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Is the sustainability report the right place for storytelling?

Firstly, what is storytelling? 

Storytelling is how people naturally communicate. Within your sustainability report, it is a means of communication, using narrative techniques surrounding employees, the organisation, the past and visions for the future, social bonding and work itself, to build in the reader a new point-of-view or reinforce an opinion or behaviour. Storytelling tools include using anecdotes, case studies, typography, colour, illustration, data visualisation, photography, interactivity, video and even gamification.

Arguments for.

Reporting, by nature, is somewhat dull. Getting stakeholders to read your sustainability report is the biggest obstacle in reporting. Many companies keep packaging their reporting year-on-year in dense corporate documents, relying on stock templates, generic letters from the CEO, and pages and pages of text. Too often, large amounts of time, money and effort is spent on a report that very few people care to read.

These reports are not interesting to look at. They do not showcase a company’s brand and personality. And neither do they make the reader feel invested in the company or the work it does.

Why? Because they simply state numbers, charts, and straightforward facts; they don’t tell a story.

When companies are trying to advocate what they do through a report, data is integral to make convincing arguments. However, studies show that if you share a story, people are more likely to be persuaded. When data and stories are used together, audiences are moved both intellectually and emotionally.

And who doesn’t love listening to a good story? 

Storytelling helps companies connect with their stakeholders, forming an emotional connection to increase brand loyalty. An essential part of content marketing, storytelling are useful techniques that craft communications in the most engaging way to capture the reader’s attention and make them excited about what you’re doing. Stories are even noted as being 22 more times more memorable than facts alone

Sustainability reports can be a great avenue for powerful storytelling; creating inspiring stories and sharing data in more creative and engaging ways, ultimately demonstrating that real, tangible efforts are being made to make a company’s operations and portfolios more sustainable.

“There have been great societies that did not use the wheel. But there have been no societies that did not tell stories.”

Ursula Le Guin, novelist

Arguments against.

A report acts to serve as a purpose for the communication of two key aspects:

  1. An explanation of how sustainability is being managed to create long-term value. 
  2. Data (evidence) to support these claims.

Do readers want to spend time ploughing through dense, formal corporate reports to get to this information? 

Storytelling techniques strike emotive chords, and it can be argued that reports utilising these could be misleading in that they may not necessarily fully reflect a sustainability record. The report might even be choreographed to deflect attention away from areas where a company isn’t succeeding.

There is sometimes a disconnect between the information that these readers are looking for and what companies actually provide (PWC and others have been looking at this for several years). Investors and analysts have a limited interest in the majority of the content that ends up in a sustainability report. 

The opposition would argue that there is no role for storytelling in sustainability reports, which should focus solely on the business case. Instead, storytelling should be confined to website content and social media streams.

Conclusion

Removal of storytelling in its entirety from the annual sustainability report seems extreme and unjustifiable. 

Successful sustainability communications should always provide specific audiences with information that focuses on what’s most important to them – and presents information in ways that resonate. This may mean shorter, more impactful reports using imagery to illustrate effectively. 

Some companies are also looking at taking a “modular” approach to reporting, with a centrepiece summary document supported by a variety of supplementary resources, including infographics, impact fact sheets or reports on specific themes. This approach could provide the required content in a clear bitesize manner, where the stakeholder can select material to meet their individual needs. EVORA advises caution in this approach of separating out sustainability information intended for different end-users in multiple reports and communications. Publishing information on a company’s ESG risks and opportunities and information on a company’s sustainability performance across separate reports may not serve investor needs and risks signalling that information on a company’s sustainability performance is not material for investors. In addition, multiple communications may hamper the ability for a company to present an overarching vision and strategy and could lead to inconsistent sustainability information.

The issues of materiality and external assurance are useful to give storytelling elements credibility and validity in accurately reflecting a company’s approach to sustainability. More specifically, stories employed in sustainability reports should reflect the concerns of a wide range of the company’s stakeholders and that the more general themes that such stories illustrate are externally assured. At the more everyday level, companies might also give consideration to selectively using such sustainability stories in social media posts.

Using storytelling in sustainability reporting doesn’t need a mega budget or substantial resources. There are many fantastic examples out there that are brilliant, bold and inspiring, but also quite simple. Align with an appropriate reporting framework to ensure transparency. And beyond this, be brave, be honest, share your brand story, demonstrate your impact and connect to your reader.


References

Jones, Peter ORCID: 0000-0002-9566-9393 and Comfort, Daphne (2018) Storytelling and Sustainability Reporting: An Exploratory Study of Leading US Retailers. Athens Journal of Business and Economics, 4 (2). pp. 147-162. doi:10.30958/ajbe.4.2.2

This article was originally published on GRESB Insights.

