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CSR and Accountability

Dr. Samantha Miles

 What is accountability?

Accountability, simply, is the duty to provide an account (e.g. a CSR

report) of those actions for which one is held responsible.

So, what actions are companies responsible for?

• the accountability that society requires (legal requirements)?
• the accountability that the business wishes to express (strategic
requirements)?
• the accountability that the stakeholders wish to see (stakeholder
requirements)?

The ideal situation is to discharge accountability at all three levels (legal,

strategic, stakeholder) but is this impractical?

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 CSR and Accountability
There is a growth in the demand for accountability with a growing pressure
being put on businesses to be more transparent in their actions to
society and the environment. These pressures are coming from:

• Greater stakeholder awareness of corporate ethical, social and

environmental behaviour
• Direct stakeholder pressures
• Investor pressure
• Peer pressure
• Increased sense of social responsibility
Ernst & Young (2002)

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 Benefits of Accountability
The business case for CSR focuses on a British Land
range of potential benefits. Jones et al. Responsibility
(2006) identify the following for the UK Corporate responsibility brings real
construction industry: benefits to the business.
•Improved financial performance/profitability Corporate responsibility reduces risk,
•Reducing operating costs improves our reputation and helps us to
•Long term sustainability for companies and build strong relationships with
employees stakeholders, attracting and retaining
•Increased staff commitment/ involvement occupiers and providing shareholders
•Enhanced capacity to innovate with a good return on investment.
•Good relations with government and
communities
•Better risk and crisis management
•Enhanced reputation and brand value
•The development of closer links with
customers

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 Communicating CSR in the Real Estate Sector

According to ACCA (2007)

Building materials is a high-
impact sector and home
construction a medium-
Where our Heart is
impact sector yet no ~
Corporate Responsibility Report 2006
company from this sector
excels at accountability as
recognised by independent
external adjudicators, for
example being short listed
for ACCA ERA.

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 What are the major impacts that stakeholders wish
companies to account for?
The impact of the sector is clearly documented:
• Health and safety: accidents from manual handling, hand-arm vibration
syndrome, allergic dermatitis, working with asbestos.
• Impacts on local communities: site cleanliness, noise, dust, traffic
management, behaviour of workers on site
• Energy and resource use
• The production of waste materials
• Pollution and quarrying
• Soil, sand and gravel extraction and the impact on the landscape
• Direct loss of sites of special scientific importance
• Displacement of peoples and population of species
• Climate change is one of the most urgent issues that face business and
consequently stakeholders are becoming increasingly interested in
corporate responses to both the risks and opportunities it brings.

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 What is being reported?
•CSR in the industry is largely
aspirational.
•There is a wide variation in the
volume and detail of CSR information
presented, with some companies not
disclosing any data
•Some companies provided dedicated
CSR reports Corporate social responsibility report 2007
Building for a brighter future

•Some provide limited information on

web sites or within annual reports
•Those providing dedicated CSR
reports appear to be working towards
integrating CSR with core business
activities

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 What is being reported? Environment

•Environmental impact

•Water and energy use

•Transport
•Land use
•Remediation
•Biodiversity

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•Waste management

•Recycling

http://www.taylorwimpey.com/Home/CorporateSocialResponsibility/EnvironmentalStewardship

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•Qualitative data is more
frequent than quantitative data.
•Little monetary disclosure.
•Little normalised data.
•Few companies set targets or
KPIs Corporate Social Responsibility
HBG policy
•Few companies report on
climate change and those
reporting do not do so
comprehensively

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 Health and Safety
Major concern for the industry, although partially driven by
legal compliance
Areas reported
• Accident prevention
• Health and safety management
• Employee and contractor training
• House design for safety
• Site inspection and audits
• Engaging with stakeholders
Better reports:
• provide targets and measures
• focus on specific occupational health practice, such as
management of asbestos, manual handling, skin
conditions, noise and vibration risks
• give a break down of major injury causes

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 Other areas
Human Resource Management
Recognition that HRM is poorly developed within the industry
Most reporting relates to commitments (e.g. to equal opportunities and
training), policies, sentiments and initiatives to improve communications
with employees.
Supply chain
Despite responsible purchasing policies being seen as a central part of
CSR for UK businesses, this issue is rarely mentioned, and not
reported on in any depth.
Customers
Issues reported on include customer satisfaction, fair treatment of
customers, quality build, handling complaints, communicating with
customers. Better reports include KPIs and report quantitative data.

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Communities
Reporting is discursive, covering sentiments to be ‘good neighbours’, or to
‘listen to communities’, providing ‘project newsletters’ or participating in
the ‘considerate constructors’ scheme. Some companies also raise
money for local charities, and/or provide paid leave for staff to
participate in fund raising activities. Very little reporting of key issues
such as site cleanliness, noise, dust, traffic management and the
behaviour of workers on site
Governance
Very few companies see this explicitly as part of CSR or state how CSR is
managed within the business, whether it is a board level issue and who
within the business has ultimate responsibility for it.

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 Conclusions
CSR and accountability pressures are increasing
The issue of climate change is bringing an additional pressure to the
industry, with stakeholders expecting to see how the risks and
opportunities are being managed
The sector a a whole is currently mediocre at best at CSR and
accountability
Can the sector afford not to improve?

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