Corporate Social Responsibility, Corporate Social Performance & Sustainable Stakeholder Accounting

Abstract

Disclosures of a corporation’s socially responsible (CSR) activities and measurement of its per-formance in those activities are uneven, inconsistent, and incomparable. Given the absence of re-porting standards, this is not surprising. This paper explores ways to "account for" CSR and presents an example of “sustainable stakeholder accounting” that can be used to integrate corpo-rate social performance (CSP) into the financial statements which provide information for so many economic decisions. It suggests how the development of indices of social responsibility may facilitate analysis of a company's performance by quantifying and objectifying what is clearly a value-laden area. However, this will only be possible if current accounting standards are modified. Indeed, one of the primary objectives of this paper is to advocate changes in current accounting reporting practices so that a various aspects of CSR/CSP are made more transparent and can be more objectively assessed by the stakeholders who are impacted. To accomplish this, the form and substance of these disclosures must have “bottom line” meaning – and these disclosures should be mandated by accounting and securities regulations, not left to the discretion of individual companies.