“Rather than demonstrating greater commitment to sustainability, does a standalone CSR report suggest it is considered something ‘other’ and different to the core business?”

Each month, we ask two communications practitioners to debate an issue via an exchange of emails. In this month’s digital discussion, arguing in favour of the motion is Chris Clarke, MD of Epoch PR. Taking the opposing view is Jos Havermans, director of Stampa, a PR agency based in Amsterdam and London 

Dear Jos,

At the outset it is important to explore more broadly the role that CSR fulfils for today’s global brands. Over the last few years, we have seen the media and social narrative move against big business. The media, regulators, governments and interest groups have all openly questioned the role that business plays in society. In response to this shift, we have seen many businesses point to the work they are doing to address social, environment and economic ills to somehow justify their right to operate.

For me, this serves to reinforce the misjudged perception that business is a malevolent force and must justify its existence and actions by pointing to the ‘good’ it can do.

The wider issue is that business communicators should be more robust in their defence of business. There is no greater force for social progress, economic development and environment innovation than when business pursues profit. For example, building up a business infrastructure in Africa will do more for development there than any standalone CSR programmes, no matter how big the brand.

However, I am not advocating that businesses pursue profit at all costs, far from it. But what I do want to see is a greater emphasis on good business practice full stop. 

There is something both self-serving and compliant about companies bragging about what they do, instead of just getting on with doing what they do well with integrity in their pursuit of profit. Therefore, I am against standalone CSR reports primarily as I believe they are symptomatic of a culture which has seen the emasculation of business: we should instead make a stand to shift this narrative.

Best regards, Chris

Dear Chris,

Are you implying that CSR is not the right platform to focus on when building a company’s reputation? And that CSR activities should therefore never be put in the spotlight at the expense of a company’s core business activities?

If that’s the case, I would like to point out that, in our experience, most companies that decide to put an effort into CSR – reducing CO2 emissions, being more vigilant about respecting human rights in their overseas operations, for instance – do so because they think it is good for business. It reduces costs and risk, including reputational risk.

They say it makes them more appealing as an employer, allowing them to recruit and retain top talent. And as CSR usually requires a shift in focus and adjustments to their way of working, many companies see CSR as a powerful driver of innovation.

Companies that have been active in CSR for a long time tend to produce an integrated CSR & Financial report. For these companies, CSR has become so interwoven with strategy and operations that combined reporting is a natural step. However, businesses that are just beginning to get serious about CSR can greatly benefit from having separate reports. A standalone CSR report can be an extremely powerful catalyst for developing and differentiating a company’s CSR policy, as well as for improving its CSR performance.

Having a separate CSR report is by no means a sign that a company sees its CSR activities as just ‘something extra’ to brag about. In most cases, it is a sign that a company has high ambitions in achieving environmental and social goals.

Best regards, Jos

“Many businesses point to CSR to somehow justify their right to operate. For me, this serves to reinforce the misjudged perception that business is a malevolent force and must justify its existence and actions by pointing to the ‘good’ it can do”

Dear Jos,

What I am suggesting is that good companies are simply those that succeed whilst respecting the law and moral codes of conduct. Good companies are those that pursue long-term profitability and growth as their sole purpose.

Why do I say this?

It is because I strongly believe that when companies do this, there is no greater or more universal force for progress in the world; not governments, not individuals, not charities.

This force for progress manifests itself in significant economic contributions through taxation and investment; quality employment and training opportunities; the creation of stable and prosperous communities; and innovations, such as new green technologies, as companies seek market advantage.

These are outcomes borne solely from the profit motive, nothing else.

In the current climate, there is the increasing assumption that unless a company reports on CSR or tracks its performance on economic, social and environmental measures it is somehow not committed to improving our world. This is simply not the case.

I’d argue that the obsession with reporting on corporate CSR initiatives has served to narrow the concept of corporate reputation. It has served to place public statements of ‘high ambition’ ahead of quiet operational integrity. And it has served to make companies nervous about talking about profit without the shield of more wholesome activities.

