Corporate Social Responsibility and Sustainability Paper Example

List of Definitions

• Corporate Social Responsibility (CSR)- According to Schwartz (2017), this is a self-amendable design that assists organizations to be concerned and accountable to the stakeholders, public and for itself.
• Corporate Social Responsibility Strategies- these are techniques that a firm adopts to be accountable and responsible to itself, the public and its stakeholders (Schwartz, 2017). For example community development.
• Materiality- in relation to Jones, Comfort, and Hillier (2016), this is the quality of being economical, socially and environmentally significant to rely on in appraisals and decision making.
• Sustainability- is a progressive advancement and growth of a business without negatively influencing the environment or exhaustion of natural resources that support human life and comfort.
• Corporate Social Responsibility Reporting - according to Schwartz (2017), this is the preparation of statements for the stakeholders about the corporate social responsibility practices a company has engaged in a given period.
• Global Reporting Initiative- according to Bill (2015), it is a global independent standard that seeks to show organizations in comprehension and communicating their contributions on matters relating to corporate social responsibility like climate change, corruption etcetera.
• Transparency- this is being open and honest and revealing all the relevant information that is important for decision making.
• Accountability- this is the act of taking responsibility and being liable for the activities in an organization and to reveal results in an open and honest way.
• Stakeholder- these are individuals who have interests and are concerned about an enterprise and their actions can impact the business operations, aims, and strategies.

List of Abbreviations

• CSR- Corporate Social Responsibility
• GRI- Global Reporting Initiatives

Corporate Social Responsibility and Sustainability

According to Bill (2015), Global Reporting Initiative (GRI) is an international non-profit body that outlines standards necessary for organizations or business entities to give information concerning their effects on matters regarding the environment, society, and economy. It is also known as the G4 sustainability guidelines. The GRI was established in 2000 by Coalition for Environmental Economics and Tellus Institute to provide standard guidelines for organizations to draw relevant reliable and standardized information on sustainable development.

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The objectives of the GRI are; to provide user-friendly guidelines to help new users easily understand and apply, improve the quality of the standards and eliminate ambiguities. Moreover, it seeks to harmonize universal conventional principles, advance on the identification of physical issues and link the sustainability reporting process to Integrated Report. These guidelines have since improved the extent of corporate social responsibility and led to the publishing of the standards of corporate social responsibility (Kareiva et al., 2015). These standards emphasize the transparency of public reporting, accountability and stakeholder identification and engagement.

Several organizations all over the world have adopted the guidelines to enhance corporate social responsibility practices even though the sustainability reporting is voluntary for any business to incorporate. The objective of this study, therefore, seeks to analyze issues on Corporate Social Responsibility in regards to the GRI guidelines on Sustainability Reporting.

Fundamentals of Global Reporting Initiative Guidelines

As stated by Leipziger (2017) Corporate Social Responsibility is a means in which an organization incorporates the communal and ecological concerns of the stakeholders in their operations. These stakeholders include clients, personnel, contractors, financiers, government, communities, and the environment. The principles and concepts of corporate social responsibility are built on the following pillars:

Transparency

The G4 Guidelines have elaborate disclosures on material issues in an organization thus determined to enhance transparency in reporting to the stakeholders (Braam and Peeters, 2018). The materiality concept requires that the information in the report should contain issues that reflect the entity's significant fiscal, social and environmental impacts or affect the resolutions of the interested party.

The guidelines seek to enhance transparency through the provision of consistent language, concepts, and metrics to support and communicate about a firm's sustainability reporting about CSR. To achieve this, the G4 guidelines consider the interest of diverse stakeholders like the business, employees, accounting bodies, investors, suppliers, customers, governments and others (Jones, Comfort, and Hillier, 2016). Through collaboration and continuous consultations of a wide network of experts from the stakeholder groups have improved the reporting framework of GRI thus transparency.

Accountability

Accountability and transparency are the main pillars of good corporate governance, and the former implies that an organization will justify its events, take obligation for them and unveil the results transparently (Visser and Tolhurst, 2017). The G4 guidelines always insist on accountability to reinforce credibility and quality of an entity's performance and reporting. The GRI guidelines contain two parts with the first concerned with reporting principles and standards disclosures and implementation of the manual.

According to Font, Guix, and Bonilla (2016), the concept of accountability will play a great role in the disclosure of the standards and principles such as materiality, sustainability, and others stated in the guidelines. This principle will allow the management to sufficiently make strategy and profile disclosures, administration tactic and performance pointers revelations towards ensuring the sustainability of a firm in line with corporate social responsibility.

