Case study: How SGS creates economic value for its stakeholders
With more than 96 000 employees in 125 countries, SGS is the world’s leading testing, inspection and certification company, led by its purpose to bring value to society by enabling a better, safer and more interconnected world. Maintaining continuous dialog and creating shared value with all its stakeholders, is critical to SGS’s long-term success.
This case study is based on the 2021 Corporate Sustainability Report by SGS, 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.
Abstract
Ensuring long-term value creation for all its stakeholders, is a top priority for SGS. Tweet This! In order to create economic value for its stakeholders SGS took action to:
- create economic value for employees
- create economic value for subcontractors
- create economic value for shareholders
- create economic value for the government
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With this case study you will see:
- Which are the most important impacts (material issues) SGS has identified;
- How SGS proceeded with stakeholder engagement, and
- What actions were taken by SGS to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2021 Corporate Sustainability Report SGS identified a range of material issues, such as cybersecurity, risk management, data privacy and protection, ethical behaviour, health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for SGS.
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 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 SGS engages with:
| Stakeholder Group | Method of engagement |
| Employees
| · Global employee engagement programme, Catalyst · SGS intranet portal and internal social network · SGS Inside newsletter · Rules from Lëss sustainability engagement campaign. In 2021, SGS launched an internal initiative hosted by Lëss the bear, its sustainability mascot, to empower all colleagues around the network to actively contribute to the achievement of its corporate sustainability goals, as set out in SGS’s SA30 · Training programmes, videos and eLearning modules · SHINE onboarding · Employee representation councils (e.g. European Works Council – Euro Forum) |
| Customers
| · One-to-one meetings · SGS hosted conferences, seminars and webinars · Customer surveys, e.g. Voice of the Customer · White papers · Customer portal |
| Governments and industries
| · SGS hosted conferences, seminars and webinars · Membership meetings and events · White papers |
| Investors
| · Annual General Meeting · SGS Investor Days · Meetings with investors and analysts · Responses to analyst questionnaires |
| Communities and the planet
| · Multiple projects across the network – the impact of which SGS measures through its annual community survey · White papers · One-to-one meetings with NGOs and responses to questionnaires |
| Consumers | · Certification and product labelling · Direct marketing and communication with certain B2C products |
| Suppliers | · Supplier self-assessment · Supplier code of conduct · Supplier audits |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics SGS conducted a formal materiality assessment involving over 4 000 stakeholders in 112 countries, including customers, employees, suppliers, investors, non-governmental organisations and sustainability professionals
What actions were taken by SGS to create economic value for its stakeholders?
In its 2021 Corporate Sustainability Report SGS reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2021, SGS paid CHF 3 180 million for employee salaries and wages.
- Creating economic value for subcontractors
- In 2021, SGS paid CHF 385 million in subcontractors’ expenses.
- Creating economic value for shareholders
- In 2021, SGS paid CHF 641 million in dividends to shareholders.
- Creating economic value for the government
- In 2021, SGS paid CHF 269 million in income taxes and CHF 35 million in other taxes.
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
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References:
This case study is based on published information by SGS, 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:
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