Maximizing Return on Your CSR Reporting Investment

Use your CSR report “as a springboard to improvement, not as a final resting place for valuable information.” By Gil Friend

JM Juran, one of the fathers of Total Quality Management, observed back in 1948, that to be in a state of “self-control” — responsible, effective and accountable — “a person needs to know what’s expected of him [sic], know how well he is doing, and know what resources/options are available to improve.“ When it comes to performance across the triple bottom line, companies all too often expect responsibility from people, but don’t provide these necessary conditions.

The CSR reporting process can help — but only if it is transformed from an expensive marketing brochure into a powerful tool for improving the business. With the cost for a large company potentially running into the hundreds of thousands of dollars, “What’s the ROI of our CSR report?” is a question worth asking.

“Radar” recently exhorted its readers to use their CSR report “as a springboard to improvement, not as a final resting place for valuable information.” Unfortunately, major gaps which exist in many companies can prevent the springboard from springing. Important data may be missing or incomplete, too old, too inaccurate, hard to gather, hard to analyze. Worse still, if the CSR reporting process is isolated from management processes all that investment in data collection and analysis fails to deliver timely, relevant, accurate information to company decision-makers who could use it to improve decision-making.

Even leading reporters typically fail to fully exploit the information they’ve gathered. We’ve asked dozens of CSR reporters: “How do you use your CSR report to help your people make better business decisions?” The most common response, unfortunately, has been: “What an interesting idea.”

The challenge, then, is to get the right data in front of the right people at the right time. There are several software packages which exist to do just that — collect, analyze, organize and present triple bottom line information for improved decision-making. One such tool is Business Metabolics, developed by Natural Logic, a California-based consultancy. Business Metabolics is a versatile Web-based application designed to manage environmental indicators. It maps the “metabolism” — the key physical flows through a company, its business units and facilities: energy and material flowing in, product and non-product flowing out. It uses a “point and click” interface to help people navigate the huge universe of potential metrics to the “the measures that matter” — and that are worth tracking because they help turn data into actionable insights.

Benefits of using such tools can include:

• Reducing the cost — and easing the pain — of producing a CSR report, by replacing tedious, ad hoc reformatting and collation of Excel spreadsheets — or even calculation by hand — with automated data collection from diverse existing systems.
• Making it easier for internal — and if you like, external — stakeholders to select the trends, ratios, and interfacility benchmarks that put data in context, turn data into information, and enable people to use that information to gain insight.
• Allowing users to track common performance indicators and follow their own concerns and intuitions to discover new patterns and insights.
• Enabling intelligent “rollup” and “drilldown” of analyses, both across the enterprise, and across classes of materials, while preventing inappropriate aggregation.
• “Layering” of relevant attributes, from toxicity to supply criticality.
• Taking advantage of the interactive potential of Web-based reporting.
• Simplifying IT management. The opportunity is significant. A CSR report designed as a tool, not just a press release — as a radar system, not just a rear view mirror — can provide direct business benefits and catalyze further change.

So don’t just ask “Do we have a world-class CSR report?” Ask “Do we use our CSR reporting process to help our people make better business decisions — and to discover new business opportunities?” And “If not, can we start now?”

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Gil Friend is president & CEO of Natural Logic Inc.

This article has been reprinted courtesy of Radar, SustainAbility’s monthly newsletter.