Why Report on CSR Activities?


Why report of CSR activities? This article summarizes key research findings on the business benefits of CSR reporting.

Why Should I Report on CSR Activities?

Report CSR to boost stakeholder engagement.

In a study of 180 firms, those that integrated environmental and social activities into financial reporting experienced lower stock price volatility than less sustainable peers.

Report CSR activities to consistently to strengthen market value.

In a study of 622 firms from S&P 500, DSI 400 or both, even firms with low but consistent levels of CSR had higher market values than firms with occasional spikes in CSR.

Report CSR activities for competitive edge in industries where product differentiation is difficult.

A multinational phone company that actively sought CSR publicity saw improved brand integrity and employee willingness to pay a premium.

What Activities Should I Report?

Report on results you have achieved.

In a study of 174 energy-intensive companies, firms that had achieved emission reductions had higher Tobin’s q scores than their carbon-emitting peers.

Realize environmental targets mean little to investors.

In the same study, firms that just reported on emission targets had lower ROE and Tobin’s q scores than companies who had achieved goals.

Disclose your mistakes.

Firms that voluntarily disclosed their involvement in the 2006 backdating scandal experienced stock price declines of 2.7 per cent compared to 3.5 per cent for firms that were exposed by others.


Related Resources