How sustainability reporting is evolving?
Performance is only meaningful when it can be measured, and inaccurate reporting is pointless
Prior to starting your company's sustainability reporting journey, it's critical to keep this in mind
It would be wise to define sustainability reporting before moving further The dissemination of an organization's environmental, social, and governance (ESG) goals through sustainability reporting
In recent decades, reporting on sustainability has advanced significantly When businesses began to understand that they had responsibilities to society beyond maximising profits, the trend began in the 1960s Early sustainability reports emphasising on environmentalism gave the movement more traction
Social and governance elements were introduced in the 1980s to complete the ESG trinity In response to increased accountability expectations in the 1990s, some organisations developed strict standards for gauging sustainable performance The Global Reporting Initiative created the most well-known of these reporting guidelines (GRI) Some organisations with widely used reporting formats for sustainability include:
● CDP- Carbon disclosure project
● The Sustainability Consortium
● IIRC- International Integrated Reporting Committee
● SASB – SustainabilityAccounting Standards Board etc
How companies get sustainability reporting wrong
Despite greatest efforts, international reporting guidelines for sustainability are not flawless. Some of these reporting requirements were developed when business sustainability was merely an afterthought.This led to numerous businesses merely employing flashy reports to increase their own publicity.The data in sustainability reports can occasionally be unreliable, skewed, and difficult to independently verify. Instead of making genuine efforts that have an impact, some businesses are able to misrepresent data thanks to the flaws in current standards.
The complexity of sustainability reporting as it is today is another problem Companies are obligated to adhere to some of the over 200 distinct reporting requirements when filing reports When compared to GRI, some of these reporting systems, like SASB, are more generic in nature It might take a lot of time for businesses to meet the data needs of various reporting standards For businesses that report on activities that are not directly related to their company operations, this becomes more challenging Businesses occasionally acquire more data than they can make sense of, which results in data overload
And finally, some businesses view reporting as a goal in and of itself They produce yearly sustainability reports and even set some objectives, but they have trouble getting anything
useful out of the data Sustainability reports are not awards that should be won annually and displayed on a shelf They must be implementable, and a corporation must use the results to enhance its decision-making and dedication to creating a positive impact
Companies should reconsider the goals they have established and the criteria or techniques they use to report on those goals in light of the shift in ambitions from carbon neutrality to nature-positive
What investors (and other stakeholders) need from sustainability reporting
Companies that create sustainability reports can learn a lot from them because they give a general summary of how a firm has affected the social, economic, and environmental facets of society Yet, other stakeholders, such as investors, also rely on the information in sustainability reports when making important choices No matter what role various stakeholders play, they all place equal importance on timely and accurate information that is consistently disseminated For instance;
Investors are always looking for profitable opportunities that have a big environmental impact Reporting on sustainability enables them to strike a balance between risky investments and involvement in causes like social justice and reconstruction
To determine whether their effect aims to align with a certain firm's corporate objectives, impact partners need reliable reporting This information can assist them to choose which companies to partner with or what impact initiatives to prioritise. Impact groups must also produce their own reporting in order to assess how much they have accomplished over time and where they may make improvements.
The general public needs honest reports from businesses dedicated to having a beneficial influence.They require reports that make it very obvious which actions have the greatest impact and how they themselves can make a difference. Finally, transparency in sustainability helps the general public choose businesses that share their values so they may make informed decisions.
SOURCE: HANDPRINT
