History and trends of cesr

• 1.HISTORY AND TRENDSOF CESR Begisheva Lidiya

2. Contents

• History of CESR

• Sorts of social accounting

• Stakeholder model

• Trajectories of sustainability reporting

• KPMG trends

• Main conclusions

• Further trends

3. Social and environmental reporting t he process of communicating the social and environmental effects of organisations economic actions to particular interest groups within society and to society at large. As such, it involves extending the accountability of organisations (particularly companies) beyond the traditional role of providing a financial account to the owners of capital, in particular shareholders. Such an extension is predicated upon the assumption that companies do have wider responsibilities than simply to make money for their shareholders Gray R.H., Owen D.L. and Maunders K.T. (1987)Corporate Social reporting: Accounting and Accountability 4. History periods Antal, A. B.; Dierkes, M.; MacMillan, K. & Marz, L. (2002): "Corporate Social Reporting Revisited", Journal of General Management, 28 (2) 5. History periods

• The late 1950-s late 1960s

• Processes that promoted social accounting:

• • • • Faith in governments ability to offer solutions to social problems

• • • • Criticism of Standard GDP

• • • • Pressure for companies to include social aspects in their decision-making process

• • • • The emergence of generation of responsible managers

Antal, A. B.; Dierkes, M.; MacMillan, K. & Marz, L. (2002): "Corporate Social Reporting Revisited", Journal of General Management, 28 (2) 6. History periods

• The late 1960-s mid 1980s

• • • Social accounting starts occupying an important place in business

• • • The main question Is It Time to Legislate?

• • • French law in 1977 required CS reporting

Antal, A. B.; Dierkes, M.; MacMillan, K. & Marz, L. (2002): "Corporate Social Reporting Revisited", Journal of General Management, 28 (2) 7. History periods

• The mid 1980-s late 1990s

• • • Regression of social reporting and accounting practices:

• • • • Resistance of established groups

• • • • Neo-liberal economic policies

• • • Some approaches and concepts of social reporting became part of everyday business practice

Antal, A. B.; Dierkes, M.; MacMillan, K. & Marz, L. (2002): "Corporate Social Reporting Revisited", Journal of General Management, 28 (2) 8. History periods

• The late 1990-s beginning of 2000s

• • • Free-market strategies failed to solve social problems (Enron scandal 2001)

• • • Maximizing shareholder value doesnt mean maximizing welfare of society

• • • New approaches of social accointing (CSR)

• • • Launching of Initiatives by international organizations (GRI in 1997, Global Compact in 1999 and Green Paper in 2001)

• • • The presentation of triple-bottom line concept (social, economic and environmental performance)

• • • Increasing risk if socially irresponsible behaviour

Antal, A. B.; Dierkes, M.; MacMillan, K. & Marz, L. (2002): "Corporate Social Reporting Revisited", Journal of General Management, 28 (2) 9. Strands in social accounting Social audits Silent social accounts New wave of social accounting Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 10. Social Audits Social audits - those public analyses of accountable entities undertaken by bodies independent of the entity, and typically without the approval of the entity concerned Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 11. Social Audits The standard for social audits was set by Social Audit Ltd in 1970s. Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics The message is if the companies fail to act appropriately and fail to discharge their account to society, the social audit may well appear and do the job for them 12.

• Social audits are founded on:

• Conflict

• Power/information asymmetries

• Differing interests

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 13. Silent social accounts

• Silent social accounts data of officially required disclosures (employees, political & charitable donations & governance) & voluntary disclosed data (environmental issues, consumers, product safety & interactions with the community)

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 14. It has potential

• Active employment of the data provides a means to make organizational accountability a more active process

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics The collation of material to produce separately identified social and environmental reports alongside the extant financial report will help o socially reconstruct the organization as more than simply an economic entity This hypothesis was right 15. The new wave of social accounting

• Range of organizations (NGOs, valued-based organizations & companies) make significant attempts to produce systematic social accounts

• A lack of theoretical rigour and the triumph of optimism and pragmatism over clarity of purpose are leading to a melange of stakeholder dialogue, sustainability reporting & community reporting

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 16. Objectives

• The most crucial lesson clarity of objectives :

• • to discharge accountability to stakeholders

• • to control stakeholders

• • to move towards sustainability reporting

• • be an exercise in self-justification

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 17. Stakeholder model

• Stakeholder is anyone who can influence or is influenced by the organization

• Stakeholder rights to information:

• • law

• • quasi-law (non-legal codes)

• • corporate values and missionstatements

• • moral rights (over the environment)

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics Responsibilities are determined by society, the company and the stakeholders 18. Stakeholder model

• Identify a ll the broad groups of stakeholders

• Break this groups down into constituent parts (different categories of employees)

• Prioritize the stakeholders , explain the process of prioritization

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 19. Stakeholder model

• For ea ch stakeholder provide the following layers of information:

• • Essential elements of s/h-organization relationship

• • Required to discharge responsibilities obtaining through law and quasi-law

• • Company-preferred information

• • Concerning the preferences and views of the stakeholders themselves

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics 20. Stakeholder model

• Identify, report & discharge social accountability

• Its the job of the auditors to pronounce on the qualitative characteristics of a social report

• Attestation

• The auditor should be:

• • Independent of organization

• • To be in position to exhibit the highest standards of ethical & professional integrity

• • To have had thorough training in the issues at stake

Gray, R. (2001): "Thirty years of social accounting, reporting and auditing: what (if anything) have we learnt?" Business Ethics The most important criteria -COMPLETENESS 21. Key Lessons to Learn

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