The Monetary Value of CSR Reporting

CSR global standard image
April 12, 2013

In recent years, Corporate Social Responsibility (CSR) reporting has emerged as a major business trend. By putting in place sustainability practices and dialoguing with key stakeholders, companies have increased savings, gained efficiency in their operations, and in many cases reinforced their reputation as corporate citizens.

That said, there is no clear consensus on how to measure the monetary value all this adds to a company. Without a quantitative view of the tangible benefits for the company, it is often an uphill battle for CSR managers presenting their case for both the resources and the long-term leadership commitment necessary to drive sustainability programs.

A recent study focused on the relationship between the sustainability efforts and financial performance of companies included in the Dow Jones Sustainability Index (DJSI). The sustainability efforts were split into two broad categories: development of new products and processes and modification of existing products and processes.

The study concluded that the average monetary benefit of the sustainability efforts was $186 million—ranging from $0 to $2.85 billion—with companies who made efforts in developing new products and processes having a higher average return. This is important because it shows not only a quantifiable monetary value for sustainability investments, but also that the type of investment can be crucial.

Another recent study looked at the share price between 2002 and 2012 of 80 companies, all included in the DJSI, and concluded that there was a significant net positive gain in share price for those companies over the entire period (even during the stock market crash in 2008) compared to the benchmark MSCI index.

As the tools and metrics for quantifying the monetary value of sustainability efforts are further refined, they will gradually become mainstream. They will help companies realize the net financial gains to be made in addition to the positive impact on their reputation as good corporate citizens.

The ultimate challenge for companies will be to find the best way to reap the benefits of their efforts by sharing their sustainability performance with stakeholders using their CSR reporting.

The process of organizing and analyzing this information can be a difficult task. Collaboration across multiple departments and geographical locations is required to gather the necessary data, and subsequently present it in a manner that makes it easy for stakeholders to appreciate the quality of the work done.

Wdesk will help companies simplify this process. Multiple users collaborate simultaneously on the report in our cloud-based platform, reducing the time and hassle required to bring the report together and giving the CSR team more time to focus on telling the story and sharing the company's vision.

To learn more about how Wdesk can help you achieve success in CSR reporting and quantify a monetary value of sustainability efforts, visit here.

References: Brent Kurapatskie and Nicole Darnall “Which Corporate Sustainability Activities are Associated with Greater Financial Payoffs?” Business Strategy and the Environment 22, 49–61 (2013) Serena Pollini “Sustainability Performance” Method Investments (2013)

Francis Quinn

About the author

Francis Quinn is the Director of Corporate Sustainability Technologies for Workiva. Before joining Workiva, he directed sustainable development for L’Oréal in Paris.