Globally, 55 per cent of online consumers across 60 countries say they are willing to pay more for products and services provided by companies that are committed to positive social and environmental impact, according to a 2014 Nielsen study.
In Australia, 97 per cent of all ASX100 companies and 87 per cent of ASX200 companies now report annually on sustainability, according to the Australian Council of Superannuation Investors.
But does this actually make a difference to our impacts on resource depletion, climate change or human rights, or are we just creating reams of reports that no one reads?
The secret to valuable sustainability reporting is in ensuring it drives business strategy and performance.
While sustainability reporting was once considered a showpiece branding exercise, companies are increasingly recognising that corporate social responsibility, environmental sustainability, transparency, ethics and integrity are not ‘nice to haves.’ They are business drivers.
But the underlying purpose of sustainability reporting is not to tell a story, it’s to demonstrate real-world impact.
By using the power of transparency, sustainability reporting can energise teams to improve performance and inform decision-making by providing meaningful data and comparisons.
A good sustainability report does more than divulge energy and water consumption statistics or analyse carbon footprint reduction strategies.
It enables companies to understand the risks and opportunities inherent in their business models, streamline processes, reduce costs and improve efficiencies. It identifies opportunities for companies to invest in innovation, engage with the supply chain and collaborate with stakeholders.
This is why sustainability reporting is not exclusively for the big industry players. Smaller companies are finding that using the same sustainability and reporting language along the supply chain makes it easier to build trust and create value.
My own company, NDY, has adopted Global Reporting Initiative’s (GRI’s) G4 Guidelines as our benchmark, and we recently released our third annual sustainability report. Our stakeholders have told us they value sustainability reporting, and that even those clients not yet reporting themselves acknowledge transparency as an imperative.
An additional focus for this year’s report was an extensive client and stakeholder interview program aimed at informing our strategic agenda and linking to our business strategy.
Amsterdam-based Michael Meehan, GRI’s chief executive officer, helped us launch our latest report. He says sustainability reporting is now being used by companies to “communicate their risks, opportunities and goals around important issues that aren’t financial,” though they do have financial impacts.
Meehan says sustainability is not about “pie in the sky aspects” but critical issues such as human rights, corruption, environment, climate change, gender, pay equity – issues that “translate into financial risk considerations for business.”
This is why sustainability is more than a ‘tick box’ exercise. It sparks innovation, and helps companies identify efficiencies and bottom-line savings, as well as anticipate and mitigate risk.
Above all, it demonstrates how ‘doing good’ improves the bottom line.