Who reads sustainability and CSR reports?

The popularity of sustainability reports among larger companies has increased rapidly in recent years. Back in the 1980’s, only chemical companies issued “sustainability reports.” Those reports were really just environmental impact reports. Today, over 50% of the Global Fortune 100 and more than 2000 companies worldwide from every imaginable industry issue sustainability reports that focus not only on environmental issues, but also on economic, social, and governance issues.

As sustainability has become mainstream, critics of CSR have raised concerns about the usefulness of the reports. Are CSR reports just a marketing tool and greenwashing, or do they actually provide useful information about a company’s performance? Does CSR increase shareholder value? Can CSR coexist with or even enhance capitalism? But one of the most frequent questions raised is: Who, if anybody, actually reads CSR reports?

A survey conducted by GlobeScan found that about half of the general population in North America, Australia, parts of Europe have read, looked at, or at least heard of a CSR report. The survey also showed that “Opinion Leaders – people who are the most likely to be engaged in and speak out on corporate issues – are twice as likely as the general public to say they have looked at a report, suggesting that even more people will be reading these reports in the future.”

A separate study by the Global Reporting Initiative (GRI) showed that about two-thirds of readers are in business or consulting and many of the rest are government employees and academics. Let’s take a more detailed look at who reads sustainability reports and why.

Employees

A company’s employees are one of the major readers of its CSR report. Particularly in larger, multi-national companies, employees use the report to learn more about their company’s practices and performance worldwide.

Potential Employees

A sustainability report is a great source of information about a company for prospective employees. CSR reports give a an idea about the priorities, practices, and culture of a company, which can say a lot about what it might be like to work in a given company.

Worldwide, 80% of people said they would prefer to work in an organization that has an environmentally-friendly reputation. People want to work at companies that have progressive policies and practices, and sustainable/green practices are becoming an effective recruiting point that can help attract and retain top talent.

Students

Like potential employees, many students use sustainability reports to learn more about the practices of a given company or about sustainability in general. Some students may use the information for projects on sustainable business and socially responsible practices while others may be looking for internship opportunities.

Investors

Socially Responsible Investments account for about 10% of all the money invested in US markets. Sustainability and CSR reports are an extremely important source of information for SRI investors. A CSR report is an SRI investor’s window into a company’s practices and performance. Investors usually scour the reports for key performance indicators that can be used to compare companies, key challenges, potential trouble areas, and progressive practices.

Customers

It is becoming increasingly common for customers to put some emphasis on sustainability and environmental performance when making purchasing decisions. For this reason, it is important for companies to be transparent about their sustainable policies, practices, and performance (both good and bad) with consumers through a CSR report.

Note: A CSR report should not be seen as a marketing tool. While it can increase trust and loyalty among existing customers and attract new ones, a CSR report should explain a company’s performance honestly and openly, sharing challenges in addition to achievements.

Purchasers

Purchasers – companies with many suppliers – are putting more emphasis on corporate social responsibility in their supply chain. Purchasers seek reliability and low risk in their supply chain. They use the CSR reports of their suppliers to determine how well adapted the supplier is to exist into the future and if involvement with that supplier poses a reputational risk.

Suppliers

Suppliers use the CSR reports of purchasers to learn about the culture and practices of the company. Before doing business with a purchaser, it is important for suppliers to understand what standards they will be held to and what responsibilities they must fulfill.

Government employees

Government employees use CSR reports to understand the impacts of organizations on the local community and the steps that organizations are taking to improve that impact.

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Sources:

CSR Network Inc. 2001. The State of Global Environmental and Social Reporting: The 2001 Benchmark Survey. Cutter Information Corp.

Ipsos MORI. October 2007. Corporate Environmental Behavior and the Impact on Brand Values.

KPMG International and SustAinability Ltd. 2008. Count me in: The readers’ take on sustainability reporting. Global Reporting Initiative.

http://www.globescan.com/news_archives/csr04_gri_PR.html

http://www.socialfunds.com/news/article.cgi/1459.html

http://www.ivci.com/pdf/corporate-environmental-behaviour-and-the-impact-on-brand-values.pdf