Ethical Performance
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CSR gongs can prove to be a liability as much as an asset

November 2004

There are hundreds of awards open to companies and individuals to win but many are of doubtful value because it is often unclear what they measure

As with codes of practice, so with CSR awards. There are simply too many of them. At the latest count, from an online database of environmental and sustainable development awards, there were more than 300, recognizing everything from the contributions of individuals to sustainable development at a global level to local company efforts to cut their water use.

In one way, the sheer diversity of the awards on offer is, of course, a good thing. There is nothing wrong with a lot of awards. But problems arise when the quality is uneven. Anyone can announce an award scheme, book a venue, invite judges and find a celebrity to hand out some gongs.

According to the Royal Society for the encouragement of Arts, Manufactures and Commerce, which set up the online database* three years ago, award ‘schemes are plentiful but their effectiveness varies considerably. Some are very well recognized and attract high-quality entrants. Others are barely noticed.’ As a result, potential sponsors and entrants ‘are often unsure of the quality and validity of schemes’, the RSA says.

In an effort to raise standards, the RSA last autumn began accrediting award schemes to improve their design, operation and efficiency. To date it has accredited six, with a further seven in the pipeline, and has rejected one. ‘They can come back,’ says awards forum manager Anita Beardsley. ‘But they will have to make changes.’

Awards can serve a valuable function in highlighting best practice. The sustainability reporting awards developed over 14 years by the Association of Chartered Certified Accountants have unquestionably helped to shape non-financial reporting and to spread best practice worldwide, for example. Acca now runs 10 such schemes in 12 countries. The latest, for companies in Sri Lanka, was announced this month.

Acca is also the secretariat for the European Sustainability Reporting Awards. For these, judges assess company CSR and sustainability reports, using 15 weighted criteria subdivided into 23 subcriteria that cover both the contents of a report and core reporting principles such as comparability and clarity of the information presented.

Here, as in certain other award schemes, the comments of judges are useful for all reporters because they identify trends. At last year’s, for example, won by the Danish life sciences company Novo Nordisk, the judges picked out weak assurance statements and the tendency to include information of marginal relevance as areas to address. Few awards can claim such a coherent methodology. Paul Scott, a CSR consultant on the judging panel, says: ‘The last few years have seen the spawning of a mini CSR awards industry. People are charging thousands of pounds for tables and sponsorship, but there is no reason why an awards ceremony should cost a small fortune to attend.’

Perhaps the main reason companies are willing to pay is because winning is a morale booster and sends the right message to some key audiences (though not to investors, who generally seem unimpressed by this area of corporate activity).

Ed Williams, head of corporate social responsibility at Marks & Spencer, which won the prestigious Company of the Year award given by Business in the Community, says: ‘Obviously we’re delighted, but we aren’t shouting it from the rooftops. Our customers don’t know what Company of the Year is. It’s really a business to business award – and the people who know about it are already converted.

‘But winning has been a positive fillip internally. It’s a form of benchmarking and external assurance that gives us the confidence we are on the right track.’

He stresses: ‘An award is simply a snapshot of performance in specific areas at a particular moment in time. No company can claim to have got everything right.’

As with investments, past performance is no guarantee of future performance.

The RSA’s Forum for Environmental and Sustainable Development Awards is at

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