Corporate social responsibility reports are often a company’s beachhead effort on sustainability, and most focus on relatively easy-to-achieve metrics, such as employee volunteerism rates, corporate giving and supplier diversity. Advocates say even this kind of transparency can spur companies to further action. That’s the logic behind the Global Reporting Initiative, which provides a framework for companies to evaluate their own CSR reports. The GRI Framework doesn’t give points for good or bad outcomes, however; companies earn points simply for disclosing information.
Sounds easy, right? Wrong. CSR data is notoriously complex. Putting together a report can mean pulling data from environmental health and safety departments, community and education programs, philanthropic giving records, supply chain partners and operations records. Historically, companies have pulled that data into Excel spreadsheets to create new data sets for CSR reports. But as stakeholders — and shareholders — show more interest in sustainability concerns, companies are beginning to eye more sophisticated software to help them manage and report that data.
Traditionally, CSR reports were released on an annual basis, sometime after the end of the company’s fiscal year. Combined with year-end financials, such reports informed socially responsible investment groups and shareholder organizations about companies’ activities. “A lot of these groups that…need that real, deep level of data tend to review their companies on an annual basis,” says Suzanne Fallender, Intel’s corporate responsibility communications manager.
In today’s market, however, companies are recognizing a need to go beyond sustainability reporting with strategic management plans that take social and environmental issues into account. That means they need deeper — and more dynamic — visibility into their performance against specific metrics, says Scott Bolick, VP of sustainability solutions for SAP. “We want to get the data at a level where it’s manageable,” he says. SAP, which just released its own sustainability report two weeks ago, is working on new solutions that could help clients automate sustainability reporting using data from its existing software products, Bolick says; the company’s recent acquisition of Clear Standards was a step in that direction.
Intel, which released its first CSR report in 2001 and its most recent report last week, currently uses a variety of internally developed, customized databases and information systems to help measure and manage its environmental impacts. But now the company says its needs are outgrowing customized solutions that sit on top of other software programs. “We are actually starting to explore alternative software solutions,” Gary Niekerk, senior manager of Corporate Responsibility, wrote in an email. “While our internal systems have worked well, the growing complexity of data needs and our push for ever more transparency is requiring us to look for even better solutions.”
As companies choose these new solutions, they need to consider how that data gets used, Bolick says. While health and safety metrics may need to be monitored constantly, other data (such as employee turnover) might be more meaningful on an annual basis. As companies set annual sustainability goals, they may want accountability for meeting those targets tracked on a monthly or quarterly schedule. Bolick points to the example of air travel. SAP has made a public commitment to reducing its carbon emissions to 2000 levels by 2020. To see progress, Bolick says he needs monthly visibility into the flights taken and the carbon that represents.
That doesn’t mean companies are necessarily moving their reporting in a more granular direction, however. Neither SAP, Intel nor Microsoft say they’ve seen a demand for more frequent data. Fallender notes that a number of years ago, Intel tried reporting quarterly environmental health and safety information on its web site, but stakeholders didn’t end up using the information. Collecting, verifying and publishing the data was labor intensive, so the company went back to annual reporting. However, Fallender says Intel could revisit the issue going forward.
If companies move increasingly toward dynamic information about their environmental performance, they’ll need systems that can verify the numbers’ accuracy. “The concern is that part of what we do before we publicize anything is auditing,” says Microsoft Chief Environmental Strategist Rob Bernard. SAP’s Bolick agrees: “The market is going to hold you accountable,” he says. “That’s why people are now saying, Excel spreadsheets aren’t going to cut it for me anymore.”
This article also appeared on BusinessWeek.com.