Planning Your 2018 CSR Report? Get Smart on 4 Reporting Trends
It’s the time of year when many companies are kicking off their sustainability and CSR reporting efforts. If your company is one of them, there are some trends you’ll want to keep in mind based on new developments in the reporting space over the past few years.
Trend #1: Reporting Frameworks
There are a growing number of voluntary reporting frameworks, including the Global Reporting Initiative (GRI), United Nations (UN) Global Compact, Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD). And you don’t have to choose just one. Many companies incorporate aspects of two or more, ushering in an era of hybrid reporting that’s tailored to the particular needs of companies and their stakeholders.
GRI is still by far the most popular reporting framework, especially among larger, publicly traded companies and CSR leaders. According to the World Business Council for Sustainable Development (WBCSD)’s recently released 2018 Reporting Matters, 83 percent of WBCSD members use GRI in both integrated reports and CSR reports. KPMG’s Survey of Corporate Responsibility Reporting 2017 found that 75 percent of the world’s largest 250 companies use GRI.
Materiality – a critical GRI component that assesses the topics your stakeholders and your company care most about – continues to increase in importance. The vast majority of WBCSD members (89 percent) report the use of a materiality process, while more and more members are fully aligning their report with the outcomes of their materiality assessments.
Earlier this year, FleishmanHillard helped Monsanto Company (now part of Bayer) develop their 2017 Sustainability Report: Growing Better Together. WBCSD included Monsanto as a good–practice example in its 2018 Reporting Matters study. For each material topic, the report provides strong evidence of Monsanto activities that further its sustainability agenda and presents a range of case studies in a graphically compelling way.
UN Sustainable Development Goals (SDGs)
Announced in 2015 and endorsed by 193 countries, the SDGs are a set of goals aimed at addressing the world’s greatest challenges. As such, they’re much more than just a framework for reporting, but a growing number of companies are including them in their CSR reports. For example, more than 89 percent of WBCSD members’ reports connect their CSR activities to the SDGs in some way. It’s a trend that the organization is encouraging; 2018 is the first year that WBCSD included an SDG score as part of its overall evaluation of companies’ reports. And going forward we expect to see more alignment between the SDGs and companies’ sustainability strategies.
Our takeaway: With a growing number of reporting frameworks to choose from, we continue to favor GRI, which includes much of the information required by the others. In fact, you can create a multi-framework index at the back of your report. For example, we’ve helped companies align the SDGs and select SASB indicators within their GRI Index.
Trend #2: Integrated Reporting and Non-Financial Information
Integrated reporting – combining financial and non-financial performance in one document – has been a buzzword in the reporting realm for years. But while self-declared integrated reporting is increasing, the uptake has been slow. Only 11 percent of large companies publish an integrated report, according to KPMG. Clearly, standalone sustainability or CSR reports still reign, but it’s important to note that companies increasingly include CSR information in their financial annual reports.
Our takeaway: Unless your overall business and sustainability strategies are truly inseparable, opt for including some sustainability or CSR information in your financial annual report. But don’t make that a substitute for a standalone CSR report. Because integrated reports are geared primarily to investors and providers of capital, they tend to leave out information that’s important to the larger stakeholder community and they do less storytelling. In short, they’re just not a terribly effective way to communicate your company’s sustainability efforts.
Trend #3: External Assurance
It’s becoming more common – especially among recognized sustainability and CSR leaders – to enlist third parties to independently assure some or even all sustainability and CSR-related report data. This external assurance is an effective way to build credibility for your report and provide peace of mind that your data management and collection methods are sound.
Our takeaway: Start conversations with assurance partners early to decide what data to submit and to complete the process before you publish your report. Most companies that choose this path start by assuring select environmental data.
Trend #4: Human Rights Reporting
A clear majority of large companies have come to recognize human rights as a global business issue. Yet only 62 percent have human rights policies in place (per KPMG). Western European companies lead the way, while North America and the rest of the world lag behind. And it’s important to remember that even if your company isn’t directly affected by such issues as forced or child labor, your supply chain may be another story.
Our takeaway: As consumers and business customers demand more transparency, consider including more human rights content in your CSR report. Or take the next step and issue a standalone human rights report informed by the UN Guiding Principles Reporting Framework, the world’s first comprehensive guidance on how companies should report on their respect for human rights.
One last bit of advice: Based on years of helping a wide variety of clients with their CSR reporting, strategy and communications, we’ve learned that there is no one-size-fits-all approach. We can work with you to strategically grow and unlock the business value of your CSR and sustainability efforts.