Social metrics in the process industry: background, theory and development work

Abstract

Sustainable development as the leading global development paradigm and sustainability as a cornerstone of modern industrial development have guided this development work on social metrics in the process industry. This study addresses the development of social metrics in the process industry and for metal production, in particular, at the plant level. The developed social indicators are one part of the overall sustainability index that aims to present a balanced and holistic view of plant-level sustainability performance, encompassing information on all different dimensions. This development work was preceded by the benchmarking and review of existing global reporting frameworks, initiatives and the literature. Current indicators of industrial sustainability mainly satisfy the needs of corporate-level management and capital investors. Therefore, plant-level indicators are critically needed to support and fill potential gaps in corporate-level assessments and management with a special emphasis on plant-level sustainability. The purpose of our development work for social indicators was to operationalise the concept of sustainability and associated performance measurement at the plant level. The development of social indicators was carried out through workshops with industry partners. As a joint effort, eight core social indicators and their associated sub-indicators were developed. We also report the results of our benchmarking and review of existing frameworks, initiatives and the literature. The social part of the overall sustainability index provides the information on both in-plant sustainability performance and the direct and indirect impacts of plant-level operations on the surrounding society including various stakeholders, interest groups and citizens.

Keywords::

• sustainability
• sustainability index
• social indicators
• sustainable production
• process industry

1. Introduction

Sustainability of all operations is one of the key elements of long-term success in any branch of the modern process industry. Sustainability management requires the focus on all dimensions of sustainability covering the linkages between sustainable industrial development and broader goals associated with sustainable societies and economy. Sustainable development (World Commission on Environment and Development [WCED] 1987) has been established as the leading global development paradigm especially within the UN and European Union (EU) frameworks and various associated policy processes and instruments. Further, multiple UN and EU instruments incorporate requirements for innovative and sustainable approaches to resource use and sustainable industrial development (UN 2002; EC 2005, 2010, 2011). The present development work on social metrics in the process industry is based on this special role of sustainable development and on the application of the principles of sustainability to industrial development in particular.

More integrated industry–society–environment interactions are needed to ensure responsible approaches to industrial activities (Graedel and Allenby 2010) and more attention should be paid to the closure of material cycles and to the economic recycling of materials (Reuter et al. 2005). The role of social indicators, life-cycle methodology, redefinition of system boundaries, recycling and efficient utilisation of waste materials and exergy analysis are all growing in importance (Dewolf and Van Langenhove 2006). In general, sustainability involves a strong focus on specific limited resources and on the development of systems that are capable of supporting human prosperity in the long run, recognising the limits of a finite planet and its resources (Daly 1996; Daly and Farley 2010; Jackson 2009). Sustainable use of natural resources should include the establishment of resource caps in order to set limits to the utilisation of natural resources (Jackson 2009).

All the aforementioned factors mean that corporate-level decision-making and strategic management require a continuous feed of comprehensive information concerning the sustainability performance of plant-level industrial production (Figure 1), covering all elements of sustainability: economic, social and environmental. This study focuses on the development of social metrics in the process industry and for metal production, in particular, at the plant level. Plant-level assessment encompasses operations within a single plant in some specific location. This type of assessment is more detailed than corporate-level assessment that deals with all operations in the assessed corporations covering multiple plants, if applicable. It is also very different from country-level assessment that focuses on the whole economy and society of the assessed country instead of a single corporation or industrial plant. Social indicators are applied to plant-level sustainability assessment as a part of the overall sustainability index, covering all dimensions of sustainability performance. The social dimension of sustainability can be operationalised at the plant level through social indicators, encompassing both in-plant sustainability performance and the surrounding society including value/supply chain and other key stakeholders.

