Corporate Responsibility and Market Valuation of Financial and Non-Financial Performance

Financial performance indicators have traditionally marked whether or not to invest in a firm. Non-financial indicators, however, are also indicative of the future performance of companies. This Laboratory aims to improve the communication process of non-financial indicators to investors through the development of principles and recommendations.

Leaders   Facilitators  
Lloyds TSB Telecom Italia Sodalitas CSR Europe

CSR Europe members and Laboratory participants can access additional information in the members' area.

Project Description

Financial markets are ever more important to the modern economy - representing the vast majority of capital flows. Yet traders and investors rely on a limited set of data that reflect but one aspect of the operation of companies. The link between social and environmental activities and overall company performance has been demonstrated and is increasing as consumers become ever more aware of their wider impact. Unfortunately, there are, as yet, no standardised indictors upon which players in the financial market can base their investment decisions.

This Lab addresses this information gap by developing tools to overcome barriers in the mainstreaming and communicating of non-financial performance both within companies and with investors. These tools should be accepted by the investing and accounting community across Europe and by the European Institutions.

Main Project Objectives and Targets

Objectives:

  • Identify four or five core areas of non-fiance performance that are ciritical to companies and investors
  • dentify broad metrics for each core area identified
  • Establish linkages between financial and non-financial performance
  • Test the above with investors and key stakeholders

Deliverables:

  • A comprehensive review of the critical areas of non-fianncial performance and the contribution to financial performance as an evidence base for the work of the Laboratory
  • A Management Framework outlining proposed metrics and strategies for management and communication of key areas of non-financial performance highlighting the link with financial performance
  • A declaration of principles and recommendations providing clear guidance on how to improve communicatios around meaningful indicators of value created through non-financial performance

Laboratory Leaders

Llyods TSB

Telecom Italia

Facilitators

CSR Europe, Sodalitas and EABIS.

Company Participants

Arcelor, P&G, Intel, Nordea, Suez, Foretica, ENEL, ENI, Titan, France Telecom, KPMG, BITC Ireland, SNS, Unilever; EFQM members, PWC, Standard & Poor, HP, Canon, Shell, Rabobank, ING Bank, and Monte die Paschi di Siena

Rating agencies; members of GRI; audit specialists; interested or already active companies; BT; Akritas, Atlantis Consulting, Bausparkasse Schwabbisch Hall, BP, British American Tobacco Hellas, Deutsche Bahn, Holcim, Indesit, Interbeton, Toyota Hellas; Telecom Italia; Banca Popolare di Milano; Holcim; Vodafone; Amgen; Hera, Manutencoop

Contact Information

Jan Noterdaeme, on behalf of the European C'homme'Pany for CSR
+32 2 541 1612 / 497 48 4347
jn@csreurope.org

Chabuca Barnes, CSR Europe
+32 2 541 1620 / 498 50 5832
cb@csreurope.org

Milestones

Incubation Phase

  • November 2006 - March 2007: Conference calls and bilateral meetings with leaders and 2 meetings with Italian companies hosted by Sodalitas (10 Jan, 27 Feb)
  • 19 April 2007: Roundtable LABS Discussion in Brussels

Kick Off

  • 14 June 2007: LAB group meeting hosted by Sodalitas/Telecom Italia in Milan
  • 27 September 2007: LAB group meeting in London hosted by Lloyds TSB. Expert witness hearings with representatives of investor and accounting community to clarify expectations and test approaches
  • 29 November 2007: CSR Europe MarketPlace Event in Brussels - Initial Results of LABS Demonstrated
  • 4 March 2008: 2nd high level meeting of the EU Alliance - CEO input on better alignment of business strategy on CSR/SD and investor interest
  • 19 June 2008: CSR Europe General Assembly and LABs presentation in Brussels
  • September 2008: LAB group meeting in Paris hosted by Caisse de Dépôt
  • November 2008: CSR Europe Event in Brussels - Final Results of LABS Demonstrated