18 Dec 14

The key drivers behind CSR reporting

9155131824_e5b46c3520_mCSR reporting has increased significantly in the last decade, with a substantial rise in the number of companies from Asia and Latin America publishing reports.  As a result The Americas has now become the leading CSR reporting region, overtaking Europe, with 76% the world’s top 100 companies producing a public CSR report, making it now considered standard global practise [KPMG 2013 sustainability survey]. The old debate of whether to report or not is waning and companies should instead be asking how they can implement relevant and effective CSR reporting processes. 

However, until CSR reporting becomes embedded in an organisation’s business as usual processes and its value is understood internally, management will need to be convinced of the benefits of reporting to increase uptake.  There is a range of drivers behind decisions to report CSR, a number of which are outlined in the table below.

Risk management

Strategic, financial, supply chain, reputation risks etc.

Compliance

Legislation, customer or investor requirements

Innovation

Finding new solutions to save resources or serve needs

Differentiation

Building a position based on CSR/ sustainability

New business opportunities

Finding new target groups, address new markets/ capital

Attracting talent

Value-based employer branding

Building trust

Building or rebuilding the license to operate

Branding/ image

Using CSR to strengthen your market position

Motivating employees

Involvement means satisfaction

Resources

Saving resources = saving money

Stakeholder expectations

Investors, NGOs, media etc. – trend spotting

[Deloitte – “Why engage in CSR as a company; building the business case”]

In addition to this list, the reason CSR is most likely to capture attention is its potential impact on bottom-line. Research suggests that the value of CSR disclosure extends to the firm’s balance sheet, with the most transparent companies in some studies tending to have better financial performance. Research by EY found that over half of respondents to their survey reported ‘realising business value as a result of their company’s reporting efforts.” [EY Press release 15 May 2013].

Understanding your own company’s drivers for CSR reporting is essential.  When defining what your company should report, the areas that are central to achieving your strategic goals combined with those that are important to your stakeholders should define your areas of focus.  A CSR strategy should make sense for your business and be aligned with your overarching business strategy.

CSR Reporting

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[image credit: André Hofmeister

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