Corporate legacy has created much of the climate issues we are
facing today. For far too long, companies have been able to operate without
levels of accountability. This has brought about the devastating social and
environmental damages we are seeing more than ever before.
It is now more necessary than ever for corporations to be held
accountable for more than mere financial performance. Consumers are
increasingly no longer interested in supporting companies that are only out for
their own profit margins.
Companies are also already coming up against regulatory
changes, externality taxes and higher demands on corporate responsibility and
transparency. As such stakeholders and investors are looking for the same level
of sustainable alignment.
Why is sustainability
reporting important?
●
It helps to track environmental, social and governance
(ESG) performance which gives businesses a better understanding of where they
need to improve
●
It promotes transparency and accountability with
customer bases and stakeholders, which can also assist in building trust in the
brand in question
●
It opens doorways for optimization in sustainable
development, in turn changing companies and businesses into tools to positively
impact our world
●
It communicates to stakeholders and investors that a
corporation has intentions for long term sustainable progress
●
It ensures that the environmental, social and
governance (ESG) gains are strengthened and intentionally pursued
●
It incentivises better practices by rewarding the
companies that are performing strongly on corporate sustainability inclusion
●
By making sustainability a priority, companies can
actually avert potential financial risk. According to the
World Economic Forum Global Risks Report
released in 2018, almost half of all significant business risks are
environmental.
As a society we cannot improve, prevent and successfully manage
that which we do not completely understand. Just like a neighborhood can’t
accurately curb and assist with crime prevention if the crimes aren’t reported,
so too businesses can not improve themselves if they don’t attempt
participation in the conversation towards sustainable transparency.
Companies that wish to make a genuine impact and experience a
truer definition of value contribution need to utilize the various
sustainability reporting frameworks currently available to their advantage.
Understanding the
different frameworks
According to Greenbiz, a media
and events company that advances the opportunities at the intersection of
business, technology and sustainability, there are five main reporting
frameworks to consider:
●
CDP (Carbon Disclosure Project)
●
DJSI (Dow Jones Sustainability indexes
●
GRI (Global reporting initiative)
●
GRESB (Global Real Estate Sustainability Benchmark)
●
SASB (Sustainability Accounting Standards Board)
Greenbiz also put together this useful graphic on the
comparisons between these different frameworks.
Still, in order for a business to provide the most efficient
feedback, they need to focus on giving material clarity on aspects relevant to
them.
For this the Reporting Exchange is a valuable tool.
The Reporting Exchange is a global knowledge platform and
resource for corporate sustainability reporting. It was established by the
World Business Council for Sustainable Development (WBCSD) in conjunction with
the Climate Disclosure Standards Board and Ecodesk.
Its primary goal is to bring “coherence and clarity to the
global reporting landscape” in what is still currently an emerging and
multi-faceted field of complex requirements.
It levels the playing field by:
·
introducing common language and definitions
·
identifies relationships between requirements
and reporting resources
·
highlights what is relevant to the specific
business model
By understanding that the many frameworks available aren’t
mutually exclusive but rather support each other, companies who focus on the
reporting frameworks that offer material clarity to their unique operations
will provide the most valuable picture of transparency.
The clearer businesses are able to communicate their
sustainability impact in formats relevant to their interested parties the
sooner they will be able to meet business objectives and grow as truly
sustainable companies, and the sooner the collective landscape can benefit,
learn and share on the exchange of experience and amassed knowledge.
