Sustainability Reporting in Brief
What is a corporate sustainability report, what purpose does it serve and why should organizations publish one consistently?
Now that the relationship between business and society has become a huge subject of concern across the globe, sustainability reports have evolved to become communication tools that organizations use to measure and give account of their non-financial (economic, social and governance) performance and impact to internal and external stakeholders such as employees, customers, suppliers, regulators, media and shareholders.
Sustainability reports enable organizations to respond to the array of expectations for improved commitment to sustainable development which revolves around protecting the planet and advancing social equity. Moreover, sustainability reports can help organizations strengthen ties and deepen engagement with stakeholders, measure and meet their commitment to sustainability, evaluate and improve business strategy, enhance reputation capital, woo investors and build trust with the society.
Corporate sustainability reports come in different forms; we have the stand-alone, combined and integrated reports. A stand-alone report is a single document that reports only on an organization’s non-financial performance (for example, Nigerian Stock Exchange’s 2017 sustainability report) while a combined report gives account of financial and non-financial performance in the same document (for example, UBA Plc’s 2017 annual report). Unlike the first two, an integrated report gives account of financial and non-financial performance and shows how one affects the other vis a vis value creation.
There is a sizeable number of reporting frameworks that organizations can use to report sustainability performance, the most prominent among them being the Global Reporting Initiative (GRI) Standards. To make sure that sustainability reports serve their purpose effectively and efficiently, it has become increasingly important for organizations to avoid producing long and convoluted reports. As these reports are prepared for a diverse set of people, they should be written clearly and concisely in such a way that they are easily understood. It is also equally important that reports should be objective. Organizations must avoid whitewashing by adequately highlighting their negative impacts and not exaggerating their positive impact in the reports that they produce.