Reporting giants share their experiences
The number of companies engaging in CSR reporting is clearly growing. Two of Denmark’s heavy hitters on the reporting scene shares their thoughts of how to do it in a way that creates value for the business.
When it comes to CSR reporting in Denmark, you would be hard pressed to find companies more revered for their efforts than Novo Nordisk and Mærsk. Twentythree and ten years into their reporting journeys, respectively, both prize-winning reporting giants had agreed to share their experiences and advice at an event organised by FSR and KPMG at the end of March.
Novo Nordisk goes digital
From Novo Nordisk, Anne Gadegaard explained what was new for 2018 and the main theme appears to be a move towards digital.
Firstly, Novo Nordisk’s Communication on Progress, which in previous years has been published as a pdf in a format and style very much resembling a sustainability report, has been transformed into an online landing page with an index linking to detailed descriptions and performance data for subjects under all ten principles.
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“It is a first step and we have wanted to monitor stakeholder reactions carefully. So far there has been no reaction. No one has asked us for the pdf or expressed confusion on how to understand our work on the issues related to the UN Global Compact principles,” said Anne Gadegaard.
Novo Nordisk and Mærsk's reporting history
The reporting history of Novo Nordisk stretches back to the mid nineties, where the company began publishing environmental reports. After adding a social report and combining the two in a sustainability report, Novo Nordisk moved to integrated reporting in 2004. The past six years, they have also published a communication on progress report – serving as a way to comply with the UN Global Compact’s requirements – and to bring additional knowledge of Novo Nordisk’s sustainability efforts to external audiences.
For Mærsk, the reporting journey began in 2008 with a Health, Safety, Security and Environmental Report, and continued from 1999 to today with a sustainability report published simultaneously with the annual report. This report also serves as the communication on progress and ensures compliance with §99A.
Secondly, the company is creating an “investor repository” of information on the company’s sustainability-related performance, based on the questions most commonly asked by rating agencies and investors. This also means that Novo Nordisk will limit its participation and responses to indeces etc to the CDP (about carbon disclosures) and the Access to Medicines Index.
“We are taking ourselves out of the ratings game. Instead, we will be extending the information available on our website and make the type of information we usually give to rating agencies available to all,” Anne Gadegaard explained.
Mærsk: Six factors to build on
Mærsk’s head of sustainability, Annette Stube, began her presentation by praising the tangibility of the printed report, which she does not see Mærsk move away from anytime soon.
“The sustainability report tells a different story about the company than any other publication, and our executives often use it as an extended business card in their meetings with external parties,” she said.
The transport and logistics company’s sustainability reporting rests on a firm belief in and pursuit of six factors:
- A red thread and recognisable narrative end to end for each report.
- A decent materiality assessment because it is the basis for decent reporting.
- Relentlessly improve quality, because reporting should never be about going through the motions.
- Continuously push for transparency – particularly important on negative stories, because you loose trust if you do not.
- External assurance – because it is a great source of and push for rigorousness on quality of information and data. Underlines transparency and honesty.
- Engagement and feedback from peers to guide continuous improvements.
“Considering the amount of resources, you put into reporting, it needs to be something that can excite and drive interest every year,” Anette Stube said.
“It is our experience, that reporting is a structured process that helps you see your company from a different angle than the financial reporting, providing a broader perspective on the company’s risks and opportunities. when you prepare a report that builds trust it is an important internal driver of pride and reflection,” she continued.
Moving towards an outside-in perspective
Mærsk reporting has undergone two major changes over the past two years.
The first was a new take on materiality, which discarded the materiality matrix and instead, through a structured process, divides all issues into three categories: shared value, responsibility and risk.
“We did not feel that the matrix served our needs in terms of defining how we would work with an issue. The issue of safety, for example, scored much lower than the efforts we wanted to put into this area,” Annette Stube said.
The second was a shift to looking at the company from the outside when reporting.
“We are increasingly trying to understand Mærsk’s role in society. To which problems can we help provide solutions? What are the pitfalls? What are the systems we are part of and how can we work with other members of these? That understanding of your company is becoming increasingly helpful and the sustainability report might be the only place, our company releases information on this,” Annette Stube explained.
The future of reporting
In terms of the future of reporting in general, KPMG, Novo Nordisk and Mærsk all agreed on the headlines drawn up by Frances Lu, head of KPMG’s sustainability team, as she introduced the day:
- Increasing attention and push from investors with increasing demand for ESG disclosures
- Move towards forward-looking reporting focused on systemic issues, in many cases as articulated by the SDGs.
“We see a clear demand for investors for increased disclosures, including reporting on impact and the SDGs and societal mega-trends. The question they pose is: Are you appropriately taking advantage of and mitigating risks from large-scale change,” Anette Stube said.
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“There is a dawning understanding that we are all part of systems and if we do not generate value for the system as well as for ourselves, we won’t have a place in that system in the long run,” Anne Gadegaard said.
While such systems-oriented reporting is not taking place anytime soon, Novo Nordisk is experimenting with operationalising a broader and more forward-looking mindset by working with Future Fit, a framework and benchmark for defining and measuring a company’s broader impact.
