The Value of Quarterly Reporting
As one of the only companies out there that’s currently reporting non-financial performance on a regular basis, I’m often asked “what value does Timberland get out of quarterly reporting?” Although it’s a pretty complicated question in itself, what often follows is a myriad of questions that take more than a few minutes to answer: How did you make this decision? Who’s using the quarterly reports? Does increased disclosure help with other parts of your CSR strategy?
Since Timberland began reporting our environmental and social performance on a quarterly basis in 2008 we’ve learned a lot. Our intent in issuing reports on a more frequent basis was to analyze, disclose, and integrate CSR information within the company in the same manner that we manage our financial performance. Our quarterly statements feature a dashboard of 15 key performance indicators, including analysis of individual progress towards our long-term goals. It’s our way of tracking performance in a more detailed manner, and also sharing the details of how we’re faring against our targets in a closer-to-real time scenario (as opposed to a backward looking CSR “statement” of the previous year’s impacts – often released long after we’ve made business decisions based on such performance). Note: we do believe such accountability statements are valuable and have published bi-annual CSR reports as an opportunity to share stories that illustrate our progress, successes and challenges in more detail. Our 2007-2008 CSR report was released in October 2009 and we will be issuing a new report later this year with 2009-2010 performance information.
The benefit of evaluating our performance quarterly is that this more timely information helps us to make changes to meet our goals more efficiently and effectively than we would if we relied solely on annual data. It also provides us with data that’s critical for internal stakeholder discussions and business decision-making. Our quarterly CSR performance metrics equip business leaders to better understand how trends (and challenges) in the “CSR world” are related to their regular activities and our company’s overall bottom line. This includes things like reducing our overall carbon footprint (for the benefit of reducing total energy costs across the company) and increasing organic cotton or other renewable materials to deliver sustainable products to consumers ((such as Timberland’s Earthkeepers product line, which is increasing rapidly and best demonstrates the inclusion of environmentally-preferred materials). We have a lot of work to do in this area – but it’s an important part of leveraging more sophisticated data as a means to create shared ownership and accountability, rather than simply sharing information among colleagues.
What will this frequency of reporting ultimately achieve? I believe we’re working towards a system where sustainability risks and opportunities could be evaluated in the current global market. If we can share information in ways that also highlight the need for long-term valuation of such priorities, that will serve as an opportunity to educate and engage different stakeholders in the process. Is our approach perfect? No. Does it take additional time? Yes (there, I said it). But it is helping us to create an integrated strategy for analysis, implementation, and accountability. Timberland CEO Jeff Swartz calls this commerce & justice — working hand in hand for the benefit of our overall company, not in separate silos.