How to Sell Sustainability Reporting to Your CEO

How to Sell Sustainability Reporting to Your CEO

Corporate sustainability reports show up in media coverage nearly every day. Two-thirds of the S&P 500 provided at least some carbon emissions information to the Carbon Disclosure Project in 2009.

Last year, nearly 1,400 global companies filed reports with the Global Reporting Initiative, a 29 percent increase over the prior year. As more and more companies produce sustainability reports, why are so many CEOs still reluctant to do so? What’s holding back that last third of the S&P 500?

There are some significant hurdles. CEOs worry about the risk of exposure, fearing that transparency about their impacts will attract censure by activists who may feel the company is falling short. There are costs to gathering information and communicating it effectively.  Reporting isn’t mandated by law (in the U.S.). Standards are still emerging and somewhat loose. How do you get your executive team over these hurdles and help them to see the opportunities in reporting about sustainability? 

We’ve interviewed a number of companies that do report to find out why they do it. The main reasons include:

  • Better managing the company’s reputation and brand
  • Responding to queries from stakeholders
  • Meeting channel requirements
  • Staying ahead of future regulations
  • Focusing internal execution
  • Competing effectively

This last point turns out to be one of the most potent ways to get the attention of the C-Suite:  competition.

Have you ever met a CEO who was not pretty darned competitive? They want to win and they like to compare themselves and their companies to their peers. Preparing a benchmark report and displaying the results using a simple visual device is quite powerful. 

A benchmark should first define a set of three to five companies for comparison purposes. These “comparables” compete with your company for investment, employees, customer purchases and other resources. They may be in the same industry or of similar size or may be companies that you wish to emulate.

Your benchmark analysis should cover four main categories:

  1. Quality of sustainability communications -- How well does each comparable company rate on key attributes that make for credible, impactful communications?  These attributes include: materiality, target setting/tracking, completeness, accuracy, balance, clarity and others. (EcoStrategy Group rates communications across a set of 14 attributes.)
  2. Inclusion in sustainable investment indices -- Which of the comparables have made it into key investment indices such as the Dow Jones Sustainability Index, FTSE4Good, the NASDAQ Global Sustainability Index and others?
  3. Ratings by industry watchers -- How is each company rated by key industry watchers like the Newsweek Green Rankings, Fortune Most Accountable Companies, the Carbon Disclosure Leadership Index and others?
  4. Affiliations and other public commitments -- What public commitments have been made and which affiliations have been established by each company?  Who is a member of or signatory to the EPA Climate Leaders, the UN Global Compact and other organizations that make a commitment to environmental and social responsibility?

The results of a benchmark analysis like this can be eye-opening for the C-Suite. It generally triggers a lively discussion about what, when and how to communicate about sustainability. It’s a great way to propel that last third of the S&P 500 over the hurdles and toward sustainability reporting.

Karen Janowski is a partner in EcoStrategy Group, a consultancy that helps clients gain competitive advantage through environmental sustainability. The firm specializes in crafting sustainability communications strategies, including conducting Sustainability Communications Benchmark analyses.

Photo illustration based on images by sxc users forwardcom and Mupsu.