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International Journal of Business Management & Research (IJBMR) ISSN 2249-6920 Vol. 3, Issue 4, Oct 2013, 93-104 © TJPRC Pvt. Ltd.


ABSTRACT Beyond Carroll’s Pyramid and Elkington Triple Bottom Line (TBL) - integrated impact assessment driven corporate responsibility and sustainability performance reporting system is put forward to improve the quality and reduce variability of corporate responsibility and sustainability reports published by companies. However, key performance indicators specification and definition was found to be crucial for it to be operational. Analysis of reports by FTSE 100 companies revealed that key performance indicators used for reporting are in a state of chaos within industry and across industries. Thus point out the possibility of corporate reputational damage in futuristic terms as well as setting up uncertainties around delivery of world sustainable development performances.

KEYWORDS: Corporate Responsibility, Sustainability Performance, Integrated Impact Assessment INTRODUCTION There are no evidences of quietness of the academic community and research organisations on the matter of corporate responsibility and sustainability (CRS). In respect of this fact, academia efforts on the development of frameworks to connect CRS principles and rules in a harmonious manner to facilitate practices that delivered desired corporate sustainability performance remains a challenge. Central to strategic corporate responsibility performance management decision is CRS reporting. This currently faces with issues relating to availability of quality data and variability of presentations. Data reporting quality relates to rationalising and harmonising the economic, compliance, ethical, and sustainability dimensions of business operational activities in the context of stakeholder’s requirements. Based on the understanding of importance of data reporting quality for stakeholders acceptability of CRS reports published by companies; then what CRS performance reporting system is capable of delivery of CRS reports with quality non-financial information that meet stakeholder’s requirements and reduce variability within industry and across industries (Katsoulakos and Katsoulacos, 2006a & 2006b)? To the extent of the pose question, this paper put forward CRS performance reporting system design with capability to support CRS strategy and publication of CRS reports containing quality non-financial information that meet stakeholder’s requirements and reduced variability. In delivery of this objective, the below described methodology was followed.

RESEARCH METHODOLOGY Analytical review of literatures at forefront CRS oriented frameworks was carried out to identify deficiencies. The deficiencies were found to have contributed to CRS reporting inadequacies such as failings to meet stakeholder requirements. From the literature we found that integrated impact assessment (IIA), a methodology used in development projects and policy interventions evaluations possess capability to resolve issues relating to CRS reporting. Also, review of


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reports on non –financial information reporting was carried out and it was found out that key performance indicators (KPI’s) specification and definition are important for the operations of IIA methodology driven CRS reporting system. Yet corporate responsibility and sustainability key performance indicators (CRS KPI’s) were omitted from Companies Act (2006) review as recommend in reports. In the process of review of literatures stakeholder oriented performance management process model was found to contain basic CRS reporting attribute but lacking in IIA methodology and CRS KPI’s components. These missing components are introduced to create integrated impact assessment driven corporate responsibility and sustainability (IIA- CRS) performance reporting system. This was followed by empirical analysis of sampled FTSE 100 CRS reports by KPI’s contents. A sample of 40 companies was selected using stratified sampling strategies ensuring that samples was taken across retail services, manufacturing, financial services, and extractive (oil and gas) industries. The findings validated the importance of CRS KPI’s in the IIA - CRS performance reporting system design. Originality and Contribution to Corporate Sustainability Practices The paper put forward a novel CRS performance reporting system design by refining stakeholder oriented performance management process through the introduction of IIA methodology and CRS KPI’s components. With a strong view point that IIA- CRS performance reporting system would make corporate disclosure of business CRS impacts along economic, social, and environment chains of programme or policy intervention in line CRS strategy and systemic.

