Some time ago I was challenged to write a series of articles to share my sustainability related experience with those who have the responsibility to lead their organisations’ sustainability plans. I was told I had to write an article for every letter of the alphabet – an A-Z for sustainability managers if you like. Well, life sort of got in the way for a bit, but I remembered the challenge recently and decided to give it a go. I hope it will help CEN’s current clients but also connect with a wider pool of sustainability folk who will find it useful and who knows, might want a bit of support from the team at CEN along the way. So, what super exciting topic to kick off with under the letter A then? Well, the Annual report of course!
Stick with me on this. I know lots of people will tell you that annual reports are boring, a real pain in the backside to draft, redraft, edit, check for typos etc and that no one reads them anyway, but as a sustainability lead, they are actually your friend. No really!
It is true that no one sits down and reads an annual report cover to cover. If someone told me they had, I’d give them a pretty wide berth to be honest! So why are they your friend and why should you take them so seriously? Well firstly, for most companies they are the main source of information on sustainability that the outside world has about your company. You may have sections on your website, but often they will be summarising the data and words from the annual report anyway, and the annual report forces an update of information, every year.
Over the 20+ years that I’ve been involved in sustainability, its inclusion as a topic in the annual report has changed out of all recognition. Back when I started no one told you to include anything on environmental and social topics, and how you structured it was pretty much up to you. A lot of people didn’t even put anything on sustainability in their annual reports, creating a separate sustainability report that could be tucked out of site and produced for those very rare customers or investors who were interested, and these weren’t always produced annually. How things have changed. Now, depending on where you are in the world there will be various listing requirements, particularly regarding climate change, and reporting standards are actually becoming more standard. More people are interested in what you are doing, and you are asked to include more and more and there is increasing scrutiny and even external assurance being asked for. You’ll need to be very mindful of what data points are required on what topics across a variety of standards and often this can be where outside help may be useful. This is particularly the case if your company pays attention to how the various rating agencies will score the business, based on the information you disclose.
This gives a huge opportunity for the sustainability professional to get their company’s progress out there, to highlight achievements, to signpost where more action is required. To get to that point, senior managers have to sign it off, giving you, every year, a chance to engage at the top of the business on what matters most in this area. If you take the opportunity well, the sustainability story moves beyond just a separate section in the report and gets woven throughout, connecting to customer success and growth plans, helping people understand that it is a part of the overall business strategy not something that is standalone.
Once something ends up in black and white in the annual report it becomes a reference point for you for the rest of the year. I have lost count of how many times I’ve used or heard phrases such as “well we need to show progress because we said we’d do it in last year’s report”. It’s a great way to exert some leverage when other pressures have led to initiatives stalling. Even just pointing out that if we don’t do something soon a particular metric will be going in the wrong direction in the annual report can help people stop and think. Sometimes as a sustainability manager you’ve got to use whatever levers you can!
So that’s why I think it is so important. It’s your main vehicle to get your progress out there and you can use it to keep activity happening during the year. And you also need to make sure that your reporting isn’t going to lead to you falling foul of disclosure regulation, so it gives you senior level attention at least once a year.
So, when you are into your fifth draft just after a comms agency has just changed the formatting of everything, stick with it! And if you need a helping hand, preferably before you get to that point, CEN has plenty of experience in helping craft things so that your external stakeholders properly recognise your efforts.
About the Author
Chris is a senior strategic leader with over 25 years’ commercial experience including sales, marketing, strategic planning and major business change initiatives at AkzoNobel and ICI. He has a wide knowledge of sustainability and how to integrate this into business having held senior sustainability roles at AkzoNobel for 12 years, including as Global Sustainability Director Decorative Paints and AkzoNobel Planet Possible Programme Manager. Chris is now an independent sustainability consultant and a pension trustee director.
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