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DGD 1 09-02-2018
Corporate Social Capital Implementation
Draft Guidance Document 1
Table of Contents Page No. 1 Introduction 1 1.1 Scope of the Guidance Document (GD) 4 1.2 Development Stages of the GD 4 1.3 What is Social Capital? 4 1.4 Corporate Social Capital 6 2 Development of Social Responsibility Practices and Social Capital in
Corporations 8
3 Management Approach for the Development of Corporate Social Capital while
Performing Corporate Social Responsibility 12
3.1 Stage 1: Forming Stage (PLAN) 14 3.2 Stage 2: Implementing Stage (DO) 15 3.3 Stage 3: Confirming Stage (CHECK) 16 3.4 Stage 4: Improving Stage (ACT) 16 Annex A
Linking Corporate Social Capital to HKQAA Sustainability Rating and
Research (HKQAA SRR) for Hang Seng Corporate Sustainability Index Series
(Index Series)
18
Annex B HKQAA SRR seven core subjects and subsequent practices
21
Annex C Implementation Templates for CSC projects to be supplemented in DGD 2 after completion of the pilot-run projects
23
Annex D Case studies
24
4 Bibliography 25 5 Acknowledgments 28
1
1 Introduction
Community Investment and Inclusion Fund (CIIF) was set up by the Government of the Hong
Kong Special Administrative Region in 2002 to implement diversified Social Capital development
projects in the community, promote reciprocity between the public and private sectors, and build
together a cross-sectoral collaborative platform and mutual help network. The Fund seeks to build
Social Capital – to garner mutual trust, social networks, spirit of cooperation and social cohesion,
and enhance mutual support among individuals, families and organizations, so that our community
can grow from strength to strength.
While addressing organization’s objectives and targets, the CIIF funded projects aim to achieve six
core Social Capital dimensions, namely, (1) social networks; (2) trust and solidarity; (3) mutual
help and reciprocity; (4) social cohesion and inclusion; (5) social participation; and (6) information
and communication.
Nowadays, corporations around the world and their stakeholders, including direct stakeholders such
as their employees, customers, end-users, investors, suppliers, and indirect stakeholders such as the
regulators, governmental agencies, non-governmental organizations, pressure groups,
neighbourhoods and media, etc., are becoming increasingly aware of the need for corporations to
exhibit and disclose their socially responsible behaviour. This may pose social risks to the
corporations but these, when being properly managed, will in turn bring about numerous
opportunities for corporations.
Corporations could enhance their transparency and accountability to their stakeholders by means of
Environmental, Social and Governance (ESG) or sustainability reporting, which would
communicate the risks and opportunities they face and how they manage them for achieving
sustainable development.
To promote the concept of social responsibility and to assist organizations in contributing to
sustainable development, the ISO 26000:2010 Guidance on social responsibility identifies norms of
seven core subjects of social responsibility, including organizational governance, human rights,
labour practices, the environment, fair operating practices, consumer issues, and community
involvement and development (International Organization for Standardization [ISO], 2010). By
addressing and acting on the core subjects, corporations are not only performing their social
responsibility, but also contributing to sustainable development and creating benefits for society.
In 2014, the Hong Kong Quality Assurance Agency (HKQAA) designed and developed its
proprietary management and assessment methodology, namely, the HKQAA Sustainability Rating
and Research (HKQAA SRR) methodology, for organizations to manage their social risks and
opportunities, and ultimately assess their social responsibility performance in contributing to
sustainable development (HKQAA, 2016). Since then, this methodology has been used for the
HKQAA Corporate Social Responsibility (CSR) Index Plus assessment and for supporting the
compilation of Hang Seng Corporate Sustainability Index Series (Index Series).
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The HKQAA SRR was developed mainly based on ISO 26000:2010 Guidance on social
responsibility and the Plan-Do-Check-Act (PDCA) model (Moen & Norman, 2009). The PDCA
management model is widely adopted by various international management system standards, such
as ISO 9001 Quality Management Systems (ISO, 2015a) and ISO 14001 Environmental
Management Systems (ISO, 2015b).
