RAAS Consulting Ltd

Definitions, Drivers, Benefits and Risks

Definitions

Sustainability reporting is based on the idea that entities can develop in a manner that “meets the needs of the present without compromising the ability of future generations to meet their own needs”.

Core to the CSR / Sustainability reporting is the concept of "triple bottom line reporting", comprising Economic, Social and Environmental reporting. Today's mandated reporting frameworks focus almost exclusively on the Economic reporting element. CSR seeks to formalize reporting of the other elements of triple bottom line, either through changes in mandatory reporting or voluntary uptake by organizations.

CSR / Sustainability in companies tends to be viewed as either an extension of marketing activity, or as purely operational efficiency with an environmental focus. 

Drivers

Understanding the company's drivers for introduction of a CSR / Sustainability program will be important to ensuring that the program is structured to be responsive to those drivers.  Common drivers for such programs include:

•    Competitive positioning
•    External marketing pressure
•    Regulatory pressure
•    Internal pressures
•    BoD or Senior Leadership direction
•    External stakeholder interest
•    Owner’s concerns


Benefits

The benefits of an effective CSR / Sustainability program fall into two main groups; Reputational and Business Performance.  A clear understanding and agreement on which (or both) of these is the primary motivation is important for success.

Reputational:

•    Customer / client awareness
•    NGOs
•    Publications / media
•    Employees (existing and target)
•    Regulators

Business process and performance:

•    Cost reduction
•    Resource optimization
•    Waste reduction
•    Vendor quality improvement

Both are admirable sets of benefits, and some activity will support both sets of benefits.  Likewise, the primary target benefits will shape the program.

Risks

As with any significant initiative, benefits must be balanced against potential risks. Probably the most important risk would be from a lack of clearly defined and communicated objectives. The major risks include:

•    Lack of commonly accepted objectives
•    Market and internal perception that this is window-dressing
•    Failure to provide appropriate resources
•    Creation of CSR / Sustainability reports that are “greenwashing”
•    Short term only focus