ResponsAbility » ESG Reporting http://blogs.hillandknowlton.com/responsability Thoughts on corporate responsibility and sustainability Tue, 24 Jul 2012 15:12:42 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Trends in CSR Reporting http://blogs.hillandknowlton.com/responsability/2010/08/25/trends-in-csr-reporting/ http://blogs.hillandknowlton.com/responsability/2010/08/25/trends-in-csr-reporting/#comments Wed, 25 Aug 2010 18:58:53 +0000 Tara Knight http://blogs.hillandknowlton.com/responsability/?p=144 I had the opportunity recently to do a bit of digging into best practices and trends for corporate responsibility reporting – and it was a fascinating journey. CSR (or ESG – Environmental, Social and Governance) concerns and reporting are clearly moving to the forefront of corporate agendas.

There are a few more obvious trends – corporate responsibility reporting formats are clearly headed away from large volume hard print copies and towards digital solutions such as websites and online formats as reports get more detailed. Finding easy-to-manage ways to organize large volumes of information is especially true for organizations using integrated reporting frameworks to incorporate financial and non-financial indicators into a single report. (A couple of excellent resources in this area are: Corporate Register’s CR Reporting Awards  and CSR Trends 3)

In the wake of a number of corporate actions which have publically (and dramatically) not met their CSR reputations, there is a lively debate about evaluating the breadth and credibility of corporate CSR reporting. With a more skeptical audience, there is a significant appetite for more transparency, independent verification of CSR reporting, and engaging stakeholder participation to validate key aspects of corporate CSR reports.

The Chartered Accountants of Canada recently released a report, Environmental, Social and Governance (ESG) Issues in Institutional Investor Decision Making, which provides another window into why these trends have become more prevalent. As investors are increasingly concerned with the environmental management aspects of CSR as a risk mitigation strategy, especially long-term investments, CSR (or ESG) reporting is also becoming critical data in making investment decisions. In fact, their report identifies that reporting on environmental, social and governance elements of the business are now being seen by some investors as a proxy for evaluating the quality of management of a company. Jennifer Hicks wrote about this growing interest in Triple Pundit.

Of course, this trend is frustrated by the lack of truly comparable metrics to evaluate CSR or ESG reporting between companies. Although the Global Reporting Initiative seems to be emerging as a favored standard, Corporate Register’s 2010 CR Reporting Awards report indicates the second most popular option is a completely customized reporting framework.   

For companies looking to initiate or improve their CSR (and ESG) reporting, making the choice between a global standard or custom framework will be difficult. A global reporting standard might enable their investors and stakeholders to perform better comparable analysis on their CSR performance relative to the market, where a custom reporting system could be a better fit to the company’s needs. In the meantime, companies should be conscious that reporting their CSR activity is critical not just for their corporate reputation – but potentially their financial success as well.

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