Planning the report

Production related issues

Who is responsible for the report?

There are a number of steps in producing a report: defining the general content and structure, gathering the relevant information and data over the past period, writing the report and selecting the illustrations (pictures, graphs, etc.). It can be the task of one department or the joint effort of several (usually environment, human resources, communications and finance). Also, who is the ‘sender’ of the report? For example, is it the CEO, the EHS manager or the board?

Who is going to write and lay out the report? Are we to use in-house resources or external consultants?

Most companies tend to use professional writers and information consultants in order to make a high-quality sustainable development report. In many cases the information and the investor relations departments are involved in the production process even though someone with sustainable development experience has overall responsibility for creating and improving the report.

Also important to note is that companies do not outsource the production and development process. It seems to be important to keep the major parts of these processes internal because this is an opportunity to learn about necessary improvements and major inconsistencies in the internal sustainable development management and reporting processes.

Objective of the report

What is the objective statement of the report?

The statement highlights the report’s key set of objectives. The report planning must be flexible enough to integrate new issues or to reflect changes in known issues. Issues that were unimportant when the reporting process started might become critical during the report process. So, the more flexible the plan and objectives of the report, the easier those issues will be managed.

Information to disclose

Will the report have a general theme?

Once the objectives have been clarified, a general theme can be chosen for the report, if appropriate. The report structure, including headings and sections, is then planned.

What information do we want to disclose in each section, heading and page of the report?

How do we transition from following abstract information guidelines to finding “real” information to report on? What other important issues should we mention that are not included in any of the reporting guidelines? This information might relate to the company’s specific sustainable development approach and activities, its vision and values, business objectives, strategies, short-term targets, and internal projects.

Will this document be a comprehensive sustainable development report?

Will it evolve from an HSE report to a sustainable development report and, if so, what will it be called? How does that name impact how the users perceive the report? In some cases, a report labeled sustainable development, which does not fulfill the demands of such a report, might negatively reflect on the company. Conversely, some stakeholders may not bother to look for sustainable development information in a report labeled environmental.

Many companies claim that one of the challenges ahead is to publish an integrated sustainable development report. This would enable different stakeholders to get an accurate picture of the company's financial position and future business potential as well as its influence on the wider society and the environment.

How should you report on the value created by sustainable development?

Value creation can be described in terms of increased financial value, decreased levels of risks and enhanced image and brand name. It is usually easier to provide a qualitative description than a quantitative evaluation. Yet, attempting to assess how much sustainable development contributes to brand value can back up the qualitative description.

Gathering and collecting information

Where is sustainable development data collected from?

Existing information systems may provide some data already. The more mature the system, the more reliable and rigorous the data tends to be. You may, however, have to develop dedicated systems, which can be expensive and time-consuming.

First time reporters tend to use questionnaires to gather and collect the relevant sustainable development data that is not yet included in existing systems, e.g. financial, human resources and environmental information systems. Experienced reporters, however, either develop specific sustainable development information systems or integrate the financial data systems to collect and aggregate relevant sustainable development information.

What sustainable development data should be measured, collected, analyzed and reported?

Each company has to make decisions on what data to collect and how to report it. This may require the development of new internal management processes and must be well planned as it usually requires several years to be fine-tuned.

Which demands do we need to put on data quality and internal controls?

A company must determine the quality and internal controls on data. The use of internal controls creates an audit trail, which helps to support the data that is transferred into the information systems. Conversely, a lack of internal controls makes an external third-party assessment of the sustainable development information contained in the report very difficult and expensive, both in terms of internal resources and cost for an independent assurance provider.

How often is sustainable development information reported into the systems and how often do we aggregate data and examine our actual performance?

Do we need to develop internal reporting guidelines that explain and define what sustainable development indicators and data each reporting unit must examine and how to make calculations in accordance with company-specific accounting principles? Will enough data be available after nine or eleven months to perform an initial analysis of this year’s performance? It is also important to communicate the reporting plan to various parts of the company responsible for submitting sustainable development related data into specific information systems. The importance of meeting the deadline should also be stressed because delayed reporting will slow the whole production of the report. This is even more crucial if it is to be released together with the annual report.

The answers to the above questions will help guide the content of the report.

When is sustainable development data collected and analyzed?

In general, data is periodically reviewed within the confines of normal information systems, and systematically checked in the month preceding the publication of the report. Experienced companies tend to start analyzing the annual data in the quarter preceding the release of the report and then update this result with the latest data.

Quality assurance of information and data

Who is going to validate the report?

Often, several departments and functions are involved in a sustainable development report: environment, communications, human resources, finance and accounting are core and more functions may participate as information providers. The validation process of the information, data and conclusions presented in the report can be long and painful if responsibilities are not clearly established beforehand. In most companies, the report has to be approved by top management. Mentioning this approval process in the report enhances its credibility.

How do you ensure data quality and internal controls?

The first step is to ensure that processes are in place to collect and measure sustainable development data. Then, internal auditors should also perform controls.

How will quality assurance be performed internally on the data?

Quality assurance routines and mechanisms for information fed into the report must be developed and documented. Those responsible for quality assurance in different information areas and at different levels of the company must be identified and informed of their new responsibilities, including how they are to be performed and reported on.

Will the report be assessed by a third party, and if so, how?

There are different possibilities. Whatever form of assessment is chosen, it normally benefits from being planned well in advance of the publication of the report.

There are currently three types of third-party assessments on the market:

• Accountancy firms perform traditional third-party assessments based on the international verification methodology. This method gives the reader various levels of assurance depending on the activities performed. The general conclusion given by the assurance provider in his statement usually reads as follows: “It is our opinion that the data and statements in this report … provide in all material aspects a true and fair view of the reported parts of the company’s operations.”
  
• Independent stakeholders assess and comment on the company’s performance and activities within certain sustainable development related areas of importance.
  
• Assessments are made on the environmental, social or corporate social responsibility of a company’s performance within certain sustainable development related areas.

The first type of assessment is based on the generally accepted methodology used for verifying financial information.

The second and third types of assessments are similar to the environmental audits performed in relation to due diligences, ISO certifications and comparable activities. The purpose there is to identify instances of non-compliance rather than to ensure that the information provided in the report is in all material aspects true and fair.

Companies ask third parties to assess the information to increase the credibility, transparency and accountability of their reports. Companies may also gain valuable feedback from this process.