EIRIS research into corporate social responsibility (CSR), sustainability and corporate ethical, social and environmental behaviour

EIRIS research into corporate social responsibility (CSR), sustainability and corporate ethical, social and environmental behaviour

EIRIS researches the non-financial performance of over 2,800 companies globally. This assists clients to understand whether these companies can be regarded as socially-responsible or sustainable, and the extent to which they include social, environmental and ethical issues within their corporate strategy.

Our research is independent. We receive no payments for research from companies. We do not belong to any campaign groups or NGOs. And we do not give investment advice or invest client assets.

EIRIS does not provide any overall assessment or rating of companies. Each company is assessed against over 400 criteria. Clients then decide which criteria to use, and in what combination.

EIRIS primarily assesses listed companies in major developed countries. In addition non-listed or smaller companies are assessed from time-to-time to meet client demand. When companies are assessed EIRIS looks at their global operations, including their subsidiaries and associates worldwide.

Our research falls into four clusters – social, environmental, governance, and areas of specific ethical concern. Wherever possible companies assessments are risk-related, and aim to identify the companies for whom a particular issue is material.

Governance – we focus on making comparable assessments of all companies in the following areas:

Board structure and practice – we assess every company against four elements including separation of chair and chief executive, independent directors, independence of audit committee, and disclosure of directors’ pay.
Women on the board – the percentage of women on each company’s board.
Ethics – whether a company has a clear, public ethical code, what that code contains, and what systems it has in place to manage ethical breaches or issues. This includes looking at how the company deals with bribery and corruption issues.
SEE risk management – whether and how well the company discloses and manages social, environmental and ethical (SEE) risk. This follows the approach of the Association of British Insurers (ABI), and applies it to major companies globally.
SEE risks – wherever possible we identify major potential SEE risks faced by major companies, to allow investors to engage with companies on how these are managed and what provisions have been made.

Social – we focus on a range of social issues including:

Stakeholders – how companies perform in relation to key stakeholders, including employees, customers, suppliers and the community. We research employee stakeholders in particular depth and look at a range of issues including training and development, occupational health and safety, employment equity, job creation, and trade unions and employee participation. We also look at the extent of a company’s philanthropic activities and how and where it engages with its key stakeholders. Stakeholder assessments are made for all companies.
Human rights – how companies deal with the challenges of operating in countries where human rights are most at risk. We assess the policy and systems of companies operating in 29 specified countries (such as China, Burma, Zimbabwe, Iran, and North Korea). In particular we examine how they uphold the key rights outlined in the United Nations Declaration on Human Rights (UNDHR) and how they uphold core labour rights in difficult circumstances.
Sourcing – how companies ensure that core labour rights apply within their supply chain. In particular we look at the policies and systems of companies with global supply chains in those sectors where breaches of labour standards are most frequent. These include food producers, toy manufacturers, retailers, apparel and sports goods manufacturers, and electronics.

Environment – we classify each company as having a high, medium or low environmental impact, based on its major activities. Every company is then assessed for:

Environmental policy – whether it has an environmental policy and the extent to which this policy addresses the key issues relevant for that company, whether it is globally applicable, and a range of other elements – such as commitments to sustainability, monitoring and targets.
Management systems – the depth of its environmental management systems and the extent or percentage of the company which is covered by these. This includes looking at both externally-certified and internally-developed systems.
Reporting – the extent and quality of a company’s environmental reports, including whether such reports are public and contain meaningful performance data.
Performance – based on the extent to which a company’s own performance has improved or deteriorated over a given period (using key indicators in the five areas of climate change, air emissions, discharges to water, waste, and water consumption). In addition, wherever possible, the company’s indirect impacts (either through its supply chain or its products) is assessed.

Specific ethical concerns – we assess each company against a range of positive and negative issues, of relevance to many clients. We generally assess not only whether a company is involved in any of these areas, but also the extent and nature of that involvement. It should be stressed that EIRIS does NOT take a view on whether any of these are ‘bad’. Areas researched include:

Military – the nature and extent of any company’s involvement in the arms industry and arms exports.
Tobacco – the nature and extent of involvement in the production or sale of tobacco.
Alcohol – the nature and extent of involvement in production or sale of alcohol.
Nuclear – any involvement in the nuclear power industry.
Animal testing – any involvement directly, or by contract, in testing on animals and the types of products involved (such as pharmaceuticals, household cleaners or cosmetics) and whether such testing is required by law.
Genetic engineering – the extent to which companies do genetic engineering or use GM ingredients in their products.
Breaches of core labour standards – whether a company has been accused of breaching core ILO labour standards either in-house or in its supply chain.
Adult entertainment/ pornography – the nature and extent of any company’s involvement in the adult entertainment industry or similar products.
Abortion – whether any company is involved in providing facilities for abortion, or manufactures contraceptives or abortifacients.

EIRIS also monitors news reports and NGO sources for information on each company’s performance in relation to the criteria.

In addition to the criteria mentioned above, a number of country-specific criteria are available on topics ranging from advertising complaints to pollution convictions and directors pay.