Proposed Corporate Social Responsibility Index

While exploring the concepts of CSR it became evident that corporate social responsibility carries variety of shades in terms of defining its concepts. Indeed, the study objective is to extract out a list of CSR indicators and variables that are identified from international instruments and efforts made by international organizations. Nonetheless in creating this index three important sources are acknowledged which are as under Dow Jones Sustainability World Indexes FTSE4Good Index Series Inclusion Criteria Jantzi Social Index , Canadian investment data base

Indicators:
The index is based on five broadly defines indicators that are further being categorized into 20 variables 1. 2. 3. 4. 5. Human Rights Environment Labor Standards Corporate Governance Corruption

Companies will be evaluated on the basis of these proposed indicators and their weighting formula which is based on the composite 100 index score. Where on the fulfilment of these criteria the company will get the rating attached with variables and if it not then will be marked as zero under non pursuance. Indeed, if the company manage to provide evidence or indication that it comply with the criteria to some extent than on judgemental basis company will be given half of the score attached with the respective variable (for instance if the score attached with variable is 1 than 0.5 will be secured by the company against the variable). Nonetheless the weightings assigned to the variables in this formula are tentative and can be changed if required after being tested and could be shifted by considering the global trends.

Formula:
=V(v1+v2+v3+v4)+W(w1+w2+w3)+X(x1+x2+x3)+Y(y1+y2+y3+y4+y5+y6+y7)+ Z(z1+z2+z3) Proposed Weightings to the Formula =2(3 + 2 + 2 + 3)+2(4 + 3 + 3)+2(4 + 4 + 2)+2( 2 + 1 + 2 + 1 + 1 + 2 + 1 )+2(4+3+3)

20

20

20

20

20 = 100 Index Score

In order to know that at what level company is performing and complying with the index score. The index score is further classified into 4 stages/ levels as under: High performing/complying companies will lie in Excellent Scale (70%100%) Medium performing complying companies will lie in Average Scale (60%69%) Low performing complying companies will lie in Average Scale (45%-59%) Below Average companies will lie in Poor Scale (Below 45%)

Excellent

A+ A

80% - 100% 70% - 79%

Above Average

B+ B C+ C

65% - 69% 60% - 64% 55% - 59% 45% - 54%

Average

Below Average

Poor

Below 45%

Information Sources for conducting evaluation Mainly two sources of information are identified in order to rate the company. 1. Questionnaire Questionnaire is designed by focusing on the indicators and variables that must answer either directly or indirectly, semi structured and combination of open ended and close ended. Questionnaire will be responded by senior management at corporate governance level. 2. Company Documents Company documents will be the source of the secondary information and contributed by the company itself. These documents could be as under - Social reports - Corporate philanthropy initiatives - News letters - Audits reports - Promotional campaign publications - Website - Internal reports - Press releases - Media reviews - Stakeholder comments - Civil society reports - Company spokesperson statements - Auditors comments - Employee appraisal documents - Direct interviews with companys representatives

Corporate Social Responsibility Indicators their weighting scores and criteria

INDICATORS

CRITERIA

SCORES

SUBCRITERIA
Company Human Rights policy Mission, Vision, Codes of Conduct and Management Practices 1. Human Rights policy, codes of conduct 2. Human Rights Management Practices 3. Policy on Human Rights abuses Support and Respect Human Rights Respect the Human Rights as International Obligations and Commitments 1. Supporting and participating in peace mission 2. Participate in Humanitarian aids

Human Rights

V=2

UN Global Compact

V1=3

UNDHR

V2=2

OECD Guidelines

V3=2

V4=3

Peace Mission

Environment policy, Health & Safety Measures Commitment to promote environmental Responsibility Development and diffusion of environmentally friendly technologies Precautionary approach to environmental challenges Carbon Zero Policy 1. Products manufacturing process ensured no hazardous or harmful elements. 2. Compliance with their respective regulatory authorities 3. Provide Customer Relations Management Approach 4. Compliance to International Instruments 1. Sustainable Environment Initiatives 2. Environment Friendly Supply Chain

II

Environment

W=2

Quality

of product/service

W1=4

Company Branding and Image

W2=3

3. Community Caring Practices 1. Health and environmental assurance report(planned activities, Environment Audit and incident investigations) 2. Work &Safety Management System 3. Compliance to International Environment Standards

Upgrading of Environment &sustainable development

W3=3

The freedom of association and right to collective bargaining1 Elimination of all forms of forced and compulsory labor Abolition of Child labor Elimination of discrimination in employment and occupation

III

Labour Standards

X=2

X1=4

Worker Rights

1. Labor policy (abolition of forced and child labor , Right to associate and bargain, elimination of

UN Global Compact , Labour Standards,

discrimination) 2. working conditions and working hours 3. ILO Standards and compliance to International Instruments of Labor

Sustainable Community development

X2=4

Creation of Jobs opportunities covering local communities and regular investment in human capital development

Capacity Building

X3=2

Family benefits i.e. child care support, job sharing, career breaks, or maternity or paternity pay

IV

Corporate Governance

Y=2

Corporate Governance Policy Role of shareholders and stakeholders Culture of corporate governance Relationship b/w corporate governance and socio-economic development Contribution in sustainable development Relationship b/w corporate governance and institutional investors Policy on independent

Auditors Internal controls

Balance On the Board

Y1=2

1. Board size, representation of women, minorities 2. Integrity, disclosure and transparency

Non Executive Directors

Y2=1

oversight and management of risk

Timely, Complete & Transparent Disclosures

Y3=1

Transparency policy compliance to international standards (all forms of corruption including extortion and bribery) policies disclosure compliance to time and complete information

Sustainability Report

Y4=1

Contribution on sustainable development and proper dissemination Philanthropy compliance to development System, procedures to meet challenges Audit Report

Corporate Philanthropy Risk Management Financial Assessment

Y5=2

Y6=2

y7=1

V.

Corruption

Z=2

Anti-corruption and Bribery Policy Compliance to UN Global Compact, AntiBribery Convention on International Business Transactions, OECD Public statement of commitment on Anticorruption. Codes of conduct compliance to Anticorruption and bribery policy. Whistle Blowing Process Transparent disclosure of policies Anti-corruption mechanism Business practices compliance to anticorruption policy

Codes of Conduct

Z1=4

Transparency policy

z2=4

Public Reporting

Z3=2