Constructing the report

This should be determined after carefully considering two constraints. On the one hand, you have to define the objective of the report and ensure that the information and message you want to convey are in line with your company’s overall communications strategy. On the other hand, you have to evaluate stakeholder expectations and their information requests. Only then can you structure the report and decide which information goes where. There may be several iterations during this phase. There are often considerations as to whether a company should change the report structure and content focus from year to year. A ‘marketing/communications approach’ will favor a ‘renewal’ at each season whilst a ‘reporting approach’ modeled after financial reporting will emphasize continuity and prediction. A reporting approach should be used both to build an overall theme and continuously improve the report structure.

How should you manage stakeholder expectations, demands and viewpoints?

The views of stakeholders should be listened to, communicated and as appropriate commented upon in the report. Stakeholders may demand specific statements and data on how the company is dealing with a certain issue. Furthermore, you should decide how you want to report on your involvement with stakeholders and how they influence the way your company manages sustainable development issues.

How should you collect, aggregate and analyze data?

The earlier the data can be aggregated, the more time can be spent analyzing the company’s performance. This analysis should be an integral part of the management process, and therefore, managed on an on-going basis. Some information is proprietary or covers aspects of significant uncertainty such as the risks linked to soil pollution or to past product failures for which the company could be blamed. When disclosing such information, companies must comply with corporate accounting and disclosure regulations but they must also meet stakeholder expectations that arise from their corporate values and principles.

To facilitate the data collection process, companies try to aggregate the ninth or the eleventh month performance. However, it is extremely important to have routines and systems in place that make it possible to start aggregating the twelfth month result around the fifteenth day of month thirteen.

Information technology is crucial for creating an information system that improves communication throughout the organization and makes data standardization easier and faster. When information handling is centralized at a corporate level, each production site has a “data responsible” person in charge of reporting sustainable development data to the information system. Usually each site manager has to accept and verify that the sustainable development data is reliable and accurate.

Writing and layout

Most companies go through several iterations and draft versions of the report before it is finalized. Many parts of the company are usually involved in commenting and suggesting improvements. Information on the company’s sustainable development performance is analyzed and integrated. Finally, the company’s senior management or board of directors approves the final version.

How should you make sustainable development information easy to understand?

Publishing a whole set of sustainable development information covering all aspects of the company’s activities is not enough. It may be useful to build the report around a theme that is closely linked to the company’s business objectives and values. The balance should be struck between a highly technical report and an easy-to-read, appealing report, depending on the audience. Some companies compile most data and figures in an appendix at the end of the report, allowing for an easy read while still providing technical information. In the case of a web-based report or a CD-ROM, the challenge is to build a robust storyboard enabling an easy navigation across many topics and access levels. You may want to write briefly about one topic while offering very detailed information on another.

Companies usually take the following issues into account when writing a sustainable development report:

• Adapting language and the information to the target audience(s)
• Considering using professional writers and designers to help convey complex information
• Breaking down sections so that readers can understand sections separately
• Providing readers with special formats that facilitate information dissemination
• Supplementing the report with more detailed information on the Internet
• Avoiding the use of complex and technical terms and, if necessary, enclosing explanatory notes or a glossary

Internal quality assurance

How to perform internal quality assurance on the report? Before the report is finished it must be internally approved with regards to the data, information and conclusions it contains. In most companies the report has to be approved by representatives from senior management. Internal assessments must be performed for each production site. Each manager must ensure that the information reported is legitimate, correct and reliable.

Third-party assessment

How to perform external assurance of the report?

Even if internal controls have been performed, you may still want a third-party to check that the data is indeed reliable and that no key data has been omitted. This assessment can be performed at different levels, ranging from assessment of the report, stating that it has been written in good faith and in a transparent mode; assessment of the management and reporting systems, as well as checking that the aggregation of data is done properly and reflects the situation reported by the different sites of the company. Deeper levels of assessment include checking the actual reported data, at site level, to guarantee the reliability and relevance of the full information chain. Most companies start with the first level of assessment before implementing the full process.

No standardized and generally accepted approach yet exists and regional differences prevail, but a practice is emerging mainly in Europe. A typical engagement will cover sub-components of the report and/or of the process of preparing the report. Yet, when looking at independent statements, uncertainty and a lack of clearance exist among report producers and users as to the meaning, scope and work performed by the assuror.

The bulk of the work remaining at the end of the development phase can be significantly reduced by checking the information systems and processes at an early stage, which allows for the transfer of sustainable development data into the report. The external assurance providers give advice on how to improve the reliability of the reported data and processes. This information is valuable for the management process as it may either improve current procedures or find shortcomings in the data processing.

Usually the assurance process is split in two phases. The first is the assessment of information systems and the quantitative sustainable development data. The second includes the assessment of qualitative information and specific statements in the sustainable development report.

The main steps in an independent assurance are:

Understanding the basics – the assurance provider is informed about the

• Organization
• Report content
• Structure of information systems
• Process of data collection
• Process of writing the report, etc.

Determining the scope of the engagement

• Risks related to how sustainable development data and information are presented in the report are identified and analyzed
• Type of sustainable development data to be included in the report is discussed and identified
• Activities to be performed during the assessment are decided together with the company

Preliminary review of the data and text

• Review of how the data is collected, aggregated and analyzed
• Review of how the text of the report reflects reality
• Final planning: development of final work plan on how to perform the engagement with regards to activities, interviews and assessment of data and information

Assessment of data and information

• Interviews with key management staff
• Site visits
• Review of how adopted accounting guidelines and principles are applied (e.g. GRI, AA 1000, ISO 14001, etc.)
• Assessment of data and information presented in the report and how they connect to the underlying documentation

Finalization and feedback

• Review of the preliminary print of the report
• Sign-off meeting and issuance of an assurance statement
• Detailed comments and recommendations for improvements with regard to the reporting process are summarized in an internal report for the company