Accounting for Corporate Social Responsibility

This report suggests two major CSR approaches to BP for effective reporting of their CSR activities and behavior. The adoption of these two CSR reporting approaches would make it possible for BP to communicate all the information about their CSR activities to the key stakeholder.

Running head: ACCOUNTING FOR CORPORATE SOCIAL RESPONSIBILITY
Accounting for Corporate Social Responsibility
Name of the Student
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Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
CSR Approaches..............................................................................................................................2
Sustainability Reporting..............................................................................................................3
Integrated Reporting....................................................................................................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................8

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Introduction
In today’s era, Corporate Social Responsibility (CSR) is regarded as one of the major
pillars for the success of the businesses. CSR is considered as the business approach contributing
towards the sustainable development with the help of delivering social, economic and
environmental benefits to all the stakeholders (Windsor, 2013). CSR is a broad concept that
addresses different aspects like corporate governance, human rights, environmental factors,
health and safety, working conditions and many others (Jha, & Cox, 2015). The main aim of this
report lies in the suggestion of appropriate approaches to accounting for CSR to British
petroleum (BP). It needs to be mentioned that BP has been suffering from significant fall in
public relations as well as financial punishment as a result of the oil spill of Deepwater Horizon
Drilling Rig. This report suggests two major CSR approaches to BP for effective reporting of
their CSR activities and behavior.
CSR Approaches
The above discussion shows that CSR is a vast area and the business organizations are
required to take into consideration many aspects while adopting the CSR approaches. As per the
requirement of CSR, business organizations are required to take into consideration the adverse
effects of their business operations on the environment, community people, employees and other
stakeholders. The adoption of CSR activities is not enough unless the business entities disclose
all the information related to the progress of their CSR activities. In this aspect, the approaches
of CSR reporting play an integral part as it helps the business organizations in the reporting of
their progress in the CSR activities (Attig & Cleary, 2015).

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This aspect is also applicable for BP as the company is required to adopt the appropriate
CSR approach. In this aspect, it needs to be mentioned that there are many approaches of CSR
available for the companies. As BP has been facing major issues related to CSR, it is required to
suggest a set of effective CSR approaches to the company. After considering the depth of the
CSR issue in BP, two approaches has been identified for CSR reporting; they are Sustainability
Reporting and Integrated Reporting (forbes.com, 2018). The following discussion shows all
the details about these two approaches and their appropriateness in the CSR reporting of BP.
Sustainability Reporting
Business organizations all over the world are using the approach of sustainability
reporting as a major tool for the reporting of their CSR activities. Sustainability reporting
provides great assistance to the business organizations in the reporting of their economic,
environmental and social impact caused by their everyday business activities with the help of a
sustainable report (lexicon.ft.com, 2018). In addition, sustainability reporting helps in the
presentation of business’s governance and values model and shows the linkage between the
strategy and commitment to sustainability. Most importantly, sustainability reporting helps the
business organizations in measuring, understanding and communicating their environmental,
economic, social and governance performance with their key stakeholders so that effective goals
can be set and managed effectively. For this reason, it is said that sustainability reporting is
regarded as a key platform for the communication of sustainability performance and impacts
irrespective of positive or negative (globalreporting.org, 2018).
In this context, it needs to be mentioned that sustainability reporting provides some major
internal as well as external benefits to the business organizations. In case of internal benefits, it
helps in increasing the underatsding about the risks and opportunities of the businesses. After

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that, it helps in establishing a connection between the financial and non-financial performance of
the business entities (globalreporting.org, 2018). Moreover, it helps to streamline processes that
lead to reduction in cost as well as improvement in overall efficiency. In case of the external
benefits, sustainability reporting helps in the mitigation of negative environment along with
social and governance impacts. In this process, it helps in the improvement in the reputation and
brand loyalty. More importantly, the adoption of sustainability reporting enables the external
stakeholders of the companies in underatsding the organization’s true value along with tangible
as well as intangible assets. In this context, the Global Reporting Initiative (GRI) Sustainability
Reporting Standard is considered as major part of sustainability reporting (globalreporting.org,
2018).
Thus, for the demonstration of BP’s renewed commitment towards the adoption of CSR,
it was highly required for the oil company to adopt the approach of sustainability reporting as a
part of their CSR activities. The multi-stakeholder base approach of sustainability reporting
would provide major assistance to the company in delivering all the required information about
their non-financial performance to their major stakeholders (globalreporting.org, 2018). The
adoption of sustainability reporting would help BP in the identification and understanding of the
key risks related to the business activities that can create negative effect on the company. In this
way, the company would be able to develop effective CSR related strategies in order to reduce
the effect of their business activities on the environment. The adoption of sustainability reporting
in BP would make the stakeholders in understanding the organization’s process of value creation
by taking major steps towards CSR. For this reason, the stakeholders of the companies would be
able to get transparent information about different CSR related steps of the company in order to
minimize the effect of their business activities on the environment and community

