Friday, May 14, 2010

Don't ditch CSR reports

Quick Quiz: Reporting and Communicating. What's the difference ?

Apparently there are quite a few people around who don't know that there is a difference between reporting and communicating. Apparently these people believe that a CSR report is a failure because it fails to attract a readership worthy of Jackie Collins, Agatha Christie and William Thackeray Shakespeare all rolled into one. Apparently, the fact that droves of consumers don't rush to seek out every single PDF sustainability report download on a company website indicates that the entire reporting movement is a total failure. Apparently, reporting has BECOME communications and it has FAILED. Why do I say this ? Well, this week, we saw two more "down with CSR reports" posts from two people whose knowledge, writings and experience I respect tremendously, but, nontheless, have fallen into the trap of, wrongly IMHO,  pointing an accusing finger at CSR reports as inadequate failings of the sustainability process. 

The first was Mallen Baker in his post entitled Why CSR Reporting is still ugly. Mallen writes that "CSR reports have become the equivalent of avant garde art. Experts queue up to declare it beautiful, whilst ordinary people stand in front of it slightly baffled wondering just what it is meant to be." In other words, he says that " reports don't work for ordinary stakeholders". He doesn't define what an "ordinary stakeholder" is .... an investor ? an employee ? a supplier ? a community activist ? an environmentalist? a human rights specialist ? a consumer ? a socially conscious consumer ? a professional CSR person? a manager? a Chairman of a Board ? a regulator ? Who on earth is an "ordinary" stakeholder ? And for whom exactly don't reports work ? Only 4,000 reports are issued every year  around the globe. The annual double digit growth of CSR reporting numbers is much stronger that the growth of any of the reporting Companies over the past 15 years. 20% of all reports issued each year are first reports from Companies getting transparency for the first time. More and more companies are following, as reported by Jennifer Hicks on Triple Pundit in which she claims that CSR Reporitng is gaining steam.  So much steam about something no one knows what it is meant to be ? Come on.

The second was Olivia Khalili in her post entited : Want consumers attention? Ditch the CSR report.  No doubt this sensationalist headline will attract many readers and retweeters, and maybe, many will look at it and think : "Yes, absolutely!". Apparently, these are also people who don't know the difference between reporting and communications. How does Olivia explain this attention-grabbing headline ?  "The contents of a CSR report almost never reach consumers’ eyes because they’re not visible on the company’s website and they aren’t relatable or engaging. Companies write CSR reports for their stakeholders, but few take the critical steps to engage consumers in their accomplishments (and shortcomings!). And so they leave tremendous value on the table........ Don’t write a report. Reports are read in the boardroom and the classroom, not by consumers and employees. Create something that celebrates what your company has done and gets stakeholders excited about the future challenges you’re set to tackle."   I suspect that not many Sustainability Reports are actually read in the Boardroom, frankly. Despite good governance practices which everyone talks about, Directors are still way off being fully engaged in sustainability dialogue. And why can't you issue a report AND get stakeholders excited about future challenges?

These posts are sensationalism and attention grabbing but they lack substance and, I believe, an understanding of the difference between reporting and reports and communications. Let's put this into perspective:

First, a report is the summary of all the material information about a company's sustainability information in one place. There is no other document in any business which serves this same purpose. If it's not complete, its not a report. If it's partly on a consumer label, partly on a website, partly in a round table discussion with employees, partly in a cause marketing campaign, partly on a supplier order form, it's not a report. It's  pieces of communication. A report is a document, whether printed, PDF'd or online, it's an integrative document which shows at a given point in time, where a  Company is on the sustainability journey. Not every stakeholder will be interested in every part of the report, but because it's a report, it must contain the complete scope of the content. If it does not, it is  impossible to gain a balanced view of the Company's performance - it may be abusing human rights in one part of the world, whist communicating happily on green innovations to consumers somewhere else. This is the point of reporting versus specific communications. Anyone who has an interest can see all aspects of a Company's impacts. It seems obvious that if the report is online, rather than just an Acrobat icon for download, it stands to attract more attention. However, not everyone has round the clock internet access (HP report in their 2009 Global Citizenship Report that only 20% of the world's population is currently online), and the ability to download to hard-disc and read a report during a flight to the GRI conference in Amsterdam, or whenever the connection is down, is big advantage.

