The Importance of Corporate Social Responsibility (CSR) for a Company

Currently, investors, when they focus their attention on a business in order to invest in it, are examining also in detail the corporate social responsibility reports of the company under investigation.

The corporate social responsibility (CSR) reports reflect all the departments of the company and how they operate in the course of time and always in such a way that shows the company’s commitment to transparency in order to increase the interaction and dialogue between the company and interested parties such as existing shareholders and potential investors, the market and the general public-consumers.

by Thanos S. Chonthrogiannis

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The annual corporate social responsibility reports reflect the company’s non-financial data, achieving at the same time to present in a detailed manner the annual activities and actions of the company as well as its objectives in matters concerning the environment and its environmental footprint, society, employees, the market and consumers.

Corporate Social Responsibility (CSR) framework
Photo by Author Paulo Pizzaro,
https://en.wikipedia.org/wiki/Public_domain

In recent years many companies have made the annual corporate social responsibility report a mandatory complement to their annual financial report.

The objective of the company’s annual CSR reports is to inform the various interested parties about:

1. How the company concerned succeeds in linking its profitability and overall business strategy with responsible practices.

2. How and in which way will facilitate interested readers of these reports which readers usually are financial analysts and ESG Assessment Agencies (Environmental  Social  Governance, criteria) to draw the necessary to them data in order to classify the company concerned, together with all its financial assets, in an investment or non-investment grade equally.

3. How to inform the market, suppliers and consumers in order to increase consumer confidence in the offered products and services of the company, while demonstrating the company through this report the social and environmental sensitivity.

4. Why and for what reasons potential employees should choose to work in this company.

5. For what type of innovations and business enhancements are used in the development of the company.

In the EU, Corporate Social Responsibility reports follow specific standards in their publication so that the readers can easily capture the information they want (followed by GRI standards) and given that there is specific legislation that requires it.

Many companies today do not pay attention to Corporate Social Responsibility reports, either because they do not consider them important or because their products are not addressed to a widely consumers.

It is a common occurrence that as long as the products and services of a company are addressed to the general public, the greater the weight they give to the presentation and the importance of the information that should be reflected in the annual reports of their Corporate Social Responsibility.

All companies should, however, develop further the issue of Corporate Social Responsibility and use it as a tool for the development and attracting of investors, workers and consumers.

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