September 8, 2020
Every organization’s sustainability/ESG reporting journey is different. There are numerous variations – the starting point, relative prioritization of topics and stakeholders, milestones, pace of progress, metrics, etc.
Last week, I moderated the Dix & Eaton webinar “Lessons Learned along the Sustainability/ESG Reporting Journey.” We featured three experienced practitioners: Renita Dixon, senior sustainability & product stewardship at ITW; Jill Urey, vice president, deputy general counsel of Glatfelter; and Dix & Eaton Senior Advisor Gale Tedhams (formerly with Owens Corning). Here are three takeaways from the webinar.
1. Working toward best practices takes time
For ITW, Renita noted that the company’s first CSR report in 2009 consisted mostly of storytelling with a heavy emphasis on community engagement. Over the years, the company enhanced its disclosures and presented the report in various formats to meet the changing expectations of stakeholders. Today, there is a clear strategy driving the report, with a focus on four areas of commitment: Governance & Ethics, People, Communities and Environment. In addition, the company continues to enhance its data and targets, including a greenhouse gas emissions intensity reduction target.
Glatfelter’s approach is rooted in its traditional core values of environmental and social responsibility. Its journey has accelerated recently, coinciding with the company’s transformation into a leading global supplier of engineered materials. The company is currently developing its first report, beginning to engage with ESG ratings organizations and developing metrics that it plans to publish and report on in future years. Its ESG/sustainability priorities are Environmental Management, Innovation and Environmentally Responsible Products, Occupational Health and Safety, product Safety and Quality, Community and Employee Engagement, Corporate Governance, and Ethics and Integrity.
2. Determine your “essentials and principles”
Gale Tedhams provided her list of “essentials and principles” for organizations early in their reporting journeys. A materiality assessment is important, she said, but this list of essential topics would be a good starting point for any organization: climate change, environmental, safety and health, human rights, employee experience, community, leadership structure, sustainability strategy and structure, and making key policies and codes publicly available. Under her principles, she said, “include what meaningful data what you have,” even if it may seem spotty and random at first. She also encouraged companies to “explain your vision” in qualitative and quantitative terms, and “be authentic,” which includes being willing to share your challenges, weaknesses and lessons learned. She urged first-time reporters to use sustainability/ESG standards “like free consulting,” as a rough, first cut at what stakeholders expect.
3. Set a cadence to reevaluate
The Q&A covered a wide range of topics. On the importance and frequency of materiality assessments, the panelists recommended an annual check-in, a refreshed assessment following a triggering event or at least a re-evaluation every three years. As for reevaluating and evolving from previous reports, the 2020 reporting cycle will be all about making adjustments. Renita and Jill predicted that transparency about the social issues of the day will be important but also uncomfortable for many companies. Gale said the impact of the COVID-19 pandemic, the ongoing social unrest and other human capital management issues will force companies to expand their risk management disclosures.
Thank you to all who spoke, attended and participated in the discussion by asking questions. Click here to download the slide deck. Follow us on LinkedIn to learn about future events. Contact me if you want to talk more about your reporting journey.