Sustainability Reporting: it’s the journey that matters
Natasha Malinda is a Consultant at the Australian Centre for Corporate Social Responsibility (ACCSR) and has worked on sustainability reports for ACCSR clients since 2009.
In my experience working with clients on sustainability reporting for ACCSR I have found many common challenges and pitfalls for all types of organisations along their reporting journey.
Sustainability reporting is a steep learning curve. It reinforces to both companies and individuals why they embarked on the sustainability journey in the first place and where their organisation’s and their own values and commitments lie.
The biggest mistake a company can make in its attitude to reporting is approaching the task as a PR exercise. Although sustainability reports are good communication tools, a great sustainability report is fundamentally about accountability and performance management.
The second biggest mistake is failing to educate staff on that fact. Educating employees about why you have decided to report, why it matters and what this means for your company is the first step in gaining internal buy-in. Once these goals are established internally, this makes the reporting process much easier.
Consultation with the organisation’s stakeholders is also vital to ensure that the report provides the right balance of information to satisfy its stakeholders’ needs and interests. For multinationals, differences in language and culture are often a natural part of the reporting journey that needs to be taken into consideration.
Deciding which issues are material for assessing sustainability performance is therefore a crucial element in the process. In fact, the importance of materiality has become such a hot topic in recent times that in March this year the Global Reporting Initiative (GRI) launched a new technical protocol under the G3.1 update, specifically to help organisations better overcome this challenge.
Despite the importance of materiality to the report’s quality, a PriceWaterhouseCoopers report on trends in sustainability reporting released late last year found that only approximately half of all sustainability reports in Europe, Japan and Australia explain what is material to the company.
When it comes to content, topics such as human rights, community impacts and gender often have organisations stumped as to how they relate to their own business or activities. Now organisations can find greater guidance on these issues a priority area of the G3.1 update developments.
Working with ‘first time reporters’, I have found that they sometimes find it hard to grasp the level of transparency and disclosure that is required by them to produce a meaningful sustainability report. Often a lack of buy-in at senior management level will constrain what they can and cannot publicly report.
Further, there are many legal and regulatory controls with which companies must comply. It is vital for a company to understand what it is legally able to report and what information it is comfortable reporting, given its stakeholders’ desires for information.
Of course it is not just a matter of transparency in reporting. The way a company collects its data will also determine the content of its report.
This comes back to the learning curve.
More often than not the company will learn along the way what it needs to do next time in order to be able to provide the kind of information that stakeholders want. There will always be difficulties when employees who need to provide data have little interest in doing so or see sustainability reporting as an extra burden on top of already heavy workloads. This ties back to the need for explaining why you are reporting.
In my next blog, I will provide my top 10 tips for those embarking on their sustainability reporting journey.
Have you got a tip for first-time reporters?