The Value of Reporting

21 Jan 2011 – Jean-Philippe Renaut

I am the first to admit that reporting is rarely transformative. It is a process for holding companies to account and a fundamental building block for a more sustainable economy. I am pleased to see that the findings of our latest report, Reporting Change, confirm that reporting is nudging companies towards improved sustainability performance and that readers are reacting to the information provided.

Reporting Change, written by SustainAbility, Futerra and KPMG, under the auspices of the Global Reporting Initiative (GRI), surveyed both the organisations that write and the stakeholders that read corporate sustainability reports. The consensus is that reporting serves to enhance performance through having to demonstrate progress, and through improving internal processes.

Actions: Despite this, companies that report sometimes feel that the publications are not really used. Reporting does change behaviour. It will be heartening to those who put so much effort into these reports to know that over 50% of readers have used reports to inform decisions on products or services. One-third of readers are also inspired by reports to take further actions that contribute to the broad sustainability agenda.

Issues: Most interestingly, it appears readers are more interested in information about specific issues, rather than the organisations themselves. Consequently, companies should ensure that they are providing interesting facts to their audience on issues that affect them and in a format that they can use.

Trust: When it comes to factors that help readers trust corporate reporting, readers are far more interested in what companies are doing than end-of-cycle assurance processes. Readers want to see robust data, showing performance over time, and a clear link between sustainability and business strategy. This has implications for our own work: It seems that panels of experts, that we sometimes help facilitate, do little for readers in terms of helping them trust an organisation’s sustainability commitment and strategy. Users of end-of-cycle assurance might have to spend a little more time explaining their approach.

Brazil: Our recent report Road to Credibility 2010 spotlighted the enthusiasm of companies reporting in Brazil. It seems that this interest is also matched by report readers. 73% of respondents to the Readers Survey this year were from Brazil. This high percentage largely accounts for the growth in survey respondents (from 2000 two years ago to over 5000 this year). Companies that recognise cultural differences will reap rewards in terms of acknowledgement and trust.

Sustainability reporting is a discipline that has evolved significantly over the last decade. It has created a whole community of specialists and consultants who sometimes seem like the only audience for the reports they help shape. This study shows that this is not entirely true, and provides a good steer to companies (and consultants) on how to improve the effectiveness of their sustainability communications.

Let me know what you find useful when reading the report.