If the size of the crowd in today's "Next Generation Sustainability Reporting" session at the State of Green Business report is any indicator, this is one of the hottest topics around.
A more than capacity crowd discussed the opportunities, challenges and questions raised by comprehensive sustainability reporting. And judging from the discussions occurring around the tables and among participants lining the walls of the room, the next generation of reporting isn't nearly as big a concern as the first generation.
The session was highly interactive, with tables coming together to discuss their own experiences with CSR reporting, the challenges they've faced in publishing reports, and how to take them to the next level.
Two questions were posed to the group: How do you measure the value of your sustainability report? and What challenges have you faced in publishing your reports, or getting ready to publish your first report?
The comments to both questions were broad and deep: Benefits to sustainability reporting include the development of a level of trust with stakeholders, as well as a recruiting tool for the next generation of employees. The act of gathering the data needed to publish a CSR report also highlights opportunities and points out where successes have been happening and how you can capitalize on them.
But at the same time, there are a number of perceived risks for companies putting together CSR reports. One attendee put it succinctly: "The spouting whale gets harpooned."
In addition to potentially exposing one's company to risks and unwanted attention by talking about environmental impacts, there is the constant issue of the additional workload piled onto employees' already overfull plates.
Expanding upon and addressing the issues raised by attendees were two experts on sustainability reporting: Scott Bolick SAP's vice president of sustainability, and Meghan Harris, the manager of Climate Change and Sustainability Assurance Services at Ernst & Young.
Bolick laid out the importance of CSR reporting to companies that are trying to build a business around green issues -- such as Johnson Controls, whose VP of Sustainability participated in the discussion -- but the same idea is applicable to just about any company today.
"For companies that are out there trying to build a business around sustainability, it's important to say that you're walking the talk," Bolick said. For example, "how do you apply your own equipment in your own installations? If you're not publishing the case study of yourself, then it asks and begs questions."
In discussing the challenges posed by sifting through what can rapidly become mountains of data in today's environment, Harris said that the act of putting a report together can help make the act of reporting easier.
"Focusing on materiality is critical," Harris said. "Identify what your material issues are, reporting on those, and being very transparent. Once you have the issues that are important to your stakeholders and your business, that resonates with stakeholders" -- and it can also make the reporting process faster and easier.
Looking forward to what the future holds for CSR reporting, integrated reporting -- where sustainability data is reported at the same time, and even in the same report, as financial data -- is starting to take off, especially in Europe and South Africa. But at this point most integrated reports are simply sustainability data and financial "slapped together," and only a few companies are doing well integrated reports. Harris cited Novo Nordisk, Vancity Bank in Canada, and the Court of Rotterdam in the Netherlands as examples of successfully integrated reports.
Scott identified three overarching trends for sustainability reporting in the coming years:
1) Moving from transparency to accountability;
2) Moving to more frequent reports, especially quarterly reporting; and
3) Publishing the dialogue that occurs from engaging with stakeholders.
The biggest overall trend in reporting, however, is that it's not going away, and will only increase in frequency, scope and importance. Bolick cited the fact that Bloomberg terminals have started including carbon data on reporting, a sure sign that environmental impacts will begin to have impacts on investor behavior -- as well as corporate behavior.
Photo CC-licensed by featheredtar.