Black Sun Research: Companies still just ‘talking the talk’
Yesterday, BP reported their first quarterly loss in the past 18 years, signaling the clear message that, like it or not, corporate responsibility is front page news. Despite that, more than half of company annual reports still present corporate responsibility (CR) as disconnected from their overall business and operations.
Black Sun’s second edition of research into how companies are integrating CR into their annual reports, Talking the Talk or Walking the Walk reveals that although the number of companies reporting on CR has increased slightly there are still over 60% of FTSE 100 companies not linking CR to their overall business strategy and 40% of companies failing to report any non financial key performance indicators (KPIs).
Other key findings reveal that there is growing disparity between the leaders and the laggards in their commitment to effective CR reporting and demonstrating how it is core to their business.
16% of companies make a commitment to deliver value to all ‘stakeholders’, while 40% make a commitment to deliver value only to shareholders.
38% of companies provide a specific CR governance discussion, while 21% provide no CR governance discussion.
40% of companies identify CR issues as principal risks; while 60% identify no CR risks.
Sallie Pilot, Director of Research and Strategy at Black Sun commented, “For some time now there has been a lot of talk about the integration of financial and non-financial issues into corporate strategy and culture and specifically corporate reporting and we are disappointed not to see more improvement in the quality of reporting in this area. We believe it is vitally important that the Annual Report demonstrates how a company is creating value for its shareholders and other stakeholders over the long-term, and the economic imperative for businesses to act responsibly and embed social and environmental considerations into the way in which they are run. In order to do this, and rebuild trust in the corporate world, the conventional view of financial reporting and non financial reporting as two separate activities is no longer acceptable.”