From the Paris Climate Talks to changes in the GRI, we keep seeing the needle move toward regulation and refinement in sustainability reporting. We’ve said it before, and we will say it again, sustainability reporting is no longer optional.
Companies that aren’t aligning their strategy around sustainability now are soon going to be left in the dust – or maybe even taken to court as governments are increasingly enacting legislation that requires companies to report on sustainability factors.
Here are three solid examples of this trend, and three good reasons that every organization should be collecting data on sustainability for the inevitable day that the reporting becomes a business requirement.
1. Governments: We recently wrote about the UK’s Modern Slavery Act. This is just one of dozens of national-level legal requirement cases around the globe. From Japan to Norway, governments are using laws and the courts to push toward transparency – and action – on sustainability issues.
2. Reporting Trends: A recent article series from GreenBiz compared different environmental reporting tools – GRI vs SASB vs IR – and their various focus areas. In Part 2 of the series the author analyzes how different “sustainability topics” have shifted between the annual financial report and the sustainability report. Essentially, annual financial reports have consistently been held as required documentation to give insight into company performance. As sustainability topics become material to a company’s financial position, these topics are shifted from the sustainability report and into the annual report. Our thought: Soon sustainability as a whole will be material to investors, so you better be reporting.
3. Reporting Framework Refinements: Has anyone looked at the new CDP reporting requirements? The days of ‘interpretation’ may be coming to a close as organizations like CDP start to require clarification and specificity in reporting impact. The most significant change in the CDPs reporting this year, in terms of data, is the reporting of Scope 2 emissions based on the new GHG Protocol Scope 2 Guidance. By factoring in market-based and location-based electricity information to calculate a CDP score, companies will be called out for which energy providers they choose – and will be rewarded for choosing green energy (or in some cases, building green energy into their own grid).
Sustainability reporting requirements keep on coming, pushing the field far from the bad old days of greenwashing and closer and closer to the heart of what it means to integrate sustainability into core strategic planning for lasting, long-term impact.
Partnering with an experienced consulting firm like SSC, with the background knowledge and experience, to understand legislative impact, stay ahead of reporting trends, and choose the appropriate reporting framework is crucial. Contact us today to talk about your CDP report or carbon footprint analysis.