Peter Zollinger in the Financial Times on the difficulty of communicating sustainability reporting to investors

12 Oct 2007 – SA in the News

From the article:
Often, these gaps start internally. “There is the silo challenge,” says Peter Zollinger, senior vice-president at SustainAbility, a consultancy whose work includes brokering relations between internal corporate groups as well as between investors and companies.

Mr Zollinger says one of the reasons companies have trouble convincing investors of the merits of their sustainability strategies is that their sustainability staff are not communicating effectively with the investor relations department.

Part of the problem is that sustainability professionals often come into the corporate world from the non-profit sector or with backgrounds in areas such as environmental management or development economics but no grasp of finance.

“Very few companies have integrated the work of their sustainability teams and their investor relations teams,” Mr Zollinger explains. “Most of the people we speak to say they don’t understand each other – and that’s part of the reason why internally that hasn’t been progressed quicker.”

Often, the sustainability team will present their colleagues in investor relations with a barrage of initiatives, many of which are not of interest to investors. Mr Zollinger advises these teams to focus only on the two or three sustainability initiatives that are relevant to the bottom line.

The language problem also exists between companies and their investors. Take the word “integrity”. While this is now part of the ethics and sustainability community’s lexicon, for the oil and energy sector, this word refers to the robustness of infrastructure such as oil pipelines.

“It’s as simple as changing the language,” says Mr Zollinger. “If you take energy companies, they talk about legacy assets and where they can drill oil. And they’ll say it’s not sufficient just to have the technical skills, you also have to have the skills to manage a politically sensitive environment. So there you have sustainability – but they would never use that term.”

Read the full article at FT.com (subscription required).