Reporting for Positive Change: Communicate

How to leverage the content beyond the sustainability report

Once the sustainability report has been created and approved, it’s time to really communicate about the report (content). This is a key step that is sometimes overlooked. Unless you created the sustainability report only for compliance reasons (or to prop up your computer screen), involve your communications teams and channels to proudly share your results and your report.

Go back to your reason why for creating a sustainability report in the first place. Who are the key people you want to reach? Will they read a full report, or do you need to create bite size portions or a summary to engage them? Can you create short social media items to share report highlights and/or draw people to the report? That also makes it easier for your employees to share stories they are personally proud of.

And just like the full report content, this is a perfect opportunity to look forward and share your ambitions, rather than only looking back. And strive for balance, sharing what went well and what you’ve learned from things that didn’t go so well.

Last but not least, you took months to create the report, so make sure you create a nice drumbeat to share parts of the sustainability report with key stakeholders in the weeks (or even months) after its release.

“To create awareness for the sustainability strategy, we launched the report with an event at our headquarters,” says Cecile Theunissen, Sustainability Manager at Appèl Catering. “To reach our restaurant teams, we also launched a series of short posts on our internal online platform. This generated many positive reactions, questions and ideas!” Yvette Moll, Communications Director at retailer Action shares: “For most employees and consumers the English full Update2019 is quite a tough read. So we created summary pages in our local languages to share the key results with these important stakeholders.”

Once the report content has been communicated, it’s time to evaluate and celebrate. Start by collecting reactions from readers and key people in the organization. What do they like about the sustainability report? And where do they see room for improvement?

Then get the core team together to reflect on the reporting journey. What went well? What did we learn from the things that did not go as well as we expected? How can we make the process easier next year? And to avoid the time crunch at the end of the process, when should we start the next reporting cycle? Assuming the core team is still on speaking terms at this point in time, don’t forget to go out and celebrate the teamwork and the resulting sustainability report!

“We delivered the 2019 sustainability report in a very condensed timeframe,” says Kelly Rijsdijk of Albert Heijn. “Next year we’ll start earlier and from the evaluation, we also have lots of ideas on how to reduce the reporting burden on key content owners.” Sabrina Simons , Serious Communications Manager at chocolate impact company Tony’s Chocolonely adds: “Every year we do a thorough evaluation of the reporting process. This really helps us raise the bar on the report and improve the process for the years to come.”

This is the final blog in this reporting series. Want more personalized guidance than our blogs provide? Consider joining our reporting webinar (2 Oct) or our reporting workshop (29 Oct) in Amsterdam. 

This blog is part of The Terrace’s series on Reporting for Positive Change. Sustainability reporting can be a vital process to support the sustainability strategy within in a company. Yet often, this isn’t the case. Companies report on positive change – rather than reporting for positive change. Every year we support many companies and other organizations on their sustainability reporting journey. In this blog series, we share key learnings - from across our reporting projects and clients.


Tony's Chocolonely: Raising the chocolate bar for industry change

For years, I’ve been supporting chocolate – and change – maker Tony’s Chocolonely to create their annual report. My kids and my colleagues love that I work for them. Because I always return from meetings with their yummy chocolate in funky flavors. Their bars are a treat, but what inspires me most to work with them is their commitment to creating positive change in the industry. Here’s my take on their key ingredients for positive change!

Crazy people raising the (chocolate) bar

Positive change usually starts with frustration about an issue plus people crazy enough to doing something about it. And this ccompany started just like that. Investigative journalists were shocked to find out how much child labor and slavery there is involved in nearly all chocolate. In 2006, in an attempt to prove that it could be done, they produced 5000 bars of slavery-free chocolate. As this first batch sold out in just a few hours, they turned the experiment into a company.  The company tagline says it all: “Crazy about chocolate, serious about people.”

