MONTHLY FEATURE

September 2001

Summary of First World Report on Corporate Social Responsibility (CSR): Internet consultation of Stakeholders

The above mentioned report covers recent evidence on what has been happening, sickness worldwide in the area of CSR (for the full report in pdf format first world report). It covers results from replies to CRITICS (Corporate Responsibility Index Through Internet Consultation of Stakeholders) which is a questionnaire that allows people, inside or outside, corporations or institutions to rapidly self-assess the corporate social responsibility of these corporations or institutions. It has been online in English and German* for about one year on this website (see Rate Your Company) that attracts about ten thousand hits per month. Responses from around a dozen countries were obtained. It is a subset of questions that was developed to assist companies in their quest to become more socially responsible through using an online format. The First World Report covers the methodology used, the experience of using CRITICS, the main empirical results and lessons learned.

Here is a sampling of the main conclusions:

Overall

· Evidence suggests that CSR is not improving over time which is surprising given the supposedly increased interest in CSR issues over the past few years.

• · CSR is still viewed as essentially philanthropy
• · Only 27% of companies produced a social report
• · Companies that had a code of ethics did better on CSR than those without yet few produced a social report that suggests that many companies and institutions could better publicise the positive things they are doing through a social report.
• · Only 35% of companies had a suppliers code of conduct
• · Only 41% of companies applied an environmental code
• · Yet 81% of companies said that they had a statement of the company’s mission & values (i.e. business principles or vision of corporate responsibility)
• · This reduced to 65% when companies were asked if they had a code of ethics or code of business conduct
• · This further reduced to 57% when companies were asked whether the code had been distributed to employees and then only 40% of companies had trained their staff on their code.
• · 71% of companies supported their community in some way
• · 72% felt that their products were socially responsible

Corruption

· It cannot be assumed that all companies in highly corrupt countries are low on social responsibility.

Company Size

· Companies with ten to fifty employees have a worse record on CSR than all other size categories.

• · Training on codes of ethics is more pervasive the larger the company
• · There is general scope for increased training on ethics, particularly for medium sized enterprises or institutions.

Code of ethics

· Those companies or institutions with specific ethics training programme had a much higher CSR score than those without

By Economic Sector of Activity

· The highest CSR score, i.e. highest corporate responsibility, was found among the telecommunications companies

• · The lowest CSR scores were from the service sectors
• · Companies in telecommunications, retail trade and insurance tended to have codes of ethics.
• · Educational establishments and public institutions did very poorly – this is almost hypocritical given the high store some of these establishments set by good ethical behaviour.
• · The absence of training is noticeable across the board with the exceptions of telecoms, retail and insurance where between two thirds and three quarters of the firms have training schemes in place.
• · Few companies or institutions have a manager responsible for CSR or ethical issues – service sectors and education fare very badly
• · Sixty percent of companies in the energy sector do not have a CSR manager despite the high profile of sustainability issues in the energy sector.

Socially Responsible Products

· This is a major concern and over 90% of companies or institutions replied that they were active in ensuring some measure of social responsibility in the use of their products

Human Rights

· 55% of companies and institutions in the sample had an human rights policy

• · Only about a third of small and medium sized companies had an human rights policy while two-thirds of large companies and institutions had an human rights policy.
• · Telecommunication companies in our sample came top with 100% saying they had an human rights policy followed by 75% of companies and institutions in the finance, education and public sectors.
• · Service sectors performed poorly with only 43% having an human rights policy followed by the energy and manufacturing sectors with just about half having some form of human rights policy.

Wages

· Those companies or institutions that paid much better wages than average did much better on CSR than those paying below average

Finally, the absence of data on social phenomena within companies and institutions worldwide has meant that CRITICS has become a useful tool or methodology for the rapid collection of social data on CSR. CRITICS has allowed us to produce this current world report for the period 2000 to date and, as the results have illustrated, CRITICS can be used to produce a very rapid social audit which could then be rapidly fed into a short social report of an institution or company. Any company that does that will also be able, through use of this report, to ‘benchmark’ their activities to what is going on worldwide.

* French and Spanish versions are in preparation

[Contributed By Michael Hopkins]CSR Global Report