With deference to my colleagues in the Southern Hemisphere, I’d like to formally welcome the return of spring! (Rossini, anyone?) After another brutal winter for parts of Europe, the U.S. and Canada, this day already feels long overdue. For our business and many of our clients, spring also represents sustainability reporting season.
Sustainability reporting is entering its season in the sun. An impressive 43% of global CEOs surveyed in a recent study said their companies seek to align sustainability with their overall business goals, mission and values. (This figure rose from 30% in 2012!) External expectations of corporate transparency, as well as internal recognition of new financial opportunities are driving this trend.
Today’s post looks at the emergence of sustainability reporting – who, what, when, where and why – along with an H for good measure to explain how to get started.
The list is growing. More than 7,200 companies already submit to the Global Reporting Initiative The number of companies reporting to CDP eclipsed 5,000 in 2014. And, the European Union has adopted the EED, an energy efficiency scheme for its member states that mandates reporting on energy efficiency measures.
Globally recognized brands we all know embrace sustainability, and for good reason. According to a recent Nielsen study, 55% of global online consumers would pay more for products and services from companies committed to positive social and environmental impact.
Just the facts: These (and other) improvements can apply to companies of any size, not just those with global footprints or brands.
WHAT is sustainability reporting?
Sustainability reporting can take many forms, depending on the goals of the company and local regulations. The United Nations Environment Programme (UNEP) defines sustainability reporting as “…measuring and disclosing sustainability information alongside, or integrated with, companies’ existing reporting practices,” and outlines how they “affect financial, natural and human resources, and how their corporate governance is conducted.”
As sustainability reporting becomes increasingly mainstream, the metrics become more comprehensive. For instance, in 2000, GRI used 96 indicators to assess environmental, social and economic performance. By 2013, that number had grown to 150. And in recent years, the International Integrated Reporting Council has led the charge on integrated reporting as a way to communicate how an organization’s strategy, governance, and performance related to its external environment create value.
Just the facts: Each new sustainability metric that is tracked provides new, fertile ground to assess and improve organizational performance.
WHEN & WHERE do companies report?
The most well-established programs – CDP, GRESB and Dow Jones Sustainability Indices (DJSI) – set specific annual deadlines, which vary by framework, but most occur during the late spring or early summer. GRI doesn’t promote a specific annual deadline, but instead encourages companies to simply get started. In that spirit, GRI and CDP are aligning sustainability reporting guidelines to improve convenience and efficiency, and encourage response.
Regardless of the nuances in programs, applying financial reporting best practices during the process can position any organization to submit to one or multiple programs.
Just the facts: Applying rigor to data collection minimizes data leakage, improves accuracy, builds alignment and enhances accountability.
WHY do companies report?
Many companies undertake sustainability reporting in pursuit of several key benefits, including:
- Improved understanding of risks, opportunities
- Improved corporate reputation
- Improved employee engagement
- Improved efficiency and innovation
- Improved decision-making, goal-setting
Just the facts: Sustainability reporting builds credibility through transparency while improving employee engagement and customer loyalty.
HOW do I get started?
We know 43% of CEOs already align sustainability with their overall business goals. But, what about the other 57%? If they’re not submitting sustainability reports, maybe their first question is how. Start by collecting the data. Accurately and completely. My recent post covers 15 recommendations on data management. Additionally, our whitepaper on data capture and consolidation provides detailed, data-driven action plans for the next few weeks through the next 18 months.
The good news is, it’s not too late to get started. Time is of the essence, but today still sounds like spring. Tomorrow (and every passing day) has a different tune altogether.
For guidance on sustainability reporting or data management, leave a comment below or click here.
Download our whitepaper here. // Read any of my previous posts here.