February 13, 2020
Developing a sustainability or ESG report is no easy process, especially if it’s your first one or if you want to step up your strategy and engagement. A lot of time and resources go into developing a strategy, creating content, collecting data, designing the report and securing all the necessary reviews and approvals. But when it is done well, you have a highly valued communications tool that explains your strategy, documents your performance and tells the story of your company’s sustainability journey.
Whether your company is a first-time reporter or you’ve been reporting for years, the beginning of the process is always a good time to evaluate where you are and where you want to be. Before diving into your next (or maybe your first) sustainability report, consider these five critical questions.
- What does success look like?
True to any communications project, defining what success looks like and how you will measure it should be determined early on. The measure could be as simple as your stakeholders having a clear understanding of your impact on people, communities and the environment. Success may also mean improved ESG ratings or recognition by third parties such as CR Magazine, Dow Jones or diversity and inclusion organizations. Regardless of the goal, defining success from the start will serve as a guide throughout the reporting process.
- What’s changed?
This question is intended to draw out both internal and external changes that may impact your report strategy. From an internal perspective, this could mean you have a new CEO whose views on sustainability may change your tone and messaging. Or perhaps you’ve launched a new initiative that greatly impacts your greenhouse gas emissions data and will need to be explained. From an external perspective, changes in reporting frameworks such as those from the Sustainability Accounting Standards Board (SASB) or Global Reporting Initiative (GRI) may influence your reporting approach. Or you may need to address specific, ongoing questions from ratings organizations.
- Who are your stakeholders and what do they want to know?
Engaging with stakeholders should be a year-round activity, and they should inform the target audiences for your report. But not all stakeholders are created equal, and sometimes priorities change from year to year. Review your list of stakeholders and organize them into two to three tiers. Then think through what’s important to each group, particularly your first-tier stakeholders. For example, investors may only be interested in how you comply with the SASB standard for your industry sector, whereas prospective employees will likely want to know about your commitments to diversity and inclusion and leadership development. Understanding stakeholder interests helps inform report content.
- What are your material topics?
We recommend companies conduct some form of a materiality assessment to understand what’s important to stakeholders and where your company can have impact. While a robust assessment is not necessary every year, you should conduct a review of your priorities and determine whether anything should change. This may be due to a trend in your business or industry, how your company manages a topic, or a change in standards such as SASB or GRI. Whatever the case, this is a good exercise to do very early in the process.
- What theme(s) describe the past year?
Thinking through high-level themes for the year helps drive the tone of the report, whether it be humble and modest or bold and from a position of leadership. A theme can also serve as a storytelling platform that ties your content together. Your theme and your report should always be authentic and true to your voice as a company.
Addressing these questions in the early stages of your reporting process lays a good foundation for the steps ahead.
Interested in learning more about how to get started on your next or first sustainability report? Contact me.
You can also read more about sustainability reporting in these Dix & Eaton blog posts: