New Metrics
How to Take the Pain Out of CSR Reporting

Corporate Social Responsibility (CSR) and other forms of sustainability reporting can be a painful process. Whether you’re a one-person sustainability, health and safety manager or your company has staff around the world who share reporting responsibilities, it can be challenging to effectively collect, assess, and communicate your company’s sustainability metrics.

ReScore Group, a research collaborative on a mission to develop meaningful metrics, recently conducted a survey to evaluate the “pain points” of managers responsible for sustainability and CSR reporting. Discussing the commonalities across industries and company sizes, and areas of improvement for reporting solutions, the study provides useful insight for CSR practitioners, and was supported by Triana Group, 2020 Strategies, Wenck Associates, iCompli Sustainability, Manufacture New York, and Tennaxia.

The research surveyed leaders of CSR reporting about the solutions they use to help collect and manage data. The panel of respondents is very diverse: 56 global organizations, coming from 14 sectors and with revenue from $2 million up to more than $20 billion. 35.7% of the respondents still use Excel alone, 15.3% use a specialized software alone, while the majority uses a combination of both (49%).

The study reveals that these groups have different experiences. Most Excel users find it ‘difficult,’ or ‘very difficult’ to collect and consolidate data, to track the contributions of different team members, and to change the scope. In contrast, most software users found these tasks ‘easy,’ or ‘very easy.’

The two biggest ‘pain points’ expressed by all corporate practitioners are:

• Assuring the reliability of the data; and
• Responding to different frameworks (such as GRI, CDP, SASB, DJSI, internal, etc.).

Additionally, it appears that CSR data collection through the supply chain is an emerging objective, yet few have implemented robust solutions. For example, 40% of respondents collect information from their supply chain, but 67% of this group don’t know how many suppliers are contributing to their CSR data collection or the number of Key Performance Indicators (KPIs) they are collecting.

Finally, 34% of Excel users are ‘very unsatisfied’ or ‘unsatisfied’ with their solution while 100% of the software only users are ‘satisfied’ or ‘very satisfied’ with their solution.

What did you find surprising about the results?

Bernard Fort (BF): I was surprised that 49% of the participants are using a mix of solutions (Excel, CSR reporting software, EHS software...) to report their sustainability performance.

This is a sign that sustainability data management is not yet well adopted across organizations. Information for CSR reporting is coming most of the time from different departments (EHS, HR, Compliance, Finance, Procurement...) and they often don’t have the same ‘maturity’ in terms of reporting processes. The experience of some services (e.g. Environment, EHS) leads them to choose a specific reporting tool, however it can take time before these tools are adopted across the organization. At Tennaxia, based on our experience, we noticed that the multiplication of systems increases the risk of error and the time spent to collect, validate and consolidate the data. To facilitate the adoption and the efficiency of the process, we advise to choose only one system for data management, and provide great training and support to encourage adoption throughout the company.

What was most valuable about this survey?

BF: The survey was especially valuable because, based on empirical evidence; it shows what the real pain points are for practitioners – across many different industries and company sizes, with a global perspective.

While Tennaxia has 15 years of experience with European based global companies, this survey included a majority of respondents based in the USA, where the context is completely different. In Europe, the regulations linked to CR are very heavy. For example in France, all publicly traded organizations have to report on a set sustainability indicators and must be audited by an independent third party. We discovered US companies experienced many of the same pain points that European companies faced at the beginning of their journey.

The survey shows that to manage the collection process and to consolidate data are real challenges when using Excel, especially for companies that have many plants and sites. It also shows that it is easier for companies using specific sustainability reporting software. This is a trend we also noticed with our clients in Europe, when they transition from Excel to the Tennaxia Reporting Solution.

Can you recommend some best practices for sustainability reporting?

BF: Here are just a few examples - you can find more in our white paper, What is a good non-financial reporting tool, and in the SB Webinars*:* 8 Best Practices For An Exceptional CSR Reporting System and Smarter Metrics: How to Collect, Manage & Report on Sustainability Data More Effectively.

• Use a tool that can be tailored to your company's organization and structure, including when operating across many cultures. The tool must be usable in any language you work in and offer access controls according to your company structure. This is very important to facilitate user comprehension and increase data security.
• Consolidating textual data is not an easy task - above all, if users answer in their own language. Wherever possible, we advise you to use multiple-choice questions rather than open-ended questions (where the contributor has to answer in the form of text).
• Prior to the data collection, review the indicators that present the highest risk of reliability (e.g. units in various metrics systems, terms that can be interpreted differently across cultures...) and double check for accuracy. If you have a software solution, assure there are effective controls to prevent errors on these indicators.
• A good solution provider will have a depth of experience across many industries, geographies and company sizes. Use it! If your software publisher has consulting skills, why not use them early on, when mapping your data collection and management process, when choosing your indicators, when setting the scope of consolidation and even for overall monitoring of the project? This will help you make your sustainability reporting as meaningful and accurate as possible (consistent scope, indicators monitored, monitoring of users, etc.).

What is next for CSR reporting?

BF: We are noticing that more and more organizations are implementing sustainability solutions and this trend is not slowing down. This is true especially with the increasing pressure on disclosure from various stakeholders (consumers, investors, NGOs, states...), the business opportunity linked to sustainability performance, and the massive amount of data available.

The demand for reliable data will continue in order to grow commercial and financial markets around sustainability performance. A well designed solution is needed to produce reliable and auditable data.

A trend we also see coming is the rising interest in the supply chain. Organizations are starting to look in detail at what their suppliers are doing to mitigate the risks to their business. It is not always an easy task as supply chains are complex and dynamic networks. Based on our experience, to collect information from the supply chain in an efficient and meaningful way, there are three best practices:

• Identify the key suppliers, who most impacts the companies’ business
• Collect information and evaluate suppliers only based on material issues identified by the organization and linked to the organization’s Sustainability strategy
• Customize your surveys to suppliers based on what is material to you and them!

Too often we find that organizations are sending general questionnaires to their suppliers, increasing survey fatigue for the suppliers, with poor results for the organization. By defining key indicators directly linked to the sustainability policy and addressed to key suppliers, companies are able to assess, in a reliable way, the risk in their supply chain. This leads to informed, meaningful engagement with their suppliers.