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CSR Auditing, Reporting,
and Communication
Chapter
Nine
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
1
Chapter Outline
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
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
2
Social Auditing: Definition
Systematic assessment that identifies,
measures, evaluates, reports, and
monitors the effects an enterprise has on
society that are not covered in traditional
financial reports.
Chapter 9
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
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Social Auditing: Approaches
Inventory – list of activities
Program management – description of programs
Process – objectives, rational, and assessment of
programs
Cost or outlay – positive and negative effects on
society
Social responsibility accounting – return on investment
Social indicators – audit of social need
Chapter 9
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Social Auditing: Approaches
Social objective setting
Triple-E reporting – economic, ethical &
environmental
Social reports – include objectives and triple-E
criteria
Sustainable guidelines – criteria and indicators
Externally verified social reports – accountability,
not widely used
Chapter 9
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Ryerson Ltd.
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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.
Chapter 9
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Corporate Reputation and CSR
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)
Often associated with corporate image, but today
related more to “character” of corporation
An intangible asset for the corporation.
Chapter 9
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Stakeholders Demanding
CSR reporting
Shareholders
◦ Not too much or too little, and in the right places
Employees
◦ Effects: recruitment, retention, motivation and loyalty
Consumers
◦ “ethical shopping”
◦ “conflicted customer” p.181
◦ Health issues: genetic modifications, chemicals in process, etc…
Society at large
◦ Awareness and education
Chapter 9
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Stakeholders Demanding
CSR reporting
Service professionals
◦ Accounting Professionals: more reporting is required
(Canadian Institute of Chartered Accountants)
Non-governmental agencies
Charities
◦ Self-interest – social legitimacy, application procedure
Media
◦ Hot topic for a story, good or bad
Government
◦ Prefer to avoid implementing now legislation
Chapter 9
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
9
CSR and Profitability
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.
Chapter 9
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
10
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)
Chapter 9
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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:
◦
◦
◦
◦
Framework for the report
Inform decisions about what to report
Quality and reliability
Access to the report
Chapter 9
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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
Chapter 9
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Communicating CSR and Sustainability
Results
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)
Chapter 9
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The Future of CSR and
Social Reporting
Role of stakeholders will become more
powerful
◦ More stakeholders have a voice through technology
Top CSR issues will be:
◦
◦
◦
◦
Environment
Reduction of poverty
Governance
Accountability
Focus on CSR measuring and reporting –
standards
Government – mandatory reporting
Social contract – business has a greater role
Source: Strandberg, 2002
Chapter 9
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The Future of CSR and
Social Reporting
Fad-and-fade scenario
◦ Awareness and practice of CSR will decline
significantly
Embed-and-integrate scenario
◦ CSR is accepted, continuous enhancement
continues
Transition-and-transformation scenario
◦ incremental changes to CSR are insufficient,
redesign of corporation necessary
Source: White, 2005
Chapter 9
Copyright © 2008 McGraw-Hill
Ryerson Ltd.
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