The Dutch conglomerate was recognized for its annual report at the IR Magazine Awards – Europe 2017
Institutional investors are increasingly looking to annual reports for more information about ESG and sustainability issues. They also have a clear idea about what they want to see in a physical annual report and what can be better represented on an IR website, according to two recent studies.
Royal Philips’ award-winning effort provides an example of how companies are innovating to meet these changing demands, engage new audiences and embrace digital technology.
‘The [annual report] team drove a shift from a one-size-fits-all approach towards a dual-platform format, tailored to the needs of the different audiences of the annual report,’ the Royal Philips award submission says.
The team approached the traditional annual report as the primary vehicle to communicate with the financial community. The 226-page integrated report includes financial, social and environmental performance data, along with a message from the CEO. The first 30 pages of the report provide this summary data, before diving into business lines and mandatory financial reporting, in a traditional format. The report then revisits the sustainability topic in more detail with a 25-page section towards the back.
In recognizing the evolving role of the annual report, Royal Philips also built a custom mobile-friendly microsite – separate from the IR website – to provide interactive content for the company’s broader stakeholder community, including a Chinese language version. Two particularly innovative features of this site are the interactive charts and world map, where users can select the information they want to view.
The website was popular among Royal Philips senior management because it meant printing fewer copies of the annual report, thereby saving money and improving the company’s green credentials. Indeed, the site has since evolved into a year-round quarterly-updated results hub.
As head of responsible investment engagement for Aviva Investors, and one of the IR Magazine Awards – Europe 2017 judges, Abigail Herron sees a lot of annual reports. Before judging the category, she told IR Magazine that she would be looking for a simple articulation of material ESG issues, a clear demonstration of performance versus targets and the link between performance and executive compensation. During the judging process, she described the Royal Philips report as ‘a pleasure to read,’ while IR Magazine’sdeputy editor praised the dual format.