This Corporate Social Capital Implementation Guidance Document (GD) is intended to assist
corporations to develop their Corporate Social Capital (CSC) while performing their CSR. More
specifically, corporations will learn how to use the HKQAA SRR methodology and its elements as
a management tool in performing CSR with the six core Social Capital dimensions as the
underlying concepts. The linkage to the Index Series will also be demonstrated in this GD. Figure 1
illustrates how the adoption of GD can help corporations in performing CSR and to maximize their
contribution to sustainable development.
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Corporate Social Capital
Risk/Opportunities Management (e.g., ISO 26000) and Disclosure (e.g., ESG/Sustainability report)
Cor
pora
tion
s
Direct Stakeholders: e.g., employees, end-users, investors, suppliers, shareholders, contractors, etc.
Indirect Stakeholders: e.g., regulators, governmental agencies, NGOs, pressure groups, media, activist groups, academic institutions, etc.
CSC Implementation GD
Goals: Provide guidance to assist corporations to develop Corporate Social Capital when performing their social responsibility
Building and enhancing CSC Incorporate CSC
development into corporations’ strategies for fulfilling CSR
Establish CSC missions with measurable objectives and targets
Identify CSC elements to assess the development of CSC
HKQAA Sustainability Rating and Research (HKQAA SRR) With reference to
international standard ISO 26000 and the Plan-Do-Check-Act (PDCA) management maturity model, corporations manage and assess their social responsibility performance in contributing to sustainable development
Social Risk/Opportunities
Sustainable Development
Corporate Social Responsibility (CSR) Performance
Figure 1. Adopting the GD in performing CSR
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1.1 Scope of the Guidance Document
This Guidance Document (GD) provides guidance to corporations, independent of their activity or
size, on developing Social Capital in their organizations while performing their social responsibility.
The methodologies provided in this GD will serve as a management and assessment tool.
1.2 Development Stages of the GD
The development and publication of this GD will be accomplished in 3 stages, namely, the Draft
Guidance Document 1 (DGD1), Draft Guidance Document 2 (DGD2) and the final
Guidance Document (GD).
The DGD1 will be published based on the findings of the literature review and the advice gathered
from the Stakeholders Group (SG) which is composed of approximately 10 individual members
from various sectors including corporations, NGOs, academic institutions and the government.
The DGD1 contains the conceptual design of the Corporate Social Capital (CSC)
framework which will be subject to the trial implementation by the collaborating corporations.
The DGD2 will be published after the trial implementation by mid-2019. The DGD2 will contain a
detailed CSC framework and a list of plausible elements (see Table 3 on p.10) of CSC under the six
core dimensions of Social Capital. A solid process flow and measurement tool will also be
developed for more widespread adoption. The experience gained from various supporting activities
including an online platform, pilot community projects, personnel and project registration
schemes will contribute to the final version.
The final Guidance Document (GD) is expected to be published early 2020 alongside the wider
adoption of DGD2. The linkage between CSC management model developed and the HKQAA
SRR will also be supplemented in Annex A of the final GD.
1.3 What is Social Capital?
Social Capital is considered as one of the key drivers of social development in modern societies,
the other being economic capital, cultural capital and human capital. According to the World Bank,
Social Capital refers to “the institutions, relationships, attitudes, and values that govern interactions
among people and contribute to economic and social development” (Grootaert and van Bastelaer,
2001). Social Capital is seen as the “connections among individuals, social networks and norms of
reciprocity and trustworthiness that arise from them” (Putman, 2000). Meanwhile, the Organisation
for Economic Co-operation and Development (OECD) defines Social Capital as “networks
together with shared norms, values and understandings that facilitate cooperation within or among
groups” (OECD, 2001).
Social capital includes social norms (personal attitudes and social values), networks and institutions. The strategies deployed in social capital development include cognitive, relational and structural aspects, incorporating psychological and sociological concepts of role transformation, social trust
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in horizontal bridging across heterogeneous groups and collaboration in vertical linking partnerships across sectors and power hierarchy. Increasing evidence has shown that social cohesion is essential for economic prosperity and long-term sustainable development of a society. Social capital holds people and institutions together to work for the common good. The multifaceted nature of Social Capital is shown in Table 1 below.
