So when you review a CSR report, check to see how it was created and who assuresits data and statements before taking it seriously. Also, check for statements of independence of the assurance provider to the company as well as any disclaimers!This obviously is important for those who rely on these reports in assessing sociallyresponsible investment rankings.The idea of separating non-financial reporting from financial reports may well changein the years ahead. From an investors’ standpoint, it is probably preferable to havethem integrated into one report rather than as a separate report that the investorhas to request.From the research which I have seen, it is clear that the greatest number of CSRreports that have some type of independent scrutiny are from European companies.In North America, given its particularly litigious climate, it seems that somecompanies, and especially those who might perform an assurance or auditingfunction, steer away from doing this work because of the danger of being sued. Thisis a pity, and ways around this problem need to be found.Companies should realize that it can be very beneficial for them to engage outsideconsultants in the CSR reporting process. Such consultants can help them inenhancing their data quality and provide information on how to continuously improvetheir CSR performance. Thus benefits to their bottom line can accrue. In turn,organizations which provide ratings on ethical and socially responsible investmentsmay give them higher rankings, resulting in higher prices for the company’s stocksand bonds.Unsurprisingly, countries in Europe and Asia particularly, are increasingly likely tomandate CSR reports for all companies. Norway seems set on this path, accordingtoResponsible Investor. And in the UK directors of public companies must nowdisclose environmental and social risks that are material to the company’soperations. Eventually I believe we will see countries everywhere mandating CSRreporting for public companies. These reports will be largely uniform in structure,contain generally agreed upon ‘reporting principles,’ be audited by professionallylicensed assurance providers, and contain a standard ‘assurance statement.’ Withoutthese safeguards investors are disadvantaged in understanding, comparing, andknowing how to act upon CSR reports.Special note. Much of the above information came from an extraordinary, first-of-a-kind, study:
Assure View. The CSR Assurance Statement Report
, recently releasedby, and available from,http://www.CorporateRegister.com/. I highly recommendanyone interested in CSR or ethical investing to read this report. Please note though,that opinions expressed in this editorial are my own.-----------------------------------------------------------------------*Ron Robins, MBA, is founder,
Investing for the Soul
,(http://investingforthesoul.com/), a globally popular and respected ethical investingwebsite. He advocates, writes and teaches on the subject of ethical investing. Tocontact him, e-mail toRon Robinsor call 705-635-3034.
© Ron Robins, 2008
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