LITERATURE REVIEW Early academic contributions on CRS theoretical frameworks focused on ensuring that boundaries are assigned to prevent social and financial components of business entity from overpowering or overshadowing each other’s. This was the major problems of modern era business (Crowther and Rayman-Bacchus, 2004). Key among corporate responsibility frameworks that brought to the limelight the need for the demarcation of non-financial from financial performance was the Carroll’s Pyramid and Elkington triple bottom line (TBL) reporting. A review was carried out to determine how their deficiencies have affected CRS performance reporting. Carroll put forward pyramidal framework that boundary four categories of corporate responsibility in decreasing order of importance: economi, legal, ethical, philanthropic responsibilities (Carroll, 1991 and 1998). Furthermore, Carroll (1991) expressed that, although the components of Pyramid are not mutually exclusive, it helps the manager to see that the different types of obligations are in constant tension with one another. But scholastic revisit of Carroll pyramid in recent years has revealed some deficiencies that accounted for its insignificant contributions in terms of providing guidance for CRS performance management (Visser, 2006). Further , it was argued that the interconnections between Carroll’s four levels responsibilities components are so blurred making theoretical demarcation seem artificial or even irrelevant in practical sense (Crane and Matten,2004; Visser, 2006). Hence, suggested that rather than tinkering with Carroll’s pyramid, effort should be concentrated in developing alternatives frameworks that better describe the reality of corporate responsibility (De Jongh and Prinsloo, 2005). While Visser (2006) expressed that managers are increasingly using the banner of sustainability or the triplebottom-line (TBL) non-financial reporting approach to describe their CRS activities due to limited instrumental value of Carroll’s pyramid. So, the question now is triple-bottom-line reporting the alternative CRS model we are looking for? Elkiington put forward the idea of reporting on business – society relationship. The concern that business does not know how to harmonise the traditional financial bottom line with environmental quality and social justice led to Elkington

From Carroll’s Pyramid to Elkington TBL: A Move towards Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System


(1994) triple bottom line (TBL) reporting framework. TBL reporting provides guidance on measurement of business and investors performances against a new set of metrics—capturing economic, social and environmental value added—or destroyed—during the processes of wealth creation. TBL accounting expands the traditional performance reporting framework to take into account social and environmental performances in addition to financial performance through which opportunity for societal and ecological agreement between the community and businesses were created (Elkington, 1994 and 1997). TBL established the demands that businesses publicly present non –financial information about company’s CRS impact showing both positive and negative items; thereby making company’s CRS performance measurement lies with stakeholders rather than shareholders (Jacson, Bosewell & Davis, 2011). An analysis of first global wide–stakeholders survey on non-financial reporting conducted by ECC Kohtes Klewes GmbH and Fishburn Hedges (2003) revealed that stakeholders were not satisfied with state of CRS performance reporting and the very low rate of compliance and commitment to TBL reporting. Furthermore, (Jacson et al, 2011) survey finding showed that 8 countries of the world are actively promoting TBL reporting 17 years from inception of idea by Elkington, (1994). This beg the question why are TBL adopter so few? And, indeed challenged Visser (2006) argument above that managers are increasingly likely to use the banner of sustainability or the triple-bottom-line approach to describe their corporate responsibility activities because Carroll’s pyramid has limited instrumental value. These suggest that there are problems with business adoption and operation of TBL reporting framework. The reasons for the unsatisfactory TBL reporting by companies are suggested to be risk, and human and financial resources costs in relation to reporting system infrastructure. Nevertheless, the risk and costs of implementation of TBL reporting by businesses, one of the main purposes of sustainability for any business remains reduction or elimination of its cost of poor quality. Yet the above arguments pointed out that implementation of TBL reporting require extensive readjustment of a company’s operations. An indication of inherent difficulty related to maintaining the application of TBL reporting in business operations (Jacson et al, 2011). Even though, measuring the cost of poor quality is a vital part of TBL reporting, however for companies to benefits from this important management information, avoidance of self-serving bias in the reporting process is a key requirement (Isaksson, 2005; Jacson et al, 2011). To resolve the problem associated with TBL reporting adoption and application scholars suggested that sustainability function need to be tasked to company’s strategic decision making level with a section of the Board of Directors to preside as a “Sustainability Committee of the Board” (Painter-Morland, 2006). Nonetheless, this can only increase adoption rate but does not resolved the TBL application problems of bias free information gathering process, data accuracy and organisation crucial for strategic CRS performance management decision making function of the board; as well as for the production of CRS report that is straightforward and understandable by the stakeholders inclusive of society at large, employees and stockholders (Jacson, et al., 2011). Against the understanding of issues surrounding TBL reporting, a review of CORE coalition report on non- financial information in annual reports of London FTSE 100 by Henriques (2010) carried out to see the level of compliance with TBL in the below section. Review of Corporate Compliance with Legal Requirements for TBL Non-Financial Reporting Noted from Jacson, et al., (2011) survey report United Kingdom been one of the countries promoting TBL reporting among businesses guided by Companies Act (2006) that oblige companies to provide a Business Review on non –financial reporting. Thus majority of FTSE100 companies (all of which have significant stakeholder impacts) are required


