The financial sector is not getting enough of what it wants from sustainability reports, says a new international survey.
The Global Stakeholder Report 2005, a study of 500 readers of
sustainability reports from 58 countries, found that although the
importance of CSR in the financial sector has increased considerably in
recent years, ‘it is this group which gets the least from
sustainability reports’.
Communications consultancy Pleon Kohtes Klewes, which conducts the
annual survey, said that although the quality of corporate reports on
social responsibilities has risen, ‘they consistently fail to meet the
expectations of analysts, investors and shareholders’, mainly because
the economic benefits of CSR programmes are ignored or are ‘not
convincingly explained’.
Pleon said stakeholders in the financial sector consistently complain
that the reports they receive fail to explain convincingly the business
case for corporate responsibility as it relates to the company.
In its conclusion it tells reporters bluntly: ‘You have economic
reasons [for CSR], it does make business sense. Tell your stakeholders.’
Mark Makepeace, chief executive of FTSE Group, supported Pleon’s
conclusion. ‘Although companies see the financial community as the key
audience for their CSR reports, they are often wholly inadequate for
its needs,’ he said. ‘What analysts need is information and data that
is material to a company’s business and is in the context of the whole
group’s activities.’
David Bickerton, head of external communications at BP, said his
company’s own inquiries had confirmed Pleon’s view. ‘Our research
suggests that investors are becoming increasingly engaged with
sustainability reports but want to see clearer linkages between the
business strategy and sustainability issues,’ he said. ‘I believe many
companies have struggled to make this linkage in the past.’
Teresa Fogelberg, associate director of the Global Reporting
Initiative, said a revised version of the GRI sustainability reporting
guidelines, due for completion next year, was likely to place more
emphasis on reporting the CSR business case.
However, Uwe Bergmann, corporate sustainability manager at German
chemicals company Henkel, warned that although the financial sector’s
needs had to be served in CSR reports, there is a limit to the depth of
information that can be provided.
‘It’s not possible to cover all their information needs within a
sustainability report alone,’ he said. ‘Firstly, we want to reach other
stakeholders with the report as well – like employees, consumers, the
media, non-governmental organizations and politicians. And secondly, in
a report we can present no more than the most important aspects of an
issue if the report is to remain readable.’
Bergmann added that ‘direct dialogue, in person, via telephone and
email’, is the best way to give analysts exactly what they want.
The Pleon study found that, despite limitations on financial data,
readers of CSR reports are generally more satisfied with the quality of
the documents than they were two years ago.
