More and more companies are creating sustainability reports. At last count, 90% of the S&P 500 issued a CSR, Sustainability or Citizenship report, a huge jump from under 20% in 2011.
And it’s not just the biggest companies. Small and mid-size companies are also creating reports, particularly B2B organizations with requirements for their supply chain, and also as part of their recruiting strategies.
Say yes to discrete reports
A robust website with all the information for mainstream and niche audiences is always appreciated, but it serves a different purpose than a discrete report. Information can live in many places, but helping serious stakeholders and investors find the relevant information faster is always good. Suggestions:
- Include a roadmap or index linking directly to specific information (the GRI index is a good framework for this, even if your report is only “informed” by G4).
- Consider other Frameworks, GRI is the baseline now. SASB, TCFD, and CDP are all important for investor audiences.
- Many issues are qualitative, and they require engagement with stakeholders. Not everything can boil down to a number.
Quality not quantity
Information overload is an issue, more is not always more. Emphasize what is relevant and material to your industry, your business and your stakeholders. Many pointed to SASB as a good place to look for that guidance. And, conducting a materiality assessment is the gold standard. Suggestions:
- Prioritize the information in the report. Keep it relevant and material, align it to your priority issues.
- If you want help figuring out what to include and don’t want to do a formal analysis, ask your top 20 investors. They will certainly tell you what they think is material.
Above all, clarity
Be sure what you want to say is quickly digestible. Look to your marketing department to see how they talk about your business and the strategies—your sustainability messaging should align. And, with Morningstar now rating mutual funds on ESG performance, there is even more focus on the underlying companies. Suggestions:
- Prioritize! Select the information that best tells the story and supports the evidence that you are working toward your priorities.
- Make the information visual. No one wants to read pages and pages of text!
- Give context. Align your targets with what the science is saying. How do your sustainability efforts align with corporate strategy? Be brief.
- Set goals and show progress against those goals.
- Use plain English. Just because you speak “acronym” doesn’t mean your audiences do.
Assurance and comparability, the next frontier
Reports are still mostly unverified, so there are questions about the reliability of the data. Adoption of external assurance is coming slowly, 36% of the S&P 500 in 2018, but that is mostly some data and largely greenhouse gas emissions. This is still an evolving area, but definitely the next step in sustainability reporting.
Comparability is another area ripe for refinement. With competing frameworks and no standard way to measure and report on KPIs, stakeholders and investors are left to their own devices to compare companies. With more players getting into the act and a proliferation of frameworks, there is not yet a clear path forward to any unified standard. Yet.
What you can do now
Wherever you are in your sustainability journey, there is room for improvement:
- Assess what you do currently throughout your business. How can that be showcased in an annual point-in-time report?
- Find what is most important to the greatest swath of your stakeholders. Include the priorities in the report, and keep the rest on the website for your niche audiences.
- Visualize the information with compelling charts, infographics and callouts, so your information stays accessible and digestible.
- Consider third party assurance.
- And, use your report as an engagement tool with investors, employees, regulators, NGOs, communities and all stakeholders. Many of these issues are qualitative and need engagement, not just facts.
If you’re looking to get started on your first report, here are some tips. And feel free to call or email with questions. Ideas On Purpose is always ready to help.
[Updated October 2020]