In recent years, companies have been asked to conduct their business differently and to rethink how they interact with the environment and society. Corporate Social Responsibility (CSR) has become a priority for many companies, which now recognize that their their ability to generate profit is directly linked to their social and environmental impact. Within this new economy, indicator management is key to monitoring and improving a company's performance in relation to its CSR objectives.
Indicator management involves defining metrics that help the company measure its performance in important areas such as sustainability, diversity and inclusion, business ethics and philanthropy. These indicators vary depending on the sector, but here are some examples for you to evaluate:
Economic indicators
- Contribution to local development;
- Job creation;
- Fair remuneration and benefits practices.
Environmental indicators
- Reducing carbon emissions;
- Efficient use of resources (water, energy, raw materials);
- Promotion of recycling and waste reduction practices;
- Use of renewable energies.
Social indicators
- Diversity and inclusion programs;
- Workers' health and safety;
- Employee training and development;
- Engagement with local communities.
Governance indicators
- Transparency in business practices;
- Ethics and integrity in business;
- Active participation of stakeholders in decision-making.
Stakeholder relations
- Customer satisfaction;
- Employee satisfaction;
- Stakeholder participation and feedback.
Supply Chain
- Sustainable purchasing policies;
- Evaluation of suppliers' CSR;
- Promoting fair labor standards throughout the supply chain.
By establishing Corporate Social Responsibility indicators, companies assess their progress towards their objectives and determine where they need to focus their efforts to improve their sustainability. Here's how to choose the most suitable indicators for your company:
- Define Your Objectives: Before choosing indicators, it is crucial to clearly define what the company hopes to achieve with its CSR initiatives.
- Know Your Stakeholders: Understand the needs and expectations of your stakeholders (customers, employees, communities, investors) and choose indicators that reflect these priorities.
- Review Industry Standards: Some industries have specific standards or frameworks for CSR. Familiarizing yourself with these can help your company choose the most relevant indicators.
- Measure and adjust: After choosing and implementing the indicators, it is vital to regularly measure performance and adjust the approach as necessary.
- Ensure Transparency: Make sure that the indicators chosen are transparent and clearly communicated to stakeholders.
For example, if a company has a target of reducing its carbon emissions by 20% in five years, it can regularly monitor its emissions indicators to ensure that it is on track to achieve this goal. In addition, the definition of Corporate Social Responsibility indicators helps the company communicate with its stakeholders, including customers, investors and regulators, about its CSR efforts and demonstrate transparency and accountability.
With growing global concern about climate change, companies are coming under increasing pressure to take measures to reduce their environmental impact.
In addition, consumers are choosing to support companies that demonstrate a commitment to CSR, according to a study released at the Apas Show 2023, 95% of Brazilians prioritize products and companies that invest in sustainable practices.
That said, companies that manage their CSR indicators effectively have a competitive advantage over companies that do not. The management of indicators is fundamental to the long-term success of companies.
Companies that fail to manage their social and environmental impact face growing risks such as the loss of market share, regulatory fines and reduced sales.
On the other hand, companies that have a solid performance in Corporate Social Responsibility generally have better financial results and are more attractive to investors, who are increasingly looking to invest in companies that demonstrate a commitment to sustainability and social responsibility.
Various strategies can be adopted to raise your Corporate Social Responsibility (CSR) indicators. These practices balance the economic, social and environmental interests of an organization, and strengthen sustainable development and the creation of value for all stakeholders. To find out more about how to implement this strategy in your business, click here.
SB Solutions is an ESG consultancy which, through a digital environment, helps companies to classify the level of sustainability of each of their suppliers, generating an audit evidenced against the main ESG criteria.
