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Who Reads Sustainability Reports?

Updated: May 18, 2022


Quick Takes

  1. An overwhelming majority of companies issue annual sustainability reports...yet these reports are almost never read by the audiences issuers are hoping to engage.

  2. Sustainability reports are most commonly read by algorithms and hyper-focused research analysts...for these audience members, narrative and design means much less than does data quality and information hierarchy.

  3. Algorithms and analysts are the intermediaries to your intended audiences of consumers, employees, regulators, and communities...rather than write for your intended audience, you should reach them by reporting for your actual audience.

  4. Sustainability reporting is more important than ever, it's time to optimize the ROI of your efforts.


A Missed Opportunity

Corporate sustainability and ESG teams are perpetually busy managing projects throughout and beyond their organizations. Yet there is one all-important task that introduces a rhythm and a schedule to all of these efforts: preparing the annual Sustainability Report.

Nearly all publicly-traded companies (in fact, a full 90% of the S&P 500 members), and nearly just as many privately-held companies publish annual sustainability reports. Not all companies approach it in the same way, and not all refer to it by the same title, with some preferring Corporate Sustainability Report, Corporate Responsibility Report, or ESG Report. Regardless, the fact is all are publishing an annual opus exploring their performance and perspectives of the Business & Society relationship.

Lots of work goes into these reports. From data collection and analysis through to design, copy editing, and marketing and public relations. Each year brings a fresh opportunity for the issuing companies to shape how their stakeholders think of them--and such an opportunity is not to be squandered.

Unfortunately, squandered they are.

It’s not that the sustainability reports are not sufficiently researched, compiled, designed, or disseminated. Most companies do not fall short in investing in their sustainability reports. It’s that the reports are being prepared for an audience that is not in effect actually reading, nor concerned about, the reports.

Sustainability reports are often prepared under the framework of ‘telling your story’, ‘sharing your vision’, and ‘painting a picture’. Great attention is focused on narrative, emotive resonance, and aesthetic appeal. Good reports are intended to be beautiful, moving, and inspirational. They are expected to shape consumer mindsets, engage regulators, attract investors, motivate employees, and connect across communities.

But this doesn’t really happen, at least not as often as report issuers would like to believe it does. Few consumers visit corporate websites let alone read annual corporate reports. Few employees beyond members of the sustainability teams are aware of what’s contained in the reports and often not even of the report’s very existence. Few investors look beyond the details showcased on their trading platforms--annual financial statements are just barely engaged, and these typically take precedence over annual sustainability reports. Regulators are overwhelmed--that reports are properly filed is more important than what is actually included within the reports.

It’s not that all these stakeholders are not concerned with issues of sustainability or the workings of the Business & Society relationship, it's just that, generally, they don’t read annual sustainability reports.

So, Who Is Reading Sustainability Reports?

If you want to optimize the impact of your sustainability reports, you need to rethink who you are writing them for--and your true audience is not likely who you think it is.

So who is reading sustainability reports?

Algorithms and hyper-focused research analysts.

Largely in the form of ESG and financial rating agencies, algorithms have become the primary ‘readers’ of most any corporate report, including sustainability reports. These coded readers scour the internet and retrieve any and every corporate report, mention, article, or otherwise. If it has to do with a company of interest, they are programmed to retrieve it. All of this material is then filtered and parsed to be distilled into the precise data points the algorithm owners are looking for. To these ‘readers’, narrative does not matter. Aesthetics do not compute.

Beyond algorithms, a segment of flesh-and-blood research analysts do read sustainability reports. These analysts are typically hyper-focused on a particular group of companies (ex: Turkish oil and gas producers) or a particular topic (ex: decarbonization) for which they want to know everything possible . In these cases, the analysts typically focus only on the reports of a few key companies or only certain key sections of reports across many companies. Again, to these readers, narrative is not important--they know precisely what they are looking for and how to get it.

Why This Is Important

You can still reach the stakeholders you want to engage--consumers, communities, regulators, employees, and investors--with the information contained within your sustainability reports, just not with the report itself. The key is to acknowledge that the information which does get circulated is first intermediated by the algorithms and hyper-focused research analysts.

Your organization is not ‘sustainable’ or ‘under performing’ or ‘best-in-class’ in the eyes of consumers, regulators, communities, employees, and investors because of what you purposefully include (and how you include it) in your sustainability reports. Rather, your organization is labelled as it is because intermediaries in the form of algorithms and research analysts claim it to be so.

At best, your reports are an indirect connection to your intended audience. So rather than write for your intended audience, why not optimize for your actual audience?

To do that, think of sustainability reporting along similar lines as search engine optimization for websites--the SEO of Sustainability.

  • Which data points is the primary audience seeking?

  • Which additional data points do you want the primary audience to engage?

  • How can you organize your information to optimize engagement with the primary audience?

  • How can you label and discuss your information to minimize misunderstandings within your primary audience?

  • Where can you host/disseminate your information to increase the likelihood it will be engaged by your primary audience?

  • Can you connect directly with your primary audience to facilitate any trouble-shooting or editorial opportunities?

As you think through these broad questions, remember that your primary audience consists of algorithms and hyper-focused research assistants and not consumers, communities, or investors--these come into play later as a secondary (or indirect) audience.

It’s not about rearranging your sustainability and ESG programs (although this is something for a future discussion), rather it's about reframing how you discuss these programs in efforts to optimize engagement and impact. It’s about your team’s ROI.

Sustainability has never been in higher demand, but the same cannot be said about traditional sustainability reports.

Sustainability reporting is becoming more important and more highly scrutinized. It's time to reframe how we approach preparing these reports: It’s not about telling a story, painting a picture, or sharing a vision, it’s about delivering contextualized data. Always keep your intended audience in mind, but write for your actual audience.


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