CSR report: from free choice to obligation
16. March 2017
In the last few weeks, the German Parliament adopted the CSR Directive Implementation Act. As a result, from the next financial year, around 550 German companies are obliged to publish a sustainability report. The problem is that many companies are not yet sufficiently prepared for this and are working with outdated tools. There are now digital solutions on the market, such as the software from etventure startup 360report, which enables CSR to be managed professionally and sustainability reports to be prepared with significantly less effort.
What lies ahead for companies?
The “law to increase non-financial reporting by companies in their management and group management reports”, or “CSR Directive Implementation Act” for short, applies to capital market-oriented companies. Companies and corporate groups that report total assets of more than EUR 20 million, or revenue of more than EUR 40 million, and employ an annual average of more than 500 people, must publish a sustainability report from financial year 2017 onwards. In addition, banks and insurance companies that meet these criteria are subject to this reporting requirement, regardless of their legal form.
The sustainability report is intended to provide greater transparency over companies’ environmental and social conduct. Among other things, the report must include the topics of environmental and employee concerns, respect for human rights, and combating corruption. Companies that do not meet their reporting requirements are threatened with a fine of up to EUR 10 million.
A great deal of criticism – and backlog
By implementing it in national law, the German Parliament has closely followed the EU Directive and has not gone beyond the minimum requirements. A business-friendly solution that primarily protects SMEs and suppliers to companies required to report. Despite this, the Act is being criticized mainly by the companies and employer associations. They say that the bureaucratic effort to prepare a CSR report is to great and the legislators’ cost estimates are unrealistic.
Of course, the data collection and preparation for a sustainability report could not be completed without any effort. But what has been overlooked here is that CSR management is unprofessional in many companies and the tools they use are outdated. The most frequently used system is still Excel spreadsheets, so it is not surprising that companies’ estimates of the effort involved are significantly higher.
Digital, simple and intelligent
There are now digital solutions that make it significantly easier for companies. etventure startup 360report has developed a software solution of this kind. No special prior knowledge of CSR is required to prepare a sustainability report with the 360report tool. Users are led intuitively through the process of data input and, at the end, are provided with a CSR report that complies with national and international reporting standards such as DNK or GRI at the press of a button. As a result, digital reporting is significantly more efficient than conventional procedures. At the same time, the software helps companies to define goals and continually monitor progress. The tool can also be extended to include other standards and thus offers companies a holistic approach to preparing and producing reports.
360report’s clients already include companies such as E.ON, MLP, Bilfinger Real Estate and CLAAS. The demand for smart tools for CSR management will also likely further increase in future, as the awareness of consumers, investors and other stakeholders of the importance of entrepreneurial sustainability continues to increase. And not just corporations, but also SMEs will be rated increasingly on the basis of acting responsibly. Therefore the transparent communication of their commitment to CSR is increasingly becoming a success factor.