Evolution of Corporate Reporting
Itâ€™s no secret that more and more companies are placing greater importance on CSR initiatives. As CSR moves from boardroom conversation to implementation, clear reporting and accurate measurement is now an integral part of most CSR initiatives. Transparent, data-driven communications werenâ€™t always the norm, but itâ€™s increasingly becoming an expectation from investors and consumers.
For many years, the annual report was where a company shared financial results, recent successes and a vision for the future. In recent years, as companies increasingly incorporate CSR into that vision, the annual report has changed. Each year the Methodologie Annual Review of Corporate Reports serves as a barometer of current reporting practices to give us a view of recent trends and best practices in reporting.
While the annual report is still alive and well â€“ of the Fortune 100, 81 published an annual report â€“ these reports are no longer as comprehensive as they once were. Annual reports have shrunk in size, but not surprisingly, theyâ€™ve begun to incorporate more information about CSR initiatives, and nearly half of the Fortune 100 published a standalone CSR report.
This increased focus on CSR has resulted in a shift in the way reports are created and shared. For example, in the Review of 2009 Reports, we found a small, but growing trend toward incorporating social media and statements of assurance into a companyâ€™s report. Because CSR initiatives are so valuable for brand building, sharing the annual report, including CSR results, with the average consumer has become more important and Twitter and Facebook allow readers to easily spread the word. While a mere thirteen of the Fortune 100 integrated social media into their reports in some fashion, watch for this number to increase significantly in the coming year.
Assurance statements are also on the riseâ€”but why? Simply put, these third party statements vouch for the dependability of reporting methods and results. With no mandated method of reporting CSR efforts, assurance statements establish an important level of credibility. It is one thing for you to say you accomplished your sustainable goals, but that same information will mean much more when verified by an independent source.
These two developments illustrate how CSR initiatives are changing corporate reporting and resulting in companies taking an extra step to communicate their efforts to a broad audience.
Despite the increase in recent years, not every company reports on their sustainability efforts, and even among those that do report, there exists a broad spectrum in terms of the scale and depth of reports. No matter what end of the spectrum a company is on, the key to successful CSR reporting is transparency. CSR reporting done well provides a great opportunity to strengthen your brand reputation by demonstrating the values your organization holds dear and how you put those values into action.
As annual reporting continues to evolve and CSR reporting grows, here are tips for doing it right:
- Make your content meaningful and measurable.
Good reporting should communicate as accurately as possible how your sustainability efforts impact key aspects of your business.
- Admit where you fell short or made mistakes.
Companies that candidly acknowledge their shortcomings break down the negative expectations people have about corporate behavior. Admitting fault is human, and consumers relate to that.
- Include a message from the top.
Write your report to real people from real people and include a message from your companyâ€™s CEO. A commitment to sustainability is not credible unless it is supported from the top down.
- Be balanced and transparent.
Have clearly stated goals in a variety of areas that can be measured and reported against on a regular basis, whether the news is good or bad.
Janet DeDonato is CEO of Methodologie. In August, Methodologie will publish its latest Annual Review of Corporate Reports. In the coming weeks and months, as the Fortune 100 look back at 2010, new trends in corporate reporting will emerge. Expect a greater focus on standardized metrics, undoubtedly more reports will be tweeted and â€˜likedâ€™ and watch for the CSR report to be used as a valuable PR and marketing tool.
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