Employer supported volunteering increasingly features in companies’ formal communications. It is part of a broader trend towards reporting social and community impact as well as financial performance. This section provides an overview of the growing area of social reporting and explains where employer supported volunteering fits in.
What is social reporting?
Social reporting is a relatively new concept. It’s easy to forget that at the start of the 1990s only a few companies had prepared environmental reports, mainly those that felt compelled to do so to rebuild trust following a series of major incidents. By 2003, a survey by SalterBaxter and Context found that over half the FTSE 250 report on environmental, social and ethical performance, and nearly all the FTSE 100.
Social reporting is the systematic communication of a company’s social, environmental and ethical impact and its commitments to enhance that impact in future. Also known as CSR, sustainability or ‘triple bottom line’ reports, they are usually provided annually, although a few companies prepare them less often and a few are beginning to explore ways of updating them more frequently. Initially provided as print reports (often long, over 80 pages, and usually glossy, with high production values), there is an increasing tendency to use the internet to publish detailed information with the print report restricted to a relatively short (20-40 pages) overview.
Social reports usually have some or all of the following elements:
- Statements of values, principles and the way CSR is managed within the company
- Detailed analysis of social, environmental and economic impacts (the so-called ‘triple bottom line’)
- Discussion of how different stakeholders are affected by the company’s activities, particularly customers, employers, suppliers and local communities
- Case studies of initiatives to enhance the company’s impact
- The impact of CSR activity on broader business performance
- Engagement with stakeholders in the reporting process, e.g. by consulting them on what information ought to be included and how information should be presented
- Opportunities for readers to provide feedback on the report, e.g. on a reply form or through a web site
- Independent verification by an auditing organisation such as AccountAbility and the big accountancy firms
- As corporate governance has become an increasingly hot topic in the wake of accounting scandals here and in the US, companies are also expected to demonstrate how they comply with requirements such as the Combined Code on Corporate Governance of the London Stock Exchange.
The latest trend is to integrate social reporting into financial annual reports, providing a single, combined report that covers all aspects of the company’s performance. Mostly this means including a section on social and environmental performance in the annual report, or vice versa. Only a few companies have tried to bring together financial, social and environmental indicators and really understand the relationships between them. This is a key area for future development.
Benefits of reporting
Social reporting can be a time-consuming and expensive process, and you need to be clear about what you want to get out of it before starting work. The companies that gain most from reporting see it as an opportunity to learn about and improve their business, have a clear understanding of what they are hoping to achieve by reporting, and develop their own approach accordingly. It’s important to learn from other companies, but their approach may not be right for you - develop your own method and style that suits the benefits you expect to derive from the process.
Probably the most common reason to report is to enhance the company’s reputation by demonstrating openness and transparency and answering concerns about its activities. The earliest reporters were motivated by a need to respond to criticism and this has continued to be a key feature. But companies could do more to get the message across – according to MORI, nearly nine in ten people think companies should actively communicate their community activities – but only three in ten can name any company that is particularly socially or environmentally responsible. Strangely, it seems that the companies that put most effort into corporate responsibility are least likely to communicate it – Futerra and CTN’s 2003 survey of online CSR communications found that companies at the top of Business in the Community’s Corporate Responsibility Rankings came bottom of their own league table. They also found that nearly one in five FTSE 250 companies had no mention of CSR on their site at all.
Staff are often a key audience for a company’s social report, and one of the benefits can be enhancing employees’ morale, confidence and trust. Social reports give staff the support they need to act as ambassadors for the company and ‘spread the word’ about its social and environmental commitments. Including case studies can reward and incentivise staff and external partners by demonstrating that their efforts are valued.
At a practical level, companies face growing numbers of requests for information about their social and environmental performance, including screening questionnaires from socially responsible investment funds, consultants’ surveys on CSR, evaluation exercises from the host of indices and comparison tools (FTSE4Good, Business in the Community’s Corporate Responsibility Index) and campaign groups seeking information on how the company is responding to a particular issue. A detailed, comprehensive social report gathers all the information in one place and helps companies answer all these requests quickly and relatively painlessly.
The final benefit is learning. By scrutinising and analysing their activities in detail from a new perspective, many companies have discovered better ways of doing things and identified inefficiencies or risks they weren’t previously aware of.
Doing it well
Companies have to think about the content of the report (the ‘what’ of reporting) but also the tone (the ‘how’). Get either wrong, and the benefits of reporting could be lost entirely.
