Lots of time and money spent, no obvious return, and as soon as you publish, it's back on the treadmill. Is there some way to optimise sustainability reporting so it feels less of a burden and more of a driver of change?

Sustainability reporting is a big job, and for some companies it represents a huge investment running into six figures. Over 4000 reports are loaded up each year into the Global Reporting Initiative disclosure database, so if the average reporting business is spending £50-£100K (and many are spending a lot more), the total investment in reporting to the GRI could be £40bn - and that's not counting the thousands of person-years also tied up. When GRI's G4 guidelines were being developed a couple of years ago, I wondered if the extra burden they placed on reporters would create a backlash and a raft of companies dropping out, but reporting seems to be a one-way street, where companies feel there's little choice but to disclose more and more about themselves as the years roll by.

There's a highly vocal industry encouraging them to believe it's all worthwhile, but talk to people involved in creating reports and they are often sceptical about whether reporting does indeed lead to greater sustainability, or creates much value for the reporting organisation. How did it come to this?

Where’s the value?

The debate about the value that comes back from all this reporting activity has been rumbling on since reporting began. Opinions vary from the miserabilist (it’s a huge distraction from actually doing something, and nobody reads them anyway) to the pragmatic (there’s little choice but to report, so you might as well make the most of it) to the wildly optimistic (the process drives performance, and the report leads to engagement and collaboration!).

What’s odd is that all these things seem to be true at the same time. Your report may hardly be read, but if just one investor makes a decision on the basis of what they read, or one NGO decides to campaign against a competitor rather than you, then the investment could still be worthwhile. Reporting can indeed end up soaking up vast amounts of time that could be better spent on action. And yet for many companies – particularly those without a clear corporate sustainability strategy, it still represents the only process that brings everything that’s happening on sustainability together in one place – and as such is a significant awareness-raising exercise as well as a strategic intervention. And having done all that, you might as well leverage the content for more communication and engagement and you may even have some interesting material on your hands.

So while reporting may not make you more sustainable in itself, it might help create the conditions in which sustainability can thrive. But to do that, it needs to be focused on creating value in the very specific context of the reporting organisation. And that’s where the fun starts.

Optimising your approach

How do you optimise reporting for your business – minimum pain, maximum business and comms impact, and minimum cost? Working on two reports at either end of the investment spectrum (a first time report for a relatively new player in Europe, and the 11th CSR report for a major global IT corporation), but where getting value is equally important, I wondered if I could identify some rules for maximising the return whatever the business. I failed, but I did come up with some balances to strike when working out how to optimise the impact – and some thoughts on how to strike them. Here goes:

1. PR vs ‘boring but true’.

This paradox is also known as ‘stories vs data’, or even ‘left brain vs right’. As a comms person, I’ve been pushing companies for years towards the storytelling, personal, emotional, visual content that now adorns many reports, so it’s interesting to work with clients who feel they’ve been there, done that, and got little value from it. You can’t get away from the fact that reporting is communication, and it’s a comms truth that people want their emotions engaged prior to their intellect. But page after page of smiling schoolkids, seedlings and staff looking 'passionate about everything they do' in hardhats is no substitute for some data about – say – the gap between your current practice and something sustainable. And often, the PR content is not really very good storytelling either. Tip: if you are going for magazine-style content, ask yourself if you would bother to read it in a magazine.

2. Backwards vs forwards.

How much should your report be about the past, and how much about the future? Strictly speaking a report is about the preceding year, and if you haven’t set any goals then it’s hard to say much about future performance, but in the end most stakeholders are probably more interested in whether you are likely to succeed in the future than how you managed over the last 18 months. So… a bit of both. Tip: Discussion and presentation of materiality is actually a great way to look convincing about the future as you work to develop more of a strategic approach.

3. Snackers vs wonks.

This is a useful distinction that one of our clients uses to think about audiences. For them, the snackers are the all-purpose non-specialist stakeholders who want their interest piqued with summary content about material issues, the strategy and the highlights. Wonks on the other hand are the subject-obsessives who could come at you from any angle and even though they may not represent the majority, may be able to cause no end of difficulty if you can’t meet their information needs. Trying to get everything into the report is one response – and that’s why some end up at several hundred pages. Tip: Much depends on how well you can anticipate such demands, and time spent thinking about stakeholders and their needs upfront is seldom wasted.

4. Narratives vs ‘buckets’.

Here the question is whether you want to tell your own story, or ape the categories offered by tradition, or the GRI, or some other set of abstractions that are really only of interest to professional stakeholders. There is some virtue in boring old buckets – at least they can be the same year on year, some people have some idea what to expect in them, and the task of mapping your content against the requirements of GRI or other frameworks is made easier. On the other hand, structuring your report around strategy is where the leading G4 reporters seem to be heading, but then that’s not surprising as they are mostly several years into big-name strategies where they have set some pretty hairy goals. Tip: Materiality as the basis of structure seems a pretty good compromise – you can match up your material aspects with G4’s list, and you get to talk about stuff people actually care about (water, diversity, labour rights) rather than, say, ‘society’, and you can show you are responding strategically without remaking the world in your image.

5. Monolith vs multimedia.

What could be more boring than a 350 page report? Well funnily enough, quite a lot of things. Having to ferret around a website for bits of content, fiddle with a hashtag, watch seven videos, or spend ages compiling my own report and data from your interactive dashboard, for example. Nobody said to Tolstoy, ‘This war and peace thing is way too long. Have you thought about doing a summary deck, an infographic and just having the rest available as a download if anyone asks?’ OK, it’s not a perfect analogy, but there is something to be said for a simple, everything in one place bit of comms, especially if you aren’t sure something else will be better. Tip: use a simple pdf report as a default to challenge any proposals that come to spend lots of cash on apps, portals and commemorative tea towels. Who will they reach and what value will that create?

6. Investors vs the rest of the world.

Who in the end is really your priority audience? A recent survey by the PRI pointed to the gulf between how CEOs and investors see reports, with the CEOs imagining investors use them to evaluate their strategy for seizing opportunity and creating value from sustainability, and investors confirming they seldom do. In the US, the Wharton school argues that the audience for reporting should be investors, not the sustainability community. As they put it, ‘we should embrace the perspective of investors and acknowledge that the efforts put into sustainable (sic) reporting have not yielded material benefit to date and may even have distracted attention from the important and difficult task at hand’. How do you make your report more relevant to the financial community? Tip: if you want to interest investors, quantify and monetise as much as you can. Will that make them read it? Possibly not, but at least you will have the information to hand when they call you up.

So there is my pick of the boundaries reporters have to negotiate. There are plenty more (digital vs print? Integrated vs not? pdf vs microsite?). Where you end up will depend on the maturity of your programme, the extent to which you want to comply with an external framework, where you see your main audience, the ownership model of your organisation, how much you want to spend, and a range of other factors. It’s a different answer for every organisation, but if you build up the case for reporting from scratch and challenge all the excesses along the way, it’s possible to create a report that can deliver value across a range of fronts, without necessarily costing a fortune.

And who knows, someone might even read it.

Ben Tuxworth is Director at Anthesis Group, and has been working on and worrying about sustainability reports for about 20 years. Contact him at ben.tuxworth@anthesisgroup.com