A plant-level sustainability index can, for instance, support and feed comprehensive and multidimensional information into corporate-level sustainability management tools such as ISO 26000, the Dow Jones Sustainability Index (DJSI), the UN Global Compact and the Global Reporting Initiative (GRI). This would guarantee that corporate management could gain a more realistic picture of actual operations and performance at the plant level through these new indicators that also incorporate broader social, economic and environmental impacts, both locally and regionally. Furthermore, the development of new, more balanced social indicators geared towards specific industrial operating environments can bring significant competitive advantages and benefits to sustainability management including corporate social responsibility (CSR). The development of a new and transparent corporate sustainability index requires detailed empirical data on an existing plant, including its key process quality parameters, environmental loads of a process, economics of the industrial plant and its regional social impacts. This approach also requires a close cooperation with the industry and researchers working on performance assessment. The balanced sustainability index (S-index) comprises environmental, economic and social elements with legal aspects as an integrated part of each element (Figure 1):

• Environmental issues (A)

  Figure 1 Sustainability Index for process industry.

  

• Economic issues (B)

• Social issues (C)

• Legal aspects (D)

S-index = AD+BD+CD.

2. Aims of the study and research approach

In this study, we aimed at reviewing existing social sustainability practices within the process industry, assessing associated global initiatives and developing social indicators for the assessment of plant-level social sustainability. The developed social indicators are one part of the overall sustainability index that aims to present a balanced and holistic view of plant-level sustainability performance, encompassing the information on all different dimensions. Therefore, the aims of the present study were:

• To review the characteristics and operating principles of key global initiatives and existing practices of reporting social aspects in the context of corporate responsibility and/or sustainability reporting (three companies).

• To review the literature and scientific articles on social sustainability.

• To develop social indicators for the process industry with a special emphasis on plant-level sustainability.

This study covers online sources of global initiatives on sustainability metrics and online sustainability and corporate responsibility reporting materials of three companies: two steel industry companies (Ruukki and Outokumpu) and one company that delivers technology, equipment and associated solutions for the steel industry (Outotec). The research approach was based on sustainability assessment (Hak, Moldan, and Dahl 2007; Bell and Morse 2008; Sheate 2010; Dalal-Clayton and Sadler 2011) in accordance with the theory and approaches of sustainability science (Kates et al. 2001; Komiyama and Takeuchi 2006). The research methods were qualitative interviews, participatory workshops and literature research (Alasuutari 1993; Eskola and Suoranta 1998; Denzin and Lincoln 2005). The format of the interviews was more discussion based than enquiry based. In participatory research (Cornwall and Jewkes 1995; Macaulay, Sirett, and Bush 2011), as in our workshops, participants had an active role in the research and were involved in generating knowledge about sustainability indicators. The aim of this approach was to reach an agreement on key indicators and their associated sub-indicators, and a special emphasis was given to plant-level sustainability and its associated local requirements.

3. Review of the main global frameworks and instruments

3.1. Corporate sustainability performance

Many global companies have reported on CSR and major institutions and associations have committed themselves to sustainability and sustainable development. The main topics usually cover, for instance, health and safety, employee training, human rights, good governance, risk management and local communities. Many global initiatives and indices, such as the UN Global Compact (UN 2012), the GRI (2012a), the DJSI (2012a, 2012b) and the SAM Corporate Sustainability Assessment (SAM 2012a, 2012b), encompass social elements and indicators that can be modified and adapted to plant-level assessments. Furthermore, benchmarking of best practices within various frameworks and instruments can highlight some of the contemporary elements of social sustainability. The social sustainability components of these instruments under study are presented in Table 1. These instruments cover multiple aspects of social sustainability; however, they focus on the corporate level and do not necessitate the provision of information on plant-level social sustainability performance and impacts. Thus, the development and application of plant-level social metrics can help to bridge this gap.

Table 1 Social sustainability within the UN Global Compact, GRI, ISO 26000 and DJSI/SAM.