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to publish CRS reports (Henriques, 2010). Furthermore, Henrique’s analysis of FTSE100 compliance with non-financial reporting of Companies Act (2006) found out that 31% do not produced CRS report and there are widespread of variability in the nature and quality of reporting with a low overall level of reporting of non-financial data that might be relevant to stakeholders, other than on economic matters. Apart from “do noting responsibly and report noting responsible” 31% companies that don’t publish CRS reports, one might inferred reasons for non –compliance from discussion for finding below: “Less than a third of companies described the process of preparing the report. On a more technical front, even where quantitative information was reported, there was rarely any description or detailed specification of the indicators used, such as that the Greenhouse Gas Protocol was used for measuring greenhouse gases. It might also have been expected that the specific mention in the Act of KPIs (Key Performance Indicators) would have led to a more systematic disclosure of impacts and one which would allow the comparison companies on their impacts” (Henriques, 2010). Based on the above finding, it was recommended that the effectiveness of section 417 of the Companies Act (2006) requirement for companies’ annual report Business Review to cover performance relating to broad environmental matters; company employees; supplier relationships and social and community matters should be conducted urgently with respect to the below key area of interest to this paper among other recommendations: 

Specification of KPIs which may be used for reporting non-financial information, developed through a multistakeholder process facilitated by the government,

Provision of official guidance on reporting non-financial information (Henriques, 2010). Therefore, it became clear that for a CRS reporting system to deliver the required non- financial performances

information as obliged by Companies Act (2006) and demanded by stakeholders, its component must contain detailed specific and fully described KPI’s guided by official provisions. As such a review of scholastic effort to operationalise TBL in the form of CRS performance reporting system with reference to KP1’s components was carried out. Corporate Responsibility and Sustainability Performance Reporting System CRS reporting does not exist isolation as it stem out of the need for business to engage with stakeholders in a transparent manner. For a company to be seen as transparent and reputable there is need to provide CRS performance information that is clear and useful to stakeholders. Again, the establishment of insight into varied stakeholders ethical and legal requirements that opportunities and threats can be properly access ; conflict interest can be indentify and right decision on course of action to monitor business operational impact can be taken. Overlooking certain stakeholders expectations often means missed opportunities for building reputation or entering new markets and can set up problems for the company in terms of lost contracts, employee’s unrest and even litigation. As era of “trust me” culture and “show me” culture has now passed with the world moving towards an “involve me” culture which calls for stakeholders working in partnership with organisations as part of CRS performance solution. These cultural changes required transparency-enabling infrastructure and efficient communication to bridge the gap between stakeholder’s expectations and company responses. Then stakeholder oriented performance management process reproduced in figure 1 below showing the importance of measuring both stakeholder’s contribution and satisfaction inclusive of feedback streams associated with strategies, capabilities, implementation and contracts appear to meet system design requirement for CRS performance reporting (Katsoulakos and Katsoulacos, 2006b).

From Carroll’s Pyramid to Elkington TBL: A Move towards Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System


Source: (Katsoulakos and Katsoulacos, 2006b) Figure 1: Stakeholder Oriented Performance Management Process But stakeholder oriented performance management process in figure 1 above , though systemic and logical in terms of potential for disclosure of operational impacts, CRS programme or policies intervention key performance indicators was omitted in the framework (Katsoulakos and Katsoulacos, 2006b; Henriques, 2010). Nevertheless, Katsoulakos and Katsoulacos (2006b) did raise the importance of internal or external benchmarks provision for judging how well a company is doing and how its performance is changing over time. Further , they remarked that in many cases absolute scores or measures may need 'normalising' or standardising to allow valid comparisons to be made over time or between different locations. A suggestion that was in line with Henriques (2010) recommendations on KPI’s earlier noted in this paper. Other limitation of stakeholder oriented performance management process in figure 1 above is that there are not defined methodology for quality of information assurance when compared to rigor of audit processes that financial data are subjected (Katsoulakos and Katsoulacos, 2006b; Jacson, et al., 2011). So, non-financial performances information reports publish through this process is face with problems of verification and lacking in global stakeholders acceptability. However, it was noted that over the past few years several verification approaches have been suggested but cost remains the key issue. Nonetheless, the widely use of ‘Stakeholder Panel' has been one way of giving stakeholder representatives the opportunity to comment on CRS reports contents and veracity (Katsoulakos and Katsoulacos, 2006b). But when stakeholders are not involved in design of CRS reporting system, there are no KPI’s specifics, stakeholders are not fully involved in the data gathering processes and companies won’t even describe the process of preparing the publish CRS report. Then one might begin to wonder what sort of commentaries can non- participant stakeholders provide in terms of CRS reports contents and performance validity? This provides a justification for data gathering methodology that can drive CRS performance reporting system. To bridge CRS performance data gathering and reporting methodology gap, Egbeleke (2004) suggested integrated impact assessment (IIA) methodology with its capability at aiding sustainable strategic learning (Mayoux, 2002). Then what is Integrated Impact Assessment methodology? Integrated Impact Assessment (IIA) Methodology Integrated Impact Assessment (IIA) is define as an activity design to generate or produce interdisciplinary numeric or qualitative indicators to interpret, predict and communicate information about the immediate or delayed, foreseeable or remote effects of a given or series of actions, proffering what mitigation and compensation measures to be put in place against consequences of project, programme and policy actions on the well-being of an ecosystem. Further, in IIA there are many different ways in which different methods can be combined in an investigation. The most cost-effective


