Sustainability reporting plays a pivotal role in today’s business landscape, enabling organizations to transparently communicate ESG performance. A well-structured and comprehensive sustainability report enhances stakeholder engagement, builds trust and fosters accountability.
To ensure a sustainability report resonates with key stakeholders, it is crucial for organizations to ask themselves why they are reporting and which audiences they are trying to engage. This step can be challenging due to the diverse audience that may be interested in the report. Key audiences may include investors, customers, employees, suppliers, regulatory bodies, NGOs, ESG rating and ranking agencies, senior leadership, the board and the local community.
Understanding stakeholder expectations
Tailoring the style, content and means of conveying information to suit the needs of these stakeholders is essential. For example, investors may focus on financial implications and long-term value creation, requiring raw performance data and KPIs that enable year-on-year and peer comparisons.
On the other hand, customers may be interested in ethical sourcing and product sustainability. Employees may prioritize workplace safety and diversity, while local communities may seek information about environmental impacts and community involvement initiatives. A more people-centered reporting approach, communicated using case studies and storytelling, may be preferred for engaging these stakeholders. By understanding the expectations of diverse stakeholders, organizations can ensure their report addresses relevant sustainability issues and meets the information needs of their audiences.
This audience-centric approach enhances engagement, fosters meaningful dialogue, promotes transparency and encourages accountability. Regular engagement with stakeholders also allows organizations to address their expectations and concerns, seek feedback and improve reporting practices. Additionally, this approach helps organizations stay updated on their audiences as target audiences may change from year to year due to changes in business practices, strategy or leadership.
Aligning with GRI, SASB and TCFD
A strong audience analysis significantly influences the drafting of the report and the choice of reporting standards or frameworks and necessary metrics. Aligning with multiple frameworks signals an organization’s commitment to best practices in sustainability reporting and demonstrates a proactive approach to capturing a wide array of ESG topics, ensuring that important considerations are not overlooked. To ensure a robust report that both covers materiality aspects and tests the company’s resilience against future scenarios, companies should synchronize and follow the reporting guidelines set forth by the GRI and SASB standards, as well as the recommendations of the TCFD, at a minimum.
Although efforts have been made to align standards and frameworks in recent years, there are still distinct approaches and evolving definitions of materiality among the frameworks. This makes consolidating multiple frameworks within a single unified report a key challenge.
Outline content around strategic pillars
Finally, once your frameworks have been aligned, the next step is to organize a high-level content outline around strategic pillars ensuring that associated material issues are grouped underneath each pillar. Organizations should go beyond basic reporting by including vital information related to business operations, sustainability governance, strategic initiatives, stakeholder engagement, material issues and performance within a specific timeframe. By incorporating these elements, the report will provide a more comprehensive and meaningful overview of the organization’s sustainability efforts.
Reporting is a continuous practice that requires continuous improvement. It may take several reporting cycles to achieve a best-in-class report and, in the beginning, acknowledging gaps and developing plans to fill them in subsequent years is a strong start to your sustainability reporting journey.
Sylvie Harton is chief business strategy officer at Lumi Global.
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