Sunday, September 20, 2009

The catch 22 of CSR reporting and the paradox of trust

The purpose of a CSR report is to build trust. By operating transparently and responding openly to stakeholder concerns and aspirations, through a "fair and balanced" presentation of the material issues relating to your organization's sustainability and corporate responsibily efforts, you build trust. Trust, so that stakeholders can hold your Company's integrity  in high regard and make educated decisions about whether they want to invest in you, work for you, buy your products or services, supply to you, collaborate with you, complain about you to the regulators, approve your license to operate in their neighborhood or simply recommend you to their friends. But quite often, reports are met with cyncism and mistrust. Why should we believe what is written in CSR reports. And more importantly, why shouldn't we believe what's reported? 


CSR Reports are just a form of marcom or PR - self-gratifying do-gooding self-promotion.

i.e. you cant trust CSR reports and you can't trust reporting companies. People may be right. CSR reports look like  PR. They are  full of superlatives and positives and superlapositives (like that ? It's a hybrid. Using one word instead of two is sustainable best practice... or bractice. Less typing energy, less server power, less carbissions). 

Which is why i find it interesting that so very few PR professionals are actually involved in managing CSR communications in their businesses, or in leading the writing of CSR reports. See some examples from reports published in September 2009:

Corporate Express Austrailia's 2008 report :  CSR is led by a CSR manager reporting to the CEO. There is a CSR Steering Committee with representation from all functions including the New Zealand person who reports to the Head of Marketing. But there seems to be no dominant PR or comms-related presence.
WestLB AG 2009 report : The Sustainability Department, which is responsible for planning, steering and controlling all sustainability activities, is a part of the Group Development business unit and reports to the Chairman of the Managing Board. Do you detect a mention of Marketing or PR in this structure ? Nope. Me neither.
Teck 2009 Report :The Safety and Sustainability Committee  of the Board of Directors provides policy direction and monitors  environmental, social and safety performance. The Corporate Environment and Risk Management Committee is a senior management committee that sets priorities and direction for EHS programs, tracks performance and measures results. No PR stuff here.
MTR Corporation 2008 Report : The Corporate Responsibility Steering Committee is chaired by the Legal Secretary and members from different parts of the business are on the team. Sounds pretty PR-less. 

Now, in an outstanding piece of research by Sherie Winston of Georgetown University, in which she charts the positioning of CSR in a business, 125 CSR jobs were studied and only half had some form of CSR communications content. When hiring CSR people, companies dont' look for communications specialists. "Few are pure communications jobs, and most fall under administrative, managerial or business development categories."  

Logic might dictate that if companies were intending their CSR reports to be PR brochures, they would have PR people leading their CSR report publication. Does that make sense? I mean, in any business i have ever worked in, the Finance guy counted the profits and the IT person decided when to upgrade my laptop. So why would a PR-motivated CSR report not be led by the PR person, arguably the most competent person to produce PR content ? 

Do you have kids ? What happens when someone asks you about your kids? You dont start off by listing all their bad points (well, unless your kid is Dennis the Menace). You dont spend all your time saying what they dont do well. You start off by saying how wonderful they are. Perhaps you might throw in the odd comment about the fact they total-lossed yourcar again last week, but on the whole, you stay with the good stuff. They are not bottom of the class, they are 28th from the top. They are not hyperactive, they have lots of energy. Most mom's are natural PR agents for their own kids. Mom's  tell the REAL truth about their kids (my son is two rungs short of a ladder) only  when they are with their closest family members or friends. The people who they trust the most.

And it's a bit like that with CSR reports. Each report is someone's kid. No CSR reporter wants to scoop up the dirt when writing about the organization in whose success he has a vested interest. So fair and balanced reporting is acually counter-intuitive, requires a degree of maturity and confidence that most corporations have not yet achieved.

Actually, it requires trust. It requires the organization to trust that the stakeholders who read the report will do so with a fair and balanced mindset, and not look for the first opportunity to beat the company about the head for everything that it admits is not perfect.

and here we have it, the CATCH 22.

To engender trust, you have to show trust though balanced reporting.
But balanced reporting is risky, as stakeholders might react negatively to anything that is less than perfect. If you dont trust them, they wont trust you.  If you don't trust your stakeholders, your CSR report will always lack authenticity. Because you will always be too scared to present your Company in a balanced way.

Like mommy (above), a corporation will have greater trust in those stakeholders that it is closest to. Those the company has invested time in getting to know, in engaging and dialoging with. The corporation will feel safe in providing with a balanced picture to this greater critical mass of stakeholders.

and here is the PARADOX

Paradoxically, despite the fact that stakeholder engagement is crucial to building trust and therefore balanced, trustworthy reporting, most Companies do not pay much attention to this. We can see this evidenced in the brief one-pagers in most reports which do no more than pay lip-service to stakeholder engagement. Not many corporations realize how core this is to their entire CSR program, and to building trust through CSR reporting. 

At this point, you are wondering how Chunky Monkey fits with reporting, catch 22's and paradoxes (gotcha!) . Here's the thing: I did a Free Astrology Destiny Reading on for Chunky Monkey , and this is part of what what is says: ...... chunky monkey, if you are a business person, you may feel that your employees and customers (especially the loyal, long time ones) are your family and try to take care of them as such. You care about their personal lives and feel for their troubles, and can like a good mother you see them through tough times.   Get that ? Chunky Monkey is all about values and stakeholder engagement. Phew. That's a relief!

elaine cohen is the joint CEO of BeyondBusiness, a leading reporting and social-environmental consulting firm . Visit our website at:

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