CSR Performance Evaluation

Background
• CSR was used more to impress shareholders but in recent years it has become

a major selling point for employees, prospective employees, and both existing

and potential customers.

• For the modern consumer, it’s simple. 52% of millennials want to buy from

brands whose values align with their personal values.

• In fact, 63% of millennials are willing to pay more for a brand that makes

commitments to sustainability and an incredible 72% of millennials with

children are loyal to brands that practice ethical or environmentally

progressive business, according to the 2021 consumer intel report.

 Why Measure CSR?
• A CSR assessment helps to identify the benefits that you are reaping from
your efforts.

• It also helps to show you any shortfallings you may suffer from an
ineffective CSR campaign.

• CSR metrics and social return are a big factor in business strategy, and can
seriously impact the public opinion of your company- in both positive and
negative ways.

• In short: your CSR assessment is an extremely necessary part of any CSR

project.
 What to Measure
• The best way to keep track and measure your CSR efforts
is to consider ESG (Environment, Social, and Governance).
• These three tangible objective metrics represent a triple
bottom line that corporations use in self evaluation.
Investors and consumers can also use these figures to
measure a company's impact.
• Let's break these down a little more:
ENVIRONMENT SOCIAL

GOVERNANCE
 How to Measure CSR
• 1. Set Sustainable Development Goals (SDGs)
to Achieve Benchmarks
• In 2015, United Nations member states
adopted sustainable development goals (SDGs-
also known as Global Goals) as a universal call
to action to end poverty, protect the planet,
and ensure that by 2030, all people across the
planet can enjoy peace and prosperity.
 2. Set Relevant KPIs
• To set your goals, consider what you wish your long-term goal
to be, and set several smaller goals that will help you along
the way.
• For example, if you want to reduce the number of homeless
people in your city, you can set several smaller goals along the
way to the larger goal.
• Things like resume workshops, food drives, counseling and
coaching sessions, and free dry cleaning for interviews.
• These goals can steadily build into back-to-work programs,
subsidized rent, and improved policies within the local
government, helping to stop people from becoming homeless
in the first place.
 A few examples of KPIs you might consider
tracking are:
• Employee Satisfaction KPIs:
• Employee Satisfaction - Conduct an internal survey, and see how many of your
employees are happy at work and feel they have a fulfilling role. A high employee-
satisfaction score means that there is less movement within a role.
• Volunteer Programs - If your company has a volunteering program, see how many of
your employees sign up to join in. Having a volunteer program is a great way of ensuring
that your employees values correlate with that of the company.
• Diversity & Inclusion - By having a diverse team, you are showing prospective employees
that they are welcomed and appreciated. This also helps your existing employees to feel
respected and heard.
• Staff Turnover Rate - If your staff often leave or if you find yourself replacing certain roles
regularly, it’s a sure sign that there is something wrong, and employees are left
dissatisfied in their work.
• Skills Development and Career Progression - One reason for a high staff turnover rate
can be because there isn’t a clear path for employees to grow within their roles. It’s
important to offer employees the opportunity to better their skills and to grow within
their roles.
 Customer Satisfaction KPIs:
• Customer Retention Rate - If your customers are returning again and
again, it’s a fair bet that you’re doing something right. However, if you are
finding that you struggle to keep customers, it isn’t a good sign and implies
that the majority are dissatisfied with your service.
• Fair and Ethical Marketing - your marketing should be representative of
who you are as a company, and it should not attempt to scare or violate
your potential customers in any way.
• Complaints and Resolving Complaints - How you deal with complaints as a
company shows your customers if you value them or not. It’s important to
handle complaints fairly and respectfully.
• Social Media Interaction - Be sure that you only interact with companies
who share your values. Interacting with customers is a good way to
personify your brand as well.
 3. Compare yourself to Industry Leaders

• In the corporate world of CSR, there are many

leaders who you can look to for inspiration.
• Long gone are the days we can look at one off
or annual donations to charities and consider
this a good CSR program.
 4. Check your Industry Standards
• While there isn’t a unified standard on
measuring CSR efforts, there are collective
industry standards.
• Compare your business to others in your
industry to see where you fall, and follow the
example of the front runners until you can
reach an equal standing.
• Ex- GRI, B-Corporation Certifications
 5. Have a Clear Goal
• If you don’t have a clear goal in mind, it can be extremely difficult to measure your

progress on the way to your CSR goals. Be sure to set this goal using well researched

information and input from communities. You should set this goal using a host of KPIs

that promote the greater ideal.

• If you aim to create a space where you can deliver social and environmental benefits,

you should also be able to enlist the help of both internal and external stakeholders for

the business. The goal, or the KPIs used to achieve it, may shift slightly or change- this is

fine. By having a clear goal, you can define a clear direction and quantifiably measure

how successful your CSR efforts are.

6. Check What Your Employees are Thinking

• It isn’t possible to have a truly authentic CSR

program if the wellbeing of your employees is
not considered.
• A good way to measure your CSR effectiveness is
by taking the time to speak to your employees
and taking the time to discuss whether they feel
their beliefs are in line with company
motivations and whether the job they are doing
is congruent to their personal wellbeing.
 7. Get Certified
• There are a multitude of different corporations that offer memberships to

companies that reach a certain standard, be it in environmental or social CSR. One

of the most famous of which is B-Corp.

• A company can say they are a Certified B Corporation once they have applied and

been recognized to comply with B Corp’s standards of verified social and

environmental performance, public transparency, and legal accountability.

• The application process is rigorous, and the nature of the certification demands

that companies show evidence of improvement of their social responsibilities year

on year.

https://www.bcorporation.net/en-us/programs-and-tools/pending-
b-corps
8. Hire a Specialized CSR Manager to Do the
Job
• While it may not feel like you need a full-time employee to execute your CSR strategy, you

could not be further from the truth- especially if you want to measure the outcome of your

strategies effectively.

