Sustainability
Bursa Malaysia has always advocated corporate responsibility as key to sustainability. Today, sustainability, which supports stakeholder value creation, should be the main focus of every responsible company.
Tip of the Week: Approximately only 10 percent of every landfill can be cleaned up.
Frameworks
Sustainability Management Frameworks
Based on the approach that "what gets measured gets managed" there are different frameworks available to support different areas of sustainability management.
The London Benchmarking Group (LBG) guides organisations to measure the impact of their voluntary community investments.
The ISO14000 and GHG Protocol enable organisations to measure, track, manage and improve their environmental performance.
As industries face sustainability challenges unique to their operating environment, industry-driven associations have also developed industry specific guidelines. Examples of such guidelines would include:
- The Roundtable on Sustainable Palm Oil (RSPO) for the palm oil industry,
- The International Petroleum Industry Environmental Conservation Association (IPIECA) for the oil and gas industry,
- The Cement Sustainability Initiative (CSI) for the cement industry,
- The Registration, Evaluation and Authorisation of Chemicals (REACH) for the chemicals sector,
- The Forest Stewardship Council (FSC) and Malaysian Timber Certification Council (MTCC) for forestry and
- Equator Principles for financial services.
London Benchmarking Group (LBG)
The London Benchmarking Group (LBG)1 is a group of over 100 companies working together to measure Corporate Community Investment (CCI) to:
- Continue development of a global measurement standard - the LBG model
- Benchmark and share best practice
- Develop and refine measurement tools
The LBG model provides a comprehensive and consistent set of measures to determine company's contribution to the community, including cash, time and in-kind donations, as well as management costs. The model also captures the outputs and longer-term impacts of CCI projects on society and the business itself.
LBG Model
There are three fundamental elements in the LBG model. The first is the categorisation of the voluntary wider community involvement activities of business. The second is the use of a simple input/ output model for assessing the immediate effectiveness of particular projects and the community programme as a whole. The third is an approach to impact assessment over time.
The model2 divides the voluntary community contributions into three broad categories:
- Charitable gifts
- Community investments
- Commercial initiatives in the community
Further information on LBG is available at www.lbg-online.net.
Evaluation of Input, Output and Impact
Stakeholders are now looking for the impact of a company's community investment. Assessment allows organisations to better understand the business benefits and value to the community. Organisations will be able to measure their impact and make better assessments of successful programmes and key improvement areas for unsuccessful ones. LBG has developed specific definitions to enable organisations to make a reasonable evaluation on input, output and impact.
Learn about the LBG model in detail, http://www.lbg-online.net/about-lbg/the-lbg-model.aspx
Understand the benefits of the LBG model, http://www.lbg-online.net/about-lbg/why-use-lbg.aspx
| Inputs | Outputs | |||||
|---|---|---|---|---|---|---|
| Cash | Time | In-kind | Leverage | Community Benefits | Business Benefits | |
| Community Activity | Total cash contributed | Value of the time contributed by employees during company time | The 'at-cost' value of inkind contributions | Additional contributions to the activity from other sources | Quantified details of how the activity has benefited society e.g. number of people helped | Quantified details of how the activity has benefited the company, e.g. value of positive press coverage |
| Community and Business Impacts |
|---|
| Assessment of the longterm achievements of the activity, i.e. how is the world a better place as a result? |
Description of Input, Output and Impact3
LBG Australia New Zealand has provided examples of outputs and impacts to guide companies adopting the LBG model:
| Output / impact | Category | Sample Measures & Indicators |
|---|---|---|
| Leverage | - |
|
| Community benefits | Arts and culture |
|
| Economic development |
|
|
| Social welfare |
|
|
| Environment |
|
|
| Business benefits | - |
|
Measuring Output and Impact4
ISO14000
According to the International Organisation for Standardisation (ISO) 6 , ISO 14000 family are among ISO's best known standards. It is implemented by over a million organisations in 175 countries. The ISO 14000 family addresses environmental management.
This means what the organisation does to:
- Minimise harmful effects on the environment caused by its activities
- Achieve continual improvement of its environmental performance.
The intention of ISO 14001:2004 is to provide a framework for a holistic, strategic approach to the organisation's environmental policy, plans and actions. As a result, this establishes a common reference for organisations to communicate on environmental management issues between organisations and their customers, regulators, the public and other stakeholders.
Principle
The Plan – Do – Check – Act (PDCA) cycle is the operating principle of ISO's management system standards and the ISO14000 is governed by this same principle.
For more information on ISO, click here.
ISO Principles5
Greenhouse Gas (GHG) Protocol
GHG Protocol is the most widely used international accounting tool to understand, quantify and manage GHG emissions. The protocol initiative is a multi-stakeholder partnership led by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) to develop internationally accepted GHG accounting and reporting standards.
It helps companies to prepare a GHG inventory that represents a true and fair account of their emissions. It promotes consistency and transparency in GHG accounting and reporting.