Table 1. Multifaceted nature of Social Capital
Aspects of Social Capital (Nahapiet and Ghoshal, 1998)
Cognitive Focus on the people’s feelings, values and perceptions. It represents resources
obtained from a shared vision and value, common set of goals and shared
representations and interpretations among groups.
Relational Kind of personal relationships people have developed with each other through
interactions, with focuses on the quality of the relationship or interactions and
the resources that are created or balanced. It attributes the relationship of trust,
trustworthiness, respect and friendship.
Structural Structure or pattern of connections between people – who you contact, how to
contact and frequency of shared resources and information. It accounts for what
people do (associational links, networks).
Forms of Social Capital (as cited in Ting, 2012)
Bonding Linkage between like-minded people (Putnam, 2000).
Bridging Links between people of heterogeneous groups or with different backgrounds.
Through these linkages, people would have access to external resources of
different groups (Putnam, 2000; Gittel and Vidal, 1998).
Linking Linkage in the vertical dimension of bridging Social Capital, in which people of
different groups could leverage resources, ideas and information from those who
have power to those who do not in the community (Woolcock, 2001).
From the economic perspective, various studies have shown that Social Capital is important for
economic growth and development (Fukuyama, 1995; Knack & Keefer, 1997; Guiso, Sapienza, &
Zingales, 2008). Moreover, Social Capital, together with Governance, Personal Freedom and Safety
& Security, are described as the four institutional pillars1 in measuring society’s wealth and well-
being in the Legatum Prosperity IndexTM (Legatum Institute Foundation, 2017). The report has
shown that Social Capital is an essential element in developing prosperity.
1 There are nine pillars in the Legatum Prosperity IndexTM measurement.
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1.4 Corporate Social Capital (CSC)
In corporations, the importance of physical capital, human capital and intellectual capital is well
understood but another type of capital, Social Capital, has received a lot less attention (Servaes and
Tamayo, 2017). According to Gabbay and Leenders (2001), CSC refers to “the set of resources,
tangible or virtual, that accrue to a corporate player through the player’s social relationships,
facilitating the attainment of goals,” where corporate player refers to an organization and its
members. CSC can be seen as the total number and strength of networks that exist among the
members within a firm and the resources generated. It is the quality of the relationships that a firm,
and its executives and employees, have built with other stakeholders.
In the Social Capital Protocol developed by the World Business Council for
Sustainable Development (2017),
WBCSD applies the term ‘social capital’ to refer to the resources and relationships
provided by people and society. This encompasses human capital (people’s skills,
knowledge and wellbeing), and societal capital (societies’ relationships, shared
values and institutions). Together, these resources need to be maintained and
enhanced to make society more cohesive and resilient, and to make business more
successful. (p.7)
As emphasized by the WBCSD, nowadays, corporations need to look beyond financial returns;
they need to understand the value they create for their stakeholders, for society, and for their
business. Most successful companies are those that truly value people (Ibid.).
Corporations that invest in Social Capital earn the trust of their stakeholders, thereby enhancing
cooperation, potentially leading to better economic outcomes for the firm. CSC can be particularly
beneficial during times of crises (Servaes and Tamayo, 2017). Furthermore, corporate project
activities which benefit the community can increase the level of social participation and generate
positive attitudes in the business; these activities can also contribute to economic prosperity and
sustainable development (Saeed and Arshad, 2012). The development of CSC can build
reputational capital, which signifies a corporation’s stock of perceptual and social assets.2 Thus,
CSC is essential in creating a positive corporate image.
Corporations’ internal and external networks provide opportunities for social transactions.
Corporations derive benefits and value from their internal and external social capital. High level of
internal social capital can improve sharing and dissemination of information and knowledge within
a firm. Employees that have trusting relationships would have a stronger commitment and loyalty.
Both benefits would enhance the efficiency and reliability in operations, projects and innovation
management. On the other hand, building external social capital can bring competitive advantage as
a firm’s ability to access external information and knowledge would increase and its
reputation would improve. External social capital can also generate other positive outcomes such as
cost reductions and talent recruitment (Network for Business Sustainability South Africa, 2014).
