CSR reporting is gradually becoming mainstream in Nigeria and other developing countries for any organisation committed to responsible business practice especially with the support and encouragement from regulatory agencies such as the Central Bank of Nigeria (CBN) and the Nigerian Stock Exchange (NSE). But when done incorrectly, reporting can do more harm than good both to the organisation and society at large.
The following are 10 mistakes to avoid when planning, implementing and reporting on your sustainability efforts:
1. Lack of Sustainability Strategy
Before thinking of reporting, you need to integrate sustainability principles within your organisation, assess through both internal and external audit depending on your operations and improve on performance to enable you collect valid and verifiable data for reporting and assurance. The process can be summarized as follows:
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- Know thyself: Assess the organisational attitudes and understanding of social responsibility by leadership. Your CSR strategy must be authentic and must ring true for your organisation and stakeholders
- Choose a globally recognised standard to implement your strategy: An example of such standard is ISO 26000 Social Responsibility which covers 16 out of the 17 Sustainable Development Goals (SDGs). This provides for credibility and scalability.
- Implement and integrate Social Responsibility within all operations of your organisation including your relationships
- Work from the inside out: Implementation of SR strategy starts from within the organisation, for instance ensuring that you have implemented occupational health and safety within your organisation, stakeholder mapping and engagement, labor and employment conditions, fair operating practices, etc. then philanthropic and intervention schemes or activities and communication with external stakeholders.
- Continual improvement: Assess, measure and improve on sustainability strategy. Ensure that data is continuously being collected and verified for management review
2. Mismanaged data
Good data collection is essential to gaining meaningful results from initiatives such as auditing or foot printing. Assign data collection responsibilities to trained people (not just on sustainability reporting but on strategy and implementation as well) – either inside or outside your company – and continuously check the numbers for accuracy. Remember, you must work from Strategy to Reporting.
3. Materiality and Relevance
Avoid disordered priorities. Recognise that the pillars of the triple bottom line are interconnected, and that long-term sustainability goes beyond shareholder profits. A good manager will prioritise sustainability in the CSR reports by weighting it equal to financial performance. As well, implement within all organisational operations but report on things that are relevant. ISO 26000 SR has a procedure to determine relevance especially on field audits which is important in order to collect data for reporting.
4. Discounting feedback
Reporting shouldn’t be a one-way endeavour. Take the advice of third parties such as auditors and stakeholder panels, who can comment on your report and help verify data accuracy.
5. Breaking the rules
Good reporting should follow a trusted framework or guideline. The Global Reporting Initiative (GRI) is a good example. However, never ask your reporting firm to implement your strategy or allow your strategy consultant to be involved with assurance even if they have the skills to do so. Otherwise, the credibility and authenticity of your report or assurance will be questionable; avoid that conflict of interest.
6. Tenuous comparisons
Organisations are inclined to track their progress internally. Accept that you’re one fish in a large sea. Stakeholders will want to know how sustainable you are compared to your industry peers, not necessarily your own benchmarks.
7. Unreachable targets
Targets in CSR reporting should be linked to corporate priorities. Make them relevant and aggressive but still achievable. Always remember that you will still need to report for the next year therefore may be required to report on those targets set out in the current report.
8. Underreporting/overreporting
Don’t limit communication of your
sustainability performance to the sustainability report. Use a variety of media to communicate your progress and challenges. Ensure your message is consistent across media. However, do not make it look like an advertisement for the organisation.
9. Inadvertently greenwashing
While it’s important to convey your environmental and social progress, it’s a mistake to focus solely on the positives or on programmes immaterial to your organisation. Make reporting meaningful by acknowledging the areas where you still have room for improvement and tying your SR goals back to your company mission.
Done correctly, CSR reporting increases share price and bolsters stakeholder confidence in your firm even with the small and medium enterprises (SMEs). Done poorly, CSR reporting opens your company up to consumer derision and stakeholder criticism.
10. Image Laundering
Avoid using reporting as an image laundering tool. Address market, operational or stakeholder challenges with the aim of finding lasting solutions to the issues. Adopting globally recognized standards will help through due diligence to identify salient risks in any part of your operation, mitigate or completely eliminate them.