The competitiveness of the companies in emerging economies of Brazil, Russia, India, and China collectively referred to as BRICs has yet again been highlighted when analyzed on the basis of initiatives pursued on Corporate Social Responsibility (CSR) parameters when compared to peers in the eleven Central and Eastern European (CEE) Countries of Czech Republic, Estonia, Latvia, Lithuania, Slovakia, Slovenia, Hungary, Poland, Bulgaria, Croatia and Romania, according to the bi-annual survey conducted by the Partners for Financial Stability (PFS) Program of The United States Agency for International Development (USAID).
The survey confirmed that companies in BRICs outperformed their CEE peers, maintaining their leadership over the last couple of years, in terms of the three aspects of the CSR initiatives, namely,
* Corporate governance – This was further analyzed on five key aspects: corporate governance structure; compliance with a corporate governance code; company specific code of conduct or ethics; audit relation information; and shareholder rights policy
* Environmental policy – This is further analyzed on five environmental issues:compliance with environmental laws and standards, disclosure of department or individual responsible for environmental policy; energy and water use; environmental reporting; and consideration of environmental issues in supply chain management
* Social policy – The survey further analyzes five elements related to social policy: labor standards; sponsorship; employee development or benefits; health and safety policy; and employment policy
“Maintaining the trend of setting benchmarks of adhering to best practices over the last couple of years has got investors to fancy companies in the BRIC region to do business with. That has resulted in more than 450 Venture Capital and Private Equity funds to focus on the emerging opportunities in the region.” says Bundeep Singh Rangar, Chairman IndusView Advisors Ltd, the India-focused cross-border advisory firm.
The survey analyzes the extent of disclosures and availability of information in English-language websites and annual reports of companies in the sample regions under study as on April 15, 2008.
“Following a meticulous regime of compliance on all parameters of environmental, social and governance responsibilities gains significance as it forms a part of the extra-financial data investors use to evaluate corporate performance and analyze risk in their decision making process.” according to Partners for Financial Stability (PFS) Program of The United States Agency for International Development (USAID).
This is the PFS Program’s ninth semi-annual Survey of Reporting on Corporate Social Responsibility (CSR) by the 10 largest listed Companies (by market capitalization) in 11 Central and Eastern European (CEE) Countries taking the tally to 110 companies. A fourth analysis of peer companies (the ten largest listed companies by market capitalization) in Brazil, Russia, India and China (BRIC) as well as Ukraine allows for ongoing benchmarking with these emerging market peers.
Corporate Governance
The survey confirmed that companies in BRICs outperformed their CEE peers, maintaining their leadership over the last couple of years, in terms of the three aspects of the CSR initiatives, namely,
* Corporate governance – This was further analyzed on five key aspects: corporate governance structure; compliance with a corporate governance code; company specific code of conduct or ethics; audit relation information; and shareholder rights policy
* Environmental policy – This is further analyzed on five environmental issues:compliance with environmental laws and standards, disclosure of department or individual responsible for environmental policy; energy and water use; environmental reporting; and consideration of environmental issues in supply chain management
* Social policy – The survey further analyzes five elements related to social policy: labor standards; sponsorship; employee development or benefits; health and safety policy; and employment policy
“Maintaining the trend of setting benchmarks of adhering to best practices over the last couple of years has got investors to fancy companies in the BRIC region to do business with. That has resulted in more than 450 Venture Capital and Private Equity funds to focus on the emerging opportunities in the region.” says Bundeep Singh Rangar, Chairman IndusView Advisors Ltd, the India-focused cross-border advisory firm.
The survey analyzes the extent of disclosures and availability of information in English-language websites and annual reports of companies in the sample regions under study as on April 15, 2008.
“Following a meticulous regime of compliance on all parameters of environmental, social and governance responsibilities gains significance as it forms a part of the extra-financial data investors use to evaluate corporate performance and analyze risk in their decision making process.” according to Partners for Financial Stability (PFS) Program of The United States Agency for International Development (USAID).