Second, a report is the cumulation of a reporting process which is the thing that drives change in the business. The very need to report, the very need to publicly commit to targets, to transparency, to explaining the context and the impact of the Company's actions is a real tangible driver of decision making in the businesss. Talk to any SERIOUS reporter and you will find this to be true. Of course, if you talk to the PR-style reporters, the ones who fuel the blog posts such as those mentioned above, you will find that nothing happens between one report and the next, and that performance remains static. This is because they are not serious about sustainability, which is the first premise of reporting. You must have sustainability performance in the business before you can report about it. If you do, the reporting process, which involves many internal and external players, focuses the business and the decisions that need to be  made. My experience is that this works. Categorically and unequivocally.

Third, a report is a PLATFORM for communication, it is not the communcation process itself, and it is not the end of the process. It is the beginning of the process of stakeholder engagement. What do you engage stakeholders around ? Around your sustainability impacts and performance. How do stakeholders know what your sustainability performance looks like. They have a report they can read. But just hanging a report on your website and hoping that enlightened and enthusiastic consumers will race to download it at the earliest opportunity is like hoping that the Queen of England will start eating Chunky Monkey for breakfast.(Oops, maybe she does!) Aside from a few reporting freaks like me, NO-ONE will download your report unless you incentivise them to do so, by engaging their interest in what makes them tick. This means using the report as a PLATFORM for creating a conversation with different stakeholders. It means talioring your communications process by working with different stakeholder groups on parts of the report content that are relevant to them, in different ways and via different channels. Marcus Chung wrote a post about how he read a United Airlines CSR report as he was  on a flight and it was in the seat pocket. A banking client of mine puts copies of their report in their branches for people who are waiting in queues to read. Another client of mine who runs a cafe has a pamphlet on the tables next to the menu advising of the report and key messages. Everyone who orders a coffee gets Coffee and Report. How many Companies are bringing their reporting to their stakeholders ? CSR Reports is getting the message OUT. Communications is getting the message THROUGH. To get people interested in your reporting, you have to take the message to where they are, and do it in a compelling way. This may be as simple as putting your report in a place where your stakeholders will find it and will have time to read it, or it may require a little more effort, such as producing special product labels for consumer goods, sending out teazers, running a competition, setting up an Earthkeepers dialogue as the innovative Timberland does, polling your readers as Adidas does,  getting people to make a pledge as Marks and Spencer, Starbucks and others do. Establishing a presence for your report on Social Media. How many Companies have a CSR Report page on Facebook ?  This is engagement and communcation. You have to go where your stakeholders are. For more ideas, see my post called 27 ways to make your CSR report buzz. This kind of engagement can happen when a Company has got its sustainability story sorted out, which is significantly helped by the reporting process and the report.

My point is that reports, in and of themselves, are worthless. Like your new hybrid Mercedes if you never drive anywhere in it.  But, the fact that  companies are not doing what it takes to create the communications and the dialogue around the reports  is not a reason to say ditch reports. That's throwing the baby out with the bathwater, as my mom says. Instead of indulging in yellow journalism, and blasting the internet with headlines like reports are ugly and ditch them, I would like to see headlines that say "CSR reports are a basis for engagement", "CSR reporting should be more fully exploited by Companies" "We are not yet seeing the full potential of CSR Reporting" or even "CSR reports are fascinating". Why don't we see more conversation about what needs to be done to ensure that the investment in CSR reporting actually delivers? What are the naysayers doing to feed back their specific comments to Companies about how they could improve their reporting and what they, as ordinary stakeholders, are looking to see? Sigh. No answers. Apparently it is easier to moan and groan, rather than take a responsible approach to helping Companies report more accurately, more transparently, more succinctly, more engagingly. As I write, I notice a post by the Guardian on their blog, in which they ask readers "for help" in determining what  the Guardian should be reporting about this year. Nice.  Yes, I agree, reports need to get better. Yes, I agree that many are too long. Yes, I agree that following the GRI framwork in a mindless way delivers boring and stilted reports. Yes, I agree, that reporting must be more interactive, more real-time, more contextual, less self-flattering, more connected to the business reality.  But no, I do not agree that reporting is ugly, or that we should ditch reports or the reporting process. 

