INTRODUCTION

Carried out for the first time in Malta, PwC's Corporate Responsibility Practices Survey gauges the awareness of sustainability issues and evaluates the practices of companies in Malta. Through the survey and this report, PwC aims to spread awareness and foster a better understanding of the value of corporate responsibility (CR) practices.

This Report focuses on four different dimensions:

  1. Internal awareness

    The survey explores the degree of internal awareness among participants of corporate social responsibility (CSR): their understanding of the meaning of this term and the extent of importance given to corporate responsibility. This section of the survey identifies whether a CSR policy is in place, which department is responsible and why companies invest or otherwise in CSR initiatives.
  2. Current practices & external awareness

    The level of external awareness assesses whether companies believe that their stakeholders and the general public are aware of CSR and whether companies have been faced with calls for action by their stakeholders in relation to the impacts of their operations.

    We also report on current practices in relation to water and energy consumption, and waste management practices.
  3. Social responsibility

    The section on social responsibility provides an understanding of the extent of responsibility companies feel towards society and the environment.
  4. Regulation, compliance & disclosure

    This section evaluates the level of regulation, compliance and adoption of standards by local companies. It also illustrates the incidence of nonfinancial disclosures.

Internal awareness
  • Understanding and awareness of CSR
  • Existence of CSR policies and procedures
  • Information and internal communications
  • Drivers and barriers to investment in CSR
External awareness
  • Importance attached to CSR by Stakeholders
  • Stakeholders' perceptions and expectations
  • Existing company practices
Social responsibility
  • Impact on the community
  • Actions to mitigate environmental and social impacts
  • Current and future importance of CSR
Regulation, compliance & disclosure
  • Environmental regulations
  • Certifications and standards
  • Non-financial reporting
  • Rationale for disclosures

The survey was carried out during Quarter 1 2013. The survey included 45 questions and evaluates: internal and external awareness, social responsibility and regulation, compliance and disclosures. Participation in this survey was open to all companies in Malta.

The survey covered a wide range of sectors. The financial and insurance sector participated actively in this survey, followed by the manufacturing and information and communication sectors.

PARTICIPANTS' CHARACTERISTICS

The companies that participated in the survey are medium to large companies with the majority employing 50 persons or more and having an annual turnover of over 5 million euros.

Sectoral distribution

The financial services, insurance, and the information and communication sectors participated actively in this survey. However, over half of the responses relate to the manufacturing sector, services, professional activities, accommodation and other private and public sector activities.

INTERNAL AWARENESS

A review of news releases and information found in local company websites gives the impression of a narrow view of corporate responsibility, with most companies associating corporate responsibility solely to charity contributions or the investment in energy saving or renewable energy technologies.

On the other hand, this survey shows quite a good understanding of the term, with 64% of respondents recognising a more holistic understanding of corporate responsibility.

Nearly half of the participants claim to have a department identified as responsible for corporate responsibility. This function seems to be most commonly vested within the Public Relations/Marketing Department or the responsibility of a dedicated CSR team established for this purpose.

The most common internal communication channel is email, followed by internal newsletters that keep members of staff up to date with CSR initiatives. Companies mentioned the lack of funds and human resources as significant barriers to further their CSR efforts.

Participant companies feel strongly about the impact of corporate behaviour on their image and brand reputation. Companies state that this is not motivated by their stakeholders. It is clear that stakeholders are not yet as influential as in other countries when it comes to expectations of responsible behaviour. The drivers for action on corporate responsibility are mostly internal forces arising from the company's corporate values and the belief that they should do their part for the environment and the community.

66% of respondents feel that their customers, suppliers and shareholders are not very aware of the importance of environmental and social issues.

CURRENT PRACTICES

CR reporting is still in its infancy in Malta. Over the last five years, we have seen a few CSR reports being published and information on eco initiatives being publicised on company websites. Some companies have also started to include brief sections in their annual report.

The use of internationally recognised frameworks such as the Global Reporting Initiative (GRI) is still very low even amongst those companies that publish separate CR reports.

Sustainability initiatives implemented

SOCIAL RESPONSIBILITY

76% of companies believe that CSR will become very important in five years' time.

Over half of the respondents attach importance to environmental and social issues. In particular, companies illustrate concern over water and energy consumption, health and safety, pollution and waste management.

