Sustainability Reports: The Next Marketing Must-Have?
Many organizations claim to care about people and the environment, but how do we really know, and how can we compare one organization to another? Sustainability Reports are an easy way for organizations of any size to share with their customers, employees, distribution partners, vendors, communities and shareholders the brand, vision, values and practices related to their stakeholders and the environment.
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Customers, distribution partners, employees, vendors, communities and increasing numbers of investors want to do business with organizations that: 1) have a strategic plan to address the needs of all stakeholders, 2) minimize their impact on the environment, and 3) promote strong ethics. Any organization that believes its commitment to people, the environment and ethics is a marketing benefit should consider publishing an annual Sustainability Report, not only because it provides valuable information to engage key stakeholders, but because it helps ensure the organization has a strategic and systematic CEO-led plan in place to deliver its promises.
Because of pressure from a growing number of ESG (Environmental, Social and Governance) investors, more public companies have begun to publish what are known in financial circles as Sustainability, Corporate Responsibility or Integrated Reports. These go beyond financial reports to disclose the organization’s vision and practices related to the concerns of ESG investors—primarily the environment, human capital management and ethics. Because customers, employees, distribution partners and communities all care about these issues for different reasons, public companies are not the only organizations that can benefit from publishing Sustainability Reports. Of the five companies so far selected for the ISO 10018 Honorary CEO Citation for Quality People Management, four of them publish Sustainability Reports, and one of them, Wegmans, is a private company.
What Information Is Disclosed in a Sustainability Report?
Sustainability Reports specifically tell stakeholders about your organization’s brand, vision, values and practices related to customers, distribution partners, suppliers, communities, the environment and ethics. In addition, they provide a means of regularly guiding your organization’s stakeholder engagement practices by laying out a roadmap that gets updated year to year. Public companies make it part of their investor relations information; private companies feature it as a link from their websites and other marketing activities with talent, customers, distribution partners and other key constituencies.
Based on information used to create the Enterprise Engagement Alliance's Engaged Company Stock Index by McBassi and a review of the recently issued ISO 30414 guidelines for Human Capital Disclosures, as well as the reports used to evaluate the winners of the ISO 10018 Honorary CEO Citation, Sustainability Reports provide the following information with enough specifics to substantiate the content provided without divulging information that could also be of interest to competitors. Excluded, for instance, is information on details on the tactical plan underlying the strategic engagement practices referenced in the Sustainability Report. Generally speaking, Sustainability Reports can include:
- A short description of the organization’s products, service, industry, history and role in its market.
- The organization's mission, vision and values as they relate to all stakeholders—customers, employees, distribution partners, vendors, communities, investors, or other key constituencies. (government and not-for-profit organizations can benefit from publishing Sustainability Reports too, because such organizations often don't have the financial means to engage people that are available to their counterparts in the private sector and often have to appeal to more intrinsic motivators.)
- The specific promises made to the organization’s customers/constituents and examples of the policies, services and processes used to keep those promises, continually improve products and services and to address failures when they occur.
- The steps taken by the organization to recruit and retain talent and examples of what is done to develop, inspire and equip employees and contractors to provide great service. This can include examples of corporate training and coaching, recruitment, assessment and surveys, training, communications, wellness and safety, diversity, job design, perquisites, rewards and recognition, loyalty, compensation, fair trade practices, or other programs, as well as information about outcomes—i.e., retention, willingness to refer employees or customers, accidents, etc.
- Examples of the organization’s specific commitments to other key constituencies, such as distribution partners and vendors—what specifically is done to help them provide better service to the organization and to its customers in terms of education, tools, marketing support, training, etc.
- Examples of the organization’s Corporate Social Responsibility programs or other efforts to support the communities in which an organization operates.
- An outline of the organization’s efforts to minimize its impact on the environment or to otherwise contribute to sustainable environmental practices with as much specific information as possible understandable to the average lay person.
- The organization’s stance to prevent practices within its field that could create liabilities or lead to litigation.
Such reports should include a clear way for people to provide feedback, comments, or suggestions to an organizational ombudsperson, as well as a process for seriously addressing each authentic comment, concern, or suggestion. An anonymous feedback channel is highly recommended in instances where public safety, health, or financial security are concerned.
What’s Coming for Public Companies
The increasing pressure from investors has already led to a growing number of public companies publishing Sustainability Reports, as noted above, and the interest in Europe in the new ISO 30414 Human Capital Disclosures will only heighten the pressure on large organizations to issue Sustainability Reports. With market leaders such as SAP, Merck, Best Buy and Wegmans already publishing Sustainability Reports, others will feel compelled to consider publishing their own, even if the Securities & Exchange Commission doesn't move any time soon to respond to calls by investors for more detailed Human Capital disclosures by public companies.
For public companies, Sustainability Reports include the above qualitative information (generally in the form of a letter from the CEO), as well as the following quantitative data that can be compared by industry and sector:
• Number of full-time/salaried employees and independent contractors, compared with previous years.
• Overall payroll compared with previous years.
