a managerial perspective, he brings to the fore that there is an
interest in a positive relation (at least symbolically), to legitimate measures managers
take. However to implement that kind of measure, the managers’ decisions depend on the
institutional context, as they have to be part of the social context.
61
European Social Investment Forum: http://www.eurosif.org/sri.
Meyer, M. W., (2005), “Can Performance Studies Create Actionable Knowledge if We Can’t Measure
the Performance of the Firm?”, Journal of Management Inquiry, 14, p. 287.
63
Gond, J. P., (2006), “Construire la Relation (Positive) entre Performance Sociétale et Financière sur le
Marché de l’ISR : de la Performance à l’Autoréalisation ?”, Revue d’Economie Financière, Sept., 85, 1-17.
62
24

31. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Consequently, ratings have been created for the convergence of both concepts and permit
to define a metric on which to align “soft” notions linked to CSR. Actors can then
rationalise their actions with their newly adopted beliefs.
The positive correlation shown is also put forward, as we can only read or hear of a
positive correlation. Actually, if this correlation shows that responsible companies
outperform then an institutionalisation is possible at a larger level, if there are beliefs
existing then companies are going to change their way of doing things.
Previously, as no clear relationship had been established between Corporate Social
Performance (CSP) and Corporate Financial Performance (CFP), Orlitzky, Schmidt and
Rynes decided to conduct a meta-analysis to find a relationship between CSP and CFP.
So far, there had only been individual studies that lead to no conclusive result, no stable
pattern has been found yet. Thus the authors decided to aggregate the results of
individual studies, in order to get a greater precision thanks to the correction of statistical
errors. The following chart is summarizing different theories about potential
relationships, prior to their study:
25

32. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Table 2.4: Theories on relations between CSP and CFP
Theories
Relationship
between CSP
and CFP
Instrumental stakeholder
theory
CSP
=>CFP
Stakeholder-agency
theory
CSP
=>CFP
Good management
theory
CSP
=>CFP
Slack resources theory
CFP
=>CSP
Virtuous circle theory
CSP
CFP
Authors
organizational performance depends on the
satisfaction of the different stakeholder
groups – Donaldson and Preston 1995, Jones
1995
- the different processes set up to adapt and
communicate with each stakeholder group
allow the managers to concentrate on the
organization’s financial goals (Hill and
Jones, 1992; Jones, 1995)
- when dealing with multiple stakeholders,
managers can permit their organization to
respond more efficiently to external demands
(Freeman and Evan, 1990)
high CSP provides a competitive advantage
by giving more rationality and fairness in the
treatment of external claims (Waddock and
Graves, 1997)
prior CFP is directly associated with
subsequent CSP:
- high levels of CFP may provide the slack
resources necessary to engage in CSR
(Ullmann, 1985; Waddock and Graves,
1997)
- the decision to allocate funds or determine
social and environmental policy depends on
the availability of excess funds (McGuire et
al., 1988)
cross-sectional relationship (Waddock and
Graves’, 1997)
Source: Orlitsky, Schmidt, Rynes, 2003.64
After the conduction of their meta-analysis across studies, they draw the following
conclusions:
- CSP and CFP are positively correlated
- the relationship of the relation is bidirectional and simultaneous
- reputation seems to be an important mediator in the relationship.
Moreover, the implication for managers is that market forces do not punish companies
with a high CSP, and that they can use (and should use) CSP as a reputational lever65.
64
Orlitzky, M., Schmidt, F. L., Rynes, S. L., (2003), “Corporate social and financial performance: a metaanalysis”, Organization Studies, 24(3), 403-441.
65
Ibid, 426.
26

33. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Koedijk et al. (2006), in their paper, aimed at showing whether a firm can do good by
doing well. They used a database of eco-efficiency scores on a 8-year period (from
Innovest) to check if it influences financial performance and firm valuation. They found
out that “the benefits of adopting a strong environmental policy are unlikely to outweigh
the costs”66 and “that environmental winner companies initially did not trade at a
premium relative to losers” 67. However, “over time, the valuation differential between
winners and losers widened substantially”68. Thus, they demonstrated that “managers
have little reason to worry that an environmental policy conflicts with the company’s
primary financial objectives”69.
Ultimately, from this literature, I can draw five more hypotheses:
H2: Good environmental performance generates good financial performance.
I decided to focus on environment as there are more quantitative data on environmental
issues, as still some things can be measured, contrarily to social issues that are sometimes
just perceptions, or ways of doing things with nothing written, thus quite hard to prove.
The following hypothesis will permit to attempt the generalization of H2:
H3: Companies with high socially responsible standards perform better than those with
poor socially responsible standards.
Then, as we can hear more and more of CSR, I propose the following hypothesis:
H4: Companies tend to generalize CSR policies.
After that, I will test a hypothesis on whether companies are really committed to CSR:
H5: CSR is just PR.
Finally, to counter critics on CSR, and support a part of the literature, the last hypothesis
is:
H6: Even though sustainable development can be considered as in contradiction with the
market law, it provides development opportunities for companies.
66
Guenster, N., Derwall, J., Bauer, R. and Koedijk, K., (2006), “The Economic Value of Corporate EcoEfficiency”, winner of the 2005 Moskowitz Prize, Social Science Research Network,
http://ssrn.com/abstract=675628, 30.
67
Ibid.
68
Ibid.
69
Ibid.
27

34. IÉSEG Master Thesis – Aude Richon – 2 Theoretical framework
Conceptual framework
In order to have a clear representation of the subject of the study, the readers can have a
look at the following summary of the study:
Figure 2.3: Conceptual framework
Stakeholders
COMPANY
Innovation
Communication
Sustainable
Development
Reputation
Image
Visibility
Economic
…
Environmental
Social
The conceptual framework gathers the entities which interact with a company while in a
CSR process. They are all both inside and outside the company as they all have impacts
and/or are present both inside and outside the company. The arrows represent the
relationships we will study along the thesis.
28

35. IÉSEG Master Thesis – Aude Richon – 3 Methodology
3 Methodology
“Research design is the plan and structure of investigation so conceived as to obtain
answers to research questions […] A research design expresses both the structure of the
research problem and the plan of investigation used to obtain empirical evidence on
relations of the problem”70.
In this part, I will give an overview of the organization of the study to answer the
research question, that is to say what is to be done in more technical terms. This part will
provide information on data collection, instrumentation and procedures. For that, let us
follow the different descriptors of research design given by Cooper and Schindler (2003).
We also have to keep in mind that the research design is clearly based on the research
question and needs to be adapted to it.
70
Phillips, B. S., (1971), Social Research Strategy and Tactics, 2nd ed., 93, quoted in Cooper, D. R. and
Schindler, P. S.: 2003, Business Research Methods, 8th ed., 146.
29

36. IÉSEG Master Thesis – Aude Richon – 3 Methodology
3.1 Research Model
Figure 3.1: Research model
Research purpose
To understand why companies decide to engage in Sustainable Development (SD),
and more specifically in Corporate Social Responsibility (CSR), while taking into
account the relationship between Corporate Social Performance (CSP) and Corporate
Financial Performance (CFP)
Research question
What characterizes Corporate Social Responsibility strategies and do they
have an impact on financial performance?
Secondary questions
Which conditions lie at
the heart of successful
CSR policies?
Why would companies
committed to CSR
perform well/better
financially?
How can companies
overcome/counterbalance
the constraints of
implementing CSR
policies? What are the
benefits?
Research design
Deductive study, quantitative approach (ratio analysis) and qualitative
approach (semi-structured face-to-face/telephone interviews)
Data collection
Primary data: interviews, financial data
Secondary data: annual and sustainability reports, articles, websites
Theoretical background
Sustainable Development, Corporate Social Responsibility, Societal
Performance, Financial Performance…
Analysis and conclusion
Inspired from: Persson & Slonovschi71.
This figure shows the research process and the path I will follow to complete my study
on CSR and performance. The first step is to determine the research purpose, then set up
the research question and subsidiary questions in order to clearly set the course of study
71
Persson, C. and Slonovschi, D., (2003), New Patterns of Foreign Direct Investments Indirect
Internationalisations of MNCs Using Platform Countries, Master Thesis, 12.
30

37. IÉSEG Master Thesis – Aude Richon – 3 Methodology
and research. Subsequently, the figure incorporates the methods used to gather
information and the concepts pre-required to come off to the analysis and draw the
conclusions.
3.1.1 Degree of research question crystallization
I will start with an explanatory study, using a wide range of secondary data (mainly
scientific articles and reports). This study is necessary to start the research as the research
problem is of international concern and a global level implies harder-to-grasp concepts
on which it is almost impossible to have an opinion or quick outlook right away. I will
get qualitative information from scientific articles and quantitative data from reports
(research organizations reports on MNCs and CSR and annual and sustainability reports
from companies).
Then, I will proceed with a formal study in order to answer the few hypotheses
mentioned earlier, drawn from the exploratory research and directly linked to the
research question.
3.1.2 Purpose of the study
The purpose of the investigation is to find out which spillovers a multinational company
(in this study, a multinational company) can get from the dedication of a part of its
resources to Corporate Social Responsibility.
We will have a look at a potential positive relationship between Corporate
Social/Societal Performance and Corporate Financial Performance. I will also try to show
why companies decide to engage in CSR, what they can gain from their commitment
(financially and in other immaterial aspects, such as reputation, innovation…). Thus, the
purpose of the study is descriptive, as the research is more or less made to determine how
sizeable the impact of CSR policies on a company’s performance is. However the study
might also have some causal aspects, as we will try to find relationships between CSP
and CFP.
3.1.3 Type and sources of data
For the sake of the study, we will use both primary and secondary data.
Primary data will be historical data concerning the returns (or other financial data) of
benchmarking stock market indexes and sustainable stock market indexes. They will be
31

38. IÉSEG Master Thesis – Aude Richon – 3 Methodology
compared through ratio and graphical analysis, depending on the relevance of the data
gathered. I will also perform six one-hour interviews with a few Sustainable
Development managers, as I want to understand their vision of CSR and the strategy of
their firm concerning it. Thus I will make only few interviews but these will be in-depth.
If I cannot reach enough companies, I will perform interviews of people working directly
with them on SD/CSR issues, such as consultants in sustainable development, or people
in charge for social investment.
Secondary data will be scientific articles, reports, studies…
3.1.4 Time dimension
The quantitative study will be cross-sectional as I will compare indexes over a 5-year
period in order to have results from which I could draw conclusions.
The qualitative study will be longitudinal as I will meet each person only once.
3.2 Method of data collection
3.2.1 Data collection
As far as data collection is concerned, monitoring will be the collecting process for
quantitative data. I will use the websites of institutions providing sustainable indexes and
databases from Bourse websites such as Yahoo Finance72.
To get qualitative data for the purpose of my study, I intend to interview five people in
charge for Sustainable Development/Corporate Social Responsibility in different French
multinational companies.
I prefer to pick multinational companies because smaller firms usually do not have one
person working full time on this issue, or each department of the firm is dealing with its
own part of social responsibility. For my thesis, I think it will be more relevant to grasp a
more comprehensive view of each company on this subject. If I cannot have access to
companies, then I will interview opinion leaders, who are not members of the companies
but work with them on CSR issues.
As defined by Valerie Janesick, an interview is the “meeting of two persons to exchange
information and ideas through questions and responses, resulting in communication and
72
Yahoo Finance: http://fr.finance.yahoo.com/.
32

39. IÉSEG Master Thesis – Aude Richon – 3 Methodology
joint construction of meaning about a particular topic”73. Interviewing is usually
described as a conversation between two people, one asking questions (interviewer) and
leading the conversation, and the other one answering them (interviewee). In the context
of this thesis, I will be both the researcher and the interviewer, which will allow me to
spend less time on the interview guide, as I precisely know what I am looking for and the
objectives of each question I will ask.
I plan to perform semi-structured interviews (in-depth interviews) – conversational but
with a minimum of structure (exploratory study) – so that interviewees will feel freer to
express their point of view and I will get the maximum information. It will also be easier
for me to catch their perspective on the situation. It will be as well a means to prevent the
“social desirability bias” of the structured interview: I do not only want to hear that
everything done by companies is perfect, I want to hear about a lack of opportunities to
detect issues for instance. As CSR remains quite controversial, it is important also to let
people talk about it, without directing them too much. Finally, I prefer not to use
unstructured interviews: they would be the best situation however the risk of missing
some information is too high.
The questions should have more or less the same meaning to the respondents as they will
occupy roughly the same function, which will take away one risk of bias. Another aspect
is that I will perform personal interviews but not on personal subjects, it will then be
probably easier for interviewees to answer as respondents will not be involved
personally. However the pressure of the company, the corporate culture, the secrecy
around strategy will probably maintain a certain reserve in their answers. Besides
interviewees will more or less control the course of the interview as I am “just” a student
while they will certainly be much older than I am and have a lot of responsibilities, even
though I am questioning them I have to be careful not to be manipulated. Nevertheless,
during the interview, I will develop a normal relationship with interviewees, as for a
discussion, I’ll disclose basic information about myself (background, purpose of my
study), and attempt to establish a relationship of confidence.
I will prepare an interview guide with the wording of questions, making sure it is almost
only made of open-ended questions to encourage the respondents to disclose more
information. I will, as much as possible, avoid yes/no questions, and no leading questions
(those that presuppose a particular answer). I intend to record the interviews, except if the
interviewee does not accept, in order to keep the most reliable of what would have been
said.
73
Quoted in Esterberg, (2005), Qualitative Methods in Social Research, chs. 5-9, McGraw-Hill Primis, p.
83.
33

40. IÉSEG Master Thesis – Aude Richon – 3 Methodology
The readers can have a look at the interview guide in Appendix A.
3.2.2 Weaknesses and strengths of the data collection method
3.2.2.1 Qualitative data
Interviewing allows many ways of gathering information through non verbal
communication, follow-up questions and probe for answers. There is also a possibility of
pre-screening the interviewees (if one firm does not let me talk to the manager for
sustainable development, I can choose another one), and making sure that the participants
have the information I am looking for.
Generally interviewing creates a good cooperation of respondents, but the risk here is
that I am going to interview professionals that have busy schedules and the subject can
be quite sensitive for some companies. Thus, I have to really show them that answering
my questionnaire is worthy. Another issue is that interviewing is costly: in time (to get
the appointments, talk to the people, follow-up) and in money (transportation costs) that
is another reason why I will only be able to interview few people. There is a risk of
subjectivity (because of the way of questioning for instance). Finally, I will have more
experience for the last interviews, so I might not get all the information I need from the
first ones.
3.2.2.2 Quantitative data
The weakness of the quantitative data collection process is that it is not flexible, it will be
difficult for me to analyse just certain components of the indexes for instance, or maybe I
will have the possibility to do it, but then I will not be able to find any benchmark to
compare to. The strength is that the data I will get is reliable and I will be able to draw
conclusions from it and argue against any critics. I will also have a certain flexibility
concerning the indicators I decide to study, depending on each index and/or sector of
activity. I will be able to study differences in financial performance, in volatility opposed
to societal performance for instance.
3.2.3 Research ethics
As far as ethics is concerned, I will be very careful to respect the interviewees I meet. I
will ask each of them if they agree on the recording of the interviews, if they agree that I
34

41. IÉSEG Master Thesis – Aude Richon – 3 Methodology
mention their company and name in the thesis. Moreover, I will not write out what they
tell me off-record.
I will mention every source I use and try to deliver the most relevant study to the readers.
3.2.4 Sampling design
3.2.4.1 Quantitative data
There is a limited amount of sustainable indexes, thus I will study most of them. You can
see the list of sustainable indexes in Appendix B.
Then for deeper analysis, I will study environmental and financial data of the companies
of the automotive sector from the MSCI World, 24 companies listed below:
- Kia Motors Corporation
- Bajaj Auto Limited
- BMW AG
- Maruti Udyog Limited
- Daimlerchrysler ag
- Mazda Motor Corp.
- Mitsubishi Motors Corp.
- Denway Motors Limited
- Nissan Motor Company Limited
- Fiat
- Ford Motor Company
- Peugeot SA
- Fuji Heavy Industries Limited
- Porsche AG
- Renault SA
- General Motors Corp.
- Suzuki Motor Corp.
- Harley-Davidson Inc.
- Toyota Motor Corp.
- Honda Motor Company Limited
- Volkswagen AG
- Hyundai
Motor
Company
- Yamaha
Motor
Company
Limited
- Isuzu Motors Limited
Limited
3.2.4.2 Qualitative data
I will not use a random sample for my study. I will choose a few companies and see if
they accept to meet me. I will attempt to meet the interviewees that would give me the
greatest possible insight on the subject.
Arguing a lack of time and interview fatigue as well, many companies refused the
interview. However, I still managed to interview Caroline Orjebin from Dexia. I met
Damien Buffet from Sarasin Expertise, who is a manager in Sustainable Responsible
Investment funds, and Florent Gitiaux from Ethicity, who is a consultant in Sustainable
Development. I also interviewed Yannick Ouaknine from Société Générale, who is an
35

42. IÉSEG Master Thesis – Aude Richon – 3 Methodology
SRI analyst and Sophie Glémet, who is the corporate communications manager of
Toyota France.
3.3 Data analysis
3.3.1 Topical scope of the study
I will limit my study to multinational companies as the information concerning them is
quite available. I do not intend to cover all the fields of CSR, but to have a more
comprehensive view on it and grasp the strategies of companies.
3.3.2 Method(s) to analyze the data
I will make a cross-sectional study of the interviews performed. It will give me the
opportunity to compare the practices of companies and their vision.
To complete this qualitative analysis, I will use ratio analysis, and a statistical or
econometrical model to explain the link between CSR and CSP and compare the
practices of different companies.
3.3.3 Limits
Even though CSR is talked about more and more, it is still a sensitive subject, and also a
possible way to gain competitive advantage, thus companies are not necessarily open to
share their practices, at least no more than what they actually do. Thus, first, it is quite
difficult to obtain interviews and second, it is highly possible that the only information
given will be the one we could have read anywhere.
36

43. IÉSEG Master Thesis – Aude Richon – 3 Methodology
3.4 Methodology, hypothesis by hypothesis
Reminder of the hypothesis:
H1: There is no sanction imposed on companies that are not committed to CSR.
H2: Good environmental performance generates good financial performance.
H3: Companies with high socially responsible standards perform better than those with
poor socially responsible standards.
H4: Companies tend to generalize CSR practices.
H5: CSR is just PR.
H6: Even though sustainable development can be considered as in contradiction with the
market law, it provides development opportunities for companies.
The following table introduces the readers to the way hypotheses are tested.
Table 3.1: Investigation of the hypotheses
Primary data
Secondary data
- sustainability indexes
returns
- existing literature
- environmental indexes
returns
H1
- existing literature
- annual reports of
automotive companies
- sustainability reports of
automotive companies
- complementary literature
- existing literature
H2
H3
H4
H5
H6
- interviews
- sustainability indexes
returns
- interviews
- existing literature
- interviews
- existing literature
- interviews
- existing literature
Method
- comparison of sustainability returns
against their benchmarks
- link with existing literature
- comparison of environmental returns
against their benchmarks
- ratio analysis of data from the
automotive industry
- link with existing literature
- comparison of sustainability returns
against their benchmarks
- cross-sectional analysis of interviews
- link with existing literature
- cross-sectional analysis of interviews
- link with existing literature
- cross-sectional analysis of interviews
- link with existing literature
- cross-sectional analysis of interviews
- link with existing literature
37

44. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
4 Why would companies engage in CSR policies?
This part corresponds to the qualitative analysis of my research. It consists of the study of
the data gathered from the interviews I performed.
4.1 Presentation of the interviewees
For the readers to better understand the context of my interviews. Here is a short
presentation of each interviewee and its company. The interviewees are presented in the
order I met them.
Interviewee 1
Name: Caroline Orjebin
Company: Dexia SA
Position: Project Manager – Sustainable Development Department
Sector: Banking and finance
Employees: 33 321 of 72 nationalities
Geographic presence: international, 33 countries (except Asia and South
America)
Dexia (group) arose in 1996, from the alliance between two important European
institutions specialised in the local sector financing: Crédit Local de France and Crédit
Communal de Belgique. Dexia is amongst the twenty biggest financial institutions of the
Eurozone and is building its strategy on two pillars: retail banking in Europe (Belgium,
Luxembourg, Slovakia, and Turkey) and world leadership in public and project finance.
CSR lies at the heart of Dexia’s strategy. The group is part of UNEP-FI, the Global
Compact, the Equator Principles, the Principles for Responsible Investment (PRI), and
the Carbon Disclosure Project. Moreover it is included in 7 SD indexes: DJSI,
FTSE4Good, Aspi, Ethibel, Ethical Index Euro, ECPI®E-Capital Partners Indices,
Ethical Index Euro®.
38

45. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Interviewee 2
Name: Florent Gitiaux
Company: Ethicity (SARL)
Position: Consultant in Sustainable Development
Sector: Consulting in Sustainable Development Strategy
Employees: 10 and external experts
Geographic presence: national, with one international client (Rainforest Alliance,
which is an NGO established in Chile)
Ethicity is an independent agency specialised in consulting in SD strategy. It was created
in 2001 and is working with companies such as Danone, Norauto, Yves Rocher, MAAF…
They are supplying them with an inventory of the firm’s situation, a formulation of
recommendations, then they are working together on improvements and concrete actions,
and finally they can also be asked for the set up of the sustainability reports of these
companies.
Interviewee 3
Name: Damien Buffet
Company: Sarasin Expertise AM
Position: Management SRI Values
Sector: Banking/Asset Management
Employees: 12
Geographic presence: national for clients, Eurozone for values
Founded in 1997, Sarasin Expertise AM has been since March 2003 the French
subsidiary of Banque Sarasin & Cie SA, which is a Swiss bank headquartered in Bâle. It
was one of the first companies to engage in sustainable development in France. Sarasin
Expertise is managing 33 billion euros of assets, with an SRI outstanding portfolio of 2 to
3 billion euros.
39

46. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Interviewee 4
Name: Claude Arquizan
Company: Total SA
Position: In charge of the sponsorship of projects aiming at economic development and
employment generation in South West of France
Sector: Petroleum
Employees: 95070
Geographic presence: international (in more than 130 countries)
Total is an energy company, which is one of the chemical manufacturers’ leaders and is
the fifth largest international oil and gas producer. SD is very important for Total.
Indeed the firm is evolving in a controversial environment as the countries where oil is
extracted are mainly dictatorships. Total is part of the Global Compact and recognizes
the OECD guidelines for multinational companies. The group also set up a foundation
in 1992 in order to protect the biodiversity and is listed in the following SD indexes:
FTSE4Good, DJSI World, DJ STOXX SI, FTSE ISS CGI and ASPI Sustainable
Development and Governance indices.
Interviewee 5
Name: Yannick Ouaknine
Company: Société Générale
Position: Senior SRI Marketing Analyst
Sector: Banking
Employees: almost 120 000
Geographic presence: international (established in 77 countries)
Société Générale was created in 1864. It is now a leading bank in Europe in terms of
retail banking, market capitalization, financing and investment as well as asset
management. It also ratified the Global Compact, the PRI, the Carbon Disclosure Projec
and the UNEP-FI. At last, the company stock is listed in the following indexes:
FTSE4GOOD, Dow Jones Sustainability Index World, DJSI STOXX and Aspi Eurozone.
Interviewee 6
Name: Sophie Glémet
Company: Toyota
Position: Corporate Communications Manager
Sector: Automotive
Employees: 67 650
Geographic presence: international (production in 26 countries and markets in
over 170 countries/regions)
Toyota is now the first automobile manufacturer in the world. It sold more than 8.8
million vehicles in 2006. The company is very productive thanks to lean production and
processes such as Kaizen. Toyota is quite innovative technically as well and good at
innovative practices in terms of SD. It is also present in many sustainability indexes and
is part of the Global 100.
40

47. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Dexia, Total and Toyota were interviewed as companies implementing CSR policies; I
attempted to get their point of view on CSR, its development and its outcomes. Ethicity,
Sarasin Expertise and Société Générale were a bit questioned on the CSR of their
company, but their role was more as opinion leaders, since with their activity they are in
regular contact with different companies and have the opportunity to observe evolutions
in terms of CSR.
The questionnaire used for the interviews is in Appendix A (the readers should note that
it had been adapted when I interviewed the opinion leaders).
4.2 Presentation of the themes and subthemes studied
I identified the themes and subthemes in accordance with the notes I gathered from the
interviews and the relevant topics for my research. They are all assembled in the
following table:
Table 4.1: Presentation of the themes and subthemes of the interviews analysis
Themes
Corporate history and CSR
CSR within the company
Communication and (potential)
achievements of CSR
Subthemes
Motives for action
Stakeholders’ influence
Evolution over time
Partnerships in the frame of CSR
Perspectives for the future
SD departments
Governance and decision making
Accreditations, certifications and labels
CSR at the global level
Integration of CSR in the day-to-day operations
Reporting and indicators
Communication
Positioning and image
Performance
Reasons for CSR policies success
First, we will have a look at how companies started to be interested in CSR and the
milestones of CSR policies implementation. Then, we will see the concretization of CSR
on a day-to-day basis, and finally, we will identify how companies communicate on their
SD measures and the results of these measures.
41

48. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
4.3 Interviews analysis
4.3.1 Corporate history and CSR
4.3.1.1
Motives for action
For this subtheme and from the interviews, I gathered ten reasons why companies would
implement CSR policies. They are all in the table below, with the corresponding
argument in the cells on the right.
Table 4.2: Motives companies can have to implement CSR policies
Commitment of
main shareholders
Will/Awareness of
the CEO
Company’s mission
Opportunity to act/
Act like the others
Denunciation of a
problem
Differentiation
policies
Attract new
shareholders
Dexia’s main French shareholder is the Caisse des Dépôts et
Consignations, which is itself very engaged in CSR, while its
main Belgian shareholder is ARCO, a mutualist group from the
Christian labour move which is very attached to ethics and CSR.
The president of Dexia wants the bank to be the reference bank
for sustainable development.
There is a mainstreaming awareness of top management on SD
issues; they are now communicating it to stakeholders.
The strategy of Sarasin Expertise in Paris is only based on SRI.
Toyota’s mission is to build the cleanest cars with the cleanest
supply and production chains.
Ethicity is often consulted by companies with no CSR policies,
which see that some things are happening and want to be part of
the move as well. They always have some actions put in place but
they need help to formalize their policies. Companies are doing
that prospectively rather than with a real will to change.
Some companies just take a few measures, to do like the others,
but take no concrete actions, it is not really CSR.
Nike can be an example for this one. However, it is not very
common, as NGOs do not have enough money to spend on
investigations and communication. Thus they only pick big
examples.
For companies like Sarasin Expertise, specializing in SRI and
working on a niche is important, otherwise they would be run
down by bigger groups.
When a company is in SRI indexes it can attract new investors as
well. They are investors that the company would not have thought
about before, thus CSR can be a good communication and
reputational tool.
42

49. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Toyota was one of the first industrial groups to engage in CSR.
By nature, Japanese companies have a relation to their
environment that is different from ours. They have always worked
on recycled paper, been careful to waste the least quantity of
Culture and tradition energy…
Total has been doing CSR in developing countries for a while,
however before it was “without knowing it”. Of course, now
policies are more developed and permit the population’s
awareness while allowing them to acquire knowledge as well.
CSR can allow to reduce a company’s risk premium and ease its
access to the market.
In the future, another motive for action might be that if SRI is
Easier access to
favoured compared to other types of investments, companies with
financing
no CSR policies will not be able to access to all the capital they
need. Thus they will have to implement stronger CSR policies as
well, so that they could be more attractive to shareholders.
Toyota will not change its policies as it is working and they are
Improved sales
selling more cars thanks to them.
In the cells where no company name is cited, the elements come from the interviews of
the opinion leaders.
From this table, we can see that many different motives can make companies develop
(further) CSR policies. Now let us see who/what can influence firms as well.
4.3.1.2
Stakeholders’ influence
In this subtheme, we will see who are the seven types of stakeholders that can influence a
company’s decision to implement CSR policies and the reason why they can have an
influence.
Table 4.3: How can stakeholders influence a company’s decisions?
Shareholders
Dexia gets a strong demand for SD from its shareholders (especially ARCO),
thus there are meeting them regularly to present their SD action plans.
Total is asked by shareholders to respect SD principles.
According to Mr Gitiaux (Ethicity), shareholders are not really influencing
CSR policies; companies are doing CSR because of other pressure groups.
Nevertheless if shareholders do not ask anything, then the company will not
do anything neither. He mentioned Bouygues as an exception, as there is a
huge participation of employees in this company, and if all the employees
agree that new measures should be taken then they can make things change.
SMEs are doing less than bigger companies as they have less means, and
they are less exposed than large cap companies, thus shareholders have
different expectations.
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50. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Investors
Employees
Civil Society
Politics
Suppliers
Mr Buffet (Sarasin Expertise) said that companies included in SRI funds are
usually “best-in-class”, so they are proactive, they are making more efforts
than the others, they are watching at the market expectations, and answer
investors’ requests.
Collaborators of Dexia are well integrated, there is a European work council
guiding all the national work councils, they choose themes (one per year) and
work on them. They organize discussions with employees and internal
competitions to better deal with environment issues within the company. The
top management commits itself to set up the winning propositions.
Total’s employees are questioned by external institutions, thousands of them
are interviewed and there is a public restitution of the results.
Generally Toyota’s employees are satisfied and proud, thus they will not do
anything against CSR even though the relation to CSR really depends on
each individual and the following commitment is variable.
Yearly, Dexia meets the NGOs which seem to be the most implicated in
financial sector issues to explain them its strategy and discuss new ways of
improvement, even to take action jointly.
Mr Ouaknine (Société Générale) mentioned that NGOs have an impact also
when they are leading denunciation activities. Eventually, they almost
automatically make things change. Thus, when Adidas was denounced for
not checking how its outsourcers worked, everyone knew it. However,
Adidas changed its methods, and has now implemented internal auditing with
very precise specifications. That kind of NGO action is considered very
seriously as it can clearly have an impact on the firm’s image.
Mr Gitiaux said that politics has an influence on CSR policies as well: the
first discourse Nicolas Sarkozy made after being elected included a long part
on environment (while it was not the main part of its programme). Thus,
companies’ top management hear signals and can start working on measures
instead of waiting for legislation as things are moving fast (it may even go
faster in France after the “Grenelles de l’environnement”).
Mr Arquizan (Total) insisted on the fact that a legal framework is starting to
be implemented, with new regulations comprising incidences on companies’
practices of CSR.
When Toyota goes abroad, the first consulted stakeholder is the national
government and then the local authorities. Having good relationships with
them permits the firm to be respected and give a better image of it inside the
country.
CSR permits to have a better relation with suppliers and create less risk if
there is a problem one day (and maybe keep being supplied even though the
company cannot pay for a while).
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51. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Clients
Dexia makes customers surveys to know what they are looking for and what
the tendencies in terms of SD are.
It is very recent that clients are interested in products from companies like
Sarasin Expertise. However the demand is growing now.
Total’s clients are asking for petroleum products produced in the respect of
SD principles.
Ethicity thinks that the customer demand is one strong lever for CSR.
Consumers are starting to be pretty aware of SD, however it does not appear
in their consumption act yet. They are in situation of “total schizophrenia”,
they will still choose the cheapest product or the one they know, even though
they are now more exigent on issues such as planet preservation.
Nevertheless, even though consumers do not buy SD products, at least they
see them on the displays and know that they exist, which will make the
change smoother when time has arrived.
CSR permits to have a better relation with clients and create less risk if one
day there is a problem (and have customers still buy products to the
company).
To summarize the table, let us consider the importance of each stakeholder’s influence:
•
Shareholders: from the interviews, we cannot really decide whether they have a
strong influence or not.
•
Investors have an influence but only on companies already engaged in CSR that are
perfecting their SD practices.
Employees are consulted but they do not have a strong influence.
•
•
The civil society can be quite powerful with big actions, but it is not so common.
However they can influence companies’ decisions in their expertise field.
•
Politics has influence thanks to regulation and consequent laws.
•
The only important thing with suppliers is to keep good relations with them,
otherwise the situation cannot be manageable especially in case of problem.
•
Clients have quite a strong influence on the choice whether companies implement
CSR policies or not. At this time, it does not clearly appear in their consumption but
it will become more and more common in the future.
4.3.1.3
Evolution over time
The process for Dexia’s CSR was initiated in 1998 and corresponded to a commitment
from the president of the group and the fact that Dexia had been formed from the merger
of France’s Crédit Communal with the Belgian one. Both companies had already an
interest in territory development, an activity that implicated SD concepts as well. There
were two phases in the implementation of Dexia’s CSR policies, the first step consisted
in signing major declarations (Global Compact, UNEP-FI, Equator Principles…), the
second step started in 2005 when Dexia started to use SD and CSR as a commercial
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52. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
strategy. Dexia is now the European SRI leader and the firm also started SRI products for
retail banking, with a range of environmental (Belgium) and social (France) products,
according to the sensitivity of each country.
Ethicity was created in 2001. The director wrote the strategy: to set up a SD strategy, the
company’s plan is to add the SD component into the marketing and then go down to the
financial statements, after that add partnerships with NGOs/civil society, allowing
opening the company to the civil society. This finally permits to attain the basis triptych
giving legitimacy to the company. Ethicity has really been doing this for 6 months now.
Before, the company was doing SD, but just SD reports and definitions of a few stakes.
Now the SD reports are just made to accompany their clients’ strategy.
Sarasin has been doing SD since the 90’s, with environmental issues first and then SD
and SRI, taking into account social aspects as well. The headquarters of the company
were built with environmental norms and are covered with solar panels. In France,
Sarasin Expertise was established in 1996 and was one of the first companies to commit
to SD. They were one of the first clients of Arese (now called Vigeo).
First, Total was doing CSR, but without knowing it or communicating on it. As the
company has always been established in other countries (especially developing or least
developed countries), there have always been actions towards the local communities.
However, it was primary made on selfish purposes: more to be accepted, than by
philanthropy. Year after year though, the company started to develop more organized
actions with governments and institutions outside the group. With awareness as regard to
environment, SD started to grow, and things began to be formalized at the global level.
Total refered to international standards to set up its CSR policies. The firm has recently
joined ethics organizations, and signed the Extractive Industries Transparency Initiatives
(EITI) charter in 2002 (to participate in the transparency of oil revenues in countries
where the firm is operating).
Toyota really started to formalize CSR after the Kyoto Protocol (1998). Before that, it
was just latent, impregnated, especially in Japan. Other countries with different relations
to the environment were a bit less implicated at first. In 1992, the company issued
guiding principles that were put in written form in 1997. In 2001, Toyota established the
“Toyota Way” on which every employee shall agree and of which is given a handbook,
explaining the company’s commitments.
All the companies interviewed are quite engaged in CSR, and there is a common trend
with a more recent in-depth commitment to SD/CSR, due to tougher legislation, but also
greater awareness.
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53. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
4.3.1.4
Partnerships in the frame of CSR
Partnerships with NGOs are in further and more serious outburst. As outlined by Mr
Ouaknine, some companies find partners just to look good, but for others we can see that
there are real partnerships with significant investments made, thus in these cases we can
imagine that the commitment is real.
Dexia has one of its products supported by a Belgian NGO, while in France, the
company is discussing several products with “Les Amis de la Terre”. It is actually more a
cooperation than a partnership, as Dexia wants to work on specific issues but not engage
with only one NGO.
Sarasin punctually has relations with NGOs, or ask for the opinion of NGOs or
international organizations, but nothing has been planned for the long term.
Mr Aquizan told me that as an NGO, from its culture and its approach directly aims at
helping people, it has a smooth contact with populations. Thus if Total wants to do
something, it is easier to do it with an NGO, so their action is better accepted, and it is a
win-win relationship as Total gives the funds and the NGO the know-how, thus it allows
an action of better quality.
Société Générale has established many partnerships with NGOs and unions, at the
European level even, in order to validate policies, to share good practices and as sources
of information.
Toyota is having partnerships with local associations in general, for issues such as
environment or road safety (linked to their skills), but also for technical/technological
apprenticeship. However the company does not want to go over its mission. One of their
big partners is Euro NCAP which is making crash tests and help them improve cars’
safety. Toyota barely does actions other than producing or selling cars alone, for money
reasons, but also because other people can do it better.
It is not always easy for NGOs and companies to understand each other, thus Ethicity
helps them reach one another and find solutions together. Sometimes companies want to
do something, but they do not know what exactly, so if some kind of mediator can
intervene and help them it is better for both sides. Indeed NGOs often lack the habit to be
in contact with companies. Ethicity can help them as they know what companies are
looking for and how any project should be presented to them. Thanks to that, they
developed partnerships with brands (such as Volvic-Unicef) or helped NGOs
externalizing their relations with companies (Rainforest, Croix Rouge). These
partnerships can have an influence on the conduct of business if they are meant for the
long term, as it helps businessmen work differently (with big partnerships such as
Lafarge-WWF or Carrefour-FIDH for the most famous ones). It seems quite common
now, but even 10 years ago it was almost unthinkable, as NGOs and businesses are two
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54. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
different worlds. These partnerships also permit companies to open a bit. NGOs can
bring their expertise, for instance if they are criticizing the supply chain of a company,
they can also help the company find better solutions to solve those issues (like child
labour).
4.3.1.5
Perspectives for the future
CSR is going to be more and more common and be part of companies’ practices. Indeed,
companies that defined their stakes 3 years ago are now better equipped, moreover
juniors are more and more sensitized to CSR, they had classes on it, they thought of the
situation. The main problem is to change the business model. Thus, we cannot really
imagine how the situation will be in 5 years.
Sarasin Expertise hopes that CSR, and SRI will be generalized in the future, but has not
too many illusions, as companies are very demanding but only 2% of the capitalizations
are SRI, consequently it does not impose an important lever. Investors will probably be
more careful in the future, but we do not know if companies will do the same. Maybe
later, when returns are shown to be positive, more and more investors will be interested
in SRI. Otherwise, if SRI does not create value in the future, it will disappear and only
ethics investment will remain.
Commitment to CSR is not just reports; it is a global process, a reporting public process,
even inside Total’s headquarters. There, TV screens are displaying the evolutions of
work accidents in comparison with the previous year. Moreover, these data are published
internally, thus employees start to be impregnated with that. They are influenced thanks
to reports, posters, ceremonies (internal and external, with competitions and award giving
for the subsidiary with the least accidents for instance). Total is very demanding, and in
the future, this dimension will grow as employees are more and more aware.
Mr Ouaknine (Société Générale) thinks that SRI will tend to be generalized, in terms of
amount (SRI: b€ 100 in Europe) and thanks to initiatives such as the PRI (Principles of
Responsible Investing) where the social, environmental and governance dimensions will
be more and more taken into account, even for classic investment.
Finally, in terms of reporting also it is interesting, as standards are not definite yet, every
year more relevant indicators are found. We will look at elements we did not look at
before, depending on the development of the activity, on the new regulations, according
to customers’, investors’ and shareholders’ demands.
For the future, it seems that CSR policies will be reinforced and SRI will grow (meaning
that companies will want to be part of SRI and improve their CSR policies). Reporting
will be more accurate, and data more transparent.
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55. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
4.3.2 CSR within the company
4.3.2.1
SD departments
Dexia has had it SD direction since 2002; it is directly connected to the Vice-President of
the group.
Total’s SD department has been working since 2000, and it is a direction for hygiene,
safety (people and goods), and environment. Before that, there was no direction but some
positions already existed.
SD is very intrinsic for Japanese companies and before going abroad, Toyota did not
have the utility to formalize CSR. As a result now it has an SD department, and even an
environment department. Moreover, it is not just centralized: each unit in the world has
its CSR and environment departments.
According to Mr Gitiaux, there is not always an SD department in each company as CSR
is a quite recent phenomenon. In general, when there is no SD department, the SD
management function is attached to the marketing, communication or strategy
department. It is due to the fact that these departments are very open to the exterior of the
company, so they have necessarily heard of what others are doing about SD. They can
also put a bit of pressure on the company, for instance if the communication department
is asked to communicate on SD and if the company does nothing, they will have a
problem as nowadays not talking of CSR/SD is really bad perceived. Another example
would be the marketing department asking itself why the yogurts sales growth is really
low for the company while small producers of organic yogurts have a double-digit
growth. Then they will want to do something as well.
There is no good nor bad attachment to any department, however if the SD function is
attached to the communication department, it has to change in the future as it is not their
vocation. The communication department often lacks pragmatism, even though they are
really good at mobilizing people inside the company to change behaviours. The
marketing department can make people react more easily, and plan the processes as it is
used to do that all the time. The attachment of the SD function is not a factor of success
or failure; however we lack quantitative data to have a better view of the repartition. Mr
Ouaknine has the same opinion, saying that the SD function attachment does not
foreshadow any results, in terms of CSR or inclusion in SRI funds. He even adds that it
can be attached to the human resources department as well. He mentioned also that even
though there is no dedicated department, there is always someone to answer questions on
CSR. According to the level of advancement of the company, the department will be
more and more crowded; sometimes they can even have dedicated auditors.
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56. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Although interviewed companies all have an SD department, it is not necessarily the case
for all companies as CSR is quite new for most of them. Nonetheless, if the SD function
is attached to another department it can work really well too.
4.3.2.2
Governance and decision making
In 1998, Dexia’s president initiated the SD strategy, now the strategy is defined by the
executive committee and the vice-president of the committee is in charge of the
supervision and follow-up. The action plans are implemented by the committee, which
defines the strategy. The SD direction animates a network, of approximately 30
contributors in different positions, subsidiaries, entities and the coordination committee
gathering representatives of all the main banking positions. They meet once a month,
which permits them to reinforce the group’s good practices, makes them known to other
departments and updates the action plan.
Total’s governance system is quite consultative, at every level; nevertheless it is variable
and depends on the context. In foreign countries it is usually Total that is insufflating
most of the things, while in France it is a bit different. There is not really production in
France, it is more strategy, studies, there are different committees where people discuss,
express opinions, then the top management is following them or not. Suggestions,
discussions, commentaries are taken into account. Generally, employees are consulted,
thanks to satisfaction questionnaires or asked what they would like the company to do.
Methodologies are made internally, from laws proposed by the government. As above
management’s will, the support of all the employees is needed, they are regularly
consulted on implementations, means, and methods because they are concretely in charge
of the implementation and application of the policies. Now that CSR is common for
Total, the board is pushing the decisions, even though it has to be validated by the
management board and the shareholders. As the board knows evolutions in customs and
awareness, there are no problems while making decisions.
Toyota is organized into a real hierarchy (like any Japanese company). It has a
management board and every foreign entity has a board representative (in our case it is in
Brussels, as it is Toyota’s European headquarters), plus a local president and
representatives. The hierarchy is very vertical, but for decision making, the notion of
consensus is really important. All the strata should acknowledge a file, a project, thus at
all levels of the company, there are many meetings, exchanges before any validation.
For Mr Ouaknine, it is hard to think that the CEO can decide by himself to implement
CSR policies, Mr Gitiaux was thinking the contrary (at least for the first launch of CSR
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57. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
policies). Today, very few firms have someone in charge of SD, usually the investor
relations service is doing it. Thus we can imagine that the board decides to set that up and
do not really ask the employees’ opinion, considering that they would not say no.
Companies with CSR policies are usually quite consultative, but this element is also part
of more pushy social initiatives.
4.3.2.3
Accreditations, certifications and labels
All companies agreed on the importance of labels and accreditations. Actually, many
companies took international commitments such as the Global Compact or the UNEP-FI.
These commitments or accreditations, such as ISO 14001, are chosen because they are
issued by international institutions, even international organizations that permit visibility
and acknowledgement. Of course, it has impacts on reputation, but mostly at the moment
when the company signs the agreement, it is to further its commitment. It also gives
companies the opportunity to precise their segment, maybe choose a more innovator one.
Anyway, the goal is not to have certifications but to improve processes quality in all the
entities. It is not necessarily important to possess certifications, it does not necessarily
have impacts on performance, but it can have some on reputation (while saying in the
sustainability report that the company is part of SRI funds for instance). Nevertheless,
everything is not really clear for the moment, as some companies are creating their own
labels, confusing customers. Other labels like AB, ISO, Max Haavelar, Rainforest,
European Eco Label, have precise specifications. The French government is already
thinking of a label for fair trade, thus companies should do “intelligent lobbying” so that
maybe a national accreditation (even European) can be created and formalize companies’
commitment.
Possessing accreditations is important to everyone, for the reputation of the company, for
the improvement of its methods (impacting then performance and productivity), and for
clients to make sure that the company is using known and accepted processes and
methods. For financial analysts, of course it depends on the accreditation or label but at
least it shows a will of commitment, and can reinforce the trust we have in the
company’s communication.
As Toyota’s president would say, you have to be accepted and acceptable for future
generations, companies that do not will disappear. Choosing certifications and making
improvements is the first step in being accepted.
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58. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
4.3.2.4
Integration of CSR in the day-to-day operations
Dexia integrated CSR to activities themselves. It is an operational integration and the
collaborators are sensitized, for them to be aware of the strategy and develop products
that are relevant to this strategy.
Total operates in more than 130 countries. In connection with its CSR policies, it sets up
actions in accordance with local governments of the countries where it is established in,
in order to favour economic development of the communities. For instance, in Angola,
the group developed a project to support individual or SME projects by giving a financial
coverage to local banks. Thus, local banks (and the local economy) are working, and the
population can set up projects without being worried with loans. Furthermore, Total
employs locals to participate in the extraction process, but the activity is momentary thus
they have to make sure that the economy will not collapse when they leave the place.
They have reclassification plans for their employees (they are usually the first ones to do
that in those countries), and if they cannot find anything for them. They put forward that
employees can go back to agriculture but with better knowledge and the possibility to
make their activity more productive and/or start to sell their products.
Another manner to integrate CSR to their operations is for companies to have an
influence on some of their stakeholders. Dexia wrote a professional code of ethics for its
relations with suppliers, including, among other things, environmental and social criteria.
The company is also very careful of projects financed, for instance they are financing
many projects for renewable energies. Total is transmitting its commitments as well,
especially when outsourcing, they have conditions imposed on for safety, hygiene, and
environmental conditions as well. The choice of outsourcers is made according to
specifications that they have to respect and that include CSR aspects.
Many companies are working on environmental and social aspects and leverage on these
aspects to improve their performance (financial performance included). For example with
recycling, as waste can be processed then if the firm can manage to recycle it, this can
turn into a supplementary source of profit for companies and it can materialize into an
opportunity.
Toyota’s goal is to produce a clean car from its conception to its end-of-life, which
means working on new fuels, lobbying, installing compact plants with the minimum
flows inside, conceiving cars with low consumption and make them as recyclable as
possible. Toyota was one of the first car makers to recognize that cars are responsible for
20% of the greenhouse gas emissions. However Toyota’s goal is not to produce a zeroemission car that no one would buy, otherwise it would be irresponsible are the company
is employing a lot of people.
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59. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
All Ethicity employees are attempting to have the lowest environmental impact, they are
all using public transportation for instance. The company also decided to develop for free
a program to motivate the neighbourhood to adopt eco-consumption, especially,
shopkeepers, neighbour companies, in collaboration with the district council. The
company also wants to give the possibility to its employees to take 3 months off to do
humanitarian missions for instance.
Companies, such as Kraft (Anglo-Saxon company) will never do fair trade as they have a
very liberal logic, thus they will never accept the fixed price system of fair trade.
However, they see that other companies are evolving, fair trade showed the bad working
conditions in the coffee producer countries. Consequently they knew that they had to take
measures but they preferred another system. For some of its coffee, Kraft has the
Rainforest label, assuring good working conditions, and environmental protection while
keeping market logic. Another example is Chiquita which will also use a new label as
Migros, one of its Swiss clients, refused to buy its bananas anymore because of the bad
working conditions in the plantations. Finally, companies are looking at one another and
do not want to be left behind because of their business practices. For instance, L’Oréal
bought Body Shop as they know consumers are interested in more natural products.
4.3.2.5
CSR at the global level
If companies’ home countries have strict legislation for SD, then it will not be too
complicated for companies to respect their engagements. Now let us see how companies
can maintain the same level of commitment in their international operations.
For project financing, Dexia is using a chart to analyse the impacts of the projects at the
environmental and social levels. The firm also takes into consideration impact studies,
providing a mark (in the frame of the Equator Principles74). All the signatory banks of the
principles are using more or less the same chart, even though it is adapted to each firm.
Countries where Total operates are usually dictatorships (as oil is there). They could
prevent themselves from going to countries like Myanmar, but at least when they go
there, they make sure good working conditions are respected (there was a big trial in
Brussels about that and the result was a discharge). Now it even costs them money as
they have a website totally dedicated to that. Thus it is not necessarily an advantage over
competitors that might be less scrupulous. Besides, the practice of CSR contributes to the
good image of the group for the main audience; however in business it is not always the
case. For instance, Total just signed a big contract with Russia. The company practices
74
The Equator Principles are “a benchmark for the financial industry to manage social and environmental
issues in project financing”, http://www.equator-principles.com/.
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60. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
equity, however in Russia they do not really care about it, nor about developing social
dialog, they just want Total to do its job. Thus, in countries like this, it can be a drawback
to exhibit that kind of values to get contracts.
For Toyota, going abroad means cross-cultural issues as the company is from a country
with a very specific and unique culture, and a different language. Working places are
thus bicultural and everyone needs to adapt to the other culture, which is not always easy
even though there are translators. Moreover in Japan, things do not need to be written
down. Thus, to make sure their CSR policies were respected worldwide, Toyota had to
formalize them and provided Guiding Principles, which can be understood and adapted
to any country. The idea then is to let the plants governance to locals (and it works), like
in Valenciennes where there were 100-150 Japanese expatriates in the beginning, now
they are only around 15. In addition, in France for example, there is a French president
for Toyota, as he is the one that can understand the culture better. Finally all the
employees have to agree on the guiding principles bringing together rules that ought to
be respected by anyone, from the newly recruited employee to the president of the group.
4.3.3 Communication and (potential) achievements of CSR
4.3.3.1
Reporting and indicators
Ms Orjebin (Dexia) explained that reporting tools are being reinforced all the time for
two reasons, first the GRI indicators are more and more elaborate and Dexia itself has its
indicators maturing. Indicators are actually useful tools for the company; they are not just
aimed at giving feedback to stakeholders. The goal is that indicators are meaningful, and
representative of Dexia’s operations.
Now let us have a look at what people studying indicators and companies’ reporting
think of them.
Ethicity is looking at indicators also, but is deploring there are either too many of them or
too few, moreover they are neither very clear nor easy to use, they do not really mean
anything (like absolute figures). They are not audited neither, auditing companies just
look at the reporting process, but their audit is not as deep as the financial one. Anyway,
when companies give figures they ought to be right, or they would probably not give any.
M. Ouaknine also said that some indicators are not always relevant depending on the
sector, but looking at which indicators are chosen also permits to determine the
commitment of a company. Moreover he added that there is no real normalization in
terms of SRI for the moment, and that there is still a geographic disparity between
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61. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
Northern Europe, which is quite advanced in terms of CSR/SRI and Southern Europe.
There are also disparities depending on the size of companies. The bigger the company,
the more it is exposed, thus it will necessarily have to grapple with all these elements, set
up tools, means and communication efforts. Thus when analysing companies, they need
to keep that in mind, with legislation also: for instance, in Great Britain the legislation on
corporate governance is really strict, thus if we do not take that into account when
comparing British and French companies, British companies will be better ranked
whatever happens, which can bias the extra-financial evaluation we get. The analysis has
to be objective, the duration of engagement of a company is not that important, the
results are what analysts look at, the reporting must be clear, concrete, objective and
opposable.
4.3.3.2
Communication
One of the main communication companies make about SRI is their SD report.
Dexia has been publishing sustainability reports since 2002, it shows openness, but does
not impact actions on CSR as CSR is an internal strategy.
Total is communicating thanks to a rich website, it also issues sustainability reports and
have information displayed all the time inside its headquarters in Paris.
Toyota has been publishing sustainability reports since 1990; they are now quite precise
and accurate. Toyota tries to be as reasonable as possible, even though they know that
they can still be reproached to produce a polluting product.
Some companies have been publishing environmental and/or social data for a long time,
but their document was not called “sustainability report” yet. Mr Ouaknine said that it is
also interesting to see the frequency at which companies issue that kind of report, if it is
every year and if we have access to updated data. It is also important to see data
relevancy and precision, more than common sense declarations on which everyone
should agree.
Mr Gitiaux told me that new adepts of CSR do not make any report yet (such as MAAF,
Manpower). The publication of a report depends on the advancement level of the
company. Usually, it takes one year after the first step towards CSR for a company to
issue a report. A non-listed company does not have to do it any anyway, however since a
firm is taking action, it should communicate on it. Ethicity encourages companies to do
so, as in a report, companies often take engagements for the future and once it has been
written down and distributed, firms cannot ignore these engagements.
However, companies can still say whatever they want, thus when Sarasin Expertise meets
firms’ representatives, they contact their analysts in the headquarters in Switzerland, to
ask them whether they have comments and/or questions for the company. Indeed some
companies are sincere while others are doing a lot of marketing. Big companies are
55

62. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
communicating a lot on CSR/SD/SRI, they already have big teams that know how to do
it and it is almost free for them. The issue with mid and small cap companies is that they
do not have the potential to market on CSR, and they are reproached their lack of
communication. Thus asset managers should correct the data they have, taking into
account that big companies might say too much, and encourage smaller companies to
communicate more.
4.3.3.3
Positioning and image
All the companies interviewed have a proactive stance towards CSR, and they are ready
for further improvements. Then when I asked whether they are leaders or not, they do not
really want to position themselves as leaders, but they aim at being leaders anyway.
Environmentally speaking, in Japan at least, Toyota is the leader of its sector and is also a
source of inspiration for other companies. Dexia insists on the fact that each company is
a source of inspiration for the others, and usually banking institutions are part of bigger
networks, which give them the occasion to exchange best practices and communicate on
what they are doing.
For the opinion leaders, Danone is clearly the French leader in terms of CSR policies
implementation and continuous improvement, thanks to the “Danone Way” set up 20
years ago. Lyonnaise des Eaux and Veolia are also very good at CSR implementation
policies.
CSR is generally well perceived from Dexia’s management and employees.
Collaborators are even being more curious of measures taken and want to be associated
to them. Moreover management is conscious of opportunities to develop CSR policies in
the financial sector. There will always be people thinking that too little or too much is
done, however it is now well integrated in Dexia’s corporate culture. It is an important
differentiating factor that can give competitive advantage to the company, as NGOs and
clients are more and more sensitive to environmental and social concerns, and they are
looking for financial institutions sharing the same goals.
Furthermore, with an attractive HR policy, companies will have the possibility to catch
the attention of more potential collaborators. Moreover, by dealing with risks now,
companies prevent themselves from tomorrow’s scandals, that can ruin their image, even
bankrupt them.
In terms of marketing and business, doing CSR allows companies to communicate on
their brand image. Nowadays they communicate more on the environment (Al Gore’s
movie probably reinforced this tendency), while a few years ago, the social aspect was
more exposed. Committing to SD and CSR has evident repercussions on the image of a
56

63. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
company. They also have to do it to attract employees, not only to improve their
performance (it is linked anyhow).
4.3.3.4
Performance
It is quite difficult to imagine that tomorrow a company engaged in CSR would be less
performing than a company that did nothing. However there is a lack of confidence in the
financial world, and since financial workers have not been given the definite proof that
SRI is performing well, they will remain suspicious about it. Sarasin Expertise chooses
the companies in its funds from their practice of CSR but also from their financial results,
thus the risk should be limited as good practices are less amenable to bring bad surprises.
SRI funds are not ethics funds (Mr Buffet’s view differs a bit from Eurosif’s definition),
thus they are not limiting the scope of possible investments, however they are using the
same kind of analysis tools. SRI analysis is the continuation of financial analyses: it goes
deeper into the analysis, to detect risks and opportunities, but it remains a purely
financial product.
Sarasin Expertise’s funds are performing really well. There are two reasons for that: not
only the mid-cap market has been outperforming the market for 5 years, but also SE’s
funds are outperforming the mid-cap market. On the other hand, there is not enough
elaborate calculation to confirm the tendency and to determine what the causes of this
outperformance are. A share is valued to the infinite but with SRI we do not really know
how to valuate it in the future, thus firms values will probably gain from better
calculation models in the future.
Mr Arquizan insists on the fact that it is too difficult to establish a direct link between
CSR and performance; nevertheless the results can be clearly seen qualitatively. CSR is
also a good factor to motivate people.
Mr Ouaknine says that for their analysis the Société Générale takes CSR and its results
into account, as it has an impact; it is yet quite hard to quantify it. Société Générale made
an analysis model on the level of risk between performance and SD, it found a
correlation between risks to which companies are exposed, their performances and their
commitment to CSR. The link is not definite yet whatsoever as SD policies are made for
the long run, while financial statements are published every quarter. We will see in a few
years also the consequences of legislation, with Euro 5 for automobile manufacturers for
instance. Shareholders are interested in CSR and subsequent SRI, because the issue is not
only pure return. Then to know whether there is a real return, it is a bit more complicated.
Some elements can make us think that it exists, with extra-financial analysis, but it is
57

64. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
quite new, and analysts are not always sensitized to that kind of issue. They have just
started to implement tools to valuate it.
4.3.3.5
Reasons for CSR policies success
There are never complete failures in terms of CSR policies implementation. It can work
better in certain areas, it can take more time than planned, but there is always some
elements improving. That is why it is important to define a global, coherent,
homogeneous, applicable, realistic policy, also when allocating budget to it. Companies
also have to make sure their policies correspond to their sector, otherwise it will be a
waste of time and money.
One of the main reason for the success of CSR policies is the total commitment of top
management, otherwise decisions cannot be made, or only at a really small scale. It is
important also to be able to make those policies match with the firm’s activity, to
demonstrate the relevance of any policy, otherwise it would not have any sense to the
employees and it will be perceived as communication only. CSR has to be operational.
At all levels, employees need to know about the firm’s strategy, otherwise, people in
contact with the customers will not transmit that information, and it will have less
impact. For instance, in many banks, if an individual asks for SRI to his/her bank
counsellor there are huge chances that the counsellor is not able to advice him/her.
A really good motivation put in place by Danone is compensation: managers have 20 to
30% on their wage depending on the CSR policies they implement. Thus CSR can really
be part of the corporate culture. Otherwise, managers would just feel that CSR is giving
them more work (but no return on their work). Then, from a certain point in time, CSR is
naturally integrated inside the firm’s strategy. Besides, if companies want CSR policies
to be effective, they should be careful in their commands to employees, if a buyer is
asked to buy SD products while having to reduce its spending by 15%, it is not coherent.
CSR policies work better when they are in accordance with the existing corporate
culture. For instance, Yves Rocher’s employees are recruited taking also into account
their relation to the environment, thus when the company policies in terms of
environment become stronger, it is easier for them to be accepted by the employees.
Finally, the main reasons for the success of CSR policies are commitment of top
management, integration of SD values inside the corporate culture, coherence in
demands to employees and transmission of corporate actions on CSR and understanding
of them by all employees.
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65. IÉSEG Master Thesis – Aude Richon – 4 Why would companies engage in CSR policies?
4.3.4 Overview of the analysis
From the interviews, we can feel that CSR may tend to generalize in the future (in
Western countries at least) and that companies are feeling more and more concerned
about SD. Moreover, even if we might be sceptical about CSR results, we can see at least
that CSR does not harm companies. It also permits to gain confidence from stakeholders
and companies have to keep in mind that a breach in confidence is hard to gain back.
Companies are pushed to act by their stakeholders but also by their competitors as they
do not want to miss something because of their inactivity. Then, to have better results,
companies should integrate CSR at every level being consistent with their strategy and
business model, which might need to be changed.
59

66. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
5 Application to concrete cases
In this part, the quantitative study will be undertaken. We will start with a comparison of
sustainability indexes versus “classic” indexes, and follow on a more specific on the
automotive industry.
5.1 Study on sustainable indexes
Here, I intend to find out whether sustainability indexes have a better performance than
classic indexes.
5.1.1 What are sustainability indexes?
Sustainability indexes are designed to gather in one index values of companies that are
committed to CSR and that developed particular SD policies. Generally to be included in
an index, companies have to comply with different criteria (called “positive criteria” such
as commitment to human rights). Some indexes even have negative criteria which
eliminate firms depending on their sector or on businesses they are investing in
(especially sectors like tobacco, alcohol, gambling, armament…). Usually, firms have to
answer a questionnaire, which is then studied by analysts. They study the (re)action of
companies towards two of the three pillars of SD, which, in the end, allows the study of
five areas of business:
- corporate governance
- relations with stakeholders
- environmental policies and concrete action put in place
- human resources
- respect of human rights.
Then, they finally study the financial performance of companies to include them or not in
the index. The analysts talk of ESG analysis: economic, social and governance (social
meaning societal, including social and environmental aspects).
Indexes are generally reviewed every 6 months or 1 year. Motives for deletion can then
be the non-respect of firms’ engagements for instance. Finally, analysts look at
companies’ sustainability reports, sometimes visit the companies and make sure the
information provided is verified by an auditing company (from whom there is usually a
letter at the end of the annual and/or sustainability reports to confirm the reliability of the
data displayed). Criteria for inclusion in the DJSI are in Appendix C, and the
60

67. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
questionnaire of SAM (Sustainability Asset Management), for inclusion in the same
index, can be found at the following link: http://www.sustainabilityindex.com/djsi_pdf/general_questionnaire_2007.pdf.
The best-known indexes are the Dow Jones Sustainability Indexes (DJSI), the
FTSE4Good Index Series, the Ethibel Indexes, the Aspi Eurozone… Those indexes serve
as benchmarks for most of them, but some of them can be used for investments as well
(such as the DJSI EUROSTOXX 40, or the FTSE4Good Global 100). A table
encompassing the main indexes can be found in Appendix B.
Increasingly companies are also asking for voluntary ratings by rating agencies such as
Vigeo or Innovest. It allows them to know in which areas they should concentrate and/or
enhance their efforts towards CSR and SD.
As an example, we can see on the following chart in which areas, companies that are part
of sustainability indexes are doing more efforts than less engaged companies:
Figure 5.1: Sustainability scores of the DJSI members
Source:
http://www.sustainabilityindex.com/djsi_pdf/publications/Presentations/SAM_Presentation_060906_Review.pdf
61

68. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
On this graph we can see that sustainable and less sustainable companies have close
scores for corporate governance and countering bribery, which can be explained by a
clear legislation in these areas. Then, when it comes to eco-efficiency or human capital
development the gap is much bigger and in favour of sustainable companies.
Eco-efficiency is a tool to measure sustainability, used to determine the
environmental impacts (and their evolution over time) of a company on its
environment. It is interesting to study eco-efficiency data over time. Toyota
includes CO2 emissions and waste generation in the environmental impact and
calculates the eco-efficiency with the following formula:
Source: Toyota’s annual report 2006.
Coming back to the graph, we can also see that differences in sector-specific domains are
also quite impressive, demonstrating that measures taken by sustainable companies have
effective results on their operations.
5.1.2 Comparison between classic indexes and sustainability indexes
First let us see graphically the differences in returns between sustainable and classic
indexes.
62

69. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
5.1.2.1 General Indexes
Figure 5.2: Comparison between the DJSI World and the MSCI World performances
Source:
http://www.sustainabilityindex.com/djsi_pdf/publications/Factsheets/SAM_IndexesMonthly_DJSIWorld.pdf.
From this chart, we can see that the DJSI World and the MSCI World are following the
same trends, which is understandable as the DJSI World includes values from the MSCI
World. Moreover, both curves are really close to one another, especially in the end,
where the DJSI World is finally higher than the MSCI World, meaning than in seven
years and a half, sustainable companies managed to remain as profitable as a pool of
sustainable and less sustainable companies.
The same trend can be observed with the DJSI STOXX 40 and the DJSI EUROSTOXX
40 (the graphs can be seen in Appendix D), however for both indexes the curves are all
the time higher than those of their benchmarks. We can then wonder whether social
responsibility is better rewarded in Europe, especially in the Eurozone.
From the Dow Jones Sustainability Indexes, we can say that companies are not
disadvantaged for acting responsibly, and can even be better rewarded, in Europe for
instance.
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70. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Then, let us have a look at the FTSE4Good Global Index, in comparison with the FTSE
All-Developed World.
Figure 5.3: Comparison between the FTSE4Good Global Index and the FTSE All-World
Developed Index performances
Source: http://www.ftse.com/Indices/FTSE4Good_Index_Series/Performance_Analysis.jsp.
Here again, we can see that the three indexes are following the same trends, with the
FTSE4Good Global being really close to the FTSE All-World Developed. Nevertheless,
it performed better in the beginning, and in a five-year time the FTSE All-World
Developed became more financially-performing. From January 2004, the FTSE4Good
Global 100 started to be less performing while still evolving positively. With this
example, corporate responsibility does not seem rewarded.
The same can be observed with the FTSE4Good Europe Index (see Appendix E), and
what is most striking is that the FTSE Developed Europe is performing far better than the
FTSE All-World Developed, increasing the difference in performance with the
FTSE4Good Europe.
With the FTSE4Good Indexes, we get the opposite results than with the DJ Sustainability
Indexes.
In order to go thoroughly into our study, we will now see if certain pillars of SD are
better rewarded by the market than others.
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71. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
5.1.2.2 Indexes putting the emphasis on the social pillar of SD
Now we will observe the returns of the Domini Social Index 400 in comparison with the
Standard & Poor’s 500.
Figure 5.4: Comparison of the monthly returns of the DS 400 and the S&P 50075
Returns comparison
S&P 500
DS 400
15,00
5,00
0,00
-5,00
-10,00
Source:
http://www.kld.com/indexes/data/KLD_Indexes_Monthly_Returns.xls
http://www.barra.com/Research/DownloadMonthlyReturns.aspx
and
This chart shows similar changes in returns for both indexes: the DS 400 has more or less
the same evolution than the S&P 500. However, we can observe that extreme values are
usually those of the DS 400, which might mean that it is more sensible to external events.
Then if we have a look at the cumulative returns chart, we can see that the DS 400 curve
is above that of the S&P 500, meaning that the values pertaining to the DS 400 are better
performing. Consequently, we can think that taking into account social considerations
can help improve a company’s performance. Moreover it seems to be a growing
tendency, either because investors pay more attention to it, or because workers and
communities are now valuating more socially-concerned employers.
75
The data used for this chart can be found in Appendix F.
65
v- 0
7
jan
v- 0
6
jan
v- 0
5
jan
v- 0
4
jan
v- 0
3
jan
v- 0
2
jan
v- 0
1
jan
v- 0
0
jan
v- 9
9
jan
v- 9
8
jan
v- 9
7
jan
v- 9
6
jan
v- 9
5
jan
v- 9
4
jan
v- 9
3
jan
v- 9
2
jan
v- 9
1
jan
v- 9
0
-15,00
jan
Return (%)
10,00

72. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Figure 5.5: Cumulative returns of the DS 400 and the S&P 50076
Cumulative Returns (May 90 - June 07)
Cumulative returns (%)
250,00
200,00
150,00
100,00
50,00
0,00
6
v- 0
jan
4
v- 0
jan
2
v- 0
jan
0
v- 0
jan
8
v- 9
jan
6
v- 9
jan
4
v- 9
jan
2
v- 9
jan
0
jan
v- 9
-50,00
Source:
http://www.kld.com/indexes/data/KLD_Indexes_Monthly_Returns.xls
http://www.barra.com/Research/DownloadMonthlyReturns.aspx.
5.1.2.3
S&P 500
DS 400
and
Indexes putting the emphasis on the environmental pillar of SD
There is more choice for indexes especially dedicated to environmentally-friendly
companies. This might be due to the fact that environmental data are easier to put into
figures, than an evaluation of social commitment.
76
Data used for this chart can be found in Appendix F.
66

73. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Figure 5.6: KLD’s GC 100 Index Cumulative Performance
Source: http://www.kld.com/indexes/data/fact_sheet/GC_100_Fact_Sheet.pdf.
From this chart, we can see that the market valuates better companies dedicated to the
environment, especially when the market is doing well. The first benchmark for the
Global Climate 100 was the Russell 3000 and we can see that the GC 100 is even
performing better against this benchmark (see Appendix G), which reinforces what we
deducted from the first graph (and tells us that the composition of the GC 100 is probably
closer to that of the S&P/Citigroup BMI World).
67

74. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Figure 5.7: Performance of the FTSE4Good Environmental Leaders Europe 40
Source: http://www.ftse.com/Indices/FTSE4Good_Index_Series/Performance_Analysis.jsp.
The FTSE4Good Environmental Leaders Europe is following more or less the
FTSE4Good Europe 40 and is even getting better than this one in the end. However, it
remains far from the FTSE Europe Index even though its curve is quite similar, showing
the same events. Environmental sustainability does not seem to pay off in this case. Once
again we find a difference between results obtained from the study of the DJ
Sustainability Indexes and those obtained from the study of the FTSE4GOOD Series.
5.1.3 Numerical comparison of various indexes
For this last part of the data analysis on sustainable indexes, I decided to elaborate a
comparison of returns between sustainability indexes and classic ones. I picked the
indexes from the DJSI series and the FTSE4Good series; I looked for the maximum, the
minimum and the median return at different points in time. Subsequently, I made the
comparison with their benchmarks.
I preferred the medians to the means, as I think it better reflects the reality, giving less
power to extreme values.
68

75. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Table 5.1: Comparison between the returns of sustainability indexes and classic ones
maximum
minimum
median
1 mth
3 mth
12 mth
3 year
5 year
0,70% 1,00% 8,05% 7,40% 26,84% 26,30% 71,65% 78,10% 99,80% 99,20%
-2,20% -1,65% 4,20% 4,10% 15,30% 14,60% 31,60% 41,30% 53,70% 69,40%
-0,40% -0,69% 6,22% 6,35% 21,70% 22,20% 58,80% 62,70% 67,10% 78,20%
The original data for this calculation can be found in Appendix H.
In green are the data for sustainability indexes, while in pink are the data for classic
indexes. We can see different elements from this table:
- in the long run, maximum returns of sustainability indexes are higher than
maximum returns of classic indexes (even though classic indexes are really
close), while in the short run it is the contrary
- the lowest return sustainability indexes can have is much more lower than the
lowest return classic indexes can have
- the median tends to show that classic indexes tend to perform better than
sustainability indexes.
After that, I decided to check their volatilities and compare them in order to see whether
sustainable values were less risky.
Table 5.2: Comparison between the volatilities of sustainability indexes and classic ones
Volatility (3 years)
Volatility (5 years)
maximum
67,10%
12,60%
15,30%
14,70%
minimum
6,70%
7,20%
12,40%
11,60%
median
7,80%
7,70%
13,31%
12,70%
The original data for this calculation can be found in Appendix H.
In a 3-year time, sustainability indexes can have the highest volatility but also the lowest
one and the median is almost the same as that of classic indexes. Thus, the risk to invest
in sustainable values is more or less the same than the risk to invest in classic values. In a
5-year time, both values are closer to each other, with sustainable values a bit more
volatile. However, we cannot draw any clear conclusion from this observation.
5.1.4 Results interpretation
Reminder of the findings:
- general indexes: with the DJSI we see that companies are not disadvantaged for
acting responsibly, and can even be better rewarded in Europe, while the
FTSE4GOOD shows opposite results
69

76. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
-
-
social index: companies engaging socially perform better than other companies,
however, their stocks seem to be a bit more sensitive to external changes
environmental indexes: with the DJSI, we can observe that the market valuates
better companies dedicated to the environment, and as with general indexes, the
FTSE4GOOD gives us opposite results
the return study of sustainability indexes shows that sustainability indexes are
better performing in the long run
the volatility study was not relevant enough to draw clear conclusions.
Therefore, it is difficult to draw any conclusion from the observation of sustainability
indexes in comparison with classic indexes. Indeed, depending on the index studied, we
can find different results. Thus, from this we can say that there is no clear or definite link
between sustainable practices and good financial performance, or we do not have
distance enough to be definite about any finding.
5.2 Specific look at the automotive sector concerning the environmental
pillar of SD
In order to specify my study, I picked up the automotive industry, in its relation with the
environment. It is actually quite interesting as this industry has influences on its
environment at different levels:
- production: environmental damages occurring during the production
- consumption: consequences of the use of the product (pollution emitted by cars)
- product end-of-life: possibilities of recycling of the cars that are out of order.
This variety of impacts allows to gather more information, which is also permitted thanks
to stricter and stricter regulations for car companies.
In order to precise my study a bit more, I decided to work on the 24 automotive
companies included in the MSCI World. All the data I gathered from their (annual and
sustainability) reports can be found in Appendix I.
5.2.1 Presentation of the companies
First, let us have an overview of the different companies studied.
70

77. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Table 5.3: Companies information
Home country
Bajaj Auto Limited
India
BMW AG
Daimlerchrysler AG
Germany
Germany
Denway Motors Limited
Hong Kong
Fiat
Italy
Ford Motor Company
USA
Fuji Heavy Industries
Limited
Japan
General Motors Corp.
USA
Harley-Davidson Inc
USA
Honda Motor Company
Limited
Hyundai Motor Company
Limited
Isuzu Motors Limited
Kia Motors Corporation
Japan
South Korea
Japan
South Korea
Maruti Udyog Limited
India
Mazda Motor Corp.
Japan
Mitsubishi Motors Corp.
Japan
Nissan Motor Company
Limited
Peugeot SA
Porsche AG
Renault SA
Japan
France
Germany
France
Suzuki Motor Corp.
Japan
Toyota Motor Corp.
Japan
Volkswagen AG
Yamaha Motor Company
Limited
Germany
Japan
Revenues 2006 (or
2005/2006)77
bRs 100.7
(b€ 1.73)
b€ 49
b€ 151.6
bHK$ 0.9
(b€ 0.08)
b€ 46.5
bUS$ 160.1
(b€ 121.33)
b¥ 1 476
(b€ 9.4)
bUS$ 207.3
(b€ 157.12)
bUS$ 5.8
(b€ 4.4)
b¥ 9 908
(b€ 63.07)
bKWO 63 648
(b€ 51.86)
b¥ 1 582
(b€ 10.07)
bKWO 17 439.9
(b€ 14.21)
bRs 148
(b€ 2.78)
b¥ 2 919.8
(b€ 20.87)
b¥ 2 120.1
(b€ 15.16)
b¥ 10 469
(b€ 66.65)
b€ 56.6
b€ 7.3
b€ 41.5
b¥ 2 746.5
(b€ 17.48)
b¥ 21 036.9
(b€ 133.92)
b€ 104.9
(b€ 104.88)
b¥ 1 582
(b€ 10.07)
Number of
employees
13 103
106 174
360 385
1 500
172 012
over
280 000
26 115
284 000
9 700
144 785
71 650
7 371
32 500
3 334
36 626
34 911
183 356
211 700
11 384
128 893
13 760
over
280 000
324 875
41 958
We can observe that these companies are from various countries, but mostly Japan, USA
and Germany, and that they are of very different sizes as well.
77
Depending on the fiscal years.
71

78. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
5.2.2 Comparison of sustainable companies from the automobile
sector with other industries
First of all, it is interesting to compare the most sustainable automobile companies, with
the rest of their sector and a sustainable index as well. The five leader companies chosen
for this part were picked because their values are included in the DJSI World, and they
are classified as industry leaders by this index. Moreover they are all included in the
Climate Leadership Index (Presence in sustainability indexes can be found in Appendix
J). Then I chose the Automobile & Parts (A&P) Supersector (45 constituents) from the
DJ STOXX Global 1800 Supersectors (it would have been better to compare them only
with automotive companies, but the supersectors of the DJ STOXX 1800 Global are
made differently), and the DJSI World as an indicator for global sustainable companies.
Figure 5.8: Performances comparison between environmental leaders in the automotive
sector, a sustainability index and the Automobile & Parts Supersector
250
Price index
200
Ford
Daimler
150
Renault
Toyota
BMW
100
Automobile &
Parts sector
DJSI World
Se
p0
De 3
c0
M 3
ar
-0
Ju 4
nSe 0 4
p0
De 4
c0
M 4
ar
-0
Ju 5
nSe 0 5
p0
De 5
c-0
M 5
ar
-0
Ju 6
nSe 0 6
p0
De 6
c0
M 6
ar
-0
Ju 7
n07
50
Source: see data in Appendix K.
For this study between Sept. 2003 and Aug. 2007 (confirmed in Appendix L over a
longer period of time, but with price index bases starting at different times, making it less
clear), we can note that, except Ford, sustainable automotive companies have a better
performance than the DJSI World. The A&P sector itself has a better performance than
the DJSI World and three companies still have a better performance than the A&P sector.
Nevertheless, as the A&P sector is outperforming the DJSI World, it is not outstanding
that three environmentally-friendly car companies are outperforming the DJSI World.
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79. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
We can imagine that they are the reason why the A&P sector outperforms the DJSI
World, however it is quite difficult to prove, especially as Ford is underperforming and
BMW is more or less following both the DJSI World curve and the A&P sector curve.
Thus, it is useful then to compare companies within the automobile industry.
5.2.3 Comparison of different automakers associations’ attitudes
towards the environment and consequences on their
performance
A report from T&E insists on the fact that CO2 is the most important greenhouse gas. The
ACEA (European Automobile Manufacturers’ Association) agreed on the strategy set up
by the EU in order to decrease the average CO2 emissions of new manufacturers’ fleets.
The average CO2 emission should go down to 140g/km by 2008 and down to 120 g/km
by 2012 (which represents a reduction of 35% compared to the 1995 levels, however at
first the plan was to reach these targets by 2005 or 2010 at the latest). For the JAMA
(Japanese Automobile Manufacturers’ Association), the results are similar with a target
of 140 g/km but for 2009. However as it can be seen on the graph below, only three
automakers will be able to reach this target, if there is no further commitment. Two other
companies are also close to it. The problem is that the target is reachable as it is a fleet
average but companies often prefer to concentrate their efforts on more profitable
powerful cars requiring more fuel consumption.
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80. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Figure 5.9: Percentage of 140g/km target to be reached by top 20 car brands by 2008/9
if present trends continue
Source: European Federation for Transport and Environment78.
Therefore, I decided to study the attitude of car manufacturers towards CO2 emissions
reduction and if the strategy adopted could have an impact on their performance. For
that, I gathered environmental data from another research made by T&E. It compares
CO2 emissions reduction data over a 9-year period of time for different automobile
manufacturers’ associations: the ACEA, the KAMA (Korean Automobile Manufacturers’
Association) and the JAMA. Then I looked at the revenues and return on equity (ROE) of
the car companies from the MSCI World included in these associations and I attempted
to find a link between the financial returns and the cars’ CO2 emissions.
In the following table is the distribution of companies from the MSCI World in the
different associations studied in this part.
78
Anonymous, (2007), “Regulating fuel efficiency of new cars”, Background Briefing, January, T&E European Federation for Transport and Environment, www.transportenvironment.org.
74

81. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Table 5.4: Members of the MSCI World Auto in the different car manufacturers
associations
ACEA
BMW
PSA Peugeot Citroën
Fiat S.p.A
DaimlerChrysler AG
Renault SA
Volkswagen AG
Ford of Europe GmbH
General Motors Europe AG
KAMA
Hyundai Motor
Kia Motors
RenaultSamsung Motors
Co.
JAMA
Fuji Heavy Industries Ltd
Honda
Isuzu
Mazda
Mitsubishi Motors
Nissan
Suzuki
Toyota
Yamaha
In our study we will not take GM Europe, Ford of Europe, nor RenaultSamsung Motors
Co. into consideration, as we will study here the results of the whole companies. It is
relevant to study the world performance of these manufacturers even though we only
have environmental data only for Europe, as Europe has the strictest legislation,
environmentally-speaking.
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82. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
On the following graph is the data for reduction in CO2 emissions coming from T&E, for
each automobile association:
Figure 5.10: CO2 reduction trends for ACEA, JAMA and KAMA (1995-2003), g/km, cars
sold in Europe.
Source: European Federation for Transport and Environment79.
We can see that from 1999, the three associations are following the same trend with a
parallel decrease in CO2 emissions. Nonetheless, in 1995, the manufacturers from JAMA
and KAMA started from the same level of CO2 emissions, but the KAMA increased the
emissions for 3 more years and did not manage to catch up the decrease of the JAMA,
leaving a difference in CO2 emissions of approximately 8 g/km between them.
Nevertheless, the overall decrease is almost the same as the ACEA’s one, as Europeans
mostly buy European cars. Still, we can observe a certain will to protect the environment,
even though it probably comes from legislation (Euro 4 and 5) and goals to be reached by
2008 and 2012.
79
Kågeson, P., (2005), Reducing CO2 Emissions from New Cars, T&E - European Federation for
Transport and Environment, www.transportenvironment.org.
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83. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Let us now consider that these European trends can be generalized and have a look at the
returns on equity of member companies of those three associations.
Figure 5.11: ROE evolution of companies from ACEA, JAMA, and KAMA
30
Yellow: JAMA’s members
Green: ACEA’s members
Orange: KAMA’s members
25
ROE (%)
20
15
10
5
200
6
200
5
200
4
20
03
200
2
0
Source: see data in Appendix M.
With this graph, we can see that there is no real trend to be brought out from the study of
changes in ROE. Companies in more sustainable associations do not seem to have better
returns than the others, especially those from the JAMA. We can see that in 2006 both
companies of the KAMA have a big decrease in ROE, however during the other years
they were always in the average, so we cannot deduct anything from this.
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84. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Now let us see whether we can find answers by observing ROE cumulated by
association.
Figure 5.12: Cumulated ROE of ACEA’s, JAMA’s and KAMA’s members
14,00
12,00
ROE (%)
10,00
AC A
E
8,00
KAM
A
6,00
JAM
A
4,00
2,00
0,00
2002
2003
2004
2005
Source: see data in Appendix N.
With the cumulated ROE, we can see that shareholders’ get more money from
investment in less environmentally-friendly companies. The return is more or less the
same for the JAMA and the KAMA, and much lower for the ACEA. However, it is
increasing a lot in the two last years for the ACEA, predicting that it might go to the
same level as the others pretty soon, and that protection of the environment starts to pay
off.
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85. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
Next, we can see whether the changes in revenues cumulated by associations are
significant.
Figure 5.13: Changes in cumulated revenues for ACEA, JAMA and KAMA members
30,00
25,00
20,00
AC A
E
10,00
KAM
A
5,00
(%)
Change
15,00
JAM
A
0,00
2003
2004
2005
2006
-5,00
-10,00
-15,00
Source: see data in Appendix N.
Changes in revenues are the most significant for companies pertaining to the KAMA. It
may be due to the fact that they are more recent and lack the stability of older companies.
Moreover, they are only two, thus big variations for one company cannot be offset by the
other, contrarily to companies from the ACEA for instance. ACEA’s and JAMA’s have
similar changes, from which we can deduct a trend of the market. Once again,
sustainability does not seem to be rewarded even by customers, maybe it will come a bit
later as we see that during the last year ACEA’s curve is above that of JAMA, but the
difference is too small to draw any conclusion.
5.2.4 Comparison of the performances of leaders and laggards
Another possible element of comparison can be to compare automobile manufacturers
that are world leaders in their industry, and companies that can be considered as laggards
as they do not provide any environmental data or sustainability report. The five leader
companies were chosen according to the criteria set in 5.2.2. The laggards are the car
manufacturers from the MSCI World that do not publish any environmental data. Four of
them are from emerging countries, which can then be understandable as they do not
necessarily have the same legislation in their home countries or the same preoccupations.
79

86. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
However, the two others are from developed countries, they probably do not publish data
or do little about the environment as they are selling their products on niche market:
luxury and “legend”.
Figure 5.14: Comparison of the changes in revenues of environmental leaders and
laggards
40
30
Changes (%)
20
10
0
2003
-10
-20
2004
2005
2006
BMW AG
Daimlerchrysler AG
Ford Motor Company
Renault SA
Toyota Motor Corp.
Bajaj Auto Limited
Denway Motors Limited
Harley-Davidson Inc
Kia Motors Corporation
Maruti Udyog Limited
Porsche AG
-30
Source: see data in Appendix O.
We can see on this graph that revenues of sustainable firms are much more predictable
than revenues of less sustainable companies. Their curves of changes in revenue are quite
close to each other and following more or less the same trend. On the contrary, the curves
of less sustainable companies are further away from each other and include much more
extreme values. Thus, leaders in sustainability seem to present less investment risk than
laggards, and their turnover is much more predictable.
The availability of information can also be considered as a way to approximate efforts
made by companies to improve their environmental sustainability. For instance in
Appendix I is all the data I gathered from reading sustainability and annual reports of
automobile manufacturers. Very few of them display readable data, if any data at all.
Even when we have data and we try to “standardize” them so that we can compare
companies’ actions, the results are so different from one firm to another that we cannot
know if it comes from our mistake or from methods used by companies to provide us
with those data. Consequently we cannot weight companies against one another, but at
least when a company gives us data it is a first step towards being more sustainable:
80

87. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
when data is provided, they are usually accompanied by objectives and measures for the
coming years.
When we have commitments for the future, it shows that the sustainability report has not
been made just to comply with law or to look good.
5.2.5 Results interpretation
Reminder of the findings:
- it is difficult to find trends on the influence of environmental performance on
financial performance with the study on ROE
- with the study of cumulated ROE, we might imagine that sustainability starts to
pay off, but this needs to be confirmed in the future
- sustainability practices seem to increase the predictability of a firm’s revenue.
The results from a joint study of Innovest and the UK Environment Agency are quite
interesting and are not really confirming mine. From the literature review, they found out
that “in 85% of the total number of studies assessed, [there is] a positive correlation
between environmental governance and/or events, and financial performance”80.
Moreover their research, based on case studies, corroborated these findings. For instance,
3M saved MUS$ 894 between 1975 and 2002 further to the implementation of a
pollution prevention program. When they undertook comparative studies to verify
whether there were differences in performance between leaders and laggards, they
discovered that these differences were quite marked, and at the advantage of leaders.
“The cost of an eco-efficiency initiative and its financial outcomes can be measured
fairly precisely when a company sets up the appropriate environmental accounting and
reporting procedures”81. The cases of 3M and Baxter demonstrated that an environmental
governance strategy, with a long term vision can permit regular financial benefit.
Conversely, returns on investments made in the frame of an environmental strategy are
usually to be expected in the mid or long term future, and this has to be taken into
account as well. For instance, the study from the European Climate Change Program
(ECCP) for ACEA “concludes that costs of lowering average CO2 emissions from
140g/km to 120g/km through vehicle technology would translate into a retail price
increase of €2450 per vehicle [which] is in addition to a retail price increase of €1200
from reaching 140g/km in 2008”82. For this calculation, the ECCP consultants used the
80
White, A. and Kleman, M., (2004), Corporate Environmental Performance, Innovest and the UK
Environment Agency, www.environment-agency.gov.uk, Sept., 1.
81
Ibid., 11.
82
ECCP
Research,
(2006)
ACEA,
http://www.acea.be/files/Costanalyses_European_Climate_Change_Programme.pdf.
81

88. IÉSEG Master Thesis – Aude Richon – 5 Application to concrete cases
societal costs that include all relevant factors to be taken into account, comprising also
cost savings thanks to better fuel efficiency. Nevertheless, we have to consider as well
fines charged from non-respect of the legislation, the CAFE (Corporate Average Fuel
Economy83) fines are a good example to be looked at by manufacturers as for some
manufacturers they are pretty high (http://www.nhtsa.gov/cars/rules/CAFE/FINESCOLLECTED-SUMMARY.html), and can be a burden in their financial statements.
From that, we can say that the link between environmental and financial performances is
not clear enough even though there are great chances that strong environmental policies
bring a better financial performance in the future.
83
“Corporate Average Fuel Economy (CAFE) is the sales weighted average fuel economy, expressed in
miles per gallon (mpg), of a manufacturer’s fleet of passenger cars or light trucks with a gross vehicle
weight rating (GVWR) of 8,500 lbs. or less, manufactured for sale in the United States, for any given
model year. Fuel economy is defined as the average mileage travelled by an automobile per gallon of
gasoline (or equivalent amount of other fuel) consumed as measured in accordance with the testing and
evaluation protocol set forth by the Environmental Protection Agency (EPA).” (quoted from:
http://www.nhtsa.dot.gov/cars/rules/CAFE/overview.htm).
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89. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6 Analysis and discussion
6.1 Hypothesis testing
6.1.1 H1: There is no sanction imposed on companies that are not
committed to CSR
Results from the study of sustainability indexes are contradictory depending on the index
studied. This probably means that institutions providing the indexes use different
methods and that their indexes do not have the same components. This shows that there
are probably no sanctions on companies with no CSR practices; otherwise they would
never outperform sustainable indexes. Moreover, as mentioned by Attac, CSR is a
voluntary process, thus no institution/government can sanction companies if they do not
respect their commitment or if they do not have CSR policies. Petrovic, in her article on
Parson Consulting’s research, found out also that companies are not really sanctioned
upon for not implementing CSR policies (which does not mean that CSR and financial
performance are not compatible). Thus we can validate H1. Nevertheless, it needs to be
noted that any form of sanction might appear in the future, because of an increasing
awareness on social and environmental issues.
6.1.2 H2: Good environmental performance generates good financial
performance
From the ratio analysis, the link between environmental and financial performances has
not been put forward clearly. Moreover, in their article, Koedijk et al. (2006) found out
that environmentally-friendly companies do not perform better, he still added that in the
long run, it is possible that they outperform companies without sustainable policies.
Finally, a Canadian study on the forestry industry showed that only one environmental
certification (out of four) had a positive impact on forestry companies’ results84. The
authors explained this phenomenon saying that stakeholders do not want industrial
certifications but certifications from organisations they think most credible, those which
come from pressure groups (as perhaps shareholders want to reduce the risks linked to
the claims of pressure groups). Their study was made because they could not find two
studies with the same results. From this, we cannot validate nor invalidate H2.
84
Bouslah, K., M’zali, B., Kooli, M., and Turcotte M.-F., (2006), “Responsabilité Sociale et
Environnementale, Certifications et Performance Financière”, Gestion, Summer, 31(2), 125-133.
83

90. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6.1.3 H3: Companies with high socially responsible standards
perform better than those with poor socially responsible
standards
The graphical analysis did not permit to find any clear nor definite link between
sustainable practices and financial performance. From the interviews, I did not get any
special return on that matter, anyway the companies interviewed all have strong CSR
policies, thus even if they did not see a better performance, they probably would not have
told me. In addition, Meyer (2005) insisted on the fact that it is really difficult, even
impossible to measure a firm’s performance, because too many elements can be modified
in doing it or different methods used. From his point of view, it would be then impossible
to compare performances between firms. Finally, Orlitzky et al. (as seen in part II.F.2)
demonstrated that CSP and CFP are positively correlated, in a bidirectional and
simultaneous relationship. As the results are contradictory, I would say that we can
neither validate nor invalidate H3. It is still to be kept in mind that we might need
more time/distance to make a definite conclusion on this hypothesis.
6.1.4 H4: Companies tend to generalize CSR practices
Companies interviewed during the data collection are quite engaged in CSR. There is
also a growing trend with increasing awareness on SD issues. However this trend can be
observed especially for Western MNCs. As outlined by Tuzzolino and Armani (1981), in
their use of Maslow’s theory to explain commitment to CSR, CSR is one of the last step
for the “satisfaction” of the company and usually small companies have few chances to
ever implement CSR practices as they have other things to deal with before (like
profitability). Moreover, Robert Welford mentioned in a study on CSR that “even though
Asia tends to follow the West for CSR, there are very different priorities in countries
where norms, values and economic development differ”85 (Rock, 2002; Ruud, 2000). In
poorer countries, people have other problems to deal with before CSR, thus they do not
really care what their home companies are doing. This has been verified by Total abroad.
Thus, H4 is invalid.
85
Welford, R., (2004), “Corporate Social Responsibility in Europe, North America and Asia: 2004 Survey
Results”, The Centre of Urban Planning and Environmental Management, The University of Hong-Kong,
May.
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91. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6.1.5 H5: CSR is just PR
Atkins (2006) insists on the fact that companies should not spend money on CSR, but can
still use their rhetoric as a marketing tool. A lot of communication is actually made on
CSR, especially through SD reports, but usually companies which do not do much, do
not publish much neither. Moreover PR is part of CSR for stakeholders to know what the
company is doing. Of course, companies might say a bit more than what they are actually
doing, but it does not mean that CSR is just PR, they are usually people thinking and in
most cases acting behind. Moreover, by having a look at figure 1.1, we can see that
sustainable companies are doing much more than the others. Finally when observing the
following figure, we can find out that leader companies in terms of reporting (of the
CAC40) are also those often mentioned as leaders for their CSR practices.
Figure 6.1: Reporting and companies positioning
Source: Alpha Etudes, www.alpha-etudes.com.
With the previous information, we can say that H5 is invalid.
85

92. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6.1.6 H6: Even though sustainable development can be considered as
in contradiction with the market law, it provides development
opportunities for companies
SD can provide development opportunities for companies at different levels:
- opportunities to attain new markets: by developing products answering strictest
consumer claims (organic food, less polluting products…), companies will reach
new markets and enlarge the number of their stakeholders by interesting SRI
investors
- opportunities to innovate: when a regulation imposes new norms, companies have
to adapt, if they start earlier in order to respond to these new norms, they will
have more time to develop a better product and innovate to find the best solutions
to comply with the 3 SD pillars and consumers’ satisfaction.
Consequently, we can say that H6 is valid.
Table 6.1: Reminder of the methods used for hypotheses testing and results
1ary data
2ary data
H1
- sustainability
indexes returns
- existing literature
H2
- environmental
indexes returns
- existing literature
- annual reports of
automotive
companies
- sustainability
reports of automotive
companies
- complementary
literature
- existing literature
H3
- interviews
- sustainability
indexes returns
H4
- interviews
H5
- interviews
H6
- interviews
Method
- comparison of sustainability returns
against their benchmarks
- link with existing literature
- comparison of environmental returns
against their benchmarks
- ratio analysis of data from the
automotive industry
- link with existing literature
- comparison of sustainability returns
against their benchmarks
- cross-sectional analysis of interviews
- link with existing literature
- existing literature
- cross-sectional analysis of interviews
- link with existing literature
- existing literature
- cross-sectional analysis of interviews
- link with existing literature
- existing literature
- cross-sectional analysis of interviews
- link with existing literature
V: hypothesis validated
I: hypothesis invalidated
0: hypothesis neither validated nor invalidated
Results
V
0
0
I
I
V
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93. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6.2 Attempts to answer secondary questions
6.2.1 Which conditions lie at the heart of successful CSR policies?
Thanks to the interviews cross-sectional analysis, I found out that the main reasons for
the success of CSR policies are commitment of top management, integration of SD
values inside the corporate culture, coherence in demands to employees, transmission of
corporate actions on CSR and understanding of them by all employees. These points are
also parts of the “eight common strategies of successful CSR programs” from ERS’s
benchmark study on CSR86. It also puts the emphasis on partnerships with NGOs and
other stakeholders as advisors, and on the importance of the audit process of CSR.
Moreover, CSR policies in order to be successful have to be respected abroad as well,
which is more difficult especially if the country has a quite different culture. Toyota and
Total are good examples of this need for adaptation. Training, education to CSR concepts
and locals’ empowerment are very important. Local managers are those who can really
know how the company can fit in the local culture. Then, when companies have foreign
activities, they should also be engaged on initiatives such as EITI, to formalize their
commitments.
6.2.2 Why would companies committed to CSR perform well/better
financially?
As for the moment, we have not put the light on outperformance generated by CSR, we
can still imagine why some of the companies now perform better thanks to CSR, and
why companies in a closer or less future may perform better thanks to CSR. One key
element might be consumers as actually, the preoccupation for SD also answers a
consumer demand according to Ethicity and ADEME that made a survey to determine
the attitude of French consumers towards SD. More than 6 out of 10 French people think
and start to act taking SD into consideration. They also determined a typology of French
people towards SD and found out 8 categories, for which they showed that 35,6% are
more or less in the “move”, and 26,3% wants to act but need guidance87. This can make
us think that sustainability will be rewarded by consumers in the future.
Besides, De Wit and Meyer (2004) outlined that as stakeholders can mobilize public
opinion, it is better for companies to show them that they can be trusted. Trust will
provide a consequent feeling of security, mostly for employees who can work more
86
Anonymous, (2005), “Benchmark Study: Corporate Social Responsibility”, ERS, www.envsource.com,
June.
87
Anonymous, (2006), “Développement durable: de la pensée à l’action, les 8 façons de faire bouger les
Français!”, Study Brief, Ethicty and ADEME, www.ethicity.net.
87

94. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
productively then, and prospective employees for whom a position in the company would
be attractive.
Finally, a study on car companies88 showed that by improving environmental tools and
know-how, firms can develop a competitive advantage and that plants which use more
resources for production and emit more CO2 manufacture products of poorer quality.
Firms would perform well/better thanks to CSR because they answer a larger
stakeholders’ concern, taking into account emerging trends in terms of SD, and thanks to
innovation and better quality.
6.2.3 How can companies overcome/counterbalance the constraints of
implementing CSR policies? What are the benefits?
As seen in the interviews analysis, when companies decide to implement CSR policies,
they usually do it for a reason. Among the reasons linked to benefits brought to the
company are:
- actions after the denunciation of a problem: if the company does not do anything,
it will ruin its image
- differentiation policies which will permit the company to reach new markets
(even create markets)
- easier access to financing, thanks to a decrease in risk and a larger scope of
investors
- improved sales as consumers are aware of the efforts made by the company and
can identify to its values.
Moreover, companies will have the opportunity to open to civil society in most cases and
increase their knowledge with NGOs (if NGOs see that companies are willing to work on
SD). CSR policies will also have an impact on reputation, as for Total’s operations, the
results that you can observe from CSR are mainly qualitative. Thus companies will be
better perceived by stakeholders and will gain legitimation for their activities
(Handelman and Arnold, 1999).
88
Pil, F. K. and Rothenberg, S., (2003), “Environmental Performance as a Driver for Superior Quality”,
Production and Operations Management, Fall, 12(3), 404-416.
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95. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6.3 Limits of the study
Before, looking at managerial implications of this research and thinking about future
investigations, it is necessary to have a look at the limits of this study.
6.3.1 Use of sustainability indexes
The relevance of sustainability indexes is sometimes put into question as the criteria from
one rating agency to another can vary greatly. This problem has been put forward by a
report run by members of SustainAbility and Mistra89. Actually the research process of
SRI research organisations is sometimes questionable as their analysis lack of sectorspecific insights, analysts are well qualified for environmental and social assessments of
companies but quite often not for financial or strategic assessments, thus their study
might be incomplete. Moreover the data studied is provided by companies themselves
with generally no verification by the research organisation. Finally only one of the
research organisations looked at has its research process and results verified by an
external company. Consequently the risk of a lack of independence in the results
provided is real, as some of the research organisations producing sustainability indexes
are also supplying social responsibility audits to some of the companies.
6.3.2 Use of ratios
The automotive companies studied often have interests in other sectors, thus if they
operate in different industries, ratios are less meaningful.
ROE does not consider risk, it does not take into account the amount of money invested
neither (even though it can be an advantage to compare companies of different size).
Working on ROA would have interesting also, however the data calculated where very
different from the results provided by companies (if any). Consequently I preferred not to
use this accounting ratio. Actually for ROE, even though my calculations were a bit
different, the figures obtained remained quite close, thus usable.
89
Beloe, S., Scherer, J. (from SustainAbility) and Knoepfel, I., (from onValues), (2004), “Values for
Money – Reviewing the Quality of SRI Research”, SustainAbility and Mistra.
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96. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
6.3.3 Others
Lack of homogeneous data
It was really hard to gather environmental data from automobile companies. Even though
data is often provided, each company uses different units and different ways to approach
the issue. For some of them, we can get figures, clearly, for others we only have
indications on the progresses made, but if we do not know what was done in the previous
years, then the meaning of the improvements is not clear at all. It always seems
impressive to see the reductions; however it does not tell us from where the company
started.
If I had had the possibility to gather more homogeneous data, I could have had drawn a
typology of companies according to their relation with the environment.
Access to companies
I could not have interviewed all the companies I wanted because SD managers are too
busy or tired of research on CSR/SRI. I would have been interesting also to interview
more companies from the automobile sector in order to add more material to the case
study.
Access to databases
I could not have accessed all the databases I wanted to make my conclusions, especially
for financial data.
Time
Time is a constraint as, because of time, I could have done only six interviews, and time
does not allow exhaustiveness. Furthermore, SD aims at long-term results so it is difficult
to know now what the performance will be later, and studying companies performance
over a longer period of time (ahead in the future) would probably have provided more
significant results.
6.4
Managerial recommendations and avenues for research
Communication
Communication has been criticized for conveying messages in order to make people
think that companies are engaged in CSR. Actually, if it is really used for this purpose it
is deceptive, but companies can also have in sensitizing consumers to SD and responsible
consumption. Besides, managers should increase communication inside the company.
For instance, between production and environment departments, interviews led by Pil
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97. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
and Rothenberg revealed that “the contribution of environmental projects to quality is so
clear to some environmental staff that they wait until quality problems surface in order to
propose environmental solutions that will also address this quality problems”90. Internal
communication includes communication to bottom-level employees as well, they have to
be sensitized on these issues and know what the company is doing so that they can relay
the information, to customers especially.
Reporting
Ratings by rating agencies have been criticized for not being reliable, and companies to
display data that is not necessarily readable. Perhaps companies can find here an
opportunity, there is maybe a possibility to find solutions to provide better quality
information to rating agencies, or SRI funds managers, and to answer the ‘questionnaire
fatigue’ issue. Indeed, it is also in their interest to do so: they will not have to answer
those questionnaires any more; they may improve their reporting, and find better ways to
display the information to the main audience also. Companies (and/or national or
international institutions) should look for indicators that allow stakeholders to compare
companies and follow their evolution (like GRI but more harmonized). It would also
allow companies to know where they are in comparison with their competitors, they
could thus benchmark themselves. Moreover if they oblige themselves to publish figures
they will have a stronger incentive to respect their codes and engagements.
Further research could look at what are the most relevant data and tools to analyse
companies’ performance either in the short run or in the long run while taking financial
considerations into account.
Proactivity
Companies should tend to being proactive in order not to have to spend a lot of money at
the last minute to comply with laws and regulations. For instance, the implementation of
ISO 14000 has been easier for companies already accredited with ISO 9000, and it will
be the same in the future with new norms. It is also an opportunity for companies to
develop new processes that will help them produce at a cheaper cost, while benefiting the
environment as well for instance, and an opportunity to participate to the global
commitment for the Millennium Development Goals (MDGs)91. Water, environment and
human rights are included in these goals and are thus the responsibility of everyone.
Moreover, they are other goals concerning specific industry (pharmaceutical for
HIV/AIDS, malaria… e.g.).
90
91
Pil and Rothenberg, “Environmental Performance as a Driver for Superior Quality”, 412.
www.un.org/millenniumgoals/
91

98. IÉSEG Master Thesis – Aude Richon – 6 Analysis and discussion
Role of governments
There is a real need for national, even international policies, an international cohesion on
CSR and SD not to pervert competition among firms, especially with emerging countries
as they are developing quite quickly, and if they do not respect the same rules they will
have an advantage in terms of costs. International instances should be more definite, as
countries cannot really control MNCs anymore since some MNCs are so powerful and
have higher resources than some states. Further research might be started also on the
importance of the difference in sensibilities to CSR according to countries/continents,
and what can be made to overcome that in order to get international standards for CSR
that would permit alleviating climate change and promoting human rights.
Lobbying
From readings and interviews, I also found that companies should lobby for an
harmonization of taxation at the national or regional level, as a result consumers will
have incentives to buy products respectful of SD principles and companies will be able to
reinforce their CSR policies and innovation processes to provide “clean” products. This
can be the same for shareholders, if shareholders have taxation incentives for SRI, they
would probably favour it over classic investment and it would benefit both environment
and stakeholders. The company would then be better valued. It might be easier for
governments to act on stakeholders than on companies themselves, as if regulation is too
tough, companies might relocate, provoking job losses.
Partnerships
MNCs should engage in more so-called ‘innovative partnerships’, even with other MNCs
to share their knowledge and use all the different partnership possibilities (with NGOs
and UN agencies also). It would be better for them not to act on their own, in order to
favour knowledge and know-how acquisition. This item could also be the subject of
following research, determining if partnerships with NGOs and openness to civil society
(not philanthropy but on firms’ operations) have an influence on the subsequent financial
performance of the firm.
Finally, other tracks could be explored, such as determining the link between successful
CSR policies and companies’ age, or whether CSR commitments have more impacts on
certain sectors rather than on others.
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99. IÉSEG Master Thesis – Aude Richon – 7 Conclusion
7 Conclusion
The object of this thesis was to find out whether the integration of CSR policies into a
company’s strategy has positive impacts on its financial performance, and answer the
consequent research problem: What characterizes Corporate Social Responsibility
strategies and do they have an impact on financial performance?
It was possible to explain how companies can lead successful CSR policies, however,
concerning the impact on financial performance, results are mitigated: I could not
validate nor invalidate hypotheses directly concerning this point.
We can imagine that in the future, SD awareness will grow, as even during the very last
years, the topic has been put forward more and more. Thus, its application to business
thanks to CSR will probably follow the same trends. Since western companies are
integrating CSR more and more, we can imagine that it is not bad for the company nor its
performance (at least it is not worst than before). Toyota’s strategy is to act reasonably
and they have strong CSR policies for example. Thus improving social and
environmental performances, even if it does not increase revenues is certainly not bad in
itself.
We actually need to widen awareness on negative externalities of business as they might
be irreversible for some of them. The scope of action should be greater as well, as now
many MNCs have bigger budgets than some States. Moreover, MNCs should take into
account the reputational risk of operating carelessly.
Nevertheless, for SD to be successful we need to reach a great scale implementation of
CSR policies, even though I think it works and it cannot be harmful, it can impose really
tough conditions on small companies. Consequently solutions need to be found for them,
to accompany them, at the local, national or regional level.
CSR needs resources in terms of strategy, often requires changing business models
(which can be a total change if the company was not used to taking environmental and
social policies into account). It involves the setup of new processes as well, and
communication on what the company is doing. Since the company is taking action it
should communicate about it so people can know and maybe change their mind
concerning the company or their consumption behaviour.
Finally, it is important also to implicate consumers in their use of polluting products
(they can adapt their driving for instance) and it is the role of companies too.
93

100. IÉSEG Master Thesis – Aude Richon
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104. IÉSEG Master Thesis – Aude Richon
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105. IÉSEG Master Thesis – Aude Richon
Table of contents
Acknowledgements .................................................................................................... i
Contents ..................................................................................................................... ii
Abbreviations ...........................................................................................................iii
Abstract .................................................................................................................... iv
1
2
INTRODUCTION ........................................................................................................... 1
THEORETICAL FRAMEWORK ..................................................................................... 5
2.1
Globalization’s Role in Awareness for Sustainable Development ............... 5
2.1.1
The Role of Globalization .......................................................................... 5
2.1.2
The Need for Sustainable Development ..................................................... 6
2.2
Evolutions and Definitions of Corporate Social Responsibility ................... 9
2.2.1
Corporate Social Responsibility ................................................................. 9
2.2.2
Stakeholders.............................................................................................. 12
2.3
CSR as part of corporate strategy................................................................. 14
2.4
Critics and Measures to Overcome Them .................................................... 17
2.4.1
CSR also Raised some Critics .................................................................. 17
2.4.2
Implementation of codes of conduct and reporting .................................. 19
2.5
Increasing expectations on MNCs................................................................. 20
2.5.1
Should companies play the role of too weak governments?..................... 20
2.5.2
CSR’s stakes ............................................................................................. 21
2.6
Performance .................................................................................................... 23
2.6.1
Socially Responsible Investment.............................................................. 23
2.6.2
Views on Performance.............................................................................. 24
3
METHODOLOGY ....................................................................................................... 29
3.1
Research Model............................................................................................... 30
3.1.1
Degree of research question crystallization.............................................. 31
3.1.2
Purpose of the study.................................................................................. 31
3.1.3
Type and sources of data .......................................................................... 31
3.1.4
Time dimension ........................................................................................ 32
3.2
Method of data collection............................................................................... 32
3.2.1
Data collection .......................................................................................... 32
3.2.2
Weaknesses and strengths of the data collection method ......................... 34
3.2.2.1 Qualitative data .................................................................................... 34
3.2.2.2 Quantitative data .................................................................................. 34
3.2.3
Research ethics ......................................................................................... 34
3.2.4
Sampling design........................................................................................ 35
3.2.4.1 Quantitative data .................................................................................. 35
3.2.4.2 Qualitative data .................................................................................... 35
3.3
Data analysis.................................................................................................... 36
3.3.1
Topical scope of the study ........................................................................ 36
3.3.2
Method(s) to analyze the data................................................................... 36
3.3.3
Limits........................................................................................................ 36
3.4
Methodology, hypothesis by hypothesis........................................................ 37
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106. IÉSEG Master Thesis – Aude Richon
4
WHY WOULD COMPANIES ENGAGE IN CSR POLICIES?........................................... 38
4.1
Presentation of the interviewees .................................................................... 38
4.2
Presentation of the themes and subthemes studied ..................................... 41
4.3
Interviews analysis.......................................................................................... 42
4.3.1
Corporate history and CSR....................................................................... 42
4.3.1.1 Motives for action ................................................................................. 42
4.3.1.2 Stakeholders’ influence......................................................................... 43
4.3.1.3 Evolution over time............................................................................... 45
4.3.1.4 Partnerships in the frame of CSR ......................................................... 47
4.3.1.5 Perspectives for the future .................................................................... 48
4.3.2
CSR within the company .......................................................................... 49
4.3.2.1 SD departments..................................................................................... 49
4.3.2.2 Governance and decision making......................................................... 50
4.3.2.3 Accreditations, certifications and labels .............................................. 51
4.3.2.4 Integration of CSR in the day-to-day operations.................................. 52
4.3.2.5 CSR at the global level ......................................................................... 53
4.3.3
Communication and (potential) achievements of CSR ............................ 54
4.3.3.1 Reporting and indicators ...................................................................... 54
4.3.3.2 Communication..................................................................................... 55
4.3.3.3 Positioning and image .......................................................................... 56
4.3.3.4 Performance ......................................................................................... 57
4.3.3.5 Reasons for CSR policies success......................................................... 58
4.3.4
Overview of the analysis .......................................................................... 59
5
APPLICATION TO CONCRETE CASES ........................................................................ 60
5.1
Study on sustainable indexes ......................................................................... 60
5.1.1
What are sustainability indexes? .............................................................. 60
5.1.2
Comparison between classic indexes and sustainability indexes ............. 62
5.1.2.1 General Indexes .................................................................................... 63
5.1.2.2 Indexes putting the emphasis on the social pillar of SD....................... 65
5.1.2.3 Indexes putting the emphasis on the environmental pillar of SD ......... 66
5.1.3
Numerical comparison of various indexes ............................................... 68
5.1.4
Results interpretation ................................................................................ 69
5.2
Specific look at the automotive sector concerning the environmental pillar
of SD 70
5.2.1
Presentation of the companies .................................................................. 70
5.2.2
Comparison of sustainable companies from the automobile sector with
other industries .......................................................................................... 72
5.2.3
Comparison of different automakers associations’ attitudes towards the
environment and consequences on their performance .............................. 73
5.2.4
Comparison of the performances of leaders and laggards........................ 79
5.2.5
Results interpretation ................................................................................ 81
6
ANALYSIS AND DISCUSSION ...................................................................................... 83
6.1
Hypothesis testing ........................................................................................... 83
6.1.1
H1: There is no sanction imposed on companies that are not committed to
CSR
83
6.1.2
H2: Good environmental performance generates good financial
performance............................................................................................... 83
6.1.3
H3: Companies with high socially responsible standards perform better
than those with poor socially responsible standards ................................. 84
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107. IÉSEG Master Thesis – Aude Richon
6.1.4
6.1.5
6.1.6
H4: Companies tend to generalize CSR practices .................................... 84
H5: CSR is just PR ................................................................................... 85
H6: Even though sustainable development can be considered as in
contradiction with the market law, it provides development opportunities
for companies ............................................................................................ 86
6.2
Attempts to answer secondary questions...................................................... 87
6.2.1
Which conditions lie at the heart of successful CSR policies?................. 87
6.2.2
Why would companies committed to CSR perform well/better financially?
.................................................................................................................. 87
6.2.3
How can companies overcome/counterbalance the constraints of
implementing CSR policies? What are the benefits?................................ 88
6.3
Limits of the study .......................................................................................... 89
6.3.1
Use of sustainability indexes .................................................................... 89
6.3.2
Use of ratios.............................................................................................. 89
6.3.3
Others........................................................................................................ 90
6.4
Managerial recommendations and avenues for research ........................... 90
7
CONCLUSION ............................................................................................................ 93
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108. IÉSEG Master Thesis – Aude Richon
List of Figures
Figure 2.1: CSR’s three dimensions ................................................................................... 8
Figure 2.2: Stakeholder groups......................................................................................... 13
Figure 2.3: Conceptual framework ................................................................................... 28
Figure 3.1: Research model .............................................................................................. 30
Figure 5.1: Sustainability scores of the DJSI members .................................................... 61
Figure 5.2: Comparison between the DJSI World and the MSCI World performances .. 63
Figure 5.3: Comparison between the FTSE4Good Global Index and the FTSE All-World
Developed Index performances ...................................................................... 64
Figure 5.4: Comparison of the monthly returns of the DS 400 and the S&P 500 ............ 65
Figure 5.5: Cumulative returns of the DS 400 and the S&P 500 ..................................... 66
Figure 5.6: KLD’s GC 100 Index Cumulative Performance .......................................... 67
Figure 5.7: Performance of the FTSE4Good Environmental Leaders Europe 40 ............ 68
Figure 5.8: Performance comparison between environmental leaders in the automotive
sector and globally and the Automobile & Parts Supersector ........................ 72
Figure 5.9: Percentage of 140g/km target to be reached by top 20 car brands by 2008/9 if
present trends continue ................................................................................... 74
Figure 5.10: CO2 reduction trends for ACEA, JAMA and KAMA (1995-2003), g/km,
cars sold in Europe.......................................................................................... 76
Figure 5.11: ROE evolution of companies from ACEA, JAMA, and KAMA................. 77
Figure 5.12: Cumulated ROE of ACEA’s, JAMA’s and KAMA’s members.................. 78
Figure 5.13: Changes in cumulated revenues for ACEA, JAMA and KAMA members . 79
Figure 6.1: Reporting and companies positioning............................................................ 85
List of Tables
Table 2.1: Phases in the development of CSR.................................................................. 10
Table 2.2: Categorization of Social Responsibilities........................................................ 12
Table 2.3: Need Hierarchy – Comparison between Individuals and Companies ............. 16
Table 2.4: Theories on relations between CSP and CFP .................................................. 26
Table 3.1: Investigation of the hypotheses ....................................................................... 37
Table 4.1: Presentation of the themes and subthemes of the interviews analysis ............ 41
Table 4.2: Motives companies can have to implement CSR policies............................... 42
Table 4.3: How can stakeholders influence a company’s decisions? ............................... 43
Table 5.1: Comparison between the returns of sustainability indexes and classic ones... 69
Table 5.2: Comparison between the volatilities of sustainability indexes and classic ones
.......................................................................................................................................... 69
Table 5.3: Companies information ................................................................................... 71
Table 5.4: Members of the MSCI World Auto in the different car manufacturers
associations ..................................................................................................... 75
Table 6.1: Reminder of the methods used for hypotheses testing and results.................. 86
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109. IÉSEG Master Thesis – Aude Richon
APPENDIXES
Appendix A – Interview Guide...................................................................................... 104
Appendix B – Sustainability indexes............................................................................. 109
Appendix C – Corporate Sustainability Assessment Criteria........................................ 111
Appendix D – Performances of the DJSI STOXX 40 and EUROSTOXX 40 .............. 112
Appendix E – Performance of the FTSE4Good Europe................................................ 113
Appendix F – Data used to draw the chart for the comparison of DS 400 and S&P 500
........................................................................................................................................ 114
Appendix G - Comparison of the GC 100 with the Russell 3000 ................................. 115
Appendix H – Figures used for the calculation of maximum, minimum and median
returns of sustainability and classical indexes ................................................................ 116
Appendix I – Data on car companies from the MSCI World ........................................ 117
Appendix J – Automobile manufacturers’ presence in sustainability indexes.............. 121
Appendix K – Data on automotive companies and sustainability................................. 122
Appendix L – Complementary graph to the comparison between environmentallyfriendly car companies, other companies and the Automobile & Parts sector ............... 123
Appendix M – Data used to compare automobile companies’ ROE............................. 124
Appendix N – Data used to calculate the cumulated revenues and ROE ...................... 125
Appendix O – Data used to compare sustainable companies and companies less (even
no) engaged in SD .......................................................................................................... 126
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110. IÉSEG Master Thesis – Aude Richon
Appendix A – Interview Guide
Lieu d’interview :
Date et Heure d’interview :
Nom de l’interviewé :
Fonction de l’interviewé :
Entreprise :
Introduction de l’interview :
1. Remercier le participant d’avoir accepté l’interview
2. Présenter mon sujet de mémoire et la raison de cette interview.
Je suis étudiante en 5ème année à l’IÉSEG School of Management à Lille, dans la
filière Management Général. Je vous ai sollicité pour cette interview dans le cadre de
mon mémoire de Master qui porte sur la Responsabilité Sociale des Entreprises, la
stratégie des entreprises engagées, en prenant en compte les liens entre Performance
Sociale et Environnementale et Performance Financière.
3. Demander la permission d’enregistrer l’échange et préciser qu’à tout moment, le
participant aura la possibilité d’arrêter l’enregistrement ou même d’effacer
certains passages enregistrés.
Questionnaire :
Tout d’abord, recueil de données sur l’entreprise :
- Secteur d’activité
- Raison sociale
- Nombre de salariés
- Position géographique
Régional ?
National ?
International ?
Historique et description des politiques en matière de RSE
-
Quel est la nature de l’engagement de votre entreprise en matière de DD ?
-
Quand [nom de l’entreprise] a-t-elle commencé à prendre en compte les
problématiques de DD/RSE ?
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111. IÉSEG Master Thesis – Aude Richon
-
A quel(s) niveau(x) les problématiques de DD/RSE sont-elles prises en compte
par [nom de l’entreprise] ?
Production ?
Distribution ?
…
-
A quand remonte la création d’un service DD/RSE dans votre entreprise ?
o
A quel département est-il rattaché ?
Communication ?
…
o
-
S’il n’y a pas de service DD/RSE dans votre entreprise, est-ce un projet pour
l’avenir ?
De qui et comment est venue cette volonté de mettre en place des politiques de
DD/RSE ?
Demande des actionnaires ?
Demande du personnel ?
Exigences légales ? (tout en sachant que la RSE est censée être volontaire)
Demande des clients ?
Volonté des dirigeants ?
…
o
-
Quelle est l’influence des différentes parties prenantes (stakeholders) sur
l’entreprise ?
o
-
Comment l’intégration de la RSE dans les politiques de [nom de l’entreprise] at-elle fait évoluer la culture de l’entreprise ?
Quels sont leurs effets ?
Comment la gouvernance est-elle menée au niveau de l’entreprise ?
Consultation de tous ?
Implication des cadres ?
Implication des employés ?
Un seul homme dirige ?
…
o
-
Comment les salariés sont-ils associés à la vie, l’avenir, la stratégie de
l’entreprise ?
Sur quel(s) pilier(s) du Développement Durable [nom de l’entreprise] s’appuie-telle le plus ?
Economique ?
Social ?
Environnemental ?
• Cela est-il lié à votre activité ?
105

