We’ve got Lorraine Spradley-Wilson, Novata’s Senior Advisor, joining us to talk about creating a world-class sustainability report. Lorraine highlights the importance of strategic stakeholder engagement and conducting a thorough ESG materiality assessment to ensure relevant themes are prioritized. She also emphasizes avoiding common pitfalls, such as overloading reports with irrelevant metrics or creating an overly positive image that lacks substance. Listen now to find out more.
About Sustainable Intelligence
Sustainable Intelligence is an interview series from Novata that explores ESG and sustainability in the private markets. From carbon accounting to using data to create value, the series dives into the challenges and opportunities facing private market investors and company leaders as their integrate ESG across the business and respond to regulatory requirements. Each episode centers authentic dialogue, highlighting experts at the forefront of advancing ESG data collection and driving meaningful progress in the sustainability landscape. Listen to more episodes.
Conversation with Lorraine Spradley-Wilson (Transcript)
Ella Williamson: Welcome to Sustainable Intelligence, where we discuss all things ESG and sustainability for the private markets. Brought to you by Novata. I’m Ella Williamson, and I’m thrilled to be your host. Joining us today is Lorraine Wilson, Senior Advisor to Novata.
Lorraine previously served as the firm’s first Chief Sustainability Officer. With extensive experience in investment management and sustainability, she advises organizations on integrating sustainability into their overall business strategy. Therefore, she couldn’t be better placed to discuss today’s topic on how to unlock the full potential of your sustainability report.
So Lorraine, could you tell me what key elements companies need to get started with their sustainability reporting?
Lorraine Spradley Wilson: Well, first, thank you for having me, Ella. It’s been wonderful to catch up. And this is a topic that’s really important to me that I’ve spent a lot of time thinking about. And I’d start by saying, a good sustainability report just doesn’t happen overnight. The process really can extend for months, and that’s because – to produce a really strong report that’s also supported, it’s important to engage your key stakeholders. So what you might see is that a company that has a very mature ESG strategy is conducting a company-wide ESG materiality assessment. They are able to identify the most important ESG related risks and opportunities across their business. They will take in insights from internal and external stakeholders. They’ll think about the major reporting frameworks and also what their peers are doing. Competitors are one of the stakeholders when you’re producing this type of reporting. But on the other hand, organizations that are just getting started might take a simpler approach, which makes sense. And so, thinking about the most material issues is highlighted by groups like the International Sustainability Standards Board, the SASB standards as they were called. And so it’s important to develop a strategy that’s right for your organization, but also to think about, think ahead about how insights from this information might be embedded back into your corporate strategy. And, once you’re ready to have that conversation, you know, Novata has wonderful resources to help contextualize the data you have. Once it’s been captured. So this would include things like analytics and benchmarking and even the advisory team.
Ella: So it sounds like even though it’s a fairly long process, the sooner you get started, the better. Now, how do you identify the most important themes to spotlight in your sustainability report?
Lorraine: Sure. I mean, there are thousands of metrics that are considered ESG metrics. I would say look to some of the leading standard-setting organizations, and they have really just paved the way for comparable, decision useful data. I mentioned the ISSB. There are also other wonderful groups such as GRI; they have free resources that can support early work in terms of understanding the metrics that are important for your organization.
Another area that is too often missed, and this is a newer area for the private markets, think about your regulatory reporting requirements. So it’s a newer area for the private markets, but think about the mandatory disclosure requirements you have for your organization, and also whether you have reporting obligations to say, industry groups, and/or investors. Those are some of the areas I wanted to highlight.
You also want to make sure that you have a good plan for data collection. So data collection, and then subsequently your reporting and making sure that you’re meeting those requirements from key stakeholders. And this could be everything from, the metrics themselves, so what exactly you’re reporting on to the definitions, which could vary, depending on who’s asking you to report and how they’ve defined those key topics.
Ella: Great, so regulations we are definitely hearing is coming up a lot in our client conversations at the moment. And if we think about the key stakeholders you need to engage when creating your sustainability report, how do you identify them and really get them involved early on in the process?
