5 Expert Tips for an ESG Report That Speaks Every Stakeholder’s Language
If you are an ESG report owner who is starting to plan for your 2022 report, rest assured that you’re not alone if you feel a bit anxious about the project ahead. After all, there’s a lot riding on the report’s success. In particular, one of the most common concerns report owners raise is, “How do I make this report useful for investors and ESG ratings agencies?” It makes sense. Companies want to see their ESG-related initiatives and progress reflected in their third-party scores, while at the same time business leaders know that investors are increasingly considering ESG performance and looking to the Corporate Sustainability Report (CSR) to get the details. With the SEC also increasingly reading these reports, the stakes are higher than ever.
The challenge, however, is that there is no universal how-to guide on providing the right information in the right way for different stakeholder groups. And, to make things even more complicated, companies simply cannot write a report solely for investors, raters, and regulators and disregard customers, employees, or suppliers. This all presents a unique challenge for CSR writers who are trying to serve multiple and, at times, competing interests and audiences.
While we can’t give you a one-size-fits-all report template, we can offer some proven strategies that will make your job easier and your final report more effective. Keep these tips in mind as you put pen to paper, and you’re sure to produce a report that resonates more deeply with every reader it reaches.
1. Tie ESG to business strategy
Before you start writing, take some time to explore the relationship between corporate sustainability and the business’s strategic planning process. That is, how does leadership integrate sustainable, ethical, and responsible principles into its planning, target setting, and strategic priorities? And how does that, in turn, make the business a more attractive investment? Gaining clarity around these questions gives you a solid foundation to shape your writing. Of course, you also need to think through how to incorporate the answers into the report in a way that’s clear to your stakeholders and crystalizes your message. The next few tips will help.
2. Talk about the impact
For shareholders, ESG is all about driving outcomes. For some, this is improving a company’s brand to grow sales, or reducing input costs to expand profitability, or even streamlining the supply chain to reduce risk. Too often, companies make the mistake of focusing on efforts instead of outcomes. Find ways to quantify or measure the effects, savings, consequences, or impacts stemming from your ESG initiatives and highlight those numbers in your report.
3. Address oversight and risk management
Investors want to feel confident that the people and processes that govern a company’s ESG efforts can protect the interests of the business and uphold its fiduciary responsibilities. That’s why detailing the governance structure that oversees ESG is so important (and is a recurring factor across several rating agencies). Doing this creates a culture of transparency and accountability. A good sustainability report should detail the key decision-makers and the checks and balances in place to ensure the business is making smart choices and investments related to ESG.
4. Speak authentically and strategically
Strike a balance between using your company’s voice and the technical language needed to meet rating agency requirements. While your internal reference to “team member feedback” may reflect a consistent corporate voice, remember that rating agencies use machine learning, even AI, to look for keywords, like “employee survey.” Finding ways to blend these terms into your narrative will ensure your key efforts aren’t overlooked by people or software programs, and you aren’t missing out on an opportunity to boost ratings.
5. Consider your layout
CSR reports can range greatly in length, from an extensive 300+ page publication like Owens Corning’s 2021 Sustainability Report to a more concise report that provides the company’s ESG narrative and relevant metrics, such as e.l.f. Beauty’s Impact Report. Long or short, your readers will likely review content in a “popcorn” style—in other words, they’ll jump around. So, consider designing your report to allow them to easily maneuver between sections. There isn’t a “golden” length for a report, but easy navigation will allow readers to get to what they need regardless of the page count.
You Don’t Have to Go It Alone
Writing a CSR report is a daunting challenge, and doing it well takes practice and experience to master the nuances and account for different stakeholders’ unique needs. It never hurts to put more expertise behind your efforts. Whether it’s a little strategic guidance to get you started or a dedicated team to help with the heavy lifting involved in planning, organizing, wordsmithing, and writing a full sustainability report, if you’re in need of support, reach out. We are ready to pitch in to ensure your 2022 ESG report is the high-impact document you need it to be for stakeholders of every type.