Top 4 Reasons U.S. Companies Report CSR
In recent years, an increasing number of U.S. companies have engaged in Corporate Social Responsibility (CSR) reporting. Organizations are identifying the importance of keeping pace with the global movement to measure, manage, and report information which interlinks business operations with social and environmental impacts.
According to the Global Reporting Initiative (GRI) database, the number of U.S. companies that published CSR reports increased from 70 companies in 2007 to more than 540 companies in 2012. The United States accounted for 12.5 percent of companies reporting on CSR globally in 2012.1 The chart below illustrates the total number of companies who report CSR by region. While the United States is far from leading the global trend, the increase in companies that report on sustainable activities cannot be ignored.Internationally, sustainable business is now recognized as the standard and is both regulated and mandated in various regions of the globe. As the United States gains traction in sustainable business, we must ask: Why is there an increasing number of companies who report?
There are a variety of factors that motivate companies to analyze their business operations and invest in sustainable practices. A recent survey illustrates these motivating factors and discovered four key components that influence a US company's decision to engage in CSR reporting:2
- Transparency with stakeholders
- Risk management
- Stakeholder pressure
- Competitive advantage
First, a company must be transparent with its stakeholders. Stakeholders include, but are not limited to, investors, customers, regulators, NGOs, suppliers, the media, employees, and communities. Dialogue and information sharing with these stakeholders is a powerful way to reinforce relationships, reputation, and build trust.
Another motivator for investing in CSR reporting is the ability to manage risk across business activities. CSR reporting provides an opportunity for organizations to catalog their business risks, monitor and disclose related metrics, and thereby demonstrate the company's determination to mitigate those risks.
The third component is the pressure that US companies feel from stakeholders who increasingly expect firms to disclose information that provides an accurate representation of the long-term viability of a company, as well as the impact of its activities—not just the balance sheet. This is compelling organizations to report a more comprehensive set of information and share a message that tells much more than traditional financial statements.
Finally, reporting on CSR initiatives can give organizations a competitive advantage over its peers. Improved brand reputation, increased consumer and investor trust, and better integration of CSR in business activities strengthens a company's position in the marketplace and frequently leads to new business.
To summarize, sustainability reporting on issues that are material to business operations is increasingly common in the United States. Corporations are illustrating their role in leading sustainable efforts on both a local and global scale that mitigate risk and open new business opportunities.
Wdesk can empower U.S. companies by enabling their CSR reporting teams to more effectively collect, manage, and collaborate on data, allowing teams to focus on what is meaningful to the company. To learn more about how Wdesk can help you streamline your CSR reporting process, visit the CSR Reporting Solution page, or schedule a demo to see it in action.
1. "Sustainability Disclosure Database.” (2013). Global Reporting Initiative. Retrieved from http://database.globalreporting.org/search (filtered by Year: 2012, Region: North America, Country: United States of America).
2. "Value of sustainability reporting." (2013). Ernst & Young, Boston College Center for Corporate Citizenship. Retrieved from http://www.ey.com/Publication/vwLUAssets/EY_-_Value_of_sustainability_reporting/$FILE/EY-Value-of-Sustainability-Reporting.pdf