VIEWS: Measuring CSR

How do we measure corporate social responsibility? Sir Andrew Likierman, Professor of Management Practice in Accounting and Acting Dean at London Business School, recently wrote about the topic. Titled, “Acting ethically - and being able to prove it,” Likierman argues that since companies set the CSR tone, there is no agreed upon definition. Likierman believes that in order to measure success, company CSR goals must be matched against their relative successes.

Likierman has four ways to approach such measurement:

  • First, companies must link CSR goals to tangible objectives that can be met, such as the amount of money invested in internal or social programs, or by financial performance.
  • Second, measures must be actionable and linked to outcomes. They should be broken down into informative levels that can be measured against external, established measures and successes.
  • Third, measurements should be based on credible data. Measures should be clear, and based over a long period of time to ensure transparency.
  • Fourth, recognition of measurement limitations. A good measurement framework is essential for credible measurements, but it isn't always sufficient to capture the intangible value of CSR.
We couldn't agree more.