"Investors look for materiality-based reporting and hence very general CSR reporting can be less useful and, in some instances, even seem to be simply corporate marketing," she says.
Another problem, as Ms Beale asserts, is that it can be "difficult" to test a CSR approach - as "they are not designed to be tested".
She explains: "They are designed to set out an approach, and to position a firm in a good light to its stakeholders.
"Corporates may set related targets or report related metrics to give an indication of how they have implemented their CSR approach. But these can be unique as well as difficult to benchmark and compare across companies."
Ms Crowl notes: "While new norms are requiring listed companies to render their sustainability practices transparent, report carbon emissions and put back into communities where their processes degrade social and environmental conditions, these measures aren’t broad based yet."
Ms Beale agrees: "A whole industry has arisen around ESG ratings to facilitate this process. But research shows that different methodologies and the preferences of different rating institutions can lead to fundamentally different outputs."
Ms Sofat also feels there is a lack of in-depth, easily obtainable information for the average investor.
She explains: "Unfortunately, unless you have all your wealth invested in an ethical fund, it’s still very difficult for the individual investor to test a firm’s CSR policies beyond simply collecting what they publish in their CSR reports."
While Ms Sofat agrees with Mr Ditchfield that there are plenty of CSR benchmarking tables available online, she believes these "vary in how they collect data and they have limitations".
However, Ms Beauvilain says the information that is available is getting more detailed, which can help investors. She adds: "Many aspects of CSR reporting can be material and very important, such as how the company manages its labour force or its water resources. The best corporate reporting integrates financial and material non-financial aspects."
simoney.kyriakou@ft.com
