Key aspects to consider in sustainability reporting
For both businesses and investors, sustainability reporting is becoming increasingly crucial as global awareness of environmental, social and governance (ESG) issues continues to rise. However, although sustainability and ESG reporting is on the rise globally, many companies are still struggling to access accurate data and report on sustainability aspects that are material to their business.
This page is dedicated to sustainability reporting and covers topics such as: Is your sustainability data accessible? How to make sustainability reporting work for your business and how to improve transparency in your sustainability reporting.
Is your sustainability data accessible?
If you’re involved in sustainability reporting, data is arguably at the heart of it all. Many organisations are faced with a lot of data and this is only going to increase. If your data isn’t organised properly or you aren’t able to effectively analyse the data you are collecting, then it is going to be a struggle for you to communicate how you measure up against your goals and strategy. With the right supporting data, it will make it much easier for you to share your stories and successes.
Spreadsheets are the necessary evil of any sustainability professional, offering a required repository for huge volumes of data but for storing it in a complex and lifeless way. Breathing life into this sustainability data and making it talk to you is what organisations are now waking up to and realising the power of their internal big data and why data should be material and robust.
Making data accessible means it has to be easily retrieved, interpreted and acted upon by different organisational stakeholders. A single piece of data can hold a plethora of reporting opportunities and its value varies according to which audience it’s for.
For example, an organisation’s annual electricity consumption is a valuable environmental KPI. However, whereas for an employee it may be communicated at a granular office level as part of a behaviour change competition related to energy savings, for suppliers, information about their contribution to the overall impact is much more valuable. Clients and consumers may care more about the environmental (e.g. CO₂, resources or natural capital) impacts of the energy consumed and shareholders/investors might want to know whether a green electricity supplier or renewable energy certificate (REC) is associated and being reported to frameworks such as CDP.
Sustainability data is used to tell stories, set targets and report trends. But many aspects can affect your sustainability strategy. Being aware of these factors and including them in your plan, will help you build a successful sustainability strategy.
How do you make sustainability reporting work for your business?
1– Have the right data to measure the success of your sustainability plans
If you’re not measuring what is happening, then it’s hard to know if you’re meeting your goals. To support your overall sustainability strategy, you need a clear idea of what is going on throughout the organisation, regardless of your size or geography.
In short, this means:
- Deciding which data sets you to need to monitor and record
- Having a robust process in place to collect this data across the organisation consistently
2 – Support and commitment of senior management
Successful sustainability strategies often rely on support from senior management. This can manifest itself in several ways, including:
- Providing the resource and budget to help turn plans into a reality
- Embedding sustainability into the company’s overall strategy, so that it is not just seen as an optional extra
- A confirmed commitment by the company leadership to sustainability
3– Flexibility within the organisation
When it comes to sustainability strategy, knowledge is often held with a limited number of individuals. This isn’t necessarily a problem. But, as companies grow and employees change, this can lead to knowledge being diluted.
Having a broader understanding of sustainability processes and strategy within the organisation helps to make the organisation more resilient to change. It also means that time isn’t wasted having to recreate the wheel if key individuals leave the company.
4 – Embed sustainability into the overall business strategy
Being able to entrench your sustainability strategy within the business strategy and values is an important hurdle to overcome. Failure to do so can limit the effectiveness of your strategy. If it is not perceived as business-critical, then it can become more difficult to secure the necessary budget and support to make your strategy a success. There are clear tangible and intangible values that can be improved with a successful sustainability strategy, including:
- Brand value and positioning
- Improved revenue generation
- Risk reduction
- Cost reduction
Communicating these benefits to internal and external stakeholders is a key factor to embedding sustainability into the organisation. Also, having a clear vision for your sustainability strategy will give coherence and direction to the work you are doing.
It is tempting when working through a reporting cycle to use it as an opportunity to talk retrospectively about all the work that has happened in the last year. But it is also a chance to consider the opportunities that are arising in your business and review how these will support your sustainability strategy in the year ahead. Use it as a time to review your sustainability strategy, questioning whether it is still the right approach for your organisation.
How to improve transparency in your sustainability reporting
Goals will move you forward. While your strategy will provide you with the approach that you want to take, your goals will give you the primary outcomes that you want to achieve and the timeframe to achieve these. After you have set these goals, share them with the relevant stakeholders. That way it is easy for people to grasp what you want to achieve and help you to direct engagement both internally and externally to the business.
Once your goals are set, you have to decide how you are going to measure against them. How do you get the information you need to be transparent about your progress? How do you communicate this with your stakeholders? The specifics of how you measure and what you measure will depend on the goals you are trying to achieve. But, what is important here, is taking this information and communicating it clearly to your stakeholders.