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combinations must be assessed in relation to each assessment, the purpose of the assessment, the particular issues to be addressed, the stakeholders involved, and ways in which findings are to be used (Egbeleke, 2004).. Although, techniques vary according to the nature of the intervention and the purpose of the assessment, the basic methodology is similar (Kirkpatrick and Hulme, 2001; Egbeleke, 2004). IIA methodology processes are described as follows: 

Scope of Combine or Integrate Assessments: Determine which impacts chain within inter-linkages of social, economic and environmental impacts. should be investigated in the integrated assessment;

Targets: Identify targets (where possible) for the combine or integrate impacts to be assessed, from the planning documents, or from widely accepted objectives appropriate for the type of intervention;

Indicators: Identify indicators with qualitative or quantitative / both in description which support the measurement of combine or integrate impacts in relation to its targets (if one or more has been identified); also methods of data collection against these indicators and responsibility for collection of data need to be identify;

Identify Impact (s): Within the scope of the combine or integrate assessment, identify immediate or delayed, foreseeable or remote impacts chain;

Stakeholder Identification: Identify those social groups (e.g. communities, indigenous people) likely to be affected by impacts chain , and other stakeholders (e.g. suppliers, share holders, employees, government ) with a significant interest;

Stakeholder Involvement: Decide how stakeholders will be involved in the integrated assessment; this may include involving stakeholders in refining the scope of the assessment, and in the identification of impacts chain and targets;

Assessment of Combine or Integrate Impacts: Determine what impacts chain have occurred, their direct and indirect causes, and their importance in relation to targets and scope of integrated assessment redefinition;

Quantification and Qualification of Impacts: Assess impacts chain magnitude where practicable, in relation to targets by scoring with full details in statements;

Identify Mitigation and Compensative Actions: actions required to mitigate against adverse foreseeable or remote impact need identification and actions required to compensate for adverse immediate or delayed impact need identification;

Identify Policy and Planning Lessons: Lessons relating to basic philosophy, principles, objectives underlying impacts chain as well as logical guidance for delivery of programme or policy intervention along impact chain need to be identified;

Reporting: Document the findings of the separately social, economic and environmental impacts where possible and the integrated assessment in a manner that is clearly understandable to those who will use them; identify uncertainties and reliability of findings; establish means of public access to the report;

Dissemination of Findings: Evaluation findings should be disseminated amongst stakeholders in a way that enable contributions on definition of mitigation and compensative actions and promote policy and planning learning (e.g. by workshops, meetings, publication of report); obtain stakeholders agreement on the report and agree follow-up action (Kirkpatrick and Hulme, 2001; Egbeleke, 2004).

From Carroll’s Pyramid to Elkington TBL: A Move towards Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System


Furthermore, Kikpatric and Hulme (2001) argued that all changes are influenced by mediating processes (specific characteristics of the agent and of the economic, physical, social and political environment) which in turn impact both behavioural changes and the outcomes in ways that are difficult to predict. With difficulty arising from impact chains presentation of a complex set of links as each ‘effect’ becomes a ‘cause’ in its own right generating further effects. Thus a complex evaluation of the inter linkages between social, economic and environmental impacts would required an assessment that is integrated in nature. Once IIA has been indicated as required in an intervention concept note, the design of IIA methodology is next with prime emphasis on stakeholder analysis, consensus on purpose of evaluation and key performance indicators as the starting point ( Kikpatric and Hulmes, 2001; Egbeleke, 2004). Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System Below figure 2 reveal the importance of corporate responsibility and sustainability key performance indicators (CRS KPI’s) and integrated impact assessment (IIA) data gathering and reporting methodology in delivery of corporate responsibility and performance reporting system.

