SOCIAL AUDITING AND

SOCIAL PERFORMANCE
REPORTING
s

By:

Alford Sery A. Cammayo

Mark John D. Gonzales
Michael Patrick A. Pineda
MPBM – BA
Introduction:

In the context of corporate social performance or

corporate public policy, the idea of a social audit, or
social performance report, as a technique for
providing planning and control has been
experimented with for a number of years.
As a management function in the strategic
management process, it seeks to ensure that the
organization stays on track and achieves its goals,
missions, and strategies. Planning is not complete
without control because the control function strives
to keep management activities in conformance with
plans.
The Social Audit
“The social audit is a systematic attempt to identify,
measure, monitor, and evaluate an organization’s
performance with respect to its social efforts, goals, and
programs.”

 Although the corporate social audit is not in widespread use

in the industry today, it continues to be advocated as an
approach by which companies can integrate social concerns
into strategic management. More and more today, various
special interest groups want companies to reveal their
social performance results in such areas as environmental
sustainability, commitments to workplace conditions,
fairness and honesty in dealings with suppliers, customer
service standards, community and charitable involvement,
and business practices in developing countries.
CORPORATE SOCIAL PERFORMANCE REPORTING

 Uses methodologies that are less rigorous than the

original idea of social audits.
 Makes the public and stakeholders aware of their social
and ethical programs, activities, and achievements.
 Reports company achievements relative to previous goals
set by management.

The targets for social performance reports in recent years has come
from societal and public interest groups’ expectations that firms
report their achievements in the social responsibility and
sustainability arenas. Such reports typically require monitoring and
measuring progress, and this is valuable to management groups
wanting to track their own progress as well as be able to report it to
other interested parties.
 VOLUNTARY INITIATIVES
One of the major impediments to the advancement of
effective social performance reporting has been the
absence of standardized measures for social reporting.
Standardization is a challenge that has been undertaken
by a consortium of more than 300 global organizations
called the Global Reporting Initiative (GRI).

 To develop globally applicable guidelines for reporting on the economic,

environmental, and social performance of corporations, governments,
and non-governmental organizations (NGOs).
 Maintenance, enhancement, and dissemination of the guidelines
through a process of ongoing consultation and stakeholder
engagement.
 To provide principles and guidance for firms to follow in developing their
sustainability reports.
SOCIAL ACCOUNTING

“Social accounting (also known as social accounting and

auditing, social accountability, social and environmental
accounting, corporate social reporting, corporate social
responsibility reporting, non-financial
reporting or accounting) is the process of communicating
the social and environmental effects of organizations'
economic actions to particular interest groups within
society and to society at large.”
 SOCIAL ACCOUNTING
Social accounting, a largely normative concept, seeks to broaden the
scope of accounting in the sense that it should:
 concern itself with more than only economic events;
 not be exclusively expressed in financial terms;
 be accountable to a broader group of stakeholders;
 broaden its purpose beyond reporting financial success.

Social accounting is a broad field that can be divided into narrower

fields. Environmental accounting may account for an organization's
impact on the natural environment. Sustainability accounting is the
quantitative analysis of social and economic sustainability. National
accounting uses economics as a method of analysis.
 Social and Environmental Reporting
EMPLOYEES

CUSTOMER
COMPETITORS BUSINESS S

GOVERNMENT SUPPLIERS
Social and Environmental Reporting

The three steps:

1. Planning
2. Accounting
3. Reporting and Auditing
Social and Environmental Reporting

The reporting of specific social and

environmental issues has been performed by
corporations since the start of financial
reporting. Environmental reporting has long
been required for regulatory purposes, and
social and environmental issues, such as
material costs of regulatory compliance and
probable litigation losses have been disclosed
even in early corporate annual reports
Drivers of Social and Environmental Reporting

The purpose of this type of reporting is to provide useful

information to stakeholders, which will in turn result in
improved social and environmental conditions as stakeholders
reward corporations for good performance and punish or put
pressure on those with bad performance.

 Social and environmental accountability by investors and

consumers is growing, thus the need for this type of external
reporting
 Some organizations want to make sure their supply chain is
socially and environmentally responsible
 The growing demand for CSR reporting yields evidence that
the information provided is valued.
IN CONCLUSION…
Each reporting company has their own motivation for issuing
their report. The driving force can come from one or many
different sources. Since many of these forces are internal,
the business culture, as it relates to issues of CSR, plays a key
role in the decision to report.

What is more important is that companies can

become educated on the costs and benefits of
reporting and how to create a report more
efficiently and effectively to achieve their goals.