What are the best practices for balancing people, planet, and profit in sustainability reporting?
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Sustainability reporting is a way for organizations to communicate their economic, environmental, and social impacts to their stakeholders. It can help them showcase their achievements, identify risks and opportunities, and improve their performance. But how can they balance the three dimensions of sustainability: people, planet, and profit? Here are some best practices for creating a comprehensive and credible sustainability report that reflects the organization's values and goals.
One of the first steps to balance people, planet, and profit in sustainability reporting is to align the report with internationally recognized standards and frameworks. These can provide guidance on what to measure, how to report, and how to assure the quality and relevance of the information. Some of the most widely used standards and frameworks are the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the International Integrated Reporting Council (IIRC), and the Task Force on Climate-related Financial Disclosures (TCFD).
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Vajk Barabas
Sustainability Reporting | 🌱 ESG | CSRD | EHS
Aligning sustainability reports with internationally recognized standards and frameworks is not just about compliance; it's a strategic move. It provides a common language for businesses to communicate their impact and progress transparently. These standards facilitate informed decision-making, foster trust among stakeholders, and drive meaningful action towards a more sustainable and responsible future.
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Deepa Rao
ESG Reporting | ESG Controller | ESG Governance | Internal Controls over Financial and Non Financial Reporting | COSO | CSRD | Sustainability Frameworks | Internal Audit | SOX | Speaker on ESG Governance and Practices
It's valuable to be transparent if, for any reason, the organization does not align with a specific standard or framework requirement. Discuss the plans and actions your organization is taking to advance these initiatives. Don't disregard reporting the metric; if you don't align with it, explain and outline your plans
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Another key practice is to engage with stakeholders throughout the reporting process. Stakeholders are the groups or individuals that affect or are affected by the organization's activities, such as customers, employees, investors, suppliers, regulators, and communities. Engaging with them can help the organization understand their expectations, concerns, and interests, and prioritize the material issues that matter most to them. It can also help the organization build trust, transparency, and accountability with its stakeholders, and demonstrate how it creates value for them.
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Vajk Barabas
Sustainability Reporting | 🌱 ESG | CSRD | EHS
Stakeholder engagement in sustainability reporting is like a compass guiding an organization. It's a two-way conversation that not only reveals blind spots and opportunities but also strengthens the bonds of trust. When businesses genuinely listen to their stakeholders, they pave the way for responsible and mutually beneficial outcomes, fostering a sense of shared purpose and accountability in their sustainability journey. It's a win-win for both the organization and its stakeholders.
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Deepa Rao
ESG Reporting | ESG Controller | ESG Governance | Internal Controls over Financial and Non Financial Reporting | COSO | CSRD | Sustainability Frameworks | Internal Audit | SOX | Speaker on ESG Governance and Practices
ESG topics cut across the organization at a 45 dgree angle, which means there needs to be a shift in mindset of the teamsand not treat ESG as an "add on" job but ESG topics are central to the growth and progress of the organisation and everyone plays a part. It involves engaging functional teams to contribute to reporting requirements. Functional leaders should consider appointing a single sponsor or point of contact for the ESG team who ensures consistency, understands the requirements, and fosters a sense of ownership and accountability
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A third practice is to set SMART goals and targets for each dimension of sustainability: people, planet, and profit. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. These criteria can help the organization define its vision, strategy, and actions for improving its sustainability performance, and track its progress and achievements. Setting SMART goals and targets can also help the organization communicate its commitment, ambition, and impact to its stakeholders, and inspire them to join its sustainability journey.
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Vajk Barabas
Sustainability Reporting | 🌱 ESG | CSRD | EHS
Setting SMART sustainability goals is like charting a clear course on a complex journey. It brings focus, accountability, and a roadmap for progress. By making these goals Specific, Measurable, Achievable, Relevant, and Time-bound, organizations not only enhance their sustainability performance but also send a powerful message of commitment to their stakeholders. It's a crucial step toward a better future for people, the planet, and profit.
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A fourth practice is to use data and stories to balance people, planet, and profit in sustainability reporting. Data can provide quantitative evidence of the organization's performance, achievements, challenges, and impacts. It can also help the organization benchmark itself against its peers, industry standards, or global goals. Stories can provide qualitative insights into the organization's values, culture, initiatives, and outcomes. They can also help the organization connect with its stakeholders on an emotional level, and showcase its human and social side.
A fifth practice is to seek external assurance for the sustainability report. External assurance is a process of verifying the accuracy, reliability, and completeness of the information in the report by an independent third party, such as an auditor, a consultant, or a certification body. Seeking external assurance can help the organization enhance the credibility and trustworthiness of its report, and identify areas for improvement. It can also help the organization meet the expectations and requirements of its stakeholders, especially investors and regulators.
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Deepa Rao
ESG Reporting | ESG Controller | ESG Governance | Internal Controls over Financial and Non Financial Reporting | COSO | CSRD | Sustainability Frameworks | Internal Audit | SOX | Speaker on ESG Governance and Practices
External assurance is crucial in providing confidence in your data, not just internally but also for investors and customers who rely on this information for decision-making. External assurance should be the final step in validation to certify that the information presented is accurate, reliable and complete.The report from the external assurance should be included or supplemented with the ESG report. This practice allows stakeholders to consider the reported numbers and rely on it.
A sixth and final practice is to be honest and balanced in sustainability reporting. This means presenting both the positive and negative aspects of the organization's performance, achievements, challenges, and impacts, and acknowledging the gaps and limitations of the data and information. Being honest and balanced can help the organization avoid greenwashing, which is the practice of making misleading or exaggerated claims about the environmental or social benefits of a product, service, or activity. It can also help the organization demonstrate its integrity, responsibility, and leadership in sustainability.
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Matt Bullivant
Director of Sustainability and ESG Strategy at OakNorth
There is a further perspective to balance, that you shouldn’t prioritise equivalent representation of people, planet, and profit over substance. Reporting financials fairly is an imperative. Disclosing where sustainable themes impact on profits, both now and in the future, demonstrates thoughtful integration of sustainability into your strategy, business model, and risk management if done properly. As for sustainable topics themselves, it has to be about authentic impact. They may not affect, or be affected by, your business in a neatly balanced or equivalent manner. Transparency over how or why that may be the case is key.
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