Figure 2: Integrated Impact Assessment Driven Corporate Responsibility and Sustainability (IIA- CRS) Performances Reporting System Through feedback streams integrated impact assessment can shape the development of CRS KPI’s needed to monitor progress and mange the adverse effects of CRS programme design and implementation, inform CRS strategy as well as provision of all inclusive data for CRS reporting in reference to global sustainability reporting measurement index. Likewise, Katsoulakos and Katsoulacos, (2006b) argued that for CRS performance optimisation planning and activities to take place information and knowledge need to be accurate, timely, relevant and usable. They further suggested that stakeholder’s opinion surveys can be of great value in ranking concerns or establishing the factors contributing to CRS performance but cannot be the only source of input for CRS performance optimisation. Therefore, this paper argued that Integrated Impact Assessment methodology is sufficiently position to provide the required sustainability data input into the Corporate Responsibility and Sustainability Performances Reporting System. Therefore, the above description in figure 2 did confirm the capability of IIA methodology at aiding sustainable strategic learning (Mayoux, 2002; Egbeleke, 2004) as earlier discus. It is evidence that if there is going to be any move towards integrated impact assessment driven corporate responsibility and sustainability (IIA-CRS) performance reporting system depicted in figure 2 there is need for Specification of KPIs and provision of official guidance for reporting


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(Egbeleke, 2004; Henriques, 2010). Although there has been a review of the Companies Act (2006) by the UK Government that has led to useful regulatory changes, but the specification of KPI’s was excluded as recommended. The question is why has the government review of Companies Act (2006) left out KPI’s in the context of Henriques, (2010) analysis FTSE 100 that found out CRS reports rarely contain any description or detailed specification of the indicators used? Other question is there any voluntary changes in CRS KPI’s contents of FTSE 100 CRS report after Henriques report that necessitate the exclusion from review? To know where we stand as regard this simple yet important issue of CRS KPI’s specification and definition we proceed to carry out CRS reports analysis of FTSE 100 by KPI contents for which the results are presented in table 1 below: Table 1: Corporate Responsibilities and Sustainability Reports Analysis of FTSE 100 by KPI Contents Report by KPI Contents Report containing sort of Key performance indicators Report with description of Key performance indicators Report without any form of Key performance indicator

Number of Companies








DISCUSSIONS OF FINDINGS The above table 1 showed that most corporate responsibility and sustainability (CRS) published reports would contain some sorts of KPI’s as 87.5% of the sampled CRS reports did. But the analysis presents 10% of sampled CRS reports as contained corporations self –defined KPI’s contents, a confirmation of rarity of KPI’s definition and specification 3 years after Henriques (2010) CORE report on non-financial reporting and UK government review of Companies Act (2006). However, from the analysis of sample reports we found Tesco retailer to have stand out as an ideal example of report layout plan and with specification and definition of KPI’s. Although, Tesco has add new CRS oriented values called “Scale of Good Scorecard” to the existing business relationship values as they expressed that it would “help to monitor our progress against our ambitions we have carefully selected a set of measures so that we can hold ourselves to account and so our stakeholders can see how we are performing”. This prompted Tesco, Chairman –Sir Richard Broadbent to say “this report is about Tesco and society. It marks a departure from our previous corporate responsibility reports” (Tesco, 2013). Other few corporations expressed that their KPI’s was in line with GRI reference index and UNGlobal Compact principles and about 12.5% of the sample CRS report did not have any form of identifiable KPI’s. CRS reports show high degree of variability in presentation of non-financial information and so it is with KPI’s contents description where they are provided, meaning there has not been significant changes after Henriques (2010) CORE report. The lack of standard reporting format thus supports the promotion of non-specification and definition of CRS KPI when placed in the context of standardisation of financial performance reporting. Even within industry the variability are very significant as illustrated by a comparison of Tesco and Marks and Spencer, both large scale international retailers publishing CRS reports with KPI’s described in table 2 below: Table 2: Comparison of Retail Industry Supplier CRS Programme by KPI’s Specification


