With rising awareness among consumers about environmental and sustainability issues, organisations need to develop a robust CSR Reporting framework that is open to the public
- A CSR Reporting system is needed to hold organisations accountable for their action
- Open CSR Reporting helps organisations to create a positive brand perception and enhance the value of businesses
- Unethical behaviour has serious consequences for individuals and organisations
By Team ContentCraft
SR is more than mere social and moral responsibility taken by a company. It involves businesses propagating and expanding the values, ethics of a business and creating social equity. In this context, CSR Reporting involves companies publishing periodical reports of their CSR initiatives and actions, to make stakeholders aware of their integration with goals of sustainable development and plans, going beyond the normal legal framework. A CSR Report communicates the summary of all decisions and actions taken by companies regarding their contribution in the domain of social-sector management.
NEED FOR CSR REPORTING
CSR report should cover all aspects of strategies regarding CSR and sustainability goals. It serves as an effective yardstick to measure the activities of corporate enterprises and keep a record of their contributions by holding them accountable. Cisco’s CSR Business Process is based on important components like analysis for stakeholders and reputation prospects for a business. CSR reporting is one of the methodologies, which strengthen and maintain faith in the decisions taken by businesses. It should be an open document that should be widely available to the public to serve as a good statistic measure for the business ethics practiced by a company, besides helping to evaluate the impact of CSR initiatives and its effect of the organisation’s valuation.
With the rise in consumer sentiment regarding ethical business practices, preservation of the environment and specific gender movements have all collectively prompted businesses to not only involve and strategise, but also present their CSR financials for evaluation publicly.
International Integrated Reporting Council (IIRC) underlines the importance for CSR Reporting: “Globalisation and interconnectivity mean the world’s finances, people and knowledge are inextricably linked, as evidenced by the global financial crisis. In the wake of the crisis, the desire to promote financial stability and sustainable development by better linking investment decisions, corporate behavior, and reporting has become a global need.”
COVERAGE AND SCOPE
here have been several formats for the reporting and rating of corporations for CSR, which involve questionnaires, sustainability reports, SEC filings, etc. US and Japan have the highest disclosure rates of non-financials due to an increase in their sustainability reportage with time.
Reporting Solutions generally keep in mind some important goals regarding coverage of CSR by inculcating social and environmental protection values. Sustainable Development Goals (SDG) find major relevance in the CSR objectives and there is an inherent purpose in expanding the outreach of partnerships and collaborations of CSR actions worldwide.
CSR is also not specific to any one domain and is supposed to transcend various specifics and business lines across the value chain. The purpose of reporting should also involve the expanse of shareholders concerned with a business that helps to integrate the overall value of a business. Attitudes and procedures should also find relevant mention in the report to be case-sensitive towards particular conditions of the enterprise. Any deviations in the plans should become an integral part of reporting.
KEY ASPECTS AND BENEFITS
SR being a soft law in the US is not strictly enforced and non-punishable by law. In that case, reporting becomes a relevant benchmark for evaluating and analysing the non-financial activities of a business. Consumer expectations and norms make the firm accountable and the way to best communicate is through an audience that tracks the reports and strategies of the concerned company. However, countries like India have channelised the same under an Act places due emphasis on reporting.
Reduction of risk for the possibility of future sanctions, Dr. Daan Elffers, Founder and CEO of EMG Group delivered a keynote speech on CSR Reporting in which he mentioned how most of the effects of CSR are tangible if evaluated in that context. Effers also provided pointers for making this strategy more valuable and financially visible to be included as a strong pillar of business.
Benefits of CSR in improving reputation, loyalty of consumers and public support, have a are positive impact on businesses. Firms are gaining traction and positive effects of CSR are starting to bear results for companies through awards and recognition in different spheres
ETHICAL REPORTING AND ITS CONSEQUENCES
usinesses operate across multiple domains with more than one beneficiary involved in deals. The overlapping domains and concerns call for the need for an ethics and compliance committee, which can regulate these activities of a business in areas that have the potential to create controversies. Enterprises generally create a legal framework to form a basic guideline for businesses to follow. Honesty and integrity remain the major fundamentals of ethical reporting.
Unethical behaviour has serious consequences for both individuals and organisations. You can lose your job and reputation, organisations can lose their credibility, general morale and productivity can decline, or the behavior can result in significant fines and/or financial loss.
KEY CSR REPORTING PAPERS AND SITES
nternationally, various sites and standards help in CSR reporting and evaluation worldwide. The United Nations Global Compact also publishes various human rights and global ethics about responsibilities for the various entities.
The G20’s Financial Stability Board through TCFD (Task Force on Climate-related Financial Disclosures) regularly release climate-related regulations to help companies release their CSR climate goals effectively. IIRC is a global coalition of regulators, investors, companies, standard setters, accounting professionals, academia, and NGOs. The coalition promotes communication about value creation as the next step in the evolution of corporate reporting.
This organisation aims at integrating and keeping in tandem with business practices in the mainstream environment. Global Reporting Initiative (GRI) is an independent, international organisation that helps businesses take responsibility for their impact, by providing them with the global common language to report those impacts. The GRI Standards is the most widely used benchmark for sustainability reporting.
India is becoming increasingly aware of the importance and relevance of CSR today. As per a 2019 KPMG Report, it states that there is a 325 percent increase in the number of companies that have disclosed details in the annual report regarding outreach.
It is widely based on the 2030 UN Development Goals and tries to concur with the theme of sustainability, innovation, and responsibility. India’s mandatory program does not nullify the ever-increasing need for CSR reporting organisations. India’s CSR Reporting Survey, released by KPMG, takes into account the CSR activities of the top 100 companies rated in the capital market.
The Companies Act 2013, provides a legal framework for organisations while giving them the flexibility and autonomy to design and implement CSR initiatives. The Government of India launched a CSR survey along with the Budget and Economic Survey. The Act covers provisions related to compliance and reporting of CSR. CSRBOX is India’s CSR-based platform that extensively reports and studies the issues regarding CSR activities in India. A number of reports and data that has been collated come to an effective conclusion that CSR Reporting helps in improving the transparency score of companies.