Why should companies have a sustainability report?
Regardless of the size of the company, sustainability is becoming increasingly more important variable within all businesses. Climate action as well as a wider environmental, social and governance agenda is something that comes up more frequently in conversation with our clients.
As part of the EU's Green Deal and strategy for financing sustainable growth, the regulation on sustainability reporting will be extended already from financial year 2023. Therefore, already this year it is time to review how the new rules affect both the reporting and the company's operations.
How do we get started with our sustainability report and what does the process look like?
The benefits from disclosing your sustainability performance are clear – it is about taking responsibility and building trust. Tangible business benefits include improved company reputation, enhanced competitive advantage, getting ahead of regulation, clear tracking and benchmarking of progress and the ability to associate positive results with specific initiatives and efforts.
Here are some tips to help you get started!
1. External analysis and benchmark
Regardless of the level of ambition in the scope of the sustainability report, you should start from the sustainability aspects that are important for your business and its stakeholders. Start by doing a materiality analysis and benchmark where you look at how the following are affected is the business and industry:
- Global trends
- Laws and regulations – global, EU and national
- Current social issues
- Do a comparative analysis or benchmark with companies in the same industry and look at which sustainability issues they are working on.
2. Materiality analysis
Make sure your report contain information about how your company affects its environment but also how the company is affected by the outside world. Identify which issues are important for your business and identify significant sustainability risks for the company.
3. Prioritize and validate the most essential sustainability aspects
To select the areas or questions that are most important for your business, it can be good to hold a workshop with management and key personnel where you prioritize together. Reason around each area or question based on the extent of the sustainability impact and significance for stakeholders.
4. Set goals according to priority areas
What are your goals and how will you measure your results? Finding the right balance between intention, commitment through SMART targets and measurements of impact is the key. Set at least one measurable goal per priority area.
5. Follow up on performance in your next sustainability report
In the follow-up, you look at whether the expectations have been fulfilled and whether the goals have been achieved. The result should be included in your next sustainability report. The sustainability report must reflect the past year and our recommendation is to include at least one comparative figure for previous years.
