Keeping Score in CSR: Why Annual Reports Matter

In today’s world, it’s not enough for companies to simply have a corporate social responsibility (CSR) program – consumers expect to see a report with quantifiable proof of impact.

According to the Governance & Accountability Institute (G&A), 90% of S&P 500 companies published corporate responsibility or sustainability reports in 2019. When you compare that to 2011, when less than 20% of S&P 500 companies reported on their sustainability, corporate social responsibility, and other related topics and issues, it reinforces the significance of communicating about these efforts in our current business climate.

What is a CSR report?

CSR reports provide updates regarding an organization’s corporate social responsibility goals, actions and results. Typically published annually, they synthesize the highlights and key takeaways of a company’s efforts and reinforce its pledge to make a difference – whether philanthropically supporting local nonprofits, adopting more sustainable business practices into its operations, implementing employee volunteerism programs or finding other ways to give back. In short, it’s a public statement that reflects a business’ values and affirms its commitment to “doing good.”

Why is it important?

Measurement and reporting is an essential business practice in any industry – and the same holds true for CSR. The most effective brands and nonprofits provide evidence about how their efforts are creating positive change and highlight the potential future impact of their work on the world.

Evaluating CSR initiatives against a tangible goal is critical for measuring progress and showcasing the effectiveness of tactics. It also provides an opportunity for an organization to continuously leverage insights to optimize its efforts and ultimately have even greater impact.

From an external standpoint, today’s audiences expect transparency. Customers, investors, partners and others want to see these types of CSR updates. Not only can corporate social responsibility reports help build credibility, but they can attract new customers, earn loyalty among existing customers and build strong brand advocates.

How can you create an effective CSR report?

Whether you’re preparing to create your first CSR report or looking for ways to refine your organization’s existing reporting practices, here are a few tips:

  • Put a measurement process in place. How are you tracking your community impact? Does your organization follow consistent reporting procedures? Ensure you have a standardized process – and all appropriate tools and resources – to benchmark progress. Consider investing in a sustainability and CSR reporting software, such as Enablon or Workiva, to help consolidate and synthesize results. In addition to capturing quantifiable data about CSR efforts, also record specific qualitative examples that can paint a meaningful picture of the impact made.
  • Develop a communications strategy. Identify all key audiences and stakeholders, and then assess which communications channels will be the most effective for reaching them. Do your board members expect a glossy, formal report? Can you increase brand awareness among potential customers or clients by distributing a national press release and engaging target media? Should you create a video to share on social media? Whatever you decide, remember to communicate your progress internally to employees first before sharing more broadly with external constituents.
  • Start early. While you may only publish a community impact report once per year, you don’t have to wait until the month the report is due to get started. Try to track all efforts consistently throughout the year and consider offering quarterly internal updates to employees as a way to hold your company accountable for timely measurement. Starting early – and keeping all metrics up to date – will make efforts infinitely easier when the time comes to produce an annual report.
  • Include all key assets. Global Living recommends all CSR reports include a business overview, a letter from the CEO, clearly stated goals, a performance summary, case studies, and messaging that addresses how the company is prioritizing and improving future efforts.
  • Consider the current political and social climate. Be aware of issues, news and related events from the past year and acknowledge how they may impact your CSR reporting. For example, when compiling details about your organization’s efforts in 2020, be sure to highlight how it responded to the challenges presented by COVID-19 or took a stand against racial injustice.
  • Use visuals. Remember, a picture is worth a thousand words! Incorporate authentic and compelling photos to demonstrate your organization’s efforts and impact. Videos, interactive graphics and other dynamic content – which can be shared broadly via your brand’s digital channels – are also effective and engaging ways to spotlight your work.

Every year, companies explore new ways to push the envelope when it comes to CSR reporting, continually raising the bar for how they communicate their impact. If you’re seeking inspiration for how to create or refine your brand’s CSR report, check out these great examples from Chick-fil-A, Delta Air Lines, 3M, Timberland, Lego and Marriott. And if you need any help getting started, contact the Jackson Spalding CSR Team!