Rant over. Mallen thinks I take this too personally. Well, what's not personal in this world ? Of course, I have a vested interest as I make a  living (of sorts) from , in part, reporting. However,  I write based on  an absolute conviction that sustainability reporting serves an important purpose in driving sustainability and a positive contribution to business results.I have seen it. I hear reporting companies  confirm it. I believe my work in reporting  serves a valuable purpose, not just because of the reports themselves, but because of the transformation I witness in Companies that report.  

Finally, as I complete this post, I notice that the SAP 2009 sustainability Report is now online. The one referred to in the Ditch Reports post. Certainly looks interesting. An example of how more accessible reporting is evolving. More on that another time! But, where can I download it ? Hahaha.

elaine cohen is co-founder and co-CEO of Beyond Business, a leading social and environmental consulting and reporting firm. Visit our website at


Mallen Baker said...

Hi Elaine

If your blog post were a CSR report it would get full marks for completeness. But could have done with third party verification on some of the facts.

Specifically, I have never called for CSR reports to be scrapped. You can win any argument by misrepresenting the other side and then showing why the arguments they never made are wrong.

And it doesn't matter who I think the stakeholders are - when I speak to people responsible for reporting I ask them who they think their reports are aimed at - and whether those people are reading them.

There are a lot of people engaging in wishful thinking. We all want reporting to succeed, because it has the potential to lead to better outcomes for business and society. For some, that means we should see what's happening through rose-tinted spectacles. The article you quote is one of these - the quote about how reporting is rebuilding trust in business post financial meltdown is inspired by a GRI project - hardly surprising then, really. But the premise that the financial crisis is increasing the interest of mainstream investors in CSR reporting is just not supported by the evidence.

And this is the point. If we fail to see the world as it is, we will do a rubbish job at changing it. CSR reporting needs considerable improvement before it will work. If you want it to work, as I do, you do it no favours by pretending all is hunky dory in the playground.

Particularly because some of the leading companies ARE now getting frustrated. They know that a report is a form of communication - if it has no audience, it has no point.

Suppose financial reporters decided one day to leave profit figures out of the annual report. There would be outrage. Why? Because the audience for those reports expect to see that information.

I worked on a report for a company recently where we ignored the GRI, focused on the direct stakeholders (employees, customers and suppliers, since you ask) and ended up with a much smaller, more tightly focused, more simply written report. Testing has shown some progress made in making this work for at least two of those audiences. No howls of outrage from anyone else. None.

What I tell people is to treat the CSR report as a communication, and find the audience. Within the bounds of common sense, why chase the audiences you don't have, rather than the ones you do?

elaine said...

hi Mallen, thanks for commenting. Actually, I suspect we are saying a lot of the same things and feel that we basically agreee that trsnaparency and reporting is important and that Companies need to get better. In conversations with the GRI, I understand that the investment community IS looking to see more ESG data, whether as a result of the financial crisis or in spite of it.

What's wrong with focusing a report on employees, customers and suppliers? There are primary stakeholder groups. I am all for making reports focused. That's what reports are intended to be - addressing the MATERIAL issues, not a shopping list.

Where we differ is that you say treat the report as a communication. I say treat the report as a PLATFORM for communication. A "report" is a formal document which we expect to contain certain elements. Otherwise, its a communication and shouldnt be called a repoort. It could be a CSR update, CSR review, CSR Communique .. anything. When you call your document a REPORT, you set an expectation that it will contain certain core elements. Again I repeat that if Companies are frustrated that their report has no audience, they are not doing the right things in their commincations proceses. The report might be fine. If you buy a Mercedes, you have to put the key in the ignition to get it to take you to where you want to be.


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