The last decade has seen a massive increase in the number of businesses providing non-financial reports, also known as CSR reports, corporate responsibility reports or sustainability reports. During 2005, ACCA estimates that between 1500 and 2000 companies worldwide produced such a report. In 2006, 85 per cent of the FTSE 100 produced a non-financial report; while KPMG report that half of the US Fortune 250 have issued separate sustainability reports.
A range of sectors publish CSR reports, from chemicals, retailing, water, utilities, oil and gas, media, transport, steel and other metals to government authorities, and the number of sectors is growing. With the emergence of CSR, ‘pure’ environmental reports have been merged into larger, broader reports. A useful source of free information and advice on the growth of CSR reports and downloadable copies of such reports can be accessed at www.corporateregister.com.
CSR reporting tools and standards
For a business that wants to produce a CSR report, there is a range of tools and standards (see below) that can help whoever is responsible formulate key performance indicators, define the importance and significance of aspects of the report and engage with key stakeholders.
Global Reporting Initiative (GRI)
This is a set of voluntary guidelines that organisations can use to report on the economic, environmental and social dimensions of their activities, products and services.
A voluntary, universal standard for companies interested in auditing and certifying labour practices in their facilities and those of their suppliers. It is designed for third party verification.
An accountability standard designed to improve accountability and performance by learning through stakeholder engagement.
ISO26000 Corporate Responsibility Guidance
The proposed ISO 26000 standard is scheduled for publication in September 2010. The planned guidance document on social responsibility will not include requirements, so therefore will not be a certification standard.
More information, including newsletters, development timeframe, FAQs and contacts can be found at www.iso.org./sr.
Data for inclusion
For businesses that want to produce a CSR report (or sustainability report), the inclusion of social, ethical and environmental key performance indicators is fundamental. Often, businesses will have ready access to data which can be included in such reports:
- Water billing information, including consumption per year
- Electricity and gas billing, including consumption per year
- Waste-to-landfill data from waste transfer notes.
- Transport business mileage data, which can be obtained from fuel bills and litres consumed
- Information relating to employees, such as numbers of male and female managers and administration roles
- Numbers of reportable accidents
- Customer information, which can be obtained from formal complaints records
- Supply chain data, which can be gleaned from invoice payments and tender documentation (for example, the number of suppliers with environmental policies).
Should the report wish to disclose the business’ direct carbon footprint from operations and transport activities, then the application of conversion factors to both gas/electricity billing and transport mileage/fuel consumed will provide a total CO2 figure in tonnes. The source of conversion factors for CO2 emissions can be found at the Vehicle Certification Agency and Defra, as well as the global reporting initiative.
The chosen key performance indicators for CSR reporting ideally should reflect the business’s own code of conduct and, if possible, link to recognised indices, such as GRI. Where the business chooses to follow a standard, such as AA1000, then the key performance indicators should reflect and align with these principles.
CSR reporting and assurance
For businesses that produce a CSR report, the use of independent assurance helps to build trust with stakeholders. Assurance provides an independent opinion on internal systems, thus building transparency and accountability. Ultimately, independent assurance helps to manage business risks, provide recommendations for improvement, support internal decision making and verify that information in the report is accurate. Stakeholders will view a report that has not been independently assured less favourably then one that has.