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The importance of sustainable report

Updated: Oct 28, 2023

A company’s ability to positively impact social and environmental change has become an increasingly relevant consideration for businesses. A sustainable reporting means to share your sustainability actions, goals, and achievements with your stakeholders and community. It is also called ESG report which includes environmental, social and governance (ESG) factors that cover a broad range of issues that touch on everything from company culture and employee compensation to climate impact and sourcing standards. A good sustainability report generates reliable, relevant and standardised information with which to assess opportunities and risks and enable informed decision-making. The three main advantages of a sustainable report are to demonstrate credibility, increase stakeholder trust and gain a competitive advantage.

Being transparent about all the environmental, economic and social impacts of your business activities is key to reassuring others that you are serious about sustainability. 90% of Gen Z believes companies need to act on social and environmental issues. ESG considerations can influence change faster than governments or nonprofits, and younger generations are viewing their investment dollars as an extension of personal values. In 2018, US SIF Foundation reported that investors held $11.6 trillion in assets associated with ESG criteria, up from $8.1 trillion in 2016. Although many companies are naturally aware of the reputational risks that can come with failing to achieve a target, all of the experts present at the roundtable agreed that it is much better for a sustainability report to be open and honest with stakeholders than just avoid the issue.

Moreover, sustainability report is an important communication channel that an organization has with its internal and external stakeholders. It should be considered a very valuable tool which a company can use to share its environmental activities and performance, the opportunities it offers for employees and the social benefit it creates, in addition to sharing its financial performance. The goal of a sustainability report is to identify the priorities of the company under the main headings that matter to both itself and its stakeholders, report the work it carries out in the light of these priorities and in view of its key performance indicators , and make such reporting available for readers in a way to allow comparison with previous reports.

As the market becomes more crowded nowadays, an ESG report is proof of your commitments and easily separates you from your competition. According to a survey of 30,000 respondents in 60 countries, conducted by Nielsen in 2015, 66% of consumers will pay more for sustainable brands and products – a significant increase from 55% in 2014 and 50% in 2013. In addition, CSR can help companies to reduce business costs. For example, offices achieved energy savings of over 57%, by replacing fluorescent bulbs with Lightin’s Lumination LED luminaire. Furthermore, it can help to distinguish your business from the competition. For example, TOMS donates a pair to a child in need when a customer purchases a pair of shoes. Calling this initiative ‘One for One’, the footwear company is instantly setting itself apart from the competition. To conclude, sustainability reports position companies as leaders and innovators in a stronger bargaining position when it comes to attracting investment, initiating new activities, entering new markets, and negotiating contracts.

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