A breakfast briefing Perth, September 23rd 2008

Agenda

• Brief introduction

• Measuring community programs:

• The context

• LBG and how it helps

• A word on the environment

• Questions

Who we are

We help companies deliver on their community and environmental

responsibilities in practical ways that make business sense. Our award-

winning programs involve and enthuse employees, have high social and

environmental impact, and are measured and managed for results.

Through a unique mix of specialist skills and partnerships, We are able to offer clients:

• specialist CSR strategy and program management;• access to renowned international measurement and benchmarking;• a complete solution for your CSR communication and reporting needs

London Benchmarking Group is the pre-eminent international benchmark for organisations looking to assess their CCI performance. In Australia, LBG is exclusively licenced through Positive Outcomes.

Haystac is one of Australia’s premier independent marcoms agencies maintaining a blue-chip, national client base. Haystac offers highly strategic media and communications programs across a diverse portfolio.

Rodeo combines imaginative minds, strategic thinkers and technical know-how to offer insightful creative communication. Rodeo serves as a one-stop-shop for a wide range of creative services across all areas of advertising and graphic design.

Climate Positive is a not-for-profit organisation established to assist individuals, businesses and policy makers to understand and take action on climate change through auditing, measurement, reduction and offsetting.

Through the Mitchell Communication Group, we work in close collaboration with these best practice groups

to deliver a comprehensive service to meet your CSR program needs

Our strategic partners

Measurement under scrutiny

• Based on survey of 72 sustainability

reports, 58 following GRI guidelines

• Aimed to identify how companies are

reporting on community impacts

GRI’s sustainability reporting

guidelines are used by over

1,000 organisations worldwide

Findings Companies tend to report their own performance in relation to community

rather than the changes or benefits for communities and the environment

Few use quantitative indicators of community impact

Majority only mention positive, not negative impacts

Reports tend to focus on charity/philanthropy, rather than sustainable

community development

…. although community engagement is a major reporting focus for mining and

forestry companies (90% give this prominence)

Overall, community impact “appears difficult for most companies to define and

report in a meaningful way” ….

Lack of interest, lack of capacity, lack of guidance/tools?

What is the LBG? The LBG Model is an internationally recognised method for measuring,

benchmarking and reporting a company’s community contributions and achievements

Established by 6 international companies in the UK in 1995, to address two questions: How much are we contributing to the community?…. and Is it making any difference to society or our business?

Now a group of over 220 companies internationally, working together to: Create a global community investment measurement standard Improve the management, implementation and reporting of community

programs Benchmark and share best practice

LBG operates worldwide – UK, USA, Australia / NZ, Canada, France, Czech Republic, Germany and Spain – with total community contributions now exceeding $AUD2.8 billion

Members: LBG Australia / New Zealand Sep ‘08

Why businesses join LBG

• Define what the company gives and why

• Manage a more effective programme – fit with business goals, strategic planning

• Take better decisions on future investments, justify CCI budgets

• Capture CCI data from around the company

• Define, track and measure what CCI achieves

• Achieve better and more robust communication, internally and externally

• Use benchmarking and share best practice

LBG Pyramid of motives

LBG Categories of motive

LBG Category Why How Example Outcome

Donations Promote common good on intermittent basis. Moral responsibility

Partnerships with employees, customers, suppliers

Disaster relief, payroll giving, matched employee gifts, employee volunteering

Build reputation as a “caring company”. Few direct business benefits.

Community

Investment

Promote and protect long-term interests. Intelligent self interest. Healthy society for business

Strategic partnerships with community organizations

Support for education, crime prevention, inner city regeneration

Some measurable business benefits in improved physical/social environment

Commercial

Initiatives in the

Community

Achieve a range of business goals and promote brand. Direct commercial benefits.

Commercial departments’ partnerships with charities

Cause-related marketing

Charity event sponsorships

Measurable benefits in sales and market share, access to best qualified staff and suppliers.

The Input Output Impact model

Inputs

Outputs

Impacts1

year

1-2

year

s1-

10 y

ears

Mea

sure

men

t

time

scal

e

Inputs

Monetary value of costs of CCI programs(cash, time, in-kind)+Management costs(CCI program staff salaries/benefits/overhead)=Total cost of community involvement

Inputs

Cash• Donations

• Community sponsorship

• Matching employee giving

• Employee involvement

costs

• Other facilitated giving

• Membership and

subscriptions

• Cause-related donations

Time

• Employee volunteering

• Secondments

• Technical/managerial

volunteering

• In-house training

• Development assignments

Inputs

In kind• Product gifts from inventory• Free or low cost advertising space• Meeting rooms & other building resources• Hospitality, catering, accommodation• Access to training courses• Expertise, professional services• Exceptional one-off gifts valued at cost

Value at cost to the company (not commercial / retail value)

Management Costs• Community affairs staff

• Running costs

• Communicating the programme to relevant audiences

One company’s experience

LBG Australia / New Zealand 2007 results

Headline performance 2007 2006

Number of members making a return 27 14

Total contributions reported $117,924,070 $33,080,179

Average estimate of contributions captured 80% 77%

Contributions per employee $213 $143

Total contributions as % of pre-tax profit 0.56% 0.43%

Total contributions as % of revenue 0.06% 0.05%

Average % of employees having paid time off to volunteer 4.8% 3.7%

Average % of employees undertaking community activities 6.3% 8.1%

Total leverage reported $43,703,694 $28,084,886

Community

Activity

INPUTS OUTPUTS

Cash,

Time,

In-kind

LeverageCommunity

Benefits

Business

Benefits

Charitable

Donation       

Community

Investment       

Commercial

Initiative       

LBG Matrix

Community

Impacts

Business

impacts

Leverage

‘The additional resources attracted to a project or

organisation as a direct result of the initiative or

participation of the company. It can include money,

time, skills, and gifts in kind’

