How Sustainability Reporting Is Helping Your Business
Meta: Do you want to know how a sustainability report is helping your business grow? Let’s discuss them all in this to get a better idea of this.
The definition of business has long crossed the periphery of manufacturing, marketing, selling, and profiteering. Businesses, irrespective of their size and form, must prepare sustainability reporting so that they visualize the wider goals and objectives (economic and corporate social responsibility).
Sustainability has really emanated out of the fear and apprehensions that a business may face of non-adherence to the economic and social, and environmental norms and standards. When you are running a business, you need to take note of sustainability reporting. Wonder how to manage this? Take help from experts like Diginex.com. They will help you out in preparing climate risk reporting.
In this article, we are going to study the importance of sustainability reporting in your organization.
What Is Sustainability Reporting?
According to the idea of the Global Reporting Initiative (GRI), sustainability reporting is impacted by the economy, society, and the environment. This reporting is a kind of commitment of the company to taking bold steps to attain sustainability in the long run. The report helps organizations understand the do’s and don’ts they need to follow so as to gain a better understanding of the standing of the company on the pedestal of Society, Economy, and Environment.
Key Elements Of Sustainability Reporting
Let’s start with a fact. As per a 2020 study, around 80% of the N100 companies are releasing their sustainability report. Definitely, you would like your business to be on the list.
There are certain key elements that form the overall structure and build-up of the entire idea.
The end of all of a business is extracting profits. But at the same time, you need to understand how to take care of your society; take firm stands on environmental protection. So let’s see the main elements here.
Your report must have an impact on the activities that you take part in on a daily basis. This primarily means the company’s operation. A company is run by stakeholders like Owners, partners, Leaders and management, employees, and government. The report must set actionable goals and objectives.
Content must be designed in such a manner that it becomes easy for the readers. The best way to make the report legible is by inserting infographics and charts. The report must please the stakeholders.
Benchmark And Progress
Remember, different stakeholders have different goals. Benchmarking and progress are helpful for meeting the aims and objectives. If your company identifies and understands the requirements, it becomes easy to standardize the internal processes.
Support From Frameworks
When you are engaged in sustainability reporting, your report must comply with the Global Reporting Index (GRI), Sustainability Accounting & Standards Board (SASB) and Task Force on the Climate-related Financial Disclosures.
How They Help In Business
Now comes the most important section, which is, how sustainability reports help in business. Let’s try to understand this.
1. Key To Decision Making
Sustainability Reports in Business is intended only to help business decision-making. A business collects data to understand certain situations, be it acquisition, internal process, liaison between the departments, quantity of production, understanding the changing taste of the consumer, and finally, sales. Complying with frameworks like Global Reporting Index (GRI) and Sustainability Accounting Standards Board (SASB) helps address the needs of your company.
2. Better Risk Management
Speaking in general terms, there is some key risk that is common for all business:
Security and fraud risks.
- Compliance risk.
- Operational risk.
- Financial risks.
- Reputational risks.
- Social and Environment risks.
Well-chalked-out sustainability not only helps in identifying the Traditional risks but also environmental risks that manifest over the long term.
3. Understanding The Responsibilities
As mentioned already, the ultimate objective of business has gone much beyond profits. CSR, or Corporate Social Responsibility, is one area that is constantly enforced by this report.
For example, we find in the sustainability report 2020 of Ford that they chalked out plans to collaborate with GE Healthcare to prepare more than 50000 Model A-E ventilators designed to operate air pressure. The Chihuahua Engine Plant in Mexico produced 100,0000 face shields.
Thus, sustainability reports mention all these, and they definitely help identify the core responsibilities of the company.
4. Improvement Of Operational Efficiency
A few days back, it was believed that profits and sustainability are mutually exclusive. These kinds of conventional ideas have been reversed completely. It is disclosed from the financial report of different companies that the stakeholders have underscored quite a lot on the non-financial disclosures.
For example, surveys revealed that the recession companies that displayed a commitment to sustainability practices performed well in the financial markets. Had they not proposed them in the sustainability reports, things could have been completely different for them. It is clear that the sustainability measures motivated the workforce and regained trust in the consumers.
In order to conclude, it could be said that sustainability reports have gained importance with the passage of time.
These reports have not only developed awareness of the company on things beyond profits but also made them much more responsible towards wider society and the environment.