Sustainability reporting: 10 steps to build trust and increase engagement
Sustainability and corporate responsibility managers from a range of businesses across the country recently gathered in London for an exclusive roundtable hosted by edie and DNV GL, which explored the steps required to take sustainability reporting onto the next level.
The discussion took place at what is a critical time for corporate sustainability, with the era of ‘post-truth’ politics now well and truly upon us. The latest ‘Trust Barometer’ from PR firm Edelman reveals that levels of public faith in government, media, businesses and NGOs are all in sharp decline.
For sustainability professionals, this means stakeholders are growing increasingly sceptical of corporate responsibility (CR) claims and are now easily able to separate PR spin from reality. Consumers are only convinced by truthful messaging that they can connect with, while investors will only engage with data that tells a story in a transparent, meaningful way.
So, what does this crisis of trust look like when viewed through the lens of sustainability reporting? Can a single document ensure alignment with stakeholder needs; provide a snapshot of material issues and drive value through assurance? And how should the document be effectively disseminated to different audiences in order to maximise engagement?
Those were some of the crucial questions that edie sought to answer during the sustainability reporting roundtable earlier this month. The event, sponsored by sustainability consultancy DNV GL, brought together 12 industry experts to explore why sustainability reporting isn’t just about doing things right, it’s about doing the right thing.
Here are the top 10 tips that came out of the sustainability reporting roundtable:
1) Use global frameworks to your advantage
Whether it’s the Sustainable Development Goals (SDGs), Science-Based Targets or the Modern Slavery Act, there are now various drivers and frameworks underpinning corporate sustainability – but how can these frameworks be used to add value to a company’s sustainability report, and which element of which framework should actually be discussed within the final CR/sustainability document that is published?
Lauren Young, head of CSR for telecoms provider TalkTalk, explained that frameworks like the SDGs can be used to start a conversation between the sustainability team and other areas of the company. “Part of the reporting process is about taking your stakeholders on a journey and explaining the difference that these frameworks like the SDGs can have on them and their teams,” Young said.
The Body Shop’s international corporate responsibility manager Kate Upshon explained that the retailer has used the SDGs to help formulate its Enrich Not Exploit sustainability strategy and report. “We launched a new re-statement of The Body Shop’s values and position last year, and we approached our strategy by beginning with a look at some of the global issues that we needed to tackle – partly informed by the SDGs,” Upshon said. “We asked: what can we, as a business, do to address those goals?
“The real challenge for us was for our sustainability report to close the gap between those global issues identified through the SDGs and the priorities of our stakeholders and our customers.”
Amber Harrison, director of corporate social responsibility at multinational IT firm Sita, agreed that there can be a disconnect between the frameworks a company is using to shape its sustainability report, and the relevance of those frameworks to the company’s stakeholders.
“We’ve mapped the SDGs against our sustainability report and identified six goals which are most relevant to us – three which are priorities,” Harrison said. “But we’ve also signed the UN Global Compact, and then there’s GRI, and things like ISO 14001 – there’s ultimately some confusion about what it is we’re trying to be. So, trying to fit a framework like the SDGs into our customers’ needs without overwhelming them can be very difficult.”
Roundtable chair and sustainable development and environment expert Paul Toyne suggested that a sectoral approach to embedding the SDGs may be one solution to this issue of enhancing the relevance of the framework. “It sounds like we need each sector to organise itself to demonstrate leadership and pick which SDGs are most relevant to push up to the client community to ensure those SDGs are then relevant within a company’s sustainability report,” Toyne said.
2) The materiality assessment will put you on the road to reporting success
A materiality assessment helps an organisation identify the relative importance of specific environmental, social and governance (ESG) issues, and the general consensus around the table was that such an assessment can be an ideal starting point for any organisation starting out on its sustainability reporting journey.
“Any good sustainability strategy, and therefore report, has got to be grounded in a materiality assessment,” said Katie Buchanan, Head of Sustainability at telecoms giant Virgin Media. “We do a materiality review every two years, alternating between doing an in-depth materiality assessment and a ‘light-touch’ sense check. After building a list of issues that are most relevant to our business, we complete a workshop with people from across the business to prioritise and condense the list down to around 15 core materiality issues which we then work with colleagues to proactively manage.”
James Robey, global head of corporate sustainability at IT consultancy Capgemini, and Harrison from Sita both echoed Buchanan’s point. “Materiality is also where we start in terms of a stakeholder dialogue,” Robey said. “And then, we see how those issues fit in with global frameworks and issues – like the SDGs – a bit further down the line.” Harrison added: “We’ve got 12 material issues and we do a big analysis every three years. In the interim years, we spot check those issues to ensure they are still big and are still relevant, in order to make sure our materiality approach remains on-trend.”
