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