on social rating methods for businesses
Social rating for businesses covers a wide range of approaches, in terms of both
their purpose, and the methodologies applied, as well as the parties involved.
Three different approaches have been identified, looking into this subject and assessing social and environmental performance in a comprehensive way:
rating
It represents a "social rating" approach for businesses, carried out by specialised rating agencies or firms such as Vigeo in France, SAM in Switzerland or Eiris in the UK, with some grouped together in international networks. This method, with its creation driven by investors who are sensitive to ethical issues (religious groups, etc.), only concerns listed companies because its aim is to rank these companies for investors, portfolio managers etc. This ranking, which varies according to the agency, is generally based on the following main criteria: HR policy, client and supplier relations, shareholder relations, factoring in of society’s expectations, integration of respect for the environment. Independent evaluations are based primarily on questionnaires and interviews covering the company’s various managers and a sample group of its stakeholder representatives. The "rated" companies are therefore willing to take part (answering questionnaires, sending the documents requested, etc.), but this was not, at the outset, an active approach by them. In order to cross-reference the information obtained and standardize the methodologies developed, several international rating firms are currently creating networks, looking to create their own stock market index for responsible businesses in time.
reporting
This represents a voluntary approach by the companies themselves (including unlisted companies) which, to ensure transparency and dialog with their stakeholders and/or prepare themselves for answering rating agencies’ questionnaires, have decided to report on the various impacts of their activities. The report is delivered as an information document, review or report, as selected. Depending on its type, it presents progress made with a clear responsibility approach.While there are a growing number of initiatives aimed at formalizing this process, today there are still not any genuine standards in this field and is not easy to compare existing reports with one another (nature of the company and its activity, nature of the information provided and subjects chosen, existence or not of external audits, etc.).
developing standards and labels
To formalise their commitment and assess their performance on a certain number of social indicators, businesses may opt for social and/or environmental certification. With this approach, the company commits to set itself objectives (means for the standards and results for the labels) and implement the procedures needed to achieve them. The company is then audited each year by an independent organization, such as PricewaterhouseCoopers, KPMG or Bureau Veritas. These standards and trends are becoming increasingly commonplace today, and the trend is moving towards a consolidation of the various existing standards (see ISO 20000, AA 1000), which would certify, in the public’s eyes, the company’s overall social approach.
© France Telecom - Orange 2012
