Martina's posts

9 April 2009

CR reporting – which way now?

Martina Stansbie Senior Content Strategist | Read all Martina's posts

This article appears in Outlook 2009, our take on the latest developments in online corporate communications. To receive a copy, please email Paul Greenwood at paul.greenwood@the-group.net

Corporate responsibility (CR) reporting is coming of age. According to the 2008 KPMG International Survey of Corporate Responsibility Reporting, more than 80 percent of the world's largest companies now report on CR; 91 percent of the UK companies surveyed issue reports.

It's also an increasingly rigorous discipline. With the use of third-party assurance and, in particular, the Global Reporting Initiative (GRI) reporting framework, we're seeing the establishment of best reporting practice. More than three-quarters of the world's top 250 companies are now applying the GRI's G3 Guidelines to their reporting.

Finally, people are interested in what companies are doing about CR. As companies align their CR approach with their business strategy, analysts and investors are taking CR performance seriously. Customers are aware of CR issues, particularly those around environmental impact and supply chain. And employees are concerned too; in a global survey carried out by PricewaterhouseCoopers in 2008, 88 percent of graduates stated that they looked for an employer with social responsibility values that reflected their own.

What does this have to do with online communications?

More data, more reports, guidelines and a growing interest in what companies have to say – it all adds up to a need to communicate effectively. Here are a few of the issues:

• Most CR reporting takes the form of a print report. However, when reports are made more widely available via corporate web sites, it is often in PDF format, so ignoring the strengths of the online medium
• Perhaps inevitably, as this is a relatively new discipline, companies are focused on the reporting standards. While this is a positive development, it may risk producing CR reports that are simply repositories of information, rather than effective communications that reach out to and engage with external audiences
• The various audiences for CR reporting are not all looking for the same thing. Is the CR report an unsatisfactory one-size-fits-all solution? The G3 Guidelines, born out of multi-stakeholder consultation, may even contribute to the problem as companies follow best practice and end up with reports that try to be all things to all people

So what can a web-based approach bring to these issues?

The advantages of online reporting
According to a survey carried out for GRI, the single most popular format for the CR report among readers is a PDF. The report admits this is somewhat surprising, given that a PDF is no more than an electronic copy of the print copy, and suggests a comfort factor may be at work.

However, presenting CR information online remains a real opportunity to add value for report users. Companies can make good use of text, still and moving images, sound, two-way interaction and tools to provide stakeholders with an enhanced experience – one that's about encouraging engagement with the business rather than PR.

It's also a chance for differentiation. Many reports are simply distributed in PDF format, while those that do have an HTML version can still feel like an afterthought, with cut down content or a design that seems wedded to the strengths of print.

Other advantages of online reporting include environmental benefits; being able to provide information in multiple formats and levels of detail; giving the CR report equal weight to the annual report and transparency, with content accessible globally, 24/7. 

The benefits aren't restricted to standalone reports. Another option is to develop reporting through the CR section on the corporate web site. This has the advantage of presenting CR issues and performance as fully integrated within the business. Web site content can also be easily updated to reflect ongoing developments.

Vodafone's award-winning 2007 CR report doubles up as the corporate responsibility section of the company web site. This allows Vodafone to provide a large amount of information in a useful and engaging way (it does provide a PDF too but warns that, at 378 pages, it's perhaps not one to print out – those online can easily pick out the elements that they're interested in). For users who do want something to print out, there's a CR summary review available as a PDF. 

As it is conceived to work online, the report has all the benefits of a web site – plenty of useful supporting links and downloads; a clear, easily usable navigational structure; structured, in-depth information; a focus on key issues; animated diagrams. There is more that it could do – contributors to the CR Dialogues have to use an online form rather than say, reply to a blog. However, this is an interesting and valuable feature, and extends CR reporting beyond a fixed publication date.

Making CR data more useful
Those people most interested in the raw CR data in reports - analysts and investors – want to be able to use it. Companies may be gathering more data than ever before but if it is simply published in the form of printed tables its usefulness for others is limited.

This is an area where an online approach can bring clear benefits. Interactive charting tools mean that people can take the data and work with it. For example, in its 2007 Sustainability Report, Shell provides a chart generator for its social and environmental data. Simply select the year and the KPI, and then choose to see the resulting information as a bar chart, graph or in a table. The charts can be saved as images and the data can be exported to Excel.

While such tools can allow people to interrogate company data, for analysts, a major problem has always been the difficulty of comparing performance between companies in the same sector, due to a lack of standardised reporting metrics. And perhaps a solution to this may also be found in online reporting. 

