CSR is now a thing. It has gotten to the point where when visiting a corporation’s website, one of the first things you will see is at least a mention of corporate social responsibility and perhaps a link to some sort of sustainability report. While this is becoming the norm and is something the general public is now becoming aware of, interestingly some in the industry are questioning the efficacy of annual CSR reports.
The CSR Singapore Compact Summit has been taking place this past week and Lifeworth (sustainability/CSR consulting firm) director Jem Bendell led a session on the importance of CSR disclosure. His feeling-not so important. Or more important would be a way to reform the process to meet the needs of company and stakeholder in real time.
One of the common complaints regarding annual sustainability reports is that no one reads them (save for CSR directors and occasionally geeks like me). The other issue, which is a concern for many, is in regards to metrics. And that predicament is the inherent problem with metrics and using metrics for comparing, well, just about anything. As it relates to sustainability reporting, it would make sense for company reports to include metrics that are most important to or appropriate for the company and its shareholders. The main problem as major organizations like the Global Reporting Initiative (GRI) are finding out is that it’s difficult to compare companies without standardized reporting. On the flipside, how appropriate or worthwhile is it for all companies to report on the exact same metrics?
Bendell argues, social and environmental metrics that have a direct and measurable financial impact (my accounting professor would argue everything can be measured monetarily) should be part of the annual financial report. However, other concerns, findings, data, etc. that may have more importance to stakeholders and society as a whole should be done in real time, through online platforms and social media. That way an organization can be in touch with its customers as well as industry experts regarding CSR issues.
The real concern is that CSR/ESG (Environment, Social, Governance) reporting is, at this moment, completely voluntary and while that may change in the future (we may want to address financial reporting first), it may be awhile. I might argue that while annual sustainability reports may not exactly be timely they seem to be more than voluntary as many corporations that one would not expect to report are doing so, most likely because their competition is. Therefore I wonder if simply serving up a social or environmental issue over social media may be a little bit too much to ask of these corporations. Some of them are just starting to understand the positive use of social media in the first place.
Corporations may also see the annual report as a way to control the debate, but as Bendell astutely asserts, “and if you worry about not being able to control or turn off the debate if it turns bad? Forget it, the debate will happen somewhere at some point anyway.” Accountability at its finest.
Image Credit by Matt Hamm via Flickr under a CC license