En analyse af virksomhedernes oplevede værdi af CSR rapporteringsrammen udviklet af Global Reporting Initiative

Magnus Tjelle Fabrin & Mie Schou Andersen

Student thesis: Master thesis


Globalization has created a more transparent world and as the economic, cultural and political connec-tions across borders get closer, new opportunities arise. With increasing international trade, a number of possibilities for the global society become visible, but simultaneously a range of challenges become ap-parent. According to the Danish government, many of the challenges that globalization creates cannot be resolved through rules and legislation alone, for which reason the government wants the companies to take part in solving some of the issues. Thus, the Danish Government has created an act which states that from the fiscal year 2009 the 1,100 largest Danish companies must report on their work concerning Corporate Social Responsibility (CSR) in connection with their annual report. For many Danish companies, working with CSR is fairly new and so is reporting hereon. Therefore, com-panies have searched for inspiration and standards to help them grasp what is expected from a report on CSR and this has led them to the Global Reporting Initiative (GRI), an international reporting standard for CSR. For the fiscal year 2009, around 9% of the Danish companies who reported on CSR, used the GRI’s reporting guidelines and several have stated that they have used the guidelines for inspiration. Measuring and reporting on a company’s performance requires a lot of the company’s resources and is therefore a financial burden on the company. This is visible in the financial as well as the CSR reporting. We therefore wanted to study how the GRI’s guidelines support the company’s reporting processes. This thesis’ research question is: What value do companies experience using the Global Reporting Initiative's reporting framework as a tool in their Corporate Social Responsibility reporting? To answer this, we have conducted a total of 11 interviews. Of these 11 interviews, 6 were conducted with companies that currently report in accordance with the GRI’s reporting framework. The companies chosen represent each reporting level in the framework (A, B and C) and further, more interviews were conducted to include 2 companies on each level; one with a validated report and one without a validated report. To give a balanced picture of the use of the framework, we included both companies doing their first GRI report and companies which have reported in accordance with the GRI for many years. Further-more, we conducted interviews with 2 companies which plan to use the framework in the future. In addi-tion to the interviews with companies, we conducted an interview with a Danish CSR reporting expert in order to gain a general assessment of the value corporations derive from using the GRI’s framework. Finally, we conducted interviews with 2 investors to acquire their assessment of the value the GRI’s framework brings to investors and what value investors believe that the GRI can provide companies. Based on the interviews we conducted, the conclusion is that the value companies’ gain using the GRI’s framework primarily is drawn from the performance indicators in the framework. The study showed that companies use the performance indicators as inspiration for their reporting, but also as an inspiration for their work on defining the company's CSR strategy and further to identify what CSR data the company needs to collect, and how the company should treat the collected CSR data. The Danish companies’ derived value from the much specified performance indicators in the framework can be an effect of the fact that the Danish legislation on CSR reporting is fairly openly phrased; giving companies the opportunity to define the work in accordance with their core business. However, at the same time legislation gives little guidance on how companies should formulate and integrate a CSR strategy into their business and ensure that the CSR report reflects the work performed in the area. In addition to being properly informative to the outside world, successful reporting should enable com-panies to use the reporting conclusions to follow up on the CSR initiatives that the companies have set up to reach their CSR strategy. This requires measurable goals and proper data collection processes to en-sure that the data the company bases their progress on is well documented. With the specific perfor-mance indicators, where the data processing is internationally recognized, the GRI helps companies achieve this. The considerable data requirements when using the GRI’s framework shows the surrounding world that companies using the GRI’s framework have a professional and serious approach to their work with CSR, thereby generating credibility for the company’s CSR report. The challenges with the performance indicators can be that they are very generic, and the companies therefore need to put effort into assessing the materiality of the indicators instead of relating and report-ing on everything. The investors’ note to this is that they want to be informed only of the relevant issues pertaining to the company. In regards to using the framework as a benchmarking tool, the GRI states it as a part of its vision of the framework that CSR reporting is to be made more comparable. Also the companies state that they would like to have a benchmarking tool on their CSR data, and further that they find that the GRI makes the data more comparable. However, the companies’ main focus in their CSR reports is identifying the com-pany’s stakeholders and reporting in accordance with their needs. This conflicts with the GRI’s vision for the standard which is to make CSR reporting as common and comparable as companies’ financial report-ing and, simultaneously, as important to their success. To achieve this, the companies must answer the performance indicators relevant to their business, but while doing so companies need to take a number of quality guidelines into account when reporting such as; balance, completeness, timeliness, etc. to en-sure that data in the report is accurate and correctly factored in. Companies identify the GRI as a list of performance indicators and only use one half of the framework, because companies do not find the value in creating a complete GRI report as the GRI report is a com-municatory challenge in regards to serving the stakeholders’ interests. This leads to a misuse of the tool compared to the initial intention, which leads to the loss of one of the indented values of the tool; ben-chmarking. The investors find that the idea of a benchmarking tool is good, but this is not possible in the current framework. The investors mention the levels in the GRI as an example. The applied levels are not a reflec-tion of how the company’s performance is compared to others. For example, a level A reporting is not an indication of a better CSR performance than a B reporting, which is what the investors need for the levels to bring any value to their work. The companies do not see the levels as a reflection of the quality of the report. The conclusion is that, due to the very hands-on nature of the tool, the companies obtain a high value from using the Global Reporting Initiative’s framework when initiating the work and reporting on CSR in their business. But as companies have reported on CSR for a number of years, the value drops as the value of a proper benchmarking tool is lacking. To develop the framework so the value is elongated, it is our conclusion that the GRI needs to match the expectations the companies and society have of a CSR report. Should it be a supplement to the financial reporting or should it perhaps be as important in weight and in value as the annual report?

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2011
Number of pages100