We need to talk. About your company ESG report. I’ll just get right to the point – it’s probably just too big.
When companies first started reporting on CSR (ESG’s most direct ancestor) they tended to be tome-like – almost coffee table books with lots of full page pretty pictures. But frankly they were bloated with too many words that provided inadequate factual – or meaningful – information. This was before the time that ESG information was considered material.
It wasn’t long before stakeholders caught on and realized most CSR reports were PR/marketing fluff and themselves wasteful use of paper and transportation-related emissions. Many companies responded to such criticism by simply publishing essentially the same reports on-line rather than in physical document format. One small step forward, but the real point was missed.
Then the world pivoted from CSR to ESG and something changed – reports got smaller. I think it was a combination of uncertainty, the unknown, heightened concern of legal risk and a lack of comprehensive data that led to the downsizing. The reports still tended to be more about positioning and window dressing, but at least some aspects seemed to be trending in the right direction.
It is worth noting that stand alone sustainability reporting frameworks (such as GRI) existed at the time and others were developing (SASB, now ISSB). Some of these frameworks provide more flexibility in how/what companies report than others. Financial reporting regulations and accounting standards didn’t support integrating ESG/sustainability reporting into financial disclosures.
But recently, the pendulum has swung back to companies producing jumbo reports. Why? ESG reporting (or maybe let’s call it “over reporting” or “oversharing”) is a massive burden on companies – data has to be generated, collected, evaluated and hopefully validated; the reporting framework and metrics must be decided upon; text must be written hopefully by humans and not chatGTP; data tables developed; cross references to other reporting frameworks created; a multitude of internal reviews completed and approvals issued; branding and graphic design work done; etc.
But who is served by massive ESG reports?
Your readers, investors and stakeholders are very busy. Do they have time (and in some cases, patience) to read your company’s 200-page ESG report? Along with the other 200-page corporate ESG reports from other companies that are piled up ahead – and after – yours? Oh, and the 200-page financial reports as well? Might large ESG reports actually be counter-productive or – gasp – possibly a waste of time? I’ve read about many investors and ESG ratings firms lamenting the size, complexity and style of corporate ESG reports. And the more information they have to process, the bigger the risk of errors, omissions and misinterpretation. These are stakeholders who shouldn’t be ignored.
What You Can Do
I am not suggesting that companies should stop publishing ESG reports. However, it is worth looking critically at the content and size. Here are a few things to consider:
- Your audience. Reach out to your primary audiences and ask for their feedback on the report’s content and its presentation. They may have valuable suggestions to reduce the size of the report and the amount of effort you have to expend on its development.
- Your look. Is it really worth making the report look so pretty? Many years ago (before the time of on-line reports), I owned shares of Southwest Airlines and was always impressed that their SEC 10-K annual reports were printed on onion skin paper to save production and mailing costs, and had no graphics other than financial data charts and tables. There is something to that – especially in the context of ESG. Brand managers may need to pushed out of their comfort zone on this idea.
- Your style. How many words are necessary to communicate what is needed? Yes there are legal and branding considerations, as well as conformance to the chosen reporting standard. But you should also give these reports a very thoughtful edit and eliminate as much fluff/unnecessary words as possible. Granted, I am an editor and a writer who values simplicity and clarity over complexity (think Hemingway rather than Faulkner).
- Your data. Consider how your data is presented in the report. Without losing context, can it be presented in a simpler or smaller manner? Can it be presented in a separate document from the main report? Are you reporting too much data in the first place?
In the end, it is worth making reasonable efforts to reduce the bulk of corporate ESG reports. Your staff will thank you for it, as will those who read them and process the content.