Corporate Social Responsibility (CSR) Reporting—Administrative Burden or Competitive Advantage?
CSR Reporting has recently received widespread attention in the business community due to the introduction of mandatory CSR reporting at European Union (EU) level. Against this background, intense debate transpires regarding whether companies should be forced to report on their social and environmental performance, considering the underlying financial and technical effort necessary to measure and disclose the respective information. On the one hand, especially with regard to small and medium-sized enterprises (SME), such a burden is widely regarded as unbearable. Taking this argument into account, the EU has reacted by limiting the reporting requirement to large companies. This reaction clearly reflects the widespread notion that CSR reporting is an administrative and financial burden and supports the necessity of mandatory laws to motivate its realisation. Unfortunately, on the other hand, potential business benefits resulting from reporting—such as improved stakeholder communication, a better understanding of one’s own value chain, and enhanced risk management—tend to be disregarded.
The purpose of this chapter is to address this discussion. It briefly presents the nature, development, and status quo of CSR reporting as an introduction, before the connected challenges and chances are discussed. Based on this evaluation, recommendations are developed on how CSR reporting should be implemented by companies in order to generate a benefit for them so that a seemingly administrative burden is turned into a competitive advantage.
KeywordsCorporate Social Responsibility European Union Global Reporting Initiative Voluntary Disclosure Corporate Social Responsibility Reporting
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