112. IÉSEG Master Thesis – Aude Richon
-
[nom de l’entreprise] possède [noms des labels, accréditations, certifications
possédés], pourquoi avoir choisi ceux-ci ?
o
o
o
o
o
-
Depuis quand [nom de l’entreprise] publie-t-elle des rapports de DD ?
o
o
o
-
En quoi cela vous paraît-il important ?
Pensez-vous que cela ait des répercussions sur la réputation de l’entreprise ?
Pensez-vous que cela ait des répercussions sur sa performance ?
Comment cela influe-t-il sur votre philosophie d’investissement ?
Visez-vous d’autres certifications ?
La publication de tels rapports a-t-elle fait accélérer les actions dans le domaine
de la RSE ? élargi le champ d’action ?
Publiez-vous beaucoup d’indicateurs ? depuis longtemps ?
Pensez-vous que ces indicateurs soient importants et révélateurs des politiques
mises en place ?
[nom de l’entreprise] a-t-elle fait l’objet d’un rating ?
o
Par quel organisme ?
ORSE ?
Vigeo ?
…
Stratégie d’entreprise et RSE
-
Comment la stratégie de [nom de l’entreprise] en matière de RSE a-t-elle
évolué ?
-
Quelles sont les perspectives de [nom de l’entreprise] pour l’avenir, en matière
de RSE ?
Maintenir les mêmes standards ?
Renforcer les politiques de RSE ?
…
o
-
Quels aspects souhaitez-vous renforcer dans le futur ?
Quels éléments ont permis la réussite de votre politique de RSE ?
o
Qu’est-ce qui fait que votre politique de RSE fonctionne ?
Engagement de tous les employés ?
Politique faisant partie intégrante de la culture d’entreprise ?
…
106

113. IÉSEG Master Thesis – Aude Richon
-
Comment qualifieriez-vous le comportement de [nom de l’entreprise] par rapport
au DD/à la RSE ?
Réactivité ?
Proactivité ?
Leader dans son secteur ?
…
-
Au quotidien, comment se concrétise la politique de [nom de l’entreprise] en
matière de RSE ?
o
-
Quels outils ont été mis en place pour maîtriser votre responsabilité sociale au
niveau mondial ?
[nom de l’entreprise] a-t-elle des partenariats avec des ONGs ? des agences
intergouvernementales ?
o
Dans quel but ces partenariats ont-ils été établis ?
RSE et performance
-
Qu’est-ce que s’engager en matière de RSE a apporté à votre entreprise ?
Image
Visibilité
Stratégie
Performance
…
-
Quel lien établissez-vous entre performance et DD ?
o
o
Avez-vous remarqué des changements de résultats (financiers) à partir du
moment où les politiques de DD/RSE ont été mises en place ?
Avez-vous remarqué des changements de résultats au niveau social à partir du
moment où les politiques de DD/RSE ont été mises en place ?
Réduction du turnover ?
Réduction du nombre d’accidents ?
Augmentation des heures de formation ?
…
-
Le choix de vos partenaires obéit-il à la logique RSE ?
Trouvez-vous que les fournisseurs avec les meilleurs standards en matière de
RSE soient plus ou moins intéressants financièrement ?
107

114. IÉSEG Master Thesis – Aude Richon
RSE et positionnement de l’entreprise
-
D’une manière générale, comment les politiques de RSE de [nom de
l’entreprise] sont-elles perçues au sein de l’entreprise ?
o
o
Par les dirigeants ?
Par les employés ?
Insuffisance des politiques mises en place
Politiques mises en place trop poussées qui peuvent désavantager [nom de
l’entreprise]
Gaspillage inutile de moyens financiers
…
o
-
Par rapport aux concurrents de [nom de l’entreprise] les efforts faits sont-ils
jugés suffisants ?
Par votre pratique de la RSE, quel(s) avantage(s) pensez-vous avoir par rapport à
vos concurrents ?
o
o
o
Pensez-vous que [nom de l’entreprise] soit une source d’inspiration pour
d’autres entreprises ? pour vos concurrents ?
En quoi pensez-vous que la politique de [nom de l’entreprise] en matière de RSE
vous différencie de vos concurrents ?
Qu’est-ce qui fait votre force/votre faiblesse ?
Y a-t-il d’autres éléments que vous souhaitez ajouter à cette interview ?
Remerciements pour le temps accordé.
108

115. IÉSEG Master Thesis – Aude Richon
Appendix B – Sustainability indexes
Number of
companies
Construction
DJSI World
314
o includes leading companies in term of
sustainability around the world
o captures the top 10% based on longterm economic, environmental and social
criteria out of the biggest 2500 companies
worldwide
DJSI North America
112
o captures the leading 20% in terms of
sustainability out of the largest 600 North
American companies of the DJ Global
Index (90% American, 10% Canadian)
Sustainable Indexes
Creation
date
Dec. 31,
1993
DJSI US
94
Dow Jones Sustainability Indexes
(SAM - Switzerland)
DJSI STOXX
162
DJSI STOXX 40
Oct. 15,
2001
40
Portfolio of securities from the developped
world (23 countries).
744
Float-adjusted
market
capitalization
weighted index that reflects the shares of
securities of the large cap portion of the
DJ Wilshire 5000 Composite Index.
DJ STOXX 600
600
o broad yet liquid representation of large,
mid and small cap companies in the
European region
o comprises large, mid and small size
indices of 200 components each
50
o provides a blue-chip representation of
supersector leaders in Europe
o covers Austria, Belgium, Denmark,
Finland, France, Germany, Greece,
Iceland, Ireland, Italy, Luxembourg, the
Netherlands, Norway, Portugal, Spain,
Sweden, Switzerland and the UK
o captures approximately 50% of the free
float market capitalisation of the DJ
STOXX Total Market Index, which in turn
covers approximately 95% of the free float
market capitalisation of the represented
countries
Largest companies in Europe which have
been included in the DJSI STOXX,
DJ STOXX 50
weighted depending on their sustainability but available excluding
score.
alcohol, tobacco, gambling,
armament and firearms
Dec. 31,
1998
74
o captures the Eurozone companies out of
the DJSI STOXX
o selection according to a systematic
corporate sustainability assessment that
identifies the sustainability leaders in each
of the 58 sectors, general as well as
industry-specific sustainability trends
o evaluates corporations based on a
variety of criteria including climate change
strategies, energy consumption, human
resources
development,
knowledge
management, stakeholder relations and
corporate governance
DJSI EURO STOXX 40
Oct. 15,
2001
40
Largest companies in the Eurozone
included in the DJSI EURO STOXX,
weighted depending on their sustainability
score.
FTSE4Good Global
713
FTSE4Good Global 100
FTSE4Good Index Series
(EIRIS, UK)
1798
Benchmarks
no
DJSI EURO STOXX
105
FTSE4Good US
160
July 2001
FTSE4Good US 100
101
FTSE4Good Europe
293
FTSE4Good Europe 50
54
FTSE4Good Japan
FTSE4Good
(EIRIS, UK)
Construction
DJ Wilshire US Large
Cap
o captures the US companies out of the
DJSI North America
o captures the top 20% of the DJ STOXX
600 in terms of sustainability
o evaluates corporations based on a
variety of criteria including climate change
strategies, energy consumption, human
resources
development,
knowledge
management, stakeholder relations and
corporate governance
Number of
companies
MSCI World
Restrictions
Sept. 21,
2004
May 18,
FTSE4Good
2007
Environmental Leaders (base date:
June 29,
Europe 40
2001)
DJ EURO STOXX
DJ EURO STOXX 50
FTSE All World
The FTSE4Good criteria is applied to the
Developed Index
FTSE Developed Index Series, which
FTSE All World
covers 23 markets and over 2,000
potential constituents.
Developed Index
It includes companies that meet globally
recognised
corporate
responsibility
FTSE US Index
standards:
o Environmental sustainability
o Developing positive relations with o Manufacturing of tobacco FTSE US Index
stakeholders
products
o Up-holding and supporting universal
human rights
o Companies providing FTSE Developed
The criteria are revised regularly, strategic parts or services Europe
challenging companies to continually raise for or manufacturing whole
their corporate responsibility standards to nuclear weapons systems FTSE Developed
keep apace.
Europe
194
o identify Japanese companies within the
FTSE Global Equity Index Series that
meet the same criteria as the components
of the other FTSE4Good Index Series
o Manufacturers of whole
weapons systems, owners
or operators of nuclear FTSE All World
power stations and those Developed Index
mining
or
producing
uranium
40
o designed to identify European
companies with leading environmental
practices
o constructed by taking all European
companies in the FTSE4Good Index
Series that have obtained the ‘best
practice’ environmental rating of 5,
ranking them by full market capitalisation,
and then selecting the top 40 to be
included in the index
o derived from the DJ STOXX 600 index
o designed to provide a broad yet liquid
representation of large, mid and small cap
variable
companies
(approximately
100
(approximately components each) of 12 Eurozone
300)
countries: Austria, Belgium, Finland,
France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal
and Spain
50
o provides a blue-chip representation of
supersector leaders in the Eurozone
o covers Austria, Belgium, Finland,
France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal
and Spain
2030
o large-/mid-cap aggregate of stocks
from the FTSE Global Equity Index Series
o covers 98% of the investable market
capitalisation
2030
o large-/mid-cap aggregate of stocks
from the FTSE Global Equity Index Series
o covers 98% of the investable market
capitalisation
FTSE Developed
Europe
109

116. Ethibel Sustainability Indexes
(Forum Ethibel, Belgium)
Vigeo/Arese
(France)
IÉSEG Master Thesis – Aude Richon
ASPI Eurozone
(Vigeo/Arese)
Ethibel Pioneer Global
June 27,
2002
317
Ethibel Excellence
Europe
175
KLD Indexes
(KLD, USA)
GC100
Global Climate Index
SSI
Select Social Index
LCS
Large Cap Social Index
ECPI® Index Family
(E.Capital Partners, Italy)
198
Ethibel Excellence
Global
BMS
Broad Market Social
Calvert
Index
(Calvert,
USA)
120
Ethibel Pioneer Europe
DS 400
Domini Social Index
Others indexes
from different
countries
June 1,
2001
Ethical Index Euro
Ethical Index Global
Calvert Social Index
May 1, 1990
July 1, 2005
100
o
companies
whose
activities
demonstrate the greatest potential for
reducing the social and economic
consequences of climate change
no
o involvement in renewable Energy (35),
clean Tech & Efficiency (32), future Fuels
(33), same weight to each company
Jan. 1,
2001
2027
(as of April
30, 2007)
Jan. 1,
2001
640
(as of April
30, 2007)
April 2000
Ethinvest
Jantzi Social Index
Natur-Aktien Index
UBAI-Umweltbank-Aktien Index
…
S&P Global 1200
o lists the most socially responsible
companies in their sector ("Best-in-class"
approach)
o designed to approach the sectoral
Examination of the extent to
weighting of the S&P Global 1200
which
a
company is S&P 350 Europe
involved in 'technologies
and practices which are the
subject of social debate' in
other words 'disputable
o lists the companies of the Pioneer Index practices'.
S&P Global 1200
as well as those whose performance is
rated above the sector's average
o designed to approach the sectoral
weighting of the S&P Global 1200
S&P 350 Europe
400
212
(as of April
30, 2007)
Jan. 2000
DJ EURO STOXX
variable
(314 now)
o modelled on the S&P 500 index,
Companies
involved
companies not in the S&P 500 are also
beyond specific thresholds
eligible (100+50 usually)
in
alcohol,
tobacco,
o analysis on: community relations,
S&P 500
firearms,gambling, nuclear
diversity, employee relations, human
power and military weapons
rights, and product quality and safety,
are not eligible.
environment and corporate governance
June 1,
2004
Jan. 2000
best companies of the DJ Euro Stoxx,
grading in 5 criteria (Human Rights,
no
Governance,
Environment,
Human
Resources, Stakeholders Relations)
350
1200
350
Capturing approximately 70% of the
world’s capital markets, the S&P Global
1200 is a composite of seven headline
indices, many of which are accepted
leaders in their regions.
Equity index drawn from 17 major
European
markets,
covering
approximately 70% of the region’s market
capitalization.
Capturing approximately 70% of the
world’s capital markets, the S&P Global
1200 is a composite of seven headline
indices, many of which are accepted
leaders in their regions.
Equity index drawn from 17 major
European
markets,
covering
approximately 70% of the region’s market
capitalization.
500
Large-cap American companies
representing 80% of the US equity market.
Russell 3000
3000
98% of the US equity market
S&P/Citigroup BMI
World
8775
o limited to companies in
o exposure to positive social and
the Russell 1000 and S&P
environmental factors
Russell 1000
500
o sector diversified
o no tobacco companies
o best environmental, social and
governance (ESG) performers in each
sector of the Russell 3000
Companies
involved Russell 3000
o approximating sector diversification of beyond specific thresholds
the Russell 3000
in
alcohol,
tobacco,
best
environmental,
social
and firearms,gambling, nuclear
governance (ESG) performers in each power and military weapons
sector of the Russell 1000 while are not eligible.
Russell 1000
approximating thesector diversification of
the Russell 1000
o companies from the
The rating of companies is performed following
areas:
with:
pornography, contraception
(on request)
21
n.s.
o positive screening: selection of ocompanies
which
are
companies which satisfy high standards of active in non-sustainable
business
sustainability,
CSR, industries with a given
environment, social relations
minimum
turnover:
armament,
nuclear
o best-in-class-approach: incorporation of energy/technology, alcohol,
companies with a good social and gambling, tobacco
24
n.s.
environmental performance from critical o companies known for
industries or countries
infringing human rights, ILOProtocol
o companies from the 1000 largest US
Companies
involved in
641
companies
weighted
by
market
alcohol, gambling, tobacco,
(as of Sept. capitalization
no
firearms and weapons,
15, 2006) o 40% limited exposure to any sector
nuclear energy.
(659)
Australia
Canada
Germany
Germany
Sources:
http://www.stoxx.com/,
http://www.ftse.com,
http://www.ethibel.org/,
http://www.kld.com/,
http://www.ssgafunds.com/etf/fund/etf_detail_ELR.jsp?tab=1, http://www.vigeo.com/, http://www.sustainability-index.com.
1200
o subset of the DJ STOXX 600
o the index represents large-, mid- and
small-cap companies of 12 Eurozone
countries: Austria, Belgium, Finland,
France, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal
and Spain
http://www.calvertgroup.com/,
1000
1000 largest securities in the Russell 3000
3000
98% of the US equity market
1000
1000 largest securities in the Russell 3000
n.a.
n.a.
n.a.
n.a.
n.a.
n.a.
http://www.sustainable-investment.org/indizes,
110

117. IÉSEG Master Thesis – Aude Richon
Appendix C – Corporate Sustainability Assessment Criteria
Criteria for inclusion in the DJSI
Dimension
Criteria
Weighting
(%)
Codes of Conduct / Compliance / Corruption &
Bribery
5.5
Corporate Governance
6.0
Risk & Crisis Management
Economic
6.0
Industry Specific Criteria
Depends on
Industry
Environmental Performance (Eco-Efficiency)
7.0
Environmental Reporting
3.0
Industry Specific Criteria
Environment
Depends on
Industry
Corporate Citizenship/ Philanthropy
3.5
Labor Practice Indicators
5.0
Human Capital Development
5.5
Social Reporting*
3.0
Talent Attraction & Retention
Social
5.5
Depends on
Industry
Source: http://www.sustainability-index.com/06_htmle/assessment/criteria.html.
Industry Specific Criteria
111

118. IÉSEG Master Thesis – Aude Richon
Appendix D – Performances of the DJSI STOXX 40 and
EUROSTOXX 40
Source:
http://www.sustainabilityindex.com/djsi_pdf/publications/Presentations/SAM_Presentation_060906_Review.pdf
112

119. IÉSEG Master Thesis – Aude Richon
Appendix E – Performance of the FTSE4Good Europe
Source: http://www.ftse.com/Indices/FTSE4Good_Index_Series/Performance_Analysis.jsp.
113

120. IÉSEG Master Thesis – Aude Richon
Appendix F – Data used to draw the chart for the comparison
of DS 400 and S&P 500
Date
Jun-07
May-07
Apr-07
Mar-07
Feb-07
Jan-07
Dec-06
Nov-06
Oct-06
Sep-06
Aug-06
Jul-06
Jun-06
May-06
Apr-06
Mar-06
Feb-06
Jan-06
Dec-05
Nov-05
Oct-05
Sep-05
Aug-05
Jul-05
Jun-05
May-05
Apr-05
Mar-05
Feb-05
Jan-05
Dec-04
Nov-04
Oct-04
Sep-04
Aug-04
Jul-04
Jun-04
May-04
Apr-04
Mar-04
Feb-04
Jan-04
Dec-03
Nov-03
Oct-03
Sep-03
Aug-03
Jul-03
Jun-03
May-03
Apr-03
Mar-03
Feb-03
Jan-03
Dec-02
Nov-02
Oct-02
Sep-02
Aug-02
Jul-02
Jun-02
May-02
Apr-02
Mar-02
Feb-02
Jan-02
Dec-01
Nov-01
Oct-01
Sep-01
Aug-01
Jul-01
Jun-01
May-01
Apr-01
Mar-01
Feb-01
Jan-01
Dec-00
Nov-00
Oct-00
Sep-00
Aug-00
Jul-00
Jun-00
May-00
Apr-00
Mar-00
Feb-00
Jan-00
Dec-99
Nov-99
Oct-99
Sep-99
Aug-99
Jul-99
Jun-99
May-99
Apr-99
Mar-99
Feb-99
Jan-99
Dec-98
Return(%)
Cumulative returns
S&P 500 DS 400 S&P 500 DS 400
-1,66
-2,16
204,64
215,17
3,49
3,20
206,30
217,33
4,43
4,56
202,81
214,13
1,12
0,05
198,38
209,57
-1,96
-2,21
197,26
209,52
1,51
2,04
199,22
211,73
1,40
1,35
197,71
209,69
1,90
1,16
196,31
208,34
3,26
3,67
194,40
207,18
2,58
3,02
191,14
203,51
2,38
3,14
188,57
200,49
0,62
0,12
186,19
197,35
0,14
-0,21
185,57
197,23
-2,88
-3,43
185,43
197,44
1,34
0,38
188,31
200,87
1,25
0,49
186,97
200,49
0,27
0,82
185,72
200,00
2,65
2,19
185,45
199,18
0,03
-0,72
182,81
196,99
3,78
4,01
182,77
197,71
-1,67
-0,44
178,99
193,70
0,81
-0,09
180,66
194,14
-0,91
-1,30
179,85
194,23
3,72
4,84
180,76
195,53
0,14
-0,71
177,04
190,69
3,18
4,25
176,90
191,40
-1,90
-1,87
173,72
187,14
-1,77
-2,11
175,62
189,01
2,10
0,46
177,39
191,13
-2,44
-2,99
175,28
190,67
3,40
3,63
177,72
193,66
4,05
4,05
174,32
190,03
1,53
1,54
170,27
185,98
1,08
0,28
168,74
184,44
0,40
0,20
167,66
184,16
-3,31
-3,98
167,26
183,96
1,94
1,88
170,57
187,93
1,37
2,02
168,62
186,06
-1,57
-1,58
167,25
184,04
-1,51
-1,04
168,82
185,62
1,39
1,04
170,33
186,65
1,84
2,09
168,94
185,61
5,24
4,34
167,10
183,52
0,88
0,40
161,86
179,18
5,66
6,35
160,98
178,79
-1,06
-0,98
155,32
172,44
1,95
1,58
156,39
173,42
1,76
2,83
154,44
171,84
1,28
1,08
152,67
169,01
5,27
5,34
151,39
167,92
8,24
8,35
146,12
162,58
0,97
0,93
137,89
154,23
-1,50
-1,56
136,92
153,30
-2,62
-2,74
138,42
154,86
-5,88
-6,37
141,04
157,60
5,89
5,57
146,91
163,97
8,80
10,52
141,03
158,39
-10,87
-10,35
132,22
147,88
0,66
0,11
143,09
158,23
-7,79
-7,51
142,44
158,12
-7,12
-7,72
150,23
165,63
-0,74
-0,10
157,35
173,35
-6,06
-4,61
158,09
173,45
3,76
4,05
164,15
178,06
-1,93
-3,35
160,39
174,02
-1,46
-0,36
162,32
177,37
0,88
0,27
163,78
177,72
7,67
8,82
162,90
177,46
1,91
1,27
155,23
168,64
-8,08
-8,40
153,33
167,37
-6,26
-6,29
161,40
175,77
-0,98
-0,02
167,66
182,06
-2,43
-1,62
168,65
182,08
0,67
0,48
171,08
183,69
7,77
6,62
170,41
183,21
-6,34
-6,42
162,64
176,59
-9,12
-10,02
168,97
183,00
3,55
4,47
178,09
193,03
0,49
-1,45
174,55
188,56
-7,88
-7,80
174,06
190,01
-0,42
1,30
181,94
197,81
-5,28
-6,25
182,36
196,52
6,21
3,56
187,64
202,77
-1,56
-1,80
181,43
199,21
2,47
3,56
182,99
201,01
-2,05
-4,13
180,53
197,45
-3,01
-4,69
182,58
201,58
9,78
10,51
185,59
206,27
-1,89
-1,29
175,81
195,77
-5,02
-5,40
177,70
197,06
5,89
6,26
182,72
202,46
2,03
3,88
176,83
196,20
6,33
6,86
174,80
192,32
-2,74
-3,18
168,47
185,46
-0,50
-0,14
171,21
188,64
-3,12
-2,82
171,71
188,78
5,55
6,42
174,83
191,60
-2,36
-2,13
169,28
185,19
3,87
2,53
171,64
187,32
4,00
3,35
167,77
184,79
-3,11
-4,53
163,77
181,44
4,18
6,62
166,88
185,97
5,76
7,50
162,69
179,35
Date
Nov-98
Oct-98
Sep-98
Aug-98
Jul-98
Jun-98
May-98
Apr-98
Mar-98
Feb-98
Jan-98
Dec-97
Nov-97
Oct-97
Sep-97
Aug-97
Jul-97
Jun-97
May-97
Apr-97
Mar-97
Feb-97
Jan-97
Dec-96
Nov-96
Oct-96
Sep-96
Aug-96
Jul-96
Jun-96
May-96
Apr-96
Mar-96
Feb-96
Jan-96
Dec-95
Nov-95
Oct-95
Sep-95
Aug-95
Jul-95
Jun-95
May-95
Apr-95
Mar-95
Feb-95
Jan-95
Dec-94
Nov-94
Oct-94
Sep-94
Aug-94
Jul-94
Jun-94
May-94
Apr-94
Mar-94
Feb-94
Jan-94
Dec-93
Nov-93
Oct-93
Sep-93
Aug-93
Jul-93
Jun-93
May-93
Apr-93
Mar-93
Feb-93
Jan-93
Dec-92
Nov-92
Oct-92
Sep-92
Aug-92
Jul-92
Jun-92
May-92
Apr-92
Mar-92
Feb-92
Jan-92
Dec-91
Nov-91
Oct-91
Sep-91
Aug-91
Jul-91
Jun-91
May-91
Apr-91
Mar-91
Feb-91
Jan-91
Dec-90
Nov-90
Oct-90
Sep-90
Aug-90
Jul-90
Jun-90
May-90
Return(%)
Cumulative returns
S&P 500 DS 400 S&P 500 DS 400
6,06
6,93
156,93
171,85
8,13
8,87
150,87
164,91
6,41
6,61
142,74
156,04
-14,46
-14,81
136,33
149,44
-1,07
-0,46
150,79
164,24
4,06
5,16
151,85
164,71
-1,72
-1,83
147,79
159,55
1,01
0,69
149,51
161,38
5,12
4,25
148,50
160,69
7,21
7,48
143,38
156,43
1,11
2,11
136,17
148,96
1,72
1,83
135,07
146,85
4,63
6,13
133,35
145,01
-3,34
-3,13
128,72
138,88
5,48
5,53
132,06
142,02
-5,60
-5,67
126,58
136,48
7,96
8,89
132,18
142,16
4,48
3,79
124,23
133,26
6,09
5,44
119,75
129,48
5,97
7,66
113,66
124,04
-4,11
-4,44
107,69
116,37
0,78
0,69
111,80
120,81
6,25
7,47
111,01
120,13
-1,98
-2,12
104,77
112,65
7,56
7,82
106,75
114,77
2,76
2,27
99,19
106,95
5,63
5,88
96,43
104,68
2,11
2,97
90,80
98,80
-4,42
-4,48
88,69
95,83
0,38
0,25
93,11
100,32
2,58
2,57
92,73
100,07
1,47
1,79
90,15
97,50
0,96
0,20
88,68
95,71
0,93
1,75
87,71
95,51
3,40
3,14
86,79
93,76
1,93
0,82
83,38
90,62
4,39
4,56
81,46
89,80
-0,36
0,21
77,07
85,24
4,22
4,03
77,42
85,03
0,25
0,35
73,20
81,01
3,32
3,41
72,95
80,65
2,32
3,19
69,64
77,25
4,00
3,89
67,31
74,05
2,95
2,50
63,32
70,16
2,95
2,47
60,37
67,67
3,90
4,11
57,42
65,19
2,59
3,37
53,52
61,08
1,48
0,56
50,93
57,70
-3,64
-2,70
49,45
57,15
2,25
1,83
53,09
59,84
-2,45
-2,43
50,84
58,01
4,10
4,37
53,29
60,44
3,28
2,72
49,19
56,07
-2,45
-2,24
45,90
53,35
1,64
1,08
48,36
55,59
1,28
1,07
46,71
54,51
-4,36
-4,47
45,43
53,44
-2,71
-1,82
49,79
57,92
3,40
2,62
52,51
59,74
1,21
0,98
49,11
57,12
-0,95
-1,09
47,90
56,14
2,07
1,90
48,85
57,23
-0,77
-0,45
46,78
55,33
3,79
3,97
47,55
55,78
-0,40
0,01
43,75
51,81
0,29
0,19
44,16
51,80
2,68
3,06
43,86
51,61
-2,42
-4,55
41,19
48,55
2,11
2,28
43,61
53,11
1,36
0,80
41,50
50,83
0,84
1,39
40,13
50,03
1,23
1,80
39,30
48,65
3,41
4,18
38,07
46,84
0,35
2,36
34,66
42,67
1,18
2,16
34,32
40,31
-2,05
-1,46
33,14
38,15
4,09
4,66
35,19
39,61
-1,49
-1,96
31,11
34,95
0,49
1,10
32,59
36,91
2,94
0,80
32,10
35,81
-1,95
-2,56
29,17
35,01
1,30
1,62
31,11
37,57
-1,86
-0,94
29,82
35,95
11,44
12,87
31,68
36,89
-4,03
-2,95
20,24
24,02
1,34
1,03
24,27
26,97
-1,67
-1,97
22,93
25,94
2,37
3,14
24,60
27,91
4,66
5,52
22,23
24,77
-4,58
-4,86
17,57
19,25
4,31
4,13
22,15
24,11
0,24
-0,02
17,84
19,98
2,42
4,52
17,60
20,00
7,15
7,06
15,18
15,48
4,36
5,33
8,03
8,42
2,79
3,54
3,67
3,09
6,46
8,08
0,89
-0,45
-0,43
-0,85
-5,58
-8,53
-4,87
-5,46
-5,15
-7,68
-9,04
-9,79
-0,28
-2,22
-0,32
-2,65
8,76
7,57
-0,68
-0,75
9,08
10,22
9,75
10,97
9,75
10,97
Sources: http://www.kld.com/indexes/data/KLD_Indexes_Monthly_Returns.xls,
http://www.barra.com/Research/DownloadMonthlyReturns.aspx.
114

