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June 24, 2009

The Seven Phases of Producing a Sustainability Report, Part 1 of 2

Note: This is the first in a series of two articles. Look tomorrow for Successful Design in Sustainability Reporting.

Putting together a successful sustainability report relies on teamwork, support from the top of the company, ample feedback and a healthy dose of introspection.

There are seven phases to producing a report, according to “Sustainability Reporting 101: Best Practice Strategies for Successful Reports” a Webinar from Addison, a brand strategy and communications design firm that has produced sustainability reports for companies including ITT, Time Warner and AIG, among others.

Phase 1: Gain executive support and commitment

For company executives who haven’t bought into the need for sustainability reporting, the first step is presenting a business case to the company’s upper echelon of management, said Judy Sandford, Corporate Responsibility Strategist at Addison.

Executives should see the value in creating a benchmarking program that reveals hidden risks and opportunities. Executives should understand that sustainability reporting often improves employee morale and retention, and serves as a way to attract top talent, Sandford said.

Additionally, the benefits from enhancing customer and investor loyalty and encouraging stakeholder engagement should be emphasized.

Companies that have good sustainability reporting programs often have improved access to capital from individual and institutional investors, she said.

Phase 2: Select a cross-functional team.

Parties involved in CSR reporting should include legal counsel, corporate/investor relations, external affairs, human resources, environmental healthy and safety, labor relations and technology teams.

Phase 3: Determine a reporting strategy

Whether a company chooses to publish a sustainability report once a year, once every two years or even quarterly, as Timberland does, a company must choose a regular cycle.

If a company has a Web presence for its sustainability program, it should be updated multiple times throughout the year to maintain interest, she said.

Multinational companies need to consider the geography of their various business units, as well as cultural differences.

There are international resources for best practices in sustainability reporting, including the Global Reporting Initiative (GRI) and United Nations Global Compact (UNGC).

Phase 4: Consider which key issues to address.

“This is where companies seem to struggle the most,” Sandford said.

In determining key issues of a sustainability report, companies need to consider materiality. This includes determining which issues most greatly concern stakeholders and mapping them against issues that most closely concern one’s own business.

After mapping the issues, a company has to determine what degree of control it actually has over them, she said.

Phase 5: Measure progress over time.

A good sustainability report uses both quantitative and qualitative metrics, including existing regulated reporting, putting software systems in place to gather the data and working with consultants if necessary.

“The key is not to create a snapshot in time, but to show progress over the years, adding indicators that matter to stakeholders,” she said.

Usually a company should have at least a year’s worth of data available for reports, Sandford said.

Phase 6: Solicit and incorporate feedback from stakeholders and external interests.

“Do this both before and after issuing the report,” Sandford said.

A company can rely on feedback from non-governmental organizations and auditing firms, as well.

Phase 7: Learn from reporting by identifying gaps.

Companies should look at sustainability reporting not just as a way to be transparent in its business practices, but also as a way to improve their stewardship to customers and the environment simultaneously.

A company also should watch and learn from its competitors. For instance, what elements are other companies reporting on? Additionally, companies should consider which environmental and sustainability issues are emerging as top of mind for regulators and the media.

Come back tomorrow for part 2: Successful Design in Sustainability Reporting.

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