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Telling your sustainability story
01/07/2007

Adapted from a presentation given by csrnetwork director Mark Line to the Sustainable Opportunities Summit in Denver in the USA in March 2007

Being transparent about your material CSR issues and reporting your performance is your route to securing many of the potential benefits of being a responsible corporate citizen. It can help you win the trust of your stakeholders and set your organisation apart as an accountable business.

For most companies, the primary channel for disclosure is the annual CSR or sustainability report. It allows you to tell the world about your priorities and successes, and also to be candid about your shortcomings and plans to improve.

In recent years, there has been a rapid rise in the number of companies issuing these reports, even though it remains a largely voluntary activity. In 2005, 52 per cent of the Fortune Global 250 companies issued CSR or sustainability reports in addition to their statutory annual financial report. This is a trend that is likely to continue over the next few years, and we expect that around 90 per cent of the big companies will be reporting on CSR by the end of the decade.

Of course, quantity should not be confused with quality. The standard of many reports being produced remains worryingly low. The really good reports - those that show the extent to which the company has put responsible practices at the heart of its business - are rare indeed.

Here are our 10 tips on how to tell your sustainability story based on our experience developing, evaluating and assuring CSR and sustainability reports for companies around the world.

Be relevant

Probably your single most important goal for your report should be to make it relevant; in other words, it needs to cover your organisation's "material issues".

Determining materiality is a complex issue, and it's probably the biggest challenge facing reporters. It's certainly the one that crops up most often when we're advising companies on their reporting.

The overriding principle is that your report must cover the issues your stakeholders really care about. It doesn't matter how much coverage you give to your charitable activities, or how detailed your paper recycling data is, if you neglect the elephant in the room. To understand what those issues are, you need to start with a well-managed programme of stakeholder engagement.

Be integrated

The best companies show how their sustainability strategy links to their core business strategy and decision-making.

To do that, your report needs to show that your senior executives understand the sustainability priorities and that these are central to running the company and drawing up policy. And you should highlight how non-financial targets are embedded in core strategy, and in mainstream processes, standards and incentives.

Be truthful

So many reports get dismissed as elaborate and expensive PR stunts. And that's because they don't give a balanced and open account of the organisation's impacts. Even the most accountable companies have weaknesses, and if your readers don't see you acknowledging your shortcomings, they'll tend to take everything you say with a pinch of salt.

Many companies provide a list of low-lights to balance their summary of highlights or key achievements for the year. Others - and the UK defence company BAE Systems is one notable example - give space in their report to critical comment from stakeholders.

Be robust

It's all well and good listing your impacts, highlighting stakeholders' concerns, and explaining strategy and policy. But for your report to be credible, you need hard facts. And that means having the right data collection systems in place. This one takes a real investment of time and management resources.

First, you need to decide what you're going to measure. That's pretty well established for technical issues such as EHS. But for many social and ethical issues, consensus is only starting to form so you really have to engage with the subject to understand what's needed. Next, you need to write clear protocols for data collection, get buy-in from those on the ground who'll be crunching the numbers, and provide the right IT system so you can monitor and analyse performance.

Be pragmatic

There's no shame in limiting the scope of your report in the early days. In year one, you might focus just on your core home-country operations, looking to extend the scope from years two or three onwards.

There's no shortage of advice that might encourage you to report more rather than less - most notably, the sustainability reporting guidelines from the Global Reporting Initiative. They include around 90 different indicators, and only a few companies are yet equipped to report against all of them.

Like so much else in life, it's better to do a few things very well than a lot of things badly. As long as you explain why you've covered what you've covered, and outline sensible plans to broaden your scope over time, your stakeholders will cut you quite a lot of slack.

Be innovative

Different audiences have different needs, and you should adjust your approach accordingly.

The banking group Lloyds TSB publishes three different reports - a short version for customers and shareholders; a data-rich version for those who scrutinise the company's CSR performance; and a supplement in the staff magazine. The telecommunications company BT has recently introduced a podcast to support its sustainability reporting. And some companies are beginning to explore the potential for fully interactive web reporting in which users get a different version of the report depending on whether they're investors, customers, employees, journalists, activists and so on.

Be readable

It's easy to get caught up in tricky issues like materiality and collating accurate data, and end up forgetting one fundamental requirement - at the end of the day, your report has got to be read. Otherwise all your good work - and the organisation's investment - goes down the pan.

Your first job is to get attention - only then can you start communicating. So make sure your cover forces readers to pick up your report from the table.

In your copy, get to the point as quickly as you can. Readers are impatient, and you've only got a moment to draw them in. Think about how you read a newspaper. Before you get to the end of the first paragraph, you've decided whether to read on or bail out. So make sure your first paragraphs punch their weight.

And use plain English. You're trying to communicate, not to impress. If you wouldn't use it in a conversation, it probably shouldn't go in the report.

Be trusted

Getting independent assurance of your report can be instrumental in winning the trust of stakeholders. It can help give them confidence that what you say - and what you don't say - about your CSR performance has been subject to proper scrutiny.

However, most third-party statements tend to be limited to verification of data. Few companies have yet been bold enough to seek broader comment on whether, and how well, their report addresses the issues that really matter.

Real value-adding assurance is about checking not only that the information in your report is right, but also that the right information is in your report.

Emerging best practice points to involving stakeholders in the process - something that the Ford, Nike and Shell have all done in their recent reports. The end result is assurance that achieves its ultimate aim: greater trust among stakeholders.

Be forward-looking

With all sustainability issues, there are uncertainties, and no-one expects you to have all the answers. It's seen as positive if you acknowledge where you need to do more to understand and tackle issues, and if you show that you're learning as you go.

If you can, you should also outline your future plans. Although there's a risk you'll create hostages to fortune, it can be a very useful way for you to get your organisation to discuss and commit to its sustainability objectives.

Be aware

Finally, don't forget to take a look around you so you can tell where you stand against your peers and other organisations. There are a whole range of metrics out there that offer to measure and benchmark your reporting. They all have their uses, but at csrnetwork we've developed what we believe is the most effective tool for measuring just how accountable you are - the Accountability Rating.