Comparing t the company's CSR report using the Dow Jones Sustainability Indexes
A key challenge with CSR is determining the ways in which companies measure, represent, and report on their ethical and sustainable programs and activities. Although there are national and global best practices for ethical behavior by corporations, there is no single national or universal index used by all.
As a potential socially responsible investor, you're interested in learning more about a company's CSR and sustainability practices. To that end, you are planning to perform due diligence before making a decision about whether or not to invest in a company. Select one Multi-National Company (MNC) and read its annual CSR report. Then address the following:
Compare and contrast the company's CSR report using the Dow Jones Sustainability Indexes and The Global 100, which measure the CSR practices of corporations. Evaluate the usefulness of these two indices for your research on the MNC's CSR practices by critiquing the credibility and limitations of each.
Generate a report about the company's CSR performance and strategies based on your analysis. Support and cite your analysis with facts drawn from your research.
Sample Solution
I have chosen Microsoft Corporation as the MNC to analyze. Microsoft has been included in both the Dow Jones Sustainability Index (DJSI) and The Global 100 since 2013, making it a great candidate for comparison between these two indices.
The first index to be considered is the Dow Jones Sustainability Index (DJSI). This index measures corporate sustainability performance by evaluating economic, environmental and social criteria in three dimensions: Economic Value Creation, Environmental Stewardship, and Social Responsibility. In 2019 Microsoft was named a leader among global software companies due its strong ratings across all three categories of evaluation, showing that they are incorporating sustainable practices into their company strategy. They were given particular recognition for their work on resource management as well as customer privacy protection initiatives.
The second index is The Global 100 Most Sustainable Corporations in the World list published by Corporate Knights. This index ranks corporations based on quantitative performance indicators such as carbon productivity, waste output and operational eco-efficiency as well overall financial performance scores including return on assets ratio and dividend yield ratio. Microsoft scored highly on this list because of their leadership around renewable energy sourcing commitment and towards achieving net zero carbon emissions goals set out by 2020. They also received high marks for their efforts towards transparency with regards to employee satisfaction levels within the company’s various divisions across different countries around the world.
Based on my analysis of these two indices I believe that both provide useful information about Microsoft Corporation's CSR performance and strategies but each one offers something unique which can help inform an investor's decision-making process when investing in this company or any other multi-national corporation for that matter. On one hand DJSI provides a more qualitative approach looking at how companies are addressing ethical issues surrounding corporate governance while The Global 100 looks at more quantifiable metrics such as total sustainability score achieved based on key sustainability characteristics such as energy efficiency or waste management etc.. Furthermore both indices can offer investors insight into where specific areas need improvement within certain organisations so they can make informed decisions when selecting stocks they wish to invest in or divesting from them if necessary at some point down the line depending upon changes made within an organisation over time with regards to their CSR initiatives/practices etc..
In conclusion I believe that analysing reports from either -or both- of these indices gives investors valuable insights into how potential investments might perform with regards to long term sustainable growth along with knowledge of what strategies are needed should changes be required further down the line inside a particular organisation if desired outcomes aren't being achieved through current CSR practices presently employed by said entity .