AN OVERVIEW OF SUSTAINABILITY REPORTING
Traditionally, corporate organizations provide statutory financial disclosures and annual reports to their shareholders. For a shareholder, the AGM is the reporting card of the organization, and they get to see the performance and how much they will receive as dividends. Today, we are in the era of non-financial disclosures. More often than not, organizations exact negative externalities on the shared commons, hence the increasing call for non-financial reporting.
If you disclose 3Bn in profit but create air pollution, reducing the quality of life? Are you doing well? The actual financial performance has to internalize that negative externalities. These increasing call for corporate accountability and transparency has spurned organizations to start reporting their impacts on environmental and social issues.
According to GRI, “A sustainability report is published by a company or organization about the economic, environmental, and social impacts caused by its everyday activities. A sustainability report also presents the organization’s values and governance model and demonstrates the link between its strategy and its commitment to a sustainable global economy.”
In other words, the Bolton College Center for Corporate Sustainability defined a sustainability report as the disclosure and communication of environmental, social, and governance (ESG) goals and a company’s progress towards them. The benefits of sustainability reporting include improved corporate reputation, consumer confidence, increased innovation, and even improvement in risk management.
Why Sustainability Reporting?
A sustainability report is like a report card showing the organization’s performance, targets, and commitment. It speaks to different stakeholders and provides information to inform decisions if scripted correctly. If, as an organization, you wish to communicate your progress to all stakeholders, then a sustainability report is the way to go. In other words, it improves stakeholder and investor confidence. Furthermore, it provides an excellent avenue to brag about the organization’s social responsibility. If your organization has done fantastic work in corporate social investment, then a sustainability report is a perfect way to connect with stakeholders and consolidate the license to operate. A sustainability report is also a tool for investors. It provides information on the organization’s material topics and how it manages the risks and opportunities.
What are the drivers of sustainability reporting?
Some of the drivers of sustainability report include:
- Increasing need for corporate transparency and accountability
- Meeting investors and legal requirements
- Shift to stakeholder capitalism
- Conduit for capital
- Legal Requirements
What does the scripting process entail?
The scripting process involves determining the scope and boundaries, identifying the reporting framework, data collection, and stakeholder engagements, analysis, and report writing. It is a delicate act of presenting the data, vision, and strategy into a storyline that speaks to the core of the organization.
At Parallelpoint Consult, we are well-equipped to help your organization script a befitting sustainability report.
I will end this with this note- What drives you as a stakeholder? We all have a stake either as a customer or in our environment.
If you need information about an organization, look no further than a sustainability report. This article has provided a brief overview of the sustainability reporting process; if you have questions, kindly get in touch with us at Parallelpoint Consult.
We will be glad to support your sustainability journey.