he recent evolution in the businesses role entailed the recognition of a social and an environmental dimension of their activity, sided and integrated by economic, financial and competitive management features.
The community is increasingly expressing its needs and expectations which affect the growth of business system, the development idea itself and its sustainability; furthermore, such growth and development must be coherent with the community needs and expectations. However, social approval and legitimation foster the achievement and implementation related to income and competitiveness benefits.
An increased awareness on the social environmental role played by businesses determined a renewed theoretical and practical interest towards communication. Until the past decade, it was in fact supposed sufficient to disclose only economic and financial details on management, as these used to be the information required by the stakeholders interested in companies. Today there’s a general interest consisting not only in the amount of expectations of the individuals, entertaining direct relationships with a business, but also in the community interest.
Businesses should therefore adopt a broader, widespread and transparent communication policy, to satisfy an increasing demand of information related to the income and competitiveness results of management, on a side, and to social and environmental impacts linked to the operations, on the other. Accounting models for business social and environmental impacts have recently been broadly discussed, enabling the detection of new schemes for the representation of reached results and an increased accuracy of the existing ones.
AN ACCOUNTING TOOL
he Social Report is an accounting tool allowing businesses to implement a widespread and transparent communication strategy, capable of pursuing consensus and social legitimation, which are the premises to reach all sorts of goals, including the income and competitiveness targets. It is a document to be sided by the existing ones, offering to the different interested stakeholders information on social and environmental impacts, deriving from the businesses choices.
The stream of information on social and environmental performance to be disclosed outside, increases the choice capacity of the economic agents, on one hand, and it encourages the consensus and the engagement of the community, on the other, thus enabling businesses to strengthen their reputation. Moreover, such stream makes available to the management the needed data to assess and control the produced results, which are useful to define social and environmental strategies to be put in place.
It is a stand-alone document providing quality and quantity information on the impacts of business operations. The social report autonomy is to be intended as relative: it concerns the document itself, not the information here included, which must instead show a strong connection with reliable and verifiable sources and established procedures, in order to avoid the information released being read as a mere statement and thus escaping to any space or time control and comparison.
The social report must be drafted by all businesses, including those producing internal consumer products (consumption business), the businesses targeted for the market (companies) and those setting their products to third parties, in a different way from the exchange (supply business). The social report must be periodically drafted, usually at the end of every fiscal year. It is therefore a final balance document displaying the future policies.
The social report is a public document targeted to stakeholders directly or indirectly involved in the business: those devoting resources to the business in the form of assets, job performance, goods and services supply, etc., on a hand, and those using the proceeds of business operations and on which such business may impact, in an indirect manner as well, on the other hand.
The social report addressees are hence all stakeholders and the community in general. Of course, the various stakeholders assign different relevance to social and environmental impacts information, as well as to financial ones, in accordance with the contribution they brought and with the consequent expectations arising from it. On a general basis, though, a social report contributes to strengthen and spread a reputation enabling an enhanced stakeholder dialogue.