CSR Reporting: Making it Meaningful

1. CSR Reporting: Making it Meaningful Tonkon Torp LLP Jeff Cronn and Marco Materazzi

2. What is Corporate Social Responsibility? Generally, “Corporate Social Responsibility” is an umbrella term used to describe corporate initiatives or obligations that extend beyond generation of profits for investors to include, e.g., promotion of community development, protecting the environment and promotion of human rights.

3. CSR Reporting – Communicating CSR • Communicating the achievement of non-financial corporate purposes and impacts • Variety of CSR Reporting is as broad as the concept of CSR itself. Variations include: • Few paragraphs in a company’s annual financial reports • Stand-alone glossy CSR reports extending to 100s of pages • Posts on company websites about employee giving campaigns • Reports on supply chain practices • Third-party score cards

4. Framework for CSR Reporting • Identify goals • Identify audience / stakeholders • Establish baseline • Collect and measure data • Apply third-party standard • Report

5. Why might businesses engage in CSR Reporting?

6. CSR Reporting Standards -- Voluntary • Major International Standards • Global Reporting Initiative • International Organization for Standardization • The United Nations Global Compact • SEC-Reporting Companies • Sustainability Accounting Standards Board • B Labs

7. CSR Reporting Standards -- Mandatory • California Transparency in Supply Chains Act • SEC reporting re conflict minerals Trend towards mandatory reporting

8. What are companies actually reporting? • Huge spectrum of reporting practices • Examples:

9. Benefit Company Legislation – New Source of CSR Reporting • Adopted in 20 states (including Delaware and Oregon) and DC • Generally, benefit company laws require company fiduciaries to consider a wider range of goals than profit alone • B Corps vs. Benefit Companies

10. Oregon Benefit Company Statute – Effective January 1, 2014 A record 24 Companies registered as of January 1, 2014 Chime LLC

11. Oregon Benefit Companies – Reporting • Each year, the company must prepare a "benefit report," including: • A narrative description of how the company complied with its general (and specific) public benefit purpose • And a self-assessment of the extent to which the company met a third-party standard with respect to providing a general public benefit • Third party audit or certification not required • Post to website and provide to shareholders / members

12. CSR Reporting – Monetary liability? False or misleading statements/omissions in CSR reports could result in monetary liability • To investors under securities laws • To consumers under consumer protection laws

13. CSR Reporting – Other risks • Injunctions for violation of expanded fiduciary duties are possible under benefit company laws • Activist Shareholders • Expanded fiduciary duties could give activist shareholders another platform to question company governance • Harmed business relationships and public image

14. CSR Reporting -- Meaningful or purely marketing? Does CSR reporting really make a difference, or does it just enable corporations to appear to be addressing important issues without actually making meaningful contributions(i.e., “greenwashing”) Probably a bit of both

15. CSR Reporting – What should your clients be doing? • Identify goals • Identify audience / stakeholders • Establish baseline • Collect and measure data • Apply third-party standard • Report