An Analytic Tool for Comparing Corporate Social Responsibility Reports
Baruch College’s Weissman Center for International Business created the CSR-Sustainability Monitor as a tool to analyze corporate social responsibility reporting from the largest U.S. and international companies. The CSR-Sustainability Monitor measures the scope and quality of the information provided by a company in its CSR reporting only. It does not represent an assessment or ranking of a company’s actual performance or activities in the area of corporate social responsibility.
The effectiveness of a company’s corporate social responsibility reporting depends, to a large extent, on the level of credibility that the company’s important stakeholders attach to it. That is why the CSR-Sustainability Monitor, in its screening process, also measures the degree to which the reporting company provides integrity assurance as to the accuracy and completeness of the information it is disclosing.
Corporate social responsibility reporting has become an important part of corporate communication efforts regarding the non-financial aspects of a company’s performance. These non-financial aspects have significant implications for a company’s internal and external stakeholders, including institutional investors, public pension funds, civil society organizations, regulators, and news media. During the last decade, there has been growing global, public concern about corporate accountability and the impact of corporate strategies and operations on the physical, economic, and sociopolitical environments. Financial analysts often view adverse public opinion on corporate social performance as a measure of long-term reputational risk to a company’s market value. Thus, CSR reports have become a competitive tool in promoting a company’s practices and values when compared with those of its peers and competitors.
A team of researchers at the Weissman Center for International Business, under the direction of University Distinguished Professor S. Prakash Sethi, developed the CSR-Sustainability Monitor, which is an analytic framework for the systematic and objective evaluation of the transparency of CSR reports, in response to the growing significance of companies’ non-financial disclosures. In their research, the team reviewed and scored each report based on 11 relevant topics in corporate social responsibility and sustainability.
Through this analysis, the CSR-Sustainability Monitor:
- offers a range of objective measures for comparing reports in terms of their comprehensiveness, specificity of detail, quality, and accuracy of reporting;
- provides internal corporate accountability officers with an external and independent evaluation tool, and provides guidance for companies initiating their own CSR reporting;
- enables companies to compare their reports across their industry, region, and market capitalization;
- creates a market-driven incentive for companies to improve their CSR reporting to gain competitive advantage, as an alternative to greater regulation in this area.
The 2012 report describes in detail the CSR-S Monitor, and includes examples of its analytic results drawn from the 560 companies from around the world that are included in its sample. It also ranks the top companies, the strivers, the also-rans, and those companies just making a start in terms of their CSR-S Monitor scores. Additionally, the 2012 report provides “big-picture” findings that suggest that individual corporate culture and leadership characteristics play a significant role in the quality and scope of corporate social responsibility reporting.
The report provides detailed information about company performance with regard to two of the eleven contextual elements contained in the CSR-S Monitor’s analytic framework. The first of these two elements is Environment & Sustainability and the second is Philanthropy & Community Involvement. Separate from the quality and scope of the reviewed CSR reports, the 2012 CSR-S Monitor also reveals that independent third-party assurance is frequently underutilized or not present in many CSR reports, and remains a weakness in many CSR reports.
The CSR-S Monitor allows for the review of results from a ”macro” perspective—analyses by industry, by region, or by country—but also provides customized, detailed reports on individual companies and on industry groups. These analyses include further breakdown of a CSR report within each factor in the CSR-S Monitor, along with guidance on how to improve the information content. This service allows for more incisive comparative analysis and benchmarking between a company’s own CSR report and the CSR reports of competitors and other firms.
For other questions:
646-312-2103 or CSR-S.Monitor@baruch.cuny.edu