Sustainability Reporting: Green Is The New Black – Pass It On


"Green" encompasses so many connotations that it's hard to keep up. It's a color. It's an adjective. It's a noun. It implies everything from envy to nausea to genius (it's said that green is the most common favorite color of "geniuses," so take note). It's a celebrity bandwagon, with people like Leonardo DiCaprio rolling up to red-carpet events in hybrid vehicles, and with the "I'm NOT A Plastic Bag" bag becoming this year's hottest fashion accessory. But, like many celebrity bandwagons, it's easy to wonder if this trend is about to take a long drive off a short bridge. Reality check: Green isn't going anywhere - we all know that now - but communications professionals have inherited the multi-faceted challenges that come along with corporate social responsibility and sustainability: branding, marketing, innovating and communicating initiatives to every stakeholder. Of course, there is a solution, albeit easier said than done. The best way to encapsulate sustainable branding efforts and communicate them to relevant audiences has, in fact, been around for decades: sustainability reporting. History In The Making Sustainability reporting is the practice of publicly reporting financial and non-financial information to key stakeholders on a company's operational, social and environmental activities. Their first incarnation developed in the 1980s with environmental reports issues by chemical companies, many of which were battling image problems. In the 1990s, these reports evolved to include social issues - labor practices, for example - and in 1997, the Global Reporting Initiative (GRI) was founded to establish universal guidelines for reporting. Many reiterations have come and gone, resulting in the current "G3" framework, which outlines the necessary principles, disclosure items and performance indicators for communications executives to incorporate and follow. But sustainability reporting is more than ticking off a checklist and just barely clearing the bar of expectations. For one, the number of global sustainability reports has increased dramatically over the last 15 years (see "Charting the Industry" above). This has a few implications: First, it is good news for stakeholders who are increasingly interested in having access to this information. Second, with more and more companies partaking in sustainability reporting, there is a growing challenge to stand out from the crowd. That said, communications executives have the responsibility and capability to infuse their brands with sustainable practices, rather than just superficially going through the motions and churning out a report. So, without further ado, consider these best practices to making your organization's sustainable report reflect a brand that is truly green. Shades Of Green *Alignment and Authenticity: According to David Hudson, principal of Hudson Consulting, "Sustainability reports offer the opportunity to deliver on brand promises made related to sustainability. The challenge here is for your report to align with the brand while being authentic and not coming across as marketing. Readers of these reports look for openness, honesty and sincerity." Thus, authenticity is key, as is aligning the content of the sustainability report with your brand. There are a number of examples of the different ways organizations approach the challenge of incorporating their brand voice into their report, and visa versa: McDonald's: Hudson describes the report from two years ago, which had pictures of happy people on the cover, with Ronald McDonald in the center. This year, the cover marks the beginning of the report's content, jumping right into the nitty gritty of the issue and using coloring to evoke the brand. This approach is honest and real; there is no effort to pad the issue of sustainability with fluffy images. Novo Nordisk: This is one of the few companies that combines its annual and sustainability reports to demonstrate that sustainability is truly integrated into the company's brand identity.   *Compelling Vision & Goals: "[Sustainability report] readers want to know how a company is addressing pressing challenges," Hudson says. "So, more and more companies are offering bold goals." Consider UK-based retailer Mark & Spencer's "Plan A," which pointedly defines five goals and objectives that will be achieved by 2012. Beyond identifying these objectives, executives offer readers 100 specific initiatives that will help meet the objectives. This practice shows that the company has committed to a long-term plan in writing, and it has a strategy to meet it. *Accessibility: Sustainability reports squeeze a huge amount of data into one publication, leaving stakeholders less inclined to read and digest the information. This is where communications executives can leverage the power of the Internet. Building the content of the report into a Web platform is the best way to manage massive amounts of information, as users can search and sort. BP is just one company that does this, using an interactive online map to make content more compelling. You should too. Another aspect of accessibility is presenting data in a way that laymen could understand it, as not all readers speak in numbers and charts. Haygood highlights BP as a good example, pointing to its practices of showing trends in charts that are accompanied with interpretations. *Credibility: Making the reports credible is essential to keeping this sustainability trend alive. The GRI guidelines are a good first step, but writing a report with these guidelines in mind means nothing if the words aren't backed by actions. "There has to be reporting. That means telling the good and the bad," says Angela Harrell, creative director, corporate reports, Coca-Cola. No company is perfect, and stakeholders are well aware of that. If a report just waxes poetic about all the good things, readers will immediately lose trust in its content. While it's difficult, it is still necessary to point out the places where the company failed, or at least has room to improve. It's all about transparency. "Transparency really builds trust with the reader that you are giving them the full story," says Leah Haygood, president of BuzzWord. Reebok, Nike and Shell are examples of companies that took the honest approach, highlighting their struggles with labor relations, supply chains and corruption, respectively. *Materiality: "Materiality is an emerging practice, and a concept that's borrowed from the financial industry. In sustainability reporting, materiality is what's most important to the company and its stakeholders," Haygood says. "Materiality analysis is a structure process for analyzing material issues." She points to four analysis steps: Identify issues Prioritize Review Use analysis results for reporting and strategy   Ford includes a materiality analysis in its sustainability report, grouping and rating issues in a matrix format. *Third-party Assurance: Communications professionals can bolster the credibility of their reports - and their brands - by getting third-party assurance that the organization's efforts are legitimate. Assurance providers can be professionals, stakeholders or NGOs. Haygood highlights a handful of varying models: Bringing in third-party professionals to grade efforts and endorse the report claims' legitimacy; Building a review committee of stakeholders who verify data and data reporting processes; and, Providing independent perspectives on issues via quotes and statements, or a letter from the stakeholder review committee. Ford execs did this by publishing an unedited opinion letter from their review committee.   While sustainability reporting is still a relatively young practice, organizations are clearly ramping up their efforts in hard-hitting and innovative ways. And if the upward trajectory is any indication, this "green" trend isn't going anywhere - it's going everywhere, so pass it on. CONTACTS: Leah Haygood, lvhaygood@earthlink.net; David Hudson, david@hudson-consulting.com; Angela Harrell, adharrell@na.ko.com Challenges (And Solutions, Too) CHALLENGES: Too many different audiences: Reports must address a number of stakeholder groups, all of which have different levels of expertise, not to mention different interests. Reaching different audiences directly may require customized reports for individual stakeholder groups; this increases costs. Measurement and alignment: For the executives at Coca-Cola, the enormous breadth of their brand means that aligning its various segments in a single report is difficult; after all, Coke's bottling partners are a huge reflection of their brand, and their practices must be aligned with those of the behemoth beverage company. "The greater our presence, the greater our responsibility," says Angela Harrell, creative director, corporate reports, Coca-Cola. Differentiation: The good news is that more and more companies are releasing annual sustainability reports; the bad news is that this makes differentiating yourself from the competition more difficult.   SOLUTIONS: Make it customizable: Follow Hewlett-Packard's lead and create one comprehensive report with extensive data, case studies and goals that is available online, then customize versions to allow readers to download and print only the sections that are relevant to them. Beyond being more readable, it saves paper. Be accountable: "Start with your story, just make sure that you mean it," Harrell says. "Our challenge is that the story's not all ours - it's our bottling partners', too. A lot of accountability comes along with that." Ask your stakeholders what they want to know: To deal with the challenge of differentiation, Harrell says her team surveyed stakeholders to find out what they were most interested in learning from the report. Based on those answers, the team was able to tell a story that everyone wanted to read. "Ask stakeholders what they care about and want to know," Harrell says. "Then focus on a few important areas instead of putting together something that just looks pretty."  

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