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Sustainability Reports Don’t Cut It, Or…

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“Reports don’t cut it – why is it so difficult to attract stakeholders to the benefits of sustainability?”

In early October, some 200 experts met in Berlin to discuss the future of sustainability reporting during the 2nd annual conference of the Reporting 3.0 platform. The statement above set the stage for the first of three discussions around the theme of stakeholder engagement.

During my opening remarks I made the case that the premise was missing the point and that it is actually not the reports, but the reporters themselves that do not cut it. They need to change their mindset. Reports are not the end point of a process nor do they equal stakeholder engagement. Nor are reports suitable tools for answering the very valid question of how to attract stakeholders to the benefits of sustainability. Rather, reports are the end of the preparatory phase for stakeholder engagement.

Companies have two compelling reasons for engaging with stakeholders about their performance, challenges and future plans:

  1. Influencing stakeholders’ opinion and knowledge of the company. GlobeScan Radar research shows time and again that transparency is one of the key drivers of reputation, as you can see in the matrix below which shows that ‘being open and honest’ is the strongest driver of trust in companies with the global public, but company performance is rated very poorly in this area.



  2. Capture valuable feedback from key stakeholders as part of its management system. The latest GlobeScan/SustainAbility Survey underlines just how important transparency is for driving internal action. According to the surveyed experts, valuing and reporting on externalities and sustainability reporting are among the most important drivers of decisions in companies.

So, if the aim of reporting is to engage with stakeholders to build reputation and collect management input, what then is the role of the actual report? Reports provide comprehensive, after-the-fact evidence of what a company has achieved. As such, these reports are crucial input for tailored stakeholder engagement.

All stakeholders, without exception, are only interested in certain pieces of the information contained in a report. Their interests are determined by the context of their relation to the company: are they buying its products, are they providing the company with financial means, are they living near the company’s operations, are they business partners in some capacity, etc.?

And, vice versa, it is also this context which determines what topics the stakeholders can provide useful input about.

Furthermore, focusing communication efforts on last year’s data will not get stakeholders of their chairs and cheering. What they are more interested in is to hear what a company learned from the results, what they are going to do to further improve its performance, and last but not least, how stakeholders can engage with the company on that next step of its journey.

From our experience, the lessons for effective stakeholder relations are clear. A company needs to first establish carefully the areas of interest that overlap with those of its key stakeholders and then to engage in a real dialogue. The report and its data become the starting point for such conversations.

In conclusion, it is not the reports but the reporters that are not quite cutting it. By simply publishing the report, sending out a press release and not using the reports for true stakeholder engagement, the reporters are missing strategic opportunities.


Please feel free to comment on this blog or contact me directly:

Peter Paul van de Wijs | Senior External Consultant | Twitter

For twenty-five years, GlobeScan has helped clients measure, understand and build valuable relationships with their stakeholders, and to work collaboratively in delivering a sustainable and equitable future. Uniquely placed at the nexus of reputation, brand and sustainability, GlobeScan partners with clients to build trust, drive engagement and inspire innovation within, around and beyond their organizations. www.GlobeScan.com

Comments

  • Helmi Ansari 13 January 2015

    Thanks Peter - I found value in your article. Too many reports are put out there, just to be put out there. A lot of companies big and small spend a lot of money and effort to put them together, but these are often more of a marketing exercise than a true gauge of the situation on the ground vs. a goal or an objective that has been set.
    Perhaps you could offer an example of someone that has done a better job with these reports that we could learn from? That could be very helpful for companies, big and small.
    Thanks!
    Helmi / Chief Sustainability Officer
    Grosche International Inc http://www.grosche.ca

  • Peter Paul van de Wijs 14 January 2015

    Dear Helmi,

    Thanks a lot for your response. Rather than give you one example I’d like to highlight a sample of creative approaches which hopefully trigger some ideas.

    * Unilever is using open online stakeholder dialogues to discuss challenges they face, for example around water management, discuss progress and collect input on how to deal with these challenges.
    * Novo Nordisk used to have customisable charts allowing people in communities around their facilities to easily extract the information relevant to them.
    * Patagonia used their clothing catalogue to discuss progress and dilemmas they face. For example, I recall an issue in which they addressed the clash between their desire to use biodegradable polymers and the fact that the only bio-polymers at the time were made from GMO based raw materials.
    * The Dow Chemical Company produced in 2002 a suite of public reports instead of just one. The global public report was complimented with local reports for all their major locations making the performance data relevant for the communities they operate in. These reports were used for community outreach activities.

    In general, I like the idea of focussing stakeholder engagement around performance on materiality. However, since the perception of what is material will differ per stakeholder there is some homework to be done. A company wanting to engage in a purposeful conversation would need to identify and select the audiences they want to engage with and establish for each the specific material issues prior to that engagement.
    Kind regards
    Peter Paul

  • Sam Kirkland 25 February 2015

    Thanks Peter! Much Appreciated!and I agree with your thoughts that the audience needs to be understood to determine the materiality of the aspects that will be put forward with full transparency.
    Sam K

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Guest 23 October 2017

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