Some skeptics question the value of corporate social responsibility reports. They point to the resources expended on producing these documents and demand “Who reads them, anyway?” While that may be a valid question, I think a more informative question is “What value does producing a CSR report offer to the company doing the reporting?”
Based on my experience producing CSR reports, I have seen firsthand the positive impact that publishing a report can have on a company’s employees and performance management. So, I wasn’t too surprised when Boston College’s Center for Corporate Citizenship’s new report, The Value of Social Reporting, found that “a social report, and the reporting process,” make CSR reports a “unique tool for promoting good corporate citizenship.”
Authors Belinda Richards and David Woods studied the evolution of social reporting at seven companies from a range of industries: Baxter International Inc., Gap, Nestle, Novo Nordisk, Seventh Generation, State Street and Telefonica. Their research focused not on the reports, but rather on the process and outcomes of reporting.
Among other issues, they studied how companies prepared their reports and the effects of reporting on management practices. The researchers wanted to know whether and how the companies found value in the reporting process. That question can yield fascinating answers.
Here are four ways an effective reporting process can provide value.
Incentive to improve. “Once companies start disclosing their performance, there is an incentive to improve that can be used to drive a corporate citizenship agenda,” notes the BCC report. As soon as a company opts to go public and prepare a report, it is committing itself to an ongoing cycle of disclosure, goal setting and disclosure.
Heightened employee engagement. When I produced the 2007 Environmental Leadership Report for Public Service Electric and Gas, New Jersey’s largest electric and gas utility, employees were a key audience. As an initial step toward becoming an environmental thought leader on the national stage, PSEG sought first to educate its employees and equip them as brand ambassadors. Following a comprehensive rollout, well over 90 percent of employees who read the report agreed that they better understood PSEG’s environmental record, that PSEG was an environmentally responsible organization, and that they were better prepared to discuss it with others.
A broadened perspective. An early leader in environmental reporting, DuPont has moved from a compliance mentality to a footprint reduction focus now to capacity-building orientation. In a recent Net Impact Issues in Depth call, DuPont’s Director of Sustainable Development Dawn Rittenhouse noted that while DuPont has a long track record in environmental reporting, the practice still provides value. The breadth of CSR reporting today challenges DuPont to balance out its emphasis on environment, health and safety reporting with more attention to the social and community aspects of sustainability.
Going deeper with stakeholders. Even strong stakeholder communication programs can often be enhanced by the intentional process of reaching out to all stakeholders during report preparation. At the Net Impact 2009 Conference last month, Heidi Baschnagel of National Instruments, noted that as NI’s CSR efforts have matured, the company has deepened its dialogue by seeking to understand how responding to stakeholder groups concerns will impact the company’s goals.
Those are some of the ways I’ve seen CSR reporting – when done well – benefit a company. What positive outcomes have you seen? I invite you to share your story.