According to the January 2017 of Forbes.com, “Completely regardless of the global political environment, corporations will continue the march toward sustainable production because it makes sense and is a business necessity.” For prominent businesses, sustainability has become a criterion for partnering and engaging with certain partners.
Almost two years ago, I wrote that sustainable business or CSR is a “public relations invention.” Primarily due to the positive image it generates, CSR reporting has become a business necessity. Business organizations have responded by increasing voluntary social and environment reporting. Prominent examples of these are ISO 14001 and the GRI (Global Reporting Initiative). More than questions regarding information quality and reporting motives, there is a perennial doubt that the stakeholders are not benefiting from the reported social responsibility actions. Also, how are organizations communicating with the stakeholders?
In 2016, Ethical Corporation of the United Kingdom published “The State of Corporate Responsibility Reporting and Communications.” The report outlined that 40 percent of organizations have yet to prove the value of being sustainable and responsible. Moreover, more than half of the organizations have to increase their engagement with key stakeholder groups.
According to German sociologist Jurgen Habermas, social transformation can be best accomplished through communicative action or simply, mutual agreement or understanding. Under normal circumstances, we assume that the items in the CSR reports are true, that they mean what they say, that they are appropriate and relevant, and that they are readily understandable and free from jargon.
However, we cannot help but suspect that organizations arbitrarily determine what they can and should disclose. The information is craftily put in a template that allows readers to interpret it in a way that benefits the organization. A study states that it is not improbable that a report is “factually correct but paints an inaccurate picture…”
Pragmatically, CSR reports are teleological. It serves a purpose of benefiting the organization. According to Habermas, social transformation and human progress can be achieved only through rational dialogue among involved parties.
Based on an iteration of Habermas’ Theory of Communicative Action, CSR reports should go beyond truth, sincerity, appropriateness and understandability.
First, organizations must identify groups who hold a stake in corporate decisions. These groups must be allowed to participate and have access to discussions about matters that can affect their lives and welfare.
Second, participants in the discussions must have the opportunity to express their interests and objectives. They must be allowed to make assertions, and to question assertions made by others. Rather than the organization arbitrarily considering what might affect stakeholders, the stakeholders must be allowed to speak for themselves.
Third, participants must attempt to view an issue from the perspective of others. It is human nature that participants will negotiate to achieve their own ends. Compelling them to consider the situation from another point of view can foster mutual understanding.
Fourth, participants must be transparent with their goals and intentions. Hidden agenda are destructive. Only full disclosure can result in rational agreements among participants.
And last, the discussion must be free from coercion. Participants should be transparent and freely make assertions and question those made by other parties. This setting should be free from fear of humiliation and retaliation. The existence of power relationships within groups makes this a challenge.
A tall order. I have a feeling these will be intentionally ignored.
Real Carpio So lectures on strategy and human resource management at the Management and Organization Department of Ramon V. del Rosario College of Business of De La Salle University. He is also an entrepreneur and a management consultant. He welcomes comments at firstname.lastname@example.org. Archives can be accessed at realwalksonwater.wordpress.com. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty and its administrators.