Global frameworks	Social sustainability components
UN Global Compact	Human rightsPrinciple 1. Businesses should support and respect the protection of internationally proclaimed human rightsPrinciple 2. Make sure that they are not complicit in human rights abusesLabourPrinciple 3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargainingPrinciple 4. The elimination of all forms of forced and compulsory labourPrinciple 5. The effective abolition of child labourPrinciple 6. The elimination of discrimination in respect of employment and occupationAnti-corruptionPrinciple 10. Businesses should work against corruption in all its forms, including extortion and bribery
GRI	Labour practices and decent workPerformance indicator aspects: employment, labour/management relationships, occupational health and safety, training and education, and diversity and equal opportunityHuman rightsPerformance indicator aspects: investment and procurement practices, non-discrimination, freedom of association and collective bargaining, child labour, forced and compulsory labour, security practices and indigenous rightsSocietyPerformance indicator aspects: community, corruption, public policy, anti-competitive behaviour and complianceProduct responsibilityPerformance indicator aspects: customer health and safety, product and service labelling, marketing communications, customer privacy and compliance
ISO 26000	Principles of social responsibilityPrinciples: accountability, transparency, ethical behaviour, respect for stakeholder interests, respect for the rule of law, respect for international norms of behaviour and respect for human rightsCore subjects of social responsibilityCore subjects: organisational governance, human rights, labour practices, the environment, fair operating practices, consumer issues and community involvement and development
SAM Corporate Sustainability Assessment	Social dimensionComponents: social reporting, labour practice indicators and human rights, human capital development, talent attraction and retention, corporate citizenship and philanthropy, and stakeholder engagement

The UN Global Compact (UN 2012) provides a framework within which companies can commit themselves (strategically and operationally) to globally agreed principles that encompass three areas relevant to measuring social sustainability performance: human rights (e.g. rule of law, value chain management covering both potential upstream and downstream human rights issues, human rights due diligence, worker productivity and good community relationships), labour and anti-corruption. The GRI (2012a) is a comprehensive sustainability reporting framework aiming at promoting development towards a global sustainable economy. The GRI framework is based on four key areas of sustainability performance reporting: economic, environmental, social and governance performance. In addition, the framework provides the G3 Guidelines that cover guidance on both how to report and what to report. The associated sustainability reporting indicators include a social category that encompasses the following subcategories: labour, human rights, society and product responsibility (GRI 2012b).

The OECD Guidelines for Multinational Enterprises (OECD 2011) provide voluntary principles and standards for responsible business conduct consistent with applicable laws and internationally recognised standards. These guidelines aim at strengthening the contribution of multinational enterprises to sustainable development and at bridging potential gaps between the interests of industry, government and societies. In general, enterprises should contribute to economic, environmental and social progress, respect internationally recognised human rights, respect the rights of workers, apply good corporate governance practices, implement risk-based due diligence, adhere to legally required standards for consumer health and safety, combat bribery and encourage both local capacity building jointly with local communities and human capital development through, for example, training and employment (OECD 2011). The ILO (1998) Declaration on Fundamental Principles and Rights at Work includes the following key principles and rights at work:

• Freedom of association and the effective recognition of the right to collective bargaining

• Elimination of all forms of forced or compulsory labour

• Effective abolition of child labour

• Elimination of discrimination in respect of employment and occupation

The International Standard ISO 26000:2010 Guidance provides voluntary guidance on social responsibility for all types of organisation in any country. According to ISO 26000, social responsibility means the responsibility of an organisation for the impacts of its activities and decisions on society and the environment through ethical and transparent behaviour in a way that: contributes to sustainable development, takes into account stakeholder expectations, is in compliance with applicable law, is consistent with international norms of behaviour and integrates social responsibility into the whole organisation including practices in its relationships. In brief, the aim of social responsibility is to contribute to sustainable development as more and more organisation and their stakeholders are increasingly aware of the benefits of and the need for socially responsible operations. ISO 26000 encompasses the principles and core subjects of social responsibility (Table 1) and provides guidance on recognising social responsibility, engaging stakeholders and integrating social responsibility throughout an organisation (ISO 26000).

The DJSI (2012a, 2012b) is the first global sustainability benchmark and social criteria are a part of its toolbox for measuring the sustainability performance of various companies globally. The idea is to integrate sustainability considerations (e.g. through the focus on sustainable best practices) into investment decision-making. The indices are offered in cooperation with SAM (2012a, 2012b) that applies the SAM Corporate Sustainability Assessment to benchmark corporate sustainability performance covering economic, environmental and social issues with a focus on industry-specific criteria. RepRisk (2012) is a tool for identifying and assessing both social and environmental issues in accordance with the principles of the UN Global Compact with a special emphasis on issues that may cause financial, reputational and ethical risks. This tool may be applied to, for example, investment decisions and supply chain management and aims to increase transparency and compliance with international and internal standards. The assessment of social performance is based on observations provided by independent third parties and the social issues within the scope of RepRisk (2012) encompass community relationships, employee relationships, corporate governance and product-related risks as well as general issues such as violation of international standards and national legislation across the whole supply chain.