2 Please refer to Fombrun, Gardberg, & Sever (2000) and Oswald (1996) for information about reputational capital.
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In matching with the trend of disclosing ESG information by corporate organizations in Hong Kong,
Hong Kong corporations are more willing to develop their own Corporate Social Responsibility
(CSR) activities alongside their corporate policy and business development. Research has found
that the adoption of CSR practices would help to create reliable social
networks for organizations and social capacity. Social Capital is accumulated through such
networks and interactions which encourage cooperation and collective action. The creation of
Social Capital is embedded into many corporate activities in a way that helps knowledge transfer
and innovation. It also boosts efficiency in community development and CSR (Saeed & Arshad,
2012)
In fact, many corporations have incorporated Social Capital development into their strategies for
fulfilling CSR. This includes utilizing corporate expertise to actively participate in social services,
helping disadvantaged groups expand their social networks and increase opportunities to broaden
their horizons, thereby bringing longer-term benefits to society and the corporation. When
corporations fulfil corporate social responsibilities by leveraging Social Capital development
strategy, both corporations and society can reap ample returns. In addition, corporations which
participate in implementing social capital projects can improve corporate culture and inculcate
positive values in the community and society, thereby creating an environment favourable for
social and economic development (see Figures 2 & 3).
Figure 2. Positive returns to corporations and society. Adapted from the CIIF website.
Figure 3. CSC building as an alternative investment. Adapted from the CIIF website.
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2 Development of Social Responsibility Practices and Social Capital in
Corporations
Recognizing the importance of social responsibility to their stakeholders, a vast majority of
corporations now focus on and practice a few broad categories of corporate social responsibility
(CSR). Corporations would integrate different CSR-generated policies, practices, initiatives,
programmes, and projects in their organization based on their business vision, mission and
strategies.
The development of CSR means can take reference from the general social responsibility reference
or international standards, such as SA8000, ISO 50001, ISO 14001, ISO 26000, and United Nations’
Sustainable Development Goals (2015), etc.
Corporations can select their CSR means in accordance with the business strength, financial budget,
internal and external resources, stakeholders’ needs and expectations, respect for rules of law,
service targets and social requirements, etc. Incorporating the concept of Corporate Social Capital
(CSC) while developing CSR practices has the advantage of fostering long-lasting impact through
self-sustaining activities of a relationship network bound by shared values.
The seven social responsibility core subjects defined in ISO 26000 (Figure 4) can be applied for
corporations to build and enhance CSC. Table 2 listed the seven core subjects and a brief
description of the related social responsibility practices. Different issues of CSR may have different
CSC elements and dimensions. CSC can improve the quality of CSR implementation. By
performing CSR, organizations can build and enhance CSC. Figure 5 illustrates the relationship
between CSR and CSC. The six dimensions and elements of CSC are listed in Table 3.