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(globalreporting.org, 2018). Apart from this, sustainability reporting is a consistent method as a
CSR approach for the companies. Thus, in the presence of all these aspects, BP could adopt the
strategy of sustainability reporting.
Integrated Reporting
Apart from sustainability reporting, Integrated Reporting is considered as another major
approach of CSR reporting for the companies all over the world due to its simplicity in the
process of disclosing the information about the CSR related activities of the business
organizations. The main reason for the introduction of integrated reporting for enhancing
accountability, stewardship and trust within the business organizations by disclosing all the
information related to the financial as well as non-financial performance of the business
organizations (integratedreporting.org, 2018). Thus, integrated reporting helps the investors in
making effective decision related to capital allocation by providing all the information to them.
The introduction of integrated reporting is considered as an evaluation in the field of
corporate reporting as it provides a concise focus on the CSR related strategies and activities of
the business organizations. It also helps in improving the quality of financial as well as non-
financial information by bringing transparency in the whole value creation process
(integratedreporting.org, 2018). For this reason, integrated reporting is regarded as a concise
framework of concise communication that shows the process of the business organization to
create value with the assistance of strategy, governance, performance and prospects. It implies
that integrated reporting helps in the promotion of integrated thinking in the business
organizations (integratedreporting.org, 2018). The adoption of integrated report makes all the
stakeholders beneficial like employees, customers, suppliers, investors and others. The

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framework of integrated reporting assists in the establishment of CSR principles and concepts
that governs the overall content of the aspects of integrated reporting.
Based on the above discussion it can be stated that the BP could adopt integrated
reporting as their CSR reporting approach in order to disclose all the required information on
their financial as well as non-financial performance (integratedreporting.org, 2018). From the
above discussion, it can be observed that integrated reporting helps in the development of a
principle-based framework that provides great assistance in providing all the required
information to the stakeholders. For this reason, the adoption of integrated reporting would make
BP able in the development of their own report that would include all the information about the
company’s CSR activities (ey.com, 2018). Most importantly, this aspect helps to bring a cultural
change within the organization that would help BP in the effective communication of the
progress in all the CSR related activities of the business organization. Apart from this, the
adoption of integrated reporting would provide the stakeholders in effective communication of
all the information about the resources of the companies. Most importantly, BP would be able to
develop principles and contents related to CSR or developing the strategies in order to achieve
the CSR related objectives and goals (ey.com, 2018). Thus, from the above discussion, it can be
said that BP would be able to develop an effective CSR reporting mechanism with the help of
integrated reporting.
Conclusion
Based on the above discussion, it can be seen that CSR is considered as a major aspect
for the business organizations to achieve success. Among so many CSR related approaches, two
of the major CSR approaches are sustainability reporting and integrated reporting. The adoption

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of these two CSR reporting approaches would make it possible for BP to communicate all the
information about their CSR activities to the key stakeholder. In this context, it needs to be
mentioned that the adoption of these CSR reporting approaches makes it easier for any third
party organization to assess these information. Business organizations develop these CSR related
reports and publish them in their websites so that any third party can access them. Apart from
this, these reports can be reviewed easily.

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References
Attig, N., & Cleary, S. (2015). Managerial Practices and Corporate Social
Responsibility. Journal of Business Ethics, 131(1), 121-136.
Benefits of reporting . (2018). Globalreporting.org. Retrieved 29 April 2018, from
https://www.globalreporting.org/information/sustainability-reporting/Pages/reporting-
benefits.aspx
Corporate Social Responsibility (Csr) Definition from Financial Times Lexicon.
(2018). Lexicon.ft.com. Retrieved 29 April 2018, from http://lexicon.ft.com/Term?
term=corporate-social-responsibility--(CSR)
Forbes Welcome. (2018). Forbes.com. Retrieved 29 April 2018, from
https://www.forbes.com/sites/susanmcpherson/2018/01/12/8-corporate-social-
responsibility-csr-trends-to-look-for-in-2018/#1dfcc68540ce
GRI Standards . (2018). Globalreporting.org. Retrieved 29 April 2018, from
https://www.globalreporting.org/information/sustainability-reporting/Pages/gri-
standards.aspx
Integrated reporting. (2018). Ey.com. Retrieved 29 April 2018, from
http://www.ey.com/Publication/vwLUAssets/EY-Integrated-reporting/$FILE/EY-
Integrated-reporting.pdf
Jha, & Cox. (2015). Corporate social responsibility and social capital. Journal of Banking and
Finance, 60, 252-270

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Sustainability Reporting . (2018). Globalreporting.org. Retrieved 29 April 2018, from
https://www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx
The IIRC | Integrated Reporting. (2018). Integratedreporting.org. Retrieved 29 April 2018, from
https://integratedreporting.org/the-iirc-2/
What? The tool for better reporting | Integrated Reporting. (2018). Integratedreporting.org.
Retrieved 29 April 2018, from https://integratedreporting.org/what-the-tool-for-better-
reporting/
Why? The need for change | Integrated Reporting. (2018). Integratedreporting.org. Retrieved 29
April 2018, from https://integratedreporting.org/why-the-need-for-change
Windsor, D. (2013). Corporate social responsibility and irresponsibility: A positive theory
approach. Journal of Business Research, 66(10), 1937-1944.