Corporate Social Responsibility Reporting Standards
Elwin Poortman, Analyst, Netherlands, Premium Member
Businesses, auditors, stakeholders and other institutions favor different reporting standards, and whereas financial reporting standards have harmonized over time, corporate social responsibility standards still vary nowadays.
Tschopp & Nastanki evaluated four globally recognized CSR reporting standards in order to examine to what extent they can be harmonized into one, world-wide accepted, CSR reporting standard. Those current four CSR standards are explained below.
GRI guidelines: The guidelines refer to concrete issues and provide solutions that relate to reporting principles, reporting guidance and standard disclosures. GRI focusses on five content areas which are present in every company. Those are:
AA1000: Also referred to as the Account Ability; embodies principle-based standards that provide guidance to company’s CSR reporting practices and aim to assure quality of CSR accounting, auditing and reporting.
- Strategy & Analysis
- Organizational Profile
- Report Parameters
- Governance, Commitments & Engagements
- Management Approach & performance indicators
UN Global Compact: The framework consists of ten principles relating to human rights, labour, the environment, and anti-corruption, and which serve as a mechanism for assessment. The Compact has established 60 Local Networks around the world that provide services to assist companies with their reporting standards. The Compact has not set a standardized reporting format however reports must entail:
ISO 26000: Incorporates a bottom-up approach that encourages voluntary initiatives over regulated actions. Therefore, this reporting standard provides practical guidance on implementing and integrating CSR in an organization and it distinguishes two main components:
- An executive statement of continued support for the Global Compact
- A description of practical actions taken to implement the Global Compact principles
- Measurements of current or expected outcomes
Managers prefer reporting standards that allow them to elaborate on relevant topics according to their most important group of stakeholders . The authors reason that there is a wide range of specific information that is desired by different stakeholders and therefore, the standard that provides relevant decision and useful information will be chosen most often.
- External Reporting
- Communication Component
This increases difficulties with regard to harmonizing the four CSR reporting standards, because CSR appears to lack common concise issues that are relevant to all stakeholders. As a result, the process of establishing core CSR elements and the construction of precise quantitative or qualitative measures has stagnated.
Moreover, it remains questionable to what extent the 4 different organizations are willing to harmonize their standards, since this requires the 4 organizations to give up their autonomy or even their existence, which is not favored by any of them.
Source: Tschopp & Nastanki (2014) “The Harmonization and Convergence of Corporate Social Responsibility Reporting Standards” Business Ethics Vol. 125 pp. 147-162.