Recent hype about John Mackey’s “Conscious Capitalism” has drawn attention to the business shift from shareholder to stakeholder value. Increasingly, companies are creating CSR reports to demonstrate the extra-financial concerns of employees, customers, and the community. But are these reports proving truly efficient? Reporting of corporate social responsibility varies by company – the metrics captured, the level of depth, the analysis, and the collaboration with other corporate reports.
As a response to this inconsistency, organizations all over the world have been working to develop an integrated reporting standard that combines what is currently found in an annual report with data typically found in CSR reports. The intention is to provide more context for past and current performance, and to help demonstrate the short, medium, and long term sustainability of a business within a single document.
Consumer products firms have been the leader in this trend using the integrated report as a means to help build their green marketing strategies and identify sustainability opportunities. Hershey, for example, has sky-rocketed in “green” and civic-minded rankings since its engagement with the SASB (Sustainability Accounting Standards Board) advisory council. Similarly, Coca-Cola and Clorox remain sustainability leaders as they hedge forward in efforts with the IIRC (International Integrated Reporting Council). However, the life sciences and high tech industries are not falling far behind. Our clients in these industries see integrated reporting as a way to help communicate their education-based missions, to track regulatory control, and to meet reporting requirements.
But the biggest and arguably most important driver toward this practice is the market itself. Investors and consumers are demanding more sustainable business practices and more transparency. In order to keep up with these growing expectations, companies will find it necessary to have more stringent management of their data and should consider getting a head start by developing a comprehensive CSR report that will allow for an easy transition to integrated reporting.