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Home Articles

Questions every CEO should be asking about CSR Reporting

Ernst & Young's paper on sustainability reporting poses seven crucial questions for CEOs and boards to consider.

India CSR by India CSR
October 29, 2010
in Articles
Reading Time: 3 mins read
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By Deborah Fleischer

Sustainability Reporting:  Seven questions CEOs and boards should ask was released yesterday by Ernst & Young, as part of the Webinar they held on reporting.

The paper explores the following questions:

(1) Who issues sustainability reports?
(2) Why release a sustainability report if you don’t have to?
(3) What information should a sustainability report contain?
(4) What sort of governance, systems and processes are needed to report on sustainability?
(5) Do sustainability reports have to be audited?
(6) Challenges and risks of reporting
(7) How can companies get the most value out of issuing a sustainability report?

The Webinar explored the same questions, with discussion by several experts, including Mike Wallace from the GRI.  A summary from the report follows.

The take home messages I took from the Webinar:

To really capture the business value from reporting requires governance systems, metrics and goal setting to be in place. More and more investors and rating agencies are looking at these reports and now is not the time to put out a fluff piece Create something solid and credible that speaks to your challenges.

Crib Sheet:  Answers from the New Report

1. Who issues sustainability reports?
More than 3,000 companies worldwide, including more than two-thirds of the Fortune Global 500.

2. Why report on sustainability if you don’t have to?
Increasingly, external stakeholders such as institutional investors expect it. Reporting can also bring operational improvements, strengthen compliance, and enhance your corporate reputation.

3. What information should a sustainability report contain?
Reports should contain key performance indicators relevant to the reporter’s industry.  Four principles for deciding what to include are materiality, stakeholder inclusiveness, sustainability context and completeness.

4. What governance, systems and processes are needed to report on sustainability?
Governance requires a high-level mandate and clear reporting lines. Also needed: robust systems and processes that help companies collect, store and analyze sustainability information.

5. Do sustainability reports have to be audited?
Not yet. But they are being more closely monitored than ever before. As this trend continues, users of sustainability information will come to expect that the information has been validated by a reliable third party.

6. What are the challenges and risks of reporting?
Sustainability reporting presents many challenges, including data consistency, striking a balance between positive and negative information, continually improving performance and keeping reports readable and concise.

7. How can companies get the most value out of sustainability reporting?
Sustainability reports should be mandatory reading for all employees, and can be a valuable tool for communicating with external audiences as well. Setting targets in the form of KPIs also forces the organization to meet publicly stated goals, which makes reporting an accountability tool.

Checklist of Next Steps

The report itself is well designed and easy to read.  It concludes with a handy checklist of next steps to take if you want to take your reporting to the next level, including exploring:

(1) Have you clearly identified your material sustainability issues?
(2) Are you engaging stakeholders?
(3) Do you want a more rigorous process to ensure that your reporting is credible?

About the Author

Deborah Fleischer is President of Green Impact, a strategic environmental consulting practice that helps companies create authentic communication strategies that educate, engage and inspire both employees and external stakeholders.  Check out our new green team tool, Corp Green.

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India CSR is the largest media on CSR and sustainability offering diverse content across multisectoral issues on business responsibility. It covers Sustainable Development, Corporate Social Responsibility (CSR), Sustainability, and related issues in India. Founded in 2009, the organisation aspires to become a globally admired media that offers valuable information to its readers through responsible reporting.

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