A Sustainability Report is a report published by a company about the economic, environmental and social impacts caused by its everyday activities. It presents the company’s values and governance model and demonstrates the connection between its strategy and its commitment to a viable global economy. The most widely accepted standard for Sustainability Reporting around the world is the Global Reporting Initiative (GRI). It is a reporting system that is accepted worldwide with an extensive field of practice.
Sustainability Reporting has two main goals:
- Documentation and assessment of a company’s or an organization’s environmental and social impact
- Communication of a company’s sustainability efforts and progress to stakeholders
Sustainability Reporting typically focuses on comparing performance in the current year to the previous year and comparing it to specific goals and targets. It can also include a longer-term focus and comparisons to other companies in similar industries and in the same geographic areas.
In other words, the Sustainability Report is an asset that a company can use to share its non-financial performance and demonstrate its viability. The goal of a Sustainability Report is to recognize the priorities of the company that matter to both the company and its stakeholders, report the work it carries out in line with these priorities and make such reporting public so that it can be compared with previous reports. One of the most significant purposes of the report is to show that the company is viable and that it makes progress in the relevant fields
When a company decides to proceed with a Sustainability report, it must establish a structure for the provision of environmental data (such as energy consumption, emissions, amount of savings) and social data (such as educational and gender criteria for employees). The collection of such data is crucial for the company to review and assess its own performance. The Report also includes the design and establishment of a holistic management system structure which defines processes relevant to the company’s operations, allows for communication among all processes, systematically provides data and ensures periodic data flow.
The impact of a Sustainability Report has on investor relations, market behavior and financial success is linked to the fact that nearly 80% of the world’s largest companies use Global Reporting Initiative (GRI) standards as an opportunity to build business resilience, and enhance transparency and partnership. Putting Sustainability at the forefront of strategic business plans and executing on corporate sustainability objectives offers numerous potential benefits, from the financial to the reputational and beyond. Sustainability shapes a business’ future operating environment, its corporate perception and reputation, while at the same time it bridges risk management with resilience and efficiency.
The 5 most significant benefits are:
- Greater environmental awareness by reduction in energy usage, waste and pollution
- Reduction in the operating costs of the company
- Meeting customers’ needs
- Improvement of employee engagement and talent acquisition
- Improvement of stakeholder and investor confidence, leading to better quality investments
Sustainability Reporting allows for companies to achieve all of the above and most importantly it leads to the enhancement of credibility, trust, and brand reputation, which result from being transparent about all the environmental, economic and social impact of their business activities.