Trust is earned rather than gifted. For companies, what and how they communicate can build trust, or just as easily erode it. Mandatory reporting is one of the major publicly facing communication tools companies have at their disposal. The most common form of this is financial reporting, which has been honed during a century of requirements, and more recently overhauled following the corporate collapses of a decade ago. But growing in importance is sustainability reporting, which is becoming increasingly regulated, and even more so expected by stakeholders, many of whom are demanding to know more about companies.
A recent online article by Nadja Picard and James Chalmers in Strategy+Business (read it here) addresses this issue head on, with some excellent tips for companies. They highlight the risk companies face if they do not live up to their stated aims, and that sustainability reporting is very complex due to the diverse range of stakeholders with competing interests.
The article then provides three tips of companies on how to “deliver a sustainability strategy and provide meaningful…reporting that meets the requirements of its stakeholders.”:
- Find out what matters to your stakeholders:
Sustainability is the focus of the world now, and how business interacts with it is of interest to many. To provide meaningful reports engage with your stakeholders to find out what matters most to them. - Get the right data:
It sounds easy but isn’t. Knowing what stakeholders want is one thing, but you need to be clear about what data will deliver that and have a mechanism to collect and analyse it. As the article notes, this could well involve having to upskill employees and the board. - Tell the right – and full – story
Only by having the right strategy, governance, systems, and controls in place can you be sure of having confidence in presenting sustainability reports to the board and then the public.
Companies need to start somewhere with sustainability reporting, as then adjust as regulations and stakeholder expectations evolve. Companies will find that it’s a matter of something rather than noting if they want to build trust with the public.