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Article published in ‘Qué Pasa’ magazine which includes the main results of the surveys made by PROhumana for

the CSR National Ranking August 31th, 2012

Sustainable statistics

¿Which are the outstanding tasks for the companies?
Surveys made by PROhumana show the opinion of the internal collaborators, sometimes absent, but always fundamental. Key players and observer of the enterprise actions, the vote of this majority is shown in the following graphics.

Apart from the discussion to define a proper concept to describe what means an organization aware of its responsible and sustainable management - at present we face changes that few venture to visualize - but all of us are key players in it. There is no doubt that since 2010 we are witnessing a radical change in business management and other themes that define the economic and investment agenda, and its relationship with governments, citizenship and peers in the world.

Since that date is has been possible to share and compare some results regarding responsible and integrated management of some visionary companies in Chile. We mean those who consider in their main strategies economic, social and environmental axis, including areas such as internal audience, corporative governance and suppliers policies, among a wide spectrum of variables considered by CSR. We looked at them from the point of view of integrated management according to PROhumana CSR management model: these are the main points found this year among the 40 participating companies:

Figure 1: % of companies with integrated management aspects of CSR

*Sample 2012: 40 companies

It was detected that almost all the participating companies have an explicit CSR policy. Nevertheless, by means of verifiers, it was detected that a high percentage of them don’t contemplate CSR implementation, evaluation and communication in their development practices. Supported by the fact that only a 33% of them appoint a member of the board to safeguard the comprehensive management of CSR, explaining in this manner the weakness observed at national level in making CSR an integral part of the company’s objectives Nevertheless it is possible to observe progress regarding carbon footprint measurement in the companies, with an outstanding increase in the last years. The area where we still observe a medium level of comprehensive management, is in having a position regarding how can the companies contribute to overcome social inequality in our country, we observe little commitment of companies in the debate an little participation in the development of public policies. This is far from the OECD member countries where the private public Alliance is a key axis of sustainable human development management. Employees Talk After eight years applying the survey to workers, it seems relevant to show the changes found - in a universe of 257.644 people surveyed during that period. In 2012, the universe was 85.985 workers, expressed in a sample of 11.132 workers that repeated evaluation this year, showing how knowledge is evolving, compared to previous

years. Among the 40 companies evaluated this year we found the following results for some of the sub-divisions of employees’ survey.

Figure 2: Promedio Encuesta de Empleado en la subdimensión Dimensión Valores y Coherencia

*Sample of workers: 11,312. The asseverations of the employee survey are evaluated on a scale of 1 to 5, where 1 describes not at all their company and 5 fully describes their company.

Some aspects that stand out in 2012 evaluation - compared to 2010 and 2011- are the following: Considerable increase of scores in evaluation regarding the code of ethics and its implementation. It could be the result of facts occurred at national and international level. Ethical and responsible management is not an option for the company any more. It became a political and citizens’ demand. It is possible to state that this variable was not in the business agenda 10 years ago, it was only present in those companies that had made ethics an axis of their management. It stands out that workers still don’t have a positive evaluation about implementation and communication of the code of ethics to the different stakeholders. It is a point of concern to see the very low employees’ evaluation regarding dialog with stakeholders. This is not a minor issue today, when citizens have clear demands regarding the role of companies. Probably this evaluation allows confirming that the mode that has prevailed in different business sectors is being somewhat reluctant to dialog. Another aspect that is important to observe is the sudden drop in the evaluation scores made by the workers regarding corporate governance. It is justified because it is still a weak area in national companies - and that is the observation of the workers in their companies – Even more; in august 2012 SVS stated a new standard for the regulatory framework for corporate government. Nevertheless, some business representatives that are considered national leaders in these areas reacted in opposition to different suggestions of the enforcing entity. And lastly,

workers value with low grades the possibility to know who forms the corporate government, the transparency of the meetings and their results.

Figure 3: Promedio Encuesta de Empleado en Dimensión Público Interno

*Sample of workers: 11,312. The asseverations of the employee survey are evaluated on a scale of 1 to 5, where 1 describes not at all their company and 5 fully describes their company.

