Regardless of a company’s size or scope of operations, sustainability tracking and reporting are becoming increasingly expected, and for good reason. Incorporating sustainability into daily business practices and annual reporting reduces risk, as well as providing companies with the opportunity to demonstrate commitment and efforts to investors and other stakeholders. As of 2020, 80% of N100 companies are releasing a report on their sustainability performance according to the Global Reporting Initiative.
Sustainability Reporting often take titles such as “ESG Report”, “Impact Report”, or “CSR Report”; and can be aligned with different frameworks such as, GRI, TCFD, UN PRI, IIRC, and SASB. Depending on industry, intent behind disclosure, and stakeholder expectations, sustainability reporting can chameleon to serve any company’s need. Nonetheless, there are key elements that we, at 3R, believe are critical for developing a valuable, powerful, and transparent sustainability report.
A sustainability report should include insights from stakeholders and address the topics they see as most critical. To gain this insight, a materiality assessment should be conducted in the calendar year to form the basis of a report’s content.
While a report should reflect the sustainability impacts of a company’s operations, engagement with stakeholder groups will help the reporting team (or a third-party consultant) with setting actionable goals and ensuring the impact areas in the report align with external demand.
3R can assist in this process by conducting a thorough industry analysis and materiality assessment with an organization’s key stakeholders. A materiality assessment involves the surveying of external and internal stakeholder groups, as well as company leadership to form a matrix of topics that are material, or of top importance, to the company and invested parties.
Content within a sustainability report should be presented in a way that engages the reader. The use of visuals like graphs, charts, and infographics should be done intentionally with the goal of emphasizing important pieces of information.
Photos are another visual element that are key in a sustainability report. Stakeholders are pleased to read about the sustainability initiatives of a company, and photos allow the information to be visualized, thus have a more impactful effect than words alone.
Benchmarking and Progress
The data presented within a report should indicate a starting baseline and any progress made, whether it was progress toward a target or not quite meeting the desired mark. Reporting metrics should be consistent year over year, so stakeholders see the steps a company is taking to meet the goals they have declared. This is also helpful for internal tracking purposes.
Benchmarking allows for stakeholders to understand where a company started and the annual progress made. This gives context to each year’s metrics and goals. These metrics should be supported by narratives that illustrate the actions behind the numeric changes.
Support from Frameworks
Reporting in alignment with a framework like the Global Reporting Index (GRI), Sustainability Accounting Standards Board (SASB), CDP, Task Force on Climate-related Financial Disclosures (TCFD), among others, gives an additional layer of validity to the information. Sustainability reporting framework areas of focus vary depending upon which one is utilized, but generally speaking, these standards cover topics that are applicable to any industry and can be tailored to the degree of information a company can or wishes to disclose in that period.
Lastly, we cannot talk about reporting without mentioning the importance of transparency. The premise behind a report is to increase the degree of transparency of sustainability initiatives between the company and its stakeholders. But transparency is more than sharing the information people want to know, it is doing so in a manner people can trust. Transparency is achieved by supporting your claims with consistent, fact-based evidence. Present your actionable goals and documented efforts in alignment with a framework, then verify and validate this information with a 3rd-party assurance body. This adds an undeniable layer of trustworthiness.
These are just a handful of elements that our team agrees make for a compelling and reputable sustainability report. Still have questions? Still not quite sure how to get started? Contact 3R Sustainability today to collaborate on your next sustainability report. Now is the time to begin your reporting journey or take your reporting to the next level.