Learning Objectives
• Enhance appreciation of corporate responsibility reporting (CRRep), its historical development and the different forms it can take.
• Raise critical awareness of rationales advanced to explain the phenomenon of CRRep.
• Impart awareness of possible problems and challenges involved in CRRep.
• Develop knowledge of guidelines and regulatory frameworks which govern CRRep and enable you to critically evaluate their effectiveness in enhancing transparency and accountability.
• Foster understanding of country- and industry-specific developments in CRRep.
Introduction
Corporate social responsibility refers to the expectation that business is responsible for its impact on society and the environment. Society expects companies to take responsibility for avoiding, reducing or, at best, compensating for negative externalities as well as contributing to social welfare, while also being accountable for these impacts and explaining them in a transparent manner. However, such responsibility is articulated through a complex set of means and is constantly changing. The importance of understanding these complexities and dynamics and the need for transparency and accountability – whether for social responsibility or sustainability – has invited considerable interest in the field of CRRep, the subject of this chapter. CRRep in essence reflects a company's claim to portray – in printed reports or on corporate websites – an account of its ecological, social and economic performance and impacts, and to inform its stakeholders as to what extent and how it can contribute to sustainable development. The number of companies which claim their responsibilities through a dedicated corporate responsibility report has increased considerably in recent decades – as has the criticism of the reluctance and/or incapability of some companies to provide a full and fair account of their performance and impact on society and their stakeholders. This debate reflects the different approaches to regulating CRRep and the roles that society and stakeholders might play in enhanced engagement in and quality of CRRep.
The chapter will be organised as follows: it begins with a general definition of CRRep, an overview of its historic development and the various forms it can take. Then, rationales for and challenges to companies’ engagement in CRRep are outlined. At its core, different alternatives for governing CRRep are explored, distinguishing voluntary standards (e.g. the Global Reporting Initiative (GRI) guidelines) from legally binding measures introduced by governments (e.g. disclosure regulations in European and other countries) and stock exchanges.