Preparing for sustainability reporting
Our advice before starting sustainability reporting, is to prepare your organization before you do anything else. First things first. Before setting pen to paper or fingers to keyboard to write outlines or strategies or any text at all, there are a few important steps that will help build the foundation for a quality corporate sustainability report (CSR).
Most people won’t see the report’s foundation. But, just because you can’t see it, doesn’t make it any less important. Any builder (or homeowner with a leaky basement) will tell you how critical it is to have a solid foundation. Any shortcuts in laying the groundwork will impact the quality of the end product in the construction of both buildings and sustainability reports.
Here are five key steps to building a solid foundation for a top-notch sustainability report:
Get Familiar with GRI
The Global Reporting Initiative (GRI) framework is the standard structure used by companies around the world to report sustainability data. GRI is the de facto standard for sustainability reporting. Within the GRI G3.1 framework, reports can either be self-declared or GRI checked to reflect the degree of reporting transparency. With the newly launched GRI G4 reporting framework, the level check has given way to either Core of Comprehensive categories, which denote the breadth of reporting.
In either case, using the GRI framework makes sense for two reasons. First, it provides a great place to start. Global sustainability experts have already spent a lot of time and energy to establish a system that works, so why start from scratch? Second, a GRI aligned report gives your CSR credibility while presenting stakeholders with an instant view of organizational transparency.
I recommend becoming your company’s authority on GRI. As the in-house GRI expert, you’ll be able to build a stronger report and increase your own value to the organization in the process. To do so, be ready to spend some quality time reading and understanding the framework. For help, contact an experienced sustainability colleague with questions, join the GRI (or other sustainability) LinkedIn group(s), and consider attending an official GRI training (check here for more information on GRI training).
Take the pulse of your stakeholders
The CSR communicates environmental, social and governance (ESG) data to address the informational needs of all stakeholders, beyond the important financial results included in the annual report. That’s why stakeholder engagement is one of the hallmarks of top-notch sustainability reports. It is critical to understand the interests and concerns of your organization’s customers, investors, employees, communities and regulators.
To build a good report, you’ll need to compile as much information as possible about your stakeholders and their expectations of your company. There is probably a good bit of existing data available that just needs to be collected. Some good resources to search for stakeholder information include employee satisfaction surveys, market research (such as focus groups), comments and feedback on social media, and customer service information. If the source materials reflecting stakeholder interests is incomplete, it may be necessary to collect anecdotal information or even contact a small sample to get direct feedback. All of this will help tremendously with the next step.
Conduct a materiality exercise
It can be tempting to skip the up-front part of the GRI framework, and just use the disclosures as a checklist. Don’t. The GRI process is enormously helpful in prioritizing what information to report based on what is most important to organizational stakeholders, not simply what is available. And the best way to do that is to conduct a materiality exercise, which is essential to the G4 framework. For GRI’s official description of materiality, click here.
A materiality exercise will help identify which business elements have the biggest impact on stakeholders, and therefore represent the biggest organizational risks and opportunities. If you’ve completed the previous step – you’ll be well on your way.
The key to the materiality exercise is mapping out the various stakeholder interests in order to reach agreement on priorities. Reaching consensus within the management team can be challenging. In fact, it is worthwhile to consider hiring an outside facilitator both to serve as an authentic external perspective and to help navigate the uncomfortable discussions that inevitably arise.
Locate the gatekeepers
Once you have the material topics identified, and a reasonable grasp of GRI, you’ll be in a good position to track down the necessary data. This is probably easier said than done, especially inside larger organizations. It can be tricky to figure out which department and which people are responsible for any particular data point (let alone convincing them to hand it over for publication, which will be covered in a future post). Use internal networking and any company publications (blogs, newsletters, press releases) to find out where the data lives and who collects it. Anyone who is responsible for a lot of the data should be included early and often in the reporting process.
Spread the word
It’s quite possible that some of the gatekeepers you’ve identified will be less than eager to join in with enthusiasm and willingness to help. One way to build interest and ensure cooperation is to generate widespread recognition that the CSR will be a high profile project that provides tangible business benefits to the company, to their department and to their own professional reputation.
So, it’s important that all organizational leaders, whether from accounting, legal, human resources or elsewhere, understand the value of sustainability reporting from their own perspective. To do this, you’ll need to translate the bottom-line business reasons for reporting (outlined here) in ways that are meaningful to each internal audience. Also, try to anticipate and address concerns as quickly as possible in order to maintain positive momentum.
All of these steps will help build a strong foundation for a compelling report that reflects stakeholder interests in a meaningful way.
If your job has anything to do with sustainability reporting, in any function, you may be interested in reviewing our 6th sustainability report for UPS.
If you are curious to know how we think and work – and what we might do for you – just send us your latest report and we’ll send you back a complimentary confidential analysis of the opportunities we see. No obligation to you, and possibly the start of a great conversation about something that really matters.
Emotive Brand is a brand strategy firm.