Partners towards a common goal

A shift to more sustainable business practices is needed at all steps along the chain. From cocoa farmers, chocolate companies and governments, to retailers and consumers. The people at Tony’s understand they cannot transform the cocoa industry by themselves. Tony’s therefore developed a roadmap towards its mission: “Together we make chocolate 100% slave-free”.

The roadmap engages five key actors in the industry to work towards this common goal:

  • Strengthen farmers to increase their income
  • Engage the largest companies in the industry to take action in their supply chains
  • Encourage retailers to leverage their buying power
  • Push governments to adopt and enforce legislation
  • Enable chocofans to raise awareness and spread the message

Scaling up for real movement

To really engage partners along the cocoa chain, Tony’s knows there needs to be a business case every step of the way. Its own story and success provide lots of inspiration to get different parties to act.

At the launch event for its 17/18 annual report that scale became very clear:

  • Over 5,000 farmers benefit from the special premium Tony’s pays, nearly 1,000 farmers are involved in awareness-raising activities to prevent unwanted child labor and slavery;
  • The Netherlands’ largest retailer Albert Heijn announcedit will use Tony’s principles of cooperation for 100% slave-free chocolate for its very successful private label chocolate brand Delicata. World leading chocolate manufacturer Barry Callebaut supports the change process;
  • 5,000 chocofans joined the party, over 8,500 people support Tony’s mission as Serious Friends;
  • And the brand became the market leader in the Netherlands with a market share of 19%. Net revenue grew by 23% to nearly € 45 million and a net profit margin of 4.5%.

Relentless ambition for chocolate and change

Nice numbers for a company that produced its first bar of chocolate just 12 years ago… But they know there’s still a lot of work to be done. Therefore, Team Tony’s continues to work – and party – very hard to increase its own impact by expanding the business to other countries and continuing to drive collaboration in partnership with many others.


Top tips for reading sustainability reports

To mark International Literacy Day, this post is about reading sustainability reports. In 2016, the theme for International Literacy Day actually was “Reading the Past, Writing the Future”. Which is quite similar to our recent blog about transforming sustainability reporting to a tool for positive change. But that's a different story, as this blog is not about writing reports, but rather about reading them.

An ever increasing number of companies publish a sustainability report. Or integrate sustainability into their annual reporting process.  The question is, who reads these reports? And are the readers finding any use for the sustainability data and stories presented in the reports?

Who's reading?

In 2015, the Global Reporting Initiative, creators of the most widely-used sustainability reporting standards, co-authored a report with Oxfam, Informing decisions, driving change, about how different stakeholders read and use sustainability data captured in sustainability reports. It offers a comprehensive view of the key users of sustainability data, such as civil society organizations, investors, business, governments, market regulators, and media.

Some would argue that consumers also belong on that list, as well as prospective employees. Very different stakeholders with very different objectives. Yet all trying to get insights from reading the same sustainability report! Besides a few reporting geeks, many people may wonder how to best read or assess a sustainability report. So here are some tips to guide your reading!

Commitment or compliance?

The fact that a company has a sustainability report, doesn't always guarantee a real commitment to making their company more sustainable. A company may simply report only to comply with regulations. So a key thing to look for when reading a sustainability report is commitment. Is top management involved and engaged? What are they committed to exactly? How are decisions made regarding sustainability topics? The introduction to the report by the CEO or chairman is the best place to look for "commitment" signals. A great way to test the depth of this commitment is to cross-check the introduction of the financial report. If there is no mention of relevant sustainability topics there, then that commitment may not run so deep.

Connected context

The selection of topics for the sustainability strategy and report generally shows how connected a company is to its environment. So the next thing to look for in a sustainability report is a clear understanding of the company's context. Is the sustainability strategy linked to the vision and mission of the company, or is it focused on totally different topics? Are environmental and social risks and opportunities explored in relation to the business model? If you are less familiar with a specific industry, this may be hard to assess. In that case, reading parts of the sustainability reports of companies in the same industry will generate insights on the key topics.

