Sustainability reporting

Sustainability reports emerged as an evolution of the environmental reports published in the 1990s by companies as well as public bodies. They represent the activities and achievements of the organizations in terms of sustainable development.

They address the most important topics of sustainability: economy, ecology and social issues (triple bottom line). In addition to the annual report, the sustainability report is an important component of the company’s information policy. It is also an instrument of sustainability management and an element of marketing. In the meantime, large companies in all sectors in particular are publishing annually – partly in line with the guidelines of the Global Reporting Initiative (GRI).- Such reports. In addition to the guidelines of the GRI, there are now numerous other standards, such as the ten principles of the UN Global Compact. These standards overlap in content, but have different focus on the different aspects of sustainability. In addition to major global corporations, medium-sized companies are now increasingly required to produce professional sustainability reports. In particular, companies of the supplier industries are demanding compliance and documentation of social and ecological standards by the decreasing large corporations.

The sustainability reports record the progress made in each area. In economics, for example, this is the orientation of the company towards the future. In the ecology – mainly in the manufacturing and processing industries – the sustainable alignment on resource efficiency and environmental stresses. For example, social issues focus on the company’s focus on family-friendly operations, support for employees in difficult personal situations and social procurement criteria (eg fair trade, measures against child labor in the upstream chain).

Since 2005, Germany’s sustainability reports have been compared and evaluated in a ranking by the Institute for Ecological Economy Research (IÖW) and future eV. This competition is the continuation of the environmental reports ranking several times in the years 1994 to 2000. In Switzerland, the Ö.BU carries out a jury of sustainability reports every two years.

Reasons for Sustainability Reporting
A sustainability report informs the stakeholders about the economic as well as ecological and social aspects of the company. It should be noted that the interest in this information has been growing for years. It is a possible way to support corporate communications.

The goal is twofold:

internally, this assessment enables the company to improve (continuous improvement) its environmental and social performance.

externally, when it is communicated to shareholders and the public; It informs potential investors, administrations or the public about the level of sustainability of integrated development by the company. It is sometimes part of the annual report on sustainable development or Agenda 21 of an administration.

it allows to compare the companies (if indicators and evaluation methods are the same) in terms of indicators of sustainable development (environmental, social, ethical and health or economic or even human development).

it describes via indicators (presented in the form of graphs, tables, summaries…) how the company integrates internally and in its external actions the principles and criteria of sustainable development, regardless of the complexity of the organization (entities, subsidiaries…).

the company’s social and environmental strategy,
the human, financial and organizational resources at the service of this strategy
The obtained results

Topics often treated;

Carbon footprint
energy savings
social policy of the company
occupational health, environmental health
Respect for human rights
training, human resources
consumption of renewable resources and fossil resourcesor not, little, hardly or costly renewable (water, soil, raw materials, including wood and paper (easy to measure, paper consumption is a common theme.) The paper policies of 50 large French companies and their evolution, the proportion responsible paper they use and the actions put in place to maximize recycling in 2010 were the subject of a study for 50 selected companies including those of the CAC 40 (18 companies did not wish to respond to the study) Some have been classified as “virtuous.” The study showed that an average Frenchman consumes 3 times more paper and cardboard than in the world, and that 78% of the graphic papers consumed in France come from France. import. To better judge their level of environmental performance, companies can rely on national or global databases (FAO, FAOSTAT).

It must provide for an evaluation followed over time, based on verifiable and credible criteria.

It is recommended (mandatory in some cases) to have the analyzes done by an independent third party, or at least to have them validated by an independent third party, so that the authors are not judges and parties, which makes the content less credible. Large NGOs also provide elements for assessing social or environmental impacts. Websites are beginning to compare the ethical and environmental performance of companies.

Some software is capable of handling validation workflows to ensure continuous data updates.

