July 2024

What are three important tips you would give to companies wanting to make sure they are integrating the correct ESG narratives into an annual report/website?

Defining the 'correct ESG narrative' for a company is about understanding where a business can make the most impact - and developing an authentic, credible and transparent ESG narrative that focuses here.

So, tip number one would be to use materiality to lay robust foundations for your reporting and strategy Proactive engagement with stakeholders allows you to identify, understand and prioritise your sustainability issues. In corporate reporting speak we're talking about 'materiality' but, fundamentally, it’s about businesses seeking to generate long-term value for all their stakeholders, which can only be achieved through effective and collaborative engagement. This then serves as the basis for developing a meaningful sustainability strategy. Easyjet, for example, include a comprehensive overview of their double materiality process and findings in their annual report, with quotes from stakeholders providing context and forward-looking disclosure around how they intend to use the findings going forward.

My second tip leads nicely on from this - articulate an integrated strategy to demonstrate the extent of impacts on business, planet and people.

As regulations evolve, sustainability can no longer be siloed from your corporate strategy. Your strategy is a key part of your narrative and while it might take time (perhaps years) to fully embed all sustainability topics, only with integrated thinking can we fully understand the extent of both positive and negative impacts on business, planet and people. A couple of examples on this; Britvic’s strategy focuses on two fairly broad pillars – ‘Healthier People’ and ‘Healthier Planet’ which enables them to collate and narrate their strategy in a way that is inherently integrated with sustainability. Natwest, on the other hand, have separate corporate and sustainability strategies but connect the two by including examples of their work to create a positive impact within their strategic framework.

Then my final tip - leverage your website to reinforce the narrative throughout the year and provide updates on progress.

There are huge opportunities for companies to leverage their website - alongside other comms channels in order to communicate their ESG narrative effectively. Mapping out a sustainability-focused comms plan which seeks to raise awareness around key topics, and the impact a company is having can be a game changer on this front. It's about reinforcing the message throughout the year and not just waiting for the half year or full year results. It's also about thinking creatively - case studies, proof points and data, spotlight events or CMDs, or even 'lunch and learns' are great opportunities for management teams to maintain a regular comms 'drum beat' around its sustainability strategy and the progress they are making.

What are the latest regulations and standards that companies need to address this year?

There's a wave of new regulations coming down the line related to ESG disclosures - CSRD for Europe from next year, Sustainability Disclosure Requirements in the UK that will incorporate transition to net zero plans (TPT) and ISSB sustainability reporting standards that have been approved globally, and will need to be incorporated into legislation on a country-by-country basis. All this means companies will have to balance the need for more data-driven disclosure with telling an authentic, differentiated and compelling story, linked very much to the points above.

Preparing for what’s coming regs-wise is a big topic of conversation in all the annual report kick-offs we’re having at the moment… along with the usual, ‘how can I reduce the number of pages in my annual report’ request!

Can you share a particularly memorable experience or project you've worked on?

I guess on the subject of ESG, one sector that gets a tough press is mining and yet they have quite rightly had to lead the way on integrating ESG considerations into the way they operate and subsequently the way they report.

One of my most memorable experiences was a visit to an Egyptian gold mine back in 2019. We spent five days on site, as part of a photoshoot, and just getting a more thorough immersion/understanding of the client. Spending time seeing the operations, meeting the teams living on site and then going hundreds of meters underground was such an amazing experience. I also saw first-hand the depth and strength of their relationship with the local communities and the cultural sensitivities they were navigating as they worked to drive greater diversity.

The trip challenged some of my preconceptions about the sector, but it also reinforced the importance of storytelling beyond the data, and highlighting the stories or case studies that demonstrate impact and reflect authentic engagement with stakeholders. I also learnt that the tin box they issued us with, prior to going down the mine, was not for storing your sarnies in… it was an oxygen pack to buy you a bit of time underground in case of an incident (that moment was particularly memorable!).

What trends are you seeing in the creation and presentation of annual reports?

A much bigger emphasis on digital first approach, with many companies moving to a landscape format recognising most reports will be predominantly viewed on screen rather than in printed form. Reporting is becoming far more interactive, with more companies taking advantage of the opportunity their website presents. We’ve just published the findings of our annual research into reporting across the FTSE 350 which found 48% are now producing an online summary alongside the annual report and 28% introduce their annual report with video content. A couple of my favourites this year are the BT and Coats annual reviews – both fantastic interactive experiences and well worth a peek.

The other shift we are seeing is the way technology and AI is being used to enhance processes and outputs in the creation of annual reports. We partner with Workiva and I’m a big fan of their data linkage platform. Its highly automated linked data retains full integrity, reducing risk and saving valuable time.

More detail on all of our research findings are available via our Future of Reporting publication which you can access via the Emperor website – a shameless plug as it’s got some super helpful insights for anyone involved in reporting!

What is the most interesting thing you’ve read or watched recently?

I’ve recently resurrected an old book that I read as a teenager called The Hiding Place by Corrie Ten Boom. It’s the true story of how she survived Auschwitz. It’s an incredible read but what’s interesting is that reading it as a teenager you simply couldn’t imagine how any society could get to a place where such attitudes and mass crimes against humanity could exist. Today however, we are seeing a frightening resurgence of far-right attitudes.

There is so much ‘interesting’ stuff to read and watch at the moment, particularly around world stage politics and what lies behind some of the trends we are witnessing globally. However, I do think occasionally, we need to escape the ‘interesting’ and in those moments, you can’t beat a glass of wine and a cheeky episode of Bridgerton!

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Please note: The views and opinions expressed in this interview are those of the individual financial professional(s) and do not necessarily reflect the views or opinions of Alma Strategic. These insights are provided for informational purposes only and may not be relevant at the time of reading, as market conditions can change rapidly. The information provided should not be construed as investment advice or a recommendation to buy, sell, or hold any financial product or security. Individuals should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Alma Strategic disclaims any responsibility for the accuracy or completeness of the information provided in this interview.