Russell Goldsmith
Russell Goldsmith 14 October 2019
Categories B2B, Content

Podcast - Evolution of the Annual Report

Recorded in partnership with Communicate Magazine at their ‘Evolution of the Annual Report‘ conference, Russell Goldsmith chatted with six of the day’s speakers.


Mei Ashelford, Director of Reporting Intelligence, Gather and Mark O’Sullivan, Director of Corporate Reporting, PwC looked at the UK’s changing approach to corporate reporting.


Chatting with Mei Ashelford and Mark O’Sullivan

Mei wrote a post on Communicate’s website where she sensed that we are on the brink of a period of significant change - there’s a lot of regulatory change coming through at the moment – new corporate governance codes and new regulations regarding stakeholder engagement. There’s also a lot of change in societal expectations. Investors are demanding greater amounts of ESG information, there’s a lot more consumer and shareholder activism, rebelling against things like ‘fat cat’ salaries and environmental impact.

Mark added that this will challenge the role of the annual report in terms of how companies and specifically boards better demonstrate the impact they have on society and the stakeholders they take into account in their decision making.

Mark shared some of the findings from PwC’s Annual Review of the FTSE350 reporting.  He said that we’re seeing a lot more of a discussion from companies recognising their stakeholders and talking about who they’re engaging with. However, he thinks that a lot of that feels like it is companies doing ctrl-F shareholders and replacing the phrase with stakeholders rather than reporting something meaningful, but it’s certainly a sign of the direction of travel. He added that the continuing challenges we’ve seen are:

  1. Companies grappling with providing the long-term perspective in their corporate reporting has stalled –
  2. The challenge of telling one coherent story –

Mei said that one practical challenge that their clients face is that, often annual reports have several authors trying to generate content for one document that should read as one story written by one person and so struggle to get this golden thread and coherency. Their approach is to therefore take a partnership role with them and really think about the messaging they want to get out, then look at the great things that the client has got to tell people about and the regulations that they need to follow and put it all together and create a book that actually has a beginning, a middle and an end and reads like one person has actually written it. 

Mei and Mark spoke with Phil Fitz-Gerald, Director of the Financial Reporting Lab, FRC who said that investors are getting their information from up to 100 different data sets when assessing investment around ESG in companies, yet on average, only three come from the company itself. 

Mark added that companies that really do try and manage their message and control certain information that they might see as competitively sensitive or that they don’t need to put out, probably destroy rather than build trust, because there are so many different sources of information out there that users are using to corroborate, pre-empt and build forecasts that actually this is just one part of a reporting supply chain.  He continued that one of the reasons why investors and arguably other users say that the annual report, despite some of its issues, remains a critically important document is because of the rigor that lies behind it. The number of people from the management to the exec, to the board, to the lawyers, to the auditors and so forth, have gone through it gives it some kudos and some credibility. Other sources, however, don’t quite have that. 

Mei said that technology will hold an important role in what the future might bring, for example, how AI might be used, how we generate information, analyse it and consume it. She added that we’re already going to be seeing XBRL reporting coming in next year and she thinks that’s just the start. 

Mark would like to see technology really help users consolidate the information they want to receive at the time they want it, in the format they want it. And as a result of that, he thinks an annual report will still have a critically important role to play in helping the users understand and paint a picture of a company’s performance and progress. He also would like to see a complete rewrite of the regulations to help the annual report be a document for the 21st century. So, technology to allow you to consume it – regulation to help present an annual report that is fit for purpose. And as a result of that, a single document that still works for many. 


Tom Bell, Director, MSL Group and Sarah Wood, Head of Digital Insight and Engagement, spoke about ‘Beyond Reporting Driving Reputational Resilience’, which Tom explained was about making sure that the company’s annual report returns as much value as it possibly can and the stories within it are told to as wider groups of stakeholders and audiences as possible.


Chatting to Tom Bell and Sarah Wood 

Sarah said that what companies don’t do so much of is to think about having got all of those stories together, how they can then be repurposed, how they can be better targeted, written in a certain way to appeal to a much wider audience. She added that the investor and analyst audience is first and foremost a priority, as indeed it should be. But we, of course, can see across society that actually many more audiences beyond investors are actually looking for this information. They’re looking to understand much more about how businesses are responding to societal need, are addressing our biggest environmental challenges, and are setting a foundation that isn’t just resilient for the business but is actually resilient for us as a society going forward.

Simon Harrison of MSL wrote an article for Communicate on how corporate reporting can enhance reputational reliance, within which he talked about VW’s reputational resilience around the emissions scandal.  Tom said that for many companies around the world, indeed, some of VW’s main competitors, they would have struggled to recover from a scandal of such scale and importance. But VW were not only a company that’s been operating for decades, but also is part of the German manufacturing industry. He said that they’ve actually spent many years building a bank of reputational capital in the way that they have communicated not only their offer, but also German manufacturing more generally. So, when the time became tough, it is MSL’s view that VW actually managed to quite cleverly section off the reputational damage and they could rely on and dive into much of that banked reputational capital to allow them to recover quickly and come back much stronger.

Tom believes that in many annual reports, there are incredible stories of value that at the moment are not being exploited quite to the extent that they should be in order to build that reputational capital that will need to be drawn on in the bad times. Crises are increasing.  He said that the Deloitte 2018 report around resilience showed that 60% of senior executives believe that in the last 10 years, the number of crises that their organisation is facing or has faced has increased.