It is a constant- not only in the last 3 years- that social benefits policies receive low evaluations, even more, this year they tend to drop to 2010 numbers. Why does this happen? Mainly because they failed to look at management from the long term perspective, and insist that companies can be managed in year or semester periods. This evaluation should raise, because it is possible to observe that there is no vision nor public policy about how to face such an important problem for our country, when we have information that in our population one of every 10 people belongs to the elderly group, and for 2025 this proportion is expected to be one in five (20% of the population). No doubt it is urgent to coordinate actions that take these data into account.

Regarding healthy life styles, it is interesting to see higher evaluations; certainly, this is thanks to the involvement of human resources departments at internal level. They understood the importance to promote healthy life styles among their collaborators, because of the many positive results it produces in the companies. It is also important mentioning the public policy developed by Cecilia Morel “Elige vivir sano” (choose a healthy life), which produced a high impact both at citizens as well as business level. Two more themes present in the public agenda match the evaluation made by the collaborators belonging to the better evaluated companies: Egalitarian inclusion and non discrimination policy. This is a clear manifestation of the debate held in our country, of the progress made in public policies and also – we have to say it – a result of very sad facts like the death of Daniel Zamudio. We have to add as well the impact of citizens’ rights vision that people manifest in public roads, also reflected in the development of business policies. This is good news: Businesses started to pay attention to the signals given by citizens.}

Figure 4: Promedio Encuesta de Empleado en la Dimensión Comunidad

*Sample of workers: 11,312. The asseverations of the employee survey are evaluated on a scale of 1 to 5, where 1 describes not at all their company and 5 fully describes their company.

For the workers the relationship between their company and the community is vital importance when evaluating CSR in management. The drop in evaluation scores in the three sub- dimensions considered above; shows that from 2011 to 2012 workers are more sensitized and better informed and they demand a better quality interaction with the stakeholders which is certainly highly relevant in the viability of the business. In this same line, it is clear that the community wants to be linked to the companies that have a good relationship with their environment. So we cannot argue, this is an area that urgently calls to be considered as a strategic axis. It is not about relating only; it is having a strategic view, which is required by the community and the workers.

Regarding social investment, there is a drop in evaluation scores compared to previous years. We can conclude that this is due to a cultural change in Chile, moving from traditional philanthropy to understanding that economic contributions - made by private companies to the communities - have to respond to an investment strategy which fosters sustainable development of the supported initiative.

At global level, corporate volunteering is already a well known policy in the companies that has gained its place in our country in recent years. For this reason it is a surprise that workers give low marks to the evaluation of this practice, even if the verification delivered by the evaluated companies show higher presence of this practice. An explanation for this is that collaborating companies already under PROhumana CSR model might reflect some sophistication in the volunteering implementation, where it is not enough to link to the communities, it is necessary to have spaces where workers can manifest their own interest, collaborating with the community in themes that are important for them and for the community. It is not only expected that companies generate volunteering, but also that workers are able to choose in which area they want to volunteer.

Figure 5: Promedios Encuesta de Empleado en Dimensión Medio Ambiente

*Sample of workers: 11,312. The asseverations of the employee survey are evaluated on a scale of 1 to 5, where 1 describes not
at all their company and 5 fully describes their company.

No doubt workers have now a better opinion about environmental management in their companies. They appreciate the consideration of different variables to become socially responsible in the three fold sustainability dimension. This is reflected in the evaluations giving the highest scores to this field, followed by management systems implemented for this same purpose. Yet these evaluations are still regular, which is a call of attention about the need for more consistent policies, which are better measured and better communicated to workers and stakeholders. There is a drop in scores compared to the evaluation of 2011 in aspects related to environment and communities’ relationship, explained by the high importance workers allocate to environmental care – specifically close surrounding- to the knowledge about measures adopted where the community must be a relevant player in protection actions. When asking about recycling and/or reusing policy and information provided on what to do with material to be recycled; we were surprised to know that workers evaluate it as the worst sub-dimension, considering that companies have implemented these practices. Again this could be poor communication and lack of workers participation in the construction, implementation and measurement of the actions carried out in terms of comprehensive sustainability, demonstrating that employee’s participation and fluid communication require consistency between statements and implementation.

Lastly, even though we have made progress in the development and management of comprehensive CSR by means of PROhumana management and evaluation model; there is no doubt that the ranking leading companies have a double task. The first, is improving their performance because sustainable management of the business require it, and the collaborators better informed about comprehensive CSR have a clear and objective evaluation from their insider position. The second is to become ambassadors showing what a responsible company today in Chile is.