A company’s value is not simply just a reference to its impressive performance and its financial reports. It also refers to the role a company or organization plays in (or the attention it pays to) aspects regarding social life, economic progress and environmental sustainability. These can also serve to boost a company’s value. These sustainability aspects can be comprehensively disclosed in a Sustainability Report. What, then, are the aspects that are usually listed in a Sustainability Report, and what benefits do these sorts of reports provide?

Sustainability Report Aspects

The Global Reporting Initiative (GRI) is a framework that many companies often use to help them prepare Sustainability Reports. This framework has the same function as other non-financial reporting frameworks like the triple bottom line and corporate social responsibility (CSR) reports. A sustainability report should at least contain the following:

Strategy and Profiles

A strategic view is needed to add detail to the context of the report. In addition, displaying a strategic view has the aim of demonstrating the credibility of an organization or company.

Organizational Profile

Organizational profiles generally contain the following points:

1. The organization’s name

2. Brands, products and services

3. The organization’s operational structure

4. Head office location

5. Number of countries or regions in which the company operates

6. Nature of ownership (legality)

7. Market services (by geography, sector, type of consumer)

8. Organizational scale (number of employees, net sales, and net income)

Report Parameters

Information on the parameters of a sustainability report contains the following points:

1. Report period

2. Date of previous report

3. Reporting cycle

4. Contact address

Governance, Commitment and Engagement

In a sustainability report, the company or organization must include information on governance that supports the sustainability aspects of a company. The company must also demonstrate its strong commitment and involvement in the aspects and development of sustainability.

Environmental Responsibility

In addition to economic and social aspects, the environmental aspect is one of the most fundamental aspects of sustainable business development. Assessment of environmental aspects in a sustainability report can include input processes (water, materials, and energy) as well as outputs (wastewater, waste, and emissions). The better the environmental management of a company, the greater the public trust it can get.

Sustainability Report Benefits

Each type of report made by a company or organization has its own specific benefits that are in accordance with the function of the report in question. By preparing a sustainability report, a company or organization can obtain various benefits, both internally and externally.

Internal Benefits

  • An increased understanding of risks and opportunities.
  • Strengthening of financial and non-financial performance.
  • A positive impact on management strategies and long-term policies, as well as business plans.
  • A streamlining of business processes, reduction of costs, and increasing of efficiency.
  • Measurement and assessment of sustainability performance in terms of laws, norms, legislation, performance standards, as well as voluntary efforts.
  • An avoidance of involvement in environmental, social and governance failures.
  • Benefit of having comparisons between companies and sectors internally.

External Benefits

  • Mitigating negative environmental, social and governance impacts.
  • Improving public reputation and trust.
  • Providing stakeholders with an understanding of the value, and tangible and intangible assets of a company.
  • Demonstrating the company’s abilities when it comes to sustainable development.

These Sustainability Reports can help companies convince the public as well as potential investors of their attention to sustainability aspects. Besides being able to increase the value of a company, disclosure of sustainability aspects in a Sustainability Report can help increase transparency in terms of risks and opportunities that can be easily identified by stakeholders. This transparency also plays a role in better decision making, as well as increasing public confidence in the company’s business. (ALV)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: