First things first, why should you track and report on sustainability? There are many ways in which organizations who report on corporate sustainability benefit both internally and externally. From an internal standpoint, Sustainability Reporting provides a deeper understanding of a business’s risks, opportunities, strategic direction, operating efficiency, and how they rank in the market and stack up against the competition. Externally it can greatly impact your brand awareness and loyalty, empower stakeholders, demonstrate your organization’s sustainable development over time, and mitigate/reverse negative environmental, social and governance impacts. But for those who are new to Corporate Social Responsibility (CSR) programs, it can seem a daunting task. Where do you start, who do you involve and what’s the best way to disseminate the information?
In this first post of our Sustainability Reporting Series, we share 5 Best Practices to keep in mind when embarking on your organization’s CSR journey:
Know Your Data
Start with your company’s data; how it’s defined, organized, validated and understood across your organization. Clearly structuring your data and putting variance measures in place will ensure data integrity and reporting repeatability. This can be supported by using software to streamline your data collection process and get a 360 view of sustainability performance.
In addition, if your data is consistent across all departments you’ll gain the ability to repurpose ongoing performance reports for Sustainability Reporting. Similarly, new reports created for your company’s sustainability efforts can be leveraged in other departments for internal communications, recruiting, due diligence and marketing campaigns.
Focus on Material Issues
CSR professionals often struggle with which activities, impacts and successes should be reported to stakeholders, and how. In comes the notorious Materiality assessment. Not familiar? A Materiality assessment is the process that organizations go through to identify and assess the potential environmental, social and governance issues that most affect their business and stakeholders. They then refine this inventory down to a select list of topics that inform corporate strategy, targets, and reporting. Example: Coca Cola’s “Three Ws”: Women, Water and Well-Being.
The rules employed during this assessment will vary from business to business depending on a variety of factors such as size, business model, and whether they are first time reporters of sustainability or have been practicing for years. What is the same for every business is the end goal; effectively communicating their sustainability story and engaging stakeholders. Most companies turn to the expertise of organizations like GRI when building out their materiality process, adopting their Sustainability Reporting Guidelines.
Contemplate Format & Frequency
When deciding on the format of your report it’s wise to take your audience’s preferences into account to ensure you’re communicating in the most effective manner. The primary formats to consider are Print, PDF, HTML, and Dynamic. Most organization will adopt a hybrid approach to satisfy diverse needs across the different groups that make up their report readers. In a study conducted in 2010 surveying European sustainability leaders, 45% said they still used stand-alone PDF reporting, closely followed by a PDF/HTML Hybrid approach with 41%. At this time the study indicated that only 12% of respondents had opted for an HTML/Dynamic approach, but GRI predicts that by 2025 all reporting will move to dynamic online models that provide real-time interactive data.
Hand-in-hand with this trend is a shift in reporting frequency as new technology makes updating, refreshing and disseminating information faster and easier. Many organizations have begun leveraging data technology to automate and integrate systems for real-time reporting and to further demonstrate a proactive commitment towards sustainable economic development. Gone are the days of looking at Sustainability Reports once a year. Stakeholders want regular updates on the progress of an organization’s environmental impacts, social practices, and governance policies.
Go Beyond Performance
As business professionals, we live and die by performance metrics and carry that behavior into most aspects of our professional life. There’s a comfort in being able to demonstrate through facts and figures that we are delivering on the promises we make and providing value. But in focusing solely on performance data, companies miss out on some of the most valuable opportunities to share their story in a dynamic and authentic way. Earlier we talked about increased frequency and proactive reporting; another growing trend is to include various forms of Topical data to increase opportunities for dialogue and provide greater transparency. Some examples of Topical reporting tools include Case Studies, Blogs, Newsletters, Infographics, and Social Media. Increasing the frequency of performance-based data reports can prove to be more cumbersome and difficult, Topical information however is more dynamic and can help your business easily provide frequent, ongoing updates to stakeholders.
Some great examples of proactive topical updates are Coca Cola’s 2020 Environmental Goals Infographic, Johnson & Johnson’s Goals Progress Report, Procter & Gamble’s Promoting Sustainable Development Case Study, Accenture’s Sustainability Twitter Feed, and Agnico Eagle’s Sustainable Development Video.
Engage Your Stakeholders
Stakeholder engagement is fundamental to CSR programs. Success is based on those individuals that your program materially affects – customers, employees, local communities, suppliers, investors, etc. Traditionally stakeholder engagement programs are primarily comprised of surveys following the release of CSR reports, asking individuals to boil their feedback down to a tick box. Impersonal and rudimentary, this method fails to capture at least 80% of the value these programs have to offer and leads to disengaged participants who lack an emotional connection to the company or its goals.
Today we receive 5x more information in a day than we did 30 years ago and not only is the media everywhere, but it’s everyone. A company’s brand and reputation are in the hands of its stakeholders making engagement a necessity, not an option. Some developing practices amongst sustainability leaders include:
- Involving stakeholders at the on-set in idea-generative, innovative, collaborative exercises
- Leveraging a variety of communication technologies such as web-chats, blogs, newsletters and online surveys to reach as many stakeholders as possible and avoid relying on the ‘usual suspects’
- Creating online Stakeholder Communities for real time engagement where businesses can collect feedback, distribute information, crowdsource ideas, proactively discuss solutions, and build relationships and trust
- Utilizing Stakeholder management tools to track and measure engagement over time and adjust programs accordingly
This was just a small introduction into what companies should consider when implementing CSR programs and reporting on sustainability to their respective stakeholders. Over the course of the next few months re-visit the Intelex Blog for the next installment in our Sustainability Reporting Series where we take a deeper dive into Materiality assessments.