Social and Environmental

• Social and Environmental reporting

  • Reporting on the social and environmental impacts a business will have
  • Shows how the success or failure of a business is not just determined by the financial statements
  • Issues that most affect the performance of the business and matter to the stakeholders
  • Makes businesses seem more accountable for environmental and social consequences of their activities
• Triple bottom line

  • Incorporates social, environmental and financial factors making sure businesses focus on social and environmental factors as much as financial factors
• Corporate social responsibility

  What is seen to be good behaviour which is morally and ethically good
• Sustainability reporting

  • Details the businesses economic, social and environmental effects
  • Report progress towards sustainability goals to see if: it is ethical, reduction in reputational risk, government funding will focus on sustainability
• Sustainability reporting became widespread

  Early to mid 1990s
• Some evidence shows sustainability reporting developed earlier, with Hogner discovering evidence of social disclosures by US Steel in 1905
• Usefulness of sustainability reporting

  • Can provide stakeholders with valuable and useful information to help with decision making
  • As some disclosures are voluntary they may only report on the positives and ignore the negatives
  • The format and level of detail may vary meaning it is hard to compare
  • Creates a competitive advantage
  • Is the information creditable and unbiased
  • Provides information for potential investors
  • Aids with the recruitment of employees from disclosing social and environmental factors
• Advantages

  • Helps to attract and retain customers and staff
  • Allows for there to be communication between the business and the stakeholders
  • Not mandatory meaning they can include whatever they like in the report.
  • Creates better relationships with customers and suppliers
• Disadvantages

  • Costs of gathering information, labour hours and printing costs may be high
  • There is the risk of reporting negative information leading to bad reputation.
  • Could give away trade secrets