Getting started with sustainability reporting
In today’s world, sustainability and corporate responsibility reporting is gaining traction faster than ever before. It’s no longer enough to make claims about sustainability, there is now an expectation on companies to provide meaningful and engaging reporting that provides detail around its commitments to, and impacts on, key sustainability issues for the business.
The urgency around some issues and the rise in stakeholder interest, especially from customers and the investor community, has shifted reporting from a ‘would like to do’ to a ‘must do’. As a result we’re seeing more and more companies embarking on their sustainability reporting journey for the first time.
But the reporting world is complex and we know first-hand that it may seem intimidating at first. According to the World Business Council for Sustainable Development, there has been a more than ten-fold increase in the number of corporate reporting requirements on Environmental, Social, and Governance (ESG) issues over the past 25 years. Today there are thousands of non-financial reporting guidelines, frameworks and requirements, and although many developments are welcome, it has made the sustainability reporting landscape confusing, time-consuming, and fragmented.
We have helped many first-time reporters to navigate this complexity so here we’ve put together our top tips on developing robust, accessible and engaging reporting designed to respond to the expectations of your stakeholders.
Consider the best channel
Be very clear from the outset about the purpose of reporting. For example, which key stakeholders are you trying to reach, inform and engage – from employees and partners, to investors, customers and other stakeholder groups – and what do you want them to do with the information?
Remember that the outcome of successful reporting is that internal and external stakeholders have the information they need to base their decisions about the company on. Do you want to build brand awareness and reputation among customers? Are you seeking to share stories about your commitment, or celebrate the work of your employees? Are you reporting to satisfy investor requirements?
This will then help to guide the best way to communicate with each group. You may then consider using one or more of the following channels:
- Sustainability website pages
- Annual report chapter
- Stand-alone sustainability report
- Social media
If reporting is aimed towards investors for example, a chapter in the annual report may be most suitable. On the other hand, if informing customers is paramount then website pages and social media may enable you to better achieve your goals.
Be open and authentic
A sustainability report, whatever form it takes, should exist to build trust with stakeholders. Too often, companies are hesitant to talk about things that either haven’t been completed or challenges that show the company as less than perfect.
Yet in reporting, openness and transparency are key, and presenting a balanced, genuine and authentic story, rather than a polished and perfect – but often unbalanced – picture, is essential to building trust with stakeholders.
First time reporters often look to the Global Reporting Initiative (GRI) Guidelines to cut through the complexity but are scared off by the large number of different criteria set out in the disclosures. If a company isn’t ready, we will suggest that understanding and using the GRI reporting principles, which sit behind the guidelines, really helps to build the foundations of a robust first report.
The principles are split between those to be considered when defining what information to include in the report (Principles for Defining Report Content), and those to be considered when deciding how to collect, prepare and present information in the report (Principles for Defining Report Quality), and they can help guide a reporting structure, or even your data collection process.
Include performance data, wherever possible
Storytelling in sustainability reporting and communication is a vital way to engage your audiences but reporting must also be evidence-based. We know that many first-time reporters may not yet have a complete set of performance data relating to the areas they want to talk about and can be reticent to put data in the public domain. However, we always support our clients to scrutinise the data and encourage them to include what they can in order that stakeholders have as complete a picture as possible and to demonstrate a commitment to transparency.
Where there are gaps or where data doesn’t show an improving picture, the reporting narrative should openly address this, discussing the nature of the issue, any challenges the company is facing and the actions it will take as a result.
In short, staying quiet on sustainability is no longer an option for most companies. The most important thing for first-timers is to put a marker in the sand and produce reporting which is open, honest and transparent so that stakeholders can use this information to inform their decisions about the company. This can then be used to build on and improve disclosure year-on-year to provide an increasingly robust and rounded picture of companies sustainability performance, incorporating materiality, the Sustainable Development Goals, and context – but more on that in our next reporting blog!
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Materiality – 7 ways to make it work for you and your business by Alasdair Marks, Director, Simply Sustainable