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.