A fabulous first SME report

26.03.2013

This week, Ingenious Britain, the UK campaign for small businesses, published my "Five top tips for growing a more profitable business through sustainability reporting". The headlines are:

1. Dedicate time to addressing the challenge
2. Define what stakeholders expect from you
3. Measure your impacts
4. Develop an action plan
5. Publish and communicate your sustainability report

If you want to see the detail behind the headlines, read the full article here. If you want even more detail (but not too much!), then you might consider investing in my book, Sustainability Reporting for SMEs: Competitive Advantage Through Transparency.

Of course, it all sounds nice on paper, but the practice requires discipline and just a little thought and effort (but not too much!). Here's an example of a great SME reporter which unfortunately I couldn't profile in my book, due to space constraints.

MHPM (MHPM PROJECT MANAGERS INC) is a Canadian SME, formed in 1989 as its founder, Franklin Holtforster led the construction industry by recognizing the need for independent representation of the owners interest during the design and construction of buildings. Today, MHPM is a business with 312 employees distributed in 22 offices across Canada, from Pacific to Atlantic coasts, with annual revenues of around $40-50M Canadian dollars.

MHPM provides a range of services including Project Management for all aspects of building and infrastructure projects, Advisory Services to help maximize the investment value, efficiency and quality of real property assets, Sustainability Services to help ensure portfolios, buildings and infrastructure are worth more, cost less to operate and are better to work in, and Construction Services for project design, budget development, tendering and procurement of trade contractors, site supervision and project implementation.

At the end of 2012, MHPM published a first Sustainability Report. Congrats!

The report itself is two pages which are information-packed. The first page (pictured above) is an infographic with key sustainability performance for two years, 2010 and 2011, and the second page provides explanations and future targets. There is also an introduction by the CEO, Franklin Holtforster. It's simple, it tells a story of a small business which takes sustainability seriously, and it shows improving performance. It does not have the pyrotechnic-multimedia-bells-and-whistles of big company reporting (though infographic representation is considered state-of -the-art these days!) but it gets the message across. A fantastic example for SMEs everywhere.

Ralf Nielsen, B.Sc., M.E.Des., PMP, LEED Green Associate, the Director of Sustainability Services at MHPM shared their Sustainability Reporting journey with me.

Why did you decide to publish a Sustainability Report?

"It was part of a corporate commitment made to our employees and stakeholders in 2009. We are committed to creating a sustainable built environment through advocating for sustainable design with our clients. Creating and publishing a sustainability report allows us to establish a baseline on sustainability performance for the company and communicate this to our clients and employees. It was a natural progression beyond getting our technical staff to gain their LEED AP accreditation and the establishment of Sustainability Services alongside our core business of Project Management. We see communications as a dynamic, on-going element of the relationships we have with our clients and employees.

We are using our first report as a vehicle for stakeholder engagement. We are getting input into what they believe is material to MHPM and our industry. This will then shape our efforts on sustainability as well as what we report upon in the future. Unfortunately many believe reporting is an annual thing, when in reality, it should be integrated into the on-going dialogue with our stakeholders and within various levels of our organization but particularly those who have responsibility for employee and client relationships."

What have been the key (tangible) benefits/outcomes of reporting for your company? and for you personally?

"It is still early days – our first report was published in the fall of 2012. Reporting in and of itself has limited benefits. Yes, getting the message out is important, but how we actually deliver our work and services, as an advisory and project management company in building design and construction is key. That being said, we have gained insights from employees that will prove valuable to both our internal operations and service delivery. We believe the report has been able to “tell our company” story around sustainability for the first time to all employees in a concise, easy to understand and meaningful manner. We believe this will benefit the company through enhanced employee engagement, recruitment and retention and strengthen our relationship with leading clients."

How has reporting empowered the people in your organization?

"Again, it is early days, but we believe that employees are proud to point their key contacts, be it clients, colleagues, personal networks, etc. to the report and say that “I’m a part of a company that is committed.” More individuals across the company are signing up to our internal Green Team initiative that will focus on business operations and employee engagement."

What have the key challenges been, especially as a small business?

"Finding the time! It took quite a bit of time to select the right indicators (from GRI) that are relevant to the company and then to begin to collect the data, determine if we can disclose the information (because we are privately held) and then putting it into succinct form for our readers. We struggled to find a balance between writing a lengthy report using volunteer hours vs. a report that was succinct, to the point, but was lean on narrative and qualitative information. We chose the latter, primarily because, as an SME, all hands are focused on sales and delivering to our clients and we can build depth and content in the years to come."

What resources did you expend on reporting?

"We allocated a part time student for 1 day a week for four months for our initial data collection. During this phase we had an internal team of 2-3 people work on structuring the report, selecting a graphic designer, writing, conducting analysis, etc. We engaged internal business functions across the company only on an as needed basis. Final sign-off was by the corporate management team and Vice Presidents. All in, it took over a year and a half to compile and publish our first report, using volunteer time from various levels of MHPM. We estimate approximately 400 hours of time across the whole team was required from start to publication launch. We anticipate significant efficiency will be gained in our second report because the reporting tools, networks and framework have been established.

We can also point to this first effort to be an investment that can pay off if one of our professional staff is retained for an additional year, or if an additional client is gained by the company, or if an employee spots business process efficiencies, or if it enables one of our staff to convince a client that a high performance sustainable facility is a sound investment."

Your top tip for SME Reporters?

"Determine your materiality early and then select your indicators. This will help guide everything else. But don’t deliberate too long as you can get caught in reflecting internally with little progress. Drawing a line in the sand and get on with the report – that is key. The first report won’t be perfect, but you can build upon it, use it in dialogue, communications, conversation and use the feedback to shape the journey and your efforts.

Finally, I would say that sustainability reporting is only a means to tell stories. What are meaningful stories to stakeholders, particularly for clients and employees, comes down to the aspects that are material to them. For service oriented businesses such as ourselves, we need to demonstrate how we contribute and advocate for a more sustainable built environment. We are learning what this really means to our business practices, services and processes. It will be a journey and one that will be informed as much by what is material as by the markets and industry we work in."

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Fabulous insights and good advice from Ralph and a testimony to both the challenges and immense value that reporting brings, yes, even for SMEs. I would like to thank Ralph, and MHPM, for sharing their inspiring story and wish them good luck on the ongoing journey. I am sure reporting will get easier with successive reports and will demonstrate its value in many ways.

Do let me know if you have a good SME reporting story - SME's don't often get good exposure - and the CSR Reporting Blog will be very happy to help spread the message.

Also, if there are SMEs out there who need some assistance with getting their reporting off the ground - thinking, planning, information gathering, deciding on indicators to measure, writing or any kind of support - from one SME to another, Beyond Business Ltd will be happy to offer our services ... at prices SMEs can afford!