This is the PFS Program’s ninth semi-annual Survey of Reporting on Corporate Social Responsibility (CSR) by the 10 largest listed Companies (by market capitalization) in 11 Central and Eastern European (CEE) Countries taking the tally to 110 companies. A fourth analysis of peer companies (the ten largest listed companies by market capitalization) in Brazil, Russia, India and China (BRIC) as well as Ukraine allows for ongoing benchmarking with these emerging market peers.
Corporate Governance
In Annual Report
Among the companies surveyed in the BRIC economies, the Chinese companies set an example by emerging the front runners in complying with disclosures on four parameters in the Annual Reports concerning ‘Corporate Governance’, Audit relation information, Corporate governance code, Governance structure, and Share holder rights; closely followed by India. Chinese companies in fact improved on its disclosures in Corporate Governance Code and Shareholders rights from last year.
Indian companies led the tally in complying with disclosures pertaining to Audit relation information, Code of business conduct & ethics and Governance structure in the Annual Reports under ‘Corporate Governance’. Indian companies improved on their disclosures in terms of Code of Business Conduct & Ethics from last year but slipped in Corporate Governance Code, giving the lead to Chinese companies.
All 10 companies surveyed in India were strictly following disclosure norms in the Annual Reports pertaining to governance structure, company specific code of conduct or ethics and audit relation information. Nine Indian companies shared information about shareholder rights policy. It was only in the case of compliance with governance code where six of the Ten Indian Companies surveyed maintained disclosure, falling behind China, Brazil and Russia.
When compared to CEE countries:
Among the companies surveyed in the BRIC economies, the Chinese companies set an example by emerging the front runners in complying with disclosures on four parameters in the Annual Reports concerning ‘Corporate Governance’, Audit relation information, Corporate governance code, Governance structure, and Share holder rights; closely followed by India. Chinese companies in fact improved on its disclosures in Corporate Governance Code and Shareholders rights from last year.
Indian companies led the tally in complying with disclosures pertaining to Audit relation information, Code of business conduct & ethics and Governance structure in the Annual Reports under ‘Corporate Governance’. Indian companies improved on their disclosures in terms of Code of Business Conduct & Ethics from last year but slipped in Corporate Governance Code, giving the lead to Chinese companies.
All 10 companies surveyed in India were strictly following disclosure norms in the Annual Reports pertaining to governance structure, company specific code of conduct or ethics and audit relation information. Nine Indian companies shared information about shareholder rights policy. It was only in the case of compliance with governance code where six of the Ten Indian Companies surveyed maintained disclosure, falling behind China, Brazil and Russia.
When compared to CEE countries:
* BRIC countries out performed its peers with 97% of the companies surveyed disclosing information on their governance structure in the annual report available online on April 15, 2008, compared with 84% of the 110 CEE companies surveyed.
* All (100%) the BRIC companies surveyed disclose audit relation information, compared with 89% of the 110 CEE companies surveyed.
* 72.5% of the BRIC companies surveyed provide information on compliance with a corporate governance code, compared with 48% of the 110 CEE companies surveyed in the annual report.
* 21 BRIC companies (52.5%) and 16 CEE companies (15%) disclose information regarding a code of business conduct / code of ethics in the annual report.
* 72.5% of the BRIC companies surveyed provide information on compliance with a corporate governance code, compared with 48% of the 110 CEE companies surveyed in the annual report.
* 21 BRIC companies (52.5%) and 16 CEE companies (15%) disclose information regarding a code of business conduct / code of ethics in the annual report.
* 32 BRIC companies (80%) disclose information on shareholder rights policy in their annual report, compared with 55 of the 110 CEE companies (50%) surveyed.
The comparison of the trends this year between companies in BRICs and the CEE countries mirrors the trends from last year.
On Website
In terms of ‘Corporate Governance’ disclosures on the websites, among BRIC countries, Russian and Chinese companies share the lead on three parameters in disclosing Audit Relation Information, Governance Structure and Shareholder Rights Policy closely followed by Brazil and India, except in the case of Audit relation Information where Indian companies rank third with only two companies following disclosure norms on the website.