The State of Corporate Sustainability Reporting in the EU

The legislation for sustainability disclosures in Europe will be reformed in 2021, as part of a major overhaul of financial market regulation. Importantly, these reforms include plans to create accompanying reporting standards.

Similar to financial accounting, sustainability reporting is essential for improved corporate management of risks and opportunities. Focusing on relevant and meaningful disclosures is key to produce high-quality and decision-useful reporting for organisations and investors alike. Using information reported on risks and impacts connected to climate change and broader sustainability matters, investors can best understand an organisation’s activities and strategies.

The European Commission will present a proposal for a reform in early 2021, while the EU Parliament will vote on the issue in Autumn.

EU Commissioner for Financial Services Mairead McGuinness clearly stated in December 2020 that “the rules of the game must be transformed to fully integrate sustainability at every step of the financial value chain” and identified the reform of the EU Non-Financial Reporting Directive as “one of the priorities to strengthen the foundations for sustainable investment”. 

Other reporting proposals have also recently stirred the reporting landscape, including:

  • Statement of Intent to Work Together from five reporting framework and standard-setting organisations that emphasises alignment and harmonisation;
  • proposal from the International Financial Reporting Standards (IFRS) Foundation to create a new Sustainability Standards Board (SSB) that would develop global sustainability standards;
  • The World Economic Forum International Business Council white paper that puts forth a common metrics for consistent reporting disclosure, building on existing sustainability reporting standards and frameworks.

These developments imply future changes to an organisation’s reporting structure and process. They lay the groundwork for framework that has close linkage to financial reporting, ultimately meaning that companies will need to treat sustainability information with a higher level of rigor, akin to information included in financial reporting.

EVORA works with companies all along the reporting journey, from those working on their first sustainability report to expert reporters who need help developing a long-term reporting strategy. By reporting, they capture numerous external and internal benefits, including meeting regulatory requirements, improving relationships with stakeholders, enhancing trustworthiness and reputation, clarifying on ESG performance, and identifying sustainability risks and opportunities.

Communicating COVID-19 impacts through Sustainability Reporting

With market uncertainty pervasive and belief in business deteriorating, using the annual sustainability report to restore confidence with all stakeholders is more important than ever.

Your next report will need to provide a clear, trustworthy narrative, detailing specific insights on how the pandemic has impacted on your sustainability strategy, business model, risks and stakeholder commitments.

Sustainability frameworks enable companies to provide reasonably comparable and useful information. However, no such template exists to compare how companies have responded to COVID-19.

EVORA have been making in-roads in accounting for the COVID crisis in our reporting for clients since March, learning more with each report, and share key areas below to consider during your next round of reporting:

1) Controlling the content

COVID-19 has impacted people in many ways. Employees may have experienced challenges adapting to a new way of working; property managers dealing with a whole new set of procedures and protocols to follow; tenants juggling the ‘return to work’ safely and local communities may have experienced unexpected environmental and social impacts.

By including a COVID-19 one-off section in the report; the opportunity may be missed to communicate the impacts of the pandemic in a more nuanced way, tailored to the different stakeholders affected. Instead, it will be more authentic weaved in specific messaging throughout the sustainability reporting, where relevant, through the voice of the affected stakeholder, for example a direct quote from an employee or a tenant.

We also encourage the simplification of the message – avoiding jargon, cliches and overly technical language, and, instead, using straight-forward, clear and concise language.

2) Mapping what is material

Materiality assessments inform meaningful sustainability communications, enabling companies to identify sustainability issues that are important to both their stakeholders and to business success. Used to their full potential they can help shape company strategy, galvanise internal functions and gain senior buy-in, as well as uniting disparate teams and processes.

As society deals with the pandemic, materiality assessments should be reassessed to better integrate sustainability into business strategy and to explore the relationship between a company’s impacts on a sustainability issue and the impact of that issue on the business. 

3) Dealing with the data

The shift to homeworking presents a unique challenge. Companies will be demonstrating a reduction in Scope 1 and 2 greenhouse gas emissions in line with the reduction of office building energy consumption.

This presents several possible issues for the reporting company:

  • Any movement in reported emissions could mask the impacts of any genuine reduction activities
  • Distortion against targets set
  • Justification may be required for smaller energy reductions than others in the sector, or anticipated, because they have seen a lesser impact from the pandemic, for instance through keeping offices open, with higher ventilation requirements, rather than closing buildings completely.
  • Emissions have not been eliminated, rather they have been relocated to employee homes beyond the company’s direct control. Some might argue that the decrease in commuting related emissions makes up for this. In order to provide a credible comparison of year on year performance, quantifiable homeworking emissions should be considered for recognition.

Our initial response is to always explain data with fully contextualised narrative.

