Today's companies ought to invest in corporate social responsibility (CSR) as part of their business strategy to become more competitive. CSR reporting is more than public relations or philanthropy exercise. Charity and philanthropy will directly enhance the reputation of a company and strengthen its brand, but the concept of CSR clearly goes beyond that. CSR is an accountability and management tool that actually drives performance improvement.
The task of selecting the right CRS tool, guideline or code of practice is very difficult as there are more than 350 external CR tools, guidelines and codes of practice (such as AccountAbility, AA1000, The Global Reporting Initiative (GRI), CERES Roundtable, WBCSD, Equator Principles,ISO(D) 26000, Bursa Malaysia CSR framework, Silver Book, Dow Jones Sustainability Index, JSE SRI Index). Apart from that, there is no one-size-fits-all method in pursuing corporate social responsibility (CSR).
Selecting and reporting wrong CSR elements may not bring any benefit to the organizations, neither in terms of performance improvement and/or increased profits. Using a step-by-step approach in implementing CSR will assist companies to achieve maximum benefits.
A properly implemented CSR concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, improved brand image, increased sales, efficient human resource base, improved decision making and risk management processes and cost reduction.