Approach

When the commitment to sustainable development has been made, the real work begins. Companies usually start working on either the management process so that it incorporates sustainable development issues or the reporting process to communicate with internal and external stakeholders.

The approach depends upon what a company wants to achieve and how to achieve it, in relation to the sustainable development issues it faces. It also depends on the internal and external pressure it is confronted to.

Experiences from WBCSD members demonstrate that roughly the same number of companies start with either the management process or the reporting process. A smaller group of companies chooses to simultaneously develop one integrated management and reporting process.

Some companies need to be in total control of their sustainable development information and data before externally communicating their sustainable development objectives, performance and value creation. Other companies use external reporting to drive internal transformation. Companies choose different ways to start working based on their culture and business environment.

Technically-oriented companies tend to start working on the management process by creating management and information systems. Communication-oriented companies usually begin with the reporting process, detailing their direction and how to achieve their objectives. In some cases, the external stakeholder pressure is so strong that companies feel compelled to start focusing on reporting before they even build management systems to collect the necessary data. In these cases, extreme care should be given to avoid projecting an external image of hollowness and inappropriate internal focus.

With regard to the external business environment, there are two factors that influence companies’ willingness to start reporting. The first factor is related to the origin of a company or where it performs its primary operations. In some countries, like in northern Europe for instance, companies are expected to report on sustainable development while elsewhere, very few produce such reports. Yet, global companies with major operations in developing countries are increasingly asked to report on how they manage their complex business environment with regard to sustainable development.

The second factor is related to legislation and informational needs from some stock exchanges. Listed companies might fear damages in stock prices when reporting on certain sustainable development issues. These companies might thus prefer to focus on developing their management process first and embark on reporting at a later stage.

Whatever the starting point, the end-result should be an integrated management and reporting process as this integration will create real value. Information in itself does not lead to action or a change of behavior unless it is relevant and connected to management systems. The quality of the reporting process increases in companies with a well-developed management process.