By Judy Sandford
The world of corporate responsibility (CR) reporting has changed dramatically in recent years. Governments, stock exchanges, regulators, customers and consumers are demanding more information from companies about their environmental and social impacts, and companies are responding in huge numbers.
I sat down with Alyson Genovese, GRI’s head of corporate and stakeholder relations for the U.S. and Canada, to find out what corporations need to know about the changing reporting landscape.
Judy Sandford, Cone Communications: Thank you, Alyson, for taking the time to update us on the current state of reporting. How has reporting grown and changed over the last decade?
Alyson Genovese, GRI: It’s grown in terms of the pure number of businesses that report, but also in the depth and breadth of their reporting. The content is becoming more sophisticated, timely and future-oriented. But most importantly it’s more material—more focused on the most important issues. According to a study by WBCSD, the average PDF report is 100 pages in length. But I’ve noticed reports expanding beyond PDF documents, using more web-based tools, providing reporting on specific information for specific stakeholder groups, and providing summary versions that are used by corporate HR and sales teams. Companies are finding ways to be succinct while still providing compelling storytelling.
Perhaps most interesting is the growth in types of reporters outside the traditional realm. Although 90 percent of reporters are large multinationals, we are now seeing first-time reporters including municipalities such as Atlanta, events such as the London Olympics and organizations such as the US Postal Service and the Cleveland Clinic. All of these organizations have stakeholders to which they need to disclose information, and the conversation is much easier when they use standard terminology. It’s a way to demonstrate their economic, social and environmental short- and long-term strategies.
JS: What’s driving the growth in reporting?
AG: First, expectations for companies are much higher these days. End-use consumers, customers and even other companies’ procurement offices are demanding more information. They want to know how a company’s behaviors impact a community’s health and the environment. Secondly, there’s a much greater regulatory environment. In particular, developing countries are finding these reports helpful in securing foreign investment, and many stock exchanges are starting to recommend or even require reporting. Finally, the investment community, increasingly mainstream investors, is requesting more information on materials risks and opportunities to guide their decisions. Just in the last three years, there’s been a sea change in demand for “non-financial” information, which has recently been reconsidered as “pre-financial” information. Sustainability information can help indicate a company’s potential for future financial success.
JS: How has report content changed?
AG: I’m seeing an evolution of these reports from being a PR tool to being a business management tool. There’s less fluff and more detailed explanations of business risks and opportunities for innovation. In particular, we’ve seen coverage of social information double in reporting since 2013.
Most recently, I’ve seen companies such as Visa*, AB InBev* and Nestle announcing support of the new UN Sustainable Development Goals (SDGs) in reports. GRI is helping companies to align with these goals by providing new mapping services from our GRI reporting framework, as well as a tool called the SDG Compass. These resources are giving early adopters more confidence that they’re working to contribute to the global goals.
JS: How should a company go about selecting the appropriate frameworks for reporting?
AD: It really depends on the company’s industry, size and geographic reach. For example, companies operating in Europe with more than 500 employees and meeting a certain market cap will soon need to report according to the EU Directive. To help companies out, GRI has developed a full list of linkage documents with many major frameworks. The recently released Carrots & Sticks report (developed by KPMG, GRI, UNEP and the Centre for Corporate Governance in Africa) provides an overview of 383 frameworks in use with descriptions of those that are most commonly used.
Furthermore, in response to companies’ desire for a single tool to report to multiple authorities, GRI’s independent standard-setting body, the Global Sustainability Standards Board (GSSB), is transitioning the G4 Guidelines into a set of modular, interrelated GRI Sustainability Reporting Standards (GRI Standards). GRI Standards will provide regulators with confidence about reporting information for multiple authorities. Already, G4 is aligned with tools such as the CDP Climate Change Questionnaire that go deeper on energy and emissions. GRI Standards will allow companies to use that type of specific information for multiple frameworks. The exposure drafts of GRI Standards are now available for public comment until July 17, 2016, and anyone can review them and offer feedback on the GRI Standards hub.
Ultimately, the goal is for GRI Standards to make data from different frameworks complementary and comparable. It will also allow GRI to focus on having conversations about the value of reporting, gathering data and engaging with stakeholders. GRI aims to help organizations use data to its maximum value by making it more accessible, digestible and comparable. GRI Standards will be released at the end of 2016, and GRI will continue to provide technical assistance for the G4 Guidelines until the end of 2017.
JS: What can companies do to make their current reports more effective?
AG: I can’t overstate the value of having a robust materiality assessment. It is really challenging for large, complex multinational corporations to decide what to measure and communicate. What readers really want to know from a report is “how is this company managing its resources effectively?”
JS: What reporting trends do you see in the next three-to-five years?
AG: Already, I’m excited to see a number of companies laddering up their individual goals in the context of global goals from COP 21 and the UN SDGs. They are trying to understand their local context as well as demonstrate how they are part of a larger ecosystem and generating value beyond their own four walls.
Another big trend is the idea of making report data more accessible. Two-to-three years from now, I see the ability to unleash reporting data in an organized way—like a phone book. GRI recently launched the Digital Reporting Alliance to develop a dynamic tool (involving XBRL taxonomy) to aggregate data across companies. The project is in its infancy, and we’re gathering partners and convening meetings to develop a central, online platform. The idea is that companies would be able to input their information into a database so other companies, investors and interest groups would have access to seek information and make comparisons.
JS: Thank you Alyson. If people have additional questions, how should they contact you?
AG: I’m happy to answer questions at Genovese@globalreporting.org
Image credits: GRI
Judy Sandford is Vice President of CR Strategy for Cone Communications. With more than 20 years of marketing communications experience, Judy has focused the last decade of her career on sustainability communications and Global Reporting Initiative (GRI) reporting. Drawing upon her passion for taking CR data beyond the pages of a report, she has helped more than 30 Fortune 500 corporations and leading nonprofits tell their stories and ensured that their stakeholders get the message in the way they prefer to receive it – including interactive web experiences, social media and video.