Sustainability Management School

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.