As we celebrate Earth Day 2015, I’d like to discuss one of the topics sweeping the international business agenda: the importance of a corporate sustainability reporting program.
Not many years ago, the international conversation was focused on trying to decide whether or not such reporting practices were “worth it.” Nowadays, corporate sustainability reporting is not only an expected practice in transparency, but also an international business standard for companies operating on a global scale.
Corporate Sustainability Reporting is Becoming a Business Necessity
In 2013, a report called “Carrots and Sticks” looked around the world and found mandatory sustainability reporting policies in place a majority of the time. In most cases, the reporting framework followed guidelines suggested by the Global Reporting Initiative (GRI).
Part of that framework incorporates a company’s supply chain. This includes gathering information on sustainable practices from entities impacting a single entity (suppliers, consultants, contractors, etc.). This top-down reporting system will have a profound positive effect on business interactions, and all but guarantees the widespread adoption of sustainable business practices.
The Cream of the Crop
Last year, we published our first sustainability report, the goal of which was to set a sustainable baseline, share our progress, and continuously expand our commitment in an effort to improve our environmental outcomes. In this very spirit, we also conducted a review of 13 companies’ corporate responsibility commitments and sustainability reports to identify the following best practices.
- Transparency. While the level of transparency should be dictated by the individual company (federal agencies treat transparency differently than publically shared or privately owned companies), most of those who adopted corporate sustainability reporting frameworks decided to incrementally increase their level of transparency every year.
- Stakeholder engagement. The companies with the longest running sustainability reports not only felt responsible for their own footprint, but also those of their communities, suppliers, and consultants.
- Customization. Every organization is different, so the framework should be customized to reflect the uniqueness of a company’s individual corporate structure, industry, clientele, and services.
- Boundaries. In the world of big data, it’s easy to over-report. The best corporate sustainability reports should set boundaries to ensure focused and consistent annual reporting.
More and more entities are adopting sustainability reporting policies because they see how environmental and social performance positively impacts financial performance. At the very least, corporate sustainability reporting is just one way to track how we’re making this world a more enjoyable place to do business.