3) Regular stakeholder engagement and feedback is crucial
David Waterston, carbon programmes manager for the Royal Mail, admitted that it can be difficult to maintain a dialogue with employees in an organisation as large as his. “Our corporate sustainability team goes out to our key stakeholders every two years and finds out what their most critical issues are, and that helps to inform our reporting,” Waterston said. “The challenge is then making sure that the report feeds back to those stakeholders and that we use the information to maintain a dialogue with them.”
Stakeholder engagement should not be treated as a tick-box exercise that consults a limited number of stakeholders to map their priorities and only repeated every three years.
Instead, argues Gareth Manning, principal consultant at DNV GL, establishing a personal connection with stakeholders is a way of driving engagement with the sustainability report and strategy. “M&S is a great example of a business going back to their stakeholder groups after producing a report,” Manning said.
“They conduct regular offline and online outreach, but also hold an annual face-to-face stakeholder event, with around 150 of their key stakeholders gathered and they use the event to launch their Plan A report. Their CEO actively participates along with the heads of key divisions of the business, and at least half of the time is dedicated to a Q&A session with their stakeholders – this essentially ‘closes the loop’, and allows for real-time feedback on their strategy and reporting.”
Buchanan noted that Virgin Media has taken a similar approach to driving engagement. “We use existing internal channels to engage our people with what we’re up to, such as our monthly ‘Ask EC’ forum – a TV chat show style format where our people submit questions for our Executive Committee to respond to,” she said.
“We regularly get sustainability-related questions posed by our people. A recent example is electric vehicle charging points and off the back of the comments we’ve built a proposal for installation at key sites. It’s a good forum to discuss sustainability issues and share our response - so that has been a good way of informing what new items we should consider for targets or areas of focus in future years.”
4) Being personal will make it believable
During the discussion, Kate Bruintjes, principal consultant at DNV GL, reiterated that the world of corporate sustainability has struggled to lose its association with PR spin. “There has been an evolution from sustainability reporting being a PR process to actually being a credible way of reporting on process, strategy and progress made,” Bruintjes said. “But there still are a lot of sustainability reports that are just PR.”
One factor to consider when writing about a particular project or initiative within the sustainability report is the voice being used to tell the story. And with public trust in business continuing to decline, harnessing the voice of ‘ordinary employees’ as spokespeople could inject a feeling of authenticity into the document.
Robey from Capgemini underlined the positive impact that this ‘voice of the people’ can have in communicating a company’s sustainability report. “One thing we’re trying to do – more on our community side than our environmental side – is to get the messages delivered not by the CEO or the reporting team, but by the individuals who are out there doing the community projects and giving them the voice to communicate the message,” Robey explained.
“People won’t necessarily trust the CEO introducing the report, they will more likely trust what they see and that’s the person on the shop floor, or the person in the call centre they ring up and talk to.”
5) Being transparent will make it credible
Companies are naturally aware of the reputational risks that can come with failing to achieve a target. However, all of the experts present at the roundtable agreed that it is much better for a sustainability report to be open and honest with stakeholders than it is to try and pull the wool over their eyes or avoid the issue completely.
“It has to start with you being honest, and being transparent,” said Sita’s Harrison. “If you don’t meet a target, that’s ok, sometimes it just doesn’t work out. In fact, if you hit every target and just frame your report as a ‘didn’t we do well’ document, then people will think that either you’re not setting yourself tough enough targets, or that you’re fibbing. We talk about things like business travel emissions very openly in our report. If and when these figures have risen, we tell stakeholders why.”
Upshon from The Body Shop agreed with this transparent approach. “I think part of building trust with stakeholders is reporting the stuff that hasn’t gone so well – that, in itself, conveys a sense of credibility,” she said.
McNicholas Construction’s sustainability manager Emma Ward added that having your sustainability report externally assured is another key way of ensuring your report is fully transparent and therefore credible. “If you’re reporting on carbon footprint data, then presenting that data in a report which includes a certificate saying you’ve had a third-party in to verify that data adds significant weight,” Ward said. “Likewise, if you implement a reporting framework such as the GRI, that can add to that credibility.”
6) Show, don't tell
Around two thirds of the population are visual learners, preferring the use of images, colours and interactive charts as a way of understanding lots of information. The sustainability achievements of a company will therefore be much more likely to resonate with stakeholders if they are brought to life through stories and pictures.
This ‘show-not-tell’ philosophy is one that is strongly held by Buchanan from Virgin Media – a company which pioneered one of the first approaches to fully digital reporting back in 2010, and has since turned to technological innovations such as virtual reality to tell its sustainability story.
“At the moment, what we’re seeing is that anybody can ‘tell’ a story,” Buchanan said. “But if you start to ‘show’ people that story and really put them at the heart of it, it can help boost engagement.”
7) Take the story to your stakeholders (don't expect them to come to you)
A sustainability manager can spend days, weeks, maybe even months producing a sustainability report. But when all is said and done, how will they be sure that the document has been read by all of the relevant stakeholders?