On the other hand, Indian companies have improved as they move up to jointly share the lead position along with Brazil in code of business conduct/code of ethics when compared to last year, closely followed by Russia and China. Indian companies also moved up one place to share the second spot along with Brazil in disclosures on Corporate Governance structure.
When compared to last year Brazil has slipped with its companies losing the lead that they had in disclosing shareholder rights to Russia and China, but retains its lead in Code of Business Conduct & Ethics and Corporate Governance Code.
BRIC countries outperformed CEE countries on all the five parameters of disclosure in Corporate Governance on their websites.
o 95% of the BRIC companies surveyed disclose information about their governance structure on their website, compared with 81% of the 110 CEE companies surveyed.
o 45% of the BRIC companies surveyed disclose audit relation information, compared with 20% of the 110 CEE companies surveyed.
o 29 BRIC companies (50%) and 47 CEE companies (43%) disclose compliance with a corporate governance code
The comparison of the trends this year between companies in BRICs and the CEE countries mirrors the trends from last year.
On Website
In terms of ‘Corporate Governance’ disclosures on the websites, among BRIC countries, Russian and Chinese companies share the lead on three parameters in disclosing Audit Relation Information, Governance Structure and Shareholder Rights Policy closely followed by Brazil and India, except in the case of Audit relation Information where Indian companies rank third with only two companies following disclosure norms on the website.
On the other hand, Indian companies have improved as they move up to jointly share the lead position along with Brazil in code of business conduct/code of ethics when compared to last year, closely followed by Russia and China. Indian companies also moved up one place to share the second spot along with Brazil in disclosures on Corporate Governance structure.
When compared to last year Brazil has slipped with its companies losing the lead that they had in disclosing shareholder rights to Russia and China, but retains its lead in Code of Business Conduct & Ethics and Corporate Governance Code.
BRIC countries outperformed CEE countries on all the five parameters of disclosure in Corporate Governance on their websites.
o 95% of the BRIC companies surveyed disclose information about their governance structure on their website, compared with 81% of the 110 CEE companies surveyed.
o 45% of the BRIC companies surveyed disclose audit relation information, compared with 20% of the 110 CEE companies surveyed.
o 29 BRIC companies (50%) and 47 CEE companies (43%) disclose compliance with a corporate governance code
o 22 BRIC companies (55%), compared to 28 CEE companies (25.5%) disclosing information regarding code of business conduct / code of ethics
o 31 BRIC companies (77.5%), compared to 66 CEE companies (60%) surveyed that disclose information on shareholder rights policy on their website.
In disclosing the Corporate Governance initiatives the BRIC companies continue to maintain their lead over their peer group in the CEE countries when compared to last year.
Environmental Policy In Annual Report
Among the companies surveyed in the BRIC economies, Brazilian companies take the top slot on all the five parameters of disclosures in the Annual Report on Environmental issues - compliance with environmental laws and standards, listing of department or individual responsible for environmental policy, energy and water usage, environmental reporting and consideration of environmental issues in supply chain management. This is an improvement over last year as Brazil led other BRIC countries in four parameters except Reporting on Environmental Performance. Brazilian companies surpassed Russian counterparts to take the lead this year.
Brazil shares the lead with India on two parameters - listing of department or individual responsible for environmental policy and energy & water usage. India shares the second spot with China on consideration of environmental issues in supply chain management. One parameter that saw the number of Indian companies slip to the fourth position from the second last year among BRIC countries was compliance with environmental standards.
When compared to CEE countries on disclosures in Annual Reports on Environmental issues:
* 42.5% of the BRIC companies surveyed and 33% of the 110 CEE companies surveyed report on compliance with environmental standards in the annual report available online on April 15, 2008.
* 11 BRIC companies surveyed (27.5%) and 11 of the 110 CEE companies surveyed (10%) disclose information on energy and water use.
* 40% of the BRIC companies surveyed and 33% of the 110 CEE companies surveyed report on environmental performance.
* 15% of the BRIC companies surveyed identify a specific department/individual responsible for environmental issues, compared with 2% of the 110 CEE companies surveyed.
