TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-09-27 Page is: DBtxt003.php txt00005945

GIIRS GIIRS METHODOLOGY Company Assessment - Key Issues and Indicators Original article: Peter Burgess COMMENTARY I archived this material more than ten years ago ... probably around 2012. I was struck then and now by the quantity of information that is being talked about, but how really none of the many ... around 120 individual data points ... are contextualized in any meaningful way. To the extent that the 'purpose' of management metrics is to have the data needed to know about the progress (or not) that is being made, how 'well balanced' everything is and the decisions to be made to get the best possible progress and performance going forward. I like the GIIRD segmentation into 4 main areas ... even though they do not match well with the three main segments of TVM: GIIRS GOVERNANCE WORKERS COMMUNITY ENVIRONMENT TVM SOCIETY ENVIRONMENT ECONOMY Note that the TVM framework is based on the foundational framework of 'double entry accounting' expanded to incorporate social accounting and environmental accounting together with economic (financial) accounting into a single all-encompassing framework. Peter Burgess
SECTION I Details of the GIIRS Company Assessment - Key Issues and Indicators ... Appendix IV 1. GOVERNANCE Mission & Engagment Engaging stakeholders, clearly communicating mission and tracking social and environmental performance helps a company keep a focus on impact. • Company has a social/environmental mission • Company tracks key performance indicators and produces a mission related report • Workers are trained and/or evaluated on social & environmental performance Governance Good governance structures and practices demonstrate better accountability, oversight & stakeholder engagement. • Formal governance structure • Board of Directors/advisory body written responsibilities • Independent member(s) on Board • Stakeholder groups with Board representation Anti-Corruption Internal financial controls, a Code of Conduct, and policies to manage complaints/conflicts can help companies avoid corruption and fraud • Segregation of A/R and A/P, segregation of check writing and signing, and other financial controls • Written code of business conduct and ethics, whistleblower policy, procedure for managing conflicts of interest within the Board or Board and staff Transparency Transparent financials and communication with customers and workers promotes accountability and reduce fraud • Financial statements produced in accordance with local or international standards and reviewed or audited • Policy for sharing financials and ownership information with workers • Customer/client protection policies 2. WORKERS Compensation and Wages Fair wages and performance-based bonuses, along with training for career advancement, improve the livelihoods of workers. • All workers paid living wage • % paid above living or minimum wage • Inflation or performance-based bonuses awarded to workers • Ratio of highest compensated to lowest compensated worker Worker Benefits Offering beneﬁts can increase employee satisfaction, improve worker health, and improve living standards. • % health insurance premiums paid by company for individual and family coverage • Weeks of paid maternity and paternity leave Training and Education Skills training and education can lead to higher worker productivity, develop transferrable skills and increase knowledge • Initial and on-going worker training • % full-time workers reimbursed for continuing education • External professional development opportunities • Outplacement services for terminated workers Worker Ownership Workers ownership plans offer the opportunity for workers to be involved in company decisions, build assets and share in proﬁtability. • % full-time workers (including founders/ executives) that own stock, stock options or equivalents • % company owned by full-time workers (excluding founders/executives) Job Flexibility /Corporate Culture (Developed Markets only) Flexible work environments create better places to work and improve work/life balance. • Support short-term & long-term leave • Workers offered part-time and ﬂextime schedules, job-sharing, and telecommuting Human Rights & Labor Policy (Emerging Markets only) Respecting and promoting fundamental principles is essential for the dignity of work (ILO). • Policies on non-discrimination, collective bargaining, freedom of association, and prohibited child labor • Third-party certiﬁed labor practices Management & Worker Communication Transparency and communication create fair and honest workplaces and builds trust between workers and management. • Performance feedback process • Written and accessible employee handbook, discrimination policy, and code of ethics • % of employees 'Satisﬁed' or 'Engaged' in anonymous assessment Occupational Health & Safety Safe and healthy work environments protect workers and prevent work-related injuries, accidents and diseases. • Injury/accident/lost days/absentee days measured and transparent • Written policies and practices to minimize on-the-job employee accidents 3. COMMUNITY Suppliers & Distributors Companies can have a positive impact by sourcing from suppliers that provide impactful products/services or employ positive practices (e.g. quality assurance, fair labor, and environmental practices). • Visited all suppliers, speciﬁc environmental and/or social criteria required, preference to local suppliers, etc. • Average tenure of supplier relationships • % of suppliers with thirdparty social or environmental certiﬁcations • Independent contractor communication channels Global Code of Conduct Routine veriﬁcation