Contribution to Society

10. Our contribution to society measured, shared and valued

Businesses not only contribute to society through the taxes they pay, but by creating employment, sustaining smaller suppliers and supporting local economies. We need to measure our contribution and make sure this is widely understood.

Why is this important to us?

Across the world, companies are under the spotlight for the impacts they have. Our stakeholders and communities want us to maintain our financial contribution – and also to play a wider social role locally, nationally and internationally. The UN’s 17 Sustainable Development Goals (SDGs) agreed by the global community are established as a way for stakeholders to frame these expectations. So it’s vital that we develop better measures of the real long-term value we create.

Our challenge

Our social licence to operate depends on the perceived value we deliver to our stakeholders: economic, social and environmental. Where people feel this isn’t positive enough, or where we simply don’t have the data, we can lose the trust of governments and communities. We have to be aware that this could cost our business – whether through changes in policy or taxation, or in disruptions to our everyday operations. Unless we have a well-founded reputation, we risk losing customers and employees.

Our action

We need to be able to measure the different types of value we create accurately, make this information open to scrutiny, and communicate it meaningfully. We need to consider not only salaries and dividends, tax contributions and payments to suppliers, but the skills training we provide, the investments we make in local infrastructure and to prevent pollution, the impact we have on the sustainability of other industries, and the value our products bring to both consumers and society at large.

Our potential to create value

We already make a significant contribution to society, but we need to demonstrate this more widely. This will help build trust in our communities and among our investors – and our employees will be proud to say they work for us. It will also help to prevent disruptions. As our local operations take responsibility for measuring and valuing their own impact, they’ll make better decisions and shape more resilient business strategies. We will become a partner of choice for governments and an employer of choice for the talent of the future.

Our stakeholders’ expectations

The 17 SDGs (or ‘global goals’) are fast becoming the proxy for the expectations stakeholders have of all economic and social actors. So companies like ours need to evidence contributions through the Global Reporting Initiative (GRI) Standards and other similar measures.

Mining companies, more than many other sectors, are expected to make significant economic and social contributions to the communities where they operate. The agreements with host governments set out these requirements in great detail. Steelmaking companies can also face similar challenges from their host governments and communities.

Recent disclosures about corporate tax payments in the retail sector make the media and consumers more aware of the issue of the companies’ contributions. Greater scrutiny of company tax structures is shining the spotlight on the contributions business makes to government revenues. Stakeholders and investors also attach great importance to transparent disclosure as a crucial element of better governance. The Extractive Industries Transparency Initiative is an example of this, and we’ve been involved in it since 2007. In Brazil, we are signatories of the NGO Transparency International.

The result we need

We can show the value of the contributions we make to society, and enable our stakeholders to understand them alongside our financial results.

Achieving the guideline

At global level, we always report on our socio-economic contribution, which means the direct economic value we create through our procurement, tax payments and R&D investments. We are also increasingly doing this at country level. We also collaborate with other organizations to analyse, for example, the different contributions to air quality or the contribution of the entire steel sector to the economy. Our local operations monitor the safety of their workforce, assess the interests of their stakeholders at site level, and report on the implementation of labour standards and human rights. In 16 countries we produce a country-level sustainability report (published here), ), most of which are aligned with the GRI framework. We’re also developing a social impact framework to enable us to measure our impacts against our 10 outcomes and the SDGs, and to show both the positive and negative social and economic impacts of our business.

We also have a well-established team specialising in lifecycle assessment looking at the impact of our products. Their studies are disseminated in various forms, including Environmental Product Declarations. We are members of the Roundtable for Product Social Impact Assessment, a cross-sector initiative developing guidance on how to measure social impacts of products and services to improve the lives of workers, users and local communities. And we regularly contribute to the SOVAMAT initiative (SOcial VAlue of MATerials), an international network of experts on the social and environmental impacts of materials.

In 2017, we announced that all new R&D projects must contribute positively to sustainable development. So we’ve developed a Sustainable Innovation tool to assess the potential sustainability impacts of new R&D proposals both for products and processes. This will help us make sure our innovations all contribute positively to sustainable development.