One of the main requirements for any organization to operate today is sustainability reporting. This is the process of disclosure of a company’s information on its environmental, social, and governance impacts. Far from being just a report, sustainability reporting is a conscious process that touches every part of a company. As we will highlight shortly, it starts with a comprehensive company evaluation and culminates with the creation of a sustainability report for stakeholders.
Although corporate sustainability reporting comes with some costs, such as buying new equipment and the need for staff training, it opens doors to a long list of benefits. In this post, we are going to highlight these benefits to help you make the big decision about the adoption of sustainability reporting.
Corporate sustainability reporting works by providing stakeholders with sustainability information so that they can make decisions about working with your organization. For stakeholders, the sustainability report they get at the end of a reporting phase helps them gauge the company's responsibility and decide whether to buy, invest, or work with it. For example, investors coming to NASDAQ or HKEX will first want to check the sustainability report of the company of interest to understand a number of things, including:
● Commitment to help make the company a better place
● Not engaging in activities that are harmful to the environment
● Using responsible production methods
● Developing high-quality products
To prepare your corporate sustainability report, you must strictly follow the reporting principles. The most notable of these principles is accuracy. This means that the information you capture in the sustainability report should be correct to help stakeholders make the right judgment of your firm. Other principles include materiality, continuity, and verifiability.
In addition to the principles, you also need to have the right corporate sustainability reporting framework. These guidelines help you understand the standards and follow the right process when reporting different aspects. Here are the main reporting frameworks that you should consider:
● Global Reporting Initiative (GRI) Reporting Framework
● The Sustainability Accounting Standards Board (SASB) Framework
● The Task Force on Climate-related Financial Disclosures (TCFD)
● Carbon Disclosure Project (CDP)
● Streamlined Energy and Carbon Reporting (SERC)
Now that we have looked at the main principles and frameworks that you can deploy for corporate sustainability reporting, let’s look at the main benefits to anticipate.
The process of corporate sustainability reporting is always targeted at helping to promote deeper connections between companies and their stakeholders. At the start of the reporting process, you should identify and engage stakeholders to ask them what they want to see the company do. This attachment might be all that you need to convince them to buy or inject more capital to grow the organization. It will also come in handy to help build a strong brand, a crucial attribute in overcoming competition.
When the COVID-19 pandemic struck in 2020, most brands were caught off-guard. Indeed, it is sad that the ruthless pandemic has knocked down a significant percentage of them. One way of dealing with disasters is adopting high levels of sustainability. When such disasters strike, the attachment you have with clients will make them stick around. Customers will not walk away, while investors will not want to let go because they know the brand’s potential.
The lovely thing about sustainability reporting is that most of the challenges will have been pre-detected and corrective measures installed. For example, the Hong Kong Stock Exchange (HKEX) requires all its listed firms to create reports anticipating future challenges and how to address them. Therefore, your firm is likely to be prepared and handle disasters more effectively.
As the negative impacts of global warming and other challenges facing the globe become evident, governments and regulatory authorities are not taking chances on their mitigation. They are now requiring companies to provide comprehensive reports on sustainability. In the UK, the government has indicated that all companies will be required to provide sustainability reports. Therefore, your focus on sustainability reporting will come in handy to help with compliance.
Corporate sustainability reporting is an important process, and you can count on it to take your company to the next level. The benefits we have listed in this post are only a few of what to anticipate. Remember that in addition to having the right corporate sustainability reporting framework, you also require good sustainability management software. The program can help you to cut down costs associated with ESG sustainability reporting and simplify the process. Visit Diginex.com today to talk with sustainability professionals, learn more about sustainability reporting and select the best program.
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