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Mar 02, 2015

Online sustainability reporting ‘falls in quality’

Investis study finds CSR reporting on corporate websites has declined in past year

The quality of CSR reporting on company websites is in decline, with many websites dropping features important to proper disclosure, according to research carried out by Investis.

The communications firm’s IQ Rankings ‒ which grade different aspects of corporates’ use of digital media, including investor relations, corporate governance and use of mobile – find the average score for CSR content has fallen by 2 percent over the past six months.

When organized by index, local trends become apparent: in half a year, the FTSE 250’s score has fallen by 4 percent, for example. Germany’s MDAX Index and the Swiss SMI Expanded Index slightly improved their scores, while the Austrian ATX was up 6 percent and the Russian MICEX/RTS by just shy of 9 percent.

Investis suggests, however, that the fall in average scores is due not to companies abandoning their CSR reporting but to the inclusion of a number of newly listed companies in the rankings, as well as a number of NASDAQ issuers that have been scored for the first time.

Marcus Fergusson, Investis’ research director, says it’s understandable that new companies may not have much CSR content to publish. ‘In these cases it is important that their CSR program is fully integrated into their overall strategy, as without this they will simply have a siloed CSR section that may explain their approach but will not have any other evidence to back it up,’ he explains.

‘It’s important at this stage that they do not appear to be merely giving lip-service to CSR, so [they should] provide performance data if it is available and otherwise give evidence of CEO and senior management buy-in.’

Elsewhere, the study identifies which aspects of CSR reporting companies have either added to or dropped from their websites in the past six months. Most significantly, 4.5 percent fewer companies now publish a statement of their CSR principles and policies, while 3 percent fewer have a dedicated CSR press release section. On the other hand, the number of companies offering a CSR press release search function has increased by 9 percent.

There was also a 3 percent drop in the number of companies providing a message from senior management or introduction to their CSR approach; that means less than a third of the companies reported on now include such a function. T

hough nearly a third of companies do not have a dedicated CSR section for their website, this figure is down slightly since Q2 2014, and the vast majority of firms (86 percent) provide some detail of their CSR activities.

For Fergusson, it’s crucial a company’s CSR strategy is clearly part of its wider business model. ‘While much of the CSR content may be found in a dedicated CSR section, this content should be clearly signposted from other areas of the site,’ he explains. ‘As with an investment proposition, a company’s approach to CSR should be explained clearly and succinctly. It’s also important for a company to explain its CSR policies, the targets it has set itself and its performance against those targets.’

He adds that a few key themes look set to dominate the CSR reporting landscape in the coming months. Strategic philanthropy, or the ability to ‘square an approach to CSR with a business model’ is one trend that should continue, as well as an evolution in reporting practices, moving away from a checklist of CSR objectives toward a more narrative-based, frequently updated reporting cycle, as exemplified by British Land and BG Group.

‘As part of this, we are also seeing companies telling more personal stories, rather than third-party case studies,’ Fergusson says. ‘Where companies have plenty of data, we are seeing them making this data freely available. The key here is presenting the data in a suitable format or by using visualization tools and charts that allow the audience to undertake their own analysis to aid transparency.’

Laurie Havelock

Laurie has been part of the IR Magazine team for more than a decade, starting out as a reporter and research editor before becoming editor in 2023. He was previously acting business editor at the i newspaper and deputy business editor at The Daily...