Annual reporting isn't the most exciting topic of discussion for even the geekiest of people. To then expand the discussion to integrated reporting—when companies integrate their financial report with sustainability and CSR indicators—is a formidable task.
But for the Global Reporting Initiative (GRI)—the developer of global sustainability reporting guidelines—this is a conversation that begins with a broader economic question: Why is the U.S., the world's biggest economy and the erstwhile Mecca for social entrepreneurship lagging behind?
In other words, "Why so slow, America?"
That's how David Vidal, director of The Conference Board's Center for Corporate Citizenship & Sustainability put it, referring to the miniscule percentage of companies that are embracing the push to redefine corporate reporting and have begun publishing annual sustainability reports. (In 2009, 12 percent of all reports came from the U.S.; 45 percent were from Europe.)
The occasion: the Launch of Focal Point USA, the agency's first official presence in the U.S.
Vidal was on hand to moderate a panel with several prominent practitioners of the corporate sustainability world, including:
- •Mindy Lubber, President, Ceres
- •Susan Arnot Heaney, Director, Corporate Responsibility, Avon (who will be joining me on a panel next week to discuss how to use social media to engage stakeholders on sustainability & CSR)
- •Mari Snyder, VP, Social Responsibility & Community Engagement, Marriott
- •Steve Leffin, Director of Global Sustainability, UPS
- •Curtis Ravenel, Director for Sustainability Initiatives, Bloomberg
While the panelists highlighted several paradigms that come with infusing the traditional 10-K with environmental and social colors, each had a common objective: To explain why they chose to publish sustainability reports and how they countered the challenges that emerged along the way?
Several observations stuck out.
UPS: Execution & Communication Equally Important
"Doing [sustainability] is a journey but speaking about it is equally important." So said Steve Leffin, as he attempted to emphasize that no one should try to navigate all the complexities of sustainability reporting alone.
As for why he chose to follow GRI standards: "The question of ROI came up pretty often internally. GRI allows us to talk objectively with data and numbers, which in turn gives your argument structure," he said. And the sense of necessity that follows.
Marriott: Sustainability is the Perfect Opportunity for Training & Development
Seconding Leffin, Marriott's Snyder emphasized that her role was to "infuse business strategy with sustainability and environmental impact," and that "GRI is the tool that helps these conversations."
Her main challenge: "How to keep people continually informed of what we are doing internally."
Snyder also stressed that sustainability reporting provided Marriott with significant competitive advantage and offered the perfect opportunity for educating employees and other stakeholders on the complexities of a company's social and environmental impact.
Avon: Employees are the Most Important Stakeholders
For the world's largest employer of women, the biggest lesson on transparency came doing fundraising work for breast cancer.
As Susan Arnot Heaney put it, "For Avon, the stakeholders in the market are important, but most important are our Avon women." Not only that, but the power of "one small action that didn't resonate with our women could push us out of business."
"And they [Avon employees] are demanding data from us continually," she said.
Bloomberg: Game Changing for Investment & Trading Choices
According to Ravenel, it took Bloomberg–a private company–three years to collect all the necessary data to report on its sustainability initiatives. But the intense process helped make the case with management.
On the consumer side, Bloomberg recently launch a dedicated environmental, social and governance (ESG) service for all its professional trading screens. Calling it "game-changing," Ravenel said that having ESG data on the same screen as other financial indicators for analysts has the potential to change the entire of process of trading and investments.
[According to Ethical Markets, Bloomberg sourced "ESG data on 3,000+ companies in 45 countries" with the coverage comprising of "20 key performance indicators (KPIs) that combine ESG factors with financial fundamentals data."]
What led to this decision? "In 2005, only 700 companies were disclosing what we call adequate information on sustainability. Today, that figure stands at 5,000."
CERES: Companies Need Actionable Roadmaps to Pursue Sustainability
Mindy Lubber–a celebrity in her own right among the CSR crowd–concluded the panel by making the case for why standards like GRI help push the sustainability discussion forward at organizations.
- "Businesses always have a plan," she said, noting that before GRI, "Companies didn't have a tool to chart out a social and environmental plan. Brands look at sustainability reports because now they have a roadmap to work off of."
- Financial tools help with goal-setting.
- "GRI reports are designed to bring senior leadership into the fold. No CEO will sign off on a public report without knowing the details of the presented data."
- A globally recognized standard helps immensely in the "call for stakeholder engagement."
Vidal closed the event with a question for the audience that resulted in some eye-opening answers: What are the top three reasons for your company's reluctance to embrace sustainability—and to adopt sustainability reporting?
What emerged from the attendees were not a top three, but 11 challenges that stand in the way of corporate sustainability. And some of them just might surprise the most veteran of CSR professionals.
Arguing For an Annual Integrated Report: Too Much Data, Too Much Irrelevance?
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