In early October, some 200 experts met in Berlin to discuss the future of sustainability reporting during the 2nd annual conference of the Reporting 3.0 platform. The statement above set the stage for the first of three discussions around the theme of stakeholder engagement.
During my opening remarks I made the case that the premise was missing the point and that it is actually not the reports, but the reporters themselves that do not cut it. They need to change their mindset. Reports are not the end point of a process nor do they equal stakeholder engagement. Nor are reports suitable tools for answering the very valid question of how to attract stakeholders to the benefits of sustainability. Rather, reports are the end of the preparatory phase for stakeholder engagement.
Companies have two compelling reasons for engaging with stakeholders about their performance, challenges and future plans:
Influencing stakeholders’ opinion and knowledge of the company. GlobeScan Radar research shows time and again that transparency is one of the key drivers of reputation, as you can see in the matrix below which shows that ‘being open and honest’ is the strongest driver of trust in companies with the global public, but company performance is rated very poorly in this area.
Capture valuable feedback from key stakeholders as part of its management system. The latest GlobeScan/SustainAbility Survey underlines just how important transparency is for driving internal action. According to the surveyed experts, valuing and reporting on externalities and sustainability reporting are among the most important drivers of decisions in companies.
So, if the aim of reporting is to engage with stakeholders to build reputation and collect management input, what then is the role of the actual report? Reports provide comprehensive, after-the-fact evidence of what a company has achieved. As such, these reports are crucial input for tailored stakeholder engagement.
All stakeholders, without exception, are only interested in certain pieces of the information contained in a report. Their interests are determined by the context of their relation to the company: are they buying its products, are they providing the company with financial means, are they living near the company’s operations, are they business partners in some capacity, etc.?
And, vice versa, it is also this context which determines what topics the stakeholders can provide useful input about.
Furthermore, focusing communication efforts on last year’s data will not get stakeholders of their chairs and cheering. What they are more interested in is to hear what a company learned from the results, what they are going to do to further improve its performance, and last but not least, how stakeholders can engage with the company on that next step of its journey.
From our experience, the lessons for effective stakeholder relations are clear. A company needs to first establish carefully the areas of interest that overlap with those of its key stakeholders and then to engage in a real dialogue. The report and its data become the starting point for such conversations.
In conclusion, it is not the reports but the reporters that are not quite cutting it. By simply publishing the report, sending out a press release and not using the reports for true stakeholder engagement, the reporters are missing strategic opportunities.
This post was written by former GlobeScan Senior External Consultant, Peter Paul van de Wijs.