There are five principles7 that guide GHG reporting:
- Transparency
- Accuracy
- Consistency
- Relevance
- Completeness
The GHG Protocol Initiative comprises two separate but linked standards6:
- GHG Protocol Corporate Accounting and Reporting Standard which provides a step-by-step guide for companies to quantify and report their GHG emissions
- GHG Protocol Project Quantification Standard which is a guide for quantifying reductions from GHG mitigation projects
Setting organisational boundaries7
There are two distinct consolidation approaches that can be used for setting a company's organisational boundaries:
Equity share approach:
A company or Group accounts for GHG emissions from its operations according to its share of equity in the operation (or company)
Control approach:
A company accounts for 100 percent of the GHG emissions from operations over which it has control
Organisations need to decide on the approach best suited to their business activities and GHG accounting and reporting requirements.
Illustration on Setting Organisation Boundary7
Setting operational boundaries7
After a company has determined its organisational boundaries in terms of operations that it owns or controls, it then sets its operational boundaries. Setting operational boundaries involves identifying emissions associated with its operations, categorising them as direct and indirect emissions and choosing the scope of accounting and reporting. There are three scopes:
Scope 1:
Direct GHG emissions from sources that are owned by the company e.g. company vehicles, company facilities
Scope 2:
Indirect GHG emissions from the generation of electricity consumed by the company e.g. purchased electricity
Scope 3:
All other indirect emissions (optional reporting) e.g. contractors' vehicles, outsourced manufacturing
OHSAS 18001
OHSAS 18000 is an international occupational health and safety management system specification. It was created via a concerted effort from a number of the worlds leading national standards bodies, certification bodies and specialist consultancies.
The OHSAS specification9 is applicable to any organisation that wishes to:
- Establish an occupational health and safety (OH&S) management system to eliminate or minimise risk to employees and other interested parties who may be exposed to OH&S risks associated with its activities
- Assure itself of its conformance with its stated OH&S policy
- Demonstrate such conformance to others
- Implement, maintain and continually improve an OH&S management system
- Make a self-determination and declaration of conformance with this OHSAS specification.
- Seek certification/registration of its OH&S management system by an external organisation
Occupational Health and Safety Manual9 specifies the required quality and content for process and documentation for workplace safety .It provides guidance in terms of policy and procedure in the following areas:
- Health and safety procedures
- Health and safety forms
- Risk assessment forms and instructions
- Health and safety policies
- Codes of practice
- Employee guides
- Hazard tables
For further information, please go to http://www.osha-occupational-health-and-safety.com
Find out what the OHSAS Electronic Toolkit contains by clicking here:
http://www.ohsas-18001-occupational-health-and-safety.com/ohsas-18001-kit.htm
ISO26000
The ISO 26000 standard aims to provide voluntary guidance on social responsibility (SR). The future ISO 26000 will distil a globally relevant understanding of what social responsibility is and what organisations need to do to operate in a socially responsible way.
ISO 26000 will add value to existing SR work by10:
- Developing an international consensus on what SR means and the SR issues that organisations need to address,
- Providing guidance on translating principles into effective actions
- Refining best practices that have already evolved and disseminating the information worldwide for the good of the international community
The guidance in ISO 26000 will draw on best practice developed by existing public and private sector SR initiatives11. It will be consistent with and complement relevant declarations and conventions by the United Nations and its constituents, notably the International Labour Organization (ILO) to ensure consistency with ILO labour standards. ISO has also signed an MoU with the United Nations Global Compact Office (UNGCO) to enhance their cooperation on the development of ISO 26000 and with the Organisation for Economic Co-operation and Development (OECD) to ensure consistency with OECD guidelines.
ISO 26000 contains guidance, not requirements, and therefore will not be for use as a certification standard.
ISO 26000 is currently targeted for publication in late 2010.
For further information, visit ISO Social Responsibility (SR) site:
http://isotc.iso.org/livelink/livelink/fetch/2000/2122/830949/3934883/3935096/home.html?nodeid=4451259&vernum=0
For specific information on ISO26000, click here:
http://isotc.iso.org/livelink/livelink/fetch/2000/2122/830949/3934883/3935096/07_gen_info/about.html
1 London Benchmarking Group, www.lbg-online.net, accessed March 2010
2 LBG and Charities Aid Foundation, "Companies in Communities", 2000
3 London Benchmarking Group,"LBG Model Outputs and Impacts, 2008.
4 London Benchmarking Group Australia New Zealand, "The LBG Model: Outputs and Impacts", 2008
5 International Standard for Organisation, www.iso.org, accessed March 2010
6 GHG Protocol, A Corporate Accounting and Reporting Standard, 2004
7 GHG Protocol, A Corporate Accounting and Reporting Standard, 2004
8 PricewaterhouseCoopers analysis
9 OHSAS, www.ohsas.org, accessed March 2010
10 International Standards for Organisations, www.iso.org, accessed March 2010