Sustainability reporting and corporate transparency, can more be done


Interview with Reana Rossouw, the owner of Next Generation Consultants, a leading boutique Management and Business Consulting Firm with a wealth of experience in the business development environment.

By Ronald Chawatama: Animus Sustainability Portal (http://animus-csr.com) and Sustainability Blog (http://sustainabilityblog.animus-csr.com/)

How can companies communicate simple inspiring stories in their efforts to tackle complex social and environmental issues?

I don’t want to focus on traditional ways of communications but I am of the opinion that the latest social media technology poses many new unconventional, interactive and responsive ways for companies to communicate.

Social media allows companies to go where their customers and stakeholders are. This enables businesses to speak to stakeholders about the things important to them in a way that they prefer and are comfortable with.

 

Various social media platforms that companies can harness in communicating with the public

 

This poses a challenge to companies and traditional communicators and communications practitioners, even their supporting agencies like PR, Marketing, Communications, Advertising, etc.  Today, if you don’t understand the power of immediacy, transparency and responsiveness you have literally missed the boat.

But, to answer your question, I believe that new technologies and communication tools such as infographics allows companies to communicate more clearly and transparently.

I believe that facebook, pinterest, google+, linkedin etc provide new channels of communication, yet communicators (particularly business) uses the new technology in old ways.  For instance, business is employing use of podcasts or webinars but then do the traditional way of sharing a story.

I think the way to communicate simple inspiring stories is to let those people affected by complex social and environmental issues speak.  For instance, if a company funds a water or energy or infrastructure program it should let the community speak about the value of the intervention and the change they experienced.  In this way, getting advocates to speak on your behalf is blending old and new technologies and methodologies.

For investor presentations for instance, instead of putting the CEO on a podium, releasing traditional printed reports, take the analysts and investors to the actual sites.  Show them the complex issues, how the company is addressing it and let them interact with the solution and the community so they can have an experience.

Governments in Africa expect companies to play a role in social development, and at the same time, companies think this is a government’s responsibility. How can we manage expectations from government and companies?

This is a complex question probably demanding a complex answer as well.  Let’s start with one framework. According to the United Nations Declaration on Human Rights it is the state’s duty to protect and companies responsibility to respect human rights.

On top of this it seems there is a perception that companies have lots of resources (i.e. money to solve complex issues) and governments don’t have the resources.  I think the problem starts with a basic assumption that

1) there is a need

2) a particular partner has the resources

3) because it is government, companies must obey.  These basic assumptions are all flawed.

We need a new way of thinking and doing without wrong assumptions and expectations.  The questions is not who has what to solve an issue but how can we work together to solve it.

I don’t think there is something wrong with the expectation that companies should play a role in social development – this is accepted practice, and neither is there something wrong with the premise that development is government’s role.

The problem lies however in the failure to bring parties together to discuss how issues can be resolved, that is the Africa problem.  Both parties need each other but they actually act as if they don’t.  Both parties proclaim the importance of partnerships but are hesitant to enter into these.

So it is not so much about expectations. We cannot do anything about our expectations and there is nothing wrong with that but it is the HOW TO that is the problem.  What is needed is a facilitated discussion, with a clear agenda, with clear plans, goals, timelines, commitment and responsibilities.  The problem is that we never get to the actual discussion and implementation.  That is the African problem.

In your experience working with various companies, what is the perceived role of companies in social development?

Companies have accepted their responsibility to contribute to the sustainable development of communities and social development.  They accept the connectedness and interdependency that exists.  The question is, how and where to start, what to do and how to do it.  The need is so great and the resources are so limited.

Companies use their resources (everything that they have) to contribute to social development often in the following ways:

·      Money – through the creation of jobs and providing skills, if not directly then indirectly through paying royalties and taxes and additional contributions

·      Process and systems – through the creation of access to markets and by servicing their clients (through products and services) – they create economic systems that funds social development

Companies are part of social development (they draw their human resources from the social sector – where they operate) – they consume resources and therefore share resources (water and energy), and therefore their future sustainability is directly linked to social development.

On top of this companies choose causes where they can contribute all their resources, core competencies and ensure sustainable social development.

There is also differentiation between sectors, for instance, depending where companies have a negative impact on society they will make a greater effort to balance that through their contribution to sustainable social development.

How can companies navigate different social and political landscapes in a way that they can fully engage stakeholders without compromising their reputation and or replacing government’s role?

It is only through engagement that companies understand the

1) geographic environment in which they operate

2) the demographic environment in which they operate

3) the risks, challenges and opportunities

4) the impact – economically, socially or environmentally that they can start navigating.

This engagement is supported through extensive data/research that is required not only to understand the stakeholders in the sector/region/demographic where they operate but also the context in which they operate.  For instance there is need to understand if there any challenges or if there is resource scarcity (labour, water, energy).

This engagement and research is then supported by impact assessments probing what is their impact on the economy, environment and society. This provides understanding of both positive and negative impact, so navigation is underpinned by extensive knowledge.

There is need to have knowledge about people, the environment, the impact, the opportunities,  in order to develop strategies that can deal with expectations and impacts.

Once they know – and understand their contribution – they can manage reputation, expectations and responsibilities.

Is there any value at all, measurable or qualitative that can be derived when business act responsibly? There is some work emerging in this context.  I think the question is how can a company measure / value the contribution of its sustainability efforts.  In this regard the Profit and Loss statements of Puma is an example though this is very much an emerging field.  Because for the first time integrated reporting asks this question.  Based on the 6 capitals model, how will the various capitals contribute to future value creation. We are now beginning to see some interesting stuff.  For instance, a company can generate profit (positive value through financial capital through the process of manufacturing) – but in the process diminish environmental capital through the depletion of natural resources (water or carbon emissions).

Also there is evidence that stock exchanges are putting a value on sustainability – i.e. by measuring impact through indicators and reporting – a company is seen as a more favourable investment.

Also there is evidence that investors (institutional) are using reports and indexes to reward sustainable strategies and behaviours.

Can sustainability reporting improve corporate transparency and what are the perceived benefits?

When a company is more transparent (i.e. through reporting), its stakeholders are more tolerant (i.e. communities or customers) – so there is reputational benefits.  Furthermore by reporting on supply chain for instance a company can mitigate negative impact (i.e. working conditions or gender diversity in the supply chain).

By reporting on negative impact (environmental i.e. water consumption) a company can relook at its internal processes and identify cost savings achieved through new or better processes.

The real benefit of reporting is that companies are learning and growing in new ways.  Now that specific aspects are monitored and measured – i.e. water or supplier relations or community expenditure, business is more integrated and the information is used to align to better strategy

These are just some of the benefits from sustainability reporting and the subsequent transparency that follows from that.

About Reana

Reana Rossouw is the owner of Next Generation Consultants, a leading boutique Management and Business Consulting Firm with a wealth of experience in the business development environment. Their specialist services includes, but is not limited to: Corporate Social Investment; Sustainable Development; Business Development and Leadership Development. Reana’s particular areas of expertise are in creating and implementing strategies and brands for innovation; growth and sustainability. She is a regular speaker at national and international conferences and have delivered various papers on her fields of expertise, that includes presentations to the likes of competitive intelligence; market research; building leading brands; future forecasts and business trends; leadership development; corporate social investment, local and socio economic development; corporate responsibility and citizenship; governance and sustainability reporting and many more


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