Those of us who have grown up in the environment, health and safety (EHS) arena are very comfortable with quantitative metrics. We are comfortable measuring and reporting in terms such as metric tons, millions of gallons and parts per billion. However, we are increasingly being called upon to report on our company’s social responsibility performance. This is a bit trickier and we need to work with different types of metrics that aren’t as easy to quantify. Metrics for social issues such as ethics, labor relations and community support are not as easily quantified as waste disposal, water use, greenhouse gas emissions and injuries and illnesses.
Measuring corporate performance in the social arena is getting increasing attention in recent years and is a continually evolving area. Most corporations have moved beyond traditional environmental sustainability reporting. There are guidelines available with social responsibility metrics. The Global Reporting Initiative (GRI) Reporting guidelines include 40 Social Performance Indicators, which it groups into four categories:
- Labor Practices and Decent Work
- Human Rights
- Product Responsibility
There are also industry-specific guidelines such as the International Council of Metals and Mining (ICMM) and American Petroleum Institute (API) guidelines, that include social parameters. For specific aspects within the broad area of social responsibility there are guidelines that companies can formally agree to follow, including the Voluntary Principles on Security and Human Rights.
Sustainability ratings that compare the performance of corporations usually focus on the full spectrum of corporate responsibility issues and social performance is often an important element in how companies are ranked. The SAM Corporate Sustainability Assessment Questionnaire, used during the assessment of companies for the Dow Jones Sustainability Indexes (DJSI), includes a series of questions in the “social dimension.” In 2010, these questions were categorized as:
- Labor Practice Indicators
- Human Capital Development
- Talent Attraction & Retention
- Corporate Citizenship and Philanthropy
- Standards for Suppliers
- Stakeholder Engagement
Corporate Responsibility’s methodology for ranking The 100 Best Corporate Citizens includes seven categories that are each weighted based on their relative values. The “Employee Relations” accounts for 19.5 percent and Human Rights accounts for 16 percent of the score highlighting the importance of these social issues.
The crucial part of social responsibility measurement is focusing on the most appropriate and relevant metrics for your company. Going back to the basics of materiality – deciding what is most important – helps companies decide where to focus their resources for measuring and reporting in the social arena. Once the material issues are identified, you need to find metrics that are measurable in a meaningful way. What are the material social issues for your company and how do you measure your performance in those areas?
During the Social Metrics session at the upcoming EHS Management Forum in Tucson, we will hear how three global companies have incorporated social metrics into their CSR strategy. For those of you who have social metrics of your own, how did you identify which ones to track? Did you use an existing protocol or develop a unique set for your company?