Measuring the Impacts of Business on Well-Being and Sustainability Selected Papers COMPENDIUM SELECTED PAPERS ON MEASURING THE IMPACTS OF BUSINESS ON WELL-BEING AND SUSTAINABILITY This compendium presents the papers selected as part of the Call for Papers on Measuring the Impact of Business on Well-being and Sustainability, issued in July 2017 by the OECD and HEC Paris/SnO centre. 1 Table of Contents Table of Contents ........................................................................................................................... 2 Foreword ........................................................................................................................................ 3 Measuring Business Impacts on Well-being: A Goal Oriented Approach/ Magali A. Delmas and Rodolphe Durand .................................................................................................................... 5 The Relationship between Investor Materiality and the Sustainable Development Goals/ Gianni Betti, Costanza Consolandi and Robert G. Eccles ......................................................... 19 Towards better measures of well-being: Conditions for intelligibility/ Haley Allison Beer and Kelig Aujogue ............................................................................................................................... 44 Using wellbeing statistics to improve how government and business interact/ Tony Burton, Suzy Morrissey, and Tim Ng........................................................................................................ 56 The State of Corporate Disclosure on Well-being: A Review of Corporate Reporting Practices in the Food and Agriculture Sector in 2018/ Diane Strauss and Alli Chlapaty ........................ 71 Linking SDGs, Wellbeing and KPIs in the Construction Industry/ Anat Itay Sarig .............. 101 A new approach to the well-being of factory workers in global supply chains: Evidence from apparel factories in Mexico, Sri Lanka, China and Cambodia/ Dorota Weziak-Bialowolska, Tamar Koosed, Carlued Leon and Eileen McNeely ................................................................. 130 Measuring the Impact of Businesses on Workers’ Job Satisfaction: Evidence from a Canadian Longitudinal Workplace and Employee Survey/ Danny Leung and Huju Liu ....................... 155 2 Foreword The concept of well-being emphasises people’s opportunities to thrive in the aspects of life that matter the most to them: their material and non- material conditions, but also inequalities in a wide range of outcomes, and whether these opportunities can last over time. Businesses play a critical role in shaping people’s well- being, through the products and services they sell, the way these are produced, their investment decisions, their role as employers, their internal governance, or through their impacts on the physical space and the resources available to society and future generations. But what is exactly the nature of these impacts? Which dimensions of people’s life are most affected by business activities? Are impacts circumscribed geographically to where business production takes place or do they extent throughout their supply-chain? Can these impacts be measured in credible ways? And should these measures allow comparisons across different firms, industries, and countries? Recent OECD research finds that there are no shared answers to these questions. In other words, no agreement currently exists that could allow assessing the contribution of firms to society beyond their creation of financial wealth. For many years now, the OECD has advanced research on measuring well-being and sustainability, aiming to expand the knowledge and data necessary to monitor people’s well-being and to understand how public policies can be leveraged to improve their conditions. But we have also recognised the importance of involving the business community in this discussion, and to better understand how businesses impact on people’s lives today and the future. This recognition is the motivation of the stream of work that we started in 2017 on “Measuring the Impacts of Business on Well-being and Sustainability”. It complements, and contributes to other OECD initiatives in the areas of Responsible Business Conduct, Social Enterprises and the Business Platform for Inclusive Growth. In order to enrich the debate and support the work on Measuring the Impact of Business on Well-being with quality research, the OECD Statistics and Data Directorate and HEC Paris/SnO Centre issued a call for papers in July 2017. The call focused on several themes, such as showcasing good examples of existing initiatives and frameworks, selection of indicators, their harmonization across approaches, mapping with the Sustainable Development Goals (SDGs), and the role of national official statistics in assessing business impacts on well-being. The eight papers that were selected by a selection committee are included in this compendium. These papers will be presented at the 6th OECD World Forum on Statistics, Knowledge and Policy, taking place in Incheon, Korea, in November 2018. The selected papers make the case for greater standardisation and harmonisation of corporate reporting practices (Strauss and Chlapaty; Delmas and Durand), pointing at the limited disclosure of information on business impacts on the environment and on national communities (Strauss and Chlapaty), and the potential for convergence around SDGs and well-being (Delmas and Durand). In addition, they link existing indicators of business impacts on various dimensions of well-being and propose new ones (Itay-Sarig; Consolandi et al.), and provide evidence on the determinants of employees’ job satisfaction (Leung and Liu; Weziak-Bialowolska et al.). Limits of current measures, in particular in terms of their capacity to stimulate new experiences and improve well-being outcomes for specific groups are also examined (Beer and Aujogue). Finally, the papers provide examples of how country-level well-being approaches could be 3 used as a starting point for business reporting, building on New Zealand’s approach to improving government and business interactions through shared concepts of well-being (Burton et al.). This compendium aims at creating a common language and conceptual understanding on how to measure the impact of businesses on people’s well-being, and how to compare existing tools and frameworks. The selected papers provide a point of departure for research and debates in this area. I hope that these papers will promote further discussion on how we can improve our understanding and measurement of the impacts that businesses have on people’s well-being and its sustainability. Martine Durand OECD Chief Statistician Director of the OECD Statistics and Data Directorate 4 Acknowledgements This compendium presents the papers selected as part of the Call for Papers on Measuring the Impact of Business on Well-being and Sustainability, issued in July 2017 by the OECD and HEC Paris/SnO centre. We would like to thank the members of the selection committee for their time, effort and input in the process of selecting the papers: Georges Blanc (HEC), Magali Delmas (UCLA), Martine Durand (OECD), Rodolphe Durand (HEC), Antonella Noya (OECD), Michael Pirson (Fordham University) and Neil Stevenson (IIRC). We gratefully acknowledge the work and effort of all those who submitted abstracts and then full papers to the selection committee. We would also like to thank Anne-Lise Faron, Efrat Shamir, and Michal Shinwell for their work on coordinating the Call for Papers and compiling and editing the compendium. 5 Measuring Business Impacts on Well-being: A Goal Oriented Approach/ Magali A. Delmas and Rodolphe Durandi Abstract While there is increasing interest in evaluating the impact of business on well-being, there is not yet a standardized approach to measure this impact. Governmental organizations and the private sector are offering different approaches to measure well-being. As a result of the lack of standardization, the performance of businesses in areas of Environmental, Social and Governance (ESG) and Sustainability, as well as other dimensions of well-being, remain hard to examine and learn from, and many business leaders are still trying to figure out what this means for their companies. The consequence is that most firms are still far from being engaged with measuring well-being. In this paper, we identify the two main logics that prevail in the frameworks proposed to measure the business impact on well-being, and stress their convergent vision but also important differences. Drawing on the academic literature on goal settings, we propose a dual approach to enhance convergence between states’ policies regarding SDGs and firms’ strategies associated with ESGs and well-being indicators. This approach can help firms develop material well-being goals that are Specific, Measurable, Attainable, Relevant and Timely (s.m.a.r.t). We emphasize that this approach need to be guided and supported by both intergovernmental organizations, rating experts and the research community. i Magali A. Delmas, UCLA ([email protected]), Rodolphe Durand, HEC, Paris ([email protected]) 6 Introduction Firms play an important role in the well-being of the community in which they operate. They have a strong impact on the life of their employees, their consumers, their suppliers, and on the communities they serve. From determining the working conditions, health coverage, training and employability of workers, to the environmental