Moving Toward Transparency and Standard Reporting
As companies strive to maximize value for all stakeholders many of them are consistently falling short in two key areas – transparency and reporting. Stakeholders often do not know where to look for information on a company’s Corporate Social Responsibility (CSR) initiatives. They also may be weary that information they do find is merely a public relations effort. To inspire trust and allow transparency companies should move toward a standard CSR Report.
Currently, requirements or strict guidelines do not exist for companies to adhere to when reporting on their environmental and social impact. Concise and standard reporting guidelines that quantify a company’s impact and can relate this impact in terms of consumers’ everyday lives is needed. For example, instead of stating the company’s Carbon Dioxide emissions reduction, it should make an effort to relate this impact in terms of number of cars taken off of the road. By helping consumers to understand the company’s true impact, companies can help build trust.
Ideally, this report should be linked to the companies financial reporting. Doing so will provide a one-stop shop for consumers to access information on the company. It will also benefit the company by enabling them to think more strategically about how their financial and social drivers align. A Health Care company, Novo Nordisk, exemplifies this practice by emphasizing its triple bottom line – financially, environmentally, and socially – in its combined annual report.
While a standard report is the ultimate goal, I recognize that measurement and benchmarking of companies CSR initiatives presents its own set of challenges; however, moving toward standard reporting is the first step in the right direction. Consistent guidelines will not only benefit the stakeholders will be give companies the opportunity to clearly communicate their CSR initiatives and impact, and build strong relationships with its stakeholders.