A new era in corporate reporting demands a fresh, innovative approach from public relations and communication practitioners.
“We are entering a new era in corporate reporting,” says Mervyn King, chairman of South Africa’s Integrated Reporting Committee and the King Committee, referring to the shift to integrated reporting, which encompasses financial and sustainability information and communicates real value – not just numbers – to stakeholders.
What’s driving this change?
Financial reporting alone no longer meets the needs of modern, well-informed investors and stakeholders. Seeking value and deeper insight, these stakeholders want to understand financial performance within the context of the bigger picture: the organisation’s long-term sustainability in a complex and ever-changing world. Specifically, they want to understand the company’s financial performance in relation to the costs thereof to society and the environment. This has driven the shift from purely reporting on financial results to providing a holistic and integrated view of a company’s performance through Environmental, Social and Governance (ESG) reporting.
What does integrated reporting entail?
In addition, reporting is evolving from the issuing of long, tedious financial reports to the publication of shorter, more concise reports, featuring diagrams and graphs that make it easier for stakeholders to understand the integrated information. In assisting stakeholders to gain insight into ‘the bigger picture’, these reports add real value. It remains crucial that companies communicate and report ethically, sincerely, honestly and accurately. Errors or omissions could alter the assessments and decisions of stakeholders, while misrepresentation or inaccurate communication places the reputation of the company at stake.
A new role for PR in this context
A new way of reporting must give rise to a new way of communicating results and performance to stakeholders via public relations. This creates unique challenges, as well as opportunities, for public relations practitioners.
Sustainability issues differ across industry sectors and across individual companies, and various stakeholders will require a different approach when communicating sustainability messages. As such, a one-size-fits-all communication approach will prove ineffective. What is required is a communication strategy incorporating key sustainability messages tailored for each target audience, including investors, employees, suppliers and consumers.
The benefits of sustainability PR
This new approach to “sustainability” PR offers some compelling benefits.
An authentic, holistic and well-considered sustainability communication plan will transform sustainability efforts into an investment in brand building and reputation enhancement, with a measurable return on investment. Clear and understandable sustainability messages communicated accurately and honestly to various stakeholder audiences will capture attention, provide a solid foundation for informed decision-making and ensure stakeholders feel valued and heard. This builds trust and loyalty to a brand.
As identified in the King III corporate principles, the benefits that could result from publishing an integrated report include access to capital markets, identification of cost savings, an increase in employee and stakeholder engagement, greater trust and an improved reputation among stakeholders, as well as enhanced brand value and increased stakeholder loyalty.
To unlock these benefits, companies will need to rely on PR professionals with expertise in broader sustainability issues, a true understanding of the companies’ sustainability efforts, the ability to provide advice regarding disclosure and the expertise to communicate a company’s sustainability initiatives to the right audience with accuracy, sincerity and integrity.