NON-FINANCIAL PERFORMANCE METRICS FOR CORPORATE RESPONSIBILITY REPORTING REVISITED Malcolm F Arnold
Abstract Rapidly growing interest in Corporate Responsibility (CR) has led to a large increase in firms reporting their CR activities and the inevitable comparisons of performance that follow. Along with growth in CR performance reporting has been an increase in standards and benchmarking, and the financial community has shown interest in whether there is any evidence of association between CR performance and Corporate Financial performance. This paper summarises academic and practitioner literature relating to the use of non-financial metrics for the monitoring and recording of corporate social and environmental responsibility performance. Significant themes are reviewed and current standards are identified, along with benchmarking initiatives. The paper also includes some literature related to CR leaders, who have pioneered CR activities in major corporations, identifying their philosophies to ensure chosen CR programmes deliver value to multiple stakeholders as well as shareholders. The paper concludes that, in spite of the considerable amount of literature defining CR standards, benchmarking initiatives and academic studies of CR performance, there are still several gaps in our knowledge. These gaps include how the CR information is used by stakeholders and investors, how CR agendas impact on corporate value and risk, and the basis of how competing CR projects may best be evaluated through appraisal techniques and criteria, and subsequent progress monitoring. Answers to these missing or incomplete strands will have a significant influence on the future development of nonfinancial CR metrics. Introduction 1 The well established practice of reporting on a company’s development and progress in purely financial terms has been challenged for some time on the grounds that financial figures alone cannot fully represent and reflect the impact a corporation has on...