The business landscape has changed with the increasing adoption of corporate social responsibility (CSR). This includes sustainability concepts, as well as explicit references to occupational safety and health in the social area. Although CSR is in the early stages in most businesses, some larger companies and early adaptors are taking their best-in-class CSR programs to new heights, providing much-needed leadership in this emerging corporate arena.
Public performance reporting is becoming an essential tool for disclosing and measuring a company’s level of CSR activity. The Global Reporting Initiative (GRI) has become the framework of choice for reporting CSR performance by multinational businesses in the Fortune 250. More than 1,800 companies filed GRI reports in 2010, and a growing number are verified by a third-party assessment. GRI reports that businesses using its framework comprise 95 percent of the Dow Jones Sustainability Index, 78 percent of the FTSE4Good, 70 percent of the Global 100, and 70 percent of the NASDAQ OMX CRD Global Sustainability Index. There is no other reporting scheme that approaches the popularity of the GRI for companies and stakeholders at this time.
The GRI is continuing to revise and expand the information required in its reporting framework. The G-3.1 Guidelines released in March 2011 requires new disclosures related to the social aspects of CSR, which are contained in report sections titled, Human Rights and Labor Practices and Decent Work. The G-4 Guidelines are being developed and will be more comprehensive with the planned launch of the final document in May 2013. The development of this more comprehensive set of CSR metrics began in June 2022.
One source of concern is the framework’s failure to include a comprehensive set of performance indicators for occupational safety and health (OSH), which is considered part of the social area. The American Society of Safety Engineers recently published a draft Safety and Health Sustainability Index of performance measures. The association is participating in the G-4 Guidelines development process. The need to develop better performance measures for the social and governance areas will receive increased scrutiny.
Mandatory and integrated reporting is also becoming more prevalent, with a growing chorus of stakeholders advocating for greater transparency and consistency in reporting requirements. This includes the development of environmental, social, and governance (ESG) reporting frameworks. Such frameworks seek to create a standardized approach for companies to report on their sustainability and social responsibility efforts.
Takeaway
The transformative power of social responsibility is undeniable and it’s causing a profound shift in the business landscape. While the adoption of Corporate Social Responsibility (CSR) is still in its nascent stages for most businesses, there’s a growing recognition of its importance as the world continues to face unprecedented social and environmental challenges.
Fortunately, the Global Reporting Initiative (GRI) framework has emerged as the de facto standard for reporting CSR performance by multinational businesses in the Fortune 250. With the development of the G-4 Guidelines and the increasing focus on developing better performance measures for social and governance areas, there’s an expectation that CSR reporting will become even more comprehensive and transparent in the coming years.
As businesses adapt to this new reality, those that take their best-in-class CSR programs to new heights provide much-needed leadership in this emerging corporate arena. Not only do these businesses set the standard for others to follow, but they also demonstrate that responsible business practices are not only good for society and the environment, but they also drive innovation, enhance brand value and contribute to long-term business success.
As we look to the future, there’s a clear sense that CSR will continue to play a pivotal role in shaping the business landscape. And businesses that embrace this reality, and take bold action to integrate social responsibility into their core strategies, will be the ones that succeed in creating a sustainable and equitable future for all.