When it comes to sustainability reporting, companies may feel like they’re in an increasingly uncomfortable public-private vice. On one side, consumers and shareholders are pressuring organizations to be better corporate citizens and increase transparency. Governments are establishing more reporting requirements as well, which will inevitably multiply through initiatives such as the recent Sustainable Innovation Forum at COP21.
Sustainability makes companies more profitable and more attractive to all stakeholders. In fact, more than 50 percent of consumers prefer purpose-driven brands. Additionally, 86 percent of consumers said they would be more likely to trust a company that reports corporate social responsibility results. Sustainability programs and reporting can boost consumer confidence, shareholder esteem and a company’s bottom line.
But many companies are failing to capitalize on these benefits simply because they don’t have the expertise and tools to capture and report progress on their sustainability goals. Even companies that want to operate more transparently often struggle with collecting and wrangling sustainability data, which is typically scattered across different silos and platforms.
Sustainability reporting has become an increasingly important issue, and practices around reporting have dramatically evolved in recent years. There are several trends that are impacting this – including improved visibility into key data points, increased involvement from the c-suite, greater focus on corporate transparency and global legislation.
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Below are eight strategies for organizations to capture and report progress on their sustainability goals in the face of organizational challenges.
- Create a roadmap — A roadmap should show how your sustainability reporting will function. For example, you might first set out expectations for governance, shareholder engagement and disclosure. Then look at your expectations for performance in specific areas including operations, supply chain, products and services and employees. Assess which of these areas represent the biggest pain points or opportunities and which can be addressed most effectively. Remember to be specific in your requests and explain why you need the data. For example, “We are consistently providing our investors and customers with incorrect information because there are no formal processes or accountability mechanisms” is a clearer request than “I need people to give me data.”
- Identify key players and develop a governance structure — This step involves identifying the data owners of your sustainability program and establishing communication pathways between them and the sustainability team. Many groups may already be undertaking parallel work so make sure to bring several teams to the table including finance, energy management, IT, operations and the executive team.
- Develop accountability structures — This is a framework not unlike an organizational chart in that it shows the different groups involved in reporting. It includes an outline of the roles and responsibilities of each group, and describes the processes, people and supports necessary to function effectively. Accountability structures provide clarity, organization and communication.
- Leverage technology — The right systems allow you to house various data points from all owners in one place. Rather than manually inputting data from a variety of sources, which is time-intensive and error-prone, implement a SaaS, cloud-based solution. That way, data can be more easily analyzed and acted upon. This platform should also offer drill-down capability into single-site, interval-level data to find inefficiencies that can be hidden in monthly reports.
- Identify the quickest ROI opportunities — Use analytics to identify projects with low up-front investments that can yield positive results over a relatively short period of time. As much as 50 percent of potential efficiency improvements are low to no cost. Analytics can be performed remotely using a SaaS platform or through onsite assessments to find and prioritize projects. Building improvements such as fine-tuning heating and cooling equipment, or installing energy meters that provide a granular view of energy use can be a great place to start because efficiency-focused projects tend to have a significant ROI. In situations where your leadership team is skeptical, proving the return of sustainability initiatives to your CFO can build buy-in. Knowing what projects to pick is extremely important, and should in part relate to overall corporate strategy and values. This approach will build confidence and support for future sustainability-related ventures.
- Communicate successes — Share success stories with stakeholders (employees, customers and shareholders), and highlight the value of what has been accomplished, as well as challenges the organization needs to address. Remember, sustainability communications will only deliver brand value if they are based on brand strategy and integrated with mainstream communication.
- Continually assess and refine — Examine where your strategy is performing well and expand upon those aspects. Then refine (or discard) the tactics that are showing less success. For example, your team might have done a great job gathering and defining sustainability metrics, but it lacks resources to analyze and act on this data. As you work through this step, you’ll want to assess your reporting strategy on a regular basis, and integrate feedback from internal and external stakeholders.
- Create a sustainable culture from the top down — Companies that see significant returns on their environmental initiatives recruit a diverse roster of employees who have one thing in common — an appreciation for the climate challenge and a passion for action. That starts all the way at the apex, with the board of directors. For a company operating in the 21st century, the risks and opportunities a board considers must include environmental and social issues. Doing so not only illustrates the company’s commitment to sustainability at the highest levels, but also enables the board to provide meaningful oversight for emerging environmental and social issues that confront the business.
These strategies will not only help organizations mobilize efforts to reach their sustainability goals, but they are also powerful drivers of business growth. In today’s market where consumers demand dedicated sustainability initiatives from the organizations they trust, now is the time to design a fully functional sustainability reporting structure that will pay dividends now and in the future.