of supplier practices is important to ensure that suppliers meet expectations; Code of Conduct policies hold suppliers accountable for safe and fair worker environments. • % of overseas suppliers visited on-site • Member of labor/fair trade association • Supplier Code of Conduct holds suppliers accountable for social and environmental performance, is third party veriﬁed, transparent to public, assessed annually, etc. Local Involvement & Ownership Companies with local involvement and ownership support their local economy and local communities. • Company ownership is local to workforce • % COGS from independent, local suppliers • Bank with community or local independent banking institution Diversity Promoting diversity engages members from underrepresented backgrounds, including women, minority/previously excluded populations, people with disabilities and/or individuals living in low-income communities. • % of management, % of the members of Board of Directors or Advisory Board, and % of company owned from underrepresented populations • % of company owned by non-accredited investors • Policies favoring women-or minorityowned suppliers Job Creation Job creation favors the creation of wealth at an individual and social level. It supports the development of a local economy. • % of worker base growth • Attrition rate for full-time workers • % of workers from chronically underemployed populations • % of workers residing or working in low-income communities • % of Signiﬁcant Suppliers located in low-income communities or creates employment opportunities Civic Engagement & Giving Companies that participate and engage employees in civic engagement and charitable giving are active stewards of their communities and society. Such service and giving demonstrates a company's commitment to its local and/or global community and promotes company values beyond proﬁt generation. • Written community service policy • % of employees that took paid or unpaid time off for community service • Recording and monitoring volunteer hours • Partnership with a service/ charitable organization • % of net proﬁ ts or net revenues donated to charitable organizations • Formal written policy setting a required commitment for charitable giving • Best practices of local engagement, sharing facilities with community and matching employee contributions 4. ENVIRONMENT Land, Office and Plant Companies can greatly improve their environmental impact through decisions on management, facilities and purchasing. For some companies, facilities have the largest environmental footprint; thus policies and efforts aiming to reduce this impact are important to capture. • Presence of an environmental management system • Environmental review conducted • Company's facilities compliant with green building standards (LEED or equivalent) • Ofﬁ ce-wide recovery and recycling program • Chemical reduction methods • Public transportation incentives/ accessibility • Corporate travel reduction policies Inputs Inputs include energy, water and raw input materials used in company operations. Monitoring resource usage over time and using sustainable inputs and materials enables companies to reduce natural resource consumption and improve overall environmental impact. • Sustainability factors integrated into design process • % revenues from products with a life cycle assessment • % of recycled, biodegradable, or sustainable materials in product • % of non-toxic materials • Active reclamation project for end products • Energy and water usage monitored, goals set and reductions achieved • % of energy reduction achieved • % of energy used from renewable sources • % of recycled, biodegradable, or environmentally-preferred materials used in products • % increase in water harvested or recycled • Water conservation methods • Company assessment of all materials used and material toxicity • Product source reduction achieved) Outputs Outputs include different types of waste and emissions a company produces. Monitoring and recording outputs enables companies to assess the amount and degree of negative impact of their operations on the environment with the goal of reducing waste and emissions, especially those that are most harmful to the environment. • Methods of monitoring and recording greenhouse gas emissions • Purchase of carbon offsets • % of greenhouse gas emissions reduction • Non-hazardous waste, hazardous waste and universal waste production monitored, goals set and reductions achieved • Hazardous waste disposed of responsibly • Company testing and treatment of wastewater • Active reclamation project to recycle or reuse end products Transportation, Distribution & Suppliers Efforts to reduce pollution and emissions from transportation and distribution of supplies and products reduce environmental footprint. Companies can also improve their overall environmental impact beyond their own practices by assessing or requiring certain environmental criteria of suppliers and making preferential purchases based on environmental criteria. • % of clean/low emission company or outsource ﬂeet vehicles • Techniques for minimizing environmental impacts in distribution and supply chain • Policies which increase the % of inbound freight/ shipping via lower impact transportation • % of Signiﬁcant Suppliers using renewable energy, recycling water and/or using water recovery system • % Signiﬁcant Suppliers monitoring and implementing initiatives to reduce harmful emissions and/or waste production SECTION II The Basic TVM Management Framework A basic idea in TVM ... and much of science ... is that all ACTIVITIES have IMPACTS that CHANGE STATE in one or many ways. TVM SOCIETY ENVIRONMENT ECONOMY

SITE COUNT