The sustainable development policy of the World Steel Association (WSA 2011) covers environmental, social and economic sustainability and focuses on, for example, value for stakeholders, safety and health, local communities (demonstration of social responsibility), ethical standards, stakeholder engagement and levels of disclosure and transparency including knowledge of and communication on sustainability covering the whole supply chain. The specific social sustainability indicators comprise the lost time injury frequency rate and employee training. The Sustainable Development Charter of the WSA (2012) states that the industry is committed to fostering the well-being of employees and providing a safe and healthy working environment. Further, the charter notes that the industry aims at promoting values and initiatives that respect communities and people associated with the business of signatories. Other key issues are high ethical standards in all employee, customer, supplier and community relationships, support for the implementation of sustainable practices in the supply chain, and constructive dialogues with stakeholders and open and active communications on sustainability.

4. Country-level indices and indicators

There are many indices and indicators that measure country-level performance in some specific field such as the World Wide Governance Indicators (WGI 2012) that are cross-country indicators of governance consisting of six composite indicators of multiple dimensions of governance covering over 200 countries (between 1996 and 2010). The indicators are voice and accountability, political stability and the absence of violence, government effectiveness, regulatory quality, the rule of law and the control of corruption. The WGI uses several data sources based on global reporting by survey respondents, non-governmental organisations, commercial business information providers and public sector organisations. The Global Integrity Report (GIR 2012) examines the existence and effectiveness of and citizen access to national-level accountability and anti-corruption mechanisms covering over 30 countries. Country-level assessment includes both a qualitative notebook and a quantitative Integrity Indicators scorecard containing six main indicator categories: non-governmental organisations, public information and media, elections, government conflicts of interest safeguards and checks and balances, public administration and professionalism, government oversight and controls and anti-corruption legal framework, judicial impartiality and law enforcement professionalism (GIR 2012). These country-level instruments cover national-level aspects of social sustainability, but do not necessitate the provision of information on corporate- or plant-level social sustainability performance and impacts. Thus, the development and application of plant-level social metrics can help to bridge this gap. In addition, country-level indicators can contribute to plant-level social metrics through the provision of data on the specific characteristics of the location of the assessed plant.

The Sustainable Society Index (SSI 2012) is a country-level sustainability assessment tool that integrates human, environmental and economic well-being. This index aims at encouraging sustainable development and achievement of a sustainable society. The human well-being categories are basic needs, personal development and well-balanced society covering nine specific indicators. The OECD Better Life Index (OECD 2012) measures the progress of societies based on 11 indicators. The Corruption Perceptions Index developed by Transparency International (2012) is a composite index ranking countries and territories according to their perceived levels of public sector corruption based on many sources of information about corruption. The Human Development Index (HDI 2012) is a composite index that originates from the annual Human Development Reports of the UNDP, and it focuses on both social and economic development. This index is based on three dimensions of human development (health, education and living standards).

5. Literature review

In general, our literature review indicates that there are many scientific approaches to sustainability metrics; however, these approaches cover corporate-level aspects of sustainability and do not encompass all the dimensions of social sustainability comprehensively and thoroughly. Therefore, there is a need for more research on plant-level social sustainability performance and impacts including potential linkages between corporate- and plant-level performance and assessments in this field. We conclude that further research on the development and application of plant-level social metrics can help to bridge this gap in the literature. In addition, further research on country-level indices and indicators can contribute to the development of corporate- and plant-level social metrics through the provision of key parameters for socially sustainable development.

Graedel and Allenby (2010) recognised that corporate decision-makers should take into account the interactions between industrial activities, humanity and the environment such as social and institutional structure and dynamics as well as social and environmental impacts. The importance of the social dimension of sustainable development has increased significantly and more stakeholder pressure is on social-related concerns associated with industrial activities. However, the assessment of social impacts and the calculation of suitable indicators are less well developed compared with environmental indicators (Brent and Labuschagne 2006). Dahl (2012) stated that it is an urgent development priority to find better indicators of progress towards sustainability (indicators of change in dynamic systems) to address challenges such as resource limits, climate change and economic instability. Steering the transition towards sustainability requires the application of a new set of value-based indicators to measure the implementation of ethical principles (Dahl 2012).

