Corporate social responsibility reporting: A business imperative

A version of this article appeared in the “Sustainable San Diego” advertising supplement in the April 18 issue of San Diego Business Journal.

The past 100 years have drawn our attention to the effect we have on our environment — and how it, in turn, affects us. Both individuals and businesses are tasked with doing our part to mitigate our impact. Simply put, it’s the right thing to do — so it’s no wonder corporate social responsibility (CSR) reporting has become common practice in the past decade.

Most large, global businesses have been issuing CSR reports for years, and midsize businesses aren’t far behind. For all but the smallest companies, investing in CSR reporting pays back — not only in the cost savings associated with better resource management but also with respect to your long-term business strategy.

The business case for CSR

Many businesses are already on the same page concerning sustainability, but it helps to have a business case.

As with other forms of reporting, CSR reporting adds transparency by identifying and mitigating potential risks to the long-term sustainability of a business. Inefficient use of scarce resources doesn’t make social or fiscal sense, and it only drives up the cost of performing the same operations over the long term. In the short term, careful resource management can result in immediate cost savings as well. Double-sided printing, energy-efficient lighting, and the repurposing of waste materials all add up. On the personnel side, investing in employee health and wellness programs or other retention efforts may temporarily increase costs, but in the long term it reduces health costs and increases productivity.

Further, sustainability is an increasingly important public relations issue. A negative public perception can make working with you a risk for vendors, business partners, and customers. This is important on an internal level as well, considering demographic shifts in the workplace. Everybody wants to feel good about where they work, but it’s an attitude even more widespread among millennials. Taking corporate social responsibility to heart helps attract, engage, and retain this audience, improving your talent profile and sparing you the costs of high turnover.

Sustainability comes with other financial benefits too. Many government agencies, utilities, municipalities, and other organizations continue to invest in programs that reward and incentivize organizations that make investments to increase energy efficiency and sustainability or reduce their environmental footprint. These incentives include grants, tax credits, accelerated deductions, sales tax and property tax rebates, and favorable financing arrangements. Normally, qualifying for these incentives requires some effort, but the data you collect for a CSR report may be useful in qualifying and monetizing your businesses investments.