March 7, 2016 | By isosteam |
The old reasons for CSR Reporting are still relevant.
All the great work that organizations are doing to up their game as it relates to sustainability and corporate social responsibility are increasingly communicated using CSR or Sustainability reporting. These reports come in many flavors and each addresses different needs, different stakeholder groups and different levels of engagement.
For a comprehensive look at sustainability activities many organizations globally are turning to the Global Reporting Initiative (GRI) as a comprehensive framework for communicating triple bottom line activities. For foundational guidance, the United Nations Global Compact (UNGC) providing a set of 10 driving principles toward a more sustainable future, AccountAbility’s array of manuals, and Integrated Reporting provide other complimentary examples of comprehensive non-financial reporting platforms.
For targeted reporting on specific issues or issue categories there are many frameworks and standards to chose from. One example is CDP, which provides a framework for Climate Change, Water, Supply Chain and Forestry reporting through their programs that target each of these issues. Others include the Electronics Industry Citizenship Coalition (EICC) and its Code of Conduct, along with the Sustainable Apparel coalition, to name a few, provide industry-specific standards. While, finally, SASB is an example of a reporting framework targeted to a specific stakeholder audience, that is also regional- it targets US companies and SEC filings to promote non-financial reporting.
Though the list has been getting longer, the need to communicate to the increasing variety of stakeholders remains relevant. Investors present one of the most prominent stakeholder groups requesting access to organizational performance on sustainability issues. This is prompted in part by the evidence that organizations that focus on these issues perform better in the marketplace. There are other stakeholders as well including customers and potential customers, suppliers, employees and potential employees. Sustainability engagement can be positive to brand image and reporting is a way to communicate that.
Increasingly organizations are engaging in reporting not as a means for communicating to their stakeholders, but as a way to deepen their engagement with the topics that this reporting represents. Reporting serves to focus attention on certain aspects of the business by providing a framework for establishing targets and goals and the metrics that measure performance against them.
The Responsible Business Summit in preparation for their New York meetings recently highlighted several priorities for top responsible businesses. We have found these same things to be important for organizations and adapt them here to discuss the relevance of sustainability reporting in our current workplace.
1. Strategic Integration – Reporting on triple bottom line activities adds visibility across the organization to the potential that sustainability offers including financial success, brand, and an engaged workforce. This visibility provides opportunities to integrate these activities with the strategic direction of the organization in order to meet organizational goals.
2. Collaboration – Reporting requires frequent collaboration between silos within the organization and with stakeholders outside the organization. In fact, the process of preparing a report brings groups and individuals together that would not often have a cause to work closely. This stimulates innovation and productivity.
3. Prioritization – Reporting helps to prioritize what is most important in the organization based on strategic objectives but also based on key impacts. This helps to keep a fresh eye on both potential risks and emerging opportunities and avoids an isolationist mentality.
4. Purposeful Work – Studies show that work with a purpose provides numerous positive results for organizations including increased employee engagement, job satisfaction, individual performance and decrease in absenteeism and stress. Sustainability reporting engages employees by enabling them to apply their skills towards something meaningful not only for the financial success of the organization, but for something much larger and more long standing. Engaging in sustainability reporting serves to highlight this higher purpose and connects the organization to it as well. This is particularly important to millennials.
So, to answer the question posed in the title of this post, YES- CSR reporting is still relevant but the reasons for its relevance are expanding. It continues to be an important signaling and communication mechanism for stakeholders but it also serves a more institutional purpose as well. Organizations are telling us that these institutional issues are taking precedent over the communication as the dominant reason for reporting. What does this mean? Perhaps less glossy marketing pieces and more living and changing working documentation of activities with simple targeted communication pieces are in our future.