wp Consultant & author of ‘Understanding G4: the Concise Guide to Next Generation Sustainability Reporting’, Elaine Coehn shares the finer points of what makes reporting smarter, post the annual edition of the Smarter Sustainability Reporting Conference in London.
The fourth annual Smarter Sustainability Reporting Conference organized recently in London was by all accounts a great success. We heard from a range of experts, raised several challenges and discussed the finer points of what makes reporting smarter. Here is a selection from my opening comments to the conference as everyone braced themselves for an action-packed day:
“G4 has emerged as the leading reporting framework with close to 1,000 reporters now having started their reporting journey with G4 or transitioned to G4. Has G4 made a difference? We do see a new relationship emerging with materiality but many reports are still written with a shopping list mindset – a list of ‘everything good that we did’. The G4 transition is still working itself out, but it’s a positive development. GRI has even introduced the G4 EXAM – to prove that people who write reports really can.
The European Directive for non-financial reporting came into force in December 2014 with around 6,000 organizations expected to get on the train by 2018. Will they just show up or will they use the reporting process to add value? In other countries, such as Taiwan and Singapore, reporting has become mandatory. Sustainability reporting is apparently not going to disappear. But what will make it smarter?
In 2014, more companies than ever reported to the Carbon Disclosure Project. CDP now reports impacts across a range of topics – climate change, water, sustainable cities, forests, and supply chains on the basis of data submitted by 4,500 of companies representing over a third of the world’s invested capital. This is a database too large to ignore.
The IIRC continued its journey and its search for identity as more companies start to pilot the framework to explain how they create value for investors. The UN Global Compact launched a program for Boards of Directors so that Directors can actually learn what’s going on. SASB has published more and more standards, but when you get beyond the hype, you realize that in some cases, you need to be a rocket scientist to understand the actual performance measures. The jury is still out on whether companies will adopt these standards and if they do, and how they will influence materiality processes.
And talking of materiality, there is still no agreement across the board on what it actually means for sustainability and despite even more declarations of harmonization and collaboration talks, all we are seeing is more and more declarations of harmonization and collaboration talks.”
Here are some of the things that others said throughout the conference (and a short reaction from me).
Mardi McBrien, Managing Director, Climate Disclosure Standards Board (CDSB) : “In 2007, at the World Economic Forum, companies were saying there are too many ways to report climate change. Investors were saying, “well, we don’t use it anyway”.”
Err. What’s changed?
Nelmara Arbex, Chief Advisor on Innovation in Reporting, Global Reporting Initiative (GRI): “Personally, I believe that reporting promotes change and innovation. Reports used to talk about the past. Now they should be talking about the future.”
I agree. But when exactly does the future start?
Sarah Grey Markets Director, International Integrated Reporting Council (IIRC): “Smarter Sustainability Reporting is a pretty big issue for business. Sustainability is about having a strategic impact in the market. Hopefully some of the integrated reporting thinking will help sustainability reporting having that strategic impact.”
Verity Lawson, Sustainability Reporting Manager, British American Tobacco: “I think especially for an organization like us that is operating in a very controversial sector, it is particularly important that stakeholders can place trust in what we report. So the robust frameworks and processes such as independent assurance and GRI are particularly helpful. But while it is encouraging to see all the developments – G4′s focus on materiality, the IR framework, the harmonization talks – frankly it is very overwhelming for reporting companies.”
Harmonization is great in theory. The problem is, it’s always theory.
Neil Barrett, Vice-President, Sustainable Development, Sodexo: “It’s really about using sustainability reporting to create actions that will be of value to our clients. Increasingly our clients want to understand how we are helping them in their own sustainability journey”.
It is great when reports are useful as part of regular business processes. And when clients know what to do with them!
Shaun Davis, Group Director – Safety, Health, Wellbeing & Sustainability, Royal Mail: “Reporting is all about engagement and taking people with you. We shouldn’t forget how powerful it is as an engagement tool to talk to people about sustainability environment, safety well being etc.”
Tried it lately?
Louise Tyson, Head of Reporting, BP: “A lot of work goes into preparing information for reports and this is wasteful if it’s mot material. Less is more. In the last three years we have cut our reporting by 30%. We are hoping that more concise reporting targeted to what our stakeholders want to know will help us answer their questions better.”
100 page reports – a thing of the past?
Irene Jakobi, Sustainability Manager, Telekom Austria: “Now we have taken a more creative approach. Our first reports were more classic with hands and people and green trees. In 2008, we started to make a shift to more communicative content.”
If you want creative, look at Telekom Austria’s reports!
Megan Mitrevski-Dale, Associate Director, Corporate Responsibility and Sustainability Communications, Coca-Cola Enterprises: “Starting in 2005 we set ourselves a target to reduce our operational carbon footprint by 15% by 2020. OK, we said, operations means our manufacturing facilities and field sales offices. But as we started to go through it, we realized that that’s only part of the story. If our product gets to a store and its not in a cooler, no-one will buy it. Then we realized that our main carbon footprint isn’t in our operations. It is actually in our vending and cooling facilities.”
How many companies think they are doing fantastically by reporting internal operational footprints when, all the time, their true impact is beyond the factory walls?
Christoph Wilfert, Chief Executive Officer, PE International: “We think the software side of sustainability management is going to change dramatically. How do you get past email and excel spreadsheet management to support our sustainability reporting efforts? To us, reporting is not a journey of harmonization that frankly will take a very long time to come together to make your lives easier. We think its an app.”
Down with harmonization. Up with apps.
Simon Howard, Chief Executive Officer, UK Sustainable Investment & Finance Association (UKSIF): “Thirty percent of assets worldwide are run with sustainability as an aim and it’s growing very fast. Can a fund manager have too much sustainability information? Overwhelmingly yes. The information they want needs to be material, relevant and timely.”
G4 to the rescue.
Paul Toyne, Group Head of Sustainability, Balfour Beatty: “We have an integrated report that has sustainability sections in it, and we use our website to disclose a lot of information. What’s interesting is that when we start to get into disclosure, we spend so much time and effort to get to group level data and aggregating up to global level, but the investment we have taken here doesn’t really drive performance. If we invested more time and energy into the source data and dealing with the impacts, then we would actually improve performance.”
The old story of the chicken and the egg. Data to drive performance or performance to drive data?
Crystal Crawford, Corporate Responsibility Manager, Liberty Global: “If we manage internal reporting requirements well, then it will drive reputation and recognition. We have 45,000 data points in our data collection process.”
Data to drive performance.
Katie Buchanan, Head of Sustainability and Reporting, Virgin Media: “At a market level its about having a real responsibility to try to bring to life the material issues for our key audiences which are our staff and our customers.”
Materiality in practice and not only in a matrix.
All in all, a packed conference with a packed agenda and many insights for reporters, future reporters and reporting partners. We addressed the tools used for reporting, the frameworks and the practice. We plan to do the same thing next year. Same but different. In a year’s time, the world will have changed and the Smarter Sustainability Reporting goalposts will have moved once again.
Elaine Cohen is a wp consultant, Sustainability Reporter, HR Professional an Ice Cream Addict! Author of Understanding G4: the Concise guide to Next Generation Sustainability Reporting AND Sustainability Reporting for SMEs: Competitive Advantage Through Transparency AND wp for HR: A necessary Partnership for Advancing Responsible Business Practices. You can follow her on Twitter @elainecohen