There have been numerous occasions where we have heard a client say this while reviewing the draft of a sustainability or ESG (Environmental/Social/Governance) report.

Of all the challenges presented by the sustainability reporting process, organizations often struggle most in  discussing areas where they fall short of their own goals or external standards.

Should they tell the bad news? Reveal the organization’s weaknesses? This often seems like it goes against every principle of reputation management.

Yet that is exactly what the standards issued by the Global Reporting Institute call for as part of the requirement that a company “report on the organization’s impacts in a credible way that is comparable over time and in relation to other organizations.”

For example, if greenhouse gas emissions are a material environmental reporting topic for your organization, as they are for energy producers, industrial companies, transportation-focused organizations and many others, and your GHG emissions rose during the year, your organization cannot just skip that data point this year.

So too if your organization set specific targets for increasing the diversity of the workforce and failed to achieve that goal. You cannot post the numbers and take a bow for the degree of improvement that was achieved.

Consistency is a key principle of sustainability reporting. A reader should be able to look at the current report next to the previous year’s report and see the same data reflected in the same way. This means that if your organization set a target in last year’s report, this year’s report needs to measure performance against that target.

A three-step process

How can you report what appears to be bad news in a way that enhances your reputation? This 3-step model can help.

1) Provide context

The team worked with Noble Energy, a global oil and gas exploration and production company (now part of Chevron), to create its sustainability report. Reducing emissions from its operations was a significant goal for the organization, and in the preceding year that goal was not achieved.

The report stated: “Our greenhouse gas (GHG) emissions levels reported in 2016 rose compared to 2015. This reflects both an increase in our operations activity and changes in measurement and reporting.”

The text went on to detail the impact of newly added assets, noting that the company was investing in bringing acquired assets up to Noble’s environmental standards. While the raw data looked negative, providing context showed that the company was experiencing healthy growth and was taking responsibility for improving the environmental profile of oilfields that had previously been operated with fewer controls.

2) Admit mistakes

If the unfavorable data represents flawed decisions or processes on the part of the organization, acknowledge this briefly and in a matter-of-fact tone: “We did not foresee…” “Our technology was inadequate…” “Our progress fell short of our ambitions.”

3) Look forward

Provide a sense of how the company is addressing the weak area and the expected improvement. This demonstrates that the organization is not just brushing off the issue, but is serious about making progress.

To improve diversity, are you recruiting from universities with a more diverse student profile, building visibility within professional associations that have diverse membership, and weeding out unconscious bias within your organization?

To reduce emissions, are you upgrading technology, looking at alternative fuel sources, changing your logistics processes? Tell these stories in ways that are credible.

If you follow these three steps you will find that investors, communities, employees and other stakeholders are more likely to find your reporting trustworthy and give you credit for the actions you have taken and the plans you have described.

Remember that sustainability and ESG reporting is not intended to paint a picture of perfection. 

Improving environmental, social and governance metrics is not a finite process, but an ongoing journey of cumulative steps. 

As organizations make progress, the goals get more challenging. What your stakeholders want to know is that your organization is making the commitment and putting in the work to move forward on the sustainability journey.