14 January 2010

Who is Your Audience (CSR/ESG reporting)?

This article is a response to an online e-mail discussion askingIs there any point putting together a CSR report?" The resounding answe ris "Yes, provided you communicate with your intended audience"

It is all a matter of defining your audience, and in particular, the audience for you CSR / sustainability / ESG report, which I'll collectively refer to as the CSR report.

Lets think about a few primary audiences, because each has different needs:

1. General public / retail customers
2. Supply chain partners
3. Investors
4. Employees
5. Regulators

1. General public / retail customers

There is a growing and general acceptance that retail customers will purchase based on the perceived social conscience / "green" credentials, as long as the produce is also competitively priced. That is especially true today. This means that it is important for a company to burnish its CSR credentials through any medium possible, and that include the CSR report.

There is also the need to be seen to be pro-active, just in case they are "caught out" by some bad PR. When (if) that happens, the company is then ready to pull out all its good works, and make the appropriate noises about how they are doing everything to make certain is does not happen again.

2. Supply chain partners

This includes both their customers and their suppliers. Customers want to know that the company is following sound business practices, acting in a sustainable manner, and fundamentally reducing risks that may travel upstream. After all, when the bad stuff hit the fan, it get spread far and wide. So CSR / Sustainability / ESG reporting that provides comfort to commercial customers focuses in demonstrating how the business is also protecting its customers from potential PR risk. It also demonstrates that sustainability practices are being applied to drive down costs, thus being able to deliver future cost advantages that competitors may not be able to deliver.

Equally, effective reporting sends messages to suppliers about expectations, and gives suppliers key messages about what might endanger the existing business relationship, especially any potential situations in which a suppliers PR problems might impact the company. Clearly stated supplier CSR policies put suppliers on notice that they will need to maintain the highest CSR standards themselves in order to retain their position as suppliers, or to gain an advantage by becoming preferred suppliers. WalMart's actions recently are a great example of establishing expectations in their supplier community.

3. Investors

Investors, including the actual shareholders (the owners) and the investor community (those that advise existing and potential owners) are a legitimate audience. They want metrics; detailed information that will support and enable investment decision making. They want comparative information that is multi-year, and that can provide insights into the company's performance against other key players in the same industry. Frequently reports that focus on the first two audience groups fail to provide adequate information for this audience, and are dismissed as "fluffy bunny bullshit" by the analysts. Analysts want tables of information that span multiple years, and that clearly show future objectives and how those objectives will be achieved.

Recently the DVFA (the German Institute of Investment Analysts) release a set of KPI (Key Performance Indicators) for ESG. This set of KPIs is broken out by major industry groups, but also contains a core set of KPIs that that they expect to see regardless of the industry.

4. Employees

Sometimes the primary audience is right there in front of you, the employees of the company. CSR / Sustainability / ESG reports for employees are and should be focused on what the company is doing, and the role of employees in individually making it happen. There reports are motivational, and should serve to bring employees together for the effort. They also provide an opportunity for communication of changes that might otherwise be buried in a staff bulletin, or not communicated at all. A classic example was came from the results of the "Talk Back" process at New Zealand Post some years ago. One mail centre specifically spoke about the quality of lighting. This lead to a review, and improvements in overall lighting, improving both performance, quality of work environment, and costs.

5. Regulators

Finally companies communicate with regulators, both directly and indirectly through public messaging. The use of the CSR / Sustainability / ESG report to communicate support for and compliance with various standards is one such way. Reading the CSR reports for the building industry tends be like reading a prose version of how the reporting company is ensuring compliance with various health and safety legislation, or preparing itself for compliance with incoming GHG emissions standards.

In in the United States, the ability to demonstrate a strong legislative compliance program, complete with effective risk management processes, can be used as mitigating factors in sentencing for any crimes that the organization might be accused of being involved in. Communication of these programs in CSR reports is one way that companies, in effect, are using CSR reporting to communicate indirectly with regulators.


Before judging a company's CSR report, consider what primary audiences are being addressed. As a company, before creating a CSR report, carefully consider who you want to be speaking to, and what are the key messages that you want that audience to take away. Finally, companies might consider creating multiple CSR reports, targeting specific audiences.

I hope this is helpful in addressing the question in the subject line of this e-mail stream.


  1. Hi, good overview of key stakeholder groups and their interest in reporting, thanks.
    I have a different perspective though on the question of who the report addresses. The whole point of a sustainability report is that it covers the core material issues affecting a company's sustainability and the impacts on stakeholders. These issues are what the report should focus on. All stakeholders should be able to find something of relevance. Of course, some stakeholders may want more detailed information and could seek this in another communication format such as online or elesewhere. But i do not believe, in writing a report, one should first decide the report is for investors, or employees or whoever and then load the content accordingly. This exactly defeats the purpose of sustainability reporting which is intended to provide a balanced view of all the factors affecting the business sustainability.
    Also consider that it is not easy to package audiences into single stakeholder groups. An employee may also be an investor, a community member, an environmental activist and a customer, all at the same time.
    warm regards

  2. Good point Elaine. I do agree with everything that you've said, but I also think that it's important to identify your stakeholder groups and their characteristics to strengthen your reporting. Not for a formal CSR report itself, but to identify the most effective communication avenues through which to share your CSR info. Take a clothing retailer with a teenage target market for example. Being recently out of college, I know that there are many students who care about certain social issues. However, very few of them actually take the time to find and read a formal CSR report (as unfortunate as that is). So by identifying this group and understanding them, you'd know that you might want to create a youtube channel and/or twitter account on top of your formal CSR report to give your responsible practices, commitments, successes, and failures more visibility.

    So again, I agree with what you're saying, but I also think that identifying and understanding your stakeholder groups will help with your CSR communication and reporting as a whole (on top of your formal report).

    Fun stuff to talk about!



  3. hi Tom, I fully agree with you!! Engaging stakeholders using different channels and methods is important to developing your sustainability strategy and identifying material issues. And this should guide the csr report . But the CSR report is only one platform, there are many others.

  4. Elaine, Tom,

    I actually agree with both of you, but do still think it is vital that you consider your audience. While the overall CSR report should address all audiences needs, and there is no clear demarcation between the audiences, it remains import that each targeted audience sees what it needs to seen.

    For example, individual consumers might be, tangentially, interested in you health and safety record and compliance with the wide range of individual regulations in a number of countries, the truth is they probably won't read that. They will want to see their own values reflected in the report.

    Likewise regulators might be interested to know that the company is funding healthcare facilities in communities fro which it draws its labor, but what they really want to see is evidence and confirmation that you are complying with their specific regulations.

    Here we get to the benefits of XBRL (eXtensible Business Reporting Language). It should be possible, but is not today for a number of technical reasons I'll skip here, to produce a single CSR report with multiple "views" of the report. The consumer of the report could read/render/display all the data, or just that which is relevant to their specific needs. But I'll leave that for now - possibly another article.

    Back to the problem.

    Too often the CSR report is clearly a marketing document. It is written by marketing, has daisies and windmills on the cover, and every picture has exactly the right racial, gender and age group represented. Products when shown are placed in situations that reinforce the values of the consumer - you can bet there will be a picture of the executives planting trees somewhere. These are "valid" CSR reports - they will contain the GRI Index (good for them), and will have targets and might even have some tables.

    Watch for the SEC to mandate CSR/Sustainability reporting by companies that are listed on US exchanges. The SEC will probably want to see specific information, and companies will look to their financial reporting and legal teams to ensure that the report exactly what the regulator requires. Those reports will look very different from the marketing department produced documents. Again, they will have been written with the specific audience in mind - in this case the Securities and Exchange Commission.