This follows my post about trust and the Top 100 Thought Leaders in Trust. Which got me thinking.
There are some questions that are apparently very simple to ask but not so simple to answer. Do you trust Sustainability Reports? Of course, there are reports and reports. Maybe you trust part of what's written in a report, and maybe not other parts. Bottom line, however, if you don't trust it all, you don't trust it.
What makes sustainability reports trustworthy? We often talk about credibility when referring to Sustainability Reports, and this is defined as "the quality of being worthy of trust". So I guess it boils down to the same thing. Do we believe what we read? If yes, trust is the outcome. If not, mistrust is. But it's not quite as simple as that. Reports are not just about what is written. They are about who is writing them. When you pick up a report of a company that you don't trust, the credibility start-point of that company's Sustainability Report is already in the red. The report has to work much harder to be believable. But it's not quite as simple as that. One report doesn't do it. I have often said that what makes sustainability reports credible is the fact that they are one of a series ... one report is a drop in the ocean, a series of annual Sustainability Reports that display consistency over time is what builds trust. Consistency is a big trust differentiator in reporting. But it's not quite as simple as that either. Here are some more factors that influence whether we trust reports.
There are some questions that are apparently very simple to ask but not so simple to answer. Do you trust Sustainability Reports? Of course, there are reports and reports. Maybe you trust part of what's written in a report, and maybe not other parts. Bottom line, however, if you don't trust it all, you don't trust it.
What makes sustainability reports trustworthy? We often talk about credibility when referring to Sustainability Reports, and this is defined as "the quality of being worthy of trust". So I guess it boils down to the same thing. Do we believe what we read? If yes, trust is the outcome. If not, mistrust is. But it's not quite as simple as that. Reports are not just about what is written. They are about who is writing them. When you pick up a report of a company that you don't trust, the credibility start-point of that company's Sustainability Report is already in the red. The report has to work much harder to be believable. But it's not quite as simple as that. One report doesn't do it. I have often said that what makes sustainability reports credible is the fact that they are one of a series ... one report is a drop in the ocean, a series of annual Sustainability Reports that display consistency over time is what builds trust. Consistency is a big trust differentiator in reporting. But it's not quite as simple as that either. Here are some more factors that influence whether we trust reports.
The CEO: Leslie Gaines Ross, with whom I had the honor to share a stage in Berlin last year, says that the reputation equity of a company is influenced by the reputation of the CEO at a level of 50%. When you get a CEO or a senior leader that makes non-trustworthy statements, this has a direct impact on the Sustainability Report credibility of the company. When a company's Chairman makes a public statement which is anti-gay, as in the case of Barilla, you have a hard time believing anything that is written in the company's Sustainability Report. When a CEO openly discriminates about people who do not match a beauty stereotype, as in the case of Abercrombie and Fitch, you are likely to have a hard time believing the Sustainability Report. Write whatever you want in your Sustainability Report, if no-one trusts your CEO, no-one will trust your report.
The Bits you Leave Out: Reporting is often as much what you don't report as what you do report. If you have had a major scandal, major restructuring or major crisis, and this is not referenced anywhere in your report, what IS referenced in your report is treated with suspicion. One of the first things I generally ask my reporting clients is: what do you not want to report? Every company has these. Every company wants to minimize the negatives. Yet it's these very issues that create credibility and trust in your report. After the big celeb scandals in the UK, the BBC did not avoid reporting the impact on its organization.
After the horsemeat scandal in Tesco frozen beefburgers, Tesco did not shy away from referring to its actions to increase food trust in the 2013 Tesco and Society Report.
The bits you leave out are the bits everyone wants to read. There is a likelihood that there is even an expectation that you will report on exactly those things. Not doing so erodes trust in your reporting and in your company.
The Reporting Ecosystem: GRI was devised to create a common platform for reporting so that we would have a measure of comparability that would also make it possible to know which reports are green-washing and which are serious about reporting the issues that matter. While comparability has never truly been achieved, the overarching framework of GRI sets an expectation of the scope of reporting and the basic elements of a report that are considered to meet the needs of a wide range of stakeholders. Reporting whatever suits you, without referring to a broad set of stakeholder expectations can often erode trust, as readers believe that you are reporting what's easy or shiny and not what matters.
After the horsemeat scandal in Tesco frozen beefburgers, Tesco did not shy away from referring to its actions to increase food trust in the 2013 Tesco and Society Report.
The Reporting Ecosystem: GRI was devised to create a common platform for reporting so that we would have a measure of comparability that would also make it possible to know which reports are green-washing and which are serious about reporting the issues that matter. While comparability has never truly been achieved, the overarching framework of GRI sets an expectation of the scope of reporting and the basic elements of a report that are considered to meet the needs of a wide range of stakeholders. Reporting whatever suits you, without referring to a broad set of stakeholder expectations can often erode trust, as readers believe that you are reporting what's easy or shiny and not what matters.
