Background paper: Global Stakeholder Report 2005

Key finding from Global Stakeholder Report 2005: Companies must base their social responsibility on economic arguments

The Global Stakeholder Report is a bi-annual survey of professional readers of reports on Corporate Social Responsibility (CSR). In 2005, the survey was conducted for the second time. It was conducted, written and published by Pleon, Europe’s largest network of communication consultancies. About 500 readers of CSR reports from 58 countries participated in this online survey which had been conducted in April and May.

According to these stakeholders, the most important issues companies should cover in a CSR report are the management of human rights (61.4 percent considered this “very important”), eco- and energy-efficient business operations (61 percent), health and safety of employees (60.4 percent), climate protection (59.4 percent) and the environmental management of production processes (58.8 percent).

Clearly, the understanding of CSR varies from country to country and between stakeholder groups. But a view that is gaining popularity among companies is that CSR largely equals corporate giving and community relations that is costing companies huge amounts of money – more than 10 billion euros annually in Germany alone according to recent research. From a stakeholder perspective, this issue is considered by just 34.5 percent as “very important” and was ranked 27th out of 30 content-related issues.

The low interest of key stakeholders in voluntary social commitments of companies reveals a fundamental difference in the meaning of CSR. Companies have to prove that, despite globalisation and manyfold social problems, they are operating responsibly in their daily business. Further voluntary engagements may be sensible but are clearly an add-on and no elementary part of CSR.

The Global Stakeholder Report is based on a world-wide online survey of the readers of CSR reports. The five largest groups of respondents were employees (27.5 percent), consultants (19.4 percent), academics (13.3 percent), non-governmental organisations (12.3 percent), and the financial community (6.2 percent). Other results of the survey include:

	The overall satisfaction of readers of CSR reports with the main content sections has increased. Environmental coverage remained on a high level of satisfaction with 75.5 percent (2003: 74.7) of readers describing reports as “fully” or “to some extent” matching their expectations. Satisfaction with social and economic issues increased more clearly (social issues from 48.7 to 55.2 percent, economic issues from 57.6 to 61.2 percent).
	From the point of view of business representatives in the survey, CSR is not merely a public relations measure (10.6 percent of employees). Instead, CSR is to create business value to shareholders (29.5 percent) and real engagement and accountability (28 percent). Yet, when asked for their key motivation the majority (48.5 percent) says CSR reports serve to increase corporate reputation.
	The majority of stakeholders consider the financial community a key target group of CSR reports. However, shareholders, investors and rating agencies find little use in CSR reports because companies don’t adequately explain their economic reasons (the “business case”) for CSR commitments.
	Support for mandatory reporting requirements for multinational companies is dwindling. Although there is still a small majority for mandatory reporting for companies over a certain size (29.1 percent, down from 38.4 percent in 2003), as it is currently debated at European Union level, opposition to any kind of compulsory CSR reporting rose from 17.8 percent (2003) to 25.3 percent.
	The traditional winning margin of the oil and gas as well as the chemicals and healthcare industries in CSR reporting has been shrinking in favour of the automobile, the retail and the tourism sector.

 

Download:

	Global Stakeholder Report 2005, English (PDF, 1.1 MB)
	Global Stakeholder Report 2005, German (PDF, 1.1 MB)

 

“Accounting for Good: the Global Stakeholder Report 2005” is a product of Pleon’s Corporate Responsibility Practice, lead by Managing Partner Andreas Steinert at the Pleon office in Bonn, Germany. Project leader and author of the report is Dr Axel Klein. Questions can be addressed to andreas.steinert(at)pleon.com or axel.klein(at)pleon.com, phone (+49-228) 91514-0.

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