Cranfield University 12 June 2007

Corporate Responsibility Index

To help companies integrate corporate responsibility across the business

Sponsored by

What we will cover today

Introduction to Business in the Community

BITC’s Corporate Responsibility Index in detail

- what is the CR Index?

- the CR Index model?

What makes a Company that Counts?

Our Crossroads!

Discussion Themes – HOW TO BENCHMARK…

• Changes in business model that promote/deliver step change towards CR/sustainability?

• Whether companies have a plan to deliver CR change – beyond incremental target setting?

• “Beyond Compliance” – rewarding opportunity seeking/innovation?

Set up in 1982 by business for business

Over 750 companies in membership (> 70 of FTSE100)

Over 2,000 engaged through a network of 90+ global partners

Mission:

To inspire, engage, support and challenge companies to continuously improve their impact on society and the environment

Business in the Community

Business in the Community

INSPIRE Providing platforms for companies to share best practice, communicate their commitment to CR and inspire others to do likewise.

ENGAGE Helping companies to work collaboratively to achieve

maximum social impact in the most deprived areas.

SUPPORT & CHALLENGE Through a range of services that help companies integrate corporate responsibility across their business functions.

What is the CR Index?

Management tool for integrating CR

Framework for a systematic approach to managing, measuring and reporting social and environmental performance

Benchmark for comparing a company’s management processes and performance with those of others in the sector/Index

Method for engaging board members and raise awareness of CR risks and opportunities

Communication tool with external stakeholders

The Index Modeland 2006 average scores

Corporate Strategy

93%

Integration 86%

Performanceand Impact

Management 88%

Community

Marketplace

Workplace

Environment

Assurance process

3 Env Impacts: 79%

3 Social Impacts: 84%

Index questions

Corporate Strategy Integration

Performanceand ImpactManagement

Values

CR principles

Leadership

Advocacy

Risk mgmt

Policies

Integration of principles

Business conduct

Performance mgmt

Remuneration systems

Strategic decision-making

Training & development

Senior training

Stakeholder engagement

Reporting

Key issues

Objectives/ targets

Allocation of responsibilities

Training/ support

Internal monitoring and reporting

Measuring and reporting

Scope of data

Quality of data

Target setting

Performance improvement

Key themes throughout the Index

• Processes for managing risks/opportunities

• Allocation of core responsibilities

• Approach to stakeholder engagement

• Level of transparency and disclosure

• Continuous improvement

What the 2006 Index is telling us

• Increased transparency and accountability

Sainsbury’s

• Starting to see CR more of an opportunity rather than a risk

Marks & Spencer, Lafarge

Key findings by impact area

CommunityKey challenge remains linking community investment to core products and services.

Diageo, FSA

EnvironmentClimate Change key for all and forever.Not just about electricity consumption.Increased focus on indirect impacts.

BskyB, B&Q, F&C Asset Management

MarketplaceRefocused stakeholder engagement.Supply chain remains biggest area for improvement.

Camelot, Rio Tinto, Kingfisher

WorkplaceIncreasing focus on recruitment + retention. More emphasis on health & wellbeing.

Morgan Stanley, National Grid

What makes a ‘Company That Counts’

= leadership and commitment at the highest level

= policies to ensure responsible behaviours across the business

= CR issues integrated into strategic decision making,

= objectives and targets set to drive continuous improvement

= clear responsibilities defined at all levels

= effective communication to share learning and knowledge

= training for relevant staff to ensure delivery of objectives

= process for stakeholder consultation and engagement

= monitoring systems to assess and report progress

= public reporting of key issues, targets and performance

= willingness to disclose information and share best practice

At a Crossroads

• The Index isn’t encouraging step-change in thinking or action

• The Index provides a “comfort blanket”– with a focus on historical data & incremental change

• The Index is encouraging a risk based approach not an opportunity driven one

Discussion Themes – HOW TO BENCHMARK…

• Changes in business model that promote/deliver step change towards CR/sustainability?

• Whether companies have a plan to deliver CR change – beyond incremental target setting?

• “Beyond Compliance” – rewarding opportunity seeking/innovation?

How do we benchmark…Changes in business model