Sun, May

Reporting for business

With the trend towards greater disclosure and transparency print companies are going to have to get to grips with sustainable reporting. It’s a confusing field, but there are guidelines…

Sustainable reporting: two words that make so many directors feel slightly queasy. You might feel you have a thorough grasp of your company’s impact on the environment. You may even be right. But the challenge is increasingly not just to be green, but to be seen to be green and to be able to prove how green you are. And for the purposes of sustainable reporting, a company has to take a more holistic view of its impact on the world around it, so not just how much carbon you emit, or water you used, but how many employees died at work last year!

At the moment, sustainable reporting is a perfect example of what Scott Adams, creator of the Dilbert cartoon, called a “confusopoly”. There are no globally accepted standards. There is a suggestion that these considerations should be built into a single integrated report (which also includes the usual financial figures). Accounting practices and standards are pretty well understood across the corporate world – even managers who flout the rules know what they are – but measuring sustainability is less advanced and more inconsistent: a recent KPMG survey showed that nearly one in three of the largest companies reporting on sustainability had to restate their figures.

Two thirds of the world’s 500 largest companies now publish some kind of report on sustainability or corporate responsibility. They do so because they want to protect their reputation, attract investors and improve the way they run their business. Publicly quoted companies have long been under pressure from institutional investors on environmental issues but after the BP disaster in the Gulf of Mexico, even hard-nosed stock market analysts consider a company’s environmental performance. In a cynical world, failure to disclose information can often be taken as an admission of guilt – so the overriding trend is towards greater disclosure not less.

Don’t believe that sustainable reporting is the preserve of large multinationals or businesses based in such traditionally tree-hugging nations as Denmark, Japan and Sweden. One Harvard University study suggests that over 3,000 corporations are issuing sustainability reports including, notably, some medium sized institutions.
A few years ago, companies could look green by scattering a few sexy numbers, out of context, through their annual report. Anecdotal evidence such as ‘a 14% cut in energy use at London head office’ might have been enough to placate many stakeholders. Not any more. The pressure now is for easy to understand key performance indicators that reveal progress or the lack of it. And big companies can only deliver those KPIs if they have an accurate, detailed grasp on how they run their business and how their suppliers manage theirs. They need to measure their operations to ensure their figures are right. And their suppliers – whether they sell energy or wide-format print – will have to do the same.

The Global Reporting Initiative framework sets out some guidelines on what companies should cover.

Materiality. You should report on the most significant impacts your company has in the short and long term. So, for example, how does your mission or strategy affect the supply chain and your customers?

Stakeholder inclusiveness. The GRI defines stakeholder as any community affected by what an organisation does – and which may affect the way the company performs.

Sustainability context. It’s not enough to highlight specific successes - you need to put such feats in context by, for example, showing how they relate to national standards, environmental targets or typical industry performance.

Completeness. In other words, have you left anything significant out that could affect how sustainability might affect your performance. For example, have you been targeted by an environmental lobby or pressure group?
You can start small, with a statement that covers these issues on your website, while you put in place the procedures to go further and deeper.

Setting up the processes and systems to produce all this information isn’t cheap, quick or simple to manage. But you can’t really manage something till you measure it and these new processes could help eliminate costly anomalies in the way you operate. That way you do the planet (and your image) some good and you save money. And you’ll be able to face customers with confidence on this issue while your rivals are scrambling around to find the information they need just to survive the vetting process.


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