As many large companies prepare next year’s sustainability reports, it’s important to note that nobody cares.
Well, very few people care, and they fall into three little buckets:
First, specialized interest (or pressure) groups await the reports so they can check on how badly companies are falling short on whatever idealized goals the groups have set.
Your average gigantic global industrial concern affords almost infinite opportunities for information requests from folks who are looking more for shortcomings than satisfaction, so sustainability reports are an attempt to institutionalize those responses and at least lessen their cost.
Second, ESG agencies that advise investors them use sustainability reports as input into their rankings (ESG stands for “Environment, Social, Governance).
Such rankings are more correlative to fond feelings than causative to financial performance, however, and they differ depending on who’s doing the assessing, so they’re not rock solid like, say, FASB rules that make it possible to compare other aspects of corporate accounting.
Third, the reports are manna from heaven for communications agencies, management consultancies, and “reputation” firms that help companies produce them.
These experts tell businesses to talk about sustainability because consumers care, as evidenced by what they post on social media which means, unlike ESG rankings, these claims are not even correlative to business performance but reside in the world of imaginary metrics of branding.
The other 99.99% of us living on the planet just don’t care.
It’s a missed opportunity, really, considering that the best business practices have always been sustainable: the word means “able to be maintained and defended,” which is kind of the litmus test for any supply chain, workplace, and external relationship with people or the planet. So you could argue that sustainable business practices should:
- Require less investment, perhaps over time because they’re easier, safer, and more reliable to manage.
- Involve communities as partners, not just hosts or resources, and treat employees and contractors fairly, thereby realizing the true productive value of everyone.
- Leave the planet no worse tomorrow than it was yesterday, and ideally improve it because that benefits everyone, and share information openly with all stakeholders because better-informed audiences — both friends and critics — are easier to work with than those who’ve been left in the dark.
What I’m describing is the stuff of an annual report, though, not some made-up publication entitled sustainability that’s so slick with infographics and soaring rhetoric that it almost dares stakeholders’ suspicions.
I think that’s why most people don’t care.
How could next year’s reports be improved and perhaps gain some credence with the vast majority of us who aren’t paying attention? Here are three ideas:
First, redefine the purpose behind the work by positioning it as a parallel report to your annual report, and ground the presentation in business processes and activities vs. “sustainability” activities. Imagine talking about, say, an improved production line or distribution network in which sustainability actions are contributing factors to things like resilience, privacy protection, cost management, or other metrics that measure on real accounting ledgers. Perhaps the overarching goal of the document isn’t to convince stakeholders that your business is sustainable but that sustainability helps drive your business? If you have to present all those detailed stats for various interest groups to check, put them in an appendix? They give the rest of us headaches.
Second, don’t conflate it with corporate citizenship, philanthropy, or awards. I think another reason people don’t understand or value most sustainability reports is because they work too hard pandering to peoples’ desire for happy talk; listing donations, community open houses, and other good works dilute the broader message of sustainability as a business activity. Most of it is pretty generic — every big company does the same stuff, basically — and you can almost hear some senior exec telling the marketers to “get more value for our work!” Winning an award for it doesn’t make it any more understandable or believable, and touting your brand name on so-and-so list is proof only that you’re talking to yourselves.
Third, be more honest about process and don’t just tout successes. Most of the numbers contained in sustainability reports are simply incomprehensible: a 12% improvement in chlorowhatever emissions means absolutely nothing without context, so is that a big/enough number? The UN’s SDG’s provide no cover, since nobody understands them, either. The reason for producing the report is not to promote your accomplishments but inform your stakeholders of your efforts, so any storytelling should be about communicating the broader story of what’s going on, how it influences your business and your business influences it and, perhaps most importantly, the difficulties and trade-offs required by your work. Inform, don’t promote.
Ultimately, the ugly reality is that we’re still incinerating the world despite all of your company’s impressive work achieving sustainability, so a little humility along with honesty would go a long way to not just gaining broader awareness, but doing so credibly.
Otherwise, nobody is going to care.
Read the original post by Jonathan Salem Baskin here.