by Robert Eccles
The recent book One Report: Integrated Reporting for a Sustainable Strategy argues that in order to best communicate and ensure a sustainable strategy, companies should combine their required financial reports with their voluntary (in most countries) corporate social responsibility or sustainability report.
Integrated reporting is about much more than a single paper document that combines the material measures of financial and nonfinancial (e.g., environmental, social and governance) performance. It is also about using the Internet to:
* Offer more detailed information of particular interest to shareholders and other stakeholders * Provide analytical tools for users of the performance information being provided by the company * Provide information in other formats such as videos, images, figures and diagrams, charts and graphs, and spreadsheets * Engage in a two-way dialogue with all stakeholders in order to improve the company's engagement with them Most companies, even the few doing integrated reporting, are in a primitive state when it comes to using the Internet for reporting, dialogue and engagement. One of the best examples we know of companies using the web well for sustainability reporting is SAP. In terms of reporting quality, SAP currently ranks as #22 out of the top 1000 companies on CRD Analytics recently published "Global 1000 - Sustainable Performance Leaders" online ranking. Even more impressive is SAP's #1 rank in the Technology Sector of the report. Although, to our disappointment, SAP is not practicing integrated reporting, its 2009 Sustainability Report website is a good example of leading-edge practice. We believe that a sustainability site should feature criteria to be effective- it needs to be user-friendly, engaging, collaborative, and secure. Let's look at the SAP site against some of these criteria. In terms of user friendliness, the SAP site presents information in a very clear, uncluttered manner that enables users to navigate via the bottom menu bar and display information in the large white space in the center of the page. While some additional navigation work needs to be done, the simplicity of the SAP system makes it much easier to use and it is certainly more advanced than the majority of CSR reports which are in a PDF or other static document format. The dynamic nature of the website comes to life almost immediately when you begin navigating through the site and notice that rich media is immediately highlighted, with videos hosted on YouTube instead of a proprietary, company-owned platform that could potentially limit their viewership online. However, the single most user-friendly element on the website is in how SAP reports the core information about its business to the end-user. Instead of long, arduous paragraphs about their current and future performance, SAP presents its core business drivers in the Sustainability space with easy-to-understand graphical representations (depicted below) that clearly spell out the respective measurements and the future action plan by the company for either improving or continuing a current trend. If users are interested in longer, more detailed paragraphs the option to drill down is always one-click away.
In terms of engaging, the website provides numerous ways for individuals to provide feedback and in many circumstances engage directly with SAP employees. Throughout the Sustainability report website there are prominently displayed comment sections on most major pages , instead of being located at the bottom of the page like most traditional comment sections. Equally important: the comments are responded to frequently by SAP employees. Complementing the comment section is SAP's heavy engagement in the social media space — primarily on Twitter and Facebook. The collaborative aspect really centers on allowing viewers of the report to effectively build their own unique reports, models, etc. Currently, SAP does this in a very basic fashion through the Create Your Own Carbon Scenario portion of the report. However, in the future, hopefully more underlying data will be exposed directly on the site in an area where individuals can merge, mash-up and collaborate directly with the data - in spreadsheets or other applicable formats. While SAP is rightfully proud of what it has done, it also recognizes that there is substantial room for progress and improvement. Scott Bolick, SAP's Vice President of Sustainability Strategy, explaining more on their future plans in a video here.
Wednesday December 1st, 2010
by Robert G. Eccles and Kyle Armbrester
This blog can also be read here with embedded video and a comments section.
A link to the recently published e-book The Landscape of Integrated Reporting can be found here.