In order for the CSI component of a social or sustainability report to be useful to stakeholders, it needs to be much more than a glossy photo essay of the projects supported by the company (as is currently often the case).
On the contrary, a comprehensive CSI report should:
demonstrate that the company understands the importance of socio-economic development, particularly in the context of systemic societal risk and how this translates into business risks and opportunities,
describe the company’s approach to addressing the issue, and its CSI governance and management structures,
identify its CSI stakeholders and how it engages with them,
outline its CSI strategy, focus areas (geographic and developmental), and the rationale for its chosen areas of support,
indicate how it determines its CSI budget and how secure that budget is,
provide details about the quantum and breakdown of its annual expenditure,
describe the main projects it supports and the project objectives and inputs,
describe its ongoing involvement, monitoring, and measurement of these projects,
explain the performance and impact assessment for these projects.
Best-practice framework for CSI reporting
Reporting on CSI in a company’s sustainability or annual report may cover the following 13 important dimensions:
Governance and management of CSI
Business rationale for CSI – Demonstrates whether each company understands the socio-economic context and business case for CSI; provides a statement (usually by company senior management) that describes the relevance of CSI to the industry sector, the company, and its long-term success; explains how CSI relates to business strategy.
CSI governance and management structure – Describes the highest governance body responsible for CSI in the business; indicates size and structure of CSI function (eg. department or foundation), lines of accountability, and any significant changes, during the reporting period, to the size and structure.
CSI strategy
Formal CSI strategy – Describes the overall vision for CSI and the strategy for achieving this vision; sets out the company’s strategic CSI priorities; describes short-term (1-2 years), medium-term (3-5 years) and long-term objectives of the CSI programme.
CSI focus areas – Defines and explains the rationale for the development focus areas for CSI spending; gives details of and rationale for geographic focus areas; provides explanation of who qualifies for funding.
Stakeholder engagement on CSI – Identifies CSI stakeholder groups (eg. beneficiaries; NPOs, civil society, community groups, government, employees); details nature of engagement with each stakeholder group (eg. surveys, focus groups, employee involvement programmes); describes how the company has responded to key issues raised by stakeholder groups.
CSI expenditure
Annual CSI expenditure – Provides total CSI expenditure figure for the financial year; describes CSI expenditure relative to the SED target on the BEE scorecard; explains discrepancies between budget and actual expenditure, or leads/lags in expenditure relative to budget.
Determination of CSI budget – Defines how the company determines its annual CSI budget (eg. percentage of NPAT, board discretion); describes the budget change since previous financial year and reasons for significant change; provides some indication of budget stability from year to year.
Breakdown of CSI expenditure – Provides percentage breakdown of how CSI funding is allocated by development focus area, by province and per project.
CSI programme implementation
Project outputs and performance – Provides qualitative narrative about ongoing performance of major projects; provides details of key outputs of main projects; describes ongoing performance against targets during the reporting period; describes challenges, lessons learned and how lessons are being addressed.
Description of CSI projects – Lists the major projects supported and the nature and quantum of support (cash, resources, time); identifies and describes the project partners; provides details of geographic location per major project; gives details about beneficiaries per major project.
Project objectives and inputs – Sets out overall objectives and time-bound targets for major projects; provides details about inputs for described projects; provides a sense of anticipated return on social investment; provides evidence of thinking regarding project sustainability.
Formal project impact assessment – Provides evidence of regular monitoring, evaluation and impact assessment; describes CSI indicators and data measurement tools; provides quantitative results per evaluated project; describes changes made as a result of formal impact assessments.
Assurance of CSI reporting
Report assurance – Indicates whether the report has been assured and the scope of external assurance; assesses what specific aspects of the CSI programme are assured (eg. quantum of money spent, how the funds are applied, number of beneficiaries); explains the relationship between the company and the assurance provider.
This is a far-reaching range of criteria and it is unlikely that many companies report comprehensively against all (or even most) of these issues. However, these cover the full spectrum of CSI practice, and can therefore serve a the benchmark for leading CSI reporting.
Originally published in The CSI Handbook, 12th edition (2009)
Published on the Trialogue Website: October 22, 2013