6 steps to successful sustainability reporting
Making your ESG rating go up comes down to how well you start your sustainability reporting.
The proverbial spotlight is shining on sustainability reporting – and businesses can feel the heat. With its potential to increase investor support and instill additional brand confidence in customers, effectively measuring sustainability efforts offers businesses great gains. But only if they get it right. Whether your company is already engaged in sustainability reporting or plans to be in the future, be sure the process brings real value to your business with these 6 steps to success.
1. Lock in your C-level: Corporate commitment is key
The first, and most important, step is to ensure commitment from your corporate team. This means not only getting executives’ OK but also enlisting their help to get everyone else on board. To gain corporate commitment, it’s crucial that this group first understands the benefits of their engagement. To do so, they’ll need to be aware of environmental, social, and governance (ESG) issues – at hand and how well your company shapes up against them. One of the most effective ways to raise awareness within your exec team is to offer them training on Sustainability or Corporate Social Responsibility issues.
Along with a promise to prioritize certain sustainability goals, corporate must exercise its power to equip the business with what it needs to achieve them. For instance, a company can aim to reduce carbon emissions within a certain time period, but it can only make true progress if the commitment is backed by concrete investment in refitting or rethinking their operations.
2. Assemble a dedicated sustainability reporting team
Pull together a dedicated team to manage the entire reporting process. This team will be responsible for planning and following up on all the activities linked to sustainability reporting. These include communicating the sustainability strategy, collecting the information, and ensuring that they are effectively shared with all concerned parties.
The team must be able to work across different internal departments as well as liaise with external stakeholders. In some cases, the team will need to customize sustainability reporting for its stakeholders, providing tailored information specific to their needs.
3. Start off strong: Choosing the right framework for sustainability reporting
There are many reporting frameworks you can leverage to build your company’s reports, such as the Global Reporting Initiative (GRI), International Integrated Reporting Council (IIRC), and the United Nations Global Compact.
When choosing a model for your reports, keep in mind that each of these reporting frameworks addresses different stakeholders. For example, the IICR is more targeted to capital providers and investors while the United Nations Global Compact structures the information for a wider audience. Additionally, in some cases, such as the GRI, you can select from multiple reporting options, such as the core part or the comprehensive report.
4. Engage your stakeholders to enhance your outlook
For both setting objectives and measuring them, you need a clear view of what topics are important for your business. This requires clearly identifying your stakeholders, selecting the most relevant, and actively engaging with them.
When identifying which stakeholders to engage with, remember to stay realistic by focusing on relevancy. No company can afford to be in contact with and respond to every single stakeholder in its scope. Instead, narrow your focus to parties with whom your company interacts closely.
Then connect with them on how you can do better. Regularly discussing ESG issues, your stakeholders’ needs, and your areas of opportunity to improve your impact gives your team an exhaustive view of these material topics. Even after your strategy is in place, this type of collaboration will also help to guide your sustainability reporting, offering more insights into how your company is responding to stakeholder needs.
5. Know where you’re going: Set goals and targets for your sustainability reporting
Like for any area of your business, sustainability goals should be realistic and achievable. As such, your company must be able to provide qualitative and quantitative information not only to accurately measure progress but also to clearly communicate it to those that receive the report. The more context you can give to your baseline, the better readers can understand the report. And the more credible the results will be. Also, be careful not to overload your company with too many goals at once. Instead aim for only a few targets to ensure that your teams can maintain momentum to make real progress.
6. Step up your sustainability reporting through third-party assurance
Partners can help to underline your efforts and enhance the end results. Review by a third-party gives sustainability reporting more credibility, validating the disclosed information and mitigating potential risks should any of it be deemed inaccurate. Another advantage of third-party review is the “external eye effect,” which can offer new perspectives on your company’s progress and shed light on additional areas that can be improved.
There are many accredited consultancy firms that can provide this service, adhering to established international standards for their review. Among the most widely used of these third-party assurance standards are the AA1000 Assurance Standard (AA1000AS) and the international Standard on Assurance Engagement (ISAE3000).
Successful sustainability reporting shows off your hard work
Showcase your efforts with reports that point to true progress. Done effectively, sustainability reporting is useful for and meaningful to everyone involved, benefiting both companies and their stakeholders. This information makes a difference in your market, helping you stand out from competitors. On the stakeholder side, clear measurement of your initiatives enables them to make an informed choice. That could mean consumers choosing a product or investors deciding on a company. Follow the steps outlined above to take a closer look at what your company is already doing, or plans to do, and to shape your reporting for optimal success in the future.