84% of companies feel strongly about their responsibility, towards their people, to create an ethical and safe working environment. This goes beyond ensuring compliance with occupational health and safety standards and deals with ethical behaviour in their HR practices and service delivery.

Top 3 actions to reduce the company's environmental and social impact

  1. Reducing energy consumption
  2. Ensuring health & safety at the workplace
  3. Conserving water

REGULATION, COMPLIANCE & DISCLOSURE

As a result of Malta's membership in the European Union, local operators are subject to European regulations and have a number of obligations, particularly in terms of the environment and social protection.

Most organisations are subject to some form of regulation. Companies operating in the financial and insurance sector are regulated by the MFSA. Other companies, particularly those involved in the manufacturing sector, may be regulated by an environmental permitting regime, environmental legislation, health and safety and other sector-specific regulations.

As regulators may hold companies responsible for their practices and the impact of their operations, companies have an incentive to become more transparent in reporting about their non-financial performance.

When asked about any specific environmental legislation which affects their organisation, the main legal instruments mentioned related to waste management regulations, notably the Packaging and Packaging Waste Regulations and the Waste Electrical and Electronic Equipment (WEEE) Regulations, both of which are based on the concept of producer responsibility. Other legislation included food safety regulations and health and safety.

Standards and certification

Non-financial disclosures

INTERESTING FINDINGS

Companies participating in the survey show a strong acknowledgement of the problem of resource scarcity in Malta. Over half of the companies state that they have a CSR policy in place, a code of ethics, and that they have invested in energy savings activities, amongst other initiatives. In other words, companies state that they give a lot of importance to CSR. Yet, close to 70% of the companies do not disclose information about their CSR efforts in their annual report.

This could be explained by the perceived lack of interest by stakeholders, such as customers, suppliers and shareholders. 66% of the companies claim that their stakeholders are not aware and do not give enough importance to environmental and social issues. Companies that report on their non-financial performance appear to see value in non-financial disclosures. Those who provide non-financial information do so to show their internal commitment, and use it as a marketing tool to associate their organisation with sound environmental management practices.

In the minds of participant companies, procurement is one of the areas through which they impact the environment. The recent launch of Green Public Procurement Regulations and targets may have increased this awareness.

Companies feel they affect the environment when purchasing office equipment, purchasing paper and choosing brands and suppliers.

Companies feel responsible towards their people in terms of creating a safe and ethical working environment. 84% of the companies surveyed feel the responsibility to create such an environment for their staff.

Over 60% of companies show awareness of their impact on the environment and on the community. The top three impacts are: energy consumption, waste generation and health and safety.

Existence of a CSR policy

Disclosure of non-financial information

RESULTS

PwC Corporate Responsibility Practices Malta Survey 2013 was intended to raise awareness and understanding of corporate responsibility among local companies. The findings show an improvement in the understanding of these issues and an understanding of the importance of problems such as water scarcity in Malta. It is also evident that companies believe that corporate responsibility will become increasingly important in the coming years.

Consciousness about the importance of CSR and the value that such responsibility brings to a company's reputation, attractiveness as an employer, and its direct benefit in terms of cost savings, is increasing. Companies are also starting to formalise their efforts through the development of a CSR policy / programme and /or the allocation of responsibility to a particular team. As one would expect, the availability of internal resources hinders the capacity to do more and to structure CSR efforts.

Thinking strategically about CSR can help companies align their efforts to their core business strategy. As stakeholder expectations towards corporate responsibility and ethical business are growing, business opportunities such as new products / services relating to corporate responsibility may provide avenues for sustainable growth.

Conclusions

1. Awareness of corporate responsibility is rising and the understanding of the term is moving away from just charitable donations to include environmental matters, health and safety, ethics and other considerations.

2. These findings show an increased sense of responsibility by companies towards their people, the environment and the wider community. The main drivers are clearly the brand and an internal commitment to corporate values.

3. The three main areas of activity in the local scenario are energy and water consumption, followed by waste management. As companies envisage CSR to grow in importance, other areas of corporate responsibility may see additional investment in the near future.

4. Stakeholders' expectations and pressures are still low when compared to other countries. Disclosure efforts are mainly driven by a desire to show a company's internal commitment to CSR and to some extent by regulatory bodies.

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