“Don’t just rely on people coming to your corporate website,” warned Virgin Media’s Buchanan. “It’s about taking your content to your audience – shareable content across social media or including key messages in the user guides or on the packaging of the products you sell – don’t wait for your audience to find the story, take it to where your audience is.”
A case in point was when Virgin Media replaced its logo with that of its charity partner, Scope, on the shirts of Southampton Football Club for one of the biggest matches of the season earlier this year, in an effort to highlight the discrimination faced by disabled fans heading to football matches.
“Rather than just talking about what we’ve been doing with Scope in our sustainability report or through case studies on our website, we wanted to really engage this part of our customer base, so we took our sustainability story to them in a way that mattered.” Buchanan said.
8) Don't get lost in translation
The roundtable attendees agreed that using accessible language within a sustainability report is critical to drive engagement with it.
Ward from McNicholas Construction noted that phrases like ‘the circular economy’ or ‘social value’ can be something people might shy away from unless they are a part of the sustainable business sphere. “No matter the audience, you must ensure you choose simple language that makes sense and isn’t full of jargon,” she said.
“Avoid branding everything as ‘sustainability’… brand it in a way that actually resonates with the audience. Think about the language you’re using and make sure you ‘de-tech’ the terminology you’re including. Otherwise, you’ll end up with a report that is produced by sustainability professionals for sustainability professionals.”
9) Consider seeking Assurance
External assurance or verification of a sustainability report can provide stakeholders with increased confidence in the quality of sustainability performance data. But it does cost, and the roundtable attendees were seemingly divided about the benefits of taking the assurance route.
Robey from Capgemini highlighted three key reasons for the IT consultancy taking the assurance approach. “Firstly, being French-listed, we are compelled to get some form of assurance done as part of our annual report under Grenelle II Law,” Robey said.
“Secondly, assurance guarantees the quality and completeness of our data. I’m trying to use our data as management information that we can use to drive decision-making. Having the processes that we use to collect the data, and the data itself, audited gives me a higher level of confidence that, when we set a reduction target, we’ve actually got a meaningful baseline to work against.
“Thirdly, from an investor perspective, we do get the extra marks from the likes of CDP for having an audited report.”
But for Buchanan from Virgin Media – whose parent company Liberty Global has taken the assurance route – justifying the cost for report assurance depends on your audience and team resource. “It can be challenging for a team to justify assurance costs and time, when the money could be used to implement impactful projects,” Buchanan said. “It’s not about just assuring for the sake of assurance… be clear on the expectations of your stakeholders.”
Ward from McNicholas Construction agreed that assurance does have some positives, but added that there is a risk that the assurance process can stifle innovation. “Rather than putting everything on the table and building your own model of something, the assurance route means you are effectively told that you must line things up in a particular order, which can be a bit prohibitive,” Ward said.
Ultimately, the benefits that the assurance process can bring will depend on the relationship between the assurance provider and the sustainability team, according to Bruintjes from DNV GL.
“A good assurance process is one that adds value,” Bruintjes said. “If clients are just doing it to get a tick, then it’s not going to bring much value. But if assurers are treated as more of a critical friend who are a part of that feedback process, then it can add significant value.”
10) Work out where the value lies
Reporting against a set of KPIs that you have set yourselves is all well and good, but are those targets of any real value to the people reading the resulting report? In fact, how do you know which issues are more important than others for different stakeholders?
Robey from Capgemini explained that his firm used its materiality process to map the perceived level of importance of 20 key sustainability issues among external stakeholders against the perceived importance of those same issues for the company’s executives – a task which generated some interesting findings.
“The importance that our clients were putting on some environmental issues such as climate change was a bit of a wake-up call for our executive team, some of which had assumed that those issues weren’t as important as some of our external stakeholders had said they were,” Robey said.
Ward from McNicholas Construction added that this understanding of what’s of the most ‘value’ to different stakeholders will help a sustainability manager understand how to cover off that issue within the report.
“What is important to a financial director will be very different to what’s important to the HR director,” Ward said. “So, tapping into that value is really important. Whether that value is through financial numbers, or just a nice thing to have or a good story to tell – that value will help to inform your terminology and your inclusions within the report.”
Businesses may well be faced with a crisis of trust, but it is clear from these 10 key themes that came out of edie’s roundtable that, done right, a sustainability report provides a strategy snapshot that provides the perfect opportunity to strengthen relationships and maximise engagement with stakeholders.
A transparent and accessible report that incorporates global frameworks, embeds materiality issues, is driven by strategy and uses assurance effectively can help to satisfy investor demands and place your organisation on a path to sustainability leadership.
For more expert advice on maximising the value of your sustainability report, watch edie’s exclusive webinar, hosted in association with DNV GL, which explores what 'getting it right' looks like when developing a trustworthy and engaging report. Watch the webinar on-demand for free here.