Large companies are expected to act according to the OECD Guidelines and adhere to the UN Guiding Principles on Business and Human Rights. And all companies can use the Sustainable Development Goals as a framework to assess how their business contributes to a better world. So when reading a sustainability report, check whether and how the company references these frameworks.

When done well, companies select their so-called material topics after engaging relevant stakeholders, such as employees, clients, investors, NGOs, and communities. Through a materiality matrix, many companies plot the interests of their stakeholders against the interests or impacts of the company. That matrix and the accompanying text are my favorite parts of any sustainability report.

Completing the cycle

Sustainability is all about the future, yet reports tend to look back in time. So when reading a sustainability report, check whether the report on past performance is in function of the future. Are the long-term objectives clear, as well as the strategies and policies to reach them? Are they closely linked to the material topics identified? Does the report share relevant results for the past year as well as previous years as a benchmark? How do these results stack up against the goals for this reporting year?

Are the results balanced? Not just sharing what went well, but also the learnings from things that did not go as well? And does the report provide insight into the specific goals and action plans for the year ahead? These kinds of questions help you assess whether there is a structured, full circle approach to sustainability for the company. In which reporting is a key instrument to fuel improvement, rather than a goal in itself.

Consistency

The GRI Sustainability Reporting Standards (and Guidelines) help companies to prepare their sustainability report, but they also help the readers. Especially the GRI Content Index, which lists the standard set of disclosures for all companies and includes the material topics selected by the company. With it, the reader can easily find the pages for each topic.

And just like it's useful to scan the sustainability report of a company's peers and the financial report, it can be tremendously useful to have a look at previous reports by the same company. Is the company consistently reporting on the same material topics? If not, are there good reasons to change the scope of the strategy and report due to changes in context? Or is the company cherry picking its stories and KPIs from one year to the other, to always have good news to show?

And last, but not least, is the sustainability report itself consistent with the materiality analysis? Are the topics in the report - and the space they are given - in line with the materiality analysis? If not, it may be time to look for the page that highlights how to get in touch with the company about their report!


Transform your sustainability reporting to a tool for a positive future

Let's talk about how to transform reporting from a burden into a tool to build a better future. Our earlier posts zoomed in on materiality, but in the end, it's all about creating that better future. Here's our take on how to get more out of your reporting efforts. Just in time for the people in the midst of planning the next sustainability reporting cycle for their organization.

Every year, the reporting cycle returns and, every year, it turns out to be a lot of work. So it should raise questions around whether it’s worth the investment. Does the report itself add value to the company’s strategy and the sustainability efforts for a better future? Does it serve a strategic purpose beyond compliance with regulations and the accountability expectations of our stakeholders? For a strictly “by-the-book” type of reporting process, the answer to these questions is probably no.

Why? First, sustainability reporting suffers from a strange dichotomy. While sustainability is all about the future and long-term thinking, most corporate reporting is all about the past and has a horizon of just one year. Second, most companies do not use the reporting process to really connect the present performance to the future they to build and be part of. With our tips below, you can overcome this dichotomy and transform the reporting process into a powerful tool. So here we go!

Report the past in the context of the future

Start from the world you want in the future! In what kind of world does the company want to operate five to ten years from now? Instead of only looking back, we strongly recommend starting your sustainability report from the long-term vision and mission of the company. The report then gives an account of where the company is on your envisioned path

What does your company have to do to achieve that vision? How are your efforts to get there evolving? When you start from the vision and these questions, you report in the context of the future. This is a much more useful perspective for the company and for the report readers.

Focus on what's material for the future

Take your materiality analysis beyond the report! Most reporting frameworks include a so-called materiality analysis to identify the sustainability topics to be included in the report. The “by the book” analysis is mostly about what stakeholders want to know or what the company considers key risks, based on past performance and fears for the future.