There is no consensus on the design and use of sustainable development indicators, which means that their effectiveness in advancing sustainability should be examined critically (Wilson, Tyedmers, and Pelot 2007). Singh et al. (2009) stated that sustainability indicators and multidimensional composite indices are increasingly recognised as a useful communication tool for assessing corporate performance in fields such as environment, economy, society and technological improvement. However, efforts to measure sustainability very often fail to integrate environmental, economic and social aspects, resulting in a very narrow focus on the subject. Addressing sustainability requires a focus on interlinkages and dynamics within the system under study (Singh et al. 2009, 2012).

Singh et al. (2007) recognised that the steel industry is responding to sustainability challenges by adopting sustainability indicators based on all the three pillars of sustainability: economic, environmental and societal. They noted that decision-making requires the integration of key sustainability indicators. Composite indicators are an innovative approach to assess sustainability performance, and the key identified sustainability indicators for societal performance encompass, for example, employee training and satisfaction, number of accidents, suppliers and contractors, human rights, freedom of association and concern for local communities (Singh et al. 2007). In addition, Krajnc and Glavic (2005) noted that a composite sustainable development index (based on the GRI) can be useful in benchmarking the sustainability performance of different companies in some selected sector, and recognised that the design and use of such an index covers all the three dimensions of sustainability. They also noted that both better assessment methods and rising stakeholder demands for more comprehensive reporting encourage the wider use of new integrated sustainability assessments.

Azapagic (2004) presented a framework for sustainability indicators (compatible with the GRI) encompassing environmental, economic and social indicators, and noted that it is not easy to measure social sustainability performance when compared with measuring economic and environmental performance. The social indicators comprised additional indicators when compared with the GRI indicators: suppliers and contractors and stakeholder involvement. In addition, the framework included integrated indicators linking social, environmental and economic performance (Azapagic 2004). Baumgartner (2008) highlighted that it is necessary to assess the sustainability performance of corporations due to the fact that corporations are important societal actors that play a major role in the implementation of sustainable development. According to Kates (1999), sustainability goals necessitate that corporate decision-makers should take into account the interactions between industrial activities, humanity and the environment such as social and institutional structure and dynamics as well as social and environmental impacts. In general, sustainability transition requires systems and life-cycle thinking and a focus on energy and material efficiency (Kates 1999).

Azapagic and Perdan (2000) noted that the assessment of sustainability is not complete without addressing social issues such as human rights. Their social indicators focused on CSR, and two sets of social indicators were ethics indicators (e.g. stakeholder inclusion, international standards of conduct and intergenerational equity) and welfare indicators (work satisfaction, income distribution and satisfaction of social needs). Full integration of all the relevant aspects is often neglected in the discussion on the sustainability performance of society (Huppes and Ishikawa 2011). Determination of the sustainability performance of a company should take into account direct impacts from on-site processes and indirect impacts (upstream and downstream) associated with the supply chains of a company (Wiedmann, Lenzen, and Barrett 2009). Strategic planning and future-oriented decision-making within the process industry requires a strategic measure, taking into account environmental considerations and changes in societal risk assessment. This can be achieved through the application of the sustainable process index (SPI) based on an operationalised form of the principle of sustainability (Narodoslawsky and Krotscheck 1995). Assessment of the effectiveness of sustainability indicators is important, covering the focus on, for example, stakeholder involvement and good practice (Ramos and Caeiro 2010).

According to Graedel et al. (2011), informed decision-making on sustainable practices requires the application of sustainability metrics encompassing, among others, societal aspects, high awareness of involved stakeholders, economic recycling incentives and focus on product life cycle. Addressing sustainability challenges calls for more attention to integrated sustainability science (Fischer-Kowalski and Steinberger 2011). Additionally, overcoming sustainability challenges will require more collaborative research between industrial ecology and social sciences covering resource efficiency tools and the establishment of material stewardship to complement product responsibility in international value chains (Bleischwitz 2011).

