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CSR Reporting: Making it Meaningful
Tonkon Torp LLPJeff Cronn and Marco Materazzi
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Generally, “Corporate Social Responsibility” is an umbrella term used to describe corporate
initiatives or obligations that extend beyond generation of profits for investors to include, e.g., promotion of community development,
protecting the environment and promotion of human rights.
What is Corporate Social Responsibility?
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CSR Reporting – Communicating CSR
Communicating the achievement of non-financial corporate purposes and impacts
Variety of CSR Reporting is as broad as the concept of CSR itself. Variations include: Few paragraphs in a company’s annual financial reports Stand-alone glossy CSR reports extending to 100s of pages Posts on company websites about employee giving campaigns Reports on supply chain practices Third-party score cards
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Framework for CSR Reporting
Identify goals
Identify audience / stakeholders
Establish baseline
Collect and measure data
Apply third-party standard
Report
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Why might businesses engage in CSR Reporting?
Improved image and reputation
Increased understanding of
risks and opportunities
Cost savings and increased efficiency
Contributing to positive change
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CSR Reporting Standards -- Voluntary
Major International Standards Global Reporting Initiative International Organization for Standardization The United Nations Global Compact
SEC-Reporting Companies Sustainability Accounting Standards Board
B Labs
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CSR Reporting Standards -- Mandatory
California Transparency in Supply Chains Act
SEC reporting re conflict minerals
Trend towards mandatory reporting
What are companies actually reporting?
Huge spectrum of reporting practices Examples:
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Oregon corporation
California corporation
Oregon limited liability company
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Benefit Company Legislation – New Source of CSR Reporting Adopted in 20 states (including Delaware and Oregon) and DC
Generally, benefit company laws require company fiduciaries to consider a wider range of goals than profit alone
B Corps vs. Benefit Companies
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Oregon Benefit Company Statute – Effective January 1, 2014
A record 24 Companies registered as of January 1, 2014
Chime LLC
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Oregon Benefit Companies – Reporting
Each year, the company must prepare a "benefit report," including: A narrative description of how the company complied with its
general (and specific) public benefit purpose And a self-assessment of the extent to which the company met
a third-party standard with respect to providing a general public benefit
Third party audit or certification not required
Post to website and provide to shareholders / members
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CSR Reporting – Monetary liability?
False or misleading statements/omissions in CSR reports could result in monetary liability
To investors under securities laws
To consumers under consumer protection laws
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CSR Reporting – Other risks
Injunctions for violation of expanded fiduciary duties are possible under benefit company laws
Activist Shareholders Expanded fiduciary duties could give activist shareholders another platform to
question company governance
Harmed business relationships and public image
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CSR Reporting -- Meaningful or purely marketing?
Does CSR reporting really make a difference, or does it just enable corporations to appear to be addressing important issues without actually making meaningful contributions (i.e., “greenwashing”)
Probably a bit of both
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CSR Reporting – What should your clients be doing? Identify goals
Identify audience / stakeholders
Establish baseline
Collect and measure data
Apply third-party standard
Report