What is the definition of a CSR report? What are its characteristics and why is it important? What examples are there of companies doing it?
What Is The Definition Of A CSR Report?
A CSR, corporate social responsibility or sustainability report is a periodical (usually annual) report published by companies with the goal of sharing their corporate social responsibility actions and results. The report synthesizes and makes public the information organizations decide to communicate regarding their commitments and actions in social and environmental areas. By doing so, organizations let stakeholders (i.e., all parties interested in their activities) aware of how they are integrating the principles of sustainable development into their everyday operations.
What Is The Purpose Of A CSR Report?
The main intention of a CSR or sustainability report is to improve the transparency of organizations’ activities. The goal is twofold:
On one hand, CSR reports aim to enable companies to measure the impact of their activities on the environment, on society and on the economy (the famous triple-bottom-line). In this way, companies can get accurate and insightful data which will help them improve their processes and have a more positive impact in society and in the world.
On the other hand, a CSR or sustainability report also allows companies to externally communicate with their stakeholders what are their goals regarding sustainable development and CSR. This allows stakeholders such as employees, investors, media, NGOs, among other interested parties, to get to know better what are the short, medium and long-term goals of companies and make more informed decisions. These decisions can spread from investing in a business, buying its products, writing positive (or negative) reviews, among others.
Official & Simple Definition Of A CSR Report
According to the Global Reporting Initiative, a CSR report can be defined as:
“A sustainability report is a report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities. A sustainability report also presents the organization’s values and governance model, and demonstrates the link between its strategy and its commitment to a sustainable global economy.”
Why Is CSR Reporting Important? What Are The Benefits?
As discussed above, CSR and sustainability reports can be used to achieve both internal and/or external goals. Internally speaking, CSR reports are important since they allow companies to estimate the impact of their activities on the environment, on society and on the economy.
Through the detailed and meaningful data collected for the CSR report, companies have a chance to improve their operations and to reduce costs. Not only because they are empowered to optimize and reduce their energy consumption but also as they review their waste cycles and disposal which often leads to product innovation or circular economy opportunities.
Finally, as collecting this data requires joint efforts from different departments, employees end up knowing that the company is focusing on CSR and sustainability, which is proven to increase employee retention and decrease turnover (and its costs).
When it comes to external benefits, a CSR and sustainability report can help companies to better engage with their interested parties which may bring some benefits to the table. By letting their stakeholders know about the organization’s short, medium and long-term project decisions, companies can be better understood which may have positive financial outputs.
For instance, it can allow stakeholders to be aware that a specific company is positively contributing to minimizing the negative impacts of an environmental hazard or that it is only focused on growing profits for its managers and investors.
In this way, consumers can decide whether they want to buy from a brand that protects orangutans by sourcing sustainable palm oil or one that does mention using RSPO palm oil. Investors can anticipate if companies are aware of the consequences of climate change and preparing their value-chains to become adaptive to these present/future impacts and decide whether to invest or not. Journalists can share best case practices from companies leading the way on topics such as plastic pollution or ocean acidification. NGOs can put pressure so that companies review their sustainability policies, etc.
Are CSR Reports Mandatory?
It isn’t mandatory that companies make their own CSR or sustainability report. Still, directive 2014/95 from the European Union demands large companies to reveal certain non-financial information about how they operate and run their social and environmental challenges. This means that it is mandatory for large public interest entities to disclose non-financial information and that large listed companies disclose diversity information.
Specifically, it’s mandatory for these organizations to give insights about how they’re taking care of environmental, social and personnel concerns, respect for human rights and the fight against corruption and bribery insider their businesses and within their value chains. Consequently, concrete data should be given about the policies pursued or active procedure, as well as what are the outcomes of these policies, the main risks identified and how they’re being managed. The financial indicators used must also be presented.
This kind of information helps consumers, investors, policymakers and other stakeholders to evaluate the non-financial performance of large companies and encourages organizations to develop sustainable business strategies that can be up to the expectations.
Still, other companies also choose to report their CSR and sustainability information due the to potential benefits mentioned above. But how do they know what or how to report?
Standardized Vs. Personalized CSR Reports: What’s Best?
One of the ways for companies to share their CSR and sustainability policies, both internally, but above all, externally, is to use and follow standards such as the ISO 26000, the global reporting initiative, the integrated reporting or the dow jones sustainability index.
Although this kind of CSR report is good to obtain certifications such as B-Corp, Dow Jones or FTSE4GOOD, they usually end up turning into very long and detailed documents. In contrast, the fact that a third-party, with authority in CSR matters, gives a certification is undoubtfully a strong proof that these companies’ CSR and sustainability practices can be trusted. Nevertheless, because of being too long, these often aren’t good ways of presenting information – for instance, many common consumers just want to get to know some sustainability highlights of companies.
In this way, another approach organizations can take is to create a personalized template. In this way, they can brief their stakeholders with the highlights of their sustainability strategies, letting them know about the risks and opportunities involved, the policies that are being undertaken and the outcomes achieved so far. Nevertheless, since it doesn’t respect any specific structure, this approach has the downside that readers must the more critical about the information they are offered.
Because if companies present data without showing how they got their numbers, or talk about initiatives that don’t seem to be integrated with a global strategy, they might trying to show that they have CSR and sustainability concerns, when in fact, they are mostly showing off and greenwashing.
In order to find the best of both worlds, many companies end up doing both types of reports. In most cases, they start by gathering the information and building a standardized report following the guidelines of, for instance, global reporting initiative integrated with the SDGs (sustainable development goals). After finishing it, they take the main points of these long reports and create an appealing design on which they advertise their own personalized CSR or sustainability practices. In some cases, the most curious people can find links within the short CSR report to the online version of the long report, allowing people to dig deeper into some actions, data or processes.
Examples Of Companies With Good CSR Reports
Please watch out that some of the CSR or sustainability reports listed below will be not opened in another tab. Instead, they’ll be saved in the downloads folder of your browser.
- European Investment Bank – CSR and Sustainability Report
- Patagonia – CSR and Sustainability Report
- Unilever – CSR and Sustainability Report
- Bloomberg – CSR and Sustainability Report
- IKEA – CSR and Sustainability Report
- Nike – CSR and Sustainability Report
- Pearson – CSR and Sustainability Report