What does meaningful sustainability reporting look like? 

By Kirsten Taylor

First, check your practice  

How are you practicing sustainability? A meaningful and strong sustainability model is based on a circular economy which addresses the issues associated with unsustainable linear take-make-waste systems.

This is how the global economy has generally operated so far: we take materials from the earth, make these into products to be consumed, and these are then disposed of as waste. This linear model, where raw materials, manufactured and destined for landfill at the end of their life cycle – is unsustainable, as the earth has only finite resources. 

What kind of value are you creating? 

The figure below shows shareholder value, where the traditional three pillars (represented by the three circles under each title in this diagram) of sustainability are separate entities; shared value where there is a small amount of connection between the circles; and system value (nested circles) shows a true sustainability model which demonstrates that for business to thrive, society must thrive – which in turn is dependant on a flourishing environment. 

Adapted from Figure 3.3: Rethinking value creation through a systems lens. (Future-Fit Methodology guide, online). This version used courtesy of Catapult.

Your reporting should reflect your values

Meaningful sustainability reporting should provide a comprehensive and transparent account of your company’s environmental, social, and economic impacts. 

Start with an overview and introduction including your mission, values, and strategy, and explain how you measure and report on its impact.

Characteristics of a meaningful sustainability report

1. Be transparent: The report should be transparent and open about the company’s environmental, social, and governance/business practices. This encompasses everything – from the good and the bad, to identifying areas where the company could improve. It should clearly state the goals and targets, as well as progress made in achieving those goals.
   
   Using emissions as an example of environmental reporting: are you revealing in sufficient detail where your emissions are coming from and what the company is doing about reducing them? If for example, a business is unsure of its scope 3 emissions, talking about this publicly can help shed light on the issue, including what you are doing about identifying these emissions up and down your value chain.
2. Assess the risks: Materiality* should be determined through a thorough assessment of the company’s operations, impacts, and stakeholder feedback. This describes how the company determines which environmental, social, and economic issues are material to its operations and stakeholders, and how it prioritises and addresses these issues.
   
   * What do we mean by materiality?
   
   “A material sustainability issue is an economic, environmental, or social issue on which a company has an impact, or may be impacted by. It may also be one that significantly influences the assessments and decisions of stakeholders.”
   – Sustainability Materiality Matrices Explained – NYU Stern Center for Sustainable Business.
3. Accuracy matters: The report should provide accurate and verifiable information. Data should be collected using reliable and consistent methods, and the report should disclose any assumptions or limitations in the data, explaining how they arrived at their conclusions. This can include disclosing the scope of a company’s reporting, the methodology used to calculate metrics, and any data gaps or uncertainties.
4. Show improvement over time: Where possible, the report should allow for comparisons over time, across companies, and across industries. It should use standardized metrics and frameworks to enable meaningful comparisons. This will be of most importance for exporters and companies of a certain size. 
5. Talk to your stakeholders: The report should demonstrate meaningful engagement with stakeholders, including employees, customers, suppliers, investors, and communities. The report should explain how the company incorporates stakeholder feedback into its sustainability strategy and decision-making. Taking stakeholder engagement further could be collaborating with other businesses in your value chain — perhaps in the area of carbon emissions reduction or bringing greater biodiversity to local communities.
6. Be clear: The report should be clear and concise, using plain language that is easily understood by a broad audience. It should avoid jargon and technical terms that may be confusing to non-experts. 
   
   Companies should include comprehensive and accurate performance data in their sustainability reports, and provide quantitative and qualitative data on the company’s impact. Key performance indicators (KPIs) related to environmental and social performance in particular might include greenhouse gas emissions, water usage, and waste generation, as well as accessible employment programmes and volunteer days for staff. This data should be presented in a clear and understandable format, and should include historical trends and comparisons with industry benchmarks.
   
   Carbon footprinting receives a lot of airtime, however, it does not tell the complete story of a meaningful environmental sustainability report, nor do KPIs and efficiency measures. Qualitative data, such as stakeholder engagement and social impact assessments should also be included: the company’s initiatives and programmes aimed at addressing its environmental, social, and economic impacts, and examples of successful outcomes and best practices.

7. Provide context and explanations: Companies should set the scene for their sustainability performance and goals. This can include explaining how they are measuring their progress, what factors are driving their performance, and what steps they are taking to improve.
8. Work together: Impactful collaboration (IC) recognises that creating meaningful and lasting impact requires collaboration and collective action. IC involves all parties working together to identify shared challenges and opportunities, co-creating solutions, and generating positive outcomes that benefit everyone. IC broadens your reach outside your own company. By working with others, you can create positive impact at a greater scale. 

In the next article in our series we take a look at some sustainable frameworks, in particular the Sustainable Development Goals, B Corps and Future-Fit Business. 

Kirsten Taylor is our sustainability reporting specialist.