The Buzz Ecosystem: Whether you trust a Sustainability Report can often be influenced by the buzz on the street and not the report itself. When the buzz about your company is negative, your report has to work much harder to generate trust. So, for example, companies such as Walmart, Gazprom, Chevron and a range of other companies that feature in the Public Eye Hall of Shame have to overcome gross mistrust before they can build trust. Reports such as Behind the Brands expose the issues that companies are addressing, or not, in their supply chains, and these can influence the way you read the reports of the companies reviewed. On the positive side, we might argue that rankings and ratings (if they themselves are credible) create a more positive disposition regarding whether you are prepared to trust a company's report. The DJSI rankings are often held to represent a solid guide to sustainable corporate practice and high-rankers tend to gain a head-start in trust. And lets not forget the Twitter community and other online forums, bloggers and commentators. They all create the reporting buzz ecosystem and influence the way you relate to a report by setting expectations, positive or negative. Managing your buzz ecosystem is part of managing trust in your Sustainability Report.
The Quality of the Content: Reporting quality impacts the way we trust reports. If we get past the trust barrier and actually read the report. If the content is poorly written, if the report is poorly constructed, if there are many errors in the report, if the data is not clear, if there are gaps in data presentation... everything influences how you read a report and how you trust it. Also, companies that translate their reports into English are to be commended, but if that translation is just awful, it reduces our trust in the report and the company.
The Timing: Who trusts a report that is published more than 12 months after the end of the reporting period? Enough said.
The Person Behind the Report: Behind every report is a person who created it. Often there were many people involved in the creation of the report. But there is always one person who has the ultimate responsibility for a report and its contents. If we trust the person, we trust the report. Very few people put themselves on the line and admit to writing and being responsible for a report and very few people who are reporters allow us to get to know them. I say that reporters in companies should make themselves more accessible, identify themselves with the reports they have created and be available to the report-reading public. These days, there are many online opportunities to get to know corporate sustainability reporting leads, with CSRChats, webinars and so on. A couple of examples spring to mind - Kathrin Winkler of EMC puts herself out there - she is often interviewed, writes a great blog, and generally helps us get to know her and what she stands for. Before I even open EMC's sustainability report, I am inclined to start with a bag-load of trust. Dave Stangis of Campbell's is another great Sustainability Officer who lets us get to know him. And Nikki Kelley King, who leads the Campbell's CSR Report compilation, tells her story in the latest report. Getting to know Dave and Nikki through their willingness to talk about themselves and what's important to them is a big plus in the trust scale for Campbell's reporting.
The Person Behind the Report: Behind every report is a person who created it. Often there were many people involved in the creation of the report. But there is always one person who has the ultimate responsibility for a report and its contents. If we trust the person, we trust the report. Very few people put themselves on the line and admit to writing and being responsible for a report and very few people who are reporters allow us to get to know them. I say that reporters in companies should make themselves more accessible, identify themselves with the reports they have created and be available to the report-reading public. These days, there are many online opportunities to get to know corporate sustainability reporting leads, with CSRChats, webinars and so on. A couple of examples spring to mind - Kathrin Winkler of EMC puts herself out there - she is often interviewed, writes a great blog, and generally helps us get to know her and what she stands for. Before I even open EMC's sustainability report, I am inclined to start with a bag-load of trust. Dave Stangis of Campbell's is another great Sustainability Officer who lets us get to know him. And Nikki Kelley King, who leads the Campbell's CSR Report compilation, tells her story in the latest report. Getting to know Dave and Nikki through their willingness to talk about themselves and what's important to them is a big plus in the trust scale for Campbell's reporting.
These are just a few thoughts about Sustainability Reports and trust. It's not an exhaustive list and I am sure there are many other factors that impact the way we trust Sustainability Reports or otherwise. One of the key takeouts is that reporting is just part of your corporate reputation and your corporate communications. Reporting is not everything. It is part of a holistic approach to sustainable and responsible business behavior that must be reflected across all stakeholder touch-points. The downside is that, even if your report is super-trustworthy, people may not trust it. The upside is that when you manage your reporting as part of an integrated approach to sustainability communications and aligned corporate behavior, it can contribute significantly to positive reputation, credibility and yes, trust.
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2 comments:
Hi Elaine,
This is really interesting - and a very big question I think. In a time when there is more sustainability reporting from many organisations, the question of reliability and trust is increasingly relevant.
I thought you might be interested in a report that our organisation has recently written. It's called 'How Do Companies Act' and is calling for more assurance of non financial (social & environmental) impact information in Directors Reports. It therefore does not quite address the question of sustainability reports in particular, but is still supporting some sort of external verification that impact information is material and complete. I believe this would go a long way towards increasing the trust in impact information.
For more information, the news release is here:
http://www.thesroinetwork.org/news/411-how-do-companies-act-released
Helen
Hi Elaine
I think these days it's more about the ongoing conversation. Rapid/timely disclosure is as important as "end of year" sustainability disclosure, because the power of social media makes a late disclosure somewhat untrustworthy.
Sustainability reporting is good for investors and analysts. Periodic/annual reporting, connecting non-financial attributes to financial reports and outlooks, is valuable for this stakeholder group.
For others (customers, communities, regulators, society), timely disclosure is increasingly important.
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