Rigorous Reporting and Stunning Storytelling
7 November 2017 - Adam Garfunkel

Adam Garfunkel, Founder of Junxion

Having worked in the field of Corporate Sustainability and Social Responsibility for over 20 years, I can give you three good reasons why sustainability reports are an incredible tool.

– It demonstrates a sense of accountability.

– Transparency helps drive performance.

– Reporting allows you to tell your company’s story.

Admittedly, reporting has been on the rise and most of the world’s largest companies now issue some kind of sustainability report, yet there are still a large number that don’t. The challenge continues to exist, but many companies still query the investment in time and money and wonder how to get more gain from the pain of reporting.

More gain, less pain

Fortunately, help does exist … because even we can admit that sustainability reporting is far from easy. There are a number of different reporting frameworks, guidelines, and standards, the foremost of which is GRI – the Global Reporting Initiative. Junxion is a Gold Member of the GRI, and we help to guide our clients through its Standards.

Now, the GRI has very clear reporting principles but using the Standards as a reference tool, essentially trying to determine which individual metrics should be covered in a report, is not the best way to approach things. Let’s not lose sight of the big picture: reporting should be a company disclosure that moves the world towards a fair and durable prosperity for all.

Reporting to the power of 4

How can your company benefit from its impact reporting? To produce a strong sustainability report, you’ll need to tell a coherent, honest and complete story across four inter-related areas:

  • Context
  • Purpose
  • Innovation
  • Impact

Set the Context

‘Sustainability Context’ is not a new term at all and has long been in the GRI Standards. According to the GRI, companies should be discussing their performance ‘in the context of the limits and demands placed on environmental or social resources at the sector, local, regional, or global level’. Why is it then that so many companies partially report on this factor, or worse, ignore it completely?

First of all, you need to determine how your company views the ‘state of the world’ and how you plan to do something about it. At a minimum, you must explain how that “state” influences your business strategy.

In 2015, the UN launched a valuable set of guideposts to addressing these emergent ideas—the Sustainable Development Goals. The 17 goals and 169 related targets are a result of the UN’s diagnosis of the issues that our global community needs to fix; presenting companies with clear ideas on how they might tangibly focus their efforts.

Steel giant Arcelor Mittal is one company that establishes its context very well. To them, their focus needed to move more towards the ‘global challenges of sustainability’ to really manage stakeholder expectations of their business. Arcelor Mittal’s approach is to be commended, and more companies need to follow their lead.

Articulate Purpose

This leads us to the reason for a company’s existence … Purpose. By placing its Purpose at the service of society, a company operates on a wholly more mutually beneficial plane. The ground-breaking platform, Reporting 3.0, have positioned Purpose as ‘the linking pin between inside and outside of an organisation’s perception’. Lloyds Bank offers a tremendous example of this, coming from the much-maligned UK banking sector, they have a purpose and a sustainability programme that are both about ‘Helping Britain Prosper’.

Considering your company’s purpose, ask yourself:

  • Will we look at the root causes of the problems we see in the world or seek only to respond to the symptoms?
  • What is our leadership’s understanding of the scale of the challenge?
  • What is the company’s level of ambition?’

The greater depth and clarity in your answers to these questions, the greater the potential to build trust with your stakeholders.

Demonstrate Innovation

Responses to sustainability imperatives ought to drive innovation. By framing challenges to sustainability as opportunities for innovation, sustainability professionals can focus their business leadership’ attention on the issues.

In our guide to CSR, Corporate Social Returns, we profiled both incremental and disruptive business responses to sustainability challenges. Undoubtedly, incremental change is an option: making steady progress by carefully mitigating a negative impact over years can make a significant, accumulating contribution to global sustainability.  Increasingly, however, society is looking for more dramatic and innovative shifts, to help solve the challenges of water scarcity or our climate crisis.

A balance must be struck: an over-ambitious mission statement can put the company at risk of over-promising and under-delivering if its programmes are run-of-the-mill. The key things is that reports have to be honest about the company, its capacity, and its opportunities to advance.

Whatever you choose to say here, it must be authentic: ensure it is linked back to your company’s defined purpose and how you’re meeting the challenges of your context.

Showcase Impact

Company reports traditionally include a number of key performance indicators for separate impacts: how much have carbon dioxide emissions increased or decreased since last year, for example.

‘We are on track to be a sustainable business.’ How many times have we seen and heard companies make that statement right? As Jonathan Porritt, the former Friends of the Earth Director has pointed out: ‘there can be no sustainable business in an unsustainable world’. Therefore, it is critical that companies detail how they are making the world more sustainable through their efforts – not just how much less carbon they might be emitting.

One company that delivers well in this area is chemical giant BASF, with its Value-to-Society approach. BASF explicitly recognises that too much reporting is limited to inputs and outputs: this many health and safety training courses saw x amount of people trained… which tells us nothing about outcomes or longer-term impact. Has this led to a drop in the number of accidents? How much value do people place on the difference that has been made?

By aggregating impacts across the value chain, BASF offers its stakeholders a useful snapshot of its total contribution to society – the difference it is making.

Bring it all together

Smart reporters will be able to stitch all this together: set the context, articulate their purpose, demonstrate innovation and showcase their impact. This is not a rubric of all the things to include in a sustainability report (see here for that), but connecting these four elements will create a strong thread running through a company’s report.

Tell your story with a healthy blend of humility and verve and you’ll have an engaging report that genuinely adds value to your business and society.

Adam Garfunkel is an owner and Managing Director at Junxion. He’s been involved in corporate sustainability and social responsibility for more than 20 years, writing award-winning reports and supporting the advancement of social responsibility on three continents.