Secrets of High-Impact Sustainability Reporting
The corporate sustainability report can be an important part of building a Green to Gold culture where everyone knows their weaknesses and identifies opportunities for eco-advantage. But who really reads these things? To answer this and other key reporting questions, I'm very pleased to introduce a guest editor and expert on this topic. Kathee Rebernak runs Framework:CR, a corporate responsibility and financial communications firm specializing in reporting.
~Andrew Winston
Increasingly, companies are seeking to address a key complaint about corporate sustainability reports: nobody reads them. Often overlong and packed with narratives about a variety of programs, many seem to devote the same attention (and space) to minor issues as to major ones. But a few companies have been very successful in overcoming the "yawn factor" - by tailoring reports to individual readers, devoting more attention to high-priority issues, applying international reporting standards to better define reporting content, and emphasizing quantitative information that enables stakeholders to better assess and compare performance.
The result of all of these efforts is not only more concise, more focused reporting but an improved ability to understand and address stakeholder concerns, integrate sustainability principles into core business strategy, and, ultimately, deliver long-term value to all stakeholders. As sustainability reporting moves from nice-to-have to must-have, you'll want to incorporate many of these strategies into your reporting effort.
~Kathee Rebernak
Focusing the Message: Personalized Reporting
One way to make reporting relevant and accessible to stakeholders is to create shorter pieces that address the most important issues. Starbucks produces a small, tidy brochure that unfolds to a 12-page summary of the information contained in its full report, which is posted on its website. HP employs a similar strategy, offering a 19-page summary report (PDF) for its customers. These pieces illustrate that, while completeness and transparency are critical to credible reporting, accessibility is what will enable companies to get their message out to key stakeholders.
We have also seen a shift away from print reports toward more robust, engaging online reports. BP's comprehensive report features an interactive "sustainability worldwide map" that shows environmental activities at BP sites around the world. Web functionality also enables quick, easy access to the information that most appeals to stakeholders. GE and Nokia, for example, allow customers to create "personalized" reports by checking off the sections that interest them; the result is a combined PDF containing only those sections. As with the shorter executive summaries, these efforts signal a greater effort to develop innovative ways to engage stakeholders and address their concerns.
Hitting the Highlights: Proper Prioritizing
With the advent of the Global Reporting Initiative's G3 sustainability reporting guidelines, more companies are conducting materiality analyses to identify and prioritize their issues and streamline their reporting efforts. A materiality analysis is (ideally) informed by stakeholder engagement and takes into account both stakeholder concerns and the impact of issues upon the company itself. For example, in its 2006 report (PDF, page 4) Barclays outlines in general terms how it prioritizes issues; it also links the issues it identifies to its business strategy, which is critical for any company seeking to integrate corporate responsibility across operations (For more on this topic, see our article in Ethical Corporation magazine.)
The Bigger Picture: Quantitative Reporting
Application of the GRI reporting guidelines necessarily leads to a more quantitative approach to reporting, which enables companies to better streamline their reporting and give a better snapshot of performance. Japanese companies, in complying with their country's environmental accounting rules, have taken the quantitative approach to the next level. Konica Minolta and Brother both publish online their environmental accounting details, which include the economic costs and benefits of their environmental conservation efforts. This is an excellent tool for not only management but also investors to assess the financial impact of environmental performance.
Standardization: Putting GRI G3 to Work
Now more than 1,000 companies self-declare their application of the GRI sustainability reporting guidelines in their reporting, and the U.N. Global Compact (UNGC) boasts more than 1,200 communications on progress. The clearest benefits of applying these standards — in particular the GRI G3 — are standardization, which allows for comparability across and within industries (see our article in Ethical Corporation, which discusses comparability), and a robust framework for report development. Lafarge's 2006 report (PDF), which is in accordance with the GRI 2002 guidelines, outlines the company's use of the GRI reporting principles and benchmarks its performance against that of its competitors. Lafarge is also a UNGC signatory, and its report serves as the communication on progress required by the UNGC. On its homepage, Lafarge, consistently a top reporter, even asks stakeholders to score its report for the GRI Readers' Choice reporting awards. I have always been impressed with Lafarge's rigorous application of reporting standards and can't wait to see how it applies the G3 guidelines.
In its 2006 sustainability report, ABN AMRO went the whole nine yards, applying the G3 at the level of A+, which means the information contained in the report was externally assured, and verifying the application level through the GRI.
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