As far as content is concerned, there are a huge range of codes and guidelines available to help companies decide what to report and how to measure it. The most high-profile are those issued by the Global Reporting Initiative (GRI) – but they are also amongst the most challenging. Many companies use the GRI structure but do not fully meet its requirements (this is known as ‘referencing’ GRI rather than acting ‘in accordance’ with it).
In terms of tone, it’s important that reports are clear about the messages the company wants to communicate, but also that they are balanced and honest. Many reports are criticised as ‘greenwash’ – PR material that is designed to hide rather than reveal the truth about the company’s impacts. These days, stakeholders fear the worst if a report is low on detailed data and full of unsubstantiated statements of commitment or aspiration.
Stakeholder dialogue is an increasingly important feature of the reporting process, to ensure that stakeholders can see the company’s commitment at first hand and the company understands their expectations.
Business in the Community provides the following guidelines for social reporting:
- Use the annual report as a ‘spine’, defining the values that underpin all the company’s activities
- Seek to extend your approach, moving gradually to full triple bottom line accounting
- Don’t overclaim
- Recognise that there’s more to do
- Link back to business logic
- Demonstrate what’s voluntary and what’s a regulatory requirement – don’t try to take credit for things you have to do
- Reflect the aspirations and concerns of all groups
- Include all relevant activities and significant information
- Make reporting regular, systematic and timely
- Audit and assure
- Establish appropriate communications channels and reach out to external audiences
- Make information comparable across reports and show trends over time
- Invite feedback
Using the Internet
Companies are increasingly turning to the Internet as their medium of choice for CSR communications. It has several benefits:
- Allows presentation of more detailed and comprehensive information
- More flexible
- Highly cost-effective
- Can be updated easily and frequently
- More engaging and interactive
- Reaches a wider audience
- Easier for readers to find the specific information they’re looking for
As a result, these days a company that doesn’t have a section of its web site dedicated to its social and environmental performance looks like it has something to hide.
However, there are some pitfalls to watch out for – online communication is not the same as producing a glossy print report. Don’t just apply the structure of your written report directly to the web, think about how your target audiences are going to approach the site.
How can you make it as easy as possible for them to find the information they’re looking for? You might consider developing alternative navigation systems, with a ‘quick links’ pull-down box in addition to the traditional menu structure.
Finally, harness the internet’s potential for interactivity and feedback. The internet creates the opportunity for true real-time stakeholder dialogue, strengthening relationships and building trust. However Net users have come to expect the ability to comment on online content, and get a quick response, so make sure that you’re geared up to deal with the information that comes in. The best approach is to develop dialogue on specific topics with a clear purpose and end-point.
The case studies in the section below on what other corporations are doing will help you get a feel for where the leading players are going with online reporting, and offers some good ideas you can apply to your own business.
How does employer supported volunteering fit it?
It’s important to try to involve employees in the company’s social impact initiatives and reporting. MORI research has found that word of mouth is the single most effective way of getting the message out about CSR activities, and the most effective companies engage and inspire their employees to act as ambassadors for them in the wider community. Many companies carry out extensive internal consultation as part of their stakeholder engagement activity when putting together and soliciting feedback on their social reports.
At the same time, employer supported volunteering programmes can be promoted in your social report as one of the most visible and high-impact ways of contributing to society and local communities. Many companies use their social and/or annual reports to position their employer supported volunteering activities as a centrepiece of their community investment activities. See the section on ‘CCI and CSR’ for more on this.
Where can I go for more information?
AccountAbility is one of the leading auditing organisations and provides an accountability standard based on stakeholder engagement – www.accountability.org.uk
The Association of Chartered Certified Accountants (ACCA) has launched a Sustainability Reporting Awards programme (in conjunction with CERES) and worked with Corporate Register to prepare a guide to best practice in online reporting – www.accaglobal.com
Business in the Community’s Winning with Integrity framework provides a template for reporting based on a range of impact areas and progression levels. 2003’s report, Indicators that Count, reviews the framework and describes the experiences of a group of 20 Business in the Community member companies that piloted it. See www.iosreporting.org for the full report and sample company reports.
The Combined Code on Corporate Governance, which is based on the Higgs Report and specifies good practice in corporate governance, can be downloaded from www.frc.org.uk
Survey of the current state of online CSR communications on CTN Communications website www.csr-survey.org
The Global Reporting Initiative is a multi-stakeholder programme to develop and promote globally applicable reporting guidelines – the current guidelines and a growing set of sector-specific supplements are available from www.globalreporting.org
SustainAbility carries out regular surveys of the state of the sustainability reporting, the Global Reporters programme, and their reports provide good overviews of best practice in this area –
www.sustainability.com