Last week I attended my first Ethical Corporation conference — their first Responsible Business Summit in New York. Since most Ethical Corporation conferences are held in Europe, I welcomed the chance to just hop on a train (and subway) and attend one in my backyard. An impressive line-up of speakers from Microsoft, PepsiCo, GRI, Bank of America, BNY Mellon, P&G, Maersk, BASF and other CSR leaders addressed an equally impressive assembly of environmental and corporate social responsibility (CSR) practitioners, some consultants and a handful of vendors.
All in all, it was an auspicious gathering that promised to – and did – deliver some of the latest thinking on corporate social responsibility, particularly the process of “Embedding Sustainability” which was the conference theme.
As a consultant who helps companies develop their CSR reporting strategy and produce CSR reports, I was particularly interested in those sessions which dealt most directly with trends in non-financial reporting. So, when I saw the session titled “Is one-way corporate responsibility reporting dead?” I made a beeline for that room.
That was a tough choice, because it meant foregoing the concurrent session on stakeholder engagement and performance measurement featuring BT Americas head of corporate social responsibility Kevin Moss (whom I follow on Twitter) and Intel director of CSR Strategy and Communications Suzanne Fallender (who I heard speak at the Economist conference last year). Fortunately, Kevin and I sat together at lunch that day and I managed to convince him to provide a sneak preview of his comments. And, I can access the conference slides online, so I won’t totally miss out on their insights.
The session on the demise of one-way CR reporting featured execs from two global pharmaceutical companies – Abbott and Merck – who discussed the evolving model of corporate communications, use of social media, and stakeholder engagement as they contribute to corporate responsibility communications. Not surprisingly, both speakers acknowledged that they are continually rethinking the way they get their CR message out and how they interact with stakeholders. While “one-way” reporting was never really defined, both speakers generally equated it with linear communication and print reports as opposed to non-linear, online reports.
Abbott’s Nonlinear Communication Model
Tracey Noe, senior director of global citizenship and policy for Abbott, began by raising some fundamental questions which every organization should ask when formulating its reporting strategy: Who are we trying to reach? What information are these stakeholders looking for?
Noe cited the old, linear model of communications versus the current, nonlinear communication model and shared a spaghetti-like stakeholder communication map provided to Abbott monthly by a social-media monitoring vendor.
Abbott, like other industry-leading CR reporters, has made its reporting more accessible and responsive to stakeholders through:
- Local reporting – publishing both a global report as well as reports for Italy, China and Brazil
- Stakeholder commentary – including brief quotes, lengthy commentary and bios of six stakeholders in its current report.
- A reporting panel – inviting review and input from its reporting panel throughout the year.
Merck’s Post-Merger Approach
To help the audience understand Merck’s current approach to CR reporting, director of corporate responsibility Eric Dziedzic described the evolution of reporting at that global drugmaker. Merck produced its first comprehensive corporate responsibility report in 2004/2005. The content for that report was largely determined by the CR professionals through based on a materiality assessment based on the Global Reporting Initiative framework, United Nations Millenium Development Goals, and UN Global Compact Comment on Progress.
“Everything was material,” groaned Dziedzic. In subsequent reports, the pendulum shifted and Merck’s understanding of materiality shifted to asking external stakeholders what they thought was important. Then the merger 2009 with Schering-Plough – which reported primarily on its environmental performance – caused Merck to put its full-blown reporting on hold as it consolidated its internal data reporting systems. Instead, for 2009-2010, Merck released an abbreviated bridge report.
“We had to take a step back and really consider what was material. That required asking who was our primarily audience,” recalled Dziedzic. “The answer was socially responsibility investors, for better or for worse.”
Given this reflection, Merck’s post-merger approach to corporate responsibility reporting has four key components.
- A defined reporting strategy. Merck’s strategic framework for corporate responsibility – shared value – is now shaping its reporting by more clearly defining materiality and more directly linking the report process to business drivers.
- Broader stakeholder outreach. Merck is engaging employees, the general public, socially responsible investors and interested stakeholders.
- Redefined purpose. In addition to serving as a performance management tool, Merck also views its report as a compliance, investment, communications and recruitment tool. Its old model wouldn’t fufill these new functions.
- Two-part report. Merck’s print report will focus on storytelling, serving as a reputation enhancement and a gateway to its online report, which will be a dynamic warehouse of data updated quarterly.
Tips for Lively Reporting
So while both speakers stopped short of pronouncing one-way reporting DOA, they offered similar conclusions.
- Effective reporting must be aligned with what stakeholders want. Stakeholders are demanding a dialogue and role in the reporting process. Merck is using its reporting process to drive a conversation with its stakeholders.
- Reporting is evolving. One-way reporting still has a purpose, but can’t be relied on as before. Merck has created an internal Facebook page with corporate responsibility as a major category for engaging employees.
- Social media opportunities must be explored. Opportunities for using social media and two-way communication are exploding, but eliminating one-way (e.g. print) reporting is not the answer.