The ball is rolling fast, and every business, sooner or later, will need to adopt sustainability reporting in its system. Yes, sustainability reporting. This is a process of disclosure that is designed to ensure that business operations are making positive environment, social, and governance (ESG) impacts.
Indeed, the process has already started because a lot of organizations and new laws are now focused on promoting sustainability. One of these is the new Taxonomy Regulation, which is intended to help stakeholders easily determine what activities and levels are considered sustainable.
This post digs deeper into the concept of sustainability reporting to help you establish the value that it can bring to your organization. In addition to the value of sustainability reporting, we will also highlight why you need to have the Best environmental risk management software.
A Brief Look at the Sustainability Reporting Process
Sustainability reporting is a process with its roots in the UN Conference on Environment and Development (UNICED) when people started to appreciate that the two are, for sure, inseparable. Sustainability reporting is the process of disclosing and informing stakeholders about the efforts for sustainability. The notable thing is that it is systematic, meaning that the results need to be correctly linked to the selected actions.
To get the highest value of sustainability reporting, you need to adhere to the defined process. Indeed, this is why most companies that previously used to prepare corporate social responsibility reporting (CSR), which was a very good effort, had to change to align the operations with ESG standards.
The sustainability report that you generate at the end of the reporting cycle will come in handy to help stakeholders decide to buy your products, invest in your company, or even become part of the brand.
The process of reporting is guided by ESG principles, including materiality, reliability, and verifiability. Once you understand the principles, follow these steps:
- Comprehensive company analysis to help determine the key risks and opportunities.
- Do a materiality assessment, which helps to determine the reporting topics or areas of focus. Also, you need to look for the best sustainability software.
- Develop a clear strategy for sustainability reporting.
- Implement the strategy and gather data that will be used to prepare the report.
- Create your report and publish it so that stakeholders can read, compare, and follow back to make their decisions.
- Set new targets, focuses, and strategies for the next reporting phase.
A Closer Look at the Value of Sustainability Reporting for Your Company
The biggest value of sustainability reporting is that it allows better understanding of key risks and opportunities of a company. Because the first step involves reviewing the company’s position, you can appreciate what opportunities your firm has for fast growth and success.
All about the climate reporting here.
For example, installing new equipment to reduce emissions comes with opportunities to cut the cost of wastes and increase production. Here are other values to expect for your company:
● Helps to Demonstrate Credibility
As we demonstrated at the start of this post, stakeholders out there are looking for companies that are credible so that they can associate with them. They want to feel that by buying your products or investing in the company, they are helping to make the globe a better place. For example, customers are becoming quick in calling out companies that are not focused on sustainability. You can imagine the damage that such social media shouts can do because most customers might be online. So, when you roll out programs and strategies for sustainability, what you demonstrate is credibility, and most customers and investors will be there to support your brand. That might be all you need to triple sales and profits.
● Money-Saving Opportunities
For most people, thoughts of installing new sustainability reporting initiatives is an additional cost that is likely to overburden the company. Well, that is not true. If you look at it from the short term, the cost of buying new machines or training staff might look high, but what about the long term.
The new machinery will help to increase productivity, automation might allow you to reduce the number of workers, and product quality will be better. In the long term, you will actually be cutting costs but increasing profits.
From Hong Kong to the US, businesses are guided by a list of clearly set rules that must be followed at all times. Most regulatory authorities are adding sustainability reporting into their rules. Therefore, one value of sustainability reporting is that you will be compliant. Let’s take the example of the Hong Kong Stock Exchange (HKEX).
Starting from July 1, 2020, Hong Kong Stock Exchange (HKEX) introduced the ESG reporting rules for all listed firms. Therefore, preparing ESG reports in line with HKEX guidelines can help you avoid getting delisted from the exchange. Other exchanges, such as London Stock Exchange (LSE) and New York Stock Exchange (NYSE), also have strict requirements for sustainability reporting.
● You Contribute Towards Making the Globe a Better Place
There is nothing as enjoyable as knowing that your company is part of the global initiative working towards building a better globe for all. This value of sustainability reporting is making more parties want to be involved in addressing the global ills. Let's put it this way.
At the current rate of planet destruction, future generations are likely to miss the thrill we have from present-day species. If the snow leopard, bears, and lions get extinct, generations that will come 500 years from today will only read about them in books. You do not want that, right? Therefore, start sustainability reporting right away to be part of this noble initiative.
We have only listed a few of the benefits that come with sustainability reporting. The value of sustainability extends even through the supply chain.
To achieve this value, make sure to identify and work with the best environmental software. A good program makes the process of reporting easy, reliable and professional. You are also sure of top-notch data security for your organization. Visit Diginex.com for the best sustainability management programs and assistance with ESG reporting.