One of the hot topics in sustainability right now is reporting. According to Littan (2017), 92% of the world’s largest companies publish some sort of sustainability report.
But what leads a company to create an actual sustainability/CSR report?
In their latest report, Thompson Reuters identified
- “reporting standards and frameworks such as GRI, IIRC and SASB” and
- “questionnaires from rating agencies and product certification organisations”
as two of the main drivers for global companies to report about sustainability.
At the same time, ReScore Group’s 2016 study identified the accumulation of sustainability frameworks like GRI, SASB, DJSI RobecoSAM, CDP, Ecovadis etc. as the main pain points for sustainability practitioners during the reporting season.
But does answering all these frameworks really enable companies to manage their sustainability issues?
A panel of experts at Edie’s conference on March 1st explained that “broad reporting frameworks have created a tick-box system for external gratification”. However, put together in one report don’t necessarily provide relevant information for the various types of stakeholders. According to them, reports that are created mainly to respond to GRI, SASB, CDP and other frameworks, “failed to truly present the benefits of firms’ sustainability actions”.
There is something here that I believe will resonate with many people doing sustainability reporting. When sustainability is not embedded in the general strategy of the company (i.e. when top management doesn’t lead the way), sustainability reports often look like checklists or an accumulation of information providing poor added value to a company (or its stakeholders).
In theory, the checklist system is supposed to simplify the reporting exercise and make all stakeholders happy. In reality, this is not always true. So far, I haven’t heard anyone say they love reporting and data collection. Long hours spent on data collection, validation, consolidation, and report creation can be gruelling.
Plus, you can imagine the frustration if this work results in a report that almost no one reads and/or uses. The company also risks frustrating its stakeholders if they can’t find the information that matters to them.
There is not one way to solve this issue but here are three best practices we recommend for our clients:
- Perform a materiality analysis to identify what matters/impacts a company and its stakeholders (here is a white paper on the subject)
- Analyze the data you collect, and use it to actually improve your company’s performance rather than just to communicate externally
- Write audience-specific sustainability. It doesn’t necessarily mean sharing more information, but writing shorter reports focused on key audiences in a way that speaks to them.
It’s highly unlikely that a company will shift overnight from a checklist kind of report to performance, audience-oriented reports. Sustainability reporting is a journey and a dynamic process. However, there is a real added value for companies to start looking at sustainability reporting as an empowering process. At Tennaxia we combine technology and sustainability expertise to help you in your journey step by step.
Exhaustive checklists are good for grocery shopping, but not sufficient for sustainability strategy. Data should truly add value for stakeholders and the company.