Firms need to attach a financial value to the environmentally responsible initiatives that undertake, according to a VNUNet article. But is there anyway to include corporate social responsibility on the balance sheet and receive some financial reward for choosing socially responsible but costly activities?
“There’s no way of saying ‘we spent extra money but it can be offset in some way to show a net benefit’,” says Professor David Crowther, who specializes in CSR at De Montfort University. Instead, he argues that the best thing that you can do is demonstrate your CSR to customers, even if it doesn’t net you direct financial rewards.
Even though there is no international regulatory group responsible for dictating corporate responsibility, more ways are developing to include CSR on the balance sheet in a structured, universally agreed way. The Global Reporting Initiative publishes a sustainability reporting framework that enables companies to lay down their sustainability activities in accounting terms.
Ernst & Young also works with the AA1000 series of standards, produced by UK-based non-profit AccountAbility. Similar to the framework provided by the GRI, these standards are designed to promote social and ethical accounting and reporting.
But the validity of these standards will only come through adoption and usage.