5.4: The CSR and ESG Framework

Measuring CSR

CSR reporting has evolved from relatively simple environmental statements to comprehensive triple-bottom-line (people, planet, profit) reporting, which is used as a framework for measuring and reporting corporate performance against economic, social, and environmental parameters. Corporate Social Responsibility (CSR) is typically measured through a combination of quantitative and qualitative metrics that assess how well a company is meeting its social, environmental, and ethical obligations. Different organizations use various frameworks, tools, and reporting standards to evaluate CSR performance. Some of the most common methods include the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), Key Performance Indicators (KPI), Dow Jones Sustainability Index (DJSI), stakeholder feedback, and benchmarking.

ESG stands for Environmental, Social, and Governance. It refers to a set of standards used by businesses to evaluate and address their impact on the world, beyond just financial performance. The FTSE4Good Index Series is designed to measure the performance of companies demonstrating specific Environmental, Social and Governance (ESG) practices. Transparent management and clearly defined ESG criteria make FTSE4Good indices suitable tools for a wide variety of market participants when creating or assessing sustainable investment products.^[1]

There has been an increasing focus on corporate sustainability and reporting, and a question often asked is what is the difference between CSR and ESG? CSR and ESG are different frameworks that companies use to assess sustainability. In short, CSR may be used as an internal framework, while ESG provides a measure of assessment for investors. It could be argued that ESG is currently overtaking CSR as a measure of sustainability in the corporate world.^[2]

There are several Canadian organizations that provide advice and guidance to businesses about how to become better corporate citizens. The Canadian Business for Social Responsibility (CBSR) is one such organization.  CBSR is a non-profit organization that helps Canadian companies integrate sustainability and social responsibility into their core strategies and operations. ^[3]

Companies like LSEG Data & Analytics headquartered in the United Kingdom offers ESG data and analytics on thousands of companies globally that is widely used by Canadian financial institutions and asset managers.

Greenwashing

Greenwashing refers to the practice of misleading consumers or stakeholders into believing that a company, product, or initiative is more environmentally friendly or sustainable than it actually is. Companies engage in greenwashing by exaggerating, omitting, or fabricating claims about their environmental practices to enhance their reputation or market appeal.

An example of a Canadian company accused of greenwashing is Shell Canada. The company launched its “Drive Carbon Neutral” program in 2020, claiming that the carbon emissions from fuel sold at its gas stations would be offset through investments in forest conservation projects. However, Greenpeace Canada raised concerns about the reliability of these claims, stating that the offsets were overstated or ineffective. They argued that the program distracted consumers from the need for Shell to reduce fossil fuel usage directly. Following these criticisms, Shell Canada discontinued the program in 2023​.^[4]

Suncor Energy has faced allegations of greenwashing due to its CEO’s statements about decarbonization efforts. Critics, including Members of Parliament, questioned the company’s commitment to climate change initiatives, suggesting that its strategies and public communications did not align with substantive action on emissions reduction​.^[5]

These cases highlight the importance of transparency and verifiable claims in corporate environmental initiatives.

Media Attributions

“Power plant, Cooling tower, Coal-fired power station image” by denfran, used under the Pixabay license.