Figure 4. Social Responsibility: seven core subjects. Adapted from ISO 26000
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Table 2. List of the seven Social Responsibility core subjects and their practices (please refer to
Annex B for details)
Core subjects Their respective practices
Organizational
Governance (OG) Stakeholder engagement
Corporate SR Commitment - strategies, objectives, and targets
Two-way communication processes with its stakeholders
Effective participation of employees in the organization’s social
responsibility activities
Human Rights
(HR) Due diligence on potential human rights impact
Risk situation
Avoidance of complicity
Grievance mechanisms
Equal opportunities and non-discrimination
Individual civil and political rights
Fundamental principles and rights on labour issues
Labour Practices
(LP) Improvement of standards of living through secure employment and
decent work
Work conditions, legal and social protection
Social dialogue relating to economic and social concerns
Health and safety at work
Human development and work training
The Environment
(Env) Prevention of pollution
Consumption and production of sustainable resources
Adaption and mitigation to climate change
Biodiversity and restoration of natural habitats and ecosystems
Fair Operating
Practices (FOP) Anti-corruption
Anti-competitive behaviour
Promoting social responsibility in the value chain
Recognition of property rights
Consumer Issues
(CI) Fair marketing, factual and unbiased information
Protection of consumers’ health and safety
Sustainable consumption and elimination of unsustainable patterns of
production and consumption
Consumer service, support, and complaint and dispute resolution
Protection of consumer data and privacy
Access to essential services to satisfaction of basic needs
Education and awareness for consumers to make knowledgeable
purchasing decisions and responsible consumption
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Core subjects Their respective practices
Community
Involvement
and Development
(CID)
Community involvement - proactive outreach to the community
Preservation and promotion of culture, education compatible with
respect for human rights, public health
Employment creation and skills development
Technology development and access
Wealth and income creation
Social investment for improving social aspects of community life
Figure 5. Relationship between CSR and CSC
OG
HR
LPEnv
FOP
CI
CID
Social Responsibility
•Social Network
•Mutual help and Reciprocity
•Trust and Solidarity
•Social Participation
•Social Cohesion and Inclusion
•Information and Communication
Social Capital
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Table 3. List of Corporate Social Capital dimensions and elements
Six dimensions Elements
Social networks
Mutual-help and reciprocity
Trust and solidarity
Social participation
Social cohesion and inclusion
Information and communication
Stakeholders’ needs identification
Win-win situation demonstrated
Network established
Corporate strengths identification
SR and SC policies formulation
Relationship established
Conduct stakeholder engagement
Regular contact with relevant value chain
Provision of professional information
Social networks creation
Provision of caring message
Sustainable partnership established with the
collaborator
Shared value demonstrated
etc…
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3 Management Approach for the Development of Corporate Social
Capital while Performing Corporate Social Responsibility
The 4-stage management method of Plan-Do-Check-Act (PDCA) for the control and continual
improvement of performance will be adopted.
Figure 6. Four-stage Plan-Do-Check-Act (PDCA) management model
Stage 1. Plan
Stage 2. Do
Stage 3. Check
Stage 4.Act
Figure 7. Flow of 4-stage Plan-Do-Check-Act (PDCA) management model
Stage 2: Do
B.1 Initiative design development and management
Stage 4: Act
D.1 Analysis of results
D.2 CSC and initiative review
meeting
Stage 1: Plan
A.1 Organization context
A.2 Stakeholders’ needs and
expectations
A.3 CSC mission establishment
A.4 Develop and provide adequate
resources
B.2 Initiative realization
B.3 Stakeholder communication
Inputs
Process
Outcome
Output
Initiative monitoring & measurement
Stage 3: Check
C.1 Monitoring and measurement
C.2 Evaluation
3.1 Stage 1: PLAN - Establish the objectives and programmes necessary to deliver results in accordance with the corporation’s targets or goals.
A.1. Organizational context
The corporation can determine its organizational context in terms of external and internal issues that are relevant to its business role and its strategic direction and that affects its ability to achieve the expected outcomes.
External issues include: legal, technological, competitive, market, cultural, social and economic environments, etc., whether international, national, regional or local.
Internal issues include: values, culture, knowledge and performance of the organization, etc.
A.2. Stakeholders’ needs and expectations
With reference to the seven core subjects and practices of CSR, the corporation identifies the needs and expectations of interested parties that are relevant to its business role and corresponding social contribution.
A diversity of relevant stakeholders may include customers, end-users, regulatory bodies, external providers, pressure groups, neighbourhoods, non-governmental organizations, governmental agencies and media, etc. Stakeholder engagement can be conducted in order to collect relevant information.
A.3. CSC mission establishment
Organizations can establish CSC missions with measurable objectives and targets with reference to external and internal issues, interested parties’ needs and expectations. Missions can be established in accordance with corporation’s goals and objectives. Organizations can also define which direct and indirect stakeholders to be served and what kinds of relationships and networks to be formed to suit the target stakeholder groups.
Periodical review of missions subject to organizations’ policy and business strategies would also provide directions for CSC development. The external and internal issues, interested parties’ needs and expectations can be monitored and reviewed regularly.
