As more and more non-financial reports come out, it’s time to question whether sending the complete report out to stakeholders really is a good idea
As more and more non-financial reports come out, it’s time to question whether sending the complete report out to stakeholders really is a good idea
Ethical Corporation's global reporting conference in Berlin on March 3-4 revealed the companies are still confused about ethical communications.
A few days ago this magazine held one of our business meetings. This time it was on reporting. Sustainability and corporate responsibility reporting to be exact.
We held it in Berlin, and had a good mix of delegates from across Europe.
The conference conversations and debates revealed that there is still a huge amount of confusion within companies over what to do with their reports once they’ve produced them.
Picture the scene. A small, likely under-resourced team in a company produces a corporate responsibility report. The process is a year round one, with at least a couple of intensive months, often in spring, spent working around the clock to get the thing finished.
Then some "assurance" (sometimes) by an external service provider takes place.
Finally, it’s printed on sustainable paper and is perhaps made “carbon neutral” in some unclear manner.
The CSR team rests, exhausted after their considerable efforts to pull together meaningful (if it’s a good report) information from across their company.
The company’s board is handed copies of the glossy new report.
The PDF is added to the website. A press release is sent out. Copies are mailed to “opinion formers” and key stakeholders, such as big NGOs, opponents and the socially responsible investment community.
Perhaps even shareholders and employees each get a copy. The print run in some larger companies can run into the thousands. The CFO no doubt dislikes signing off the bill. But it is job done for the CSR or sustainability team.
And now...
So what happens next? In many cases not much. The company has made its annual accountability statement.
Perhaps in the case of a Gap, BP or Nike, a couple of newspapers or the trade press might mention some of the stats from the report, if the company is very lucky.
Apart from that, the publication of CSR reports is generally met with a deafening silence.
Why is this? It’s because no-one outside the CSR analyst community reads them.
Does this mean reporting is pointless and irrelevant? No, not at all.
No-on would dispute the value of CSR reports to the company. They are an essential management and accountability tool, at least in part, if they are well done.
Companies need to do them to know, at least in part, what is going on in their business and to show key NGOs and the SRI community that they care about their impact.
Corporate responsibility and sustainability reports are not ignored because they are pointless (although the bad ones border on that). They are ignored because they are the wrong communications format.
We all know that 99% of the people CSR reports are aimed at do not read them. How do we know this? Call it crowd wisdom, but at conferences for over half a decade we have heard this over and over again from businesses themselves.
Reports about an organisation, by that organisation have very little credibility as a complete document. I would argue more concise, more obvious communications is a better option.
Aside from the management tool usefulness, and the “keep the board happy” value of corporate ethics reporting, plus the interested analysts, the only other audience for CR reports is probably the odd journalist checking facts and looking for hypocrisy, and a sceptical employee thumbing through the report with half a smirk on their face.
So companies face a problem. They must produce reports. But no-one really reads them.
Write a shorter letter, better
What’s the answer? Is it to simply produce the report and then engage in the business to consumer advertising trend around green issues we currently see inundating the UK’s Advertising Standards Authority’s office with complaints (many justified, if not most) about greenwash?
Well, that’s one option. Another might be to think about how target communications around sustainability a bit better. Of course, lots of companies do employee awareness campaigns on volunteering, giving and the environment. These are good things. But how to reach all those others who won’t read the reports? (these others include this magazine a lot of the time)
Here’s a solution. Target sober looking marketing (for that is what it is) in simple formats to those other “opinion formers” who you want to reach who don’t have time to read your 40-70 page report.
For shareholders, why not send them a short summary of how your plans for sustainability will impact their returns over the medium term, and encourage them to stick with your stock, since you have new product x or y coming out that may well help the share price, or at least the sales. Risky strategy, but more compelling than a non-financial report that’s likely longer than they’ll have the time to read.
For others, lets say NGOs and the media, why not just take the most interesting parts of your report relevant to those groups and send them those sober looking, humble 4 page “issue briefs” that the odd company does well.
Understand what these groups are after (demonstrable progress backed up by verified stats in clear language on an important issue, with credible third party comment attached) and send it to them.
What can work
Here are some good examples. Nike has a cool looking HTML newsletter with information about their CSR progress. It’s humble while obviously being public relations focused, but it’s much more compelling than reading a report, mainly because it’s accessible and shorter.
Unilever and Microsoft send out two-four page conservative looking "highlights" brochures on relevant issues. Unilever even sends out press cuttings from publications such as the Financial Times. Unless it’s in the FT article, there is not a smiling child in sight.
As a "stakeholder", I much prefer these. You don't need to send the full report with it, just supply a simple web link.
These types of shorter formats can be compelling and easy to read. Other companies should use them, but beware both the ethics team and the marketing team having too much input.
If the corporate responsibility team write too much of it, it may become jargon heavy and hard to read.
If the marketing or communications team writes too much of it, it risks reading like greenwash and being far too flimsy a document.
The best companies who communicate with those with little time, a sceptical eye and a demonstrated interest in the subject are these who get this balance right.
It’s not rocket science, as someone once said. But there needs to be more of this type of communications for companies to be able to tell their story about corporate responsibility more effectively.