Capture a Huge Opportunity with Sustainability Reporting
Effective sustainability reporting is about managing performance. New NBS resources show how to make your reporting organizationally relevant.
NBS will soon release new resources on sustainability reporting. Lead author Dr. Jodi York describes their focus: “Sustainability reporting is not about producing reports, it’s about managing performance. Sustainability is a key window into that. Firms that recognize the value of the reporting process can capture a huge opportunity.”
Here’s an excerpt from the upcoming report.
Developing formal sustainability reports is standard practice
for leading businesses. This action is in response to growing demands for corporate transparency and alignment to global sustainability frameworks. For many companies, these reports are the primary way they communicate their sustainability priorities and performance.
External stakeholders seek a broader base of information with which to evaluate company performance, beyond bottom-line financial results. In particular, investors, lenders, customers, and NGOs are more likely
to factor sustainability information into decisions than ever before.
Effective sustainability reporting is also useful to internal stakeholders. The reporting process and outcomes can increase employee engagement, inform managerial decision-making, identify cost savings, foster innovation, and create goodwill that aids marketing, hiring, and retention. In short, sustainability reporting can allow internal stakeholders to be more effective in their roles.
“For us, the sustainability report is a tool. It requires the organization to gather ideas and learning spread across departments. By undertaking this exercise, you get a complete picture of sustainability—and the ability to plan for the future.”
– Marcelo Lu, President, BASF Canada
Companies often see sustainability reporting as an exercise to meet stakeholder expectations — with little connection to core operations. As a result, firms do not realize many potential benefits.
“Businesses can spend a significant amount of time and financial resources in producing a sustainability or CSR report. As CSR professionals, we have to make sure that we involve key internal and external stakeholders from the beginning to ensure that the report generates measurable value for the organization.”
– Jeremiah Brenner, Manager, Corporate Responsibility, LoyaltyOne
This research argues for a shift in focus from report to reporting. The formal sustainability report should be an important part of a larger “reporting” platform for understanding and communicating organizational performance, rather than the production of the sustainability report being an end in itself.
This research draws on relevant research, global best practice, and interviews with seven Canadian companies and their stakeholders to identify opportunities for enhancing the effectiveness and impact of sustainability reporting. Their stories vividly illustrate the challenges and opportunities of reporting.
Here’s some of what we heard:
“I think the best information is information that has currency in the organization that’s reporting it. By that, I mean they use it for something besides just reporting their sustainability. Like it’s used to make their business decisions. It’s used to satisfy their reporting to government on something else, for example. They use it as the basis of their financial statements. That’s the kind of information that’s useful . . . If you're using it to manage your business then it’s good information. I want to know about it.” – Industry Body Stakeholder
“If you want people engaged, if you want them motivated, if you want their buy-in, you need to show numbers but you also need to be able to tell the story in a very sophisticated but also a very brief way. People don’t have time to read now.” – Industry Body Stakeholder
“My challenge has been that our social media team wants material or assets that are more fluffy in nature, and my topics are quite serious, and not as warm and fuzzy as they would like . . . [They] don’t know how to handle a corporate responsibility message like that because it’s not the rah-rah bank stuff that they usually put out.” – Industry Body Stakeholder
Organizations can enhance their reporting process to achieve more effective reporting. Effective reporting communicates material information to internal and external stakeholder groups in ways that are useful to them and that inform their decisions and the organization’s future strategy. In other words, this is reporting that reaches the right audience at the right time, in the right format, for maximum impact.
NBS resources include several departures from the status quo. First, we emphasize the integration of sustainability and business strategy. Second, we consider the embedded processes, the “how” of reporting. Finally, while most organizations see reporting as a linear process of gathering inputs and producing an output, we show that effective sustainability reporting is a cyclical process that involves all functions in an organization, and feeds back to inform future strategy.
Using these resources, you can take your reporting in new directions and achieve your goals.