Businesses perform better when they define clearly what they stand for socially. Future-proof impact reporting reconciles the true values of a company and puts them on display in a communicative way.
By Thorsten Greinus, Creative Director wirDesign.
Replacing mission and vision with impact and purpose in reporting
The times when businesses and institutions lived on a lonely isle, “communicating” unilaterally in aimless messages about how sustainably they cared for their island, have long since passed. Practising a social identity and community spirit (based on the Danish model dubbed “samfundsind”) can be a crucial differentiating factor, making it an obligation for a brand. This also influences reporting, from satisfying the capital market to addressing socially relevant differentiating factors, fuelled by a discussion about a new understanding of values. Stakeholders today look much more closely at what a company is working towards. The expectations of shareholders must be elevated to the same level as those of employees, suppliers and society, and they must all be fulfilled equally.
The new currencies in the capital market
The executives of the US’ most influential companies were very early to start talking about how profits cannot be the primary focus of business activities. They believed that businesses concentrate on maximising profits too much and have lost sight of rank-and-file stakeholders. The Harvard Business Review entitled its late-2019 edition “Put Purpose at the Core of Your Strategy”. The significance of this title is reflected in current events. Companies increasingly see themselves confronted with a demand for sustainable investment options. Responsibility, transparency, reputation and loyalty are currencies that should not be underestimated in this context. Now is the time for companies to describe their brand purpose afresh and define points of trust. To become lighthouses that guide stakeholders to the island’s harbour. Coming across as inviting and ready for dialogue.
An impact is unavoidable
While corporate social responsibility (CSR) influences brands positively when it comes to the identity of a message sender, it is still overly associated with environmental factors. The GRI Standards set by the Global Reporting Initiative are important for reporting and help capture the data available. However, putting the focus solely on them can be a one-way street in communication terms. The entity providing the reporting takes a numbers-based approach and, for example, sticks to absolute figures and nothing else. The Sustainable Development Goals (SDGs) are an important guideline for global issues and can also be seen as a compass for a brand’s ambitions and actions. There is no chance of evading responsibility.
The DAX® benchmark index in Germany established a new index called the DAX® 50 ESG in spring 2020. It combines criteria relating to the environment, social factors and governance (ESG). ESG involves a voluntary contribution from business to sustainable development in excess of statutory requirements. Intangible assets account for an increasing percentage of a company’s future value. Not only will they influence the capital market of the future, but they will also tend to shape it significantly.
Impact-Reporting: Differentiating with community spirit
Future-proof reporting has a task of reconciling the true values of a company, seen from social and commercial perspectives, and putting them on display in a communicative way. Value is added because companies achieve financial benefits when they concentrate more strongly on their impact and keep sight of what their actions lead to. Businesses perform better when they define clearly what they stand for socially. Impact reporting helps make them unmistakable and authentic. It stands for relevance and community spirit. The impact is the emotional differentiating factor.
British businessman and author John Elkington introduced the business world to the “triple bottom line” in 1994. The term denotes how companies must account for their environmental and social results in addition to their financial ones. For example, sportswear manufacturer Nike has set up a dedicated purpose committee and precedes its activities with the message “Purpose moves us”. It is a message that is substantiated with content in its impact report.
Impact in the place of irrelevance and ignorance
Impact should be an essential component of any reporting. It involves far more than a statement about purpose, mission or vision. In future, it will be more strongly about the societal and cultural effects that a company triggers and how that company contributes to people’s quality of life. Reporting will centre ideas and solutions for the future and pair them with participatory approaches. Approaches that include employees and customers and sweep away uncertainties in relation to challenges and changes affecting society, politics and the environment.
Impact communication does not mean simply fulfilling a purpose. Rather, it means providing evidence of a social and societally relevant spirit. The task for impact communication is to emphasise the positive influence of a brand through the impact of its actions. Impact offers an opportunity to minimise the risk of irrelevance or ignorance and to use the opportunities arising from (current) changes. Consequently, seen from a long-term perspective, impact reporting is the umbrella term for a new approach to reporting.
wirDesign communication AG is a creative brand and design consultancy which consistently ranks among the top ten German agencies. As an expert in holistic brand development, wirDesign is the go-to partner for strategy, design, communication, technology, brand management and brand activation.
More success in reporting: Inspiration and invitation to the free report checkup from wirDesign.
More on ndion
More articles on the topic of brand and brand management on ndion.
Share this page on social media: