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Eight key points to ensure CR and sustainability reports are relevant

Tuesday, November 15, 2005

Eight key points to ensure CR and sustainability reports are relevant

The varied audience of a prospective CR or sustainability report raises difficulties for companies. How do you respond to all parties in the same document? Analysis of foreign studies and sustainability reports shows the following eight points must be considered to ensure relevance.

1. Commitment of management
Every study stresses the importance of management commitment at the highest level, and of expressing the support and involvement of management in sustainability reporting.

2. Corporate values and principles
The sustainability report is a means of describing a company's specific approach, values and culture. Instruments and methods used by organizations for managing their performance in terms of sustainability include charters or codes of conduct, internal regulations, standards, external voluntary initiatives, and management systems.

3. The provision of information on objectives and the resources applied
The reports should encompass the past and future objectives of the company in order to allow precise measurement of its performance. Many of the best sustainability reports set out quantitative and precise objectives.

4. Identifying and ranking CSR risks
An understanding of the sustainability issues linked to the company's activities is essential and forms the basis for the credibility of the reports. Paradoxically, a sustainability report that deals with “sensitive” subjects has enhanced credibility and improves the company's image. For a company simply to acknowledge a problem, even if it has no answer, is a factor in leadership and influences the views of rating agencies, the media, stakeholders and so on.

5. Means of verification introduced
Although the concept of “verification” as it concerns sustainability reports is still poorly defined, it can cover three types of factors: quantitative data, actions taken by the company (circulating a code of conduct, setting up a management system, and so on), and acknowledgement by the company of the impacts of its activities and of the expectations of its stakeholders, notably as regards its choice of indicators and objectives.

6. Results in all three areas of sustainability
The definition of good social and environmental performance is still strongly dependent on cultural background and particular business sector, making it more difficult to select relevant overall social indicators. A company's economic impact is still the area that is least developed in sustainability reports; aspects such as a company's contribution to the economic development of the countries in which it has a presence are only rarely reported, and this is still a challenge for most reports.

7. Views of the stakeholders
One of the first steps for a company to take in preparing the sustainability report is to get to know its stakeholders. Some companies devote several pages to the subject, providing a comprehensive list of identified stakeholders, with a profile of each group, the means of dialogue employed, the main expectations expressed, and key performance indicators corresponding to these expectations.

8. Impact and reaction
A number of methods for consulting stakeholders can be used, such as interviews with experts, stakeholder meetings, or even integrating stakeholders into the organization (by means of a consultative committee, for example).

Adapted from Assessing the French experience with mandatory CR reporting, in the current issue of Corporate Responsibility Management.