• Overall nonpayroll expenses (incentives, recognition, benefits, training, excluding taxes), and as a percentage of payroll.
• Employee retention (percentage retained year-to-year).
• Number of independent contractors (compared with previous years) and overall expenditures on independent contractors.
• Customer retention (percentage retained year-to-year).
• Overall expenditures in marketing and sales costs, and as a percentage of overall sales, compared with previous years.
• Number of accidents/deaths compared with previous years.
• Expenditures in Corporate Social Responsibility, with comparisons.
• Number of lawsuits (by employee, customer, community), with year-over-year comparison.
In addition to Sustainability Reports highlighted in the articles about the ISO 10018 Honorary CEO Citation Winners Best Buy, Merck and Wegmans, see the Whole Foods 2017 annual report for another example of a Human Capital report.
Who should prepare the Sustainability Report? Most likely the Chief Engagement Officer reporting to the CEO or a senior consultant engaged with the authority to handle this role on behalf of the CEO.
Services: The International Center for Enterprise Engagement at TheICEE.org, offering: ISO 10018 certification for employers, solution providers, and Enterprise Engagement technology platforms; Human Resources and Human Capital audits for organizations seeking to benchmark their practices and related Advisory services for the hospitality field.
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Or, contact:
Bruce Bolger, President
Enterprise Engagement Alliance at TheEEA.org
245 Saw Mill River Rd., Suite 106
Hawthorne NY 10532
914-591-7600, ext. 230
Master the Principles of Enterprise Engagement to Achieve Organizational Goals and Enhance Your Career
- Profit from a new systematic approach to engagement to enhance your organization’s brand equity; increase sales, productivity, quality, innovation, and safety, and reduce risks.
- Achieve ISO 10018 Quality People Management Certification to demonstrate your organization’s strategic commitment to people to your customers, employees, distribution partners, vendors, communities, investors, and regulators.
Live Education: The Brand Engagement Conference, June 18-20, 2019, Chicago, in conjunction with the Selling Power Sales 3.0 Conference. Learn a breakthrough, practical approach to enhance performance and stakeholder experiences at Selling Power's Sales 3.0 Conference, "Frictionless Selling," June 18-19, and "Enterprise Engagement in Action," June 20, at the Drake Hotel. Register now.
In Print: Enterprise Engagement: The Roadmap 5th Edition.
In Print: Enterprise Engagement: The Roadmap 5th Edition.
The first and most comprehensive book on Enterprise Engagement and the new ISO 9001 and ISO 10018 quality people management standards.
Online: The Enterprise Engagement Academy at EEA.tmlu.org, providing the only formal training on Enterprise Engagement and the new ISO 9001 and ISO 10018 quality people management standards. Provides preparation for professionals to support organizations seeking ISO 10018 employer or solution provider certification, as well as elective courses on Trade Show Engagement, Rewards and Recognition, Government, and other topics.
Plus:
10-minute short course: click here for a 10-minute introduction to Enterprise Engagement and ISO standards on Coggno.com.
10-minute short course: click here for a 10-minute introduction to Enterprise Engagement and ISO standards on Coggno.com.
5-minute Audiopedia summary of the Enterprise Engagement field.
Services: The International Center for Enterprise Engagement at TheICEE.org, offering: ISO 10018 certification for employers, solution providers, and Enterprise Engagement technology platforms; Human Resources and Human Capital audits for organizations seeking to benchmark their practices and related Advisory services for the hospitality field.
The Engagement Agency at EngagementAgency.net, offering: complete support services for employers, solution providers, and technology firms seeking to profit from formal engagement practices for themselves or their clients, including Brand and Capability audits for solution providers to make sure their products and services are up to date.
C-Suite Advisory Service—Education of boards, investors, and C-suite executives on the economics, framework, and implementation processes of Enterprise Engagement.
Speakers Bureau—Select the right speaker on any aspect of engagement for your next event.
Mergers and Acquisitions. The Engagement Agency’s Mergers and Acquisition group is aware of multiple companies seeking to purchase firms in the engagement field. Contact Michael Mazer in confidence if your company is potentially for sale at 303-320-3777.
Mergers and Acquisitions. The Engagement Agency’s Mergers and Acquisition group is aware of multiple companies seeking to purchase firms in the engagement field. Contact Michael Mazer in confidence if your company is potentially for sale at 303-320-3777.
Enterprise Engagement Benchmark Tools: The Enterprise Engagement Alliance offers three tools to help organizations profit from Engagement. Click here to access the tools.
• ROI of Engagement Calculator. Use this tool to determine the potential return-on-investment of an engagement strategy.
• EE Benchmark Indicator. Confidentially benchmark your organization’s Enterprise Engagement practices against organizations and best practices.
• Compare Your Company’s Level of Engagement. Quickly compare your organization’s level of engagement to those of others based on the same criteria as the EEA’s Engaged Company Stock Index.
• Gauge Your Personal Level of Engagement. This survey, donated by Horsepower, enables individuals to gauge their own personal levels of engagement.
For more information, contact Bruce Bolger at Bolger@TheEEA.org, 914-591-7600, ext. 230.
