Differences between Annual Report and Sustainability Report
Annual Report vs Sustainability Report.
versus Sustainability Report?
Comparing the annual report with a sustainability report
An annual report (sometimes referred to as Financial Report) is a record of a company’s activities over the last 12 months or financial year. The Annual Report is an account of its primary activities and business results. The report is supported by Audited accounts submitted by an independent auditor.
Reasons for having an Annual Report?
In some industries, the annual report is officially required by regulators such as the banking sector (see sample). Whether it is mandatory, it might be expected as per corporate policy or board member requirements.
The report will usually be published for a public or private viewing. Most often is published for the benefit of the general public and its stakeholders. Often times it coincides with an AGM.
The sustainability report (see sample) is also a review document. It’s a record of all the environmental and socially responsible activities of a company’s past performance. Unlike the Annual Report, it doesn’t show detailed audited accounts. Instead, it may show costs for energy consumption and savings. It may also show investment in the health and welfare of staff. It may reveal tables showing CSR investment and their returns. Sustainability content is about recording activities related to sustainable goals and objectives. These goals may align with an industry authority with whom it associates them. As part of the membership, they might have to comply with regulations to qualify for accreditation (for example, LEED).
Comparison table showing key differences between the sustainable and annual (financial) reports.
Comparison table between sustainable reporting and annual (financial) report.
Planning your reports
The planning stages of both the annual report and sustainability reports are quite similar. The most notable exception is the annual report relies on an independent auditor to deliver a section on financial statements (see sample). These 3rd party accounts make up a significant part of the annual (Financial) report.
Annual report or Sustainability Report
90% of S&P 500 Index Companies Publish Sustainability Reports in 2019.
The timeline (Content delivery timeline).
Content submission often comes from multiple sources so knowing when they will be received is important to the timeline. Allowing for delays by factoring in time buffers is good practice.
Identifying and engaging with relevant department heads helps ensure maximum commitment to the content delivery timeline. If they cannot reach senior people we can copy them on all related correspondence. An alert reminder process for each delivery deadline is important. Each department head should be identified and made responsible for delivering their own content. It’s their opportunity to showcase their efforts and achievements over the course of the previous 12 months.
Extracting Content (Content Questionnaire).
When there are challenges collecting content, because it’s not available or easily accessible the best practice is send a list of key questions (content questionnaire) to the department head.
The opportunity to provide a well-designed, informative report showcasing all the achievements of the previous 12 months is the principal goal of each contributing department.. The report is a declaration to all stakeholders and interested parties that they have met their targets and commitments for the year. They have delivered on targets and aligned with their mission and vision statements.
An annual report and/or sustainability report goes beyond a corporate profile in terms of what they communicate. By definition, a report is a factual account of all efforts and activities with numbers to support its claims.
Overview of how the department has performed.
Has it met it’s overall strategic (long term) goals?
What KPI’s have been met.
What recent developments have occurred that were unprecedented.
How were they overcome
CEO/Chairperson Message/ Letter
(See sample questionnaire Q&A list).
There are no rules or official guidelines for what content to include. But there are some best practices to follow. If possible, review the previous year’s report or look at an industry sample for reference. Then decide which sections are necessary to include. You can follow our ‘suggested content’ to help get started.
People, Planet, Profits
What’s your strategy?
Sustainability Content Suggestions:
Summary, CEO/Chairperson’s Message, About/Who we are, Our Approach to sustainability, Our Sustainability Strategy, Our Material issues, Governance, Our Stakeholders, Report Profile, GRO Index.
Annual Report Content Suggestions/Guidelines
Overview and Values, Strategy, Financial Highlights, Awards, Chairman’s Statement, The Group Structure, Board of Directors, Senior Management, Subsidiaries, Associates and Joint Ventures, CEO’s Report, Business Review, International Operations, Branch Management, Branches/Network, Financial Services Business Review, Non-Financial Services Business Review, Corporate Social Responsibility, Corporate Governance Report, Consolidated Financial Statements, Basel III Pillar III Disclosure.
Should we do a report based on 2020? Looking ahead to post covid times?
Chronological order is preferable to show the sequence of events or activities that took place throughout the year. Supporting images for each section/department help improve readability (see sample). If you are publishing a web-based HTML report then you can include dynamic content such as video and motion graphics (see samples). Infographics are a popular way to support and highlight major facts. Simple charts and tables can also help summarize figures from a large table.
People, Planet, Profits
What’s your strategy?
This is one of the pages most commonly visited, so it’s important to get it right. It must be succinct and immediate. Typically 500-1000 words. Often supported with infographics to highlight key information.
Preceding the main content is a note from the Chief Executive Officer and the Chairperson. These messages act as a personal endorsement to the readers of the report and show more insight and explanation into the overall performance of the company from a managerial perspective.
It’s not the most environmental thing to do by printing hundreds or thousands of copies of a sustainability report even on recycled paper. Especially since the report should be talking about reduction of resources. Recycled paper isn’t as eco-friendly as it many think. Much of it is only partially recycled (40-60%) not 100%. To be truly eco-conscious your paper choice should be 100% fully recycled from certified sustainable resources and carbon neutral timber processes. However, eco-friendly paper stock can also be 40-60% more expensive than standard recycled paper. Suffice to say if it’s prudent to print minimal run and if possible direct readers to a digital version of the same report online. Digital versions come in the 3 formats (PDF, Flipbooks and web-based HTML).
People, Planet, Profits
What’s your strategy?
What format to select
Available options are: PDF format, Flipbooks and Web-Based publications.
Choosing your publishing options starts with the most basic PDF format. Although basic it can be optimized (resolution) for print or online. Some companies do both. A limited run for their senior managers and board members and a download link to an online PDF.
Converting the PDF into a Flipbook is an easy option. Simply upload it to a 3rd party online host that will optimize and enhance with view/zoom and page navigation features. They can be free (but include annoying pop-up ads) and some subscription without ads and more features.
The 3rd option is a web-based publication (see sample link here). More user friendly, (easier on the eye, quite literally). Designed for all devices, especially mobile. Responsive with dynamic features like view/zoom and page navigation. Enriched features like embedded video and pop-up windows with motion graphics.
We as an agency encourage this format as it also enables visitor tracking. Measuring the pages visited most. Knowing where your visitors are going means you focus on the sections that really matter.
When asked what the major difference between a Financial/Annual Report and a Sustainability Report we can summarize into three differences. The first being regulatory. In some industry sectors like Banking, the Financial mandate requires /.
The Financial/Annual report includes an audited statement of accounts, whereas the sustainable report does not need to, even though it may show some financial costs and savings to relate to its activities.
An Annual/Financial Report is published each year, whereas the sustainable report can sometimes be less regular (every 1-3 years).
Last note in some sections, both reports may overlap in, similar content or sections. But when compared with each other they are different enough to warrant many companies producing both reports each year as part of their compliance and corporate policy.