What is Sustainability Reporting?

In our previous articles we talked about ESG and how organizations use statistical techniques to set science-based ESG or net-zero targets to steer towards decarbonization. 

Don't forget to check out those articles if not already-

What is ESG?

What are Science-based targets (SBTs)?

In this article we well learn about sustainability reporting and the steps involved in the reporting process.

What is Sustainability Reporting?

Sustainability reporting is becoming increasingly important for organizations as stakeholders, including investors, customers, employees, and regulators, are placing greater emphasis on sustainability performance. The information disclosed in sustainability reports can help stakeholders make more informed decisions about the organizations they interact with and can also help organizations identify areas where they can improve their sustainability performance.

There are several frameworks and standards for sustainability reporting, including the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). These frameworks provide guidance on the types of information that organizations should disclose in their sustainability reports and how to structure and present that information in a meaningful way.

Lets now see the generic sustainability reporting process that organizations use to publish their sustainability reports. 

The Reporting Process-

The sustainability reporting process typically involves the following steps-

Sustainability reporting strategy- A plan that outlines an organization's approach to reporting on its environmental, social, and governance (ESG) performance. The strategy sets out the objectives, targets, and actions needed to ensure that the organization's sustainability reporting is aligned with its overall sustainability goals and objectives.

"Materiality Assessment is a  process of identifying the most significant sustainability issues for the organization and its stakeholders"

Data collection- A description of the data collection process, including data collection methods, data management, and analysis.

Audit & Assurance- Auditing a sustainability report involves an independent assessment of an organization's environmental, social, and governance (ESG) performance data and reporting processes. The aim of the audit is to provide an opinion on the accuracy, completeness, and reliability of the information presented in the report, as well as the organization's compliance with relevant reporting standards or frameworks.

Report & Communicate- The sustainability report is released and shared internally, as well as made accessible to stakeholders for review and evaluation.

Continuous improvement- A plan for continuous improvement of the sustainability reporting process and the organization's sustainability performance.

By developing a sustainability reporting strategy, organizations can ensure that their reporting is aligned with their sustainability goals and objectives, and that they are reporting on the issues that are most important to their stakeholders. It also helps organizations to be transparent and accountable, which can enhance their reputation and build trust with stakeholders.

In an attempt to not deviate from the big picture, I have not explained each of these process steps in detail as each step is an ocean on its own. 

Let me know your thoughts in the comments. Also let me know if you want a detailed article focusing on each of the sustainability reporting processes.

I hope this article was useful. Watch out this space for more insightful topics on sustainability.