Implementing CSR does not solely consist of the effort; how companies present their CSR policies and practices to stakeholders is also important. Most companies communicate with their stakeholders on CSR initiatives implementation through corporate websites, media releases, voluntary communications or corporate sustainability reports.
Typically, CSR reports were regarded as marketing instruments and efficient communication tool to enrich stakeholders’ understanding of companies’ commitments and actions. Although the quantity and quality of CSR reports have gradually improved over the past years: many corporations have changed their one-page declaration of environmental and social responsibilities into more comprehensive CSR/sustainability reports or annual reports with detailed information on specific plans and outcomes. However, the reporting practice varies significantly in terms of disciplines, scope and depth.
Numerous studies have shown that the production of high-quality CSR reports yields both internal and external benefits. Internally speaking, CSR reports provide comprehensive tracking of corporate sustainability performance and emphasize the link between financial and non-financial performance which leave a positive effect on staff engagement and work efficiency. Externally, corporations see the CSR reports as a means to express their efforts in mitigating negative environmental, social and governance influences and a way to improve reputation and brand loyalty. It also enhances stakeholders’ understanding of the organization’s value.
Yes, previous studies have outlined the importance of CSR practice and reporting in sustainable corporate development, the number of companies that are officially and consistently producing CSR reports has been relatively small compared to the size of what is being done. Organizations are not putting sufficient effort in reporting or getting their activities out in the public domain.
In fact, CSR reporting practice varies among organizations, especially when there is a lack of legal and regulatory compliance.
In recent times, the quantity and quality of CSR reports have greatly improved with some reasonable enhancement in the breadth and depth of reports being witnessed. A number of establishments have introduced the concept of sustainability into their reports and many others are beginning to recognize the significance of the “triple bottom line” of environmental, social and economic responsibilities while some leading organizations have begun to also apply the generic guidelines or frameworks for their CSR reporting together with the validating statistical summaries. But there are still some drawbacks, such as low credibility, using unstable results, lack of consistency which have been found in the reporting process.