Sarah said that the mindset they want clients to have is around ‘Campaignable reporting’, which she explained is a way of thinking about those stories and content from the outset.  She explained that if you think of the report and the amount of content, stories and proof points that are in it, and think about not it’s disclosure and regulatory requirements, but actually just as a huge rich repository of information and stories and then think from a communications and stakeholder engagement perspective and think actually what value would that content provide a conversation with those stakeholders and how could it enrich that engagement? She said that campaignable reporting is about thinking of the annual report, not just as a report supported and promoted through a press release and through shareable assets and content, but actually as a centrepoint for a potential engagement campaign to reach out to a range of different audiences and stakeholders in interesting and meaningful ways. It gives you the cues and clues to think about how you craft those stories from the outset.  g activity.

Sarah highlighted Apple as an example. In their environmental report released last year, a critical core to their strategy is e-waste, which is a growing significant environmental challenge for our society with 50 million tonnes being produced each year – the equivalent to 4500 Eiffel Towers in terms of weight, which would cover an area the size of Manhattan. She added that the figure is set to over double over the next few years. Therefore, this has always been a strategic priority and concern for Apple. In response, they launched Daisy – a Disassembly, Recycle Robot that could disassembly phones in a really speedy fashion. She explained that this, of course, helps Apple to deliver or move towards a closed loop society in terms of extrapolating and extracting precious resources and being able to repurpose them into the next device. However, for Sarah, what was really interesting was actually that they introduced Daisy to the world through the front cover of the Apple Environment Report itself, which they supported by delivering and launching the report on World Earth Day – a moment in time where audiences across the world were looking more closely at solutions to some of those big priority challenges. This generated not just press releases, but huge conversation which tapped into the army of Mac influencers, bloggers and vloggers, giving them greater exposure and greater understanding and awareness around their activity than they would have achieved through more traditional measures.


Our third guest was Helen Baker, Head of Secretariat, Coca-Cola European Partners.


Chatting with Helen Baker

Coca-Cola European Partners was created through a merger in May 2016 of three bottling organisations - the German bottler, the Iberian bottler (that included Iceland as well) and the bottler who looked after Great Britain, France, Norway, Sweden and other parts of Western Europe, although that was a US headquartered company with all its operations in Western Europe. As a result, those three entities we’re actually listed on seven exchanges, in four countries and therefore they have to comply with more than one set of reporting requirements.

Helen said that their reporting approach, certainly in the first-year post merger, very much mirrored the US style of annual reporting. So, in 2016, they were very much on a compliance focused approach that was a very text heavy US influenced annual report.  Then, in 2017, they wanted to try and give it a more European feel, which she explained really means including some more diagrams, pictures and tables, trying to break the text up a bit and make it more accessible to people. Finally, in 2018, it was very much about integrating the sustainability piece and producing an integrated report for the first time that talked not just about the financial performance, but also the wider performance of the business and the non-financial side.


Slide presented by Helen Baker

Helen said that they have actually got more content in their annual report this year, but in fewer pages and fewer words, which she believes is proof that you can include more but in less space. She explained that they were disciplined about going through and trying to avoid repetition and stripping out unnecessary words, trying to use really clear, transparent, consistent language.  This also resulted using less paper to print the report as it was 5% shorter.  Plus, after about three months of discussions with lawyers and providers in the US they also reduced the print run from 10,000 copies in 2016 to just 750 in 2018.


Our final interview was with Kerry Cooper, Senior Manager, External and Group Communications and Marketing, Mondi Group.


Chatting with Kerry Cooper

Kerry said the conversation is really moving quite quickly towards what people are needing from reporting and that as communicators, that’s their real opportunity – to think about not only what we want to communicate, but also how do we make sure that that information is getting to the right people in the way that’s easy for them to access the level of information that they want. She added that the reason why it’s important is because there’s a huge volume of information being communicated around reporting that sometimes becomes quite hard for people to get to what they’re looking for.

One of Mondi’s key messages is about delivering innovative and sustainable solutions and Kerry said that it’s an interesting time to be in the packaging industry. The spotlight is very much on them and the world is looking for solutions. She said that we all know that the level of waste that’s going into the environment, both into oceans but also into landfill, is unsustainable and that we have to take action. She thinks for Mondi sustainability is not new on the agenda and in fact, they produced their first sustainability report back in the early 2000’s.  She added that the landscape is changing so quickly, and the conversations are becoming much more real because it’s touching consumers, whereas in the past they were a little bit under the radar. So although their practices were very good and their sustainability practices have had to be strong because it’s fundamental to being able to operate as a paper and packaging company, they haven’t had to have as much emphasis on the way that they communicate their sustainable practices and certainly haven’t had the interest from end-consumers in how their goods are packaged. So therefore, the way Mondi communicates has changed radically in the last year.

Mondi will produce the number of reports that they need for their stakeholder base or for their shareholder base that need to receive it in print and also a number of their businesses use it as a marketing tool to show how beautiful a report can look if it’s printed on great paper. She added that it’s a good opportunity for them to show that paper, when it’s coming from sustainable fibre, is a useful resource and that we’ll always still need paper. But the conversation has to be around making sure that we source paper sustainably and it’s exactly the same conversation that they are having in packaging because packaging can’t disappear. She said that we know that to protect and prolong the life of goods, packaging is necessary. So, the question really has to then be around how do we make it fit for purpose? Kerry said that the perspective Mondi’s taken is that, where possible, packaging should always be made from fibre, from paper, and only when necessary should it be made from plastic. She added that the conversations that they are having now with our customers, large FMCG’s [being] probably one of those key customers for them, is not around getting rid of packaging, but around making sure that the packaging that they choose is exactly the right packaging for what their trying to produce – that’s where it’s about being thoughtful and mindful and not just packaging things for the sake of it.

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