• While CSR is something that should be practiced by those at all levels of the company (and

especially managers), having a dedicated CSR manager means that you can rely on them to

execute plans and to inspire the management- who will, in turn, inspire their employees.

• Research has shown that having a CSR manager helps to properly involve staff from all

levels, and incorporate CSR practices much more effectively than CEOs, other managers,

and so on.
 9. Measure Increased Revenue and
Efficiency
• Of course, while CSR is a great idea, it is also important for any business to

consider the bottom line. Equally, efficiency is a crucial aspect of running a

business. Luckily, CSR can offer important things for a company to help

bolster these metrics.

• Measure the brand differentiation you've created through your CSR

campaign by taking a look at traditional revenue and efficiency metrics

through the lens of your CSR campaign, looking specifically for ways that

your efforts may have affected these figures.

 10. The 5 Rs & 1 I
• The 5 R’s and 1 I aim to measure the overall success of a CSR campaign, by looking at the:

• Revenue - Specifically looking at customer retention, new customers, and cost savings.

• Reputation - Customer perception of the brand, awareness of the brand.

• Recruitment - Attraction of talent to the organization.

• Retention - Are your employees staying? How are their levels of satisfaction and involvement within the

company?

• Relationships - Consider your business partnerships and whether they are thriving.

• Impact - Are your KPIs reflective of a job well done?

• Keeping track of each of these variables is a lot of work, and ensuring that you are keeping track of your

inputs, outputs, and outcomes is certainly a challenge. However, you will find that making the effort to

track these different areas will give you a much deeper insight into the performance of your CSR

campaign.
• https://www.youtube.com/watch?v=oPz-6eCX
pCo&feature=youtu.be
 What is Social Accounting?
• Social Accounting, also known as Social Responsibility
Accounting, is a part of an evolving corporate reporting system
that assesses and takes responsibility for the company’s effects
on the environment and its impact on social welfare.
• It is a concept that has been introduced to better articulate the
measures that contribute to long-term value and the role
organisations play in society.
• It is also a subset of the Triple Bottom Line accounting
framework which emphasises three dimensions of performance:
Social, environmental and financial.
• It goes beyond the profit motive of businesses and focuses
on sustainable development.
 Definitions
• Kohler defined Social Accounting as ”the application of
double-entry book-keeping to socio-economic analysis”.
• Ralph Estes defined it as the “measurement reporting, internal
or external, of information concerning the impact of an entity
and its activities on society”.
• Sybil Mobley defined it as“it refers to the ordering, measuring
and analyses of the social and economic consequences of
governmental and entrepreneurial behaviour”.
• The  Institute of Chartered Accountants of India or the ICAI
defined it as “Social accounting is a way of measuring,
understanding, reporting and ultimately improving an
organization's social and ethical performance”. 
 Why Social Accounting?
• Business is a socio-economic activity that continuously draws its
required resources from society. 
• Therefore, businesses are not only accountable to shareholders
but also to other stakeholders including
• Environment.
• Customers.
• Employees
• Suppliers.
• Business partners.
• Local communities.
• Regulators.
 Types of Social Accounting
• Environmental Accounting
• It provides information about how the business activities of the
organisation are impacting nature. While some companies claim to
be eco-friendly, their ecological footprint may tell an entirely
different story. Some examples include
• Use of scarce resources such as oil, petroleum, and water.
• Cutting trees for using its various parts and plantation of trees to
compensate for it.
• Jeopardization of land due to its activities.
• Installation of water treatment plants to treat and reuse the treated
water.
• Emphasis on 3Rs i.e Reduce, Reuse and Recycle the waste produced.
• Air, soil, water and noise pollution caused.
• Sustainability Accounting
• It provides social and economic sustainability information. It
directly impacts society and the economic performance of an
organisation. Some example includes
• Effects on the health of local communities due to emissions or
hazardous waste.
• Fair compensation to farmers and artisans in return for their
products & services.
• Installation of solar power plants to save electricity consumption.
• Ethical initiatives are taken by the company for the welfare
of society
• Measures were taken for employee safety and sustainability.
• Opening schools & other educational facilities in remote industrial
areas for children of employees and locals.
• Paying taxes to local authorities and government fairly and on
time.
• National Accounting
• It analyses the economic activities of a country. It analyses
the total expenditure incurred by a country to conduct its
business.
• Does the overall capital cost of the project exceed the
approved capital cost?
• Has the planned rate of return been achieved?
• Is there any poor or inefficient project planning?
• Are the systems of project formulation and execution sound?
• Are the cost control measures adequate?
• Are efficient operating procedures used?
• Are Public sector programmes, entities and activities
efficiently managed, regulated, organised and executed?
 Approaches in Social Accounting
• Classical Approach
• This is the approach of accounting in which businesses show how they have maximised
their profits within the constraints of legal and ethical framework, acting in the best
interest of society at large.
• Descriptive Approach
• This is the traditional method of reporting social information. In this social activities are
disclosed in narrative form along with financial statements.
• Integral Welfare Theoretical Approach:
• This approach accounts for both social benefits and social costs in the financial
statements themselves. This is a type of accounting format that highlights the creation of
social reports that involves the social benefits and social costs. 
• Programme Management Approach:
• In this approach, the organisation has to disclose its Social Objectives, how it is going to
achieve them and how the feedback and control have been exercised.
• Pictorial Approach:
• In this approach, photographs of various welfare activities conducted by the organization
are presented in annual reports.
• Footnote Disclosures:
• In this approach, the social activities of an organisation are quantified and disclosed as an
additional footnote in the financial statements.
 CLASS ASSIGNMENT
• Discuss in detail the CSR activities of any one
company of your choice.