Is sustainability reporting part of corporate social responsibility?
In the last few years, companies have started giving a lot of importance to sustainability. Statistics indicate that a large percentage of companies are prioritizing sustainability to mitigate costs and enhance operational efficiency.
Moreover, companies are also investing in corporate citizenship best practices for positive publicity and attracting more customers.
Since words like ‘corporate social responsibility (CSR)’ and sustainability reporting are now being used on a regular basis, a lot of people want to know the meanings of these words.
The goal of this post is to help you understand these terms and determine whether sustainability reporting is a part of CSR.
What is Corporate Social Responsibility (CSR)?
Corporate social responsibility (CSR) is a wide term that encompasses both corporate sustainability and corporate social responsibility. CSR-oriented businesses work in ways that benefit society, both locally and worldwide.
However, it is important to note that CSR is an evolving concept and can greatly vary from company to company.
Companies that rely on accounting firms in Malaysia can get help from experts in sustainability reporting and preparing the relevant reports according to global standards.
Sustainability Reports
A CSR report, commonly known as a sustainability report, is a periodic (typically yearly) report released by businesses to share their corporate social responsibility activities and outcomes.
The primary goal of the sustainability reports is to help businesses assess the effect of their operations on the environment, society, and economy.
Companies may get reliable and meaningful data in this manner, allowing them to enhance their operations and have a more beneficial influence on society and the planet.
It also helps organizations communicate their sustainable development objectives to their stakeholders and the general public.
This helps stakeholders, including workers, investors, the media, and non-governmental organizations (NGOs), better understand a company’s short, medium, and long-term objectives and make more sustainable choices.
Internal Benefits of Sustainability Reporting
Internally, CSR reports are important because they enable businesses to assess the effect of their activities on the environment, society, and economy.
Companies may enhance their operations and minimize operational expenses by using the extensive and useful data provided for the sustainability report.
Not only do businesses become more equipped to optimize and minimize their energy usage, but they also discover new innovation ideas or circular economy prospects as a consequence of examining their waste cycles.
At the same time, gathering this information necessitates collaboration amongst several departments.
Employees typically become more aware of the company’s efforts on CSR and sustainability as a consequence of the buzz, which makes them proud, hence improving employee retention and minimizing turnover (and its costs).
It’s a win-win situation for employer branding.
External Benefits of Sustainability Reporting
When it comes to external advantages, a CSR and sustainability report may assist businesses in better engaging with their stakeholders.
Companies can better understand whether projects will have beneficial financial outcomes by informing their stakeholders about the organization’s short, medium, and long-term project choices.
A sustainability report, for example, might inform stakeholders about whether a company is actively working to mitigate the negative effects of environmental danger or is only concerned with increasing profits for its executives and investors.
If a company chooses not to publish the sustainability report as part of its CSR, it is possible that the public will assume that the company is not implementing sustainable practices.
Is Sustainability Reporting Mandatory?
Since 2016, all publicly listed companies in Malaysia have been required to perform sustainability reporting and disclose CSR in their annual reports.
Hence, it is compulsory for companies to disclose non-financial information, like how the company is operating and managing its social and environmental implications.
Companies are recommended to use professional accounting services in Malaysia to disclose all of the important information in sustainability reporting and disclose how the organization is taking care of the environmental, social, and personnel concerns.
As a result, the company will meet the legal requirements of CSR, as well as reveal relevant information to the public to win their confidence.
Takeaways
Sustainability reporting is an integral part of corporate social responsibility (CSR), so companies should utilize all of the available resources like accounting firms in Malaysia to get the best results from sustainability reporting.
CSR reports provide a unique opportunity for organizations to communicate their mission and sustainability practices to the stakeholders and the public.
Therefore, every company should focus on this important process and provide fair and transparent reports as part of sustainability reporting.