XBRL – eXtensible Business Reporting Language – is now mandatory for financial reporting in the US and is spreading to the UK and Europe. It's a set of standard electronic tags that can be applied to financial data. These tags can be read by computer software programmes, making it quick and easy for people to gather, compare and manipulate data.

The GRI has been developing a set of XBRL tags for CR reporting, based on its G3 Guidelines. As its guidelines are becoming the standard for reporting, this seems like a positive development. It released the first set of tags in 2006, and is currently working on improvements.

XBRL promises to bring greater consistency to CR information, better data handling, improved ability to customise reporting to meet user needs and compatibility with financial reporting systems.

Demonstrating the link with business strategy
Nearly everyone says it. But far fewer actually present the connection between CR and their business strategy effectively in their reporting. For those companies who can and do so, it is a real point of differentiation.

It means focusing on the issues that are material to the business. For online reports, storytelling around these issues, using animation and / or video, as well as text and images, can be effective and distinctive. However, to avoid accusations of greenwash, it's essential that this approach is supported by detail elsewhere.

Another, simpler way of connecting CR with the business is to give greater visibility to senior management. CR reports have their introduction statements and Q&As; online, with video, these can move beyond one-dimensional statements to become powerful and engaging tools.

Companies also need to think beyond CR as a separate discipline. If CR issues have a role to play in the management of business issues, then CR information and data should be integrated into annual reporting. And CR messages should be reflected in all company communications – including those that are online.

The right information for the right audience
Investors, analysts and pressure groups. Employees, customers, regulators and the general public. There are simply too many CR stakeholders to have their needs fully met by a single communication.

The GRI readers' survey, which predominantly heard from businesses, consultants and NGOs, found that what people expect to see in a quality report does not differ substantially between groups. What does differ is how they then use the information. Providing information in different formats and at varying levels of complexity may help to make it more usable for these groups. Then there are customers and employees who may not read the report at all but are still interested in some of the issues.

The answer may be to develop targeted communications to complement the report. We've already discussed some of the developments around online data which will help to meet the needs of analysts and investors. These groups are also looking for information about risk management and how CR impacts on financial performance – the annual report is an additional vehicle for such content. 

Stakeholder involvement in a company's approach to CR is seen as increasingly important. Campaign and social media-driven sites move beyond the report to reach out to stakeholders and to get them involved.

Timberland, for example, has experimented with separating out its CR data in quarterly summary reports but talking about the issues on the JustMeans social media platform (we've talked about this before on the blog). The company's CSR Reporting Manager explained that the aim of this approach was to "scale our conversation about CSR with stakeholders". 

Starbucks is using a social media site, MyStarbucksIdea, to talk directly to consumers, encouraging people to submit, comment on and vote on ideas for products and services. Some of the suggestions are on CR-related issues and, as customers are CR stakeholders, such sites can be important channels for communication and engagement. (There's more on MyStarbucksIdea on this earlier post on the blog).

And finally, the CR report itself can be focused on stakeholder groups that are core to the business. Such an approach can provide a strong point of differentiation and is a way of highlighting relevant issues to the business. For example, the concept behind Cadbury's online CR report, Dear Cadbury, is a personal, customer-oriented one that uses real letters as the starting point for discussion. This approach might possibly be in response to consumer issues the company faced the previous year. While the look and feel are consumer-driven, the report still provides a separate navigation channel for those who ‘know their stuff' and want governance and performance details.

 
So what's our verdict?
As interest in CR issues becomes mainstream, the effective communication of those issues becomes increasingly important. While the establishment of reporting guidance has been essential for building credibility, the reporting of CR issues should always respond to stakeholder concerns and be presented in a way that meets their needs. Otherwise it risks looking like an internal-facing box ticking exercise.

Reporting in HTML – whether as part of the corporate site or as a standalone report – can help to make CR information more usable and more engaging. And it makes that information easily available to anyone with an internet connection.

Communicating CR also goes beyond the CR report. Those interested in how businesses address CR issues include various non-traditional corporate audiences. This provides considerable scope for targeted CR communications, perhaps with interactive features to enhance the potential for engagement and feedback. Indeed, we may see the report itself becoming gradually less significant, with CR issues also integrated into general communications – for example, the data and commentary about CR's impact on business performance becoming part of annual reporting rather than in a separate CR report.

CR may be all grown up now but the way we talk about it is still evolving.
 

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Any statements made in these blog posts are the views of the blogger and do not necessarily represent the views of The Group.