CR Report reading for dummies, five rules

In a guest post below, Mallen Baker considers some fundamental questions concerning CR and sustainability reporting.


Most companies can learn about reporting from Nike
Marc Gunther (who writes an excellent business sustainability blog) recently wrote an article titled 'how to read a sustainability report'.

It was full of eminent good sense, but at the same time highlighted exactly why the state of the art is so immature. Gunther covered five basic principles (with my paraphrasing in brackets).

1. Pay attention to what's in the report - and what's left out (does the company actually talk about its biggest impacts?)

2. Follow the (big) money (a variation on point one above)

3. Think about context (numbers without context don't tell the full story)

4. Read more than one report at a time (so you can compare how a company is doing against its peer group)

5. Look for all the news that's fit to print (does it include the bad stuff?)

These are perfectly good pieces of advice. Unless, of course, you believe what the companies that produce these reports purport to believe - which is that their reports are aimed at all their stakeholders.

It's a belief I've criticised before, since no sensible communicator aims one single communication as such a bewilderingly large range of audiences with such disparate information needs and interests.

But Marc's article makes the assumption that there is a particular mind-set coming to the consumption of a sustainability report - which is a quest to use the information based within to form an intelligent and correct view about the current sustainability performance of that company.

If that is your mission, then a lot of this makes sense.

But how often is that actually the mission that drives people to look at these reports?

And, since the customer of a company, or an employee, is not going to be driven by such a mission - how should they read those reports?

Having done work with several companies looking at inducing, persuading and seducing their direct stakeholders to take an interest, here are a view principles of my own.

1. Be clear about what people might want to know - and why 

Direct stakeholders are those whose wellbeing is substantially influenced by the company. So they are not necessarily looking to objectively compare how a company is doing within a peer group.

They may be looking for reassurance that the company is doing the right thing in relation to an issue they care about. They may be interested to know how that issue will affect their own relationship with the company.

You may have to interest them to be interested in the first place. Just because they care about an issue, doesn't mean they would think to care about how YOU respond to that issue.

2. Answer the question 

The big restraining factor is that such stakeholders generally don't read reports. The language of 'our sustainability report' may put them off completely. But they may well want to ask the question.

Good companies will identify the key issues their stakeholders really care about, and create content that answers the questions they way they ask them - drawing data from the report to substantiate what they say, but not asking them to actually read the report.

So, for instance, if I google "what does Sainsbury do about sustainable fish?" the top answer is a page on Sainsbury's website labelled "fish with thought" that talks about the issues. It frames the straightforward questions - 'what is sustainability', 'what fish are sustainable', 'what are we doing about it'? It draws information from Sainsbury's recent performance and includes links to go deeper - but it starts by answering the question.

If I try the same search focused on Sainsbury's competitor Morrisons, the top result is nothing from the company at all, but an independent review by the Marine Stewardship Council. At about number five in the results is a link to a big pdf report by the company which makes less than an enticing entry point for the casual stakeholder enquiry.

3. Tell engaging stories 

We are raised from childhood being enchanted by stories. But all those stories have one thing in common. There is no fairy story, no novel, no dramatic TV series, that is about the actions of a company. Or a country. Or any other institution.

All stories that have any power focus on people, on the things they attempt to achieve against the odds, and the tension that comes from the uncertainty as to whether the happy ending will be achieved or not.

Case studies in sustainability reports are, almost universally, deathly dull. They never own up to the things that went wrong. They never introduce us to the individuals who overcome the obstacles. They talk in terms of the corporate whole. And they don't even provide enough detail so that someone who was inspired by the example would have information at their fingertips to replicate the success for their own business. What are they for? They're there to bring the issues to life. But your direct stakeholders are not charmed or even interested in stories devoid of all tension or human interest.

4. Provide context with external voices 

Marc Gunther is absolutely right that understanding whether what companies are doing counts is largely a question of understanding context. But that is a specialised thing. In financial reporting, all you get are numbers. It takes financial analysts who understand how to read a balance sheet, who know the track record of the current leadership and the current market conditions - to interpret those figures in their correct context.

With sustainability reporting, there are no such expert commentators. So companies try to provide their own context - which they need to do. But nobody trusts them to provide their own context, and often their perceptions are rather skewed by where they sit and they may not even understand their own context. So outside voices can be brought in to help provide it.

Such outside voices can be presented as being in dialogue with the company - laying down well-informed challenges to which the company responds. If the outside voices are all raving fans whose role is akin to a customer endorsement in a commercial advertisement, then the benefit of that is considerably reduced.

5. Find ways to get them to put themselves in your shoes 

Even direct stakeholders won't necessarily understand your business, and they may not be fascinated enough by what they know they don't know to ask. But you can take measures to interest them and intrigue them.

Produce a dilemmas game - the nature of which leads them to become better informed about what you do - in an entertaining and compelling way. What have games got to do with the process of reporting? There are ways of using game mechanics that have absolutely nothing to do with reporting. But applied smartly, it can be about informing, and getting audiences to better understand the nature of issues that you face, which will give them additional context to interpret what you do. Of course, you could just provide that context in a sub-section of your report. Provided you don't mind that nobody will read it.

You will note, of course, that I have not played entirely fair with the title of this article. It is headed 'CR Report reading for dummies' - but it's really about report writing.

That's because most reports currently do not accommodate the direct stakeholders the company alleges it cares about.

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This article was first published in Mallen's excellent regular newsletter Business Respect. Sign up to it here.

Mallen will be leading the forthcoming "Getting to Grips with CR and Sustainability Reporting" online training course with managers from around the world, which begins on October 28th 2013 here.

Full details on the course are available here.

A online training course focusing more on CR and sustainability communications will also be held at the same time. More details here.

Finally, here'a a very relevant Ethical Corporation conference on the topic which both Mallen and I are heavily involved in. Hope to see you there.
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