Sustainability reporting is now mandatory in many countries and industries, making sustainability an inevitable responsibility.
Creating the report was a satisfying and exciting experience, but it was not easy. Reflecting on our work to make our inaugural report, we discovered a few significant insights that will guide future reports and our sustainable path.
What is a sustainability report, exactly? More importantly, how can you make an efficient and helpful one? This post will address these concerns and walk you through creating a sustainability report.
Throughout this article, you will learn why these kinds of reports are so important in today's business environment and the critical components of each one.
What is a Sustainability Report?
A sustainability report informs the public about the effects of an organization's operations on the environment, the economy, and society.
A sustainability report helps the business show its commitment to these concerns, track its development, and establish long-term sustainability goals. Companies must present sustainability reports to consumers, staff, shareholders, regulators, and the general public.
It gives these stakeholders the knowledge they need to comprehend the company's sustainability policies and procedures, evaluate its performance and risk in these areas, and make their judgments and choices based on this knowledge.
Why Do Companies Produce Sustainability Reports?
Sustainability reporting serves various purposes for your organization, including turnover, KPIs, activities, business vertical, and size. Nonetheless, sustainability reporting for your company has some advantages and disadvantages that won't change. Sustainability reports are often produced by companies even when not legally required. Here are some reasons to create sustainability reports,
- To make credibility with morally conscious clients
- Recruiting green, climate, and sustainable financiers
- To make internal procedures that are more effective
- Conserve certifications with third parties
- Distinguishing companies from rivals
- To make significant, assessable progress on climate change
What details should be included in a sustainability report?
A sustainability report should include several key components, such as
Global sustainability frameworks for consistency and comparability should measure the report. Finally, it should be relevant, significant, and transparent, and it should avoid misleading or incomplete information.
Steps to Create a Sustainability Report
Step 1: An active commitment from senior management
The first and most critical stage is to secure a commitment from your business team. It includes securing CEOs' approval and requesting their assistance getting everyone on board. To acquire corporate commitment, this group must first comprehend the advantages of their involvement.
To do so, they must be aware of the environmental, social, and governance (ESG) challenges at hand and how your organization performs in relation to them. One of the most effective methods to create awareness among your executive team is providing sustainability or corporate social responsibility training.
Step 2: Create a dedicated team for sustainable reporting
Create a dedicated crew to oversee the whole reporting procedure. This team will plan and manage all actions related to sustainability reporting, including outlining the sustainability plan, gathering data, and ensuring it is efficiently distributed to all relevant parties.
The team has to be able to communicate with external stakeholders and collaborate with various internal divisions. The team may occasionally need to provide its stakeholders with customized sustainability reporting that meets their unique demands.
Step 3: Sustainability reporting framework selection
The International Integrated Reporting Council (IIRC), the Global Reporting Initiative (GRI), and the United Nations Global Compact are just a few reporting frameworks you may use to create reports for your business.
When selecting a model for your reports, remember that each reporting framework targets a distinct set of stakeholders. For instance, The United Nations Global Compact is organized for a broader audience, but the IICR is primarily geared toward capital providers and investors. Furthermore, you may choose between different reporting alternatives in some situations, like the GRI, the core portion, or the entire report.
Step 4: Enhance your outlook to engage your stakeholders
A good understanding of the subjects crucial to your company is necessary for both goal-setting and measurement. This calls for precisely identifying your stakeholders, picking the most essential ones, and proactively interacting with them.
Remain practical and prioritize relevant when choosing which stakeholders to interact with. Every stakeholder under its purview is too many for any one organization to afford to communicate with and respond to. Instead, focus only on those parties with whom your business interacts regularly.
Next, discuss how you can improve with them. By regularly addressing green, climate, and sustainable concerns, your stakeholders' demands, and your areas of potential to enhance your impact, your team may gain a comprehensive understanding of these critical themes. This cooperation will support your sustainability reporting after implementing your plan, providing further insights into how your business meets stakeholders' demands.
Step 5: Prepare a sustainability report with goals and targets
Set attainable and realistic objectives for sustainability, just like you would for any other aspect of your organization. Your organization must be able to supply both qualitative and quantitative data to evaluate success and effectively convey it to people who receive the report. Providing more context for your baseline will make it easier for readers to grasp. If you call, the outcomes will be more reliable. Set a limited number of goals to ensure you can keep moving forward and achieve significant progress.
Step 6: Ensure sustainability through third parties
Partners can support you in highlighting your work and improving the final product. By confirming the information provided, a third-party review adds credibility to sustainability reporting and reduces the chances of any false information being discovered later. The "external eye effect," which may provide fresh insights into the advancement of your business and highlight other areas that still need improvement, is another benefit of having a third party evaluate your work.
Finally, the Sustainability Report!
Lastly, the sustainability report embodies transparency in your approach. It outlines your program for the audience. You must justify your report and the reasons behind it for your organization. They can monitor your goals, action plans, measurements, KPIs, and metrics. Every business should embark on this adventure. To achieve excellence in sustainability, you need a systematic approach.