Working with our suppliers to innovate and provide high quality products

Tesco treats its supplier fairly Percentage of ethical improvement plans completed on time

We know that we need to improve our reputation for how we treat our suppliers, so we will ask our customers – in all markets in which we operate – whether they agree with this statement or not. This will be done through our regular image tracker survey which tracks customers’ views on our performance. An ethical improvement plan is drawn up by internal experts or ethical auditors to address any concerns identified about working conditions, i.e. anything found which does not comply with either local law or the Ethical Trading Initiative Base

From Carroll’s Pyramid to Elkington TBL: A Move towards Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System

Marks & Spencer

New social and environmental Standards are being developed with our suppliers to reward excellence and encourage improvement.

Work with M&S food suppliers to implement a Gold/Silver/Bronze sustainability benchmarking standard to improve ethical and environmental performance. By 2015, 100% will be engaged and 25% by turnover will be at Gold level.


Code. Timelines for ensuring improvement vary according to the severity of the issue and the complexity required to ensure improvement can be sustainable. Progress: Using our Food Supplier Sustainability Framework we’ve now assessed submissions from over 200 food suppliers as: Provisional, Bronze, Silver or Gold. The framework includes three sections: human resources, environment and lean (efficient) manufacturing. We use suppliers’ lowest scores from these three sections to determine their overall rating. At April 2013, site visits had confirmed that seven suppliers achieved Silver level –accounting for around 8% of M&S Food by turnover. 112 suppliers achieved at least Bronze level accounting for nearly 40% of M&S Food. Around a quarter of suppliers who completed our initial assessments last year have demonstrated significant improvement.

Sources: Authors Compilation from Tesco and Society Report (2013) and M&S Plan a Report (2013) A review of CRS KPI’s in relation to CRS programme of intervention for suppliers that potentially might be servicing both Tesco and M&S described in table 2 above simply show that CRS KPI’s specification and definition are in a state of chaos within industry and across industries. Yet, without “Like for Like” benchmark M&S claimed that “since we launched Plan A in 2007 we have received over 100 awards covering all aspects of sustainability” (M&S, 2013). The question is what industry CRS KPI’s were these awards based upon? As the answer to this question is practical none due to inexistence of industry stakeholders consensus based CRS KPI’s. Therefore, there might be a danger of reputational risk associated with using corporation self –defined CRS KPI’s in foreseeable future for companies in the same shoe as M&S. As we recalled from the statement of Tesco chairman earlier presented in this section that simple says we have new values now “this report is about Tesco and society. It marks a departure from our previous corporate responsibility reports” (Tesco, 2013). whether the statement was deliberate or coincidental, it provides a form of mitigation against futuristic reputational damages that might arise as a result of their past CRS performance reporting prior to the current selfdefined CRS KPI’s “Scale of Good Scorecard”. Danger of Non- Multi-Stakeholders’ Key Performance Indicators Specification and Definition To illustrate discussion of findings outcomes in relation to reputational damage risk associated with CRS reporting based on self –defined CRS KPI’s, a brief review of the case of Cadbury would suffice. UK. Cadbury now Kraft, a pioneer cocoa and chocolate manaufacturer with United Kingdom royal warrant of 1854 was at the forefront promotion of corporate responsibility in Europe at their Bourneville factory. A notable examples of the company’s CRS oriented programme ahead of practice at that period of time was democratically elected works council men and women with equal numbers of management and worker representatives saddled with responsibilities for working conditions, health, safety, education, training and the social life of the factory and its workers (Cadbury, 2013). By 2008 in their CRS report Cadbury said: "Ethical business sits at the heart of Cadbury. It always has. It is part of who we are, our values, our heritage, our policies and the way we behave". But the financial times investigation found Cadbury had paid an average of £6.4m a year in tax on profits averaging £100m for the decade before it was taken over by Kraft. What went wrong? The answer can be inferred from the response of the company former senior director to CRS violations accusations, "I believe that we always did the correct thing. But [Cadbury] was run as an international business." Then conceded some schemes exposed by Financial Times investigation looked "pretty aggressive", but were not out of line with what "a lot of companies did" (Guardian, 2013). One can only imagin the level of reputational damage this would have done to Cadbury, if the company has not been taken over by Kraft. The problems lie in directors “believe” in their self –defined CRS KPI’s. So, these and many corporate responsibility violations incidences across industries point out the danger of non- multi-stakeholders’ KPI’s specification and definition.


