As specialists in Environmental, Social and Governance (“ESG”) reporting, we often find ourselves pondering the ultimate question in our line of work. How can you create a report that convinces institutional investors to believe in the long-term sustainability of your strategy, employees to feel proudly representative of your business, and the public to acknowledge the societal value of your company’s presence? Here are the 5 things we believe you should strive for, in order to craft a sustainability report that inspires trust.
- CONVEY PURPOSE AND DIRECTION
The last thing you want is for your report to come across as hollow. Back it up with quality sustainability efforts. Actions do speak louder than words after all. But regardless of the quality of your initiatives, just making your efforts seem well-thought-out can go a long way to inspire trust.
Be sure to explain how your CSR efforts align with your mission, values and guiding principles – things you likely already have as part of your corporate identity. Having defined values and clear purpose signals maturity, commitment, and consistency – signs that you will not lose sight of what you stand for, even when life throws you one curveball after the next. To many, this is what separates adulthood from immaturity, the righteous from the deceitful, and the wise from the foolish, and this very much applies to organisations as well.
Addressing your values at the executive level is a good sign that they’re not just lip service; that there’s actual leadership commitment to reinforce these values throughout the organisation itself. Lenovo’s CEO Yang Yuanqing certainly seems to understand the importance of values and commitments. In his executive letter, he clearly mentions how Lenovo’s entire workforce are united by the credo of “We do what we say, we own what we do, we wow our customers.”
- DEMONSTRATE RELEVANCE
No matter how well thought out your CSR efforts seem to be however, it is meaningful only to those most affected by your business – your stakeholders. The goal is therefore not simply to inspire trust, but to inspire trust from the right people. That is why materiality assessments and stakeholder engagements have to be done carefully and meaningfully. And from a reporting point of view, clearly demonstrating alignment between your efforts and the concerns of your stakeholders goes a long way to show that you’ve carefully thought about the specific nature of your business impacts.
Another useful means of demonstrating the relevance of your sustainability efforts is to align them with international norms. For that purpose, the United Nations Sustainable Development Goals (“SDGs”) are as universal as it gets. They help establish a common language for addressing the biggest global concerns, and speaking that common language helps readers understand the broader relevance and context of your sustainability efforts.
- BE TRANSPARENT
Needless to say, the more relevant information and details you voluntarily disclose, the more truthful your report would seem. Include plenty of supplementary information explaining your data, figures, and conclusions. Couple that with external assurance, and you already have a fairly trustworthy report.
But perhaps the most important indicator of transparency, and also the most difficult step for many to take, is the willingness to talk about your successes AND shortcomings. After all, no company is ever perfect. There is always room for improvement, so long as there is demonstrated progress. In other words, having the courage to acknowledge both the good and the bad goes a long way toward humanizing your efforts and acknowledging specific problems to be solved, otherwise your narrative would just seem biased and frankly, “too good to be true”.
- ENSURE ACCESSIBILITY
The last thing you want is for your readers to be frustrated by the process of fishing information out of your report. If your report is difficult to find, its contents and structure are hard to follow, and the narrative is convoluted, then it is difficult to blame readers for suspecting that your report, and by extension your CSR efforts, doesn’t actually have substance nor impact.
So make sure to take into account the reading experience of your report as well. Use simple and concise language throughout, and avoid overly complex sentences. Make supplementary information as well as relevant contacts easily found via direct web links. And structure the report so that different stakeholders can quickly find sections of information that’s relevant to their unique concerns. Such is exactly what MTR has done in its report. Written not only in a language and format that is easily understood, the report is presented using a dedicated report microsite and interactive PDF file that makes finding information from different sections and issues a breeze. To top it off, the report includes supplementary “Did you know?” sections that provide further explanation about important relevant information, such as how the business model works, and even an overview of the ISO 14001 standard that they adhere to. They have made it simple enough that even a beginner in sustainability reporting can quickly grasp its contents with little ambiguity.
- HARNESS THE POWER OF STORYTELLING
Storytelling is of course extensively used in marketing and advertising, and it is entirely possible to harness the power of storytelling in the narrative of your sustainability report. Now the million-dollar question: What makes a good story?
Take the MTR report for example. They seem to understand that telling the story of their stakeholders can be a very powerful means of establishing compassion for the value that MTR brings to society. In its latest sustainability report, MTR included links to a total of 10 “stories”, each telling the tale of an ordinary passenger with ordinary struggles, whose life has benefited from MTR’s services. These stories, although hardly extraordinary, can be easily related to many Hong Kongers. The inclusion of stakeholder voices also serves well to humanize the MTR report in a way that few others have even attempted.
Remember that your sustainability report is a valuable opportunity for telling your company’s unique story, a window to a memorable impression of your company, and for your stakeholders to empathise with the ongoing struggles of your sustainability journey. So make it count. Just remember to chronicle the shortcomings of your sustainability efforts as well, and get your report assured if possible, because without them, your story could very well be viewed as heavily biased in the eyes of your stakeholders, and no different from mere fiction.