This document discusses the evolution of sustainability and integrated reporting and the impact on public relations. It notes that integrated reporting requires communicating business strategy and sustainability issues in a way that considers stakeholder influence. This new era of corporate reporting focuses on enabling informed assessments rather than one-sided storytelling. It also requires integrated strategic communication strategies and considering how to manage material issues. The document provides lessons for public relations, including embracing stakeholder engagement, admitting mistakes, being clear on goals, and recognizing the importance of transparency.

1. The impact of sustainability and integrated reporting on Public Relations Lessons Learnt Reana Rossouw Next Generation Consultants

2. From Annual Report to Sustainability Report to an Integrated Report………..

3. “To make our economy sustainable we have to relearneverything we have learnt from the past.That means making more from less and ensuring that governance, strategy and sustainability are inseparable. Integrated Reporting builds on the practice of Financial Reporting, and Environmental, Social and Governance- or ESG/Sustainability – Reporting, and equips companies to strategically manage their operations, brand and reputation to stakeholders and be better prepared to manage any risk that may compromise the long-term sustainability of the business”Professor Mervyn King, Chairman of the GRI

4. An integrated report …. The core concepts revolve around an “inclusive” approachand “integrated” reporting to provide a holistic and forward looking picture of the reporting organisation to the multitude of stakeholders who are impacted by and who in turn impact the reporting organisation.

5. Key considerations: Integrated reporting…. Is the evolution of sustainability reporting from a “nice to have” to a “need to have” basis Is communicating the business strategy and processes which exist or are to be implemented to manage both financial and sustainability issues Is a journey and progressively needs to cover the multiple needs of the different user types Requires the development of a framework to ensure all reporting requirements are being met. Source: KPMG – Integrated Reporting – Understanding the requirements - 2011

6. Reporting Progress Source: Next Generation Consultants – www.nextgeneration.co.za

7. What this means…. This change requires not only new skills and competencies but also a new mind shift about fundamentally different communication strategies This new era of Corporate Reporting focuses on enabling stakeholders to make informed assessments as opposed to companies telling their (one-sided) story It requires integrated strategic communication strategies that considers, allows and encourages stakeholders to influence business strategy

8. New era of communications Principles of Reporting Materiality Inclusiveness Completeness Balance Comparability Accuracy Timeliness Clarity Reliability Transparency Accountability

9. Here, There, Everywhere Issues management is a traditional role and responsibility of the public relations function Issues management, broadly defined, is the practice of identifying potential problems and working to deflect or defuse them in order to minimize their impact on an organisation or business Sustainability deals with these material issues – in particular – how a company is or plans to deal with it. The sustainability and integrated report is the communication aspect – i.e. ‘telling the story’ to stakeholders. Until now PR focused on specific ‘stakeholder groups’ i.e. investors, shareholders, media, etc. So – what is the NEW story about stakeholders?

10. Providing the link Additional requirements of practitioners are – to take the lead in stakeholder engagement, to document the engagement process, (i.e. outcome and commitment to these issues raised by stakeholders), to contribute to the reporting process, and ensure the most material issues are managed – all of these provide an additional layer of complexity.

11. The era of stakeholder engagement

12. Stakeholder Groups by Relationship

13. Increasing sophistication in approaches to engagement

14. Case Studies Engagement and dialogue is more about listening Shell – Fracking in the Karoo Expect to take time to learn a new vocabulary – even if you are using the same words, they have a different meaning BHBP – Environmental/Emissions/Pollution vs. Health Issues Accept that there might not be agreement on all issues BP – Don’t expect to set the agenda Be aware of perceptions that may not align with internal thinking – some you may be able to change, whilst some you might have to learn to live with Mines – people have short and/or long memories – relocation, wages, hostels, asbestos, water, nationalisation You may need independent, external, specialist skills to facilitate the process Walmart – local knowledge, skill and cultural insight The rules of engagement need to be agreed Comment and commitment needs to filter through the organisation It takes time and resources and it raises expectations Stakeholders are not homogenous groups Getting the right stakeholders to the table is neither simple nor easy It requires reviewing internal priorities, processes and systems

15. Lessons Learnt (1) Unlearn PR & Embrace the Specific Be afraid – be very afraid – if you see phrases like “industry leading,” “best in class,” and “visionary” “We’ve been the most responsible (insert industry) company since (insert name of scion) /(launched this great company in) [insert date]. And this year we’ve done some fantastic things to improve our performance. Not that we’re suggesting that in previous years our performance needed improving, because we were already great … ”.

16. Lessons Learnt (2) Learn to say ‘’Sorry – we made a mistake” Practice starting sentences with “Unfortunately, …” and “We didn’t reach our goal this year because … ”. Use language along the lines of “Despite these accomplishments, we know we have a long way to go.”

17. Lessons Learnt (3) Is it real or aspirational? When you talk about future performance, be it a specific goal or (dangerously) an implied goal, be very clear about what’s aspirational and what’s a hard goal for which you’re willing to be held accountable. It doesn’t hurt to qualify this by laying out the potential factors that might make the goal difficult to achieve. Sweeping predictions may bite you where it hurts.

18. Lessons Learnt (4) It matters – all of it! You have an important job. More than any other document, your Sustainability / Integrated Report has the potential to earn at least the grudging respect of your critics. At the end of the day, sustainable business practices and transparent communications represent opportunity more than risk.

19. 19 Thank YouQuestionsPlease note:This presentation is part of a larger body of research and knowledge.For more information:www.nextgeneration.co.za