Introduction: What is CSR and CSR Reporting
Corporate Social Responsibility (CSR), also known as corporate responsibility is a form of corporate self-regulation that a company integrates into its business model. Generally, a CSR policy will serve as a built-in mechanism to allow businesses to monitor and ensure adherence to law, ethical norms and international standards. This means that during decision -making processes, businesses will consider the impact of their choices on the environment, consumers, stakeholders, community, as well as the general public sphere. In addition, businesses will also actively promote public interests by engaging in social and community development activities, as well as eradicating any unlawful and unethical practises.
One particular branch of CSR, known as CSR Reporting, is currently gaining increasing interests from organisations and investors. CSR Reporting involves relaying financial information to a broader group of stakeholders, and also highlights the importance of environmental performance, organisational social issues and non-financial key performance indicators. It also reflects the company's ability to manage risks. These activities can include issues such as community involvement, employee relations, as well as progress against last year's commitments.
Drivers Behind Various Global Initiatives on CSR Reporting
There are several drivers behind the global initiatives set up to provide guidance in CSR reporting, but one of more important drivers is governments. Over the recent years, governments have realised the importance of CSR in ensuring benefits in relationships between social and business organisations. To achieve this goal, governments have been up-in-arms to emphasize on public policies to promote CSR. For instance, in Indonesia, companies are required to set aside a budget for CSR annually, while in Singapore the Government has introduced a range of CSR programmes especially on Corporate Governance and the Environment. Because of the greater emphasis on CSR, there is a need to ensure that information relating to a firm's performance - whether financial or non-financial - will be able to reflect the firm's true value to consumers and investors.
Another driver is public consciousness. As the general public gain more awareness - through mediums such as the media - about the impact of firms' decision-making in people and the planet, consumers are starting to exercise a higher level of prudence as to which companies they park their funds in. There is then increased pressure for enterprises to report. In turn, as more enterprises jump unto the bandwagon, others will feel the need to follow to prevent the loss of consumers and potential backlash.
As such, organisations such as the Global Reporting Initiative (GRI), have sprung up provide frameworks for organizations to measure and report their economic, environmental, and social performance with the...