When It Comes to Sustainability Reporting, Does the CEO Letter Matter?

June 25, 2012
  • Andrew Matthews

    Former Manager, BSR

Recently, I surveyed CEO letters from award-winning sustainability reports by Nike, Coca-Cola, Vodafone, Marks and Spencer, HP, and GE. In the past, I used to gloss over such letters when doing reporting research, but this time I hoped to understand whether these letters enhance reports. What separates a good CEO letter from a mediocre one? What does a good CEO letter achieve, if anything?

I have to admit that I began with a bias that CEO letters are simply pomp and circumstance—loud speakers for the diverse and sometimes unstructured wins that many companies tout. But what I found surprised me. A good CEO letter has three distinct effects:

1. Establishes a company as a thoughtful, experienced leader
2. Builds trust and accountability with communities, employees, investors, and society
3. Creates a corporate identity centered on social issues and a company’s unique capabilities

The CEO letter definitively states what a company is and aspires to be. By building trust with the reader, the CEO sets the stage for communicating sustainability achievements and highlighting the company’s contributions to society.

So what makes a good CEO letter? There are four main elements.

First, CEOs should explain what makes the company unique, tying those competencies to social and environmental goals. For Nike’s CEO, design and innovation separate the company from its peers and allow Nike to promote sustainable excellence in the supply chain.

Second, CEOs tell a story of the company’s evolution: where it has been, what it has learned, and where it is headed. In HP’s 2009 Global Citizenship Report, Mark Hurd reinforced a commitment to citizenship in the context of the recent financial crisis.

Third, CEOs call their readers to action. GE’s Jeff Immelt called on governments to invest in good governance, training, infrastructure, and research to augment what GE and other companies are already doing.

And finally, CEOs conclude their letters by highlighting the importance of sustainability to their businesses. Marks and Spencer’s Marc Bolland emphasized the trend of hypertransparency and how Plan A, the company’s massive, multiyear sustainability initiative, helps the company maintain leadership in this environment.

Although it’s only a small piece of the reporting puzzle, a good CEO letter propels a company toward sustainable growth while inviting stakeholders to be part of that story.

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