Designing sustainability reporting systems to maximize dynamic stakeholder agility: The role of CSR

Abstract

Most large companies file standardized corporate social responsibility (CSR) reports with organizations such as the Global Reporting Initiative and others. The information in these reports is in the public domain once filed, and it informs sustainability analysts' ratings of the reporting company; these ratings in turn affect assessment for inclusion of the company's shares in socially responsible investment funds. Inclusion in socially responsible investment funds generally lowers companies' borrowing costs and hence can increase profits. For this reason, companies' CSR reports are more than just advertising vehicles. The databases embedded in the software used to produce these reports are designed most effectively when the different subunits that provide the data and produce the reports share similar norms of organizational transparency. Also, electronic backend integration of these databases with other company databases company can increase the timeliness and accuracy of the data released in CSR reports. This chapter explains the importance of CSR reporting for effective stakeholder engagement and for organizational agility - the capability of the company to respond most effectively to stakeholders' information needs. For companies to reap the benefits of their sustainability efforts, they need to communicate them effectively. Thus CSR reporting is integral to achieving organizational sustainability benefits, which is why it is important to understand the practices and benefits of effective CSR reporting.