Held in Johannesburg (10 February), Durban (11 February) and Cape Town (12 February)
Why did no companies score ‘excellent’ in the Trialogue CSI Reporting Barometer?
In 2014 Trialogue researched company reporting on CSI and socio-economic development for those 72 South African companies that were listed on the JSE’s 2013 Socially Responsible Investment (SRI) Index. None of the 72 companies in the sample scored ‘excellent’ for the overall quality of their CSI reporting, but 12 companies (17%) achieved a ‘good’ rating. Over 50% of companies in the research sample (38 companies) scored ‘adequate’, 19 companies (26%) scored ‘poor’, and the remaining three companies (4%) were ‘very weak’ in their CSI reporting.
At the February 2015 CSI Forum, Trialogue presented the methodology and results of the Trialogue CSI Reporting Barometer (detailed in the 17th edition of the Trialogue CSI Handbook). We also presented case studies from various corporates to illustrate best practice and discussed what CSI reporting should cover in order to produce a comprehensive and useful social report and how to report better on social investment.
In each of the three cities, corporates were invited to share their reporting with the wider audience and specifically comment on some of their challenges and how these are addressed.
A summary of the discussions follow.
Trialogue’s CSI Reporting Barometer
- Trialogue designed its own measurement criteria based on international guidelines for reporting on non-financial information (including the principles of the Global Reporting Initiative (GRI) and International Integrated Reporting Committee (IIRC)). There are no other ratings of CSI reporting as far as we are aware.
- The quality of companies reporting on CSI has, on average, improved. However, the frequency of reporting on some elements, such as CSI strategy and project performance, has declined.
No companies scored excellent as, although many companies scored very well on some of the 13 criteria, no companies scored consistently well across all 13 criteria.
- The increase in the number of companies that have improved their CSI reporting, e.g. from 27% of the sample scoring average in 2009 to 53% in 2014, signifies that companies are now taking CSI reporting more seriously. According to participants, this has been driven by King III requirements, Department of Mineral Resource requirements (in the case of mining companies) and increasing stakeholder and NPO queries.
- One participants suggested that we should consider international reports as they have become more comprehensive than South African reports especially on the aspect of reporting around business rationale for CSI.
- Since most reports are targeted at a variety of audiences, it can be challenging to decide which information to include. In some cases the individuals driving the reporting process do not understand the metrics of social development (as opposed to financials) and reject what they consider ‘irrelevant’ data.
- With regard to meeting all of the criteria listed on the reporting barometer, a common challenge facing companies is the limited space allocated to CSI. Some participants that the move to integrated reporting (which includes calls for increasing brevity) is actually putting more pressure on the space they have available to communicate on CSI. This raises the question of how to promote CSI effectively as a key material issue. Understanding the business rationale for CSI is key to building a case for materiality.
- The CSI barometer rankings show that reporting on impact assessment is low (only 39% of the sample report on it). This may be because companies are not measuring impact, or are struggling with it. Reasons described at the forum include:
- Many projects are focused on behaviour change and this can be very challenging to measure and report on.
- CSI practitioners often struggle to identify suitable indicators.
- If findings are not positive, companies may not be willing to report on this.
- It is expensive to effectively measure impact – the budgets don’t allow for this. Further, short partnerships don’t warrant the expense involved with measuring impact.
- Reporting on impact should not be shied away from – CSI should be held to the same standards as the rest of the business.
- Finding time to report is often not a priority of the CSI practitioner whose time is consumed by the general running of the CSI programme. Reporting is viewed as an obligatory piece of admin and tends to get rushed through or handed over to the comms team who aren’t adequately equipped to report meaningfully on the issues. Giving reporting the attention it deserves is key to improving its quality.
- There is a misconception that it is important to provide completely new information in each year’s report. The result is that many CSI practitioners are not reporting against all the barometer variables each year.
- SABMiller experienced challenges collecting the demographics of beneficiaries but are upgrading their internal tool to track these going forward.
- The Telkom Foundation mentioned that collecting information from project managers to produce the annual CSI report is always a challenge. The other issue is that the board of trustees only meets four times a year and if one date is not met then the report has to wait another three months before it can be finalised.
- One of the challenges the MTN Foundation encounters is the large number of MTN Foundations across the globe that also have to report on their CSI activities. Due to the fact that these entities that have not yet reached a high reporting level, they tend to bring down the reporting standards of the MTN SA Foundation.
- Mr Price pointed out that the quantity and quality of CSI reporting is driven by how important CSI is the business. Afrisun concurred that if CSI is not part of the strategy it is not well resourced.
- A number of the companies in Durban mentioned the challenge of reporting back to communities and the fact that traditional reports will not suffice. NPC uses its community forums to report back to community representatives and Afrisun and Mr Price are both increasingly using storytelling and social media to communicate with, and report to, communities.
Improving CSI reporting
- Some companies were surprised at their ratings. However, they acknowledged that the ratings present an opportunity to learn and improve on their CSI reporting. It was noted by all that some of the criteria are easier to report against compared to others. For example, the CSI project descriptions are easier than the impact assessment component of the reporting.
- Providing details on the business rationale for doing CSI helps show the top management how CSI will benefit the community and the business, as well as highlight the alignment between business and society. CSI practitioners have to show reputation, stakeholder relations and new business development benefits to demonstrate the value of CSI to management.
- Reporting should be viewed as a tool for informing future work. Good reporting is critical to giving CSI a place of importance in the business. If reporting is not robust enough to convince the directorship, CSI is going to be relegated to the periphery.
- CSI practitioners that excel have board support e.g. Nedbank where the CEO is a major driver of community development.
- Big conglomerates that have different business units pursue different goals hence it becomes a challenge to report on the mandate and goodwill of the CSI department. Success is achieved only when CSI is represented and at an executive level.
- CSI practitioners do not feel encouraged to share failures. This is to some degree dependent on company culture, but also the degree to which the company has engaged with various projects. Less commitment to the project naturally gives rise to less detailed reporting.
- Much of the in-depth reporting is now happening online, and stakeholders need to be directed to these detailed reports (rather than the printed report). Social media is becoming a popular communication channel for CSI. Companies are looking to producing infographics for sharing online, as well as for showing a several data points simultaneously in a compact space.