2 RSPP’s sustainable development, corporate responsibility and reporting indices: key results of the third edition RSPP’S SUSTAINABLE DEVELOPMENT, CORPORATE RESPONSIBILITY AND REPORTING INDICES: KEY RESULTS OF THE THIRD EDITION ABOUT THE PROJECT The project enjoys the support of the RSPP Commit- RSPP has been compiling its sustainable development, tee for corporate social responsibility and demographic corporate responsibility and reporting indices (herein- policy and is being implemented with the assistance from after, the Indices) since 2014. Metalloinvest. In 2016, additional support to the project The project’s objective is to develop a toolset for inde- was provided by SUEK and Severstal. pendent assessment of business performance with a view to: • advancing a systemic view of sustainable devel- PRINCIPLES AND GENERAL opment and corporate social responsibility as the METHODOLOGICAL APPROACHES general platform for fair and impartial recogni- The project is underpinned by the understanding of cor- tion of the business’s contribution to and impact porate social responsibility in the context of sustainable upon the society and the environment; development as the organization’s responsibility for the • translating the corporate social responsibility dis- impact its decisions and activities have on the society course into the language of tangible, comparable and the environment, inclusive of the economic, envi- and verifiable indicators; ronmental and social aspects of such impact. • increasing corporate transparency and the quality This understanding is recognized by and built into a of governance in the area of sustainable develop- number of international documents (such as the United ment and corporate responsibility; Nations Global Compact, the ISO 26000 standard) and • fostering brand reinforcement and strengthening is shared by the Russian business community (The So- the reputation of Russian companies. cial Charter of the Russian Business). Pursuant to this Under the project, the following indices are com- understanding, issues of corporate social responsibility piled: the Responsibility and Transparency index, and the are considered in a broad context of a competitive econ- Sustainable Development Vector index. They serve as an omy and sustainable socio-economic development of extension of a line of tools for measuring and performing the society, effective and frugal use of natural resources, a selfassessment of a business’s performance in the area development of the human potential and improvement of corporate social responsibility (hereinafter, CSR), de- of living standards. veloped by RSPP and adopted by corporate practitioners. In addition, the indices are compiled with consider- More specifically, the indices make use of such prod- ation of the basic principles of the Global Initiative for ucts as the ISO 26000-based company self-assessment Sustainability Ratings (GISR) in order to ensure that ap- methodology and the methodology for providing public propriate techniques are applied to compare companies’ assurance on non-financial reports1. performances in the area of sustainable development and Compiling and publishing the Indices on a regular corporate social responsibility3. basis provides the means to monitor the changing sit- At the core of the indices is the analysis of quan- uation, identify each year’s leaders, identify the growth tifiable data. In defining the appropriate sets of indi- areas associated with the improvement of the reporting cators for both of the indices, consideration was given information quality. to the recommendations of the existing guidances for This third edition of the Indices takes stock of the non-financial reporting. However, evaluating corporate 2016 results2. reports’ compliance with any of these guidances has not been an objective. The compilers instead focused on 1 See materials posted on RSPP’s web site at http://rspp.ru/ those indicators that were singled out through juxtapo- simplepage/448; http://рспп.рф/simplepage/138 sitioning “demand and supply”. On the one hand, the 2 For materials from the first and second editions, refer to: A analysts studied the stakeholders’ demand for informa- set of indices for corporate social responsibility and nonfinan- tion as manifested by requests coming from financial cial reporting, RSPP, 2015, at http://рспп. рф/simplepage/475; 2012-2014 issues of Responsible Business Practices in the Mir- ror of Reporting, the Analytical review of corporate non-fi- 3 See materials posted on RSPP’s web site at http://rspp.ru/ nancial reports, RSPP, 2015, at http://rspp.ru/simplepage/505 simplepage/448; http://рспп.