3 Tips to Report Smarter, Not Harder

Sustainability

3 Tips to Report Smarter, Not Harder

  • 3 Tips to Report Smarter, Not Harder We look at case studies from Unilever, Olam International and Sembcorp Industries
  • Date: Feb 17, 2020
  • Category: Sustainability
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3 Tips to Report Smarter, Not Harder

Sustainability reporting is fast-becoming mainstream globally. Yet it is still seen by some as an exercise in compliance and a cost rather than an opportunity. Others see value in the exercise, but remain unconvinced that current practice is realising its full potential. Though reporting frameworks such as the Global Reporting Initiative (GRI) have made headway in setting reporting standards across industries, users of reported information, particularly investors, often still feel it is falling short of meeting their information needs. According to a recent McKinsey survey, investors stated that they are not able to readily use companies’ sustainability disclosures to accurately inform investment decisions and advice.

Given the number of years companies have been publishing sustainability reporting, perhaps this is an opportunity for them to reflect on how they can realise more from the process. In other words, how can we report smarter and not just harder? Through speaking to experts both within and outside companies, we have identified three important trends that are changing sustainability reporting for the better. 

  1. Moving to multichannel and audience-led reporting

The users of sustainability information are not homogeneous. This poses a challenge for report preparers. Given the varied stakeholder demands, how do you prioritise what to report on? Do you cater your report to investors, customers or NGOs?

The predominant format for a sustainability report has been a standalone PDF, which tries to meet the needs of all key stakeholders, but may not fully meet the needs of anyone.

It is 2020, and corporate sustainability reporting practice has yet to catch up with the suite of digital formats that enable a more dynamic conversation and targeted approach to engage audiences with relevant information.

Multichannel reporting, particularly digital, allows a company to provide readers with varying depths of information depending on their needs. This includes providing detailed and comprehensive content which gives users the opportunity to dig deeper, while providing access to overviews of a company’s sustainability narrative and performance for readers who find summaries more useful.

Example: Unilever

For a company with 400 brands in more than 190 countries, a single PDF report produced on an annual basis is simply insufficient to meet the needs of Unilever’s many different stakeholders.

The company has moved away from a single 56-page PDF document in 2012, to a multichannel approach to reporting. Given the volume of information in their disclosures, they have created a dynamic website serving as the primary source of sustainability information for all stakeholders. Jonny McCaig, Global Reporting Director explains that Unilever’s website offers “a visually rich content hub to help people make decisions – whether that’s to apply for a job, to buy one of our products or simply to put their trust us”.

In recent years, they also began providing a succinct, a single-page infographic for the busy reader.

  1. Telling your unique story

Naturally, reports are complex documents, touching on numerous topics which are often technical in nature. This is inevitable to an extent. Indeed, with the ever-growing expertise and sophistication of stakeholders, in order to be authentic and credible, your story needs to be underpinned by robust and relevant detail.

In practice, this means developing a clear and compelling narrative that explains what sustainability means to the company, and makes clear to stakeholders how sustainability is linked to the business strategy and the processes for creating and sustaining value. Conversely, they should avoid standardised, boilerplate statements focused more on meeting the requirements of reporting standards and frameworks than telling a story.

Example: Olam International

Olam International (Olam) has defined its purpose as being to Re-imagine Global Agriculture & Food Systems. This bold ambition cuts to the heart of some of the most difficult sustainability challenges facing its business and industry sector. As a core narrative, it is very relevant to the company’s strategy and long-term performance.

Looking at Olam’s Annual Report 2017, this narrative is clearly woven into the messages throughout the report, and demonstrates the level of integrated and holistic thinking at the company.

While these ambitions may be daunting to some, Olam is committed to follow through on its commitments, demonstrating to its stakeholders how it addresses challenges in their sustainability journey in a transparent manner. The forward-looking ambition set out by its purpose, puts the company right at the heart of the debate about sustainable agriculture and in a position where it is clearly showing leadership. Rather than following the pack, Olam is differentiating itself from its peers. In fact, it has even been taking steps to elevate sustainability-related practices among its peers, through its leading role in platforms such as the World Business Council for Sustainable Development (WBCSD).

  1. Using reporting as a lever to drive performance

Despite all the emphasis on the final product, sustainability reporting isn’t just an annual exercise in disclosure. The process itself is valuable to driving performance improvement within a company.

To realise this, companies must integrate the reporting process into the way the business is managed – i.e. reporting should work as a cog in the system that drives performance, in between strategy and management.

Example: Sembcorp Industries

Sembcorp Industries (Sembcorp) has been producing a sustainability report since 2009. Sustainability reporting has been a key tool in helping Sembcorp to engage management, establishing and enhancing management systems, and improve sustainability performance.

Ng Lay San, SVP, Group Strategic Communications and Sustainability has been with the company for over 20 years and has a nuanced view of how sustainability reporting has shaped, and is still shaping, the company’s management practice and performance. “Our sustainability journey has been predicated on many things. However, a priority for leadership since we adopted the GRI framework, has been to ensure we take a rigorous approach to measurement, monitoring and reporting our performance.” She adds, “The discipline of producing an annual sustainability report has been essential to our progress. It holds us accountable, forcing us to assess our progress regularly and work towards continuous improvement. Ultimately, this helps our ongoing journey to embed sustainability into our organisation.”

As sustainability consultants, Corporate Citizenship recognises that every company will have a different set of factors that inform its approach to sustainability reporting. Chief among these is to understand who your stakeholders are, what issues matter to them, and what kind of information will support them to make informed decisions.

We also recognise that there are other trends shaping the sustainability reporting landscape, such as convergence among the main sustainability reporting standards/frameworks, that will hopefully reduce the reporting burden on companies. Perhaps more importantly, this convergence might also provide a more meaningful set of standardised metrics and disclosures that reporters can reference, which promote comparability and consistency, and improve the overall usefulness of sustainability reporting.

However, Corporate Citizenship believes that the three trends we have focused on (moving to multichannel and audience-led reporting, telling your unique story and using reporting as a lever to drive performance) offer companies – regardless of where they are on their reporting journey – a practical set of points on which to reflect, asking questions that will help them realise greater value from their sustainability reporting, today and tomorrow.

Author

Thomas Milburn, Director, Corporate Citizenship

  • Tags : Corporate Citizenship

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