6. Review of social aspects as part of corporate sustainability and responsibility reporting

This review focused on social aspects as part of corporate sustainability and responsibility reporting using three companies as an example. The companies were Ruukki, Outokumpu and Outotec and the material (corporate sustainability and responsibility reports) that we used was gathered from the web pages of these companies. The key findings are presented in Table 2, encompassing social aspects such as the application of global principles, health and safety, and sustainable supply chain.

Table 2 Examples of social aspects in corporate sustainability and responsibility reporting.

Corporate sustainability and responsibility reporting

Application of the GRI and the UN Global Compact reporting indexCode of conduct and ISO standardsHigh level of expertise and continuous competency development, occupational safety, employee performance and well-being, and leadership cultureSustainable supply chainEthical principlesEmployee statisticsMonitoring (e.g. sick leave days, training days, and costs and bonuses).Human rights, local community relationships and dialogue with stakeholders

Sources: Ruukki (2012), Outokumpu (2011, 2012) and Outotec (2012).

7. Development of social metrics

Our research project was carried out in collaboration with the three industry partners. In this study, our target was to develop social indicators for the overall sustainability index for the process industry, highlighting the plant level and local point of view. Social sustainability is one of the key elements of sustainability in accordance with the overall global aim to encourage sustainable development at all levels. This element is often absent from the indicators of industrial sustainability, even though it is highly relevant in the context of informed decision-making and the design of appropriate codes of conduct. Thus, a more balanced approach is needed to promote sustainability in a comprehensive way. In particular, social indicators can address key sustainability issues associated with both corporation and the surrounding society with a strong emphasis on specific local characteristics and conditions. Furthermore, this covers interest groups and ethics of investment. Similarly to overall sustainability, social sustainability has multiple dimensions and involves dynamic and context- and location-specific elements. Social indicators are a tool for a plant-level development and improvement of social sustainability performance in addition to being a tool for the assessment of the level of social sustainability. Good social indicators also measure the sustainability of the intertwined relationship between a plant and the local community.

Four workshops between industry and academia were arranged during the year 2012 and 2013: social indicators (28 February 2012), environmental indicators (16 March 2012), legal aspects (5 September 2012) and economical indicators (26 February 2013). The purpose of these workshops was to achieve better understanding about challenges and needs for sustainability evaluation of the metal production industry and to choose the indicators of the sustainability index. The course of each workshop was well planned. First, researchers presented the background information and literature review. Then, all the participants received the theme of the day and the teamwork session began. The conversation in the workshops was lively and fruitful. Every chosen indicator was elaborated in the workshops. Thus, the index is a collaboration between several people and companies and a comprehensive background literature work.

The workshop on social indicators narrowed down the set of social indicators to a set of eight core indicators (Table 3): location, supply chain, social innovations, labour practices, training, education and competency management, reporting, occupational health and safety and legal aspects. Each indicator has a set of specific sub-indicators. The location indicator focuses on operational environmental risks associated with plant location (country) and also utilises global indices such as the SSI (2012), the GIR (2012) and the OECD Better Life Index (OECD 2012) as sub-indicators. In addition, this indicator covers local communities and stakeholder engagement. The supply chain indicator focuses on the integration of social sustainability into the whole supply chain, covering both downstream and upstream actors and their activities. The selection process for social indicators proceeds as follows: (1) benchmarking and extensive review of the literature and existing reporting frameworks and global initiatives before the workshops and (2) discussion on and further development and selection of indicators in the workshops as a joint effort by researchers and industry experts.

Table 3 Social sustainability indicators.

