Key Performance Indicators. A Useful Tool for CSR Reporting

Term Paper (Advanced seminar), 2015

10 Pages, Grade: 1,0


Table of Contents

1 Introduction

2 Discussion of the dimensions CSR reporting and strategic planning
2.1 Is a CSR reporting with KPIs beneficial for companies?
2.2 Is an economy wide CSR reporting possible?

3 Conclusion


1 Introduction

The need to move to a more sustainable economy is understood by the management, em- ployees, customers, investors and other stakeholders. But its especially the investors view- point that influences the policy of the company. Therefore their perspective on sustainability has a high relevance. In a report from 2006 the United Nations Environmental Program Fi- nance Initiative (UNEP FI) defines sustainability from an entrepreneurial point of view. It is “a business approach that creates long-term shareholder value by embracing opportunities and managing risks derived from economic, environmental and social developments.” (UNEP FI, (2006), p.3)

In the past the interest of investors on this topic was raising, as studies showed that a better management of climate risk is a good indicator of a better strategic corporate management, and a higher shareholder value-creation. (cf. Carbon Beta and Equity Performance, (2007), p.4)

This lead to the following development:

Note: Survey results for the years 1993 to 2002 represent separate CR reports only. Due to the increasing trend in integrated reporting, the figure published after 2005 represent total reports, separate and published as part of annual reports.

Abbildung in dieser Leseprobe nicht enthalten

Source: KPMG International Survey of Corporate Responsibility Reporting, (2011), p.7

With the growing number of reports increased the pressure on companies to disclose their Corporate Social Responsibility (CSR) activities in a more standardized way, as especially investors are interested in comparable figures and data. To support the management and to offer these information to investors, Key Performance Indicators (KPIs) became important. These indicators try to make sustainability measurable and transparent. Most KPI indicate risks cause they are for investors of utmost importance. But there are also criteria for future viability as customer satisfaction or share of sales of new products. The leading indicators for the German market are the KPIs for Environmental Social & Governance Issues (ESG) from the Deutsche Vereinigung für Finanzanalyse & Asset Management (DVFA) and the KPIs of the Global Reporting Initiative (GRI). This term paper will discuss the usefulness of these indicators.

2 Discussion of the dimensions CSR reporting and strategic planning

A CSR report communicates disclosures on an organization’s impacts - positive or negative - on the environment, society and the economy. In doing so, it’s no longer a sole reporting issue, it becomes strategically. (cf. G4 Sustainability Reporting Guidelines, (2013), p.3) Therefore this term paper will cover the dimensions CSR reporting and strategic planning and link both in the discussion. Aforementioned will be done by examining the KPIs of the GRI sustainability reporting guidelines. They offer reporting principles, standard disclosures and an implementation manual with the criteria for the preparation of sustainability reports by organizations. The aim is to help companies and their stakeholders to understand and com- municate their contributions to sustainable development, improving the quality and utility of sustainability reports. (cf. Delai/Takahashi, (2011), p.5) In this paper ESG and CSR will be used synonymously.

2.1 Is a CSR reporting with KPIs beneficial for companies?

It exists the perceived wisdom that organizations do not profit from a good management of ESG issues, but suffer a massive discount at the capital market when these are poorly man- aged. Therefore it is one of the challenges of corporations to elaborate and communicate to investors, how a good ESG management translates into a better corporate performance at the capital market and why it’s a long-term strategic benefit to invest in these issues. KPIs are a tool to communicate the efforts and the progress a company does. (cf. KPI for ESG 3.0, (2010), p.8)


Excerpt out of 10 pages


Key Performance Indicators. A Useful Tool for CSR Reporting
Catholic University Eichstätt-Ingolstadt
Seminar Sustainable Entrepreneurship
Catalog Number
ISBN (eBook)
ISBN (Book)
File size
431 KB
performance, indicators, useful, tool, reporting
Quote paper
Joel Diener (Author), 2015, Key Performance Indicators. A Useful Tool for CSR Reporting, Munich, GRIN Verlag,


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