рф/simplepage/138 RSPP’s sustainable development, corporate responsibility and reporting indices: key results of the third edition 3 analysts, and from rating systems focusing on sustain- THE 2016 RESPONSIBILITY able development, by stock exchanges’ requirements AND TRANSPARENCY INDEX and recommendations, as well as recommendations of professional and business associations, along with the standards and guidelines that pertain to this field. The other aspect that was taken into consideration was the “supply” defined as the sets of indicators that The Responsibility are being most actively disclosed by major Russian and Transparency How transparent is the and foreign companies in their non-financial re- index: the «benefit» of large companies ports1. The information under review includes over disclosure index to the society? 50 cross-industry indicators spanning economic, en- vironmental and social aspects of companies’ activi- How serious are companies ties and performance, including corporate governance about disclosing issues. sustainability/CSR-related The analysis is focused on public corporate reports information? How high are produced by Russia’s largest companies (by sales vol- the frequency and quality of ume), i.e. the companies whose importance in mat- disclosure? ters social and economic is the most significant. To produce the index, the compilers reviewed both annual and non-financial reports of Russia’s 100 largest compa- nies by volume of sales2, available in Russian on official The third edition of the index for the disclosure of corporate web sites. It is believed that these corporate information on sustainable development and corpo- documents provide a solid enough foundation to help rate social responsibility in public corporate reports form an opinion regarding the true degree of corporate has demonstrated that the best practices for disclosure transparency: of sustainability and CSR-related, viewed in conjunc- • public corporate reports are addressed to tion with data on economic performance, are getting such business audiences as investors, business increasingly widespread. partners and the government, presenting the The leading group with individual company indices company’s business with the use of facts and above 0.5 includes 14 companies (as opposed to the pre- numbers; vious edition’s five). The average index value for the first • corporate reports are official publications – the 20 standings is 0.5 (which is noticeably higher than the information contained in the reports gets to be preceding year’s value of 0.42). In addition, the first 20 verified and approved within the organizations positions in the rating are shared by 25 companies (the with the management assuming responsibility number was 20 in the previous edition). for its accuracy and authenticity. The project aims at studying the changes that are Graph 1. Historical changes in values of taking place in the realm of corporate social responsi- the Responsibility and Transparency index bility, reporting and sustainable development. Rank- in 2014-2016 ing companies has not been a central objective. That said, the insights from the projects do allow to identify 1 examples of the best practices in this field. The Responsibility and Transparency and the 0.75 Sustainable Development Vector indices are interre- 0.65 lated. The former represents both a standalone tool for 0.6 assessing the situation with disclosure of corporate infor- mation, but also a “filter” that is used to select the sample 0.58 0.6 for building the latter index that reflects the change in the 0.53 disclosure of actual facts built into the reports. 0.21 0.22 0.16 1 For materials from the first and second editions, refer to: A set of indices for corporate social responsibility and non- 0 financial reporting, RSPP, 2015, at http://рспп. рф/simplep- 2014 2015 2016 age/475; 2012-2014 issues of Responsible Business Practices in the Mirror of Reporting, the Analytical review of corporate Highest index scores non-financial reports, RSPP, 2015, at http://rspp.ru/simplep- age/505 Average index scores 2 For further details, refer to A set of indices for corporate Index scores for the Top 20 social responsibility. RSPP, 2015 4 RSPP’s sustainable development, corporate responsibility and reporting indices: key results of the third edition INDIVIDUALLY How the Responsibility and Transparency index MEASURED INDEX VALUES FOR was compiled COMPANIES IN THE The index is intended to characterize the real situation LEADING GROUP COMPANIES with the disclosure of corporate information on CSR as 0.5–0.75 AFK Sistema, Gasprom compared with the “ideal” one: the measured level of EuroChem, Bashneft, disclosure is compared to the highest level possible. The Inter RAO, Metalloinvest, information disclosure index (It) is calculated using the Nizhnekamskneftekhim, following formula: Nornickel, Rosatom Rosneft, Sakhalin