New media and the evolution of data collection methods have opened up new opportunities – and pitfalls – for sustainability reporting

Reporting on corporate sustainability can be an intensive, time-consuming task. It involves the collection of large amounts of often complex data from an extensive range of sources. This has to be processed and made meaningful – companies do not want to fall into the trap of generating data for data’s sake, with little operational relevance.

Adrian Penfold, head of planning and corporate responsibility at British Land, one of the UK’s largest property managers, says the company could potentially delve into a deep data reservoir.

One priority is energy efficiency. “We’re moving to providing that data on a building-by-building basis,” Penfold says. But the company is careful to keep it relevant. “The process of producing the CR report takes up a lot of time and resource,” Penfold says.

Building-by-building energy data for the British Land portfolio, which includes major office blocks and shopping centres, is most relevant for the occupiers of properties, rather than the wider audience. The sustainability report is not necessarily the best channel for the detailed information.

“The CR report is not the only way we communicate with our occupiers,” Penfold says. There is “very intensive communication” on issues such as energy, but the main means of communication in some British Land properties are environmental working groups involving the company and its tenants, and quarterly building-specific newsletters.

The company sees a clear rationale for providing the data. “If we do this well, we should get some commercial advantage because occupiers want to occupy our buildings,” says Penfold. “Our occupiers are interested, partly for cost-saving reasons, but also because they have their own CR agendas.”

Data overload

The British Land example underlines one of the risks of modern technology: modern information management systems deliver a huge amount of data, but any data collection exercise should have clear objectives, and should not get sidetracked.

In this respect, it is surprising that relatively few companies use tools that can help them understand and present data in ways that are relevant for their sustainability strategies.

An autumn 2011 Ernst & Young study (Six Growing Trends in Corporate Sustainability) found that, although most companies report growing interest from investors in their sustainability strategies, only 24% methodically manage their sustainability data using specialised software, though such tools are available from a number of vendors. For most corporations, relatively ad hoc data collection and analysis using spreadsheets and emails remains the rule.

One specialist sustainability software company is Credit360. Its commercial director, Iain McGhee, says dedicated software can help a company “put a workflow around data collection” and “present information back to the business” in easily understandable formats, such as charts and tables summarising progress against sustainability goals. Such software also helps check for compliance with standards such as the Global Reporting Initiative or the United Nations Global Compact.

This approach also has the potential to transform sustainability reporting, by providing sustainability “dashboards” made up of interactive graphics that can be easily published online close to the time of data-gathering, McGhee says.

A number of companies are moving in this direction. Examples include Centrica, Daimler and Rio Tinto. Centrica, for example, provides a range of responsibility indicators online, which can be sorted into bar charts and tables. Subjects covered include environmental performance, employee relations and workplace safety, responsible procurement, and “values and behaviours”, which relates to the proportion of managers that complete a declaration of commitment to Centrica’s principles (less than 100%, surprisingly).

A limitation of this approach is that it is not always clear what the data is telling the viewer. Rio Tinto, for example, provides a chart showing that its “community contributions” rocketed in 2011, nearly doubling compared with 2010. But the chart alone provides no context: what does Rio Tinto include in the “community contributions” category? Why did they suddenly increase? Understanding this requires considerable further digging into the company’s website.

McGhee says that using sustainability software such as Credit360 is “not just churning out data”. There will always be a place for the annual report. This “should be more narrative and should link back to data on a website”. However, the balance has to be right. Sustainability reports that lack data also lack credibility, he says.

Best of both worlds

James Osborne, a partner at sustainability communications consultants Lundquist, says many corporations have seen an opportunity in transferring their sustainability reporting online – in other words, dispensing with the production of a formal report, whether in printed or PDF form.

However, there have been mixed experiences. “A web-only approach is ill-advised,” says Osborne. “Even if the online version is prioritised during the creation of the report, all the same content must be provided in PDF as a once-a-year snapshot for users to download. This is also important for transparency and assurance reasons.”

Sustainability dashboards “tend to be the reserve of big companies with big budgets both for the dashboard itself and for an appropriately sophisticated data management system to generate the figures,” Osborne says.

He adds: “There are also companies that are moving back to doing PDF only because they fail to see a return on the investment for an interactive version in terms of readers.” For others, “the report is conceived of as a website in the first instance and subsequently transformed into a PDF and even a print copy. Doing this in the reverse order – as was traditionally the case – often means the online version was rather poor: important features such as video, data tools and interactive elements used to be after-thoughts.”

Lundquist surveys have shown that there is no strong preference for one reporting format over another. A recent survey of 360 sustainability professionals showed that a quarter wanted online reporting, a third wanted a “traditional” report, albeit in PDF format, and another third wanted to be able to choose between the two options.

Companies should also distinguish between reporting and communicating. The once-a-year sustainability report is an opportunity to take a step back and assess the company’s performance, backed up by indicators, and to provide information on strategy and the company’s grasp of key sustainability issues.

“There is without doubt great demand for ongoing [sustainability] information from companies – between one report and another,” Osborne says. “This is something that many companies are not totally in tune with.” In Lundquist’s latest survey, “only one in 10 said a once-a-year dollop of information was sufficient”.

More reports?

But this does not necessarily mean there is a demand for more reports. “Preferences go to getting the company’s position on issues in the public or media debate, case studies, press releases on major developments and ongoing engagement via social media. Only about a quarter of our respondents said they would need environmental indicators on an infra-annual basis or information incorporated into interim financial reporting,” Osborne says.

The growing importance of the sustainability report as a complement to the financial report, with the two being viewed side by side to give a full picture of the company, is shown by a clear preference for their simultaneous publication. Lundquist’s survey found that 80% of 176 “non-corporate professionals” – such as investors – saw either simultaneous publication, or integrated reports, as the preferred approach.



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