To raise sustainability to a higher level, go beyond and ask: “what are the key topics we need to manage strategically to create value for the company and society?” Involve senior management in this analysis. Not only will the materiality analysis then inform the sustainability report content, but it will also provoke a strategic discussion and add a new perspective on what matters. That's the moment for sustainability (reporting) to enter to the board room.

Focus on what's material for the future

Involve your stakeholders in value creation! Stakeholders are vital to really create value for the company and society, so don't just engage them for selecting material topics for the sustainability report (as most reporting guidance recommends). Again, frame this step in the reporting cycle at a strategic level rather than the limited scope of reporting. And then continue the conversation from there.

Don’t limit the role of stakeholders to helping you choose your material topics. Really listen to what matters to them, what their goals are and jointly explore the world you want to build and the path you envision to get there. Only then can you find opportunities to collaborate and co-create on joint goals to make both your company and society stronger.

With these tips, we trust you can make your report a tool for positive change in the future, rather than just a report on positive change in the past. Let us know which of the tips you found most useful!

This blog post is part of a series on sustainability reporting and materiality. It is co-authored by Marjolein Baghuis of The Terrace and Nelmara Arbex of Arbex & Company. At GRI, they worked together on the creation and stakeholder engagement around GRI’s G4 Sustainability Reporting Guidelines. They now collaborate to support companies with strategic sustainability challenges, materiality analysis, and communications.


Developing roadmaps for reporting - for positive change

On June 22 and September 28, 2017, The Terrace held a workshop on sustainability reporting for companies just starting on their reporting journey and those eager to take their reporting to a higher level. Here are some of the key learnings from the workshop.

Start from why

We kicked off the workshop with a brainstorm on the reasons to publish a sustainability report. The participants came up with many: engaging stakeholders like clients, suppliers, and NGOs; having something tangible to prove what we claim to be doing; measuring and communicating our impact; accountability; informing and influencing employees to deliver on our sustainability strategy and more. Some are more internally focused, others are more externally oriented. Some relate to managing risks, others to identifying opportunities.

Make the complex simple

At the start of the workshop, we provided all participants an empty template for the reporting process. Using interactive exercises and group discussions, we jointly walked through the various steps in the reporting process. Here are some of the key questions we answered in the course of the workshop.

Prepare: Who's on the team? What are the tasks and timings? what budget is available? What are your initial ideas on topics to include in the report?

Engage: Which stakeholders are impacted by how you do business, and vice versa, which impact your business success? How can you engage with them effectively to understand their issues?

Focus: What are the material (or important) topics to include in your report (and in your strategy of course)? How does the prioritization of these topics compare for senior management versus the stakeholders' interests? What are the targets and measures for each of the material topics? And how will you achieve these targets?

Collect: Which sources are available to collect the information for your report? Who needs to be involved? And when do they need to deliver the information? Is it realistic to get this all ready in time for the first report?

Report: What are the key building blocks for your report content? How can you best structure this for legibility and engagement? Who will write, edit, check the report content?

At each step along the way, the workshop participants filled in parts of their roadmap.

Show the positive side of business

We closed the workshop with a brainstorm on how to make the best use of the report once it's done. All agreed that reports and their content are currently underutilized in communications. Besides sharing the report in its entirety with stakeholders and the press, the brainstorm also generated ideas like sharing parts of the report on the website or in social media, tailoring the content to engage different teams internally, training sales reps to use the report in sales calls, and - our favorite - throwing a party to launch it.

Don't be afraid

This advice came back again and again throughout the workshop. Be honest with yourself and your stakeholders and therefore also share things that are not going so well. Of course always in combination with your learnings and next steps. Or perhaps there are material topics you cannot yet measure. Again, signal that you understand this is a material topic, combined with how you will address and measure it in the coming year. A balanced, honest report that goes beyond the good news show is so much more credible! And don't be afraid to ask for help in the reporting process. A reporting consultant can add expertise and extra capacity to your reporting team at every step of the reporting journey.