121. IÉSEG Master Thesis – Aude Richon
Appendix G - Comparison of the GC 100 with the Russell 3000
Cumulative returns (%)
Cumulative Returns
50
40
30
Russell 3000
20
GC100
10
ju i
l-0
5
se
pt05
no
v-0
ja n 5
vma 0 6
rs06
ma
i-0
6
ju il
-0 6
se
pt06
no
v-0
ja n 6
vma 0 7
rs07
ma
i-0
7
0
Source:
http://www.russell.com/Indexes/performance/calculator/calculator.asp
http://www.kld.com/indexes/data/KLD_Indexes_Monthly_Returns.xls.
and
Table used for the graph:
Return (%)
Month
Russell 3000
Cumulative Return (%)
GC100
Russell 3000
GC100
June-07
-1,87
1,16
28,09
44,02
May-07
3,64
2,27
29,96
42,86
April-07
3,99
3,61
26,32
40,59
March-07
1,04
2,23
22,33
36,98
February-07
-1,64
2,66
21,29
34,75
January-07
1,9
0,89
22,93
32,09
December-06
1,2
1,44
21,03
31,20
November-06
2,18
2,69
19,83
29,76
October-06
3,6
3,71
17,65
27,07
September-06
2,24
-0,46
14,05
23,36
August-06
2,45
3,09
11,81
23,82
July-06
-0,09
-0,73
9,36
20,73
June-06
0,18
-1,34
9,45
21,46
May-06
-3,2
-5,95
9,27
22,80
April-06
1,08
4,78
12,47
28,75
March-06
1,73
0,18
11,39
23,97
February-06
0,18
0,84
9,66
23,79
January-06
3,34
10,96
9,48
22,95
December-05
0,09
3,37
6,14
11,99
November-05
3,89
1,97
6,05
8,62
October-05
-1,87
-6,07
2,16
6,64
September-05
0,88
4,95
4,03
12,71
August-05
-0,95
4,40
3,15
7,77
July-05
4,1
3,37
4,1
3,37
115

122. IÉSEG Master Thesis – Aude Richon
Appendix H – Figures used for the calculation of maximum,
minimum and median returns of sustainability and classical
indexes
Indexes returns at different points in time:
1 mth
3 mth
FTSE4Good Global
FTSE4Good US
FTSE4Good Europe
FTSE4Good Japan
FTSE4Good UK
DJSI World
DJSI US
DJSI STOXX
-0,70%
-2,20%
-0,30%
0,70%
-0,50%
0,29%
-1,35%
0,28%
6,50%
5,70%
6,60%
4,40%
4,20%
8,05%
5,93%
7,28%
FTSE All-World Developed
FTSE US
FTSE Europe Developed
FTSE Japan
FTSE All Share
MSCI World
DJ Wilshire US Large Cap
DJ STOXX 600
-0,60%
-1,60%
-0,30%
1,00%
-0,80%
-0,77%
-1,65%
-0,56%
6,90%
6,10%
7,40%
4,10%
4,50%
6,51%
6,18%
6,58%
12 mth
3 year
5 year
24,20%
58,00%
90,10%
20,70%
31,60%
53,70%
22,70%
69,80%
67,10%
15,30%
56,00%
77,60%
15,80%
58,80%
64,80%
26,84%
66,59%
99,80%
19,01%
24,31%
71,65%
64,96%
24,50%
20,50%
26,30%
14,60%
18,40%
23,59%
20,81%
25,92%
62,70%
41,30%
78,10%
59,60%
68,20%
59,04%
99,20%
69,40%
78,20%
85,10%
77,50%
92,53%
76,39%
76,16%
Sources: www.sustainability-index.com, FTSE4Good June 2007 report.
116

123. Revenues (b€)
2003 2004 2005
0,92
1,08
1,52
41,50 44,30 46,70
136,44 142,06 149,78
0,16
0,12
0,09
48,35 46,49 51,83
131,87 127,31 149,39
10,16 10,37 10,34
147,29 144,32 164,38
3,67
3,71
4,51
59,01 58,79 61,84
31,04 37,66 49,10
9,99 10,30 10,68
8,55 10,82 13,35
1,99
2,28
2,78
19,06 19,41 20,87
18,65 15,29 15,16
55,00 61,77 67,40
54,24 56,11 56,27
6,15
6,57
7,27
37,53 40,29 41,34
14,92 15,84 16,91
114,75 124,56 132,63
84,81 88,96 94,00
7,55
7,29
9,83
Profit before tax (M€)
Net income (M€)
Earnings per share (€)
2006 2002 2003 2004
2005
2006 2002 2003 2004 2005 2006 2002 2003 2004 2005
1,73
297
297
107
127
131
207
213 1,05 1,27 1,29
2,09
49,00 3 297 3 205 3 583 3 287 4 124 2 020 1 947 2 242 2 239 2 874 4,38 3,33 3,33
2,89
151,59 5 925
596 3 535 3 438 3 993 4 718
448 2 466 2 846 3 227 4,68 0,44 2,43
2,80
0,08
146
187
215
216
223
134
172
196
203
221 0,04 0,02 0,03
0,03
46,54 -4 817 -1 298 -1 577 2 264 1 641 -3 948 -1 900 -1 586 1 419 1 151
1,25
121,33
907 1 088 3 036
911 -11 405
858
159 2 244 1 216 -9 558 0,45 0,10 1,23
0,66
9,40
451
348
405
151
183
243
247
278
130
99 0,33 0,33 0,36
0,17
157,12 2 229 2 367
632 -14 137 -3 749 1 655 3 034 1 995 -8 797 -1 499 3,20 5,33 3,53 -15,56
4,40
845
926 1 019 1 256 1 231
995
762
657
643
440 1,83 2,00 2,23
2,89
63,07 4 426 4 514 4 623 4 696 5 188 2 912 3 153 3 344 3 476 3 794 2,99 3,25 3,51
3,72
51,86 2 206 1 812 1 929 2 829 1 652 1 153 1 195 1 165 2 040 1 026 0,68 5,27 5,25
9,41
10,07
-229
-826
399
492
507
-345 -1 068
394
429
375 -0,27 -0,97 0,52
0,40
14,21
690
629
588
1
0
547
513
490
568
32 1,49 1,41 1,40
1,64
67
134
222
348
56
94
145
229
0,37 0,51 0,52
0,79
226
400
532
840
193
251
330
477
0,14 0,21 0,27
0,37
339
-571 -3 320
-592
300 -1 595 -3 419 -659
0,20 -1,07 -1,40 -0,14
66,65
5 455 5 713 5 784
3 975 3 728 3 690 3 704 2 935 0,95 0,90 14,17
0,81
56,59
2 439 1 530
206 1 690 1 497 1 357
990
63
6,14 5,64
4,47
933 1 137 1 238 2 110
565
690
779 1 393
39,63 44,68 78,10
41,53 2 457 3 023 3 463 3 784 3 198 1 956 2 480 2 836 3 367 2 869 7,53 9,32 11,16 13,19
17,48
316
461
568
765
776
180
230
316
433
420 0,33 0,42 0,59
0,81
133,92 7 804 9 080 12 717 12 544 13 288 4 468 5 559 8 370 8 373 7 398 1,22 1,56 2,47
2,54
104,88 3 986 1 354 1 088 1 621 1 793 2 597 1 003
697 1 050 1 955 6,72 2,54 1,79
2,90
10,07
446
579
473
731
752
205
297
275
458
492 0,88 1,17 0,99
1,60
Fiscal years finish on March, 31st, thus the date provide for year n includes the following period: March 31st, n - Marche 31st, n+1.
For Yamaha, 2004 includes only 9 months as they changed fiscal years by January 1st, 2005.
The exchange rate chosen to convert currencies for year n is that of January 1st, n+1.
117
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited
Total vehicles produced
(1000's units)
2002 2003 2004 2005 2006
1 815 2 291 1 723
1 183 1 209 1 344 1 415 1 471
Total vehicles sold (1000's units)
2002
1 446
1 150
2003
1 518
1 198
2004
1 825
1 301
2005
2 281
1 425
2006
2 722
1 474
6 767
582
260
0
6 597
571
262
9 051
9 181
360
3 262
73
2 344
1 642
5 404
5 023
3 310
82
2 385
1 844
5 850
5 021
3 405
91
1 830
6 514
5 093
3 376
103
2 528
2 010
7 231
5 219
3 357
2 346
2 200
6 513
5 660
547
8 411
51
542
8 098
55
554
894
362
9 098
859
1 011
1 106
1 962
2 771
3 268
67
2 441
1 509
3 057
3 286
77
2 416
1 310
3 389
3 390
88
2 490
1 149
1 344
3 569
3 366
97
2 535
5 785
4 996
6 113
5 016
6 719
5 143
7 408
5 193
55
64
76
12 189 13 724 13 662
1 874 2 094 2 338
1 141
2 483
2 433
6 719
5 734
Shareholders' equity (M€)
2006
2 002
2 003
2 004
2 005
2 006
2,10
3,00
5 196
5 254
5 609 16 973 19 130
3,16 35 004 34 481 33 551 36 817 34 133
0,02
441
545
678
953
967
0,79
8 679
7 494
5 757
9 403 10 036
-5,09 27 994 18 765 21 875 12 299 -1 747
0,13
3 180
3 045
3 268
3 368
2 963
-2,65 377 681 326 532 335 191 397 839 352 733
2,99
2 129
2 348
2 378
2 604
2 089
4,13 20 663 19 467 20 702 45 025 48 422
4,67 10 806 10 279 11 905 16 547 17 083
0,31
490
196
790
1 133
1 556
0,09
3 171
3 977
3 521 -4 060
4 276
0,77
11,17
0,80
2,68
7,07
1,72
1 558
2 250
14 517
10 984
1 755
11 828
4 977
58 805
24 692
1 446
1 648
2 219
14 983
11 864
2 921
13 591
4 799
52 714
23 863
1 846
1 929
2 339
17 759
12 697
3 420
15 864
4 986
58 903
22 681
2 116
2 845
1 921
22 076
14 406
5 376
19 661
5 326
64 663
23 647
2 745
14 062
21 201
3 926
67 228
26 959
3 301
data is missing
data is not yet available
calculation cannot be made because of missing data
IÉSEG Master Thesis – Aude Richon
2002
0,89
42,40
147,38
0,18
55,43
159,23
10,94
169,07
3,90
59,10
35,72
12,83
9,78
1,87
18,98
31,19
54,82
54,44
5,58
36,34
13,39
113,92
85,29
8,13
Appendix I – Data on car companies from the MSCI World
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited

124. IÉSEG Master Thesis – Aude Richon
2002
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited
16 854 19 482 19 803 79 057
187 327 178 268 182 696 202 000
482
596
721
1 003
92 521 62 711 57 243 62 454
281 486 250 810 225 584 227 555
10 192
9 950
9 721
9 705
351 881 356 071 354 328 401 264
3 777
3 908
4 051
4 438
55 720 56 861 59 985 66 608
37 092 35 596 41 151 55 145
10 630
7 616
7 763
8 168
7 207
7 050
7 579
939
Total liabilities (M€)
2006
2002
2003
2004
2005
2006
1 243
74 566 11 658 14 228 14 194 62 084 55 436
190 000 152 323 143 787 149 145 165 183 155 867
1 012
41
51
43
50
44
58 303 83 842 55 217 51 486 53 051 48 267
211 074 253 492 232 045 203 709 215 256 212 822
8 584
7 012
6 905
6 453
6 337
5 621
141 087 345 118 335 767 333 551 387 162 144 308
4 192
1 648
1 560
1 673
1 834
2 103
67 300 35 057 37 394 39 283 21 583 18 878
57 614 26 285 25 316 29 246 38 598 40 531
7 440 10 140
7 420
6 972
7 036
5 884
9 864
4 036
3 073
4 058
4 998
5 589
14 081 13 292 12 732 12 787
12 523
19 471 15 020 11 446 11 135
17 221
58 998 58 183 70 930 82 082
44 481
56 008 58 064 65 569 69 175 69 050 45 024
6 315
9 014
9 710 14 629
4 561
53 228 58 291 61 775 68 411 68 766
10 819 11 381 11 363 12 106 11 775
5 842
159 666 149 183 158 737 173 974 182 907 100 861
108 896 118 146 127 603 133 081 136 603 84 204
5 612
5 196
5 529
6 852
7 185
4 166
11 644
12 801
43 200
46 200
6 094
6 581
96 470
94 283
3 350
10 804
9 942
9 107
9 214
53 172 60 006
55 866 54 769 54 988
6 290
9 253
45 911 48 750 47 565
6 377
6 780
7 849
99 834 109 311 115 678
104 922 109 434 109 644
3 414
4 108
3 884
2003
ROE
2004
2005
2006
2002
2003
ROA
2004
2005
38,88
14,00
13,48
1,30
30,33
31,51
-45,49 -25,35
3,07
0,85
8,00
8,30
0,44
0,93
46,72
32,44
15,00
16,00
10,67
11,62
-70,38 -545,89
17,25
12,89
13,80
7,35
28,89
-27,55
10,26
8,90
0,60
27,65
16,00
9,78
49,85
13,91
13,50
7,73
21,25
15,09
9,89
3,90
-2,21
24,68
15,50
12,33
37,89
-14,00
16,90
9,45
22,83
11,47
546,96
3,30
-0,42
21,05
15,70
6,01
24,13
0,75
6,30
2,52
3,39
-4,27
0,29
7,50
0,45
25,11
0,04
0,00
-0,03
0,01
5,60
0,25
2,94
-3,03
0,05
5,30
0,68
15,47
0,04
0,00
-0,10
0,00
6,50
1,35
2,58
-2,77
0,74
3,90
0,42
11,99
0,04
0,00
0,04
0,00
6,60
1,41
2,20
2,27
0,45
3,30
-1,85
12,23
0,04
0,00
0,04
0,05
16,30
18,70
-71,88 -146,19
24,88
20,78
12,62
10,69
23,62
22,78
18,25
17,88
4,79
6,33
10,40
15,20
7,50
8,80
9,80
14,00
20,00
-34,30
16,78
6,87
25,91
17,13
8,12
13,60
9,70
18,90
1,40
0,01
0,05
3,02
8,95
3,67
0,01
0,02
2,38
3,60
1,90
-0,08
0,05
2,58
7,65
4,25
0,01
0,03
0,85
5,70
2,60
-0,22
0,04
2,07
8,02
4,59
0,02
0,04
0,55
5,20
3,80
-0,04
0,03
1,43
9,52
4,92
0,03
0,03
0,79
7,40
2002
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited
Total assets (M€)
2003
2004
2005
13,20
13,34
27,38
15,39
32,20
16,54
3,61
7,80
7,60
10,70
0,45
13,53
10,69
15,20
9,60
18,10
2006
17,11
7,60
1,70
2,13
1,97
-3,43
4,60
-0,80
7,95
0,04
0,00
0,03
0,00
2002
39
43 112
4 708
64 904
118
15 012
16 752
7 001
2 155
226
7 311
13 211
23 456
4 643
57 665
44 435
2 840
2002
60,00
30,10
32,92
0,38
8,22
0,78
23,08
10,87
10,84
-6,31
13,65
Current liabilities (M€)
2003
2004
2005
231
28 084
296
1 675
50
42
28
1 224
41 547 40 654 43 536
4 588
4 345
4 363
56 577 55 330 59 727
69
67
69
23 114 24 018 16 313
16 868 18 952 25 070
4 892
4 638
3 874
2 558
2 571
4 998
211
207
305
6 948
6 318
5 983
11 600
6 175
6 199
22 966 28 626 34 685
41 802 44 670
4 996
52 254
48 013
2 474
4 944
54 722
48 692
2 687
2006
258
26 555
416
17
2 200
42 612
3 999
51 392
82
14 998
25 221
3 166
5 589
44 515
5 318
58 817
53 309
3 383
6 198
63 843
53 485
3 301
ROCE (%)
2003
2004
2005
71,00
80,00 174,00
23,80
25,40
23,20
1,72
34,30
31,65
22,12
3,70
0,52
1,64
0,50
6,49
7,54
2,82
0,79
0,21
-4,14
24,11
25,58
28,76
13,38
12,85
9,34
9,67
8,69
9,41
-30,31
12,76
15,51
14,01
11,75
0,09
2006
125,00
21,70
2,11
22,38
2,92
-6,77
3,98
-4,18
29,95
9,92
5,10
27,38
0,00
0,09
3
5
20
12,40
6
-17
22
9,40
8
-63
19
8,40
12
-12
15
2,21
0,30
4,17
0,02
0,03
1,43
7,40
0,38
7,65
6,18
16,09
0,50
9,37
1,93
21,26
0,72
12,23
1,38
16,63
11,27
10,89
2,03
10,68
13,91
11,16
2,16
10,46
Shareholders' equity = total assets - total liabilities
ROE = net profit / shareholders' equity
ROA = net income / total assets
ROCE = profit before taxation / (total assets - current liabilities)
118

