When the World Summit on Sustainable Development (WSSD) was held in 2002 in South Africa, one of the main outcomes was the call for organizations to embrace ESG sustainability reporting. This is the main framework for communicating sustainability performance and the impact of businesses’ actions.
Although sustainability reporting is an undertaking that comes with some costs, the benefits outstrip them by far. If you improve your company reporting, it will come with more benefits, helping your enterprise to grow rapidly.
This post digs deeper into ESG reporting to help you understand the process and strategies to improve it. Why stick to a few benefits when you can enjoy a lot more?
Aligning ESG Reporting with Your Company’s Financial Reporting Calendar
It is not uncommon to see some companies’ ESG reports that are completely off sync with the financial reports. This creates a major sense of separation between social, environmental, and economic impacts from the company’s operations. The effect is ESG reporting getting shoveled aside or being seen as a cost that can be foregone, but you can avoid this by aligning it with the financial reporting schedule.
Aligning the reporting system with the company financial reporting schedule implies that gathering data becomes easy. For example, take the case of resource allocation for corporate social responsibility activities. When worked on in sync with the financial reporting schedule, it will get prioritized in line with preset sustainability targets and goals. Also, gathering data will be easy and accurate.
Identify and Address the Impacts of Sustainability Reporting
One fact that you need to appreciate is that ESG sustainability reporting comes with some financial implications. Therefore, simply highlighting the benefits without indicating the cost will be giving just one side of the story. For example, the new machinery you installed in the production line can help to increase the efficiency in the production line and cut the overall cost, but first, you need to think about the costs.
One of the principles of ESG data software is transparency and accuracy, which implies that you capture the right data and present it well. These impacts, be they financial or resistance to change by staff, can help rethink the strategies for success. You might want to start with staff training to change the attitude about sustainability and then extend to more expensive applications. Remember that sustainability reporting will be more beneficial in the long term, so stay focused on mitigating the negative effects.
Bring in Other Stakeholders to Achieve the Goals of Sustainability
The process of sustainability reporting is aimed at helping companies discover their potential and work towards achieving it while making positive social, economic, and environmental impacts. The truth is that you can only achieve so much when pursuing these objectives alone. To have a bigger impact, you should rope in other stakeholders in your businesses.
Consider starting with suppliers of raw materials by asking them also to adopt sustainable production procedures. For example, a manufacturer that uses iron and steel as raw materials might insist on only working with suppliers committed to sustainable mining practices. Then, request managers and investors who share the same goal of making the world a better place also to adopt sustainability reporting. This means that the goal of having a positive impact on the environment and communities will be achieved faster because you will be working together with others.
When planning for sustainability reporting, it is important to think about the concept broadly. Where possible, make sure to get other parties also to adopt the process because the impact will be more compared to working alone. More importantly, you should select the right sustainability management software to help you follow the right procedure and achieve the anticipated results.