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Chaotic CRS KPI’s Implication for World Sustainable Development Performance The world’s population current estimate is 7 billion with projection of increase to 9 billion by 2050. Situation analysis shows that demand for diminishing natural resources is growing while income gaps are widening. Sustainability calls for a decent standard of living for everyone today without compromising the needs of future generation (United Nations Conference on Sustainable Development -UNCSD, 2012). Currently, the world sustainability is not on track not only because of the CRS principles violations or irresponsible practices by businesses; but national culture that is responsibility characteristics of governments and effectiveness of public institutions have majorly influenced the corporate behavior towards contribution to sustainable performances missed targets. It is a reflex action for an individual or a company, largely irrespective of their values, to behave differently in a well organised ethical national environment than in one which is not (Katsoulakos and Katsoulacos, 2006b). So, if CRS KPI’s that would enable businesses to contribute to delivery of world sustainable development is “Chaotic” resulting into disorganised CRS performance measurement and reporting within industry and across industry; then slow level of progress towards achievement of sustainable development 20 years after the landmark 1992 Earth Summit in Rio is part of the consequences (United Nations Development Programme, 2011). Also, UNCSD tagged Rio+20 focus on jobs , energy, cities, food, water, oceans and disasters in need of urgent solutions with specific KPI’s across these areas of concentration to bring back on track the world sustainable development performances. Yet none of the sample FTSE 100 companies CRS reports KPI’s contents mirror world sustainable development KPI’s. So, if the basis for business contribution to the solution is fundamentally chaotic, then it does imply that there are uncertainties regarding “The Future We Want” (UNCSD, 2012). The above over all discussions did strengthen Katsoulakos and Katsoulacos, (2006a) arguments that CRS challenge represents a tall order for the business world that is accustomed to worrying about the next contract and the annual financial performance rather world sustainable development performance. The emerged requirements for corporate support to sustainable development probably represent a cultural shock that will take time to sink in the business way of thinking and working. If new business bound sustainability model to guide CRS performance management is to be establish, CRS specification and definition within CRS reporting system need to be sort out first as evidence from this paper. It is on this basis that we present our recommendation.

RECOMMENDATION Guided by the all the above discussions, this paper recommend: Specification and definition of CRS KPI’s in alignment with world sustainable development KPI’s useable for CRS reporting within industry and across industries, developed through industry specific and across industries multistakeholder processes under the joint coordination of UNGlobal Compact and World Business Council for Sustainable Development.

CONCLUSIONS From Carroll’s Pyramid to Elkington Triple Bottom Line (TBL) reporting deficiencies has been identified operational wise. While TBL reporting was viewed as a step ahead of Carroll’s descriptive model by putting forward a case for non –financial reporting of information about company’s impact on sustainability showing both positive and negative items placed in public records. But, it did not provide a clear methodology for CRS performance information gathering and reporting. Nonetheless, the number of companies publishing CRS reports is on the increase attributed at least partially to TBL reporting model. Because, its lack defined methodology, there are high degrees of variability in CRS reports in

From Carroll’s Pyramid to Elkington TBL: A Move towards Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System


comparison to financial performance reports as such it rarely meet stakeholder’s expectations. Analysis show that CRS reports produced through systematic disclosure of impact would allow for comparison of companies on their impacts though KPI specification. Scholastic attempt to develop CRS reporting system was found lacking operational process methodology and KPI’s specification and definition. So, CRS performances reporting system was design through the introduction of IIA methodology as driver pre-conditioned by CRS KPI’s specification and definition. A cross check of Companies Act (2006) revealed CRS KPI’s specification was excluded from review though recommended in CORE report (2010). A validation empirical studies was carried out through analysis of FTSE 100 sample companies CRS reports KPI’s contents and findings shows that CRS KPI’s is in state of Chaos with implication for futuristic corporate reputational damage and uncertainties about meeting world sustainable development performance targets. It was on this basis, this paper recommends that industry specific and cross –industries multi-stakeholders processes to be convened under the banner of global businesses associations to voluntarily fix the CRS KPI’s chaos problems for “Integrated Impact Assessment Driven Corporate Responsibility and Sustainability Performance Reporting System” to be operational.


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Beyond Carroll’s Pyramid and Elkington Triple Bottom Line (TBL) - integrated impact assessment driven corporate responsibility and sustain...