A.4. Develop and provide adequate resources
The organization should determine and provide the resources needed for the establishment, implementation, and continual improvement of the CSC development. The organization should consider:
Corporate strength, capabilities, and constraints on existing resources;
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Short/long-term resources requirements;
What needs to be obtained from external providers such as NGOs and project consultants;
Form partnerships with other organizations wishing to conduct similar evaluations;
Planning for achieving organization’s objectives and targets.
3.2 Stage 2: DO - Implement the plan, execute the initiative and make the progress.
B.1. Initiative design development and management
Meetings and discussion with stakeholder groups are to be held for detailed initiative design. Programme or schedule can be devised for progress monitoring. Initiative implementation team would be established, while roles and duties can be assigned to team members and any other external partners.
B.2. Initiative realization Initiative implementation according to the initiative planning and programme: corporation can provide technical support, venue, people and equipment to execute the initiative.
Corporation should define the detailed implementation plan based on each initiative, such as inputs, process, monitoring and measurement, output and outcome.
B.3. Stakeholder communication
Enhance the communication with concerned stakeholders and partnership organizations in order to establish cooperation. Responsible staff or department can be assigned for proactive facilitation of internal and external communication. Data can be collected for charting and analysis in the following stages.
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3.3 Stage 3: CHECK – Study the actual initiative results and compare against the expected results to ascertain any differences.
C.1. Monitoring and measurement
Initiative progress and outcomes should be monitored and measured for further evaluation. CSC evaluation tools (before-and-after evaluation) such as surveys, questionnaires, interviews, focus groups, etc. can be used.
Before-and-after survey is one of the commonly applied tools for evaluation. Depending on the resources allocation, interim evaluation can also be conducted in order to obtain the full programme progress and achievement along with the implementation.
The data collected can be presented with charts in order to oversee the trends of implementation cycles and convert the data into project information and experience. If deviation is identified in implementation from the plan, fine-tuning of project activity or the appropriateness and completeness of the plan would enable the project execution to be adjusted to the right track for desired outcomes.
C.2. Conducting the evaluation
The evaluation targets can be focused on participants and/or their families, staff, volunteers, and other stakeholders.
Corporations can conduct the actual evaluation with the efforts of stakeholders and partnership organizations in order to get closer cohesion and trust with the targeted stakeholders.
3.4 Stage 4: ACT – Improvement or adjustment can be induced from the initiative evaluation in order to establish a new standard (baseline) for potential future enactment.
D.1. Analysis of results Conclusions can be drawn from the analysis of data collected in order to compare with the corporation’s measurable CSC objectives and targets.
D.2. CSC and initiative review meeting
The development of corporate level CSC and project level CSC activities can be regularly reviewed in order to determine the effectiveness of CSC development. Meetings can be conducted with stakeholder groups, service organizations, NGOs, service clients, social workers and expertise, etc. in order to evaluate:
delivery of activities;
responses and feedbacks from stakeholders and/or service
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clients;
performance and effectiveness of the CSC initiatives/projects;
performance of external providers;
need for instant improvements to the project execution;
routine communication channels, etc. Corrective actions can be executed for initiative implementation or potential future enactment.
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Annex A
Linking Corporate Social Capital
to HKQAA Sustainability Rating and Research (SRR) for Hang Seng Corporate
Sustainability Index Series (Index Series)
1.0 Introduction
ISO 26000 is an international standard which defines the social responsibility for organizations.
The standard summarised the social needs and expectations for corporations to consider their social
aspects. The standard also deployed the social responsibility into 7 core subjects. The organization
should consider the social needs and expectations while doing business. According to the GD’s
framework design, the 7 core subjects of social responsibility are the entrance portal for the
corporation to build up their own CSC.
Since 2014, Hang Seng Index Company Limited has appointed HKQAA to perform scoring and
rating service on the selected Hong Kong and Mainland China listed companies. Every year more
than 600 listed companies are assessed by using HKQAA SRR assessment model. HKQAA SRR
assessment model is also developed based on ISO 26000, thus providing a seamless interfacing
between the CSC management model and HKQAA SRR.
