Today, Salesforce released its FY22 Stakeholder Impact Report to share ESG progress and commitments with its key stakeholders.
We are firmly in the era of corporate ESG — environmental, social, and governance initiatives that companies aspire and adhere to. Simply making a profit is no longer good enough for customers, employees, and investors. Companies also need comprehensive ESG strategies and disclosures to satisfy these stakeholders.
As a result, companies are relying on ESG reports to outline what initiatives a company has taken on, and how these initiatives are helping them reach their commitments. Sunya Norman, Vice President of ESG Strategy and Engagement at Salesforce, shares how the company put together its comprehensive report, and in doing so, provides insight to other businesses aiming to serve as a platform for change.
Q. Why is it important for Salesforce and others in the business community to be transparent about their ESG impacts?
Salesforce believes that building trust with stakeholders is a critical part of being a champion of stakeholder capitalism, a successful business, and a good corporate citizen. One way that trust can be built is through transparently sharing what you’re committed to as a company, and how you’re progressing toward those commitments. Our annual Stakeholder Impact Report is one of the ways we keep our various stakeholders updated about what we’re working on and how our values come to life.
Expectations continue to rise across all stakeholder groups about what it looks like for a business to be a leader in ESG. From the investor and analyst perspective, they want transparent ESG data so they can make informed investment decisions. Customers and employees are increasingly voting with their business and their labor, wanting to align their values and interact with companies who share them.
ESG thus becomes a differentiator. Even though most ESG reporting is voluntary, these stakeholder expectations make robust corporate transparency table stakes. In order to do business as a large public enterprise, you have to be focused on ESG performance and transparency.
Q. What is the process of putting together a report like this?
What people might not understand about ESG reporting is that it’s incredibly cross functional. It’s not something that just a few analysts who focus on sustainability do off in the corner.
Our report highlights over 20 different Salesforce impact initiatives — the impact leaders for those programs provide the latest and greatest for the report. We partner with our finance and legal organizations to make sure what we’re sharing is accurate, and is held up to rigorous standards in terms of quality assurance. It requires coordination between functions that may not normally work together.
That’s also one of the unexpected benefits of producing a report like this; once you create these connections, they can be leveraged for other strategic business initiatives.
Q. How does Salesforce overcome the challenge of doing such a comprehensive report that covers so many different topics?
I like to say that the report is the one-stop-shop of everything that Salesforce does to bring “doing well” and “doing good” together.
Behind all of this data there are stories. It’s all about impact on the ground. For instance, on the environmental side, the trees we plant represent communities receiving economic, social, and environmental benefits. Our job is to spotlight the most compelling stories that bring the data to life for our reader.
Q. How did you come up with the framework for your report, and how has it evolved?
We provide focus to the report by using external frameworks, best practices, and a materiality assessment. Our internal ESG materiality assessment checks on what our stakeholders believe are the most important ESG issues (based on impact to society and the environment, as well as enterprise value), so that helps us decide where to focus our efforts. By refreshing our materiality assessment regularly, we verify the alignment of our strategic ESG priorities to meet the expectations of our stakeholders.
We’ve also aligned with leading frameworks such as SASB and TCFD. Salesforce produced our first TCFD report last year, so a lot of that great work is incorporated into this year’s Stakeholder Impact Report.
Additionally, Salesforce has long been a proponent of convergence in the ESG reporting framework space. We feel strongly that companies need a little bit more clarity about the best way to produce the information for stakeholders because there isn’t currently just one mandated approach.
Q. How does Salesforce approach communicating about goals that weren’t achieved on time?
The goal of ESG reporting is to share candidly where you are in the journey. For all these initiatives, there’s no finish line. Even if you reach your original goal for a particular year, you still have to work to maintain it over time, such as sourcing 100% renewable energy, or upholding employee representation through growth and acquisitions.
We try to make sure that everyone understands our North Star, which can often be a stretch goal. The reality is sometimes there are setbacks, especially when we set ambitions high. We try to be transparent about those and share the context when they occur so others can benefit from our learnings.
Q. What makes Salesforce’s impact report different when compared to other companies’ reports?
We’ve designed the report website to maximize accessibility for all audiences. The interactive navigation allows readers to jump directly to the issues they care most about, or take a deep dive into the report details to make it easy to find key metrics.
We’re also proud that, for several years, we’ve had a third-party reviewer of key data in the report. The way we approach and process the data around our most material metrics is pretty unique.
This year, we have a new disclosure, called the schedules of selected environmental, equality, and social value metrics. It ensures that select ESG metrics, like net zero residual emissions, have a thorough disclosure around them, including the methodology used for calculation and how they were reviewed.
The other thing that sets us apart is our advocacy and engagement with policymakers. This report allows us to have the credibility to make comments to the SEC and other organizations that are deliberating on creating guidance for corporations on key issues. We’ve been among the most vocal companies giving our feedback publicly.
Q. What tips do you have for other companies that want to get started writing an ESG report?
For companies who haven’t reported yet, it can definitely feel overwhelming.
The important thing is to get started. A good first step is an internal audit of what commitments, programs, and data the company already has. Begin to capture your baseline and understand your data. Then, you can start off reporting internally to give your executives visibility into how the company is performing. You can follow that up with some benchmarking on how the company might be performing according to your sector or your peers. This will help you understand if you’re ready to share this important information publicly.
Finally, remember that it’s a journey, so you and your company can continuously improve over time.