Our phone lines and inboxes have been busy with burning questions about corporate social responsibility (CSR) reporting lately. We are continually asked how to create a CSR report, and to make sure it brings tangible value to our clients’ businesses.
Paladino advises on CSR reporting for companies of all sizes. Our experience has shown that LEED is just one of many valuable tools in your belt, and there are many ways to demonstrate sustainability and corporate social responsibility.
Experience has also shown that people are paying attention – and they care. Sustainable and socially responsible behaviors are significant to investors, consumers, and local communities. Companies can no longer scoot by with a few sentences on a website about recycling.
What value does Corporate Social Responsibility offer a company?
Companies need to deliver an increasingly resilient business for the benefit of its investors, employees, and stakeholders. They must validate year-over-year progress toward a resilient business model, and address issues like climate change and business performance.
CSR reports can demonstrate a brands’ sustainability position to the market, and improve business outcomes. Reporting and performance improvements benefit businesses by:
- Improving brand perceptions from investors, employees, and stakeholders
- Improving energy efficiency by monitoring and verifying performance data
- Mitigating risk from climate change effects
- Providing an opportunity to influence public policy in favor of a business environment
- Increasing market penetration
What are the steps to create a Corporate Social Responsibility report?
In addition to LEED (or perhaps instead of it), companies can explore commissioning, wellness planning, corporate reporting, energy analysis, and more. Once we are engaged with a company to develop a CSR report, we generally take the following steps:
- Discovery – we comb through company data and conduct interviews to create a baseline understanding of the company’s CSR status and history
- Perform a gap analysis to determine where our client is now compared to where they want to be
- Prioritize which sustainability initiatives are most valuable for the client, and then rank them by effort of implementation
- Document the company’s values and priorities to confirm what they care about most.
- Track those values through an environmental management system, which is a customizable framework that is used to track metrics. For example, we might track climate change mitigation by assessing flooding risk within a real estate portfolio.
- Aggregate data using a platform such as FigBytes or Envizi
- Translate this data into a digestible, intelligent, and interesting format for investors, employees, and stakeholders
Investors and customers prefer companies that provide real-time reporting that is available online any time.
The trend toward real-time reporting demands a robust environmental management system that can constantly track and monitor data. A robust EMS also allows organizations to respond to investor surveys with the click of a button. Fortune 500 Companies respond to hundreds of surveys every year, and this capability drastically increases accuracy and decreases reporting response time.
What is a typical budget for a CSR report?
There’s no one-size-fits-all model for CSR reporting, so services and fees differ greatly from client to client. The scope of work and complexity of the reporting will depend on where the company falls in the gap analysis and how far they need to go to meet their sustainability goals.
The scope of work will be very different for a company that simply needs to track energy, water, and waste than it will be for a company that needs to track complex goals around community engagement, charitable impact, and health and wellness.
There are a few reasons why companies benefit from hiring a CSR consultant versus hiring an in-house manager. Sustainability reporting is constantly evolving, and customers and investors alike are demanding more transparency from companies. The market is quickly losing its patience with static, annual CSR reports.
A credible report demands a complex set of skills – often fairly technical ones. Working with a consultant gives companies more flexibility and access to a broader skillset – often for less than it costs to employee a single expert.
As consultants, we have the benefit of working with many organizations with a variety of sustainability goals. Our team has a broad view of what works, how to achieve goals, and how to do it quickly. We aggregate best practices and help all clients improve without compromising proprietary information. Many companies understand their desired outcome perfectly, but don’t know how to achieve it. We’ve adapted approaches for so many different companies that as consultants, we have a lot of experience adapting the model to work for the client.
Additionally, most organizations have small sustainability teams (if any at all), and it takes the focused attention of more than one person to tackle a quality CSR report. Further, the CSR reporting demands the contributions of every department within the company, and an outside consultant wont’ be bogged down by internal politics and reporting structures. Being an outsider has its advantages – we’ve seen it firsthand.
Want to learn more? Our recent post, “You have the power to change sustainability reporting for decades,” highlighted your opportunity to influence how SEC sustainability disclosure requirements are communicated publicly.
If you want to know more, contact us.
Julia Raish is division leader at Paladino Seattle.