A study by Nielsen found that 81% of global respondents feel strongly that companies should help improve the environment, and 66% are willing to pay more for sustainable goods.
Let’s face it: sustainability is no longer a trend, it is an imperative aspect for responsible and successful business models. At Sustainable Square we are firm believers that investing in sustainability is not only the right thing to do for the world, but also for your business. And investing in sustainability without reporting is like driving with your eyes closed: you don’t know where you are, if your strategies are working, and there is no way to show customers and investors if you are making progress.
According to KMPG’s Survey of Corporate Responsibility Reporting, 93 percent of the 250 largest corporations in the world (measured by revenue) currently report on sustainability. Investing in sustainability reporting will increase as more consumers and investors become conscious of sustainability issues and demand responsibility.
In this post, we will go over the primary definition of sustainability reporting and explain 5 of the main reasons why you should invest time and effort in sustainability reporting as a business. We will also share a few examples of our reports.
What is sustainability reporting?
Sustainability reporting, sometimes known as “non-financial reporting,” is the process by which a business produces a report outlining its environmental, social, governance, and economic goals, as well as its progress towards attaining those goals. Typically, businesses outline their strategic objectives, sustainability initiatives, and a status report on the advantages and disadvantages of such initiatives.
Various definitions and recommendations exist today for reporting on sustainability. For instance, businesses have begun to report on their contributions to the various indicators and their efforts to accomplish the Sustainable Establishment Goals since their development. Since everything is ultimately interconnected, what matters is how the businesses choose to measure and communicate their selected sustainability criteria.
Why should my company invest in sustainability reporting?
Below we outlined some of the many benefits of sustainability reporting:
1. Walking the Talk With Proof: Demonstrating Credibility
Consumers and investors are increasingly choosing the most sustainable option in the market. A study by Nielsen found that 81% of global respondents feel strongly that companies should help improve the environment, and 66% are willing to pay more for sustainable goods.
Companies that are open about their operations reveal the resources they use, and their supply chains are as environmentally friendly as possible. Giving investors and customers the information they need to make decisions is essential if you want your firm to receive the backing and recognition it needs to grow.
2. Attracting Capital and Investment
One thing is clear: the whole world requires a massive shift in investment. If we don’t take the climate threats seriously, the damage will become almost irreparable. And taking it seriously means investing in businesses that are sustainable in their practices. Not only that, but banks and financial institutions are becoming more strict about the kind of companies that they include in their investment portfolios. For example, BlackRock, the world’s largest asset manager, stated it will require companies to disclose in like with the Task Force on Climate-Related Financial Disclosures and the Sustainability Accounting Standards Board (SASB).
What does this mean for you? Simply, if you have the data to back up your sustainability claims, you will be able to attract more capital and investors for your business. Sustainability reporting can help you win stakeholder’s trust, and this is particularly true for investors: investing in your sustainability shows that you are looking to manage long term risks to the company, which makes you a more attractive investment.
3. Competitive Advantage: Attract Customers & Talent
You’ll gain a competitive edge by investing in sustainable reporting. Even if it has gained popularity, many companies still do not invest in sustainability reporting, presenting your company as open, reliable, and dedicated to sustainability. This will not only bring in more clients but also talent because people who care are drawn to firms that care.
Early adoption of sustainability reporting allows your company to have an advantage over rivals in the long run (in both sales and talent).
4. Better understanding of opportunities and risks
Like any other reporting process, the data collected allows you to ask questions, make connections and draw conclusions. Sustainability reporting adds another layer to your data set that will reveal potential risks and opportunities through the ESG lens.
It helps identify cost savings brought about by your sustainability strategy and the potential for making even more savings. It is important to understand that consistency of reporting is key – as the benefits will mostly show in a long-term basis.
5. Show Progress: Transparency & Accountability
You must be aware of your existing situation in order to demonstrate improvement and boost consumer confidence in your brand. Your business can enhance performance and comprehend the development (and relationship) of the sustainability and financial goals by measuring impact.One advantage of investing in sustainability reporting is that it adds a layer of accountability and transparency to stakeholders, and it’s the best way to set your company apart from greenwashing and SDG washing. Transparency transforms your business from a faceless organization into one that clients feel comfortable doing business with and building a relationship with, increasing client loyalty.
How we do it at Sustainable Square:
Even though the core of our business lies in sustainability investing and reporting, we walk the talk and make sure every year we can release a sustainability report. We measure different metrics and report on all aspects of our business: from the clients we work with to our internal practices to increase wellbeing.
Feel free to reach out to us and we will be more than happy to show you how our range of Sustainability/ ESG reporting services can be tailored to best suit your sustainable goals.
