CSR study summary


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Developing Corporate Social Reporting as part of Corporate partnership with Development Organization
Study: How to jointly develop social responsibility in Corporate Social Reporting

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CSR study summary

  1. 1. Developing Corporate Social Reporting as part of Corporate partnership with Development Organization Study: How to jointly develop social responsibility in Corporate Social Reporting Jaana Siljander Aalto PRO -study Helsinki 29.11.2013 Summary
  2. 2. Executive Summary Corporate sustainability reporting has a long history going back to environmental reporting. The first environmental reports were published in the late 1980s by companies in the chemical industry which had serious image problems. Non-financial reporting is a fairly recent trend which has expanded over the last twenty years. Many companies now produce an annual sustainability report and the number of companies reporting is increasing year-by-year. The most used standards in sustainability reporting are the Global Reporting Initiative (GRI) guidelines and the United Nations Global Compact (UNGC). The latter is a set of ten ethical principles that a majority of the companies reporting agree to follow and support. GRI is the most widely used standard as more than 4 000 organizations from over 60 countries follow it. Plan, as the majority of the non-profit organizations, follows other principles in their reporting. As the corporate partnerships grow to play a more important part of Plan’s strategy and funding, it is crucial to understand the needs for company decision making and the link between business performance and social value creation. In order to have the cooperation to benefit both parties in a maximal way, the reporting principles need to be clear, measurable and relevant. Companies need to be able to measure the effects of their investment and the progress also in social value creation and verify the economic value for the business of actions taken. "Business must find a way to engage positively in society, but this will not happen as long as it sees its social agenda as separate from its core business agenda." Michael Porter, Professor at Harvard Business School. Purpose with the study Purpose with the study was to study the reporting principles and the different social key performance indicators (KPIs) that the cooperation companies use, with focus on the social part of reporting, and compare the information found with the logical framework – the report and measurement Plan produces – to find KPIs that can eventually benefit companies in their reporting. To get to the very point with the questions raised, the findings of the desktop study were discussed with a number of decision makers of Plan’s corporate partnership organizations. In addition, three key professionals from consulting and academic world were interviewed about their view on the current status and way forward with the CSR reporting in Finland and wider in EU and globally.
  3. 3. What was found out? Social indicators are still very much absent in the CSR reporting of Finnish companies. The indicators shown in this section of the report refer mostly to employee welfare and working conditions factors, not community support or training and educational indicators outside of the own existing personnel. The companies interviewed were willing to discuss further about using Plan’s KPIs to support their reporting and in measuring the effects of actions made – but, as one company representative said, the reporting needs of a non-profit organization differ radically of the corporate needs. The measurements need to be defined separately in each project, to fulfill the company needs in a clear way, and to support the company reporting in a right way. Measuring of the effects of each project is crucial; in fact good and clear is the key to get the project to succeed 100%. Measuring the contribution in monetary or other numerical value (ex. number of girls educated during a certain time, amount of children getting access to clean water in the beginning of the project versus during and after the project etc.) should always be done as comprehensively as possible. In projects that take several years to complete, it is important to document the development trend on a yearly basis. Many of the experts see the path to a more business –focused reporting already happening. The time of the over 100 page “all inclusive” CSR reports will hopefully be history and we get to read more focused reports in the future. That said, we need to understand that there are groups that need detailed and comprehensive reporting for their decision making, for example investors. Also in those cases the CSR report will be integrated in the annual reporting, as part of it. Way forward The company representatives saw a clear need in putting more focus in the social aspect of the reporting in the future. To be able to do so, the help from Plan is welcomed both when it comes in developing KPIs and, very clearly, in producing material for communicating purposes inside the company and for external usage as well. “Please give us material for telling good and positive stories, with pictures and authentic quotes. We would love to tell the stories as part of our own communication to our target groups”. The companies and the university and consultant representatives alike saw Plan’s activity in developing their understanding of the joint needs of reporting and cooperation very positively. Plan is considered as a key player in the NPO field, together with a few other international players. The companies interviewed have a clear need to get more involved with Plan’s work in helping the societies in developing countries: All levels of the organization from company management to the employees are willing to support the goal to help, if the message is clear enough and the projects are defined in a way that support the company values. As one of the interviewed company
  4. 4. representatives said: “We are willing to invest a few days a year to give our own professional expertise to help and support you in your work. It is more rewarding for us to work like that, not just giving the time to do doing traditional cleaning, painting the wall or posting letter –type of work.” The companies welcome Plan to be more actively involved with the organizations to help in defining measures and KPIs, as well as in activating both the company management and the employees “in the good work of developing the societies where we act”. Corporations have a critical role to play in helping Plan to promote child rights and lift millions of children out of poverty. Plan works with companies in a variety of ways and values the great importance of developing partnerships that are mutually beneficial. The study was made together with Plan Finland as a Aalto University PRO study during April – November 2013. The report in Finnish can be obtained from the author.