125. 3,23
2,88
2,26
2,07
2,04 3,21 2,94 2,94 2,94
Energy consumed production
2002 2003 2004 2005 2006
2,9
CO2 emissions per unit produced (ton)
2002
2003
2004
2005 2006
0,98
1
data per vehicle type
3,75 3,93 3,72 3,55 3,46
1,32
1,37
0,94
0,99
0,94
data per vehicle type
1,33
1,26
1,13
data existing but in g/m²
246 663
exists for 1m² of coating
7,70
8,10
5,90
6,10
graph and figures for changes
7 711
en g/m²
2 066
2,15
2 131 2 172
carbon intensity by sales revenue
0,74
0,70
graph and figures for changes
8 055 8 972 10 145
2 473
0,25
0,24
0,21
0,26
2,20 2,30 2,36 2,32 2,40
0,25
0,26
0,25
0,26
0,19
1,70
0,27
0,20
1,60
0,26
0,20
1,70
3,07 3,16 3,12
0,23
1,90
0,24
en g/m²
3,93
3,72
##### 15 860 #####
236 795
292 848
230 048
2 473 000 2 528 000 2 729 000 2 981 000
1 395 173 1 456 873 1 616 198 1 826 586
0,69
0,20
3,83
en g/m²
CO2 emissions during production (tons)
2002
2003
2004
2005
2006
370 600
395 000
375 000
only reduction
373 600
320 000
244 900
347 000
372 000
398 000
0,25
383 000
357 000
1 230 000 1 360 000 1 320 000
476 378
496 109
536 010
544 345 577 563
VOC: Volatile Organic Compound
Fleet's CO2 emissions (g/km)
Wasterwater (m3/unit)
2002 2003
2004
2005
2006 2001 2002 2003 2004 2005
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited
1,07 0,92 0,98 0,83
Waste generated (kg/vehicle)
2002 2003 2004 2005 2006
349
354
291
357
2002
Waste generated (ton)
2003
2004
2005 2006
318
by plant
Investment in environmental protection (M€)
2002
2003
2004
2005
2006
20,7
11 487
10 995
384 143
478 473
10 008
25,3
34,2
9 092
236,74 233,01 240,47 228,66 230,53
205
228
113
263 364 223 155
graph
data by car type
36,9
6,83
411,1
graph
233,2
eau prélevée
reduction in emissions
m3/revenue
5,4
5 4,1
5,07 4,88 4,66
170
4
43,4
4,2
160
152
150
22,03
173
252,7
18
159
265
20
115
264
20
105
1,2
64,8
1,4
54,1
191,4
146
119
approximation d'après graph
Data on water are usually data
of water used, of which we do
not which quantity is reused,
recycled or really wastewater
210,4
36 166
33 736
35 807
1 269 453 1 332 132 1 344 084
39 824
100,6
203,1
1,4
IÉSEG Master Thesis – Aude Richon
VOC per unit produced (kg/unit)
Energy consumed per unit
2002 2003
2004
2005
2006 2002 2003 2004 2005 2006
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited

126. Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited
481
533
559
2002
5,92
data only for the US
exist in Nm3
SO2 per unit (ton)
CO per unit (ton)
2003 2004 2005 2006 2002 2003 2004 2005 2006
8,27
7,44
data only for the US
283
315
399
data only for the US
0,08 0,08 0,07 0,07
percentage change from 1995
225
205
157
750
800 762,8 740,2 660,9
113
110
93
141
graph
229,9 235,7 220,3 213,3 184,7
90
en m3N
en m3N
Comments
120
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
PSA PEUGEOT CITROEN
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited
No environmental data but they are working on processes to set up SD policies.
BMW has the most comprehensive and readable information.
Comparison with European (Euro 4 and 5) and US (CAFE) norms
Information just on corporate governance
Never talk about environment
Comparison with international norms, I am not really sure of all the values displayed, it seems that the methods of measurement changed.
Data is there but very difficult to compare with the rest.
The methods of measurement seem to have changed too, no figures permitting to esblish comparisons with other companies.
Data is really hard to gather and to compare.
Data in each report, difficult to compare, but existing and reachable
Many indications for future or on-going actions
Quite detailed but no figures
Very precise
No environmental data
Website giving many examples, but figures are not presented clearly
Trends in fuel economy
Very precise and comprehensive report
Results clearly shown
Sustainability
report
no
yes
yes
no
yes
yes
yes
yes
no
yes
yes
yes
no
no
yes
yes
yes
yes
no
yes
yes
yes
yes
yes
IÉSEG Master Thesis – Aude Richon
NOx per unit (ton) NOx average (g/km) 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
Recycling
program
no
yes
yes
?
?
? Probably
yes
yes
no
yes
yes
yes
?
?
yes
yes
yes
yes
?
yes
yes
yes
? Probably
yes
Sources
http://www.bajajauto.com/
http://www.bmwgroup.com
http://www.daimlerchrysler.com/
http://www.irasia.com/listco/hk/denway/
http://www.ford.com/
http://www.ford.com and ford.com/go/sustainability
http://www.fhi.co.jp/english/
http://www.gm.com/
http://www.harley-davidson.com/wcm/Content/Pages/home.jsp?locale=fr_FR
http://www.honda.fr
http://worldwide.hyundai-motor.com/
http://www.isuzu.co.jp/world/index.html
http://www.kmcir.com/
http://www.marutiudyog.com/index.asp
http://www.mazda.com/
http://www.mitsubishi-motors.com/
http://www.nissan-global.com/EN/index.html
http://www.psa-peugeot-citroen.com/fr/hp1.php
http://www.porsche.com/france/
http://www.renault.com/renault_com/fr/main/index.aspx
http://www.globalsuzuki.com/corp_info/index.htm
http://www.toyota.co.jp/en/
http://www.volkswagen.com/vwcms_publish/vwcms/master_public/virtualmaster/en2.html
http://www.yamaha-motor.co.jp/global/link/index.html

127. AS
P
Su I - Ad
sta
va
Pe inab nced
rfo
rm le
an
ce
Eth
Ind
ica
ice
l In
s
de
xG
lob
al
Pio
ne
er
Glo
ba
l
ES
I
ES
I
Ex
ce
llen
ce
ap
an
G lo
ba
l
nd
ex
uro
pe
I
FT
SE
4G
OO
DJ
lob
al
S
FT
SE
4G
OO
DU
FT
SE
4G
OO
DG
TO
XX
IE
UR
OS
DJ
S
DJ
S
IU
S
DJ
S
IS
TO
XX
rica
hA
me
IN
ort
DJ
S
IW
orl
d
DJ
S
FT
SE
4G
OO
DE
Index in which the company is included
Index in which the company could have be included but is not
Index in which the inclusion of the company is not applicable
IÉSEG Master Thesis – Aude Richon
Company in all/all but one sustainability index
Company in no sustainability index at all
Appendix J – Automobile manufacturers’ presence in
sustainability indexes
121
Source:
http://www.sustainable-investment.org/index.asp?page=http://www.sustainableinvestment.org/indizes/5_indize_2.html
Bajaj Auto Limited
BMW AG
Daimlerchrysler AG
Denway Motors Limited
Fiat
Ford Motor Company
Fuji Heavy Industries Limited
General Motors Corp.
Harley-Davidson Inc
Honda Motor Company Limited
Hyundai Motor Company Limited
Isuzu Motors Limited
Kia Motors Corporation
Maruti Udyog Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
Nissan Motor Company Limited
Peugeot SA
Porsche AG
Renault SA
Suzuki Motor Corp.
Toyota Motor Corp.
Volkswagen AG
Yamaha Motor Company Limited

128. IÉSEG Master Thesis – Aude Richon
Appendix K – Data on automotive companies and
sustainability
Ford
Date of reference
for the price index
base
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00
Jan-01
Feb-01
Mar-01
Apr-01
May-01
Jun-01
Jul-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01
Jan-02
Feb-02
Mar-02
Apr-02
May-02
Jun-02
Jul-02
Aug-02
Sep-02
Oct-02
Nov-02
Dec-02
Jan-03
Feb-03
Mar-03
Apr-03
May-03
Jun-03
Jul-03
Aug-03
Sep-03
Oct-03
Nov-03
Dec-03
Jan-04
Feb-04
Mar-04
Apr-04
May-04
Jun-04
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Jun-07
Jul-07
Aug-07
Daimler
September-01 September-03
September-00
Renault
September-03
September-00
Toyota
September-03
September-00
DJ STOXX Global
Automobiles & Parts
BMW
September-03
100,00
September-00
September-03
100,00
September-00
100,00
100,00
105,42
76,80
93,19
112,96
83,49
119,46
140,45
92,75
114,80
125,39
111,67
94,34
93,69
104,96
139,78
102,48
88,39
88,31
107,05
135,49
91,61
87,37
97,20
157,36
100,69
93,71
92,31
100,22
156,74
September-03
107,31
103,81
DJSI World
97,99
102,46
September-03
100,00
104,89
99,19
81,66
91,63
90,41
166,36
99,67
84,33
102,27
92,29
163,13
104,89
72,78
103,49
82,07
147,64
93,29
72,40
104,63
72,50
149,64
84,11
82,40
102,38
78,45
159,93
91,26
86,42
110,09
80,16
163,22
93,14
81,97
108,04
81,70
148,26
99,62
109,26
78,19
160,36
97,63
95,15
103,98
82,27
173,99
101,47
95,76
102,23
81,35
169,60
101,84
100,40
94,92
99,43
76,56
175,66
97,86
84,62
87,16
70,55
152,45
83,94
100,00
58,17
59,39
60,10
121,58
68,15
100,17
68,82
64,92
57,02
143,16
70,70
116,02
82,48
73,66
60,16
153,93
78,02
102,43
85,36
75,97
59,07
169,84
77,97
96,32
82,88
85,15
60,69
185,85
100,96
81,91
96,37
59,64
185,85
83,69
103,85
92,46
105,29
67,66
199,09
88,85
81,40
97,91
92,48
98,67
63,79
189,23
87,51
108,21
94,58
102,95
64,42
201,19
85,65
88,17
88,46
92,31
61,66
179,90
76,90
76,40
77,61
91,24
55,81
168,84
71,96
67,29
78,52
96,11
58,22
168,46
72,11
54,39
61,19
84,99
59,70
138,16
65,92
49,46
61,64
92,62
56,78
158,79
63,37
63,27
65,79
96,79
61,81
149,12
68,08
50,37
52,83
87,31
61,93
126,82
61,60
46,58
51,30
86,46
55,85
117,87
57,29
43,01
51,22
76,47
55,47
113,58
56,52
40,92
48,21
59,11
52,80
111,58
52,29
51,95
54,69
75,56
53,18
131,01
55,29
50,20
50,62
75,95
56,01
131,16
54,44
56,65
57,55
92,49
60,84
149,12
53,54
60,71
99,32
60,26
154,07
62,51
59,42
65,33
110,29
65,06
159,41
68,47
52,12
100,00
57,04
100,00
102,05
100,00
70,26
100,00
144,88
59,71
114,55
61,00
106,94
114,31
112,01
61,80
118,57
60,16
105,46
111,40
109,16
68,45
97,43
70,28
100,03
72,38
138,87
70,03
122,76
109,90
107,68
81,12
67,80
130,08
72,40
126,92
60,84
116,72
68,42
119,94
59,42
114,01
64,31
112,74
108,58
106,40
112,80
110,53
113,22
110,94
73,85
141,69
73,90
129,56
125,05
65,08
124,86
72,46
127,03
72,27
138,65
75,89
63,21
121,28
64,12
60,37
100,00
64,62
100,00
151,88
104,83
66,65
103,14
94,95
164,03
113,22
66,37
102,70
100,00
102,26
115,46
164,08
113,25
70,03
108,38
101,10
78,35
111,51
157,12
108,45
68,84
106,53
102,44
81,57
116,10
153,50
105,95
70,08
108,46
104,47
88,37
125,78
147,74
101,97
72,30
111,89
106,51
122,54
86,84
123,60
160,60
110,85
73,76
114,14
105,57
122,35
119,88
85,82
122,15
158,46
109,37
72,33
111,93
105,40
133,05
125,75
123,22
96,82
137,80
165,17
114,01
77,92
120,59
104,39
73,35
128,59
131,70
129,05
94,89
135,06
167,65
115,72
77,29
119,62
105,94
123,02
67,49
118,31
132,59
129,92
93,93
133,70
153,88
106,22
75,16
116,32
103,30
62,87
120,63
65,62
115,04
132,28
129,62
91,15
129,73
150,31
103,75
72,84
112,73
57,39
110,10
64,01
112,22
131,78
129,13
92,60
131,80
150,55
103,91
71,09
110,01
102,20
61,74
118,46
66,51
116,60
123,66
121,17
89,16
126,90
144,31
99,61
68,54
106,07
102,25
59,99
115,09
69,69
122,17
123,66
121,17
97,71
139,07
150,74
104,04
71,17
110,15
103,32
57,61
110,53
68,95
120,87
125,97
123,44
93,32
132,82
146,07
100,82
71,91
111,29
53,76
103,15
69,16
121,24
137,42
134,65
92,82
132,11
146,88
101,38
71,74
111,02
106,52
49,12
94,25
68,25
119,64
138,42
135,64
89,34
127,16
159,17
109,87
69,84
108,09
108,55
40,63
77,96
62,70
109,91
129,99
127,38
87,33
124,30
148,50
102,50
66,22
102,48
108,18
46,63
89,47
67,38
118,12
143,53
140,65
86,13
122,60
162,79
112,36
70,53
109,15
106,54
48,44
92,94
69,39
121,65
150,46
147,43
85,87
122,22
174,51
120,45
72,48
112,16
112,54
50,37
96,63
82,91
145,34
156,03
152,89
91,12
129,70
179,28
123,74
76,93
119,06
115,15
45,10
86,54
86,17
151,06
148,08
145,10
98,47
140,16
168,46
116,28
77,23
119,51
117,90
44,77
85,88
91,21
159,90
162,63
159,35
111,86
159,20
180,66
124,70
84,64
130,99
116,85
39,56
75,90
86,34
151,36
149,10
146,10
112,39
159,96
167,41
115,55
81,91
126,76
122,58
40,46
77,63
88,73
155,55
137,02
134,27
117,16
166,75
172,61
119,14
85,38
132,13
120,65
37,97
72,86
89,13
156,26
142,20
139,34
126,69
180,32
171,37
118,28
87,88
135,99
125,85
39,90
76,55
97,65
171,18
160,35
157,13
125,59
178,75
172,18
118,84
89,26
138,14
128,53
38,77
74,38
96,08
168,44
166,45
163,10
129,41
184,20
186,57
128,77
92,59
143,29
130,60
38,43
73,72
97,95
171,70
181,11
177,46
131,87
187,69
210,20
145,08
94,73
146,59
132,70
31,98
61,35
89,79
157,41
189,86
186,04
141,84
201,88
199,38
137,62
96,01
148,58
133,84
30,67
58,85
84,71
148,50
190,02
186,19
130,03
185,07
188,57
130,15
88,07
136,30
133,31
29,82
57,22
79,81
139,92
177,94
174,36
126,65
180,27
183,52
126,67
85,68
132,59
125,76
30,33
58,20
83,50
146,38
181,21
177,57
127,42
181,35
189,85
131,04
86,88
134,45
126,11
36,79
70,58
85,13
149,24
192,55
188,68
131,19
186,73
190,00
131,14
89,54
138,56
127,63
37,13
71,23
81,42
142,74
191,59
187,74
131,87
187,69
198,48
136,99
90,72
140,39
130,90
38,14
73,18
92,35
161,90
194,15
190,24
142,89
203,38
211,43
145,94
96,79
149,79
133,48
34,80
66,78
90,57
158,78
191,70
187,84
145,37
206,91
195,71
135,09
94,64
146,46
137,62
32,60
62,54
96,70
169,51
192,77
188,89
162,64
231,49
204,43
141,10
100,34
155,28
135,11
35,20
67,54
98,47
172,63
201,14
197,09
159,58
227,13
219,87
151,76
102,31
158,34
139,21
32,82
62,98
106,23
186,22
190,41
186,58
161,78
230,27
206,29
142,39
101,74
157,46
33,45
64,17
126,86
222,39
185,45
181,72
155,19
220,89
207,53
143,24
100,74
155,90
138,39
33,73
64,71
126,82
222,32
202,75
198,67
147,03
209,27
212,91
146,96
99,42
153,86
140,09
35,14
67,43
144,36
253,06
232,09
227,42
146,23
208,14
237,11
163,66
102,89
159,23
143,61
40,46
77,63
145,29
254,70
260,40
255,16
152,43
216,96
228,73
157,88
106,89
165,42
148,23
36,79
70,58
137,92
241,77
233,86
229,15
146,08
207,91
218,34
150,71
103,17
159,66
147,89
31,86
61,13
216,30
211,94
140,08
199,38
212,63
146,76
98,99
153,19
102,64
104,73
142,12
Calculated from prices obtained on Yahoo Finance!: http://fr.finance.yahoo.com/.
122

129. IÉSEG Master Thesis – Aude Richon
Appendix L – Complementary graph to the comparison
between environmentally-friendly car companies, other
companies and the Automobile & Parts sector
300
Ford
250
Renault
Toyota
150
BMW
Automobile & Parts
Supersector
DJSI World
100
50
Ja
n07
Ja
n06
Ja
n05
Ja
n04
Ja
n03
Ja
n02
Ja
n01
0
Ja
n00
Price index
Daimler
200
Source: see Appendix K.
123

130. IÉSEG Master Thesis – Aude Richon
Appendix M – Data used to compare automobile companies’
ROE
2003
14,00
1,30
ROE
2004
13,80
7,35
7,60
7,50
10,67
11,62
17,25
12,89
8,00
8,30
15,00
16,00
-70,38 -545,89
13,20
16,30
13,34 -71,88
27,38
24,88
3,61
4,79
7,80
10,40
10,70
9,80
13,99
17,88
8,80
9,78
13,91
8,90
16,00
49,85
18,70
-146,19
20,78
6,33
15,20
14,00
2002
BMW AG
Daimlerchrysler AG
Fiat
ACEA
PSA PEUGEOT CITROEN
Renault SA
Volkswagen AG
Hyundai Motor Company Limited
KAMA
Kia Motors Corporation
Fuji Heavy Industries Limited
Honda Motor Company Limited
Isuzu Motors Limited
Mazda Motor Corp.
JAMA Mitsubishi Motors Corp.
Nissan Motor Company Limited
Suzuki Motor Corp.
Toyota Motor Corp.
Yamaha Motor Company Limited
13,48
2005
13,50
7,73
15,09
6,87
17,13
9,70
12,33
12,96
3,90
15,50
37,89
20,00
-34,30
16,78
8,12
13,60
18,90
2006
16,90
9,45
11,47
0,45
13,53
9,60
6,01
0,75
3,30
15,70
24,13
10,69
15,20
18,10
On the graph, the following companies are not included:
- Fiat
- Mitsubishi
- Isuzu.
These companies actually have extreme values that made the graph less readable, thus it
is important to keep this in mind when looking at the chart.
124

131. Total ACEA
Total KAMA
Total JAMA
Calculation: ∆=(Rn+1/Rn)-1
Net income (M€)
2003
2004
1 947,00
2 242,00
448,00
2 466,00
-1 900
-1 586
1 497,00
1 357,00
2 480,00
2 836,00
1 003,00
697,00
5 475
8 012
1 194,59
1 164,54
512,61
489,77
1 707
1 654
247,25
278,00
3 153,48
3 344,22
-1 068,19
394,05
250,95
329,86
-1 594,69 -3 419,47
3 728,42
3 689,52
229,66
315,71
5 558,88
8 369,59
297,02
274,76
10 803
13 576
2005
2 239,00
2 846,00
1 419,00
990,00
3 367,00
1 050,00
11 911
2 040,42
568,23
2 609
130,11
3 475,88
429,21
476,85
-658,91
3 703,60
432,56
8 373,48
457,72
16 821
2006
2 874,00
3 227,00
1 151,00
63,00
2 869,00
1 955,00
12 139
1 025,83
32,05
1 058
99,31
3 794,37
375,32
2 934,75
419,81
7 397,96
491,67
15 513
2002
5196
35 004,00
8679
10 984,00
11 828,00
24 692,00
96 383
10 806,12
3 171,31
13 977
3 179,94
20 663,27
490,37
1 558,21
2 250,16
14 516,84
4 977,31
58 804,76
1 446,23
107 887
2002
9,37
12,16
11,24
2003
5,67
11,98
10,70
2004
8,33
10,72
12,04
Shareholder equity (M€)
2003
2004
2005
5254
5609
16973
34 481,00 33 551,00 36 817,00
7494
5757
9 403,00
11 864,00 12 697,00 14 406,00
13 591,00 15 864,00 19 661,00
23 863,00 22 681,00 23 647,00
96 547
96 159
120 907
10 279,46 11 905,17 16 547,03
3 976,81 3 520,87
4 383,24
14 256
15 426
20 930
3 044,67 3 267,61
3 367,95
19 466,62 20 701,82 45 025,14
195,68
790,46
1 132,87
1 647,81 1 928,73
2 845,35
2 218,69 2 339,12
1 920,81
14 982,71 17 758,66 22 076,37
4 799,49 4 986,36
5 326,21
52 713,53 58 903,14 64 663,45
1 846,24 2 115,71
2 744,51
100 915 112 792
149 103
Cumulated ROE (%):
2003
-4,37
-12,97
-4,40
2004
3,81
22,45
4,70
2005
5,19
28,81
6,82
2006
2,32
5,80
0,30
Total ACEA
Total KAMA
Total JAMA
Calculation: ROE(association)=Total NI/Total SE
2005
9,85
12,46
11,28
2006
19130
34 133,00
10 036,00
14 062,00
21 201,00
26 959,00
125 521
17 082,64
4 275,86
21 359
2 963,39
48 421,72
1 555,54
3 926,38
67 228,26
3 300,95
127 396
IÉSEG Master Thesis – Aude Richon
Changes in Revenue (%):
2002
2 020,00
4 718,00
-3 948
1 690,00
1 956,00
2 597,00
9 033
1 153,14
547,14
1 700
243,11
2 911,77
-345,13
193,47
300,24
3 975,12
179,76
4 468,05
205,15
12 132
125
Appendix N – Data used to calculate the cumulated revenues
and ROE
BMW AG
Daimlerchrysler AG
Fiat
ACEA PSA PEUGEOT CITROEN
Renault SA
Volkswagen AG
Total ACEA
Hyundai Motor Company Limited
KAMA Kia Motors Corporation
Total KAMA
Fuji Heavy Industries Limited
Honda Motor Company Limited
Isuzu Motors Limited
Mazda Motor Corp.
Mitsubishi Motors Corp.
JAMA
Nissan Motor Company Limited
Suzuki Motor Corp.
Toyota Motor Corp.
Yamaha Motor Company Limited
Total JAMA
Revenues (b€)
2002 2003 2004 2005 2006
42,40 41,50 44,30 46,70 49,00
147,38 136,44 142,06 149,78 151,59
55,4
48,3
46,5 51,83 46,54
54,44 54,24 56,11 56,27 56,59
36,34 37,53 40,29 41,34 41,53
85,29 84,81 88,96 94,00 104,88
421
403
418
440
450
35,72 31,04 37,66 49,10 51,86
9,78
8,55 10,82 13,35 14,21
45
40
48
62
66
10,94 10,16 10,37 10,34
9,40
59,10 59,01 58,79 61,84 63,07
12,83
9,99 10,30 10,68 10,07
18,98 19,06 19,41 20,87 20,87
31,19 18,65 15,29 15,16 15,16
54,82 55,00 61,77 67,40 66,65
13,39 14,92 15,84 16,91 17,48
113,92 114,75 124,56 132,63 133,92
8,13
7,55
7,29
9,83 10,07
323
309
324
346
347

132. IÉSEG Master Thesis – Aude Richon
Appendix O – Data used to compare sustainable companies
and companies less (even no) engaged in SD
Revenues (b€)
BMW AG
Daimlerchrysler AG
Ford Motor Company
Renault SA
Toyota Motor Corp.
Bajaj Auto Limited
Denway Motors Limited
Harley-Davidson Inc
Kia Motors Corporation
Maruti Udyog Limited
Porsche AG
2002
42,40
147,38
159,23
36,34
113,92
0,89
0,18
3,90
9,78
94,26
5,58
2003
41,50
136,44
131,87
37,53
114,75
0,92
0,16
3,67
8,55
114,25
6,15
2004
44,30
142,06
127,31
40,29
124,56
1,08
0,12
3,71
10,82
133,68
6,57
Changes in Revenues (%)
2005 2006 2002 2003 2004 2005 2006
46,70 49,00
-2,12
6,75
5,42
4,93
149,78 151,59
-7,42
4,12
5,43
1,21
149,39 121,33
-17,18 -3,46 17,34 -18,78
41,34 41,53
3,27
7,37
2,60
0,46
132,63 133,92
0,73
8,55
6,48
0,98
1,52
1,73
2,87 17,26 41,61 13,54
0,09
0,08
-11,92 -20,38 -29,64 -5,76
4,51
4,40
-5,89
0,93 21,76 -2,56
13,35 14,21
-12,50 26,50 23,39
6,43
148,00
21,21 17,00 10,72
7,27
10,13
6,93 10,63
126