Has the Corporate Social Responsibility Report Become a Waste of Resources?

It's obligatory. The report, that is, not the actual behavior. Which is part of the problem.

The Corporate Social Responsibility (CSR) report has become an annual feature of the corporate communications attention-scape. To the extent that it is printed anymore, rather than delivered electronically, it proudly features recycled paper. Mostly.

But the readers increasingly tend to be those who are already committed to the cause and are searching the document for further evidence to support their own previously embraced conclusions. It rarely changes minds and almost never moves the investment needle.

The challenge it what to do about it. There is plenty of data to support the notion that CSR is good for the bottom line. But in an era when everyone has the ability to pick and choose their own evidence, belief systems remain far more powerful than information systems.

Corporations are considered no more credible than most other large institutions unless one works for them. So that lack of trust, which the CSR report was initially designed to bolster, has largely failed to meet the objective. Which is not to say that CSR has failed, but that convincing the world the enterprise means it means what it says when it addresses the environment, or workplace safety, or human capital has, so far, been a noble but largely unsatisfactory endeavor.

Surveys suggest that executives and their boards recognize the benefit to reputation that such reports provide. But until they are able to convince themselves that the data inside the report also bolsters the enterprise's strategic prospects, they will have a hard time convincing anyone else. JL

Paul Klein comments in Advertising Age:

Despite the considerable efforts that corporations put into reporting their social and environmental performance, readership is low and believability is even lower. The notion that corporations have a trustworthy perspective has been declining for years
It's time for "Communications Jeopardy!"
Answer:: This annual piece of communications is expensive, time consuming and contributes virtually nothing to the performance of your business.
Question: What is our annual corporate social responsibility report?
Next year is just around the corner, and corporations everywhere are on the verge of spending hundreds of thousand of dollars on a piece of communication that leads the race to the bottom for the worst marketing ROI. Why is something that is so inconsequential so well-resourced? And, more importantly, what can be done to improve the value of an initiative that has become a must-do in spite of its poor performance?
Despite the considerable efforts that corporations put into reporting their social and environmental performance, readership is low and believability is even lower. Today, the notion that corporations have a trustworthy perspective on the ways their businesses contribute to social and environmental change is flawed. Trust in large corporations has been declining for years and companies such as tripadvisor.com have shown that consumers prefer to believe each other. However, this important shift seems to have been missed by the people responsible for these reports.
Further, annual CSR reporting is thought to be the most conspicuous manifestation of a corporation's commitment to transparency -- a concept that has become a key pillar of corporate social responsibility. The problem is that increased transparency isn't doing enough to support other strategic priorities, including strengthening reputation, differentiating from competitors and maintaining a social license to operate. You may feel proud that you're sharing more about your corporation than was typically done in the past, but today stakeholders just consider this information as table stakes.
Finally, CSR reporting has become a case of the tail wagging the dog. There is a growing industry of suppliers that specialize in defining, collecting and packaging environmental, social and governance (ESG) data. This industry advocates for annual reporting but, given the results, the current model seems to be driven by self-interest rather than real value.

The good news is that it is possible to improve the ROI of CSR reporting. Here are three ways to increase the readership and value of your next report:

1. Make your stakeholders the authors of your report.
Ask people in the communities where you do business and other external stakeholders to rate your company's social and environmental performance. Community-based reporting is more believable and more interesting -- but you have to be prepared to listen to what these people have to say and to address their concerns.
2. Provide an opportunity for your most vocal opponents to have their say.
Ironically, while most other stakeholders don't read your CSR reports, advocacy groups are paying lots of attention to what you have to say. Corporations consider advocacy groups to be their arch-enemies and, not surprisingly, do their best to keep contact with these organizations to a minimum. This strategy is not paying off and advocacy groups are more aggressive than ever. A better approach is to give your critics the opportunity to share their views along with other stakeholders.
3. Make CSR reporting a year-long window into your impact on communities and their impact on you.
You don't need to imitate your corporation's annual report. Instead, try creating an interactive portal where you can share accomplishments and report on hurdles as they happen, provide quantitative data (e.g. air and water quality) in real time and provide an opportunity for stakeholders to voice their opinions and ideas.
It takes lots of courage to give people outside your company, including your naysayers, a public platform, and being as transparent as I've suggested isn't for everyone (for some businesses, having a CSR report that nobody reads is actually a strategy). However, the upsides of breaking with status quo are that the people who matter most will support what you're doing and the value of your CSR reporting will increase significantly. If you want people to actually pay attention in 2015, your current approach may be putting you in jeopardy.