* Nine BRIC companies (22.5%) and three CEE companies (2.7%) report on the integration of environmental considerations into supply chain management policy.
The companies in the BRIC countries continue to maintain their lead over the peer group in the CEE countries in disclosing information pertaining to environmental policies in their annual reports when compared to last year.
On Website
In terms of ‘Environmental Policy’ disclosures on the websites, among BRIC countries, Brazilian companies lead the tally on three parameters - compliance with environmental standards, environmental considerations in supply chain management and energy & water usage. When compared to last year that is a slight slip from leading on four parameters. Brazil lost its lead in listing of department or individual responsible for environmental policy to Russia this year.
Chinese companies took the lead in reporting on environmental performance, taking the lead from Russia that slipped to the third spot in this case when compared to last year. Russian companies lead in listing of department or individual responsible for environmental policy. Indian companies took the second spot on two parameters - environmental considerations in supply chain management (taking the place from China which slipped to third) and shared the position with Russia in compliance with environmental laws & standards.
BRIC countries outperformed CEE countries on all the five parameters of disclosure on Environmental Issues on their websites.
* 55% of the BRIC companies surveyed and 48% of the companies surveyed in CEE mention compliance with environmental standards on the company website.
* 47.5% of the BRIC companies surveyed and 40% of the 110 CEE companies surveyed report on environmental performance.
* 18 BRIC companies surveyed (45%) and 27 of the 110 CEE companies surveyed (25%) provide information on energy and water use.
* 32.5% of the BRIC companies surveyed identify a specific department/individual responsible for environmental issues on the company website, compared with 17% of the 110 CEE companies surveyed.
* 15 BRIC companies surveyed (37.5%), compared to 19 CEE companies surveyed (17%) that report on the integration of environmental considerations into supply chain management policy on the company website.
When compared to last year the trend mirrors last year’s disclosure activities by BRIC maintaining their lead over CEE countries on compliance with environmental standards and performance.
Social Policy In Annual Report
Among the companies surveyed in the BRIC economies, Chinese companies reinforce their lead in the table of BRIC counties when compared to last year in disclosing information pertaining to three initiatives that include, sponsorships, listed employee development & benefits (position shared with Brazil) and compliance with labor standards (the position shared jointly with Russia and India). Brazil loses the lead to China in sponsorships, a position that the two countries jointly shared last year. Brazil moves up one position in disclosing listed employee development & benefits to share the lead with China this year.
Indian companies take the top slot in two of the five parameters of disclosures in the Annual Report on Social Policies; listed employment policy and compliance with labor standards (which they share jointly with Russia and China.) In terms of disclosing listed employment policies, Indian companies have made a remarkable improvement by moving up from fourth and last to the top slot, when compared to last year.
Brazilian companies lead the charts in two of the five parameters – listed health and safety policy and employee development & benefit (which they jointly share with China).
When compared to CEE countries on disclosures in Annual Reports on Social Policy initiatives:
* 80% of the 40 BRIC companies surveyed disclose employee benefit or development policies in the annual report available online on April 15, 2008, compared to 65% of the 110 CEE companies surveyed.
* 75% of the BRIC companies surveyed disclose community patronage and/or sponsorship programs in the annual report, compared with 49% in CEE.
* 19 BRIC companies surveyed (47.5%) compared to 22 of the 110 CEE companies surveyed (20%) listed their employment policy in the annual report.
* 27.5% of the BRIC companies surveyed, compared to 11% of the CEE companies surveyed disclose information regarding their compliance with labor standards in the annual report.
* 20 BRIC companies surveyed (50%), compared to 35 CEE companies surveyed (32%) disclose information regarding health and safety policy in their annual report.
BRIC countries continue to maintain their lead over their CEE peers in disclosing social initiatives in their annual report when compared to last year on the two parameters concerning employee development & benefits and sponsorship programs.
On Websites
In terms of ‘Social Policy’ initiative disclosures on the websites, among BRIC countries, Indian companies lead the table on two parameters - compliance with labor standards (position it shares with Brazil), a position India holds on to when compared to last year; and listed health & safety policies, making an improvement when compared to last year when it ranked second while Russia lost its top slot.
