Many companies approach sustainability reporting by asking themselves what story they want to tell. The more important question may be, “What story does our target audience need to hear?” Often, the best way to understand the needs and expectations of a specific audience is also the simplest: Ask them.
For example, consider The Travelers Companies’ implementation of SASB standards. As Yafit Cohn, the company’s Vice President, Chief Sustainability Officer and Group General Counsel, has pointed out, “a foundational part of our process was meeting with our large institutional investors, representing half of our shares outstanding, to solicit their views, preferences, and guidance with respect to ESG disclosure.” Among other findings, Travelers “observed significant investor momentum behind SASB standards and the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).” Cohn has said that “the conversations we had with our investor base confirmed how essential it is for us to draft a coherent and comprehensive narrative, specifically for investors, about Travelers’ approach to ESG and how we are managing risks and availing ourselves of opportunities to enhance the long-term economic sustainability of our company.” Travelers proceeded to use the learnings from its investor engagements in deciding on its approach to reporting, the frameworks and standards with which it has aligned its disclosures, and the specific topics it covers on its sustainability site.
Laurel Peacock, Sustainability Director at NRG Energy, agrees. “We had an investor road show where our CSO went along with the CEO, CFO, Head of IR, and others to talk with shareholders about ESG, and we had those face-to-face conversations to learn, ‘Are we providing the information you need?’ ‘What other information can we get you?’” she says. “All our communications come down to the audience.” Based in part on feedback from investors and other stakeholders, NRG has developed an approach to sustainability disclosure that illustrates the complementary nature of the disclosure frameworks it uses, which include SASB standards, GRI standards, CDP disclosures, and the TCFD recommendations.
Similarly, for Vornado Realty Trust, “Our decision to disclose through SASB came out of stakeholder engagement with our largest institutional investors,” according to Senior Vice President of Energy & Sustainability Daniel Egan. “I’ve been fortunate to have exposure to the stakeholders we think are most valuable—investors, tenants, employees, and local governments—to understand their needs,” he says. “We did a series of one-off ESG engagement calls with our largest investors and nearly 100 percent had either heard of SASB, worked for a [SASB Investor Advisory Group] member organization, or were just very supportive of organizing our disclosure according to the SASB framework.”
A company may also wish to extend its consideration of the target audience beyond identifying specific topics and metrics to determining how that information should be presented. For example, Nike chose to report its SASB disclosures in a standalone table rather than weaving the data throughout its sustainability report. After all, “The information they [investors and professional stakeholders] are looking for should be easily accessible,” said Director of Purpose Communications and Reporting, Alex Hausman.
Finally, it’s important to remember that not every investor has the same information needs, so what works for one might not satisfy another. “[Our] support of SASB does not diminish the value we place in other comprehensive or issue-specific ESG disclosure frameworks that call for more comprehensive transparency such as GRI, CDP, or the UN Guiding Principles Reporting Framework addressing human rights,” according to Heidi Soumerai, Managing Director at Boston Trust Walden. She points to greenhouse gas emissions (GHG) data as an example. Although SASB standards include a Scope 1 GHG metric for 23 of 77 industries, Walden believes all companies should report this information. “In our view, SASB’s industry-based materiality framework does not encompass some system-wide indicators that contribute to improved economic (and societal) outcomes long term,” she has said. Thus, for many companies, using a combination of disclosure frameworks may be the most effective way to meet the information needs of a key audience or audiences.
 Remarks of Yafit Cohn, The Travelers Companies, Inc., SEC Investor Advisory Committee Discussion Regarding Disclosures on Sustainability and ESG Topics (December 13, 2018).