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November 14, 2003
Survey Says: NGOs Believe Corporate Social Responsibility Reports That Reveal Faults
by William Baue
In a recent survey, nongovernmental organizations say they believe CSR reports that disclose
noncompliance, poor social or environmental performance, and big challenges.
SocialFunds.com --
The majority of nongovernmental organizations (NGOs), who play an increasingly important role in
evaluating corporate social responsibility (CSR) reports, are skeptical of these reports, according
to a recent survey. Of the 56 NGOs surveyed by Burson-Marsteller, a public relations firm, and RoperASW, a market research consultancy, 79 percent find CSR
reports “very” or “fairly” useful, but only 44 percent consider the reports “believable.”
How can companies gain credibility in the eyes of
these NGOs? According to the survey, companies can gain credibility for their reports by
disclosing poor sustainability performance, or significant challenges, or noncompliance with social
or environmental laws or regulations. Other factors that boost confidence in CSR reporting include
comprehensive performance metrics, third-party certification, and standardization of reporting.
The NGO survey, part of a much larger survey entitled 2003 Building CEO Capital, found that
case studies and input from independent research centers, academics, and scientists are much less
likely to bestow credibility.
“Today, social responsibility is no longer a matter of
corporate discretion, due in large part to the NGO community’s growing influence,” said Bennett
Freeman, managing director for corporate responsibility at Burson-Marsteller. “NGOs and other
stakeholders are more likely to acknowledge progress and success if companies are candid about
problems and even mistakes.”
“Corporations need to focus on the implementation of
substantive policy commitments even if that process is uneven or incomplete,” added Mr. Freeman,
who served as deputy assistant secretary of state for democracy, human rights, and labor in the
Clinton Administration.
The NGOs surveyed, which cannot be named due to the survey’s
confidentiality code, comprise human rights, environmental, and community service groups. Most are
based in the U.S. but are global in scope. While the sampling does not represent the perspectives
all NGOs, it does provide insight into general NGO opinions on CSR reporting.
Almost all
of these NGOs (95 percent) agreed that third-party independent verification is the most important
source of influence in forming an opinion on a company’s commitment to responsible business
practice. Observance of external standards, such as Social Accountability International’s SA8000 and the International
Organization for Standardization’s ISO 14000
environmental standards, bolsters the confidence of more than three-quarters of NGOs in companies’
CSR. Exactly three-quarters (75 percent) of these NGOs’ opinions are influenced by companies’
inclusion in socially responsible investment (SRI) funds and indexes.
NGOs hold chief
executive officers (CEOs) particularly accountable for a company’s reputation and responsible for
restoring trust in corporate America. NGOs surveyed believe that the CEO is responsible for 52
percent of a company’s reputation. Two-thirds of the surveyed NGOs (66 percent) believe that CEOs
bear the greatest burden for restoring trust in corporate America.
“NGOs demand that CEOs
hear them, pay attention to their position, and change their company ways regarding the issues they
advocate,” said Dr. Leslie Gaines-Ross, Burson-Marsteller’s chief knowledge and research officer.
“CEOs need to deal with social and environmental issues in a spirit of cooperation rather than
confrontation.”
The survey made recommendations based on feedback from the NGOs. It
listed a series of reporting “musts:” engage with key stakeholders; use plain language and avoid
jargon; say what you mean--do not overstate claims or obscure problems; and make the report
compelling in ways that bring the subject to life, among other imperatives.
©
SRI World Group, Inc. All Rights Reserved.
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