Last year 59% of the Euro 250 and FTSE 100 published a web based sustainability report and 47% a printed report.¹

Whilst it has taken a while to brew to this level, Europe having been on the corporate responsibility track for the last 10 years, it has clearly reached tipping point.

In New Zealand, generally, we're latecomers to Corporate Responsibility reporting (CR – sometimes called Corporate Sustainability Reporting or CSR).

We're more or less where Europe was 10 years ago, when corporate responsibility was seen as a worthy cause or sponsorship opportunity relegated to the communications team. In Europe it is now part of every boardroom agenda and integral to corporate strategy. This is not yet the case in New Zealand.

But at least we have the benefit of learning from those who have gone before.

You might ask, why report?

Climate change is fast becoming the biggest issue worldwide. Al Gore's The Inconvenient Truth rescued it from the too-hard basket and made it a populist cause. The Kyoto Protocol, and its potentially devastating cost, has our government fast-tracking its sustainability efforts and putting real pressure on its suppliers. Younger generation employees care to work in organisations that take business responsibility seriously. The media is keen to find new angles on a cause that is being ridden so hard. Investors recognize that there's good business in responsible business and that companies could well be competing on their climate friendly credentials.

It's worth noting, however, that concentrating on climate change should not be to the detriment of other CR issues. They must still be given due care and attention. Depending on your business or sector, you may find non-climate change issues more pressing.

So, basically, whilst not mandatory here in NZ, reporting is certainly becoming expected and it's good business. In the UK the changes to the UK Companies Act require listed companies to consider and report on their environmental and social impacts and on employee and supplier issues. But there are no statutory requirements as to how that is done.

If you've decided you're going to report, you may wonder where your sustainability report fits in with your annual report.

There is no hard and fast rule on this. But the recent changes to the NZ Companies Act mean that, so long as you notify your shareholders about the availability of your annual report, you don't have to send them one unless they request it. This frees you up tremendously. It is possible that currently your annual report is an uneasy mix of statutory and non-statutory, marketing and financial information, serving all your stakeholders from the same bowl. Adding a sustainability report to your range of reports allows you to deal more directly to the disparate needs of your various audiences – as succinctly as you choose. And combining your reporting across web and print gives you even greater flexibility to present targeted information that will be read.

A proviso to the above is to remember that one of the reasons your report is to communicate with, and involve, your stakeholders. If you think of them as audiences, then you need to consider which is the best way to reach them. It's not always in a printed or web-based report.

What makes a good report?

The Global Reporting Initiatives (GRI) G3 guidelines are seen as the de-facto standard for best reporting (www.globalreporting.org). They focus on transparency, performance over process and stakeholder relevancy or materiality. Although, interestingly a recent article in Ethical Performance² noted that ‘Companies that are signatories to the United Nations Global Compact have stronger policy frameworks on aspects of CR than those that are not.’

Transparency is fundamental to being accountable. In earlier days companies were concerned that transparency meant exposure. But times have changed and increasingly companies are more confident to address issues in an open and positive way.

Reporting is about performance and not process. A report is not an end in itself but is a tool for measuring business performance against business strategy. The aim is to put in place, and to communicate well, the measures and objectives to improve performance.

Stakeholder materiality. Understanding what is important to whom and how best to communicate in a credible, transparent and engaging way. By really working hard at understanding effective materiality you should be able, over time, to work your way to smaller reports than are currently being published.

Key to good reporting is using clear, straightforward language. Reports must be credible and genuine. Avoid the fluff above all else as it quickly sets off the ‘greenwash’ detector. Important, also, is finding ways to engage your readers at all levels. Use graphics where you can rather than lengthy text, summarise information for the 5-minute reader, whilst providing greater depth for those who care. Remember, if you want to keep it short and punchy in print, the web is a great partner for more detailed targeted information.

¹ Is corporate responsibility in your blood? Directions 2006. Salter Baxter
² Ethical performance volume 9, issue 2, June 2007. www.ethicalperformance.com