Reporting Change
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22 Februarie 2011 |
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KPMG ROMÂNIA S.R.L. |
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Less than a decade ago, sustainability was still treated as 'hype' or 'an add-on' and often labelled as simply 'giving back to the community'. However, judging by the flurry of recent commitments from CEOs eager to show true leadership, many organisations now appear to be integrating sustainability into their business strategy as a key issue.
Nowadays, leading organisations are competing with each other to announce the greening of their product portfolio, or a halving of their carbon emissions whilst increasing turnover, and they are asking their suppliers to follow them on this journey.
A similar story can be told for sustainability reporting. Whilst the first non-financial reports were written over 20 years ago, only in the last decade has reporting been used as an engagement and performance management tool. Today, sustainability reporting is increasingly considered essential, accompanying publicised commitments whilst being integrated into the mainstream annual reporting cycle.
For better or worse, sustainability reporting has professionalised over recent years. The key questions remain whether these developments are in line with the expectations of Readers and how the reporting process benefits the organisation that produces a report.
This report is based on a survey of over 5,000 Reporters and Readers. The survey was conducted by KPMG, SustainAbility and Futerra, commissioned by the Global Reporting Initiative (GRI). The objectives were to gain insights into why organisations report on their sustainability performance, and to drive the transparency and accountability of these reports. Reporting will only be successful if an organisation clearly identifies its target audience and fulfils their needs. Our global survey matches that agenda, exploring the views of both Readersand Reporters.
Executive Summary
There are two sides to every sustainability report: the organisations that write them (the Reporters) and the stakeholders that read them (the Readers). In 2008, the first global survey of Readers was launched, revealing the expectations, preferences and actions of the reporting audience. In 2010, we are hearing both sides of the story, as we also surveyed report authors and compared the expectations of Reporters and Readers.
The response to the survey was astounding. Participant numbers more than doubled those of the previous survey, with a vast increase from emerging economies (notably Brazil). Our Readers and Reporters did not agree on all points, although clear agreements were obvious in key areas. Our conclusions cover the motivation for reporting, how to build trust, and the behaviour change reporting generates. For Reporters we have developed these conclusions into a set of practical recommendations at the end of the report to help drive reporting forward.
1. The future of reporting is global
Many new Readers joined the survey in 2010, with over 70 percent of the participants from Brazil. This demands a review of widely-held preconceptions.
Many Reporters based in developed nations have a longer history of reporting their sustainability performance, but no entitlement to predominance. The significant impact of Brazil, Russia, India and China (the 'BRIC nations') in this report is self-evident. There are fascinating cultural insights throughout the report that reveal different perspectives between Readers from different countries. Reporters who learn the diversity lesson can expect returns in terms of acknowledgment, recognition and trust.
2. The purpose of reporting is performance
Reporting is driving performance worldwide. Both Readers and Reporters listed their top two reporting objectives as 'improving internal processes' and 'accounting for sustainability performance'. Above any other business case for reporting, making real progress on sustainability is the priority.
3. Reporting isn’t stakeholder engagement
Readers and Reporters disagree on whether the purpose of reporting is stakeholder engagement. More than half of the Reporters chose ‘engage with stakeholders’ as one of their top three reasons for reporting. However, less than 20 percent of the Readers surveyed claim they use reporting as a source of information on how to engage further withan organisation.
This disagreement between Readers and Reporters is not simply semantic. Rather, it raises difficult questions about the role of reporting. Because of this, both reporting and stakeholder engagement strategies may need to change.
4. Reporting is trusted
Readers do not consider reporting to be ‘just greenwash’, although the question remains whether reporting provides a full overview of a company’s sustainability progress. Only 10 percent of Readers believe that reporting provides a complete picture, a continuing theme from 2008. There is a clear need for greater efforts from Reporters.
5. Standards have value
Independent standards play a role in building trust. The two important elements that GRI and its Sustainability Reporting Guidelines provide, are improving comparability of reports and enabling transparency.
6. All assurance is not equal
Most Readers named at least one external validation mechanism in their top three choices for building trust in an organisation’s sustainability commitment. However, Readers valued the specific tactics at very varied levels, with third-party assurance rated highest and awards rated much lower.
7. Readers influence each other
Almost half of the Readers use the information from sustainability reports to share their views or opinions with others. This means that whereas an organisation may not receive much feedback on its report, the story told and impression taken from the report will be shared actively between stakeholders.
8. Reporting changes behaviour
Readers are investing, seeking employment and buying Reporters’ products and services based on sustainability reports. One-third of Readers are also inspired by reports to take further actions that contribute to the broad sustainability agenda.
The Survey
For Reporters, meeting the needs of their Readers is an essential, but not easy, task.
Success means the difference between an engaging, effective report and one that merely gathers dust on a shelf. This GRI Readers and Reporters Survey compares the reporting objectives of 90 organisations with the expectations of over 5,000 Readers from across four continents.
Conducted between late 2009 and May 2010, this survey formed the basis of the 2010 GRI Readers Choice Awards, where Brazilian organisations fared extremely well. The slogan for those awards was 'No Judge, No Jury, Just You', and the following pages explore the attitudes and actions of 'You'. The comparison between the expectations of Readers and the motivations of Reporters reveals good news as well as several surprising differences.
This report presents the results of the Survey, together with an analysis and discussion. It has been designed not only to report the objective results of the Survey, but also to create debate and offer insights from the author organisations. From our experience of working daily with Reporters and Readers from across the world, Futerra, KPMG and SustainAbility have highlighted our professional insights within the Survey.
Who participated?
Over 90 reporting organisations took part in the Survey (although many more reports were judged by Readers as part of the Readers' Choice Awards). A total of 5,227 Readers participated, 73 percent of whom were from Brazil, ten percentfrom India and five percent from the United States.
