Sustainability Reporting or Reporting Sustainably?
In today’s world, sustainability themes are greatly discussed on a day-to-day basis, especially how a business manages natural resources and the economic or social impact of their operations. Hence, according to advocates, it is common sense to no longer optional to ignore the environmental and social impact of your business operations. Prior to now, organizations were mandated to report only financial indicators and performance in line with financial standards. However, regulations and other initiatives are mandating organizations to report their sustainability performance by following recommended guidelines for sustainability reporting such as the Global Reporting Initiative (GRI) — one of the globally accepted standards in sustainability reporting — or telling compelling stories about their activities.
If you have not been formally introduced to the subject matter, sustainability as defined in the Brundtland Report for the World Commission on Environment and Development (1992) as “Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
Accordingly, sustainability reporting discloses an organization’s commitment to a sustainable, inclusive economy communicating their governance, economic, environmental, and societal performance, and goals to ensure sustainable business practices. Some organizations combine their sustainability report as part of an Integrated Report, which combines financial and non-financial parameters while some organizations prepare stand-alone sustainability reports.
The big question therefore is which is more important — compliance to sustainability reporting standards or reporting in any format, albeit sustainably.
Whilst sustainability reporting helps organizations to measure, and consider impact on material or relevant themes, it does not guarantee that they are transparent about challenges, setbacks and potential opportunities as well as risks.
Nonetheless, should an organisation decide to go the compliance route, publishing a sustainability report ensures your organization achieves the following:
• Planning: Here, through the data gathering and inquiry phases of the reporting cycle, organizations are empowered to make better mid and long-term decisions with a keen eye on how they manage risks. It will be easier to measure and track social impact, allocate resources and determine strategies to build a sustainable business when a full-blown process that a sustainability report requires, gives.
• Awareness: For brands conscious about the leagues that they play, opportunities to be enlisted amongst global firms aligned to global sustainability guidelines creates top-of-the-mind awareness and a somewhat ethical reputation. This, experts believe strengthens your organization’s brand positioning both locally and internationally.
• Compliance: Organizations can communicate their impact and report its economic, environmental, social and governance performance according to globally accepted standards. It is believed that compliance has multi-facated benefits some of which are already listed above.
• Trust: This is the fundamental benefit of any reporting process — that the stakeholders can build trust with a brand of interest, engage to ensure their voices are represented and feel included or at least considered in the decision-making processes. This assessment ensures transparency and inclusiveness.
From the benefits highlighted above, it is easy to observe that they also constitute a business case for reporting sustainably. Whilst the standards are ideal, the sophistication of the stakeholders, cost of reporting, outcomes and other factors should be considered in the choice between reporting sustainably in whatever format or publishing standardized sustainability reports every year.
A’Lime Impact Partnerships (AiP) recommends growing a culture of reporting sustainably as the first step to consider when thinking about publishing a sustainability report. This is because most organisations who jump the gun to publish reports benchmarked against international standards often end up with complex documents with ambiguous data that their stakeholders cannot decipher or start conversations around. Our multi-stakeholder reporting approach provides a methodology to engage a wide range of stakeholders at the same time with documents that can be understood. This is why we do not just communicate but ensure our clients are well understood by all stakeholders.
As various organizations continue to engage and innovate, a duty of accountability which reports (both financial and non-financial) to stakeholders represent, must be prioritized in order to open up new opportunities while creating value for the society.
REFERENCES
https://www.globalreporting.org/information/sustainability-reporting/Pages/reporting-benefits.aspx