Many debates exist on the reliability and transparency and verifiability of the indicators used to rate the different social, environmental and societal issues;

It is sometimes difficult to link the impacts and responsibilities of daughter companies or remote subsidiaries to the parent company;
Manufacturing secrets and the confidentiality of certain information are sources of bias;
Quantitative data are often easier to interpret than qualitative ones;

Legal motives
With the adoption of the German Accounting Standard 20 (DRS 20) in 2012, companies reporting in accordance with HGB 315 para. 5, p. 2 are required to report and report sustainability in the financial years from 2012, if non-financial performance indicators be used for the management and development internally under the aspect of sustainability.

The IÖW has identified three main reporting motives in a survey of environmental rapporteurs:

Market-oriented motives
If the company is located in a market segment in which ecological and social aspects play an important purchasing criterion, the sustainability report should show a clear market relevance. Above all, stimulated by the media, consumers will increasingly include the sustainability aspect in their purchasing decisions in the future as well. Here the environmental report is an opportunity to inform and retain the customer with his sustainable ideas far beyond the actual product.

Management-oriented motives
The public interest is aimed primarily at large companies. Small and medium-sized enterprises usually do not attract the public to that extent. Here, the sustainability report can serve to promote their internal social and environmental management. Above all, the own employees should be informed and motivated. However, this is only appropriate if the aspects of sustainability are to be embedded in the management.

Public-oriented motives
Especially industries that have been under increased public scrutiny for decades have public-oriented motives. Industries that have a greater impact on the environment perceive a lack of public confidence in the environmental performance of their business. The goal of environmental reporting is to achieve credibility and trust in itself and its products.

Principles of Reporting
For companies, the Sustainability Report should help stakeholders to get an idea of the reporting company, its services and overall activities. All information has to be truthful and thus the strengths and weaknesses of the company should be presented. The entire company should be described in the report and be rearranged at regular intervals (every 3 to 4 years). It should be ensured that the contents of the report are true, material, complete and comprehensible.

Elements of the Sustainability Report

Key figures
The most important key figures on sustainability should be presented in the report as early as possible in order to enable a quick orientation about tendencies. Particularly suitable for this purpose are a table or some graphics.

Foreword by the management
The foreword makes it possible for the public to recognize whether and how management commits to sustainability. The reader should recognize through concrete statements of the management, as the progress in this area is. Here it makes sense to present positions of leadership on economic, environmental and social aspects.

Profile of Reporting Company
The profile gives the public an overview of the company. In addition to the main products and services, should be informed about locations, legal form, number of employees, ownership and turnover.

Vision and Strategy
Although sustainability itself is a vision, economic, environmental and social aspects are weighted differently depending on the company and industry. Therefore, visions that have been developed specifically for the company should be communicated. Also, visions and concrete goals should point in the same direction.

Management Systems
Through the representation of responsibilities and processes in the management system, the public should recognize how competencies are perceived. In the Sustainability Report, this concerns both the areas of economic, environmental and social governance of the company and the difficult area of coordinating strategies and goals and dispelling contradictions.

In addition to reporting on the company’s sustainability performance, the report should also strengthen the company’s image. It is thus possible to present planned strategies and programs that strengthen the strengths and reduce the weaknesses of the company.

Sustainability reports are usually implemented as a print, PDF or online report. According to a report by the IÖW, the relevance of printed reports has tended to decline in recent years. Often, companies are now supplementing or even replacing the latter with sometimes more extensive online reports. Potential benefits of online sustainability reporting (as micro websites) may include: in the networking of content through hyperlinks, interactive features, a good findability via search engines and the static readability of their use to see.

Organizations can improve their sustainability performance by measuring (EthicalQuote (CEQ)), monitoring and reporting on it, helping them have a positive impact on society, the economy, and a sustainable future. The key drivers for the quality of sustainability reports are the guidelines of the Global Reporting Initiative (GRI), (ACCA) award schemes or rankings. The GRI Sustainability Reporting Guidelines enable all organizations worldwide to assess their sustainability performance and disclose the results in a similar way to financial reporting. The largest database of corporate sustainability reports can be found on the website of the United Nations Global Compact initiative.

Source from Wikipedia