Turn around – The benefits of reporting and external submissions are within your organisation
April 02, 2015
At this time of year, it’s easy for CR practitioners to get focused on external indexes and reports. But real change can only come from within, writes Megan Stoffer.
It’s a busy time of year for corporate responsibility (CR) practitioners. Many annual shareholders’ meetings are fast approaching and so too are the deadlines for annual financial and CR reports. Throw into the mix the Dow Jones Sustainability Indices (DJSI) and CDP submission periods, already in full swing, and the demands can pile up quickly. These efforts are mainly geared towards one objective – becoming more attractive to investors.
This narrow focus makes sense. There is a growing body of evidence that suggests investors are increasingly taking environmental, social and governance (ESG) considerations into account when making investment decisions. The number of funds incorporating ESG criteria in the US has nearly doubled from 493 in 2010 to 925 in 2014. As investors continue to seek out ESG information, CR practitioners are tasked with making sure that the CR report offers useful insights into the company and that the approach to ratings and rankings strengthens the company’s position with this audience.
But keeping your eye on the prize ignores all that is going on right behind your back. Those countless hours pinning down the green procurement policy, gathering testimonials from employees about the impact of their volunteering experiences, and collecting environmental data from across the business directly create opportunities to embed corporate responsibility within your organisation. These actions provide a platform to engage employees and build powerful connections. They also generate a wealth of information about the company’s current activities and future plans that can be used to improve performance.
Let’s start with engagement. CR departments may only engage with other departments once or twice a year to gather updated stories and figures of interest to the investor audience. At times, external submissions require additional information that expands the list of subject matter experts engaged and increases the number of corporate responsibility touch points within the business. For example, prior to DJSI’s addition of a question on tax strategy last year, probably very few CR practitioners had spoken directly to the head of tax.
Whether it is with new departments or long-time partners, practitioners need to actively view the opportunity for engagement as a chance to collaborate with other business divisions and strengthen the business. Moving from a transactional to a collaborative relationship requires changing the tone of the conversation. Instead of diving straight into the details, take the opportunity to better understand the business objectives and challenges facing the department and discuss the role corporate responsibility plays within the company. These conversations will not only help to gather the most pertinent content for the report, but will also enable practitioners to find corporate responsibility champions within the business and identify collaboration opportunities.
Let’s now consider evaluating performance. Using the information gathered to track and improve performance can deliver extensive business benefits. However, this is often overlooked in the rush to get the submission done. If information is being used by investors, corporate responsibility practitioners should also find a way to make it work for themselves.
By looking at this information with a critical eye, practitioners can begin to identify both short-term and long-term improvement areas. Consider: what trends are appearing from the data? What stood out as the greatest improvement area over the past year? What is the one issue that seems to be the most difficult hurdle to overcome? By taking the time to digest and analyse performance, practitioners can evaluate progress made over the past year, build on the great work that has been accomplished, and focus efforts on the areas that need a little more attention – before the time comes to collect the data again next year.
Each spring, companies allocate significant time and resources to corporate responsibility reports and external submissions with the aim becoming more attractive to investors. But too often, the benefits of this process are only measured in terms of a rise in score on an external index. By looking within their organisations, corporate responsibility practitioners will be able to effect far more meaningful change. Just turn around!
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