Business Supports Mandatory Sustainability Reporting – CSR Survey
Thursday, 4th May 2017 at 10:15 am
More than half of the respondents to an annual study of corporate social responsibility practices say sustainability reporting should be mandatory – and for the first time Australian banks have fallen off the list of top 10 CSR companies.
The ninth annual review of the State of CSR in Australia and New Zealand found that 53 per cent of Australian respondents supported mandatory sustainability reporting for all organisations of a certain size.
In New Zealand, support stood at 48 per cent, but only for large companies. Only 7 per cent in both countries said it should not be mandatory.
The 2017 Annual Review of the State of CSR in Australia and New Zealand is published by the Australian Centre for Corporate Social Responsibility (ACCSR), and is described as the largest ongoing longitudinal study of CSR practices in Australia.
This year there were 1,215 respondents, a 12 per cent increase on 2016.
ACCSR managing director Dr Leeora Black said told Pro Bono News the results were pleasing and also surprising.
“The issue around sustainability reporting is one of the big messages to come out of this year. We look periodically at the state of sustainability reporting and what value people are getting from it but we haven’t actually asked the question of people’s views on mandatory sustainability reporting for quite some time,” Black said.
“I was surprised by the high level of support for mandatory reporting especially when you compare it to where we were a decade ago when [a] couple of federal government inquiries canvassed that question and there was a resounding lack of support for mandatory sustainability reporting from business in particular. But we now see the tide has shifted significantly on that.
“I think that has been an incremental change. First of all there has been significant growth in voluntary sustainability reporting particularly in the use of the Global Reporting Initiative (GRI) framework. More and more organisations are producing GRI reports and then GRI has evolved and become easier to use and [there has been] a significant improvement in the quality and quantity of sustainability reporting and I think organisations are seeing significant benefits from it.
“[Companies] are not so fearful anymore of an additional burden for compliance requirements and they are seeing the value in sustainability reporting and the ‘materialty’ process that underpins a high quality sustainability report.
“I also think we have seen a proliferation of a number of specialised sustainability reporting. For example Rio Tinto put out its tax report and we have seen dedicated human rights reports and that type of thing coming out from different companies, and companies are doing that because they see value in that.
“Our results are consistent with global trends, where over 50 countries have introduced some form of regulatory sustainability reporting instrument. The New Zealand Stock Exchange is the latest to consider sustainability reporting disclosure with its review of the NZX Corporate Governance Best Practice Code.”
The review also named the CSR top 10 companies in Australia and the top three in New Zealand – being the companies with the strongest management capabilities for CSR, as rated by their employees.
Black said there were some noticeable and surprising changes to the top 10 list for 2017.
“There are some changes in so far as there are some new companies entering. One surprise is that we don’t have any banks on this year’s [Australian] list,” she said.
“This is concerning and makes me wonder where CSR is with the banks. They were an industry sector leader in CSR in Australia and a really early mover. Some of the banks particularly Westpac and NAB have a 15 year track record of excellence in CSR.
“This is speculation… but I think the federal government inquiry into the treatment of consumers is sucking up a lot of bandwidth from the banks and that inquiry does highlight the progress that still needs to be made by the banks in their responsible business practices.”
She said one of the pleasant surprises was the IT industry had increased in its level of CSR management practices and capabilities.
“We are seeing that the issue of cyber security and the implications of increasing use of technology are extremely high on the list of priorities and I think this is good because all businesses are talking about the internet and how analytics are going to be driving business in the future and this of course brings a host of corporate responsibility issues,” Black said.
“Our data suggests that at least those IT companies that participated in our review are aware of that and businesses are beginning to deal with those issues so I would predict that over the next five years we are going to see a lot more attention to the CSR implications of big data, privacy security, cyber security and so on and we will see technology firms really stepping up their commitments in this space.
“The thing about the capabilities measure that underpins the CSR top 10 is the embeddedness of capabilities for managing CSR. These capabilities predicts performance and so we often see names in CSR top 10 that are not necessarily well know yet for CSR or recognised leaders in performance.
“These may be leaders now but if they are not leaders now they certainly will be in the future because of the strength of their CSR capabilities.”
The CSR top 10 in Australia, in alphabetical order, are:
- Tata Consultancy Services
- Yarra Valley Water
The CSR top three in New Zealand are:
- Air New Zealand
The report’s project partners were La Trobe Business School, Massey University, the Sustainable Business Council of New Zealand, Sustainable Business Australia, Wright Communications and CSRConnect.ed.
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