Social sustainability indicators	Examples of sub-indicators
Location	Worldwide Governance Indicators
Supply chain	Social risk management covering the whole supply chain of the factory (practices of suppliers, contractors, sub-suppliers and sub-contractors) Factory covered by ISO 26000 and the UN Global Compact
Social innovations	Development of new social sustainability benchmarks or innovations such as principles, standards or practices
Labour practices	Commitment to international standards (e.g. ILO labour standards, ISO 26000, GRI and UN Global Compact) on working conditions Code of conduct
Training, education and competency management	Average hours/days of training and education for all employees/per employee provided per yearSkills management and competency development programme
Reporting	CSR policy and reporting Local crisis/risk communication plan/strategy Local communities
Occupational health and safety	Safety principles and standards covering at least safe practices, safety training, safety audits and continuous monitoring Demonstration of continuous monitoring of improvement in safety and health performance over the last 5 yearsCoverage of occupational health services and continuous monitoring and reporting
Legal aspects	Collective rightsSalary and termination of employmentWorking hours and leavesEmployee rightsYoung employeesCompany liabilities

The social innovation indicator aims at measuring the level of proactiveness of a single plant in the field of social sustainability and risk management, covering, for instance, social initiatives and investments. The labour practice indicator covers the main employment, working conditions and career development standards associated with social sustainability, whereas the training, education and competency management indicator comprises skills and knowledge management and competency development aspects of social sustainability. The reporting indicator encompasses plant-level CSR reporting, social sustainability reporting, risk/change communication and issues related to local communities. Furthermore, the occupational health and safety indicator has a high weight in the overall social index and outlines the key elements in that field such as standards and monitoring of relevant health and safety priorities.

Discussions with industry experts indicated that social sustainability is an increasingly important element of sustainability management and assessments (e.g. CSR), and it became evident that supply chain issues, including both upstream and downstream actors and activities, are particularly timely and important. Therefore, this element was added as a social indicator with a special emphasis on suppliers and contractors. In addition, this element is part of all the other sections of this sustainability index. The industry recognised that there are country- and culture-specific variations in how social sustainability is perceived and how different elements and practices are valued and implemented. However, experts noted that even though the plants of one company may be scattered all over the world, the code of conduct can be the same in each plant (relevant for the discussion on plant location and related aspects). Multiple indicators and associated background issues were discussed in the workshops and many overlapping single indicators and sub-indicators were streamlined to achieve a coherent set under each indicator category.

Operational environmental risks (location and country specific) should be widely addressed, and international agreements such as those agreed upon the ILO framework jointly with ISO standards (e.g. ISO 26000:2010) are important benchmarks and guidelines for linking plant- and corporate-level management and for the assessment of social sustainability performance. Plant-level activities should be integrated into corporate-level reporting, covering, for instance, policies, standards and risk management. Commitment to and implementation of the code of conduct is one of the important elements. The development of global principles and reporting frameworks raises questions such as on the identification of appropriate priority focus areas and associated development measures as well as on the level and details of expectations concerning the industry. There is not much information on social due diligence in the context of sustainable industrial development and the whole area is under broad-based development. In summary, industry experts concluded that the importance of social sustainability has increased global sustainability and similar indices.

The legal part of the social indicators (Table 4) covers the social substance area of the sustainability index, bringing the legal aspect of this area of the index into discussion. Legal aspects were adapted to meet the needs of this area of the overall index. The frames of the legal research were built on the legislation of the EU. The concrete circumstances of the country that is under examination must be acknowledged since the legal frames and regulations are highly affected by, for example, the political situation or corruption. The chosen method to represent the legal part of the index is in the form of a checklist. The checklist covers relevant legislation and regulations that are essential for the industrial activity that is being surveyed. This legislation checklist reveals whether certain regulations are part of the country's legal circumstances and covers different areas of the legislation system. The areas that are covered include social legislation, such as regulations concerning employment contract, leave, equity or strikes.

Table 4 Legal aspects in social sustainability.

Issues	Legislative elements
Collective rights	Right to form labour unionsCollective agreement on terms of employmentRight to strike
Salary and termination of employment	Minimum salaryLength of period of noticeProbationary period
Working hours and leaves	Maximum working hoursOvertime compensationLength of a working weekLength of the annual leave
Employee rights	Anti-discrimination legislationOccupational health serviceMonitoring of industrial safety by authorities
Young employees	Minimum age of employeesEmployment of minors
Company liabilities	Vicarious liabilityLiability insuranceCriminal responsibility of a corporation

The response method for the legislation checklist is designed to be yes/no answers to questions. The index identifies the strengths and weaknesses of the country's legislation system and/or how regulations are obeyed within industrial processes at the plant level. The method for assessing answers is both qualitative and quantitative as answers concerning the legislation system are valued/scored with a points system: the more the positive points, the more the sustainable industrial activities. However, there are challenges concerning legal evaluation. First, the appreciation of different questions has its difficulties: Must some questions have a bigger value than others and what are the priorities here? Second, there must be a line between whether the answers reveal legislative conditions of the country and whether the industry obeys the regulations existing in the country or, what is more, improves its practices from what is required.