*** Detailed mapping will be provided at a later stage ***
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2.0 HKQAA SRR Scoring for Index Series
Introduction
The HKQAA sustainability rating and research (HKQAA SRR) is designed to rate a
company’s system maturity and risks with regard to sustainability performance, based on and with
reference to international guidelines to provide an important input for the compilation of the Index
Series. A fact-based scoring approach is applied in rating the company’s ability to manage its
sustainability performance and risk. In order for the scoring to be conducted in an objective manner,
an assessor should base on the available implementation evidence to determine the system’s
management maturity and relevant risk level. The following sections are extracts from the
HKQAA-HSIL Sustainability Rating and Research Scoring Handbook (SRR Handbook) to
facilitate a basic understanding of the methodology. For the full methodology, please refer to the
SRR Handbook.
Sustainability Rating Assessment HKQAA SRR Assessment Model Methodology HKQAA SRR Assessment Model contains several elements. The sustainability performance of each eligible company will be measured against seven core subjects. Element 1. Seven Core Subjects Forty recommended practices are consolidated under seven core subjects. Element 2. Practice Types Mandatory practices refer to those that all the participants shall implement. Desired practices refer to the mandatory practices assigned to designated industries that may have higher potential impact on these particular issues. Voluntary practices refer to advanced practices that a company is encouraged to implement. Scores gained for these practices will be taken into account if they can help improve the subject scores. Element 3. Plan-Do-Check-Act Scoring Approach A company’s performance on managing the practices is collected in the form of a questionnaire. Performance is rated using a five-point scoring approach.
Points Stage Description
1 point Starting Phase No action taken.
Organizational
Governance Human Rights
Labour Practices
The Environment
Fair Operating Practices
Consumer Issues
Community Involvement
and Development
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2 points Forming Phase (Plan) Actions are under development/established without full implementation/implemented on an ad-hoc basis.
3 points Implementing Phase (Do) Actions have been fully implemented with advance planning to realise the recommended practice.
4 points Confirming Phase (Check)
Data collection and analysis on the actions are conducted to gather relevant information to evaluate the effectiveness of the implemented practice.
5 points Improving Phase (Act) There is a review of the implemented actions for identifying improvement areas.
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Annex B HKQAA SRR seven core subjects and subsequent practices
Core Subject 1: Organizational Governance (OG) OG1 Organization should set its direction by making sustainability/social responsibility an
integral part of its policies, strategies and operations. OG2 Organization should establish programme or mechanism for raising awareness and
building competency for sustainability/social responsibility in the company (e.g., new staff training, on-going training, seminars, etc.).
OG3 Organization should be aware of applicable social responsibility laws and regulations, inform those within the company responsible for observing these laws and regulations and see that they are observed (e.g., initial and regular review, applicability evaluation, control and monitoring mechanism, internal and/or external compliance audit, report verification, etc.).
OG4 Organization should disclose how the highest governance body is established and structured in support of the organization’s purpose, and how this purpose related to economic, environmental and social aspects are evaluated and managed.
OG5 Organization should establish sustainability risk and crisis management mechanism or means.
OG6 Organization should establish a two-way communication process between the organization and its stakeholders so as to identify areas of agreement and disagreement and resolve possible conflicts.
Core Subject 2: Human Rights (HR) HR1 Organization should establish a programme or means to resolve grievances. HR2 Organization should ensure that it does not discriminate against employees, partners,
customers, stakeholders, members and anyone else with whom the organization has any contact or on whom it can have any impact.
HR3 Organization should ensure the fundamental principles and rights at work. HR4 Organization should ensure every person, as a member of society, has economic, social
and cultural rights necessary for his or her dignity and personal development (For companies involved in utilities sector with industry code: 40 Utilities).
HR5 Organization should establish a programme or means to face challenges and dilemmas relating to human rights and in which the risk of human rights abuse may be exacerbated.
HR6 Organization should respect all individual civil and political rights. HR7 Organization should respect human rights and have a responsibility to exercise due
diligence to identify, prevent and address actual or potential human rights impacts resulting from their activities or the activities of those with which they have relationships.
