Sustainable_Business: ‘Greening the Cracks’ or True Transparency?

Business - July 3rd, 2009

Spotlight on CSR reports in today’s market.

by Darell Nelson

They go by many names—sustainability reports, corporate social responsibility reports, environmental reports, citizenship reports—the list goes on and each is a little different from the next. But what exactly do they do and what are they for?

CSR Reports have become one of the main tools companies use to green their image, and increasingly corporate reporting has gone from ‘nice to do’ to ‘need to do.’ The reason for this shift is the rise in ‘ethical consumerism,’ wherein the customers, investors, and stakeholders are demanding increasingly greater accountability and transparency from companies on environmental and social issues. They now want to know what companies are, and aren’t, doing, warts and all.

Detractors of CSR reports question their worth and validity, as previously there were no centralized guidelines covering how reports should be set out and what should be covered. However, stakeholders are increasingly pressing companies to produce reports that comply with the guidelines of the Amsterdam-based Global Reporting Initiative (GRI), whose sustainability reporting framework sets out the principles and indicators by which companies are to measure and report their economic, environmental, and social performance. About a fourth of all reports published in 2008 adhered to GRI’s guidelines. However, the overall number of CSR reports as tracked by, a global registry of resources on corporate social responsibility, remains relatively low only 253 companies in 2007, barely a 50 percent rise in five years. That leaves a great deal of room for improvement.

Corporate social responsibility reporting sprung from the realization that there was a significant information gap between corporations and external stakeholders. GRI was meant to serve as a framework for social and environmental reporting in the same way that generally accepted accounting practices govern almost all financial reporting. Recently, though, the framework has had to adapt and become more rigid as companies attempted to publish CSR reports that aimed at papering over the real issues, or to coin a new phrase—’greening the cracks.’

Initially, companies largely focused on environmental, health, and safety indicators because those were areas where regulations already required disclosure. But GRI forces many corporations to look more broadly at other areas of corporate policy and performance, such as product responsibility, supply chain issues, sourcing, governance, diversity, and social issues.

Corporate reports in general have become useful tools for companies to engage with their stakeholders in setting goals and measuring progress. From an internal perspective, they offer corporations the opportunity to benchmark their performance against their peers and competitors, as well as to engage their employees. Their ability to communicate progress also makes them increasingly important tools in recruitment. In the future, expect to see more companies disclosing more information.

Sustainable Business is no longer an option, but a necessity, to stay ahead in the market. The Anaheim University Kisho Kurokawa Green Institute, located in Minami Aoyama, Tokyo, currently offers one of the largest selections of sustainable courses available, including MBAs, Diplomas, and Green Certificates in Sustainable Management. For more information see or contact for an information session. Darrell Nelson is the International Liaison Office Director for the Kisho Kurokawa Green Institute.