Sustainability reports – Who reads them and why?

Since the European Commission, led by Ursula von der Leyen, adopted the European ‘Green Deal’ in December 2019, there has been a roadmap of sorts for a sustainable EU economy. This is a new growth strategy with which the EU aims to achieve climate neutrality by 2050. For this reason, the topic of sustainability is not only high on the agenda in politics, but is also gaining more and more importance in the economy.

If companies are committed to sustainability, communication is an essential part of their sustainability strategy. Since 2017, companies above a certain size have already been required to report on sustainability (cf. Section 289b (1) HGB). However, small and medium-sized companies are increasingly facing the challenge of showing their stakeholders and the public in a transparent and credible manner how they contribute to sustainable development. Sustainability reports as part of sustainability communication have now established themselves across all industries as an element of holistic corporate communication. Companies from the food industry, such as Rittersport or the PHW Group, are already setting an example by reporting on ecological, social and economic issues in their companies. Sustainability reports are aimed at a variety of different target groups, including employees, customers, suppliers, trading partners and investors. But what about the actual use of such reports? Do the target groups concern themselves with the elaborately prepared sustainability reports and, if so, what are the readers’ motives for using them?

Answers to these questions are provided by a study on the use and motives for use of sustainability reports, carried out as part of a bachelor’s thesis in collaboration with a company from the food industry that specializes in the processing and packaging of cheese and has already published a sustainability report for the second time. The most important stakeholder groups of the company were interviewed by means of an online survey, which are the main target groups to be addressed by the sustainability report: Customers, employees, investors and trading partners.

With regard to usage habits, it was found that the average reader spends around 5-15 minutes reading the sustainability report, with most survey participants stating that they mainly read headlines, summaries and graphics. Since most readers only devote a short time to the sustainability report and tend to skim it, a clear and quickly understandable design is important. Graphic and textual presentation of data and facts makes it easier for readers to get a good overview during the short period of use. As far as the textual design is concerned, the survey participants from all stakeholder groups rated one topic area as particularly interesting, namely all content relating to ecological aspects. This is followed by the social section of the report, which is of particular interest to employees. In the overall ranking, articles on economic topics take third place. Almost two-thirds of respondents said they read the report in online format.

For 97% of the stakeholders surveyed, the top priority when reading the sustainability report is to be informed about the topic itself and about the company’s commitment to sustainability. Furthermore, they state that they read the report out of curiosity and because they expect to learn something new about sustainability from the report. In second place for the respondents is “wanting to have a say”. Accordingly, the CSR report is read in order to be able to interact with others, whether in conversation about sustainability or about the company itself. Particularly from the group of employees, many survey participants state that they invest time in reading the sustainability report because it makes them proud of their work in the company. Another reason frequently given for using the sustainability report is habitual media use, i.e. for those concerned it is part of their job to read the report.

An important aspect of a sustainability report in the context of successful sustainability communication is stakeholder satisfaction. On the one hand, this includes addressing the target group in a way that meets all the requirements of the different reader groups. Furthermore, the readers’ assessment of the quality of the report also plays an important role. The results of the online survey show that print users rate the quality of the sustainability report somewhat higher than online users. One possible interpretation of this result is that people often still think in “too analog” a way, which is why the print versions in particular find great favor. In addition to this, a close correlation between the survey participants’ assessment of credibility and the report quality could be demonstrated. This means that if the sustainability report is perceived as being of high quality, it is also rated as very credible.

Sooner or later, all German companies will have to deal with sustainability. At the latest when the planned measures of the EU Green Deal are gradually implemented. The right communication is the be-all and end-all for a company, because anyone who comes under suspicion of not properly fulfilling sustainability promises risks massive damage to their public reputation. For this reason, credible and authentic sustainability communication is elementary and offers the ideal opportunity for holistic corporate communication.