Why CSR is mandatory

Compliance & Law

Institutional investors have recognized the social importance and economic relevance of CSR reporting. From their point of view, risk management and marketing aspects are particularly important when it comes to assessing the future viability of companies. For many companies, however, the CSR report is now a chore. The extra-financial reporting requires additional resources, which is why it is viewed very critically. Other companies, on the other hand, have long since integrated sustainable management and reporting into their corporate strategy, such as SAP.

CSR Report - A Fad?

The trend towards reporting and communicating about sustainable performance has increased a lot in recent years. Critics like to see it as a fad that contributes to greenwashing. In fact, sustainable reporting has a history of over 60 years. The number of guidelines by which companies can report solidly and sustainably has increased. These include, for example, the German Sustainability Code, Environmental Social & Governance Issues - Key Performance Indicators (ESG-KPI), International Integrated Reporting Council (IIRC) or Global Reporting Initiative (GRI). The trend towards CSR reports should therefore intensify further due to the current new reporting obligation, which affects companies with more than 500 employees. Sustainable management and the corresponding communication, such as the CSR report, contribute to a positive perception in the public. However, such communication is also associated with risks. It is therefore important to adhere to certain principles, which can differ greatly from the usual rules of communication.

How does professional sustainability reporting work?

For CSR communication and reporting, companies and organizations should adhere to special rules that deviate from classic communication. The latter contributes to the image and reputation of a company. CSR communication, on the other hand, shows solutions and means social legitimation. Only those who really deal with CSR can report on it without it appearing like greenwashing. The following guidelines are therefore important:

1. Dialogue as a basis: Identify your stakeholders and ask about their interests. The results of the stakeholder dialogue and the key topics developed from it form the substantive basis of your sustainability strategy and communication.

2. Transparency: Report credibly, that is, honestly and completely. Don't just share positive things, but also failures and challenges that have yet to be resolved. A study by the Universities of Kassel and Düsseldorf has now also been able to scientifically prove this: If a company informs itself about violations of the principles of sustainable management, there is no risk of negative effects on the share price. The situation is different if the misconduct is uncovered by a third party.

3. Structure and language: Make your report clear. Like the content, the language of the report should be understandable, precise and target group-oriented.

4. Define goals and measures and report continuously whether the goals set are being achieved. And if this does not succeed, which measures are taken to optimize it.

5. Remember that sustainability reporting is an interface task. Identify everyone involved at an early stage and create transparency in terms of objectives, tasks and responsibilities. If all departments involved recognize the sense of the reporting, everyone pulls together and can put together the report with manageable effort.

  1. Pro bono: use in emerging markets
    There are a few things that should be considered when sending volunteers to emerging countries to support non-profit organizations. Here are 7 tips for managers of pro bono programs.
  2. 1. Clarify the interaction between pro bono and business strategy:
    How does the program support your company's business goals? Which business skills do you want to use to achieve which social impact? Which project partners are right for your company?
  3. 2. Measure the impact of your projects:
    Put this process at the center of program development. How do you determine the success of a pro bono mission? With the participants? At your company? With the supported organizations? How (for a long time) do you measure these desired changes?
  4. 3. Create clear competencies:
    Transfer responsibility for the pro bono program to either the CSR department or human resources. Otherwise it will be too complex to get the program up and running.
  5. 4. Use external support:
    Check the involvement of experienced partners with whom you can act faster. The spectrum ranges from logistical support to the assumption of conceptual tasks such as the selection of suitable non-governmental organizations (NGOs) or impact measurement.
  6. 5. Mix your teams as heterogeneously as possible:
    The greatest success is achieved by three to four-person project teams who differ in terms of age, gender, nationality, area of ​​work and the time they have already worked in the company.
  7. 6. Ensure the sustainability of the projects:
    Integrate the branches of your company in the target countries. Involve your colleagues there in the selection of the NGOs. Network the NGOs with your national companies in order to ensure the sustainable success of the projects.
  8. 7. Use the enthusiasm of the former participants:
    Connect each current participant with an alumnus they can talk to about their expectations and experiences. Such coaching maintains the learning success of Pro Bono. In addition, the alumni increase the reach of the program.

Sustainable reporting in the future

CSR communication and reporting will gain in importance. Even medium-sized and small companies have to deal with the topic more and more because of an entrepreneurial necessity. Because only companies that are aware of the challenges, such as demographic change and the scarcity of resources, and that prepare for them, are competitive and fit for the future. And: Reporting on sustainability is becoming more and more important for purely economic reasons. The EU's CSR guideline and critical stakeholders also require a strategic approach to sustainability. The ISO 26000 guide, for example, can provide orientation. The report should only be available at the end.