Case study: How LSR Group creates economic value for its stakeholders
Operating in the Russian construction and real estate market for 27 years, LSR Group is one of the largest developers in the Russian Federation. LSR Group’s strong market and financial position makes it confident about its business outlook and allows LSR Group to create sustainable value for all its stakeholders. Tweet This!
This case study is based on the 2020 Sustainability Report by LSR Group, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
In 2020, the direct economic value generated by LSR Group was RUB 121,494 million, of which RUB 90,285 million were distributed to LSR Group’s key stakeholders. In order to create economic value for its stakeholders LSR Group took action to:
- create economic value for employees
- create economic value for providers of capital
- create economic value for the government
- create economic value for communities
Subscribe for free and read the rest of this case study
Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).
With this case study you will see:
- Which are the most important impacts (material issues) LSR Group has identified;
- How LSR Group proceeded with stakeholder engagement, and
- What actions were taken by LSR Group to create economic value for its stakeholders
Already Subscribed? Type your email below and click submit
What are the material issues the company has identified?
In its 2020 Sustainability Report LSR Group identified a range of material issues, such as customer satisfaction, occupational health and safety, employee training and development, product quality and customer safety. Among these, creating economic value for its stakeholders stands out as a key material issue for SMPC.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups LSR Group engages with:
| Stakeholder Group | Method of engagement |
| Shareholders and investors
| · General Meeting of Shareholders · Publishing corporate statements · Publishing press releases, presentations, and news · LSR Group participation in investor conferences · Organising site visits for investors · Working with rating agencies and analysts · Attending roadshows and organising capital markets days |
| Government and regulators
| · Preparing and publishing reports in accordance with legislative requirements · Internal checks and inspections by government authorities · Acting on comments and improvement notices · LSR Group participation in law-making processes and initiatives · Implementing charitable projects and building social infrastructure |
| Employees
| · Supporting internal communication channels (the corporate magazine, TV channel, social media accounts, the LSR Group internal web portal) · Handling, reviewing, and responding to reports received via the Trust hotline · Running incentive programmes · Raising awareness of, and conducting training in occupational health and safety · Holding sporting, charitable, and cultural events · Implementing employee health initiatives · Providing decent social and living conditions for workers · Providing social benefits · Training and upskilling at training centres · Working together with educational institutions to attract young talent · Holding initiatives to boost employee satisfaction |
| Customers
| · Signing contracts and agreements · Conducting competitive procurement procedures (www.zakupki.lsr.ru) · Counterparty and bidder screening and due diligence · Assessing product compliance with safety and quality standards · Regular contractor checks to ensure product compliance with relevant requirements |
| Local communities
| · Collaborating with charity foundations and other not-for-profit organisations to implement social and charitable projects · Supporting the construction of social infrastructure · Organising cultural and entertainment events across regions of operation · Holding management meetings with the representatives of local communities to discuss current issues · Supporting projects to preserve architectural monuments and cultural initiatives |
| Media
| · Publishing press releases about key events · Holding briefings, presentations, and conferences for the media · Arranging for personal meetings and interviews · Regular support to the media and industry periodicals · Creating LSR’s own YouTube expert platform · Cooperation with regulators in the media |
| Public organisations
| · Participating in industry associations · Participating in industry conferences, seminars, and forums · Participating in professional and other industry competitions · Taking part in the development of professional standards in the construction industry · Membership in sustainability, in particular green construction, organisations |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics LSR Group engaged with its stakeholders through surveys.
What actions were taken by LSR Group to create economic value for its stakeholders?
In its 2020 Sustainability Report LSR Group reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2020, LSR Group paid RUB 12,681 million for employee wages and salaries.
- Creating economic value for providers of capital
- In 2020, LSR Group paid RUB 11,302 million to providers of capital.
- Creating economic value for the government
- In 2020, LSR Group paid RUB 4,710 million to the government.
- Creating economic value for communities
- In 2020, LSR Group spent RUB 424 million in community investments.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
78% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
7 GRI sustainability disclosures get you started
Any size business can start taking sustainability action
GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom (venue: London School of Economics)
- Exclusive FBRH template to begin reporting from day one
- Identify your most important impacts on the Environment, Economy and People
- Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP.
- Benchmarking methodology to set you on a path of continuous improvement
See upcoming training dates.
References:
This case study is based on published information by LSR Group, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
https://www.lsrgroup.ru/assets/files/2021/lsr-our-2020-eng.pdf
Note to LSR Group: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.