Paris, 24-25 September 2009

Defending Business Assets and Reputation During World Economic Turmoil:The Role of a Successful Legal Team Paris, 24-25 September 2009 Prof. Claudio Cacciamani Department of Economy University of Parma (Italy)

Agenda • CSR in listed companies in Italy: only selfregulation • Laws affecting CSR in Italian listed companies • Communication about risks in listed companies in Italy • Some empirical results: communication of risks and insurances • From actual value to sustainable value for shareholders and stakeholders: indications for future regulation claudio.cacciamani@unipr.it

CSR in italian listed companies • Practices of CSR are more and more diffused among italian listed companies (the 53,2% of the companies are active), but, unfortunately, up today, the CSR is still not integrated in the business strategy. • Social balance; • Environmental balance; • Codes of behavior and governance CSR: voluntary bases claudio.cacciamani@unipr.it

Codes of behavior and governance The code of <<Business Behavior>> suggested by Italian Stock Market is a tool of management with which the company aims to: • explicit the essential lines of its own actual and future identity (mission, vision, etc.); • clarify the fundamentals of the relationship between shareholders and management; • prevent illegal behaviors of workers; • clarify its own responsibilities and behaviors towards external (suppliers, competitors, local community, political parties and public officers) stakeholders. The business code must become an alive element of the existing and future strategy. claudio.cacciamani@unipr.it

Codes of behavior and governance: some examples in Italy just implemented • ENEL • ENI • FIAT • GLAXO WELCOME Codes of behavior and governance still limited in Italy claudio.cacciamani@unipr.it

Social balancesheet in Italy The most suitable tool to give visibility to the CSR of the company. It represents an istitutional tool: • to communicate to stakeholders; • to improve the organization, the management, the internal communication; • to elaborate a social strategy. OIL: Eni EXAMPLES PHARMACEUTICAL COMPANIES: Glaxo UTILITIES: Acea, Aem, Edison, Enel, Hera, Snam claudio.cacciamani@unipr.it

Environmental budget • The environmental balancesheet is a document describing the principal relationships between the company and the environment, <<voluntarily>> published to directly communicate with the stakeholders. • If compared to the Social Budget, the Environmental balancesheet describes only a part of the business activity, referring to specific parameters and following lines defined by different international organizations. Among the others: - CEFIC (Council of European Chemical Industry); - PERI (Public Enviromental Reporting Initiative); - FEEM (Fondazione ENI Enrico Mattei, oil and gas). claudio.cacciamani@unipr.it

Incentives to CSR in Italy Legislative Decree n. 231, June, 8th 2001 • It Introduces, for the first time in italian laws, the penal responsibility of the company and not only of the people. • The extension of the responsibility to the company directly engraves the assets of the company in the punishment of the crimes. Therefore, it enforces a greater control on the correctness of the strategy and operations of the company. claudio.cacciamani@unipr.it

Incentives to CSR in Italy Legislative Decree n. 460, 1997 It introduced the ONLUSs (non profit Organizations) promoted by companies and privates and gave a new definition of non commercial Institutions. It also introduced a new principle that could be prelude to the introduction of rules for a report on the social activities, quite a sort of “balancesheet” of the social activity. claudio.cacciamani@unipr.it

Communication about risks • In Italy some listed companies freely decided to communicate their activities and their impact on the environment, as done by some french companies (Lafarge and Renault), through an environmental report. • A European recommendation simply invites to consider in the annual report also environmental matters. claudio.cacciamani@unipr.it

Value of communication: markets and number of companies analized claudio.cacciamani@unipr.it

Value of communication:industries investigated claudio.cacciamani@unipr.it

Results

Results claudio.cacciamani@unipr.it

Results

Results 67.79% OF ENTERPRISES COMMUNICATES ONLY INSURED RISKS INSURANCE PREMIUM = 2,26% OF COSTS FOR SERVICES claudio.cacciamani@unipr.it

Index • CSR in listed companies in Italy: only selfregulation • Laws affecting CSR in Italian listed companies • Communication about risks in listed companies in Italy • Some empirical results: communication of risks and insurances • From actual value to sustainable value for shareholders and stakeholders: indications for future regulation claudio.cacciamani@unipr.it

From value to sustainable value • A social balancesheet is the first and more important tool of knowledge and check of what a firm is doing in CSR for: - customers, suppliers; - rating agecies; - “socially responsible” analists and researchers; - any other stakeholder. • Italian Companies with a unity of CSR are more and more. In 1998 1,6 per cent had a unity and now about the 38,7 percent has a unity, i.e. about 4 firms on 10 have a unit dedicated to Corporate Social Responsability. claudio.cacciamani@unipr.it

From value to sustainable value • A CSR manager is fundamental in the dialogue with stakeholders, directly managing often the stakeholder enquiries (28,6%) and the meetings with the associations of consumers (36,4%). • The unities of CSR are also helping in the relationship with the local community. In fact, Foundations promoted by companies (22,6%) are growing. There are more donations (61,3%) and sponsorships (77,4%). Also the diffusion of budget of sustainability (40,3%) and sections of the site internet devoted to the CSR (45,2%) are in growth. claudio.cacciamani@unipr.it

The future… • There are two main challenges: • specific laws that impose the respect of precise social objectives are anyway desirable; • neither voluntary decisions, neither compulsory laws; on the contrary a complete (also tax) regulation to stimulate and to reward companies that socially move toward models of responsable development, also favoring spontaneous activities carried out by related Foundations. claudio.cacciamani@unipr.it

Questions? claudio.cacciamani@unipr.it

Thanks!!! claudio.cacciamani@unipr.it

Paris, 24-25 September 2009