Think of the most important thing that you need to do to take your firm to the next level. Well, you might consider a number of things, from marketing to raising additional capital. However, the efforts will not be complete until you get it right on ESG sustainability reporting. So, what exactly is sustainability reporting? How does it work? Keep reading as we delve deeper into the concept of sustainability reporting to reveal the core fundamentals that make it good and complete.
A Closer Look at Sustainability Reporting
Sustainability reporting is an emerging concept, which involves disclosing and communicating a company's impacts in three core areas; environment, social, and governance. It climaxes with the publishing of the report for stakeholders so that they can make the right decisions about the company. If your business is involved in responsible production, stakeholders will want to stick with you, injecting more capital or buying your products.
While the ultimate goal is creating a report that stakeholders can act on, it is important to put more focus on making sustainability part of the organization's strategy. This means that if you were to look at the sustainability of your enterprise in the absence of the report, it would still make your firm shine. For example, adopting clean energy and improving efficiency will come in handy in helping your company keep the cost of production low and enhance production. These benefits would still grow your firm to the next level. However, you have a reason to adopt ESG reporting because it comes with a lot more benefits, including:
● Helps to build a stronger brand.
● Cuts down the cost of production.
● Helps your company to identify opportunities and strategies on how to cut down risks.
● An excellent way to sustain growth and profitability.
● Can help you to strengthen your brand.
Fundamentals of Good Sustainability Reporting in Business
Here are the main fundamentals to consider for your sustainability reporting to tick right and win you the needed support from stakeholders.
Stakeholder Engagement
As we indicated earlier, your sustainability reporting should be directed at stakeholders. You should rope them into the process when doing a review of the company processes at the start of the process. By asking stakeholders what they prefer focused on, you can identify the key topics to build on for the sustainability report. When you combine their preferences with materiality assessment, your company will be able to narrow down to areas with the greatest impacts.
Engaging the stakeholders also helps you set the goals not just for the ESG reporting process but also for the company's operations. If your company targets listing in exchanges such as HKEX, stakeholders will also tell you what to target in the long term. Remember to build on this engagement to strengthen the company’s brand in all areas, from social media to partnerships.
Support from Sustainability Frameworks
To give your reporting a higher layer of validity, make sure it is supported by a globally accredited framework. Here, you are free to select the most preferred framework depending on your company and niche. For example, the Task Force on Climate-related Financial Disclosures (TCFD) is a good pick for companies that want to focus more on climate. However, Global Reporting Initiative (GRI) can work for your organization no matter its size or niche. Other frameworks to consider are the Sustainability Accounting Standards Board (SASB) framework and the Carbon Disclosure Project (CDP).
Transparency
Lastly, we cannot talk about sustainability reporting and its benefits without highlighting the importance of transparency. Your stakeholders want to look at the company's efforts and trust the information you provide. The reporting topics, the goals, and the results should showcase your mission to transform not just the operations but the globe. To achieve this, you need to ensure that the information is verifiable, easy to read, and reproducible.
As you can see, sustainability reporting is an important process for your company and it should be built on the fundamentals we have listed above. To ensure you get it right on sustainability reporting, make sure to also have the right environmental management software. Reach out to Diginex.com to learn more about ESG reporting, get technical support, and pick the best software.
The United Nations put forth a new of set of 17 universal goals, known as “Sustainable Development Goals (SDGs)” to address the environmental, social and economic challenges across the globe, which was adopted by 193 countries of UN General Assembly in 2015.
These SDGs were built on the Millennium Development Goals (MDGs), which was started as a global effort to reduce extreme poverty, child mortality, HIV/AIDS and other diseases, etc.
In addition to MDGs, the SDGs also include issues such as, natural resource management, sustainable consumption and production, effective institutions, good governance, the rule of law and peaceful societies.
All the countries have a shared responsibility towards achieving the SDGs’ target by 2030 and have a significant role to play locally, nationally as well as globally.
Since the adoption of the SDGs, there have been many positive initiatives.
Many countries have started incorporating the goals into their national budgets, plans/strategies and have set up coordinating structures for coherent implementation of goals across the sectors.
August 27, 2019: Global logistics provider Agility has strengthened its commitment to a sustainable future with an investment of $18 million in green supply chain technologies.
Agility Ventures has made green technologies one of its four core investment areas.
To achieve this, it is implementing renewable energy pilots in large facilities across the world and building to green standards as it adds over 3,00,000 square metres of facilities to its portfolio of warehousing and light industrial facilities across the Middle East and Africa.
The company is committed to adopt science-based targets for greenhouse gas emissions reduction and achieved third-party certification for its shipment emissions reporting.
"Green technology is a major focus of our investment strategy, and we’re always on the lookout for dynamic new businesses that can revolutionise the supply chain to help protect the planet.
Hyliion is a hybrid technology trucking industry that reduces fuel consumption and corresponding emissions by 30 percent.
The advantages of Sustainability reporting are that it makes sure organizations consider their effect on sustainability issues, and permits crystal-clear solutions to risk, and shows the opportunities they have.
In this manner, an organization builds faith among one another which in turn influences the bottom line.
Sustainability reporting may have advantages for a firm if used efficiently like increase stakeholder's trust, risk management technique better decision making, and improves operational efficiency.Consultivo has more than ten years of experience in sustainability and corporate social responsibility.Consultivo comes up with free reporting based on a risk management structure acquire by financial institutions.
Corporate legacy has created much of the climate issues we are facing today.
For far too long, companies have been able to operate without levels of accountability.
This has brought about the devastating social and environmental damages we are seeing more than ever before.It is now more necessary than ever for corporations to be held accountable for more than mere financial performance.
Consumers are increasingly no longer interested in supporting companies that are only out for their own profit margins.Companies are also already coming up against regulatory changes, externality taxes and higher demands on corporate responsibility and transparency.
As such stakeholders and investors are looking for the same level of sustainable alignment.Why is sustainability reporting important?It helps to track environmental, social and governance (ESG) performance which gives businesses a better understanding of where they need to improveIt promotes transparency and accountability with customer bases and stakeholders, which can also assist in building trust in the brand in questionIt opens doorways for optimization in sustainable development, in turn changing companies and businesses into tools to positively impact our worldIt communicates to stakeholders and investors that a corporation has intentions for long term sustainable progressIt ensures that the environmental, social and governance (ESG) gains are strengthened and intentionally pursuedIt incentivises better practices by rewarding the companies that are performing strongly on corporate sustainability inclusionBy making sustainability a priority, companies can actually avert potential financial risk.
According to the World Economic Forum Global Risks Report released in 2018, almost half of all significant business risks are environmental.
