The Top Five Do's of CSR Reporting

Solid reporting encourages measurement and improvement of your current CSR initiatives, exposes your brand to new groups of socially conscious consumers and social criteria investors, shows off CSR related cost savings and gained efficiencies, and acts as a method of communication between your business and its stakeholders. Honestly displaying both your triumphs and shortcomings will also provide owners and employees with a source of pride, and will motivate them to do better.

On the flip side, poor CSR reporting can make your initiatives appear disingenuous and insincere, resulting in destroyed credibility and a loss of support from your stakeholders. Without taking a number of reporting best practices into consideration, your CSR can easily be perceived to be nothing more than a public relations activity.

So how do you develop a reporting system that will contribute to your CSR’s success, rather than failure? This article series will help answer that question, as the next few articles will examine:

   1. Taking action: Where to start with CSR Reporting
   2. Developing your CSR reporting system: What guidelines work best for you
   3. Finding your CSR reporting style: Thoughts & best practices
   4. Opening the channels: Using social media and other mediums for CSR reporting  communication

As a way to launch the series, I’ve decided to list the top five DO’S of CSR reporting.  These are the type of actions that can be surprisingly easy to overlook, but disastrous to your program if you do so.

1) Do Include Your Shortcomings

One of the great things about reporting is that you get to celebrate your successes, sharing how you've improved lives while improving your business. But how do you communicate the shortcomings of your CSR performance? While it's tempting to just ignore these areas, this is the last thing that you should be doing. It may sting to publicly acknowledge that you've failed to achieve certain goals, but it does demonstrate honesty and accountability. In fact, you can significantly enhance your credibility by discussing what you've learned from your shortcomings and outlining the steps that you're taking to improve. But by trying to enhance your reputation by ignoring your failures, you will only hurt your program in the long run.

2) Do Obtain Top-Brass Support

A good CSR program requires leadership, which typically stems from top management and executives. However, if your company has a CSR team in place that lacks high ranking executives, top brass should openly support and champion all CSR initiatives to demonstrate your program’s importance to the company's success. When a program lacks support from a company's leaders, it becomes apparent that the business does not see CSR as an important and strategic decision, and both internal and external stakeholders will be more reluctant to buy-in. So for CSR to be successful, it is vital that at least one of your business’s most senior executives (ideally the MOST senior executive) has a presence in your CSR reporting. This presence is predominately seen through an address or letter to stakeholders at the beginning of a report, celebrating the program's successes, acknowledging the shortcomings, and reaffirming the company's commitments. Without this presence and support however, the strength of your business's commitments will come into question, and your credibility will take a hit.

3) Do Treat Reporting as a Business Communication

CSR reporting can be communicated through several different mediums, all of which allow for some creativity in style, language and content. While this permits information to be presented in a more attractive manner than typically found in SEC or CSA filings, companies seem to sometimes forget that CSR reporting is a business communication, and should be delivered as such.

Anecdotes and employee profiles can provide for some interesting and relevant content, but you shouldn’t allow ‘fluff’ to get in the way of communicating your results. Results should be the primary focus of your report, and be sure to use clear and concise language that your stakeholders will understand.  And most importantly, do not let the style of your report be distracting or unprofessional. You want to show the world that you take your CSR seriously, and that you put some time and effort into communicating your results. 

4) Do Consider Third-Party Verification

Even if your reporting has clearly presented all relevant data and results, there is a good chance that the reports credibility will come to question if you lack third-party verification. Having your report audited by an external group will not only verify that all information is accurate, but it will also motivate your business to develop systems to measure and document your performance. Third-party verification can typically analyze four major areas:

• Completeness: does the report cover all the operations and impacts that an external reader would need to know about?

• Relevance: are the indicators and programs reported the appropriate ones, given the sector, type of operations, and locations involved?
  
• Accuracy: does the report accurately reflect your businesses CSR performance and challenges?
  
• Responsiveness: does your business respond to a wide range of external expectations and pressures related to sustainability issues?

Despite its importance, many small and mid-sized businesses avoid third-party involvement in CSR reporting as it is seen as expensive, time consuming, or unnecessary. We will further discuss avoidance and options later on in the series, but do currently note that a lack of third-party verification can have serious negative impacts on your CSR reporting.

5) Do ask about preferred medium(s) and frequency

Your typical fortune 500 company will release a yearly, downloadable CSR report, and might put out some quarterly performance metrics and occasional press releases. Since this is the norm, many companies assume that they should follow suit and avoid asking their stakeholders what mediums they would like the company to use, and how often they would like to see formal reports and updates. While for many, the standard yearly pdf file is fine, those who care most about your socially responsible actions (socially conscious consumers or investors for example) may want more frequent updates through various communication channels.  Asking the people who want to learn about your CSR program and performance what medium and update frequency they would prefer just makes sense.

Honorable Mention: Do include benchmarks!

While I have mentioned avoiding your CSR failures, it isn’t quite the same as avoiding the use of benchmarks. Even if you’ve openly discussed how you’ve failed to meet some of your commitments, using benchmarks helps your stakeholders compare your performance to previous years. You may also have information available on how your industry is performing, and should use this to give stakeholders a clearer picture of your leadership position. Benchmarks help provide a truer picture of if your results can be considered a success or not, and should thus be used when possible.

Although they’re not always easy to carry out, ignoring any one of these items can wreak havoc on the quality of your CSR reporting, and can do much damage to your CSR program itself. The aforementioned are definitely my top five (plus honorable mention), but what other reporting practices do you think businesses should be aware of? 

While in this article we focused on some general actions that are important to reporting success, the next few article will focus on the specific steps needed to begin developing a reporting system that will provide the most value for you and your stakeholders.

Stay tuned!