Reduced Scrutiny

https://en.wikipedia.org/w/index.php?title=Corporate_social_responsibility&oldid=736600984#Reduced_scrutiny

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Reduced scrutiny

Corporations are keen to avoid interference in their business through taxation and/or regulations. A CSR program can persuade governments and the public that a company takes health and safety, diversity and the environment seriously, reducing the likelihood that company practices will be closely monitored.

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 I think that this often is the main reason for advertising CSR. By awarding suppliers with “Gold” who do not allow their own employees to check the EcoVadis Premiom Report, EcoVadis helps their clients to avoid thorough audits. That is irresponsible.

First Things First

Dear Pierre-François Thaler,
Dear Frédéric Trinel

Before employees can read a CSR report of their employer, it has to be disclosed to them. First things first. Right?

You may want to have a look at http://www.csrwire.com/blog/posts/1757-three-ways-to-get-people-to-read-your-corporate-responsibility-report:

Three Ways to Get People to Read your Corporate Responsibility Report

Submitted by: Judy Sandford
Posted: Sep 06, 2016 – 06:00 AM EST

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Your employees, consumers, shareholders and others are demanding more corporate responsibility (CR) information from companies, but they probably aren’t reading your CR report. […]

 Judy Sandford (no relation to EcoVadis) is right. The bad news: There are employers who do not want their employees to read the CSR report, if it is an EcoVadis Premium Report. These employers even reject the employees representatives’ request to read the report.

 How can employees read the report if there are zero ways to get it from their employer? When will EcoVadis publish a policy on how to support the employees of assessed suppliers as stakeholders in the CSR of these suppliers?

AntiCSR.com

 Employees are key stakeholders in the CSR management of their employers. Without credible stakeholder involvement, even being ISAE 3000 audited won’t help (as much as all the buzz words in EcoVadis’ announcement won’t help). EcoVadis talks to unions, but they don’t pay enough respect to employees where EcoVadis could help them directly without too much effort. That is an ethical problem in the ethics business.

 I think that the concept of EcoVadis is good, but their reluctance to encourage suppliers to disclose their EcoVadis Premium Reports at least to the own employees is irritating. On the other hand that also provides suppliers with an opportunity to get an “Platinum” award just by publishing their reports without having been asked by EcoVadis.

 That said, I want to draw your attention to AntiCSR.com with the understanding, that I am not against CSR reporting in general. I am against insufficiently verified CSR reporting. I am against hype. “Anti CSR” takes “a Critical look at Corporate Social Responsibility”. That is what we need.

Checking Reporting Attitude

Each year, PWC, Deloitte, EY and KPMG check annual reports of their clients. As a part of this business, the “Big Four” also audit the increasingly important “sustainability” chapters of their clients’ reports. Here organizations assessed by the Big Four often present their “Corporate Social Responsibility” (CSR).

 When checking an organizations’ annual report, the EcoVadis Premium Report is an interesting source of information to auditors. The assessed client probably is proud to mention an EcoVadis “Gold” award in the annual report.

To auditors: Use the EcoVadis Premium Report to assess your client’s reporting attitude.

 Auditors can use the EcoVadis Report in at least two ways:

  • The content of the report gives auditors a good and well structured overview on how their audited client has presented the CRS mamagement to EcoVadis. That is the usual way to use the EcoVadis Premium Report.
  • The application of the report shows to auditors, which attitude their assessed client has to transparency. If the organization discloses the EcoVadis Premium Report to clients only, but refuses to disclose that report to the own employees, you as an auditor know, that there probably something is wrong with the report. As an employer, the assessed organization may want to avoid that employees scrutinize the report with their insider knowledge. That attitude of the assessed organization towards reporting also may affect what your client reports to you on other matters.

 Thus, not only the EcoVadis Premium Report itself but also the way how your client uses it, helps you as an auditor to assess the transparency and credibility of your client’s reporting.

 However, there may be legitimate reasons not to disclose an EcoVadis report. If your client claims to have a legitimate reason not to disclose at least the chapter “LABOR PRACTICES & HUMAN RIGHTS (LAB)” to the employees, let the client explain to you, which parts exactly of that chapter should not be disclosed and why these parts of the EcoVadis Premium Report should not be disclosed to the own employees, even though they obviously hold a stake in their employer’s CSR. There is a legitimate “need to know” on the side of the employees.

Question to Suppliers

 EvoVadis reported that the following suppliers had turned to EcoVadis’ supplier sustainability ratings service:

  • Amcor,
  • Bombardier
  • Clarins,
  • Coca Cola Enterprises,
  • DuPont,
  • Eastman Chemical,
  • GlaxoSmithKline,
  • Huawei,
  • ING Bank,
  • Johnson & Johnson,
  • Merck,
  • Nokia,
  • PSA/Peugeot-Citroen,
  • Renault-Nissan,
  • Subway,
  • Verizon

 Question to these suppliers: Do you disclose your EcoVadis Premium Reports to the public – or at least your own employees?

Transparent and honest reporting is possible.

