Guide
Communication
Communicating about your due diligence efforts is key to informing and engaging colleagues, suppliers, and other stakeholders.
After this section:
- You understand what you are expected to communicate and report;
- You have a basic due diligence strategy that you communicate internally and externally.
What is the difference between communicating and reporting?
Reporting and communicating are not the same. Reporting refers to more formalized and more standardized forms of communication, for instance as part of a sustainability report. Communicating covers a multitude of ways to inform stakeholders about risks, and about your approach to dealing with these risks.
What is expected of SMEs?
Large companies are increasingly required to report through the use of KPIs, and in accordance with international reporting standards like the Global Reporting Initiative. For SMEs, the situation is less straightforward. For some SMEs, formal reporting will become inevitable, e.g. because they operate in a sector covered by legal obligations (e.g. precious metals, tropical hardwoods), or because large companies ask their suppliers to report on risks to fulfill their own reporting obligations (e.g. forced labour, emissions, deforestation). For many other SMEs, a communication strategy is more important than formal reporting.
How should you communicate about due diligence?
Based on international guidelines, due diligence communication should adhere to five principles.
- It should be approached as a process. As you mature in your due diligence efforts, you will need to communicate on this;
- It should be accessible to all stakeholders, including those at risk (e.g. workers, local communities);
- It should be detailed enough to allow a good understanding of your due diligence efforts;
- It should be proportionate to the severity of the risks. In case of serious risks, you are expected to report formally.
- It should be honest and transparent. While sustainability communication often focuses one-sidedly on positive achievements, due diligence is all about daring to report about risks and about the limitations of your approach.
What does this mean concretely?
Communication on due diligence can take different forms. It can be more formal, e.g. as part of a sustainability report or in the form of an annual due diligence updates published on the company website. It can also be more informal and focused, e.g. in the form of social media posts, blog posts, appearances in public events, or discussions with clients or suppliers. In this guide, we propose a ‘hybrid’ approach that contains elements of formal reporting, combined with a flexible communication strategy.
Throughout this manual, you were asked repeatedly to report on the steps you have taken in a designated word template. If you have done this consistently, you have already laid the basis for a due diligence strategy. This strategy can now be polished and completed. Once your strategy is finalized, you need to think about how you will communicate it to other stakeholders. The following two questions are important to determine an effective communication strategy:
- Which stakeholders do you want to target? If you are mainly targeting investors and other companies, a more formalized approach may be warranted. If you (also) wish to reach other stakeholders (e.g. colleagues, individual consumers, or local communities), a more informal and targeted approach may be required.
- Do you wish to communicate about due diligence separately, or as part of a broader sustainability communication strategy? For larger companies, there is a clear trend towards integrated and formal reporting. For SMEs, separate communication about due diligence can be more interesting.
Off course, a due diligence strategy is never finished, and needs to be revised on a regular basis. This can be done e.g. through annual updates published on your website or in annual reports. The sheet ‘tools’ of your excel-file contains a range of resources that can further support your reporting and communication efforts.