Better CSR Reporting: One Report

Senior executives who devote considerable amounts of time and money to CSR activities often pay little attention to how the results are reported to other managers, board members and external stakeholders. How companies report on these non-financial metrics – information on environmental, social, and governance performance – has important ramifications on their reputation, strategic effectiveness and business risk. In a politically charged, dynamic and risky world, organizational leaders need the right tools to better identify, describe, and confront the issues around environmental and social sustainability that their companies increasingly encounter.  Better reporting is not only an internal requirement.  Today, key external stakeholders like fund managers are demanding it.

There are a number of ways of reporting sustainability impact and CSR activities, including the popular Triple Bottom Line report.  However, many of these accounts suffer from flaws in relevance, methodology and applicability.  Thought leadership coming out of Harvard Business School recommends another approach to reporting non-financial measures and deeds. The “One Report” is an integrated reporting tool that can improve CSR and sustainability strategy as well as drive program excellence.  One Report addresses many of the unique challenges facing corporations where many stakeholders – companies, investors, accounting firms, sell-side analysts, regulators & standard setters, NGOs and the public itself – must interact and collaborate together around various high-profile economic, political and environmental issues.  One Report can deliver an integrated, consistent and jargon-free corporate message to all requisite parties across multiple channels (including Web 2.0 technologies like social media, blogs and YouTube), while describing various threats and opportunities and demonstrating transparency.    The format of One Report challenges management to be much more granular and precise about how they are ‘doing well (for shareholders) by doing good (for stakeholders).’

 One Report delivers many benefits as a CSR reporting mechanism:

 1. Greater clarity around the relationship between financial and nonfinancial key performance indicators.  This enables managers to better understand and confront the trade-offs necessary to balance financial and societal demands.

2. Better management decisions. There is plenty of evidence to support the notion that better measurement leads to better information, an improved decision-making process and ultimately, better decisions.

3. A greater confluence of interests between the company and the broader stakeholder community. Sustained engagement will help shareholders look beyond short term numbers to longer term and broader societal considerations that impact financial returns. As well, it will help some external stakeholders understand the importance of continued investment and decent profits to further environmental and societal sustainability.

4. Reduced reputational risk.  Clear and consistent communications about a company’s financial and non-financial performance can serve as the basis for a constructive two-way conversation, helping to minimize the possibility of misunderstanding.

Properly deployed, One Report serves as a platform to facilitate communication, mutual understanding and trust between disparate actors in different geographies.

A wide range of companies are presently using One Report including: the German chemical giant BASF; the Dutch health-care and electronics company Philips; the Danish pharmaceutical company Novo Nordisk; the Brazilian cosmetics company Natura; and the U.S.-based technology and aerospace company United Technologies.

 Like other reporting tools, there are watch outs to using One Report.  For example:

1. Company’s need to take their CSR activities seriously and be committed to communicating them broadly in a regular fashion;
2. Because of intent or culture, transparency (in terms of results or programs) does not always come easy for many firms and executives;
3. Key information may not be available.  And even if it is, it can not always be directly linked to financial metrics.

 For more information on our services and work, please visit the Quanta Consulting Inc. web site.

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