Lorraine: This is a good one because I hear too often from heads of ESG or Chief Sustainability Officers that they are working sort of, you know, on their own on this work. And it’s such mission critical work. So I’d say before you get too far along in your reporting, pause, engage the senior leadership at your organization. Too often they’re non engaged until, say, the final draft of a report. And that’s just too late. And, um, a key partner and someone I’ve always leaned on is your general counsel. So engage them early and often throughout the process. Make sure you talk to them about your level of disclosure, why you want to disclose, how the reporting will be distributed. Is this going on your public website, on your LinkedIn? And also talk to them about any potential follow ups. So that’s a big one that I’d like to flag.
Ella: That is a great flag. So general counsel is your number one stakeholder. And I love the way you’ve reframed stakeholders as actual partners in this process. Collaboration is just so key to any organization. So based on your experience, creating sustainability reports, what common pitfalls should you watch out for along the way?
Lorraine: Sure. I’d say one that I see all too often is breadth over depth. So just putting everything and anything into the report. And so I’ve just always made it a practice to engage clients and tell them to think about the areas that they’d like to be known for. Highlight a core set of areas for their organization and think about how this conversation could play out over time.
So what are the key areas that are of critical importance to your organization? How would you like to report on them for say the next three to five years? Where would you like to invest and show progress? So that’s key. Another area where I’ve seen people stumble is cherry picking information.
So putting together sort of a group of metrics that paint a very possibly overly rosy picture, and it’s unrelated information. It’s just, here’s one thing we did for one year and here’s another thing. When you produce a strong sustainability report, it really gives people on the outside and even employees and investors and other stakeholders an opportunity to learn about your organization.
What are you really good at doing? But you can also share your process and areas where you’d like to do better. So make sure the reporting is balanced. I think those are two good areas to highlight where I see people stumble, but sometimes it’s better to be more focused and to produce a better result.
Ella: Absolutely. And I love the way you’ve talked about painting a realistic picture of an organization and actually showing the progress towards their goals. Now, finally, could I ask you to provide your three key pieces of advice on how you can continuously enhance the quality and impact of your sustainability reporting over time?
Lorraine: Sure. And now my background, I was working with publicly traded companies that have so many reasons to disclose and so many ways that stakeholders can access the data, but this disclosure is still new in the private markets. And so, we have fewer years of data. That’s what I’m saying in the private markets than we do for, say, a large publicly traded company.
So consider reporting on the same key topics for several years. That’s number one. Collect and share data, over, what we’re looking for is time series data. Share challenges and propose solutions to these key metrics that you are collecting information on. The second I would highlight is asking for input. I close every report with a request for feedback, and I’ve seen some really great ESG reports that include the contact information for the person who’s authored the report, who’s, you know, your main person for talking about and engaging on these different topics. Ask for feedback and support from stakeholders. It’s only by working together that we can advance progress on these important issues.
The third one is, and Ella, you know, this is one that I’ve been thinking about just through my own process, but think about your goals as an organization. So performance-based standards, such as the B Corp certification can certainly help. Novata is both a public benefit corporation and a B Corp. So this means that we have annual mandatory reporting requirements as part of our legal public benefit corporation status. But we also have to think about this voluntary performance-based standard from B Lab, the B Corp standard, which involves a recertification process, but also this need to embark on a process of continuous improvement because of the recertification and because you’re just incentivized to keep improving across different areas that they’re measuring. So these are two requirements that we’ve set for ourselves as a north star, and they really help focus the efforts in terms of the how and the why.
Ella: Thanks for that, Lorraine. Really interesting stuff. I know here at Novata, we’re still very proud to be a B Corp and taking what you said there is kind of your key pieces of advice, collaboration, capturing progress along the way, and really setting your goals to set your organization up for success is really, really key.
So I’m looking forward to digging into your next sustainability report. For anyone who needs a little inspiration, you can find Novata’s sustainability report on our website. Until next time. Let’s keep building sustainable intelligence together. Find out more at novata.com.
