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A Guide to Designing and Implementing Performance Reporting to Increase the Confidence of Conservation Investors’, Bush Heritage Australia, Melbourne

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A Guide to Designing and Implementing Performance Reporting to Increase the Confidence of Conservation Investors’, Bush Heritage Australia, Melbourne 2009 A guide to designing and implementing performance reporting to increase the confidence of conservation investors Bush Heritage Australia Mathew Silver Rob Richards Stuart Cowell Copyright notice © Bush Heritage Australia, Australia, 2009. Legal information To the extent permitted by law, Bush Heritage Australia (including its employees and consultants) excludes all liability to any person for any consequences, including but not limited to all losses, damages, costs, expenses and any other compensation, arising directly or indirectly from using this publication (in part or in whole) and any information or material contained in it. Citation Silver MJ, Richards R and Cowell S 2009, ‘A guide to designing and implementing performance reporting to increase the confidence of conservation investors’, Bush Heritage Australia, Melbourne. Contact Stuart Cowell Bush Heritage Australia [email protected] 1 Performance reporting to increase the confidence of conservation investors Preface Building investor confidence is critical to the success of any business. A primary mechanism used by organisations worldwide to maintain or increase investor confidence is reporting. By presenting information such as financial performance, liabilities and strategies for the future, reports give the investor the information needed to decide whether to continue investing. Like any entity using external investments to deliver goods or services, organisations that deliver conservation outcomes can use effective reporting to build investor confidence. Continuous investment in conservation organisations is critical as investments are not used to provide self- sustaining income and profit, but to generate external benefits. While the approach to reporting some aspects of conservation business, such as organisational objectives and financial position, can be achieved in the same manner as profit driven companies, there are some that cannot. The reporting of return on investment presents unique challenges for conservation businesses because their returns are not readily reportable in dollars, there are often complex risks that are unknown or not possible to assess, and there is often a long lag between the investment and delivery of the conservation outcome (i.e. the return). Despite these challenges, there is no reason why investor confidence cannot be raised through sound reporting practices in the conservation sector. Bush Heritage Australia (BHA) is a well known private conservation organisation that invests donations into the acquisition and management of properties with high conservation value. BHA has long seen the potential of reporting to build investor confidence, however before investing in any new reporting process for investors, BHA made the decision to investigate and clarify the reporting preferences of different investors and an assessment of how best those reports could be delivered within the existing organisational framework. This document is a synthesis of the resources, concepts, and approaches discovered during the investigation and new approaches that were developed where needed. This is all presented in the form of a guided process that is aimed at assisting other conservation organisations with the establishment of their own reporting processes to increase investor confidence. Stuart Cowell (Project Director) Bush Heritage Australia 2 Table of contents Preface .......................................................................................................... 2 Abbreviations and acronyms.......................................................................... 4 Introduction ................................................................................................... 5 About the Increment project .............................................................................................................. 5 What is the purpose of this guide? ..................................................................................................... 5 Who is this guide written for? ............................................................................................................ 5 How to use this guide ......................................................................................................................... 6 The structure of this guide .................................................................................................................. 6 Phase 1 – Before you start ............................................................................. 9 STEP 1: Project set up and planning.................................................................................................. 10 STEP 2: Run internal information sessions ........................................................................................ 14 STEP 3: Understand your existing reporting capability and processes ............................................. 16 Phase 2 – Development of feasible reporting options .................................. 19 STEP 4: Develop an organisational outcomes model ....................................................................... 20 STEP 5: Select the places in the outcomes model where performance will be reported ................ 23 STEP 6: Set SMART targets for selected outcomes ........................................................................... 25 STEP 7: Select viable performance indicators ................................................................................... 27 STEP 8: Develop preliminary reports ................................................................................................ 29 Phase 3 – Investor consultation and refinement of reporting ....................... 31 STEP 9: Prepare investor interview process ..................................................................................... 32 STEP 10: Identify investor representatives and conduct consultation ............................................. 37 Phase 4 – Implementation of the reporting .................................................. 39 STEP 11: Building report processes into existing business procedures ............................................ 40 STEP 12: Monitoring and evaluating the impact on investor confidence ......................................... 41 STEP 13: Using the reporting for internal improvement .................................................................. 42 Glossary of terms ......................................................................................... 43 3 Abbreviations and acronyms ANU Australian National University BHA Bush Heritage Australia CMA Catchment Management Authority DEWHA Department of the Environment, Water, Heritage and the Arts LWA Land & Water Australia M&E Monitoring and Evaluation MER Monitoring, Evaluation, Reporting NGO Non-government Organisation NRM Natural Resource Management ROI Return on Investment 4 Introduction About the Increment project The Investment in Conservation and Natural Resource Management Project (or Increment) project was a research and development project managed by Bush Heritage Australia (BHA). Funding for the project was provided by the Native Vegetation Program at Land & Water Australia (LWA) and the Department of the Environment, Water, Heritage and the Arts (DEWHA). What is the purpose of this guide? This document is a synthesis of the lessons learnt by the project team involved with the Increment research project. It is presented as guide to assist those in conservation and natural resource management organisations that want to design and implement a performance reporting and improvement framework to increase the confidence of investors. The basic premise of the Increment project was: Maintained or Effective Increased increased performance i n v e s t o r investment in reporting confidence conservation organisations While the focus of this guide is on reporting to increase external investor confidence, the process is structured to accommodate those organisations that already have a reporting framework that meets internal management needs and/or specific requirements established by funding bodies. Who is this guide written for? This guide will be of value to you if: you are looking for ways to maintain or increase investment in a conservation or natural resource management organisation from private or government sources you need to design a performance reporting framework for a conservation organisation, and /or you are interested in conservation Monitoring, Evaluation, Reporting (MER) that will lead to organisational self improvement. The intended audiences are: . private conservation organisations needing to maintain a private donor base 5 . regional natural resource management (NRM) body looking to diversify their income sources into non-government sources and/or report to the community . state and Australian government environmental agencies reporting to treasury, and . local government reporting to the community as the investors How to use this guide This guide presents a process to design and implement a performance reporting framework for a conservation or NRM organisation. The process is designed for implementation at the whole of organisational scale and accommodates reporting at multiple landscape and organisation levels. The process has four phases, each with a number of steps. The process was designed with the benefit of hindsight from the learning of the Increment project and therefore does not represent the exact sequence that BHA went through. The process presented
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