Promises, promises, promises. Companies seem hell-bent on making them in their social and environmental reports. And why not? Pledges and commitments have a comforting ring. In the early stages of reporting, they help point the way a company intends to go. And in the absence of quantifiable progress, a pledge to tackle child labour in supply chains offers at least the promise of action.
But there are dangers here. It is all very well saying the cheque is in the post, but when it does not arrive, people will want to know why. Once beyond the early stage of CSR reporting, the focus has to be on actual performance rather than future aspirations.
A quick scan of company social and environmental reports reveals dozens of specific commitments made on a huge range of issues. The exuberance of the promises made in these reports is in striking contrast with the sobriety of financial reports.
Companies are storing up trouble. Targets are met by hard work, not wished into existence. It would be all too easy for a critic to contrast past commitments with actual progress.
Furthermore, many goals, while admirable, are extremely hard to achieve, particularly in the social sphere, and environmental targets are subject to the law of diminishing returns. Once the low hanging fruit is picked, things get much harder. There is, of course, nothing wrong with making pledges. But their sheer number makes it inevitable that some will not be met.
This plethora of promises is a symptom of the general failure on the part of companies to relate CSR policies to business strategy. Strategy is often simply stated, and undertakings should be in the same vein. Only targets directly relevant to the business should be set. No pledges should be made unless the company has a clear idea how to fulfil them.
Companies will not be able to deliver on their promises if they commit to things they can’t deliver. Making too many pledges increases CSR-related risk. It could discredit not just individual companies, but CSR itself.