4) Shift to online-first

We recommend an online-first approach for corporate sustainability reporting. This enables the audience to more easily search, navigate and locate information. This format can enhance storytelling – enabling more in-depth features and linking direct to other relevant documents.


Stakeholder scrutiny of how organisations are responding to the COVID-19 pandemic is bringing heightened attention to the importance of corporate transparency on sustainability issues. EVORA design reporting strategies for organisations, enabling them to apply frameworks, communicate meaningful sustainability outcomes and impacts to key stakeholders and use reporting as a tool to improve sustainability performance. Get in touch with the EVORA reporting team today.

Sustainability Report Post-COVID-19

As COVID-19 coincided with our spring peak reporting season, our reporting clients have had to consider adjusting their reports to suit. Despite the focus on the 2019 reporting calendar, many have chosen to acknowledge COVID-19 within the introduction or even a dedicated full chapter, allowing stakeholders to considerately judge the effectiveness of the organisation’s response.

This crisis has also placed an emphasis on social criteria. We have observed more reports focusing on the treatment of employees, suppliers, and relationships with local communities. Changing stakeholder priorities means that organisations are increasing attentions on social issues to demonstrate responsiveness to the highest priorities at the present time.

We perceive next year’s reporting to be the most changed by the disruption has caused. Accordingly, EVORA is developing aspects of reporting, including:

  • Re-examining materiality assessments to ensure the true identification of sustainability issues that are important to both stakeholders and business continuity.
  • Presenting further disclosures, to provide effective insight into an organisations COVID-19 response.
  • Continuation of reporting on standard, year-on-year ESG data and performance, which will allow readers to evaluate the organisation’s resistance to shocks.
  • Backing data with contextual explanations. We perceive that there will be significant reductions in environmental performance data reported, such as energy and travel. This fall in carbon emissions will undoubtedly accelerate the attainment of sustainability goals. However, this distortion will require a full narrative with expectations for future trajectory.

Stakeholder scrutiny of how organisations are responding to the COVID-19 pandemic is bringing heightened attention to the importance of corporate transparency on sustainability issues. EVORA design reporting strategies for organisations, enabling them to apply frameworks, communicate meaningful sustainability outcomes and impacts to key stakeholders and use reporting as a tool to improve sustainability performance. Get in touch with the EVORA reporting team today.

INREV and Sustainability Reporting: Mandatory Requirements and Best Practice Recommendations

INREV is the European Association for Investors in Non-Listed Real Estate Vehicles. It is recognised as the leading platform for sharing knowledge on the non-listed real estate industry and has a goal to improve transparency, professionalism and best practices across the sector.


In 2016 INREV Sustainability Reporting Guidelines were revised to establish a disclosure framework that enables delivery of meaningful data to increase visibility and insight into an investment vehicle’s ESG efforts and also details their next course of action for improvements. The new guidelines aim to present a clear picture of sustainability strategies and require the reporting of energy performance data.  They are aligned, where possible, with other industry standards including GRESB, EPRA and GRI.

The new INREV Guidelines published in 2016 consist of mandatory sustainability reporting requirements and best practice recommendations.

[clickToTweet tweet=”The 2016 #INREV Guidelines consist of mandatory requirements and best practice recommendations” quote=”The INREV Guidelines consist of mandatory sustainability reporting requirements and best practice recommendations.”]

The mandatory requirements have to be reported on an annual basis to claim compliance with the INREV Guidelines. Managers are required to report, based on these guidelines, over the year 2017.


Mandatory Requirements

  • Describe the overall approach to setting a long term ESG strategy for the vehicle
  • Detail the vehicle’s approach for ensuring compliance for current legislation relating to ESG issues is in place
  • Set out the annual objectives and associated targets for the coming 12-month reporting period
  • Detail objectives for the next 12-month reporting period for ensuring compliance with current legislation in relation to ESG and about preparations for any future legislation that may be undertaken in this period
  • Report against annual objectives and associated targets set for the vehicle
  • Report against compliance with current legislation requirements and objectives and associated targets for preparations for upcoming legislation
  • Disclose absolute and like-for-like environmental data for the proportion of the vehicle’s portfolio that is in the fund manager’s operational control.  This should cover:
    • Energy
    • GHG Emissions
    • Water
    • Waste

Best Practice Requirements

  • Detail any additional key material aspects for the ESG strategy for the vehicle
  • Detail additional information on other annual objectives (related to key material aspects referenced above) and associated targets for the vehicle based
  • Report against the annual objectives and associated targets as set out above
  • Disclose absolute and like-for-like environmental data for the available tenant data for the vehicle’s portfolio

Whilst this blog focuses on INREV, EPRA – The European Public Real Estate Association – sets out CORE and Additional Requirements in much the same way.

EVORA, supported by our proprietary software, SIERA, is highly experienced in the collation, analysis and reporting of data.  For further information, please get in touch.