In the first of a three-part series focusing on CSR reporting, we cover why and what: why produce a report and what do you report?
In the not too distant past, companies noted they were good corporate citizens by listing a few social or environmental accomplishments on their websites. With the added emphasis on Corporate Social Responsibility (CSR) and sustainability, that’s no longer enough—nor does it provide the numerous benefits of formally reporting “good” activities.
A CSR report is a non-financial document that enables companies to tell their CSR and sustainability story to stakeholders. This type of reporting is fast becoming mainstream practice for companies of all sizes—public and private—that want to engage key stakeholders, improve their reputations, and stand out among their competition.
Why produce a report?
Building trust and enhancing your reputation and standing with stakeholders is probably the most important benefit of CSR reporting, but there are many others:
- Drive change and innovation. It can help you identify and drive internal improvements and unlock potential areas for growth, and you may even see your business in a new way.
- Help gain internal buy-in. It’s an excellent way to tell your story to employees and engage them in your CSR efforts.
- Enhance recruitment and retention efforts. You have an edge in attracting and retaining top talent. Job candidates often search for information on potential employers’ social and environmental practices.
- Foster better decision-making. You’ll likely gather data you may not have tracked or measured before, and you can leverage it to identity opportunities to enhance efficiency, save money, and improve overall business performance.
- Mitigate potential risks. The process of reporting can also help identify potential risks from environmental and social perspectives.
- Improve access to capital. Many investors include social and environmental performance in their due diligence.
- Gain competitive advantage. It shows potential customers a little more about your company and helps build customer loyalty.
What do you report?
A CSR report should focus on three key areas:
- Environmental: the company’s impact on the environment, which at the very least includes energy and water consumption reduction efforts, and waste recycling efforts.
- Social: the company’s impact in society, which at the very least includes its charitable contributions, employee volunteerism, workplace safety, diversity, human rights and consumer protection practices.
- Governance and ethics: the company’s governance practices and policies, management structure, data privacy and compliance practices.
Each company is different, therefore you should report on the topics and issues that are material to your company and important to your stakeholders.
Watch for the second part of the series, which features an interview with Jeremy Handler, Corporate Social Responsibility Manager at Hunter Industries, who recently went through the process of creating a CSR Report for the third time.
If you’re considering creating your first CSR report and aren’t sure where to begin, or you wish to improve your existing reporting, we’ll be glad to help. Visit our Sustainable Business Consulting page or schedule a quick consultation with me.