Transcript 5 CSR Auditing, Reporting, and Communication Cht 9 (Jan 29).pptx

CSR Auditing, Reporting,
and Communication
Chapter
Nine
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
1
Chapter Outline
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Social Auditing: Definition and Approaches
CSR Reporting
Corporate Reputation and CSR
Stakeholders Demanding CSR
CSR and Profitability
Social Auditing and Reporting Criteria
Communicating CSR and Sustainability Results
Business Schools and Corporate Reporting
The Future of CSR and Social Reporting
Chapter 9
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Social Auditing: Definition
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Systematic assessment that identifies,
measures, evaluates, reports, and
monitors the effects an enterprise has on
society that are not covered in traditional
financial reports.
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Social Auditing: Approaches
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Inventory – list of activities
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Program management – description of programs
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Process – objectives, rational, and assessment of
programs
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Cost or outlay – positive and negative effects on
society
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Social responsibility accounting – return on investment
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Social indicators – audit of social need
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Social Auditing: Approaches
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Social objective setting
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Triple-E reporting – economic, ethical &
environmental
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Social reports – include objectives and triple-E
criteria
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Sustainable guidelines – criteria and indicators
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Externally verified social reports – accountability,
not widely used
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CSR Reporting: Definition
A management function that documents
the corporation’s economic, ethical/social,
and environmental responsibilities and
initiatives and communicates this
information to relevant stakeholders.
 Also known as sustainability reporting.
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Corporate Reputation and CSR
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Corporate Reputation: “a perceptual representation
of a company’s past actions and future prospects
that describes the firm’s overall appeal to all of its
key constituents [stakeholders] when compared
with other leading rivals.” (Fombrun, 1996)
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Often associated with corporate image, but today
related more to “character” of corporation
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An intangible asset for the corporation.
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Stakeholders Demanding
CSR reporting
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Shareholders
◦ Not too much or too little, and in the right places
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Employees
◦ Effects: recruitment, retention, motivation and loyalty
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Consumers
◦ “ethical shopping”
◦ “conflicted customer” p.181
◦ Health issues: genetic modifications, chemicals in process, etc…
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Society at large
◦ Awareness and education
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Stakeholders Demanding
CSR reporting
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Service professionals
◦ Accounting Professionals: more reporting is required
(Canadian Institute of Chartered Accountants)
Non-governmental agencies
 Charities
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◦ Self-interest – social legitimacy, application procedure
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Media
◦ Hot topic for a story, good or bad
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Government
◦ Prefer to avoid implementing now legislation
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CSR and Profitability
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Relationship between profitability and
CSR has been extensively studied, but
with mixed results:
◦ Expenditures on CSR do not contribute to
profits;
◦ Expenditures on CSR do contribute to profits;
◦ Expenditures on CSR might contribute to
profits.
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Social Auditing and
Reporting Criteria
 Canadian Business for Corporate Social
Responsibility Criteria:
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Community (9 criteria)
Employee (19 criteria)
Customer (7 criteria)
Supplier (9 criteria)
Environment (6 criteria)
Shareholder (6 criteria)
International operations (4 criteria)
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Global Reporting Initiative (GRI)
A long-term, multi-stakeholder,
international process whose mission is to
develop and disseminate globally
applicable Sustainability Reporting
Guidelines.
 Principles grouped into four clusters:
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Framework for the report
Inform decisions about what to report
Quality and reliability
Access to the report
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Global Corporate
Reporting Guidelines
OECD Guidelines for Multinational
Enterprises
 UN Global Compact
 Caux Round Table Principles for Business
 International Code of Ethics for Canadian
Business
 ISO CSR Reporting Standards
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Communicating CSR and Sustainability
Results
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How to inform employees:
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Articles in newsletters
Information on employee intranet
Agenda item at meetings
Corporate reputation committees
How to inform other stakeholders:
◦ Customer invoices or billings
◦ Corporate web sites
◦ Newspaper and magazine articles and television news
programs
◦ Word of mouth
◦ Create a position to communicate: Corporate
Responsibility Officer (CRO)
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The Future of CSR and
Social Reporting
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Role of stakeholders will become more
powerful
◦ More stakeholders have a voice through technology
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Top CSR issues will be:
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Environment
Reduction of poverty
Governance
Accountability
Focus on CSR measuring and reporting –
standards
 Government – mandatory reporting
 Social contract – business has a greater role
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Source: Strandberg, 2002
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The Future of CSR and
Social Reporting
 Fad-and-fade scenario
◦ Awareness and practice of CSR will decline
significantly
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Embed-and-integrate scenario
◦ CSR is accepted, continuous enhancement
continues
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Transition-and-transformation scenario
◦ incremental changes to CSR are insufficient,
redesign of corporation necessary
Source: White, 2005
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