Stakeholder Engagement

Stakeholders are individuals and enterprises that get significantly affected by the actions of an entity, its products, and services. In turn, their actions can influence the success in the implementation of organizations strategies to achieve its objectives. From Moratis and Brandt (2017), stakeholder involvement enhances the comprehension of the prospects of the stakeholders who are scattered all over. The GRI stipulates that a firm must document its stakeholder engagement practices to make the report realistic. Stakeholder engagement is very challenging, and some organizations shy off them, but then the challenges are minute as compared to the effects of failure to involve them.

As stated by Sierra Zorio and Garcia (2015), the GRI guidelines require that every firm must declare their stakeholder engagement practices that rely on principles like Engage on issues that matter and be ready to act, engaging the right stakeholders using the right format, critically listen to the views and level the playing field for stakeholder involvement. It further requires trust, openness, and accountability as well as agreeing to the rule of engagement while managing expectations (Stubbs and Higgins, 2018). Consequently, a firm will acquire business intelligence and minimize risks, build a strong reputation, innovate new products and techniques and even expand on market opportunities.

Sustainability Reporting

In this context, the report should reveal the role of business towards future events regarding the improvement or deterioration of economic, social and environmental conditions in the society as stated by De Villiers (2017). The guidelines involve analysis of the firm's performance in regard to environmental or social matters. Recently, there have been several issues on ecological pollution that have led to global warming and climate change.

Similarly, according to Bennett, James, and Klinkers (2017), sustainability reporting includes social and economic issues that focus on national and international socio-economic sustainable development. A firm can include the staffs' salaries and social welfares in comparison to the established national minimum levels and social safety to protect the less fortunate in the society. Therefore, every corporation that engages in CSR programs is expected to tackle these issues and document them in their reports for accountability and transparency.

Costs and Benefits of Making Sustainability Reporting Compulsory

The sustainability reporting required by the GRI G4 guidelines is voluntary, and companies join only when they wish. Hitherto, thousands of companies that are focused on implementing CSR have adopted the reporting guidelines to enhance the goodwill of their firms. According to Tai and Chuang (2014), CSR is essential in currents today establishments, and as a result, some scientist has proposed that sustainability reporting should be made compulsory. Countries such as Singapore and Finland have purposed to make sustainability reporting based on the global reporting initiative G4 guidelines mandatory.

Costs of Making the Sustainability Reporting Compulsory

Some organizations view the sustainability reporting to be too costly since the company will have to allocate a massive budget on reporting. Since the companies spend too much in compiling annual reports, they always feel that the sustainability reporting will in involve more of the same expenses hence a liability to prepare the sustainability reporting (Talbot and Boiral, 2018). This is because sustainability reporting seeks to enhance the long-term profits of a business while the management always focuses on the short-term profit of an entity.

There is also complex value chain assessment when adopting the sustainability reporting. The guidelines have a draft for public comment known as failure to go beyond boundaries that is a clear response to non-delivery of reporters (Del Mar AlonsoAlmeida, Llach & Marimon, 2014). As a result, organizations with various with various branches and multi-stakeholders, therefore, fear this complexity. Further, the capital markets require condensed indicators usually less than three (Suteja and Gunardi, 2016). Since the GRI G4 guidelines contain many indicators, firms argue that is it costly and time-consuming preparing the reports following all the signs and later condensing it for the capital markets.

However, some views are in place to disapprove these notions. For instance, about the costs, it argues that the sustainability reporting is not very costly since it involves a few pages on sustainability that is uploaded in the company's websites rather than production in hard copies hence minimizing the costs (Unruh et al., 2016). Similarly, on the complexity of value chain assessment, such firms can start with one set to pilot for sustainability reports and later on incorporate it in other product groups and business models.

Benefits of making the sustainability reporting compulsory

Sustainability reporting is perceived to be beneficial to a firm. Therefore, some scientists have proposed that sustainability reporting should be made mandatory. The required reporting on environmental matters enables firms to establish ethical and effective practices in an entity (Ioannou and Serafeim, 2017). This will assist organizations in reducing the costs due to vices like bribery and corruption that leads to inefficiencies and ineffectiveness in the operations.

Moreover, the adoption of sustainability reporting will enable firms to establish strategies for employees training and development (Epstein, 2018). This will after that improve effectiveness in board supervision and leadership to obtain credibility and competitive advantages in the market. Therefore, the o...