Walking the tightrope between compliance and differentiation

Following Emperor’s success at the IR Society Best Practice Awards, Emperor’s Director of Sustainability, Lara Sharrock, explores how reporters can stand out from the crowd.

With the arrival of the Corporate Sustainability Reporting Directive (CSRD) in Europe and the International Sustainability Standards Board (ISSB) in the UK, corporates will need to consider the way they report on their sustainability progress to inspire stakeholders and stand out from the crowd.

As sustainability reporting becomes increasingly regulation-driven, we’re seeing new reporting priorities: increasing stipulation around report content and structure, greater integration, more holistic thinking on materiality, machine readable reporting and increased assurance. All of this is bringing about greater compliance, transparency, and comparability across businesses and industries. It’s exciting. But for corporates, it also presents a challenge. Sustainability reporting is a vital tool in engaging internal and external audiences beyond investors. Against a backdrop of increasing uniformity, standing out and inspiring these stakeholders is more complex an ask.

So, where to start?

Both storytelling and format can be used as means to stand out. Storytelling involves crafting a compelling narrative that is balanced, authentic, and inspiring. For example, many companies are incorporating identifiable purpose statements and framing reports around purpose to engage stakeholders effectively. Reporting formats are also evolving, with more companies opting for integrated reporting and various topic-specific reports to ensure they best meet the needs of their specific stakeholders and tell a story that resonates. Lastly, in a world where most stakeholders are accessing sustainability reports via a digital journey, thinking beyond PDFs and towards online HTML reporting can be a smart way to balance story-led content with compliance-led documents to drive differentiation and cut-through the noise.

Both Cory Group and Alliance Pharma are great examples of companies who have been able to successfully cater to multiple stakeholder needs and differing levels of engagement, without losing sight of compliance in their sustainability reporting. Cory Group utilized its corporate purpose and vision to guide its sustainability report. The company included interviews and summaries at the start of sections and impactful messaging to bring the sustainability narrative to life. Alliance Pharma adopted a digital-first approach with an interactive and image-rich online report to ensure content was accessible and engaging. Both companies were awarded Best Communication of Sustainability at the IR Society Best Practice Awards.

As we look ahead to an increasingly regulation-driven sustainability reporting landscape, corporates will need to walk the tightrope between compliance and differentiation. Cory Group and Alliance Pharma effectively balance the two. Others will need to take stock and radically rethink their sustainability reporting to ensure it remains relevant and fit for the future.

This article was originally published by The IR Society. The full article is available for members to download here.

If you’d like to hear more, please contact Lara Sharrock on [email protected]