Transparency reports as CSR reports

(Research Summary by Katherine Furl) 

How can we understand the motivations, audiences, and meanings of transparency reports produced by information and communications technology (ICT) companies? In “Transparency reports as CSR reports: motives, stakeholders, and strategies,” Amanda Reid, Evan Ringel, and Shanetta M. Pendleton argue ICT companies’ transparency reports should be considered a form of corporate social responsibility (CSR) reporting. While transparency reports speak to different stakeholders and adopt different communication strategies across ICT companies, they generally offer ICT companies legitimacy. That transparency reports remain unregulated, however, presents a number of potential and as-yet-unaddressed issues. 

Transparency reports produced by ICT companies provide stakeholders—including users, employees, shareholders, the government, and society at large—with information about user privacy, government surveillance, and content moderation. Transparency reports can be motivated by ICT companies’ desires to communicate their core values, aid economic performance, and respond to stakeholders' demands. Because transparency reports are not required under U.S. law, ICT companies produce them on a voluntary basis. Still, providing transparency reports has become the norm among ICT companies. Market leaders like Google, Apple, and Microsoft have produced them for nearly a decade, and less prominent companies have followed suit. As Big Tech faces increasing scrutiny, these reports help ICT companies assert their legitimacy, portray ICT companies as socially responsible, and hold government agencies accountable for surveillance requests.  

Reid and her coauthors seek to understand what motivates ICT companies’ transparency reports and how these companies position themselves, engage with stakeholders, and employ different communication strategies in these reports. To do so, they analyze transparency reports produced by 88 international ICT companies in 2021. Among these reports, Reid and coauthors find:  

(1) Most ICT companies produce ICT reports to communicate the companies’ core values and culture and to signal companies’ commitments to transparency.  

(2) The majority of ICT companies also use pro-consumer language positioning companies as advocates for users and protectors of consumer data.  

(3) All ICT companies consider customers stakeholders in transparency reports. Nearly all companies consider customers primary stakeholders—customers directly impact and influence company activities. Many companies also consider the government a stakeholder in transparency reports. The government is mostly, however, considered a secondary stakeholder—the government is not seen as directly engaged in companies’ transactions nor considered key to companies’ survival.  

(4) Most companies emphasize how their transparency reports are informative for stakeholders, providing them with valuable information related to government requests and content moderation. 

Reid and her coauthors’ analysis indicates ICT companies use transparency reports to signal their legitimacy. Producing transparency reports helps market leaders signpost their central role in the market and lets other companies align themselves with institutional norms set by market leaders. Transparency reports also communicate ICT companies’ social responsibility to stakeholders. So long as transparency reports remain unregulated, however, their production will face potential issues. ICT companies can omit whatever information they choose to keep out of transparency reports—and, if they’d like, they can opt out of producing these reports entirely. As Reid and her coauthors put it,  

“Unexamined CSR reporting risks fueling the core problem that CSR was intended to address, namely, the pursuit of corporate economic goals at the expense of social responsibility... If these nonfinancial disclosures are simply taken at face value, they risk reinforcing extant power dynamics rather than offering an opportunity for dialogue among stakeholders.” 

For transparency reports to truly establish social responsibility to users and broader society rather than simply serve the economic ends of ICT companies, then, accountability mechanisms around their production must be put into place.