Reporting Corporate Social Responsibility (CSR) to Reflect Social Value

May 5th 2021 | Posted by phil scott

Reporting Corporate Social Responsibility (CSR) to Reflect Social Value

Reporting Corporate Social Responsibility (CSR) to Reflect Social Value

There is an expectation for businesses to generate social value. Consumers look for this, and top-performing finance professionals know that understanding this value is a vital aspect of measuring a business’s performance.

Social value is generated through various different corporate social responsibility (CSR) initiatives. This includes the launching of foundations, sustainability initiatives, and supporting local community groups and charities.

The importance of social investment

One major factor that makes social investment essential for businesses is consumer expectation. People like to know that the businesses they interact with are socially aware and active. So, businesses who want to prosper in the current climate invest time, resources, and money to develop a transparent CSR strategy.

However, in some organisations, there is a lack of strategic focus and budget clarity in this area. Finance professionals who are strategically aware in the arena of CSR and social value are leading the way in showing how robust and accurate social value data is vital. Without it, a business cannot hope to develop a meaningful CSR strategy.

Understanding the value of social investment

The data surrounding social value can be collated and analysed in different ways, depending on the business. However, overall, certain elements are central to an understanding of social value.

Knowledgeable finance directors and teams develop processes that allow a business to measure factors such as investing money in community ventures and time in volunteering against improvements made to the local community, environmental changes, and possibly even lives saved.

The difficulty arises from finding the most accurate measure of social value. One measure that is favoured by many businesses is Social Return on Investment (sROI). This measure is the monetary value that the business perceives to have achieved from its investment.

There are two obvious limitations to this measure. Firstly, a business may be tempted to invest only in initiatives that bring the highest sROI and therefore discount initiatives that are actually better aligned with its purpose. Secondly, there is always going to be some variance as to how monetary “value” is perceived by different businesses.

Top finance professionals and business leaders that there is more to truly understanding social value. Qualitative data has a vital role to play as it provides a humanised and deeper understanding of the difference that a particular investment makes. Without this data, a business cannot hope to measure the success of its CSR strategy and investment.

Ensuring the accuracy of data

Finance professionals know the value of real-time data when it comes to analysing a business’s financial health and performance. The same can be said for CSR reporting. Reporting software provisions like Salesforce and Google Analytics now enable the real-time capture of CSR-related data.

Businesses can also monitor online resources such as police and health statistics and social commentary sites to measure the ongoing value of their efforts. For example, a business may invest in a local health awareness initiative that improves community health figures.

This type of transparent and timely reporting is what consumers expect. Expert finance directors and top management teams know that this is the best way to measure social value as opposed to simply including data in an annual report.

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