The Purpose of Sustainability Reporting

ESG reporting
By the close of 2020, more than 90% of companies on the S&P 500 Index were publishing their sustainability reporting.
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June 15, 2023

More companies are now actively involved in sustainability reporting than any other time in history. By the close of 2020, more than 90% of companies on the S&P 500 Index were publishing their sustainability reporting. For some companies, the purpose of ESG sustainability reporting is compliance, but this is not the only reason. Keep reading as we reveal other purposes of sustainability reporting.

How Does Sustainability Reporting Work?

●        What is ESG Reporting

ESG sustainability reporting is the disclosure of a company’s data about its operations in three key areas, environmental, social, and governance. It enables a company to be transparent about its risks and opportunities so that stakeholders can pick the preferred brands to work with.

The reporting has become more common today as different stakeholders, from governments to investors, realize that organizations have a bigger role to play in advancing the sustainability agenda.

Although the term sustainability has been around for about 30 years, it is only recently that it has received more focus following the discovery that other methods of addressing global concerns were not working (find your ESG consultant here). For example, some companies did voluntary corporate social responsibility reporting often engaged in greenwashing, which misled the stakeholders.

●        How Exactly Does Sustainability Reporting Work?

ESG sustainability reporting is a strategic process that a company follows to ensure it identifies key risks and opportunities associated with its operations. It starts with a review of a company’s operations to identify major risks and opportunities for the company. For example, risks associated with manufacturing firms might include waste generation, emissions, and poor working conditions. The reporting process also allows you to identify opportunities, such as increasing productivity, cutting down the cost of production, and improving the quality of product. Then, you follow these steps:

(i)        Engage stakeholders to establish what their preferences on ESG reporting are. This is crucial because your targeted stakeholders might be interested in something different from what you want, such as seeing the company focus on reducing pollution.

(ii)      If you are okay with the process, go ahead and guide it or designate it to a specific team in your organization. For large organizations, it will be a good idea to work with an expert to achieve the purpose of ESG reporting

(iii)    Do a materiality assessment to determine the areas to target (these should be the topics with greater impacts)

(iv)    Make sure to identify a good reporting framework such as SASB (Sustainability Accounting Standards Board) or GRI (Global Reporting Initiative) to help you with data gathering. Although the bulk of data gathering will happen after installing your preferred strategy, it is important to start gathering information from the moment you make the decision to adopt sustainability reporting

(v)      Develop a good strategy for addressing the issues identified during assessment. Particularly, you should craft a detailed plan with key performance indicators to guide the process. All about SBTI on this article.

(vi)    Generate your report based on the selected reporting framework and timeframe. Remember to make the report as clear and concise as possible. Even before publishing the report, try to understand what was not achieved and factor it in the next reporting cycle.

(vii)  Publish the report and notify stakeholders to read it and make their decisions about the company. Because you had engaged them in the beginning, they are likely to be waiting.

The corporate sustainability report you generate should act as the phase for the next reporting cycle. Therefore, you might want to build on what you did for greater impact or target another area.

The Purpose of Sustainability Reporting

There are many purposes why you can engage in sustainability reporting, and we are going to highlight the main ones:

●        Improving Productivity of Your Facility

As a company manager, you have a responsibility to see the enterprise grow and become more successful. You can achieve this by adopting sustainability reporting through activities such as enhancing the efficiency of machinery through improved maintenance, adoption of new technology, and the use of new equipment. Other methods that can help to improve productivity include staff training and product redesign.

●        Improving Morale of Staff

The employees of your organization are very important in ESG sustainability reporting efforts because they execute the policies from top leadership. Therefore, improving staff morale is a crucial purpose of sustainability reporting, and you can achieve it through a number of activities.

For example, you can focus on staff training to improve their skills, expand their insurance cover to include their dependents, and offer competitive remuneration.

Again, you should provide the employees with a clear path for career progression. With motivated staff, you are sure of greater connection and commitment to your company.

●        Helping Address the Global Challenges

This purpose of sustainability reporting should always be at the top of the list because the challenges facing the globe are many and need to be addressed urgently. Good examples of these challenges include loss of biodiversity, global warming and hunger. Cutting down emissions and pollution from your facility will go a long way to addressing global warming and the loss of biodiversity. 

Remember that you can also support other organizations or groups, such as those involved in conserving tropical forests, to promote biodiversity habitat. If you opt to support other groups, make sure the efforts from your firm are quantifiable for stakeholders to make the right decisions.

●        Supporting Equity and Justice on Society

How do you feel when you see people, perhaps close to your enterprise or other parts of the globe, ravaged by war or hunger? Well, one purpose of sustainability reporting is to address these challenges. Some key activities that can go towards addressing these problems include supporting global initiatives that seek to address issues of refugees, hunger, and social justice.

You could also directly support selective government initiatives, such as the building of schools and strengthening justice systems.

No matter the purpose of sustainability reporting, know that it is only achievable if you have the right sustainability management software. It makes it easy to understand the process and follow the right process. You can even automate data gathering and make the information generated by the program an important component in defining your strategy.

Visit to learn more about ESG sustainability reporting and the best program.

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