Frequently updated web-based reporting can be more effective and efficient than a once-a-year snapshot
Frequently updated web-based reporting can be more effective and efficient than a once-a-year snapshotTechnology is revolutionising the way companies report their sustainability performance. An increasing number of companies are moving beyond the conventional annually printed sustainability report. They are taking their reports and engagement online.
The process started with companies simply posting their annual sustainability report in pdf format on their corporate websites. But realising that few stakeholders take the pain to read their lengthy reports, companies have started experimenting with a variety of formats to deliver the message.
Segmenting the annual report into several themes targeted at different groups of stakeholders is a common approach many companies have adopted.
For example, the pharmaceuticals giant GlaxoSmithKline has created a comprehensive section on corporate responsibility on its company website. The GSK website offers highly segmented information on key sustainability areas that the stakeholders may be interested in. Information is available on access to medicines, research practices, ethical conduct, supply chain, environmental sustainability, human rights, public policy, patient advocacy and community work.
“We have those chapters or segments because we think those are the areas that appear to be more interesting to our external stakeholders,” says Julia King, vice-president of corporate responsibility at GSK. “Interaction with external stakeholders helps us understand what external parties want to know about the company.”
The GSK website already had bits of corporate responsibility information and the annual corporate responsibility report. King explains that over the years this report had increased in volume and it made sense to have a corporate responsibility section of the website. “It’s more user-friendly. It’s easy to use. And it enables us to present the sort of volume of information that is required by our external stakeholders.”
Though GSK has produced once-a-year corporate responsibility since 2002, in 2010 the company for the first time decided to release an interim update mid-term. Published in September, it provides updates to information in the company’s 2009 corporate responsibility report, which was published in March 2010.
Some companies have taken the sustainability conversation with their stakeholders to the next level, making use of social media and other web tools. For example, Guardian Media Group, which publishes the Guardian and the Observer newspapers in the UK, has created a very busy section on the company website devoted to sustainability initiatives and debates.
The sustainability section includes the Guardian’s blog, which was launched in September 2009 to engage with stakeholders, provide regular updates on sustainability issues, host annual corporate responsibility reports that the group has published since 2003, and link to the company’s Twitter page that it uses to communicate on sustainability issues.
Jo Confino is the Guardian’s executive editor and head of sustainable development for Guardian News and Media. In a May 2010 blog posting he asked stakeholders what subjects they would like the company to cover in the next annual sustainability report.
In order to draw more stakeholders to read about its sustainability performance, the Guardian this year introduced “the 15-minute digested read” on the company website for those who it said “don’t have the time or inclination to read all of the sustainability report”. The 15-minute digested read promises to give stakeholders all the basics they need to know.
The trendsetter
Setting a new trend, Produce World group, one of the largest suppliers of fresh agricultural produce in the UK, has recently started monthly online reporting on the company website. The group’s firms include Solanum, Isleham Fresh Produce, RB Organic, Rustler Produce, Marshalls, Las Lomas, Briess Produce and Agromark.
“We wanted to try and set a new standard in transparency because we believe that is a core aspect of genuine corporate social responsibility,” says Gordon Fairbrother, former corporate social responsibility director at Produce World who now works with the company as a consultant.
Fairbrother explains that Produce World operates in a fast-paced business environment supplying to major supermarkets in the UK. “It seemed a bit strange from our point of view that we work in such a fast-paced environment and we were only reporting our sustainability performance once a year, six months after the end of that year,” Fairbrother says. “We felt we could do better.”
The company’s online reporting covers monthly progress on the seven key performance indicators of health and safety, workplace, carbon, energy, water, packaging and waste for each of the company in the group. The report includes monthly targets and actual performance for each of the indicators.
Fairbrother says that feedback, particularly from food retailer customers, has been very positive. “The fact that data is not in any way edited or manipulated inspires confidence among our stakeholders.”
Produce World uses Credit 360, a popular web-based sustainability data management and communication system that helps it measure, target and report on more than 100 social and environmental key performance indicators in real time. While a number of blue chip companies use the Credit 360 system for gathering sustainability data to produce their annual sustainability reports, Produce World decided to publish the data on the company website.
Clothing brand Timberland has a large section on its company website devoted to corporate responsibility communication. The company has started organising its sustainability reports online on the company website along what it calls the four strategic pillars of energy, products, workplaces and service.
Timberland has even set up a dedicated website, earthkeepers.com, to have an ongoing dialogue with stakeholders. The site uses popular social media tools such as blogs, Twitter, Facebook and YouTube to deliver sustainability communication and for engaging stakeholders in a variety of formats. The company plans to include podcasts to the site in the near future.
Another trend-setting initiative from Timberland includes quarterly sustainability reports on the earthkeepers.com website since 2008.
Still relevant
Observers say that even though more companies are likely to start seeing value in more frequently reporting on their sustainability performance, annual reports are not likely to go away in the foreseeable future.
Jem Bendell, director, Lifeworth Consulting and associate professor, Griffith Business School says that although annual social and environmental reports serve certain purposes such as establishing a baseline, such reports are flawed for external communications. “Hardly anyone other than corporate responsibility consultants and analysts actually read these reports,” he says.
Bendell says companies can therefore benefit from releasing data and inviting advice on various issues on a regular non-scheduled basis through various online networks. “They can even develop their own micro sites and smart phone apps for such initiatives, but it makes more sense to reach out to existing communities, such as JustMeans, TwoDegrees and NetImpact.”
But online stakeholder engagement has backfired for some companies. For example, the energy giant Shell set up a blog called Tellshell as far back as 1998 to seek feedback from stakeholders and the public and engage in a dialogue with them. The blog attracted criticism from activists who alleged that the company was censoring the comments posted by stakeholders on the blog. Activists even came up with their own versions of Tellshell blogs such as tellshell.org and tellshell.net to attack Shell’s social and environmental practices.
In 2005, Shell suspended the blog amid rumours that criticism forced Shell to discontinue the online forum. In 2007, Shell launched Shell Dialogues, an alternative to Tellshell, to engage with stakeholders that mostly relies on web-chats but lacks the vibrancy and robustness that many stakeholders would like to see.
Natural and organic beauty firm Neal’s Yard Remedies found itself at the centre of a public relations disaster in 2009 when it refused to participate in an online conversation with stakeholders.
The company had earlier agreed to participate in an online dialogue with stakeholders in a regular series called “You ask, They answer” hosted by the Guardian where the paper’s readers pose questions to companies with ethical and green claims. But when readers started posting questions mostly asking the company’s stance on alternative medicines and a recent controversy involving the company’s homeopathic malaria remedy, the company executives backtracked and refused to respond.
The Swiss food giant Nestlé had a bitter experience in March 2010 when environmental activists deluged the company’s Facebook page with protests over its purchase of palm oil linked to forest destruction in south-east Asia. Nestlé made the crisis worse by deleting protesters’ comments inciting more protesters to visit the page.
GSK’s King cautions that even though there is value in online engagement, companies have to be very aware of the demand on resources from activities such as online engagement. “You stand quite a big chance of disappointing people if you say you are going to engage in a conversation online and then find out that you simply don’t have the resources to do that.”
Some companies may remain cautious of establishing online engagement due to resource constraints and fear of conversations getting out of control. But more mainstream companies are likely to use their websites to segment sustainability information that is aimed at targeted stakeholders, and with more frequent updates than just a single annual report.