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Sustainability Reporting: Five Reasons Your Business Needs a Sustainability Report

India CSR by India CSR
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by Rebecca Treacy-Lenda

India CSRSadly, most American companies do not produce sustainability (or responsibility) reports. In fact, a recent study of sustainability reporting by the US Conference Board, Bloomberg, and the Global Reporting Initiative shows that only a tenth of the 1000 largest U.S. publicly listed companies effectively disclose sustainability data.

That’s unfortunate. I’ve seen firsthand the positive business impacts of reporting from inside a large, multinational company. In the course of collecting and reporting ESG (environmental, social and governance) data, the company I worked for was able to improve internal processes, save money, reduce environmental impacts, and improve perceptions in a tangible way. Not only that, our sustainability reports helped the company win new business from customers with green procurement principles.

If these kinds of benefits are available, why are so many companies taking a pass? I suspect it’s because U.S. business people often can’t see beneath the surface of sustainability reports. They see glossy photos of company volunteers and perplexing CO2 emissions data introduced by a hollow letter from the CEO. They view CSRs as a piece of communication, not evidence of hard thinking and a tighter grip on business processes. In short, they see an unnecessary use of company resources with little-to-no business value.

To be fair, there are plenty of reports that focus more on positive spin than nuts and bolts business issues. But smart managers understand the difference – and take competitive advantage of it. Good reporting can have real bottom-line business benefits in part because, as the saying goes, “what gets measured gets managed.” To take that a step further, what gets measured, managed, and reported can help companies in at least five concrete ways, including:

1. Improve Business Efficiency

Every business already collects data for internal management purposes. Most managers probably believe they already collect all the data they need without a sustainability report. That’s totally understandable. Why would you want to change processes and do the work to collect more data – which if it were really needed, would probably already be collected, right?

Maybe not. The rigor of sustainability reporting inevitably surfaces NEW information – previously unknown opportunities to improve efficiency. I’ve never met a business that didn’t want to improve efficiency. After all, if you use less energy, less water, and less paper to accomplish the same result, you lower your costs. That sounds like a bottom-line impact to me!

2. Identify Opportunities & Risks

The past five years have shown us that many companies were whistling past the graveyard when it came to risk. Finance, construction, and other industries got hammered by short-term illusions that “this time it’s different” with home values, credit ratings, and more. Good sustainability reporters earn a smarter perspective. They know that this time it’s different all right – but only in how the risk presents itself, not in the risk itself. Sustainability reporting forces companies to look beyond the quarterly earnings to evaluate success, which is a healthy balance for any business.

On the flip side, what are my opportunities when risk arises? If I’m more efficient than my competitors when costs climb, can I translate that into better pricing that wins market share? If my employee retention is higher, can I leverage that loyalty for recruitment programs? If my transportation network is more resilient to weird weather events, can I create a service based on it, or charge a premium for it? Sustainability reporters discover these opportunities earlier and already have good data for addressing them.

3. Competitive Differentiation

Getting good stories in the hands of your sales force can help set your business apart from the competition. Are sustainability reports going to be the first requirement on any RFP? No – not any time soon. But more and more, big companies are beginning to require sustainability data from Tier 1 suppliers. Those suppliers are then turning around and asking the same of their own suppliers, and so on down the value chain. Just consider any big company that wants to compete on green – whether it’s Walmart and organics or Time Warner and sustainable movie production: they need to document the story to be credible, and they need their suppliers to do the same.

Even if your customers are not asking you for sustainability information, there’s an opportunity to differentiate your business with a report that provides meaningful data and stories with impact. Aren’t we all looking for a competitive edge?

4. Keep Employees and Keep Them Engaged

Competition isn’t just for customers. There’s also competition to hire and retain a talented workforce. If you’ve read anything about generations in the workforce, you’ve probably heard of the Millennials. Those young upstarts are large in number, will be needed to replace the retiring Baby Boomers, and have different expectations of employers than previous generations. They are important to the future of any company. A recent PWC study showed that, “Millennials want their work to have a purpose, to contribute something to the world, and they want to be proud of their employer. The brands that appeal to young people as consumers, including those that stress their environmental and social record, are the same brands that appeal to them as employers.”

As a dyed-in-the-wool GenXer who is admittedly whiney about all the Millennial love, I would argue that the same is true for us and probably the Boomers as well. That is – companies that show a real commitment to sustainability have an opportunity to engage their workforce around things that are truly meaningful to those employees. Ultimately, that will keep those valuable employees coming back to work. Better yet, they’ll show up committed and proud to work hard, even serving as vocal brand ambassadors to the outside world.

5. Reputation Management

Never before has it been so important to have brand ambassadors. In part, that’s because the rise of social media has empowered individuals and activist organizations in a whole new way. The importance of engaging with ALL company stakeholders is only increasing. After all, crisis mode hits Twitter and Facebook within seconds of a CEO statement, a customer service issue, or a product recall.

Of course a sustainability report isn’t a magic wand that prevents crises. But, it can be an effective way to engage important audiences and build relationships when there isn’t a crisis – even with detractors. That way, if and when a crisis does pop up, there are more than a few folks out there willing to give your company the benefit of the doubt – and potentially come to your defense.

Rebecca Treacy-Lenda, a Strategist at Emotive Brand, is an award winning communications professional with more than a decade of experience in corporate communications and public relations. Rebecca specializes in sustainability strategy and communications having managed the industry-leading UPS sustainability report for several years.

Rebecca is part of the team at Emotive Brand, an award-winning brand and design consultancy that transforms businesses by making brands matter more to people.

For more posts from this series, click here

(Article published under 3BL Medial-INDIACSR Partership)

Source of the article : http://3blmedia.com/blog/Emotive-Brand/Sustainability-Reporting-101-Part-1-Five-Reasons-Your-Business-Needs

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India CSR

India CSR

India CSR is the largest media on CSR and sustainability offering diverse content across multisectoral issues on business responsibility. It covers Sustainable Development, Corporate Social Responsibility (CSR), Sustainability, and related issues in India. Founded in 2009, the organisation aspires to become a globally admired media that offers valuable information to its readers through responsible reporting.

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