Sustainability Reports: Who Reads them, and Why?

An open question to our readers: do you read annual sustainability reports?

Well, it turns out that the Global Reporting Initiative (GRI) were curious as well. So, they went ahead and hired a few consulting companies (SustainAbility and KPMG) to go ahead and survey sustainability report readers.

While some of the responses were not all that surprising, the survey’s results did speak to the trends within the reporting industry.

SustainAbility Chairperson Sophia Tickell discussed the strategic use of sustainability reports.

Reporting was once a way to get sustainability issues onto the corporate agenda. Today the situation is reversing as a growing number of companies make ambitious commitments to sustainability. There is much business as usual but these targets matter because what gets measured gets done and — hopefully — reported against. This shift in where the agenda is set holds real potential to influence products and services — and eventually to shape business models of the future.

Reporting will be important but will need, explicitly, to make clearer links between sustainability issues and core business strategy — something that all stakeholders (including the mainstream investment community) seem to agree upon.

So who are the readers of these reports?

• About 60% of readers are in business, and the rest are mainly consultants and government employees;
• Prospective customers or suppliers were more than one-quarter of respondents; and
• 60% of readers used sustainability reports to help themselves benchmark the reporter’s overall performance.

And what do they think about these reports?

• Survey results tended to support the viewpoint that sustainability reports are good for developing new business;
• Having reports tends to project a good image to both potential and current investors;
• Companies need to demonstrate a willingness to talk about the bad news, as well as trumpeting the good news in order to promote confidence in the reports.

Finally, according to the survey, readers would like to see reports:

• Provide stronger connections between a company’s overall business strategy, and their sustainability strategy;
• Some sort of measure as to the impact that sustainability initiatives have had on the company;
• A demonstration of whether and how companies use risk management as part of their sustainability strategy; and
• A more formalized manner of incorporating stakeholder feedback, since that tends to demonstrate a commitment to sustainability.

Image Credit: A Pile of Annual Reports by azza-bazoo via Flickr’s Creative Commons