Reporting on CSR on a standalone basis inevitably creates a sense that it is different, other and separate from the core business. Instead, I would like to see more complete annual company reports whereby companies report not on CSR performance but instead on the holistic contribution (both non-intentional as well as intentional) they make to society by actively pursuing profit. By doing so, we may turn the tide of scepticism that currently exists about the role of business in our society.

Best regards, Chris

Dear Chris,

The way you refer to CSR reporting as an ‘obsession’ with a ‘narrow’ concept of corporate reputation makes it sound like a superficial and pointless process.

This doesn’t reflect what the rise of formalised CSR reporting and the emergence of dedicated CSR managers and departments have achieved.

Their efforts are bringing focus and momentum to CSR – not just making companies’ operations more environmentally-friendly, but also helping them increase the sustainable and social credentials of their innovation pipelines and supply chains.

They also play an important role with investors. They are increasingly insistent on knowing how companies approach CSR – or ESG (environmental, social and governance) as it is also known. Their assumption is that those companies paying a lot of attention to environmental and social issues are more profitable than those that don’t. As a result, it becomes financially imperative for companies to report on their social and environmental activity.

For some, an integrated financial and CSR report could be the best option. But it is vital that social and environmental issues are easy for investors and other interested stakeholders to find and digest.

Reporting on CSR is a craft in itself. Even companies that have integrated CSR into their business operations and internal reporting can benefit from publishing a standalone report. Nowadays, most large companies will have powerful stakeholders they need to engage who will be more interested in CSR achievements and vision than financial results alone. So I maintain that a standalone CSR report can be the most efficient and appropriate option to promote not only a company’s interests – but also its profit.

Best regards, Jos

“A standalone report can be a powerful catalyst for developing and differentiating a company’s CSR policy, as well as for improving its CSR performance. It is a sign that a company has high ambitions in achieving environmental and social goals”

Dear Jos,

Whilst I think it is unlikely that we will agree on the role of standalone CSR reports, we are both in agreement of the positive impact and contribution that companies can and do make to our world.

However, what I would like to see from the CSR community is a greater acknowledgement of the positive contribution that business makes beyond what is traditionally seen in CSR programmes. Abandoning standalone CSR reports in favour of a more holistic report that tracks and charts all of the impacts a business makes would be a good start.

By doing so, I believe we’d see a more balanced narrative emerge whereby business, governments and society are equally recognised for their contribution to building more cohesive communities, to economic development, and to enhancing the way in which we enjoy our world through new ideas and breakthrough innovations. As a communicator, I passionately believe in the importance of business in society.

And long before CSR became a discipline in itself, business was transforming’ lives, helping people out of poverty, supporting educational initiatives and driving innovations in how we live. I would like to see some of that aspect reflected more fully today.

I also believe this type of evolution in CSR thinking will be vital as we enter the 21st century, which so far has been characterised by commercial crisis, political uncertainty and social unrest. A new age requires a new approach.

Best regards, Chris

Dear Chris,

Yes, we are in agreement on the positive impact companies can and do make to the world. Where I think we differ is on how to interpret the rise of CSR. You seem to believe that CSR has developed in opposition to business and that it infringes on a company’s right to pursue profit. I see CSR as an expansion of the role of business. It entrusts business with tasks that were previously entrusted to governments and other non-corporate institutions. By inciting companies to address environmental and social issues, critical NGOs, investors and other stakeholders in fact invite companies to expand their influence and increase their contribution to society. When CSR proponents developed their famous ‘Triple P’ slogan, they added ‘People’ and ‘Planet’ to ‘Profit’ – they didn’t replace the latter. That said, it may not matter how you and I interpret CSR. Companies will make their own analysis. Many are convinced CSR is relevant and offers business opportunities.

What matters most to us as communications professionals is giving companies the best possible advice on how to communicate about their CSR activities. Understanding how media and other stakeholders perceive a company’s CSR initiatives is crucial. Many stakeholders, for instance, expect companies not only to report on their successes but also on the challenges they face related to environmental and social issues. It is our task to make them aware of this and other requirements.

Helping companies tell a balanced and compelling story about their CSR activities – be it through an integrated or standalone CSR report – can be one of the best approaches to strengthening the reputation of a company and that of business.

Best regards,

Jos