Defining Sustainability

In my last article, I defined the process of stakeholder engagement, explained how integral it is to your sustainability strategy and provided practical description of prioritizing your stakeholders, once identified. After you successfully map out your primary and secondary stakeholders, you may begin to ask:

• 1. What happens next?
• 2. How do we set goals and sustainability targets, and measure impact and return on investment over time?
• 3. What type of framework should we follow?
• 4. Are there metrics and tools in existence that align within our goals?
• 5. Most importantly, how do we ensure we are communicating the issues of greatest importance and relevance to our key stakeholders?

For many companies, the Global Reporting Initiative (GRI) helps to answer these and other questions. GRI is the world's most widely used framework for establishing or enhancing an organization's sustainability strategy. GRI's G3 Guidelines (the most recently updated version of the framework) have earned global credibility and acceptance. These guidelines comprise a ready-to-use package covering economic, environmental and social responsibility that ensures increased relevance, transparency, comparability and credibility. According to GRI, more than 1,500 organizations of all types and sizes worldwide have declared use of the GRI Guidelines in their sustainability reports.

But, Why Does All This Matter?

The GRI Guidelines provide companies with the tools and metrics to report their sustainability initiatives, whether in a sustainability or corporate responsibility report, in an annual report or on a company's website. However, not all organizations familiar with the GRI Guidelines choose to formally report their sustainability initiatives; in fact, what some find most attractive is the strategic process and sustainability management tools it provides.

The guidelines help identify standard metrics that align with goals you set through the stakeholder engagement process, helping to establish a measurement baseline you can revisit and update each year. As you've read, the stakeholder engagement process is invaluable to determining which corporate responsibility initiatives matter most to your key audiences, and where unforeseen gaps in sustainability activities or communications might occur. In addition, stakeholder engagement leads to increased stakeholder support for your activities, which can be particularly useful in creating ambassadors for sustainability within and outside your company.

Sustainability as a Process

BrownFlynn bases its "sustainability as a process" consulting on the GRI guidelines and principles, with stakeholder identification and mapping as its first critical component. According to GRI, a company must identify and prioritize its stakeholders, map out the sustainability issues that are likely important to those various groups, and dialogue with key stakeholders to test those assumptions. This ensures that a GRI sustainability report or strategy engages the stakeholders most interested in your sustainability activities and impacts, helping to garner internal and external buy-in.

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From a management standpoint, stakeholder engagement also ensures the company is spending its time and resources on efforts and initiatives that matter most to those groups whose support is vital to corporate success. Materiality, a GRI principle linked closely with stakeholder engagement, is a measure of an issue's "relevance" to both the company and its stakeholders. The GRI requires companies to show that sustainability report content is material in one of two ways. The information should:

• 1. Represent the company's significant environmental, social and/or economic impacts

and/or:

• 1. Represent the primary concerns of key report audiences, as determined through stakeholder engagement

Companies can use the process of determining materiality to prioritize their efforts and report content formally or through other sustainability initiative communication materials. The stakeholder engagement and materiality process allows your organization to determine which of its current sustainability initiatives resonate most strongly with stakeholders, and where there are opportunities for improvement. If you have no sustainability initiatives in place, your most material impacts become the starting point. In either case, material topics can be used as a basis for setting specific, measurable goals in the areas of "people, planet and profit."

The GRI Performance indicators, which correspond to the 3Ps as well, offer standardized metrics to track progress toward environmental, social and financial goals over time.

In some instances, it might be beneficial for a company to establish a working group to identify material topics and associated broad "goal categories." Goal areas that correspond to a company's significant impacts or stakeholder interests offer the most potential benefit for the organization. For example, a paperboard and packaging company might consider sustainable forestry or paper recycling as important goal categories.

After these goal categories have been established, the organization must define specific, measurable targets within each category. Targets can identify a quantitative goal to be reached in a specific time frame (for example, the company will recycle X percent of its paper waste by the year 20XX). They also can be used to put infrastructure in place that will allow formation of appropriate targets in the future. For example, "By next year, the XYZ Co. will write and begin to implement a sustainable purchasing policy."

When possible, the sustainability goal setting should be aligned with an organization's fiscal year and budget timeline, to further weave sustainability into a company's culture.

Each goal or target must be accompanied by an implementation plan that includes a system for measuring impact. A baseline also must be determined before beginning implementation. Because these goals have passed the materiality test, implementation plans for achieving them are more likely to be followed.

Internal stakeholders responsible for implementing them are already more engaged in the process, especially when they receive positive feedback from external stakeholders who are pleased to have been involved. Continual communication will be required to keep them on board and maintain the momentum of your initiatives over time. Ongoing monitoring will be vital to gauging the extent of the "people, planet and profit" benefits of your work.

If you choose to produce a GRI-based sustainability report, the data you collect during your goal implementation will eventually form the majority of the report content. Even if your efforts will only be communicated internally, it is best to have a person "responsible" for the data — i.e., someone who makes sure it is consistently tracked and is familiar with how the data is collected and/or calculated. A system of accountability is necessary for sustained implementation, as well as improving the consistency, comparability and credibility of your sustainability communications.

"Reporting along [the] guidelines that have been adopted by organizations throughout the world is a pre-requisite for a company whose ambition is to lead the way in sustainability," says Inka Pieter, director CSR, KLM Royal Dutch Airlines.

Using the GRI format in your data collection also offers your sustainability communications credibility, consistency and comparability, similar to that typically associated with traditional financial reporting. Sustainability communications can take a number of different forms, ranging from stand-alone printed reports, to interactive internet-based documents, to incorporation into a company's traditional financial report. In any format, the report offers a tool for determining the company's significant impacts and further engaging stakeholders in the future, but the communications are only as credible as the data that has been collected.

In my next article, I will discuss how to communicate the information you collect, even if you choose not to do so in a formal sustainability report. In particular, we will focus on the benefits of discussing your sustainability initiatives openly and honestly, even if you are just at the beginning of your sustainability journey.

Author's Note: BrownFlynn associate consultants Emily Baunach and Christina Tamburro contributed to this article.

Margie P. Flynn is principal and co-owner of BrownFlynn, a corporate responsibility and sustainability consulting firm based in Highland Heights, Ohio. BrownFlynn advises clients on how to integrate strategic agendas with responsible practices and targeted communications to yield positive results for its clients. Flynn speaks the language of bottom-line impact and has been instrumental in shaping a variety of responsible practices for regional, national and global corporations and organizations. She is skilled in finding efficient and effective ways to establish, improve and solidify relationships with key stakeholders. For more information, visit www.brownflynn.com.