Understanding CSR Reporting and Its Significance in Business
Corporate Social Responsibility (CSR) reporting goes beyond profit generation, encompassing initiatives like community development and environmental protection. This article delves into the concept of CSR, communication strategies, reporting frameworks, reasons for engagement, industry standards, and the diversity in reporting practices by companies.
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CSR Reporting: Making it Meaningful Tonkon Torp LLP Jeff Cronn and Marco Materazzi
What is Corporate Social Responsibility? Generally, Corporate Social Responsibility is an umbrella term used to describe corporate initiatives or obligations that extend beyond generation of profits for investors to include, e.g., promotion of community development, protecting the environment and promotion of human rights. 2
CSR Reporting Communicating CSR Communicating the achievement of non-financial corporate purposes and impacts Variety of CSR Reporting is as broad as the concept of CSR itself. Variations include: Few paragraphs in a company s annual financial reports Stand-alone glossy CSR reports extending to 100s of pages Posts on company websites about employee giving campaigns Reports on supply chain practices Third-party score cards 3
Framework for CSR Reporting Identify goals Identify audience / stakeholders Establish baseline Collect and measure data Apply third-party standard Report 4
Why might businesses engage in CSR Reporting? Increased understanding of risks and opportunities Improved image and reputation Cost savings and increased efficiency Contributing to positive change 5
CSR Reporting Standards -- Voluntary Major International Standards Global Reporting Initiative International Organization for Standardization The United Nations Global Compact SEC-Reporting Companies Sustainability Accounting Standards Board B Labs 6
CSR Reporting Standards -- Mandatory California Transparency in Supply Chains Act SEC reporting re conflict minerals Trend towards mandatory reporting 7
What are companies actually reporting? Huge spectrum of reporting practices Examples: Oregon corporation California corporation Oregon limited liability company 8
Benefit Company Legislation New Source of CSR Reporting Adopted in 20 states (including Delaware and Oregon) and DC Generally, benefit company laws require company fiduciaries to consider a wider range of goals than profit alone B Corps vs. Benefit Companies 9
Oregon Benefit Company Statute Effective January 1, 2014 A record 24 Companies registered as of January 1, 2014 Chime LLC 10
Oregon Benefit Companies Reporting Each year, the company must prepare a "benefit report," including: A narrative description of how the company complied with its general (and specific) public benefit purpose And a self-assessment of the extent to which the company met a third-party standard with respect to providing a general public benefit Third party audit or certification not required Post to website and provide to shareholders / members 11
CSR Reporting Monetary liability? False or misleading statements/omissions in CSR reports could result in monetary liability To investors under securities laws To consumers under consumer protection laws 12
CSR Reporting Other risks Injunctions for violation of expanded fiduciary duties are possible under benefit company laws Activist Shareholders Expanded fiduciary duties could give activist shareholders another platform to question company governance Harmed business relationships and public image 13
CSR Reporting -- Meaningful or purely marketing? Does CSR reporting really make a difference, or does it just enable corporations to appear to be addressing important issues without actually making meaningful contributions (i.e., greenwashing ) Probably a bit of both 14
CSR Reporting What should your clients be doing? Identify goals Identify audience / stakeholders Establish baseline Collect and measure data Apply third-party standard Report 15
