The impact of company activities is typically not confined to its bottom line and shareholder value, but also extends to the environment and society. Corporate Social Responsibility (CSR) is an organizational self-governance strategy to manage not only internal governance practices, but also a company’s impact on the environment and society. This approach to achieving CSR is also referred to as the Environmental, Social and Governance (ESG) framework.
In Israel, there is a local CSR rating index called Maala, which reviews the performance of private, governmental, and publicly traded companies in terms of ESG criteria. The Maala Index is published annually on the Israel Stock Exchange. The criteria used by Maala somewhat resemble those of the international Global Reporting Initiative standards (GRI).
The strength of an organization that has committed to corporate responsibility and its willingness to report on it transparently enable effective risk management and can improve its reputation. The organization that sincerely strives to act in a socially and environmentally responsible manner is more likely to enjoy public trust, reduce its exposure to risks, and improve its competitiveness.