As a Sustainable Development professional, I am all over non-financial reporting, indeed several of my current projects are impact reports and I am Global Reporting Initiative (GRI) trained, but my god, it can be a dry one when done as a needs-must exercise.
Wherever you are with reporting, whether just starting to wrap your head around it or in the middle of the mad rush to finalise one, this article is here to give you pointers on how to make it not just relevant, but a valuable and rewarding development exercise.
Start with the serious stuff – get clear on compliance!
Depending on the size of your business, there have been regulations and initiatives surrounding social and environmental disclosures in place for many years, such as Non-Financial Reporting Directive (NFRD) or Carbon Disclosure Project (CDP). Thanks to the European Green Deal, a bigger shift is on the way with the introduction of the Corporate Sustainability Reporting Directive (CSRD) and resulting European sustainability reporting standards (ESRS) – yes I get as annoyed as you about the alphabet soup!
This legislation will ensure EU based business will need to provide annual disclosures starting with larger companies in Q1 2024 (reporting in 2025) and phasing in listed SME´s in 2026 (reporting in 2027). This Carbon Trust article gives a great overview of CSRD. The Carrot & Sticks website is also an interesting resource to view mandatory and voluntary reporting requirements for countries around the world. This is not an exhaustive list, therefore double check what other disclosure is necessary for your business jurisdiction.
Just two examples are:
Under the NFRD any public interest companies (e.g. banks, insurance or listed companies) with 500+ employees must publish information related to:
- environmental matters
- social matters and treatment of employees
- respect for human rights
- anti-corruption and bribery
- diversity on company boards
2. UK registered companies that have 250+ employees in the UK must disclose gender pay gap information (Gov.uk link). Whilst this has been an obligation in the UK since 2017, the European Parliament is only now working to enforce a similar duty on EU member states, but for employers with 100+ employees.
Find Focus – Create a Scorecard
The topic of sustainability is a beast!
Essentially, the ever evolving list of topics that need to be considered is not a bad thing, but rather shows we are making progress in understanding what it means to be a responsible business. Nevertheless, it is overwhelming. Scorecards are an incredibly helpful tool, both internally and externally, to maintain a clear overview and measure progression.
Typically presented in table format across one or two pages, they provide great summary and structure by grouping impact areas and showing comparison of progress over 2-3 years. Some smaller companies even use scorecards as stand-alone sustainability report.
Finally keep a clear record of when the metrics on your scorecard were defined or revised. As businesses and their markets grow and adapt, certain areas of impact will increase or decrease in relevance and new areas are likely to appear. It is to be expected that scorecards therefore also adapt somewhat over time.
- Create a scorecard
- Allocate ownership of metrics to relevant team members
Make it an Ongoing Group Activity – Form a Team
True to any strategy, responsibility for sustainability cannot be a siloed task of one or two people.
The reason why reporting can feel like such an effort is that it´s often done as a one-time annual scrabble, with a select few people clawing to get information from busy colleagues who have a mental dust sheet over topics that were discussed many months ago.
Getting clear on what your priorities are through speaking to stakeholder groups, conducting a materiality assessment and creating a scorecard requires teamwork. Use the effort that goes into this to your advantage to increase engatement, prove the company´s ongoing commitment to sustainable improvement and break things down into manageable pieces.
Create a sustainability core team and have them meet on a regular basis to assess scorecard area developments and actions needed.
- Set up regular review meetings (ideally monthly – quarterly depending on your size and capacity)
- Check our Sustainability Champions Programme (Link)
Be Honest and Realistic – Present an Truthful Narrative
Any impact report that is overly positive is likely to have its integrity questioned, and rightly so, only the arrogant or ignorant are unaware of their flaws and are unlikely to stand the test of time. Rule 101: Do not see this as a marketing exercise but one of honest reflection that critically looks at the changes your business needs to make in order to gain long-term respect and success.
Stakeholders today, whether customers, employees or investors, expect companies to go through transformations. By being balanced and open about where you are already making progress and where more improvement is needed you building trust which is key to current and future partnerships.
See your sustainability report as an invitation on a journey of continuous improvement, sounds corny, yes, but its what people want to see.
- Do a critical self-check by asking ´What is still needed for further improvement´
- Request constructive criticism from cross-functional colleagues
- Ask for feedback from outside your organisation
Reach out to us via our service page if you are looking for support with your reporting.
You can also check how we help with individual aspects to help lay the foundations for reporting, such as Materiality Assessment workshops.
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