Corporate social responsibility (CSR) reporting is gaining attention and prominence among a wide array of internal and external stakeholders. While there are many definitions of CSR, it centers around the idea of initiating sustainable, ethical practices and procedures regarding social, environmental and economic aspects of business — and communicating those initiatives to relevant groups and individuals.
According to online CSR report repository Corporate Register, 8,744 CSR reports were filed on their website in 2016 alone. CSR reports are becoming increasingly important, as is their readability and relevance.
Expanding CSR components
Until a few years ago, most organizations defined CSR as local or regional activities including event sponsorship, employee volunteerism, cause-based fundraising, educational initiatives, financial donations and gifts in kind. While those activities are all worthwhile, each one is just a single tile in the rapidly broadening mosaic of CSR.
The globally expanding influence of corporations means expanding expectations regarding accountability and responsibility in wide-ranging societal areas such as natural resource conservation, use of human capital, environmental outputs, waste management, local and regional economic growth, infrastructure development and investment. Corporations also faced increased pressure to advance the health and quality of life of employees and customers alike.
In the face of such impact and expectation, robust CSR capabilities can be a key differentiator for any company, while enhanced readability and sharing of CSR information broadens its benefits among your key audiences.
Finding informational equilibrium
The most widely read CSR reports start with several underlying principles that guide and inform every aspect. Generally speaking, the information in your report needs to be comprehensive, consistently formatted and company-wide in scope. It should also enable meaningful comparisons to your industry competitors. Even if such comparisons might not be possible because of a lack of industry-specific CSR standards, your company must still be able to examine comparable metrics against its own past performance. Relevant comparisons are a critical component of report readability.
Additionally, your CSR content needs to be both qualitative and quantitative in nature. If you have to choose between the two, it’s better to lean toward quantitative. The quantitative approach lends itself to apples-to-apples analysis that can easily track CSR regression, progression or stasis. But be sure to thoughtfully use qualitative elements such as anecdotes, case studies or first-person interview snippets to connect with readers and pique their imagination. Think of the quantitative as the “steak” and the qualitative as the “sizzle.” The most readable reports have both.
Then there’s data drill-down. Your report needs to provide both aggregated data exposition and normalized granularity. This means that reporting must not only reflect your company’s total numbers, but also distill large project results down to the employee level, if possible. It’s more meaningful to your reader and makes for easier company-to-company comparisons of similar projects across the same regions when you provide the estimated environmental, societal and economic impacts of a project at the individual level.
Adding an assurance statement to the mix
Without establishing credibility, your CSR report will fall flat. Readers and stakeholders of CSR reports expect them to have the following elements in some form or another:
- CEO’s letter: This provides a clear direction and vision of your organization’s dedication to CSR initiatives while establishing those programs as priorities.
- Mission statement: This succinctly presents your corporate CSR goals as well as the ethical behaviors that achieve those objectives.
- Relevant, digestible data: Data needs to be presented in easy-to-understand, “snackable” visual formats such as charts, graphs, tables, infographics and meaningful imagery.
- Grading format: Reliance on an independent CSR rating system for reporting and measurement purposes is a critical aspect of your company’s CSR program. One of the most widely recognized is the Global Reporting Initiative (GRI) framework, comprising a detailed, standardized format of 90 indicators. If your CSR program has not yet adopted a rating protocol, this is a great place to start.
Beyond these generally accepted CSR report components, there’s a growing need for third-party assurance statements to be included within CSR dossiers. Recent questionable conduct of select companies in industries ranging from life sciences to energy to auto manufacturing are pressing the question of trust (or lack thereof) for entire sectors when it comes to corporate practice. Including an assurance statement from one of the “Big Four” auditing firms — Ernst & Young, PricewaterhouseCoopers, Deloitte and KPMG — regarding material elements of the CSR program and impact on corporate business practices can add a high degree of credibility in the eyes of the reader.
One corporate general counsel leader I worked with told me that whenever a company was identified as a potential acquisitions target, the first thing he did was get a copy of the company’s past five annual reports and read their respective assurance statements to ensure the validity of the numbers. Now the same thing is occurring within the CSR space, too.
Applying for an award
Your organization may already have a solid CSR program and reporting methodology in place. One way to take it to the next level is to apply for a CSR reporting award. Perhaps the most respected are the Corporate Responsibility Reporting Awards (CRRA), established by Corporate Register in 2007. According to the site, its 46,000 registered members cast votes in 11 award categories using criteria that evaluate content, communication, credibility, commitment and comparability. That’s a good way to benchmark and improve your CSR reporting content, and maybe raise employee morale while you’re at it.
This crowdsourced evaluative exercise, along with the other tips listed above, are useful ways to improve your established CSR systems and boost the overall reader experience of your CSR reports.