At the end of the reporting workshop, the participants were certainly less afraid to get started on their (next) reporting journey. We closed the workshop by toasting to the personalized, actionable reporting roadmaps which they had each created during the workshop!

Interested in how The Terrace can support your sustainability journey? Please contact Marjolein or join one of our future workshops. The next sustainability reporting workshop will most likely take place in September 2017. Interested to join? Please let us know by sending an email to hello@theterrace.nl. We look forward to welcoming you in a future workshop!


The Terrace boosts reporting practice with Marjolein Baghuis

Marjolein is an expert and thought leader on corporate accountability, sustainability reporting and communications. At The Terrace, she will lead the reporting practice and support companies progress reporting from a burden to an inspiring communications opportunity. She will also be involved in sustainable strategy and communications projects.

The Terrace founder Leontine Gast: “We are pleased to add Marjolein's specific knowledge and expertise to our team. Her enthusiasm for positive change fits perfectly with the values of The Terrace. Together, we have all the skills to support companies in their ambitions to deliver positive change”

Through her work for the Global Reporting Initiative, Innate Motion and Change in Context, she has supported companies and people to create clear strategies and reports for positive change. Marjolein is the founder of Change in Context, an online platform for change towards a sustainable economy, which hosts her well-read blog. She also teaches sustainability at Nyenrode Business University. Previously, Marjolein worked for Procter & Gamble, Synovate and Greenpeace.

She is an active board member for the Nyenrode Alumni Circle for Sustainability and the regional Amstelland library. In addition, she serves on the advisory board of eRevalue, a British service provider in the area of ESG/sustainability big data, and speaks regularly at conferences on sustainability, accountability, and reporting.


Top tips to cut the crap: tips to help you and your organisation improve reporting

In the last decade, transparency and corporate reporting progressed tremendously, allowing society access to performance information that is usually not available in financial reports. Sustainability (or non-financial) reporting enable stakeholders – like investors, regulators, employees, NGOs, communities, partners, etc. – access to information about a company’s social, environmental and economic impacts, directly from the source.

But it’s not all good news from the reporting field, as many sustainability reports still consist of a hundred (or more) pages, difficult to navigate and to extract what matters. Many look just like glossy magazines and some even offer the same shallow content. They often present an overly positive, distorted picture of reality. They risk being considered greenwashing and useless for people intending to use the information to take decisions. Or to evaluate the readiness of an organization’s management to deal with social and environmental issues.

So ... it's time to cut the crap!

High-quality reports are clear, balanced, and focused on key issues. Corporate reports that are difficult to navigate, overly positive and/or unfocused do more damage than good for a company’s reputation. When not clearly showing the efforts, dilemmas, and results in tackling concrete societal issues, such reports just add to the overwhelming amount of useless information that surrounds us nowadays.

The European Union Directive on Non-Financial Reporting requires thousands of companies to start integrating sustainability topics to their annual reporting cycle, from the 2017 report onwards. This is a great opportunity for all involved in corporate reporting to make a step towards better reports. Cutting the crap in reporting helps experienced and new reporters generate more focused reporting. It improves the quality and reduces the cost of reporting - just what you need!

Here are our tips on how to cut the (reporting) crap!

Charming, but irrelevant

Reporting is not a beauty contest. Sustainability reporting standards, such as those provided by the Global Reporting Initiative (GRI), do not require a specific design or format. These standards offer guidance on how to prepare high-quality content. Well-organized, clear information is what really counts. If in addition, you want to make it look pretty and the visuals support clarity and navigation, that’s great. But well-structured, relevant content comes first. Always.

Random and unfocused

Don’t get distracted! Create focus through materiality analysis, an important step in the process to create a high-quality sustainability report. It helps to define the topics to focus on to sustain the company’s future in connection to society’s needs. These topics are selected by combining management’s strategic vision with inputs from strategic stakeholders’ representatives like employees, clients, regulators, and communities.

