Is sustainability reporting sustainable?
There are some that think it is. The practice is now more widespread than ever before, and legislation in different parts of the world is supporting increased non-financial disclosure. This would indicate that reporting is here to stay.
On the other hand, there are some that think it isn’t. There are those who subordinate sustainability reporting to the new financial reporting trend called integrated reporting, while others advocate online interactive disclosures instead of reports.
As we move into 2015 and face another year of corporate efforts to improve impacts, manage risk and engage with the new opportunities that sustainability brings, amid a flurry of surveys and reports that support the case for or against sustainability reporting, what can companies do to embed reporting practice in a sustainable manner? In addition to the predictable list of things we already know — focus, clarity, materiality, relevance, balance, frameworks, etc. — here are some more creative approaches that companies might like to consider.
Excite your board of directors about reporting
Reporting has often been considered an add-on, a project for the corporate social responsibility (CSR) manager, something that exists alongside the “real” reporting processes. Sustainability reporting has not really hooked the attention of the highest level of leadership and, in most cases, does not find its way onto the board agenda.
In order to make reporting more sustainable, directors must be excited about sustainability reporting. They must see it as an advantage, a benefit, a value-adding activity — and not something they tolerate.
Let’s be honest, how many company directors actually read the sustainability reports of the companies they are engaged to be accountable for? How many directors are actually consulted in the process of preparing the report? As key stakeholders, company directors surely deserve some acknowledgement, recognition and even voice in the annual sustainability report.
In order to excite your board of directors, engage them in the reporting process and have them approve the output, here are some things you can do:
- Empower your board members. This can be done, for example, through board workshops to build awareness, knowledge and engagement around relevant issues for each company. In 2014, the United Nations Global Compact launched an interesting Board Program to help align the board on sustainability matters and help directors demonstrate leadership on board adoption of sustainability principles. As board members engage in deep consideration of sustainability issues, they become empowered to embrace leadership and guide the company along the sustainability journey. This program looks like a good start, but it must result in something more than discussion in order to truly deliver change. Therefore, after education, comes action.
- Engage company directors in the reporting process. Help your board of directors own your sustainability report by asking them to contribute. Interview them individually or as a group, and include their pictures and their commentaries in the sustainability report. Stakeholders will be gratified by evidence of greater board commitment, and board members will be energized by their own involvement and declaration of what is important to them. Involving them may also help reinforce their accountability for the sustainability report and its contents. This kind of involvement is positive, but it is not enough. Involvement must be formalized.
- Establish and publish a formal board policy for sustainability reporting. This should describe board accountability for sustainability reporting. The policy should define board actions prior to report publication, including a board discussion and concurrence of the report content and agreement to publish. Following the report publication, the policy could require the board to conduct a review of whether the report has met its objectives and agree on new objectives for the next reporting cycle.
Make your reporting process cool
I maintain that sustainability reporting as a process is incredibly cool. The right process empowers people, challenges people, gets people listening to one another, sometimes even talking to one another, occasionally even agreeing with one another. This applies to both employees as well as external partners, organizations, suppliers, local authorities and consumers.
Rather than inviting people to a meeting about the sustainability report (yaaaaaaawn!), there are many ways you can involve people in activities that both interest and engage them, while at the same time, getting the information you need for your report. This includes competitions (send us a video of how your job contributes to improving the environment) or prizes (weekend for two for the first complete set of sustainability reporting information sent back to corporate) or ice cream meetings (roundtable discussions with internal and/or external stakeholders on sustainability issues, where the meeting leader brings [lots of] ice cream for consumption during the meeting). There are a million ways to make the reporting process fun, even if, at some point, there is a certain amount of actual hard work to be done.
Engage your employees around the published report
So, many reports go unnoticed by the very employees whose hard work made the report possible. That means all the employees in the company.
The minute the report is published is the signal to start the work of engaging employees around the report. Rather than just broadcasting an email announcement — we published our report (yaaaaaaawn!) — there are many ways to get your employees to sit up and take notice.
This may include quizzes with prizes (Who is quoted on page 34 of our last report? By how much did our GHG emissions reduce last year?), games (How far can you throw our sustainability report?) and feedback (cross-functional discussion groups — can be Web-meetings — each focusing on a single section of the report and analyzing the content together, with recommendations for the next report). You might even involve your employees’ children in preparing a poster about how your company makes a positive contribution to the world — requiring employees to explain the essence of the report messages to their kids. Prizes, of course, for the best contributions.
Each company can find its own way to be creative in developing an engagement process which both informs and interests employees. You might find employees actually enjoy reading the report and discover things about the company — and their colleagues — that they didn’t know. More importantly, they will be able to talk to stakeholders about the issues that matter in an informed way.
Drive your reporting throughout the supply chain
How many companies ask their suppliers to contribute to their reporting and engage suppliers once the report is published? More and more, the report of one company is both the start-point and the endpoint of the reports of other companies.
I am not aware of anyone trying to track a product through all the sustainability reports of the companies involved in producing it from raw materials to end-of-life — that could be an interesting exercise. However, suppliers are big enablers of any business, and their influence on the direct impacts of an organization may be quite significant.
Perhaps suppliers should have a bigger place in sustainability reports — strategic suppliers can contribute data, case studies and specialist perspectives — and may be grateful for the recognition their customers’ reporting offers them, thereby reinforcing the relationship with them. Once the report is published, reverting to suppliers, emphasizing the key messages, acknowledging their role and encouraging them to adopt sustainable practices in their own businesses is a critical step in maintaining the reporting momentum.
It’s so easy to criticize reports. It’s so easy to say that reports are full of irrelevant information. It’s so easy to dismiss reporting as some sort of activity that apparently everyone has been duped into doing for the wrong reasons and producing the wrong results. It’s much harder to stand up for reporting and talk about what it really is: a business process that adds value, engages people and empowers employees.
The folks that lead reporting in organizations have to address not only the hard work of reporting — and it is hard work — but they also have to overcome these notions that are bandied around saying reporting is worthless.
Reporting leaders in organizations should be celebrated. They have one of the hardest jobs around. Reporters play a critical role in helping organizations move forward sustainably and help shape the future of business. I have often said that reporting is a catalyst for performance, and great reporters know how to use the reporting process to drive change. Make sure the reporting leader in your organization gets the respect s/he deserves, has the resources s/he needs and gains the attention of management as and when needed. Ringfence your reporter and ensure s/he has enough ice cream to last through the entire reporting cycle.