Legitimate Stakeholders

 According to EcoVadis (see http://www.endress.com/_storage/asset/1576641/storage/master/file/6849002/download/eh_EcoVadis_Premium_Report_2016.pdf, chapter 10, p. 24/31) “legitimate stakeholders” are:

  • Governmental organizations (i.e. government environmental protection administrations, anti-trust agencies, customers protection agencies)
  • CSR networks and initiatives
  • Trade unions and employers’ organizations
  • International organizations (i.e. UN, ILO, UNEP, …)
  • NGO’s (i.e. Greenpeace, Clean Clothes Campaign, Transparency international, UFC, …)
  • Research institutes and reputable press (CSR Asia, Blacksmith Institute, …)

A corporate stakeholder is a party that can affect or be affected by the actions of the company and the achievement of its objectives (i.e. employees, clients, suppliers).

 I think that, presently, EcoVadis treats employees as 2nd class stakeholders.

Cher Msr. Thaler, cher Msr. Trinel

Dear Pierre-François Thaler,
Dear Frédéric Trinel

 Your concept for the EcoVadis Premium Reports is excellent. There also is a chapter on “LABOR PRACTICES & HUMAN RIGHTS (LAB)”. In the chapter, employees of companies assessed by EcoVadis could find several pages on policies, actions and results.

 Regrettably, some companies disclose their reports to customers only, but not to their employees. They trust their customers more than their own employees.

 As long as an organization assessed by EcoVadis refuses to disclose their EcoVadis Premium Report at least to the own employees, these employees have to assume that there is something wrong in what their employer reported to EcoVadis.

 In Germany, works councils are legally obliged to supervise the implementation of OH&S regulations and environment protection regulations in their organization. Therefore hiding any reports describing
• the state of OH&S and
• the state of environmental protection
from employee representatives is an infringement of their rights and interfers with the works council’s obligatory tasks. In order to obtain the report, works councils would have to sue the employer. But often works councils are to weak to do that. Here support from EcoVadis would help to settle conflicts out of court.

 According to EcoVadis, “trade unions” already are legitimate stakeholders. Please describe the process which trade unions can use in order to obtain EcoVadis Premium Reports from those companies in which these trade unions represent employees. Understandibly, employees as stakeholders are curious about the chapter on “LABOR PRACTICES & HUMAN RIGHTS (LAB)”.

 Please develop and publish an EcoVadis policy which shows that EcoVadis compassionately encourages assessed companies to disclose their EcoVadis Premium Reports to all parties who have a legitimate stake in the CSR of that company.

Best regards,
Goetz Kluge

Unfair Advantage

 EcoVadis should publish which companies disclose their Premium Reports to their employees and which companies refuse to do so.

 Honest companies tell the truth to EcoVadis. There will be no significant conflict between what an organization reports to EcoVadis and what the employees know about their organization.

 If, however, an organization has a policy to hide CSR reports from the employees, they can spruce up their self assessment quite a bit. EcoVadis doesn’t have the background knowledge and the resources to check reports as thoroughly as the employees. Therefore it is easier for dishonest companies to get an EcoVadis “Gold” award than for honest companies.

 Thus, by not encouraging organizations with a “Silver” or “Gold” rated CSR management to disclose the detailed Ecovadis Premium Report, EcoVadis gives organizations with intransparent CSR reporting an unfair advantage.

 But then again, things perhaps are not that bad: Honest companies can disclose their detailed EcoVadis CSR report without any encouragement by EcoVadis. That is how smart companies turn a disadvantage into an advantage.

Giving Credibility to EcoVadis Awards

Reputation management can be honest.

 There is a credibility issue with EcoVadis awards. However, the good news is that organizations assessed by ecovadis can make their award credible just by disclosing their EcoVadis Premium Report to the public. Then everybody knows for sure that also the employees of that company can scrutinize that CSR report.

 If they hide their EcoVadis Premium Report from their own employees, you can’t really count on “Gold” ratings and “Silver” ratings given to organizations assessed by EcoVadis for their CSR management. But companies that disclose such an CSR report at least to the own employees, deserve credit. They, and of course those who publish the report in the internet, deserve a Platinum CSR Award.

 The employees of these platinum winners then can compare the reported CSR performance of their employer with the real CSR performance experienced by the employees. Seemingly, only very few companies ranked by EcoVadis can afford such an openess.

 Companies that prove their credibility by openly publishing their report in the internet(!) of course have a top-notch attitude towards CSR – even if they have no “Gold” award. A company with a “Silver” award and disclosed Premium Reports is much more credible that a “Gold” awarded company that hides the Premium Report.

 In the listing below, entries are rendered in boldface typesetting for those companies who publish their EcoVadis premium report in the internet.

 


Platinum for transparent reporting:

Above I listed good practice examples only. The listing is not complete.

 
 Should I add EcoVadis to the list? (They didn’t answer yet.)

 “Analysing CSR orientation through employees’ perceptions can help distinguish between company’s genuine CSR orientation and simple window dressing.” Bad companies don’t care about employees’ perceptions. Such examples you can find yourself, I won’t list them here. If a company has been awarded by EcoVadis with “Gold” and if such a company has received an EcoVadis Premium Report, there should be no reason to hide a that report from the employees. Actually, according to EcoVadis, “trade unions” are legitimate stakeholders. Therefore at least these employee representatives should receive the Premium Report.

 The companies mentioned above are credible. They don’t hide their EcoVadis Premium report. But some companies seem to be afraid that providing their own employees with the Premium Report would reveal to the employees what their employer reported to EcoVadis. If a company assessed by EcoVadis hides the Report from the employees, there may be something wrong with what that company had reported to EcoVadis. Then a “Gold” award has no value.