Social and Economic Impact Measurement - Business Impact on Vulnerable Communities
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Transcript of Social and Economic Impact Measurement - Business Impact on Vulnerable Communities
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8/9/2019 Social and Economic Impact Measurement - Business Impact on Vulnerable Communities
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An Ethical Corporation and LCCGEroundtable debate, 14 July 2010
Pam Muckosy, [email protected]
Social & economic impact of bigbusiness on local communities
WELCOME
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From measurement to management
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
A marked shift in how companies are approaching thistopic
How and why do companies measure socio-economicimpacts?
A need to look beyond measures and KPIs:
Companies seek to measure what they do in order to
report externally But, increasingly the aim is to understand the external
system in which the company works for bettermanagement of the business
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The study, www.ethicalcorp.com/ impact
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Looks at understanding the true impact of business.
In-depth interviews with >30 corporate sustainability,community programme and ethical sourcing managers
Survey of 116 sustainability professionals worldwide
Review of over 60 corporate sustainability reports
Literature review of initial impact research
Analysis of existing tools and processes available tohelp you measure impact
Case studies on companies that have begun to testimpact measurement methods
Conducted by Peter Davis, Isabelle Fredborg & Pam Muckosy
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What drives a companys approach?
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
How a company approaches this topic is drivenby a number of factors:
What is the companys business? Where does it operate?
What is the company trying to achieve?
Demonstrating accountability? If so, to whom?
May be many different stakeholder groups who arereached in different ways
Seeking to understand its context
So that it can better manage its business
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Do companies measure impact?
(n=116)
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
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Reasons companies measure impact
(percentages, n=116)
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Communicate to stakeholders
Build reputation
Inform community programmes
Other
Secure a license to operate
Encourage infrastructure development
Monitor local activities that may do harm
Increase supply chain effectiveness
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What impacts companies measure
(n=116)
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Economic livelihoods for local communityEngagement, volunteering and charity
Job creation
Other
Human rightsLabour equality and rights
Poverty and economic equality
Local infrastructure
Access to basic resources
Tax contributions
Gender equality
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Tying impact to performance or
business strategy? (n=116)
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
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4 models of socio-economic impact
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
1. Management of supply chain
What are the impacts of what we buy?
2. External benchmarking against globally-defined standards
GRI the best known
3. Management of fence-line communities What is the local impact of a companys operation
4. Contribution to local economy
Corporate role in a host countrys developmenttrajectory
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#1. Supply chain management
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Who?
Large retailers and branded goods companies
Why?
To respond to consumer and media pressure to ensure thatsupply chains do not contain labour, environmental and otherabuses.
How
Questionnaires and audit processes of supplier sites and
factories
Accountability to whom?
Demonstrating to customers that goods and services are abusefree
How its developing Companies increasingly asking all suppliers, not just
manufacturing sites, about their processes
Increasingly a genuine desire to understand value chain
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I .e. Sedex
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Exponential rise in the number of companystandards
Often similar in scope but not co-ordinated inapplication
With the result that some factories foundthemselves almost always monitored to slightly
different standards
Sedex seeks to help companies collaborate intheir factory audits
Repository of information
Can still have company-specific questions/ issuesraised
But bulk of information is shared
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#2. External benchmarking
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Who? Many companies of all sizes
Why? To respond to the pressures from international NGOs
and others to report and
How
Audit against an externally-generated set ofbenchmark standards designed to allow comparabilitybetween companies.
Accountability to whom?
Primarily aimed at the global CR community How its developing
More intelligent targeting of standards to be relevant toparticular industries
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I .e. GRI
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
GRI is worlds most widely used sustainabilityreporting framework Seeks to make social reporting as comparable as financial reporting
Comprehensive reporting framework including: Corporate internal processes, for example
Strategy and planning
Report parameters
Governance and engagement
Performance indicators on 6 key issue areas, including: Environment
Human rights
Labour practices
Sector supplements developed To tailor the broad framework more precisely to specific industries Examples include: financial services, mining and metals, financial
services and electric utilities
More being developed
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#3. Managing fence-line
communities
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Who? Predominantly extractive firms, or other industries with a
significant local footprint
Why? To understand the inter-relationship of the site and the local
community and environment
To guide corporate managers in behaviours in relation to localpeople
How Detailed assessment process to understand different aspects of
the relationship and to establish relevant benchmark metrics
Accountability to whom? Primarily designed to show accountability to local communities
However, also useful in demonstrating globally a responsibleapproach
How its developing Such assessments increasingly required as part of the due
diligence approach for new projects to get sign off
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I .e. Anglo American SEAT Toolkit
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Socio-Economic Assessment Toolbox Designed to allow operations to identify and
manage their social and economic impacts (bothpositive and negative)
Designed as a management tool for Anglos siteoperations in relation to their local communities
4 stage process: Profile operation and local communities
Identify socio-economic impacts and share thatassessment
Develop management responses to each impact
Report results to community
Reporting is relevant only as a communication toolwith communities, not as a benchmarking exercise
or compliance exercise.
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#4. Contribution to local economy
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Who? Large companies with significant investments in
particular countries
Why? To understand the role that the company plays in the
society and economy of the host country To guide corporate managers in decision-making
How Detailed analyses, conducted by development
specialists
Accountability to whom?
Demonstrating to customers that goods and servicesare abuse free
How its developing Companies
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I .e. Unilever
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Increasingly seeking to understand the partthat its operations play in development
Reports commissioned from developmentspecialists to understand impacts, e.g.: Oxfam on operations in Indonesia
INSEAD study of operations in South Africa
Some key findings of South Africa study: Unilever provides 0.9% of all tax revenues
For each direct Unilever employee, there are 22
further jobs created in the value chain. Thus Unilever represents 0.8% of total
employment in South Africa
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Sample strategic approach: DCED
Standard, www.enterprise-development.org
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
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A few existing models being
reviewed
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
LBG
WBCSD Value Accounting
Good for Business
Five types of capital
Accounting for Sustainability
Poverty Footprint of Business
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Ideas raised during the debate
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Address other motives such as: responding to investors,differentiation, product impact and innovation
What are the best units for measuring outcomes. $s,
equality? Include case studies on local developing country
companies
Risk is a major motivator
Localisation of strategy is a must
How to work with in partnership with an NGO
Incorporate the role of stakeholder engagement
How can we assess cultural integrity?
What can companies do with their findings? Is a newbusiness model required?
Are there any lessons or is there cross-over withenvironmental impact assessments?
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Social and economic impact
More info: visit www.ethicalcorp.com/impact or email Pam Muckosy at [email protected]
Thank you
The full report w ill be published inSeptember at
www.ethicalcorp.com/ impact