• Government funding

• Other corporate partners

• Employee donations

• Community donations

Community benefits – output measures and indicators

Arts and Culture

• No of visitors/viewers

• Number of venues work is shown or performed

• No of new artists supported

Economic development

• New businesses started

• Jobs created

• Sites cleared/renovated

Education and young people

• No of young people involved

• No of additional literacy/numeracy hours provided

• Increases in literacy levels

• No of young people finding jobs as a result of the program

Health

• Patients helped

• Groups supported

• Advice leaflets

• Helpline calls made

Social welfare• No of clients counselled/assisted• Number of groups/individuals

/communities supported• Bed places provided• New volunteers trained/deployed

Environment• No of sites renovated• Trees planted• Volunteer hours deployed

Aid/Emergency relief

• Food/blankets/supplies/school books distributed

• Wells dug/ communities supplied

• Teachers/agriculturalists/nurses funded

• Schools/clinics opened or sustained

Community benefits – output measures and indicators

Business benefits – output measures and indicators

• No of employees involved

• Uplift in morale/commitment

• Additional training/experience acquired

• Volume and value of PR coverage received

• ‘Immediate’ uplift in sales

• ‘Immediate’ cost savings achieved

Community benefits – impact measures and indicators

• Sustainable community services

• Changes in legislation/public provision

• Reduction in crime

• Increased support to the arts

• Increased literacy rates

• More local jobs/businesses

Business benefits – impact measures and indicators

• Reduced absenteeism

• Increased productivity

• Higher staff retention rates

• Sustained reputation with key audiences

• Higher success rate on planning consents

• Reduced claims costs

Cadbury Schweppes & Water AidTo improve the quality of life of cocoa farmers by building water wells across Ghana in conjunction with the farmer’s co-operative, Kuapa Kokoo.

6380 people have benefited directly from this scheme.

Each well saves 165 hours per day which people can use to work or learn

Measurable reduction in water-borne

diseases

Assuming that 50% of the 6380 people helped by the project would go to work, a contribution of £698,610 pa would be made to GNI of Ghana

Gross benefit to Ghana per well is £2,190 pa

For every £1 spent, there is an annual return of £1.32 (132%) pa

Community impacts Business impacts

Community benefits Business benefits

OutputsInputs

Leverage

Improved PR for Cadbury Schweppes valued at xxx

Strong ties forged between Cadbury and the areas in Ghana from which they source their cocoa.

Improved corporate reputation

Long-term cost reduction due to reduced worker illnesses

Improved relationships between Cadbury and Ghana cocoa suppliers and

Reduced infant mortality helps to secure the future of cocoa farming

From 2000 to 2005

Each well costs £1,660

319 wells built by the end of December 2005

Total cost of scheme to date = £529,400

Cadbury Schweppes holds additional fundraising events to support the wells program, value xx

Leverage Community benefits Business benefits

Inputs Outputs

$470k cash contribution

10,000 hours (@40/hr that’s $400k)

610 employee volunteers

•By the end of 2006, 1,100 children had been helped by Reading for Life • x programs have been run in NSW, Victoria, Western Australia, Queensland, Tasmania and also in New Zealand.

2003/2007

Opportunity for x employees to have an empowering volunteering experience

Improved business reputation in local communities

• Team building, with improved focus and morale

Community impacts Business impacts

• Childrens reading accuracy, comprehension and fluency gained 6 to 9 months on average.

• Improved children’s literacy skills, overall academic self-esteem and performance at school

• Reading for Life is now running in x companies and universities, offering x hours reading nationally

Supporting our people to be Reading for Life volunteers and make a difference for local school children has been a real three way win – it’s been great for the children, our employees and Unilever.” Peter Slator, Chairman, Unilever Australasia

Unilever & Reading for Life A volunteer employee reading program to help primary school-age children who are having difficulty reading

•Other companies such as Rio Tinto, ANZ, Mitchells, Amcor and Cadbury now run Reading for Life programs as a direct result

ANZ & Saver Plusa financial literacy and matched savings program assisting people on low incomes

ANZ & Saver Plus

ANZ & Saver Plus

• Many companies are now developing community partnerships

with environmental organisations, making donations, involving

employee volunteers, and deploying company products and

resources

• Motivations are sometimes mixed, and can include carbon

offsetting

• These can be included as community contributions, when the

criteria of ‘motivation’ and ‘identifiable community benefit’ are

met

A word on the environment

Under LBG the activity would qualify as an allowable community contribution when:

• The motivation is primarily to deliver or promote a public or community benefit or good

• All or most of the activity takes place off site, and in communal or public locations

• There is a clearly identified charitable or community group, or non profit organisation, receiving support, or obtaining benefits from the initiative. (This can be extended to a public area, such as a park, public facility, coastal area where there is not necessarily a non-profit organisation involved).

A word on the environment

Under LBG the activity would generally not qualify as a community contribution when:

• The motivation is primarily to improve environmental performance or support better environmental practices in the business, and takes place mostly on site:• Office, factory, site or store recycling schemes

• Internal communications campaigns on reducing energy or water usage

• tree planting/site improvement

• There is no clearly identified charitable or community group, or non profit organisation, or public-use space, involved in, and/or benefiting directly from the initiative.

A word on the environment

Questions

Jerry Marston

129 York Street

South Melbourne, VIC 3205

T: +61 3 8689 2241

E: jerry.marston@positiveoutcomes.com.au

www.positiveoutcomes.com.au

www.lbg-australia.com

www.lbg-nz.com