A handful of companies in corporate Nigeria have made the smart decision to publish annual sustainability reports. Of those that do not, some are hard pressed to see tangible benefits, others do not believe they have attained the right ‘maturity’, while the rest have unfortunately not caught on to the fact that responsible business is the only way to do business. Regardless, whether you are already publishing a report, or are contemplating whether or not you should – perhaps our article, The Proof is in the Impact (please hyperlink to this article) will convince you – there are essentials to sustainability reporting that cannot be ignored.
From our research and experience with various reporting and assurance frameworks including the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the United Nations’ Global Compact (UNGC), and the AccountAbility’s AA1000 principles, among others, there are foundational principles that make a sustainability report much more than a brochure of seemingly endless and irrelevant corporate information. We have gone ahead to group these principles into three headers: materiality, accuracy and comparability.
The foundation of every report must be established through materiality. Materiality can essentially be defined as matters that have been identified as crucial to stakeholders’ satisfaction and integral to the organisation in fulfilling its goals and aspirations. It presents an inclusive approach to determining business objectives for an operating year, premised on extensive stakeholder identification, prioritisation, and engagement. A sustainability report must, therefore, present matters that stakeholders and the business have been identified as critical to business success, and are unique to the business based on its value proposition. While there are a number of methods that can be used to identify material issues – typically guided by generic lists embedded in various reporting frameworks – a sustainability report must clearly show and organic manner in determining material matters, taking into consideration industry standards, local context, emerging trends, and most importantly, the characteristics of the business; only then can a report be truly authentic.
Having determined material issues to be discussed, a sustainability report must record key accurate responses to these issues. It is not enough to list matters that were important to the business; rather, it is more useful to share business performance in the areas highlighted, with specific emphasis on how stakeholder needs were met and then measured. An important element that, therefore, comes into play here is balance. To have a truly accurate report – and in the spirit of true transparency – a company must publish its achievements along with shortcomings during the reporting year. While this may immediately make communications teams and even management nervous, we must remember that a key benefit of reporting is that it highlights areas of vulnerability, and presents an avenue to quickly proffer actionable solutions. Consequently, such ‘negative’ information should be presented in a report along with plans that are in progress to address the problem. A sustainability report that features only high praise, or glosses over areas of improvement, defeats the purpose of reporting both for the business, the stakeholders and readers of the report.
Finally, a sustainability report must have comparable information. Through companies’ sustainably reports, it should be easy to compare performance within the industry to properly set the standard for business excellence and leadership. More so, information within the report should guide both the business and its stakeholders in measuring performance against set goals and targets. The integrity and quality of the information within the report can only be ensured when the reports gives readers insights into how well the business is performing, its growth trajectory, and how well outcomes came be predicted. A quantitative year-on-year measurement of performance results is a guaranteed way to provide such an outlook. More so, such an approach to reporting helps to promote accountability, and will drive many companies to keep their word, rather than face very publicised consequences.
If meeting the criteria set above scares you as a business or dissuades you from publishing a sustainability report, then you are likely one of the companies that will benefit most from the reporting process. Certainly, a sustainability report presumes a maturity level in terms of responsible business practices. However – and even for companies already reporting – the process is one that can only be built and perfected over years of improvement which must begin today. Moreso, with transparency being the primary objective of reporting, it is important that internal processes and procedures are first put in place, driven by leadership – a topic to be discussed in the near future.
Ultimately, there are a number of tools and resources – human and material – available to companies who want to begin or improve their reporting process. To find out more about how you can take advantage of these, reach out to CSR-in-Action Consulting via email at consulting@csr-in-action.org, or via telephone at 0807 688 4871.
Thank you for reading and have the best week.