OPINION – Quantitative and Qualitative Measurements of CSR: Figures and Descriptions

Carlos Noronha

Vice President, Executive Council

Macau Institute for Corporate Social Responsibility in Greater China (MICSRGC)

In March 2022, the Second Standing Committee of the Macau Legislative Assembly reported that some legislators were concerned about how CSR activity of the gaming operators under the new gaming law can be ‘quantified’ and the President of the Committee expressed that it is very difficult to do. Let us take a look at this matter of measuring good deeds (CSR).

It can be generally mentioned that there are quantitative (by numbers, figures or monetary amounts) measurements as well as qualitative measurements of how companies contribute to society in the form of CSR.

What has been questioned by the legislators, and probably the public, is largely in terms of monetary contributions given by gaming operators to society. Everyone is certainly reminded of the 35% special gaming tax on operators’ gross income plus another 4-5% for social, infrastructure and other contributions. Most likely, people are seeking to find out whether, under the new gaming law, this 4-5% contribution will be increased. It is natural that the public will focus on this so called “CSR contribution”, but when the money goes to the coffer and whether it is spent in an effective and efficient way, is entirely another issue.

Back to the main issue of how to measure CSR. This is a difficult question but there are already what we called “measurements of social performance/contributions” (MSP/C) worldwide. It is not difficult for one to have access to the Dow Jones Sustainability Index and the so-called sustainable shares versus the “sin stocks”. If a business is listed on a particular stock market, it must fulfill certain ESG (environmental, social and governance) requirements and disclosures. For example, members of MICSRGC have already conducted research using the “Social Contribution Value per Share” (SCVPS), which is a numerical indicator of how much an enterprise is contributing towards the main stakeholders, such as the investors, government, customers, and suppliers; and taking into account the negative impacts business operations may have on the environment. Our research has also indicated that this kind of quantitative measurement can be informative to investors, giving them good indicators and criteria for investing in sustainable businesses. At present, the SCVPS is only disclosed by companies listed on the Shanghai Stock Exchange. We believe that it is applicable to companies listed on other stock markets.

What about the qualitative side of CSR measurements? I would like to share an experience of our institute, MICSRGC, being involved in an upcoming public award for responsible entrepreneurship. The “Deignan Award for Responsible Entreprenuership” is a newly set up form of recognition for businesses in Macau and Hong Kong (especially small-and-medium-sized enterprises) which have attained the award criteria and have performed in an outstanding way in terms of CSR, sustainability, ESGs, and business ethics. The event is co-organized by the Wofoo Foundation Limited in Hong Kong, the Macau Ricci Institute, and a number of key organizations including the University of Saint Joseph, the Hong Kong International Institute of Educational Leadership as well as the Center for Catholic Studies of the Chinese University of Hong Kong.

In shaping the award criteria, MICSRGC assisted in operationalizing the five core or foundational values of Alfred Deignan, S.J., namely “Respecting Human Dignity”, “Respecting Fairness”, “Respecting the Environment”, “Respecting Business Ethics”, “Respective the Disadvantaged”, plus “enhancing value” which looks into social innovativeness and crisis management. The award is open for applications and the judging panel includes respected names in the social, business and philanthropy areas in Macau and Hong Kong. Every foundational value of the award has to be substantiated by evidence – qualitative as well as quantitative – thus the inspiration behind this article. It is worth looking forward to seeing how the nominees contribute toward CSR and related issues like sustainability, ESG and so on.

In drafting the award criteria, MICSRGC (with the unconditional help of our academic members and volunteers) has referred to various awards on CSR, business ethics, and business excellence in other countries and regions. CSR is not dependent on the monetary amount any large corporation has spent on public relations or marketing. The message is simple and clear: Good deeds are difficult to measure, but if we measure them, we need to be vigilant and not be swayed by extravagant forms and impressive titles.