Chinese companies took a clear lead on two initiatives – sponsorships; and listed employee development & benefits, moving up one place while Russia slipped to the second place sharing the position with Brazil and India when compared to last year.
Brazilian companies led reporting on employment policies on their websites.
BRIC countries outperformed CEE countries on all the five parameters of disclosure on Social Initiatives on their websites.
* 77.5% of the BRIC companies surveyed disclose community, patronage and/or sponsorship programs on their website compared with 52% in CEE.
* 18 BRIC companies surveyed (45%) and 28 of the 110 CEE companies surveyed (25.5%) list their employment policy on their website.
* 72.5% of the BRIC companies surveyed and 43% of the CEE companies surveyed disclose employee development/benefits policies on their website.
* 45% of the BRIC companies surveyed and 22% of the CEE companies surveyed disclose information regarding their compliance with labor standards on their website.
* 20 BRIC companies surveyed (50%) and 36 CEE companies surveyed (33%) disclose information regarding health and safety policy on their website, in comparison with two Ukrainian companies surveyed.
BRIC countries maintain their lead over their CEE peers when compared to last year in disclosing community, patronage and/or sponsorship programs.
In disclosing the Corporate Governance initiatives the BRIC companies continue to maintain their lead over their peer group in the CEE countries when compared to last year.
Environmental Policy In Annual Report
Among the companies surveyed in the BRIC economies, Brazilian companies take the top slot on all the five parameters of disclosures in the Annual Report on Environmental issues - compliance with environmental laws and standards, listing of department or individual responsible for environmental policy, energy and water usage, environmental reporting and consideration of environmental issues in supply chain management. This is an improvement over last year as Brazil led other BRIC countries in four parameters except Reporting on Environmental Performance. Brazilian companies surpassed Russian counterparts to take the lead this year.
Brazil shares the lead with India on two parameters - listing of department or individual responsible for environmental policy and energy & water usage. India shares the second spot with China on consideration of environmental issues in supply chain management. One parameter that saw the number of Indian companies slip to the fourth position from the second last year among BRIC countries was compliance with environmental standards.
When compared to CEE countries on disclosures in Annual Reports on Environmental issues:
* 42.5% of the BRIC companies surveyed and 33% of the 110 CEE companies surveyed report on compliance with environmental standards in the annual report available online on April 15, 2008.
* 11 BRIC companies surveyed (27.5%) and 11 of the 110 CEE companies surveyed (10%) disclose information on energy and water use.
* 40% of the BRIC companies surveyed and 33% of the 110 CEE companies surveyed report on environmental performance.
* 15% of the BRIC companies surveyed identify a specific department/individual responsible for environmental issues, compared with 2% of the 110 CEE companies surveyed.
* Nine BRIC companies (22.5%) and three CEE companies (2.7%) report on the integration of environmental considerations into supply chain management policy.
The companies in the BRIC countries continue to maintain their lead over the peer group in the CEE countries in disclosing information pertaining to environmental policies in their annual reports when compared to last year.
On Website
In terms of ‘Environmental Policy’ disclosures on the websites, among BRIC countries, Brazilian companies lead the tally on three parameters - compliance with environmental standards, environmental considerations in supply chain management and energy & water usage. When compared to last year that is a slight slip from leading on four parameters. Brazil lost its lead in listing of department or individual responsible for environmental policy to Russia this year.
Chinese companies took the lead in reporting on environmental performance, taking the lead from Russia that slipped to the third spot in this case when compared to last year. Russian companies lead in listing of department or individual responsible for environmental policy. Indian companies took the second spot on two parameters - environmental considerations in supply chain management (taking the place from China which slipped to third) and shared the position with Russia in compliance with environmental laws & standards.
BRIC countries outperformed CEE countries on all the five parameters of disclosure on Environmental Issues on their websites.
* 55% of the BRIC companies surveyed and 48% of the companies surveyed in CEE mention compliance with environmental standards on the company website.
* 47.5% of the BRIC companies surveyed and 40% of the 110 CEE companies surveyed report on environmental performance.
