You can usually divide the world into those who think corporate sustainability programs are for real and those who say “window dressing, PR, don’t believe a word of it.” But both camps share the same view about why companies do sustainability reporting, because it shows off how well they’re doing.
In other words, almost everyone thinks sustainability reporting for corporations is like wrapping paper on a gift: a thin veneer, for appearances only. Would it surprise you to learn that almost everyone is wrong?
The reality is that reporting has a huge influence on what companies actually do to become more sustainable. The really committed companies found this out years ago, but they don’t talk about it much because it’s such a competitive advantage. Companies that start in on reporting find it out quickly (if they are doing it right).
If this seems like I’ve put the cart before the horse, think about the nature of most corporations. The left hand does not know what the right hand is doing. Senior managers are in the dark about most details because there are just too many nuances for such big-picture people to follow. New ideas that bubble up from below need a whole bunch of stars to align before they take over the whole company. New ideas that are assigned from the top down may never reach solid ground where they can take root.
Now look at sustainability reporting, which basically takes in everything beyond profit and loss figures. Most companies have reasonably reliable systems for counting their money, and a dedicated accounting department to run the system. But they never set up systems to count sustainability stuff.
There is no accounting department for greenhouse gases, water quality, waste, and other environmental issues. Human Resources knows some quantitative things about the people in the company, but it’s probably clueless about where people stand on even simple issues, like recycling or philanthropy.
Ask any consultant who takes on a company as a first-time sustainability reporter and they will say the same thing: the hardest thing is just getting the information.
The mere act of asking people throughout a company to divulge information they never gathered or publicized can blow their minds. “Management finally cares about this?” they say. “Well then, here’s what they really ought to know!”
The next minds that get blown are those in senior management. The company’s leaders begin to see their company from a completely new perspective: not just dollars and cents, but also carbon dioxide and employee satisfaction and license to operate from the community.
They realize that sustainability reporting can be the greatest management tool ever because it shows the true health of the business. It focuses on efficiency, engagement, empowerment, better supply chain relationships, and long-term market development – the list goes on an on. If something essential is underperforming, profit numbers can cover it up but sustainability metrics will expose it. Hallelujah!
Let’s not skip mid-level managers, who are responsible for fighting it out in the marketplace with products or services. They hate to lose one inch of ground to a competitor. When they read anything in their company’s sustainability report that creates the merest whiff of a headwind for them, they first want to kill who ever produced the report. The next thing they want is to turn that headwind into a tailwind. Now.
Sustainability reporting can indeed be the horse that pulls the cart of sustainability performance.
Next time, practical advice on how to get the horse in front of the cart at your company.