With so many sustainability reporting and disclosure initiatives, it can be difficult to weigh the costs and benefits of responding to third-party requests. How do you gauge your company’s readiness to provide a detailed response that accurately represents your performance and vision?
Proactivity is key when embarking on the road to disclosure. The champion of the disclosure process must carefully examine the business case, in addition to earning the support of company leadership, obtaining board approval, and identifying key messaging.
Here’s what successful companies are thinking about before taking the plunge:
- Show me the value! Disclosures require significant time and attention. Before committing to a response, evaluate potential benefits: will it answer stakeholders’ questions? Highlight our performance versus competitors/peers? Attract potential investors?
- Are we (really) ready? Review the reporting initiative’s guidelines carefully and identify if your company will be able to provide sufficient information without generalizations or forced answers. Consider waiting if you are at risk of releasing premature goals or unsupported statements.
- Do we have a story to tell? The context of a response is almost more important than the specific information requested; companies must look beyond data values and standard responses, and consider reporting targets, stakeholder engagements, risks/opportunities, etc. There is value in focusing on the overall message while gauging how it enhances company reputation.
- Are the right players willing to invest? When preparing a disclosure, active participation and company buy-in are key– especially from executive leadership and internal stakeholders. Alignment with internal perceptions and company messaging is also important.
- Is our data accurate? Disclosure provides an opportunity to review metrics collection processes and outputs for accuracy and improvement. Accurate metrics also provide opportunities for company level initiatives beyond disclosure (e.g. benchmarking, auditing).
- How will we manage the message? Remember: once information is released, it cannot be retracted. It is therefore critical to ensure the right message is released to protect your brand reputation. Be prepared to clarify your response as needed.
Disclosure is well worth the effort. Take it from Bryan Jacob, Director of Energy and Climate Protection in the Office of Sustainability at The Coca-Cola Company:
“Our environmental measurements and data disclosure continue to evolve. Tracking the environmental performance of our entire system across nearly 900 plants serving more than 200 countries presents challenges, but over the past decade we have been able to navigate those challenges to report the performance of approximately 95 percent of our system. Most recently, we were able to track a significant amount of performance data, including our Scope 3 emissions to submit in the Carbon Disclosure Project which improved our score dramatically.”
A proactive mindset is key. Every year there are new disclosure opportunities and revisions of existing guidelines. Chances are, if you have not already received a disclosure request from stakeholders, you will in the near future. When deciding whether to respond, keep these points in mind to stay ahead of the curve on the road toward valuable disclosures.