* 18 BRIC companies surveyed (45%) and 27 of the 110 CEE companies surveyed (25%) provide information on energy and water use.
* 32.5% of the BRIC companies surveyed identify a specific department/individual responsible for environmental issues on the company website, compared with 17% of the 110 CEE companies surveyed.
* 15 BRIC companies surveyed (37.5%), compared to 19 CEE companies surveyed (17%) that report on the integration of environmental considerations into supply chain management policy on the company website.
When compared to last year the trend mirrors last year’s disclosure activities by BRIC maintaining their lead over CEE countries on compliance with environmental standards and performance.
Social Policy In Annual Report
Among the companies surveyed in the BRIC economies, Chinese companies reinforce their lead in the table of BRIC counties when compared to last year in disclosing information pertaining to three initiatives that include, sponsorships, listed employee development & benefits (position shared with Brazil) and compliance with labor standards (the position shared jointly with Russia and India). Brazil loses the lead to China in sponsorships, a position that the two countries jointly shared last year. Brazil moves up one position in disclosing listed employee development & benefits to share the lead with China this year.
Indian companies take the top slot in two of the five parameters of disclosures in the Annual Report on Social Policies; listed employment policy and compliance with labor standards (which they share jointly with Russia and China.) In terms of disclosing listed employment policies, Indian companies have made a remarkable improvement by moving up from fourth and last to the top slot, when compared to last year.
Brazilian companies lead the charts in two of the five parameters – listed health and safety policy and employee development & benefit (which they jointly share with China).
When compared to CEE countries on disclosures in Annual Reports on Social Policy initiatives:
* 80% of the 40 BRIC companies surveyed disclose employee benefit or development policies in the annual report available online on April 15, 2008, compared to 65% of the 110 CEE companies surveyed.
* 75% of the BRIC companies surveyed disclose community patronage and/or sponsorship programs in the annual report, compared with 49% in CEE.
* 19 BRIC companies surveyed (47.5%) compared to 22 of the 110 CEE companies surveyed (20%) listed their employment policy in the annual report.
* 27.5% of the BRIC companies surveyed, compared to 11% of the CEE companies surveyed disclose information regarding their compliance with labor standards in the annual report.
* 20 BRIC companies surveyed (50%), compared to 35 CEE companies surveyed (32%) disclose information regarding health and safety policy in their annual report.
BRIC countries continue to maintain their lead over their CEE peers in disclosing social initiatives in their annual report when compared to last year on the two parameters concerning employee development & benefits and sponsorship programs.
On Websites
In terms of ‘Social Policy’ initiative disclosures on the websites, among BRIC countries, Indian companies lead the table on two parameters - compliance with labor standards (position it shares with Brazil), a position India holds on to when compared to last year; and listed health & safety policies, making an improvement when compared to last year when it ranked second while Russia lost its top slot.
Chinese companies took a clear lead on two initiatives – sponsorships; and listed employee development & benefits, moving up one place while Russia slipped to the second place sharing the position with Brazil and India when compared to last year.
Brazilian companies led reporting on employment policies on their websites.
BRIC countries outperformed CEE countries on all the five parameters of disclosure on Social Initiatives on their websites.
* 77.5% of the BRIC companies surveyed disclose community, patronage and/or sponsorship programs on their website compared with 52% in CEE.
* 18 BRIC companies surveyed (45%) and 28 of the 110 CEE companies surveyed (25.5%) list their employment policy on their website.
* 72.5% of the BRIC companies surveyed and 43% of the CEE companies surveyed disclose employee development/benefits policies on their website.
* 45% of the BRIC companies surveyed and 22% of the CEE companies surveyed disclose information regarding their compliance with labor standards on their website.
* 20 BRIC companies surveyed (50%) and 36 CEE companies surveyed (33%) disclose information regarding health and safety policy on their website, in comparison with two Ukrainian companies surveyed.
BRIC countries maintain their lead over their CEE peers when compared to last year in disclosing community, patronage and/or sponsorship programs.
Pushpam Kumar
PGDM 2nd sem
No comments:
Post a Comment