A legal system constitutes a sort of a reference level that varies within national legal systems. In contrast, when it comes to voluntary regulatory mechanisms, the baseline is to obey the binding national regulations. However, in social responsibility questions, legislations vary remarkably; even developed and highly industrial countries have great regulatory differences, e.g. when social security or labour legislation is concerned. Despite the regulatory differences, it is necessary to reach a certain common regulatory baseline on a universal basis for responsible business activity that is not dependent on the current legislation of a country.

8. Conclusions and recommendations

Sustainable industrial development and strategic management within the process industry require a comprehensive approach to sustainability, encompassing all its intertwined dimensions and elements. Social sustainability is far too often absent from sustainability performance assessment frameworks such as indices, although it is one of the key elements of sustainable development and sustainability. Furthermore, social due diligence requires much further research and is quite a new concept in this context. The development of social indicators should be linked at least to both CSR management and broader sustainability management in accordance with overall sustainable industrial development and principles of sustainability. The developed set of indicators covers a broad range of social sustainability aspects and the application of these indicators makes it possible to carry out a comprehensive plant-level sustainability performance assessment to support strategic management and corporate-level decision-making. The developed set for plant-level performance assessment covers the main aspects of social sustainability comprehensively including, for instance, upstream and downstream operations within the plant supply chain and location-specific aspects.

Discussions and workshops with steel industry partners clearly resulted in the identification of many important social sustainability and responsibility focus areas that need to be addressed in more depth such as supply chain, social innovations and improved reporting. During these discussions, it became quite clear that sustainability is a cornerstone of the modern process industry and that informed decision-making and strategic planning must be supported by appropriate sustainability control tools that can effectively address the sustainability performance of industrial production, covering all the elements of sustainability: economic, social and environmental. The management of social sustainability requires the information on both in-plant sustainability performance and the direct and indirect impacts of plant operations on the surrounding society including the whole value/supply chain and various stakeholders, interest groups and citizens. Future research is needed to explore the benefits and implications of high ethical standards that exceed the level of social responsibility required by a national or local legislative framework encompassing social/ethical due diligence and moral aspects. In this context, there arises the following question: do we have one global corporate-level code of conduct, best practice and normative framework that applies to all plants in a similar way or do we follow country/location/plant-specific code of conduct, best practices and norms? This involves addressing the implications of and the associated corporate-level response to different national legal frameworks.

The review of existing social sustainability practices within the process industry resulted in the identification of company-specific approaches to social sustainability as part of the overall corporate responsibility management. Each industry partner had incorporated social aspects into their corporate responsibility and sustainability frameworks and was reporting on the subject. The key issues covered, for example, reporting, compliance with legislation, good business practices, human rights, safe working practices, workplace well-being, training and competence, risk management, local communities and society. Code of conduct and specific policies and similar conduct by business partners, suppliers and sub-contractors were also important elements. All companies were members of some global reporting framework and had taken part in many other initiatives. In general, discussions with industry experts indicated that social sustainability is an increasingly important element of sustainability management and assessments, and it became evident that supply chain issues, including both upstream and downstream actors and activities, are particularly timely and important.

The assessment of global initiatives helped to identify existing key focus areas and elements of social sustainability including, among others, human rights, employee training, health and safety, society, stakeholders, ethical standards and local communities. The country-level frameworks highlighted, for example, good governance, the rule of law, labour practices, human well-being, education, society, the control of corruption, health and living standards as key elements. The review of the literature and scientific articles suggested that assessment of corporate social sustainability should be based on an integrated approach covering environmental, economic and social aspects. In addition, it is important to recognise the various interlinkages, impacts and dynamics within the overall studied system, taking into account aspects beyond system boundaries such as society, economy, stakeholders and the environment. Composite indicators were recognised as an innovative approach to assess sustainability performance.