If done well, the analysis generates a focused, short list of topics that expresses the issues of high concern for society directly related to the strategy and core business activities. Once you have your material topics list, you are ready to think about which indicators (and other disclosures) best help you to tell your report readers what the organization is striving for and achieving on these topics. That’s it! These topics are the only ones you need to include in your report.

Annoyingly abundant

Don’t add extra information. Basic details about the organization – such as company size, the number of employees, markets where it operates, the location of the headquarters - as well as indicators related to material topics have to be included. Nothing more, nothing less.

Check the list of basic information to be disclosed, find the information required, organize it and present it in the clearest way you can. No tricks, no misleading. And if you can’t report on a required disclosure for some reason, explain why not. It’s really that simple.

Don’t add unnecessary information, even if it makes the organization look good. A report needs to balanced; the challenges and dilemmas should not be buried in strategically irrelevant content. Excess of information – even when presented in a beautiful way – can be quite detrimental to your reputation.

Poorly planned and costly

Gathering high-quality information isn’t cheap. Financial and human resources are needed to determine the units, the boundaries, the process, as well as for the systems for actual collection, aggregation, checks, approvals, and analysis of the data.

Preparing a good roadmap of what exactly has to be reported not only increases the quality of the report but also helps you make the best use of your valuable resources. Define a clear owner for the reporting process, if necessary supported by experienced outside professionals. Such as people with specific expertise on reporting, sustainability communications, etc. Good planning and ‘cutting the crap’ reduces the costs even more in case you’re involving an external service provider to assure the sustainability content of your report.

These tips can help you and your organisation improve reporting - and reduce costs - by progressing from:

  • Charming to clear
  • Random to relevant
  • Abundant to accurate
  • Poorly planned to professional

In times like these, when critical, well-informed decisions are needed, we can’t let useful information go to waste. Don’t bury your company’s impact and performance on key topics in the cacophony of useless information that surrounds us every day.

Join our campaign to cut the crap!

This blog is co-authored by Marjolein Baghuis of The Terrace and Nelmara Arbex of Arbex & Company. It also appeared on www.changeincontext.com and www.arbexandcompany.com


Have a bath before you open your kimono: sustainability reporting

Is your company ready to open its kimono? In 2010, South African corporate governance expert Mervyn King made the audience laugh at the GRI conference. "If you're going to open your kimono, you better have a bath first." It's actually a great analogy for sustainability reporting and performance. And for companies with more than 500 employees in the EU, it's more timely than ever.

EU directive on non-financial reporting

As of 2018, many European companies with over 500 employees will have to open their kimonos. They will have to publish their 2017 performance on select non-financial topics. The European Union adopted the Directive on disclosure of non-financial and diversity information. And the EU member states have transposed the directive into national law. Therefore, many companies will publish their sustainability performance for the first time in 2018, covering 2017. According to KPMG research, 74% of the largest companies in Europe already publish a sustainability report or integrate non-financial performance in their annual reporting cycle. But thousands of additional companies will have to start reporting when this new directive takes force.  

Time to have a bath!

green-bathFor those companies new to reporting on their sustainability performance, this is the perfect time to create - or update - your sustainability strategy. Or better yet, (further) integrate sustainability into your overall strategy. The EU directive requires reporting on "as a minimum, environmental, social and employee matters, respect for human rights, anti-corruption and bribery matters". It all starts with a thorough analysis to focus your strategy for the years ahead and your action plans for 2017. How do these topics relate to your business future? And how do your stakeholders view this? Are there other societal issues that are relevant to include in your strategy and reporting?

For some companies affected by the EU directive, this bath is just a nice-to-have, as they already have a strategy in place, are making progress and "just" need to take the extra step to start reporting. For others, the bath is a need-to-have to get going with sustainability and start the journey in 2017. So there's real progress to share when they have to open their kimonos in 2018.