9 Tips to Get Started with Sustainability Reporting
Organizations face increasing demand to report on their sustainability performance. Business partners, regulators, investors and other stakeholders require trustworthy non-financial metrics from them. With the upcoming Corporate Sustainability Reporting Directive (CSRD), 48.000 companies in the EU will have to report on sustainability in a uniform way. CSRD will be effective as of 2023. Now is the time to start thinking about creating standard and structured sustainability reports. Follow this nine point checklist to make progress quickly.
- Don’t hesitate. All the information you need to report on is available somewhere within your organisation.
- Reporting is not rocket science. It’s just a big chunk of work. Start soon to be done soon.
- Decide why you want to report. Intrinsic motivation? Doing something good for the world? Are business partners, stakeholders and shareholders demanding a report? Do you need to comply with laws and regulations? Those asking you for a report are also the ones that can tell you what they want to know. If your clients ask you to report on sustainability, they can probably tell you what to report on. When in doubt, pick up the phone and ask.
- Make sure you have management buy in. You will need to work with a lot of departments to gather information. All of these people already have a job and a workload. If they know the upper management thinks it’s important, they will be a lot more supportive.
- Find out exactly what you are reporting on. Simple questions like how many people work at the company? or What’s our energy consumption? might be very hard to answer. Reporting standards like GRI, SASB and TCFD provide guidance.
- Start small and expand. Stick to the information you really want to report on. Pick these metrics before you start and make a list of the information that you need. Then collect it in an organised way. Your colleagues in HR, facilities, finance and legal departments won’t appreciate it if you keep coming back to them for more info.
- Don’t lose your documentation. Make sure to store all the information you have gathered somewhere, and in a structured way. You might need to access it and compare it next year or next quarter. Auditors and your future self will be grateful if you have a workflow or structured methodology. This makes your work and auditors’ work a lot easier.
- Are you ready to move beyond just sustainability metrics? Consider integrated reporting! This principle-based framework will improve your reports. It also helps you better understand your value creation process. It aims to trigger integrated thinking and can be helpful to unlock information that’s useful for decision-making, well beyond financial metrics. Integrated reporting typically combines a financial standard, like IFRS or GAAP, and a sustainability standard, like GRI, SASB, TCFD or another standard.
- If we are going to use one accounting term in this post, it’s materiality. There are several views on materiality. GRI explains it like this: the report should cover aspects that reflect the organisation’s significant economic, environmental and social impacts; or substantively influence the assessments and decisions of stakeholders. For the non-chartered accountants among us, this simply means that your sustainability report should include your organisation's biggest impacts on the world, as well as the most important external forces that impact your company.
Creating a sustainability report may seem difficult at first, and it can be a lot of work. But the rewards are worth the effort. You don’t only get valuable information on where you actually stand in terms of sustainability, but also understand how you can make gains. It increases transparency and trust, within the organisation and between the organisation and its stakeholders.
Do you have questions about reporting? Please contact us.