Why AEP Integrated its CSR and Annual Report
Sandy Nessing
May 17, 2010
The fact is that investors, customers and other stakeholders have been increasingly asking us for more information on a broader range of issues. What we weren't doing well enough was framing the whole picture by tying the financial aspects of our performance together with our policy positions, environmental compliance, safety performance, workforce development and technology investments. At the same time, investors are taking a closer look at ESG factors that can add value or mitigate risk across an entire institutional investment portfolio. A 2008 study conducted by SustainAbility and KPMG confirmed what stakeholders want - integrated reporting, seamless access to information through all mediums and sustainability elements embedded in business goals that are linked to business strategy.
To find out if that was really what investors were asking for, I went to our Investor Relations team. They told me that beyond the numbers, which they get through SEC filings, investors were hungry for some of the non-financial data that we were reporting in our Corporate Sustainability Report. In particular, they wanted to know about how we are managing risks associated with climate change and changing environmental regulations and our positions on public policy. They were asking for information that is voluntarily reported through the Corporate Sustainability Report but not necessarily found in the 10K. Consequently, our IR team took the Sustainability Report to their investor conferences - not the Annual Report. That was the revelation I'd been waiting for so I built a business case for it and this time it was an easy sell to management.
Last week, during the Ceres conference in Boston, our approach was validated. NGOs, investors and other companies are taking a closer look. I think many were waiting for someone else to take the plunge first. And while the feedback so far has been positive, we know there is room for improvement and we expect our reporting will improve year over year. My plan this summer and fall is to tag along with our IR team to hear, first hand, what investors of all stripes are saying and asking for. That, and continue to keep my ear to the ground for any other new issues that are coming around the bend. It's going to be a busy year!
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About the Author
Sandy Nessing
TRC Companies
Sandy has nearly three decades of transformative leadership in the utility sector, during which she served as a driving force behind innovative corporate sustainability and communication strategies. Her expertise spans ESG and sustainability reporting, corporate governance, stakeholder and community engagement, culture transformation, strategic communications, materiality assessments, and risk management. As a Senior Advisor at TRC, Sandy helps clients identify and implement strategic sustainability solutions to better navigate evolving reporting requirements and meet the growing demand for transparency.