HR8 Organization should ensure avoidance of complicity. Core Subject 3: Labour Practices (LP) LP1 Organization should encourage lawful and proper employment that signifies human
development and contribute to the improvement of standards of living through full and secure employment and decent work.
LP2 Organization should ensure decent conditions of work and provide social protection.
LP3 Organization should ensure health and safety at work. LP4 Organization should encourage human development and training in the workplace. LP5 Organization should encourage social dialogue.
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Core Subject 4: The Environment (Env) Env1 Organization should implement measures or means to prevent pollution and minimize
waste. Env2 Organization should promote the sustainable use of resources. Env3 Organization should implement measures to adapt to climate change and mitigate its
impacts. Env4 Organization should be socially responsible by acting to protect the environment and
restore natural habitats and the various functions and services that ecosystems provide. Core Subject 5: Fair Operating Practices (FOP) FOP1 Organization should develop and implement mechanisms or means to prevent
corruption. FOP2 Organization should promote social responsibility in the value chain. FOP3 Organization should develop and implement programmes or means to protect property
rights. FOP4 Organization should prevent engaging in anti-competitive behaviour. Core Subject 6: Consumer Issues (CI) CI1 Organization should ensure that no unfair marketing or misleading information about
products and services is delivered to consumers. CI2 Organization should reduce and eliminate unsustainable patterns of production and
consumption. Organization’s role in sustainable consumption arises from the products and services it offers, their life cycles and value chains, and the nature of the information it provides to consumers.
CI3 Organization should develop and implement systems on delivery of consumer service and support, complaints handling, and dispute resolution.
CI4 Organization should implement measures to protect consumer data and privacy. CI5 Organization should educate consumers to make knowledgeable purchasing decisions
and consume responsibly. Skills should be developed for consumers to assess products and services and for making comparisons.
CI6 Organization should ensure that its products and services will not be inherently harmful to consumers’ health and safety.
CI7 Organization should contribute to the right of the community to satisfy basic needs. Core Subject 7: Community Involvement and Development (CID) CID1 Organization should proactively outreach the community. It is aimed at preventing and
solving problems, fostering partnerships with local organizations and stakeholders and aspiring to be a good organizational citizen of the community.
CID2 Organization should preserve and promote the culture and promote the education compatible with respect for human rights.
CID3 Organization should create employment in the community, and develop their skills for employment promotion and securing decent and productive jobs.
CID4 Organization should create wealth and income, and promote a balanced distribution of the economic benefits among community members. It should invest their resources in initiatives and programmes aimed at improving social aspects of community life.
CID5 Organization should contribute to the promotion of public health, prevention of health threats and diseases, and mitigation of any damage to the community.
CID6 Organization should promote technology development and access.
Annex C
*Implementation Templates for CSC projects to be supplemented
in DGD2 after completion of the pilot-run projects.
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Annex D
Case Studies
Core Subject 1: Organizational Governance (OG) Core Subject 2: Human Rights (HR)
Core Subject 3: Labour Practices (LP)
Core Subject 4: The Environment (Env)
Core Subject 5: Fair Operating Practices (FOP)
Core Subject 6: Consumer Issues (CI)
Core Subject 7: Community Involvement and Development (CID)
*** To be provided in DGD2 after completion of the pilot-run projects ***
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5 Acknowledgements HKQAA would like to extend sincere thanks to the experts and companies who contributed their insight, experience and expertise on this Guidance Document development, including:
The Stakeholders Group Members:
• Mr. Daniel Wong • Ms. Dorothy Chan • Mr. Jimmy Chiu • Prof. Joe Leung, M.H., JP • Dr. Kee Chi-hing, JP • Ms. Lilian Law, JP • Mrs. May Lam-Kobayashi • Ms. Maria Cheung • Ms. Mimi Yeung • Ms. Yan Chan
Pilot Project Collaborators (Participating companies):
• Alliance Construction Materials Ltd. • Hong Kong Airlines Limited • Hong Kong Broadband Network Limited • Hysan Development Company Limited • MTR Corporation Limited • New World Development Company Limited
*Individuals and collaborators are listed in alphabetical order. We would also like to warmly acknowledge the support of the CIIF Secretariat in the development of this document.