Common pitfalls of sustainability reporting
This article is written in preparation for ISOS Group’s GRI Standards Training
Reporting is a necessary part of any project implementation. And more so when it comes to business sustainability because of the subjective and long-term nature of the concept. But although sustainability reporting is becoming more and more common, several pitfalls keep showing up time and time again.
Not aligned with the business strategy: A sure way to garner confusion is to report on issues that do not seem to have any bearing on the company’s overall business. For example, a bank engaging in the maintenance of green city parks makes you struggle to see how the parks are relevant to the bank and fit into their strategy. Whereby, a project like teaching financial literacy shows a better strategic fit.
Embellishing: As a business reports its progress on goals, there may be a tendency to report an ideal state so that they can look good. Perhaps an omission here, perhaps a rephrasing there. It’s advisable to resist this given the wide reach the sustainability report may have.
Not acknowledging mistakes, or lack of adequate progress: No one expects a business to not make mistakes along the way to achieving business sustainability. Unlike an annual financial report where an auditor will pass or fail the business, things aren’t so black and white with sustainability reports. In fact, acknowledging where it isn’t doing well makes a business seem more transparent and trustworthy because the acknowledgement implies that they want to be held accountable to do better going forward.
Not involving all the right people: Stakeholder identification and engagement is absolutely critical in business sustainability, and likewise when reports are being planned, developed and disseminated. A sustainability report cannot be developed in isolation – instead, it is an integration of all the different parts of the business. All relevant inputs from the proponents of these different parts must therefore be sought and incorporated. Getting their input into what is material to them (and that requires reporting) at the beginning of the process is also imperative.
Waiting for perfection before reporting the initiative: Many companies are only just exploring the concepts of sustainability, and essentially dipping their toes into sustainability initiatives. Many of them are hesitant to broadcast their activities, perhaps because they are not ready to be judged on them yet. But for these companies, reporting is still necessary, even if it’s a one/two pager. People should know the good work and effort the company is putting in.
Not following a structure/framework: With no structure, it is easy to report too much, not enough, or provide irrelevant information. Following a structure also helps the business to compare easily between reports, and even cut reporting time down because the structure/ framework is already defined. Frameworks and standards like GRI play a critical role in developing and disseminating such frameworks.
Being too qualitative: Many sustainability reports tend to be too qualitative, with not enough numbers to back up the claims made. This probably aids in making sustainability seem ‘flaky’, difficult to explain, and subjective. But a business that is embarking on sustainability reporting needs to go into it recognizing that they will need many cold, hard numbers. This can be achieved when a sustainability goal is tied to defined quantitative targets (e.g. amount of emissions reduced, amount of costs saved, number of employees employed as a direct result of improved sustainability reputation, etc.).
Not collecting data early enough at the start of the sustainability projects: This supports the pitfall about being too qualitative. From the start, a company needs to collect baseline data before starting out on their sustainability initiatives. This helps to set definitive targets, and helps to measure progress in cold hard terms. This is so important but unfortunately, so often overlooked.
Not requesting for feedback: Because implementing business sustainability is a long-term game, it should be expected that the process of implementation and reporting would likely be revised many times for better efficiency and/or effectiveness. Specifically seeking feedback is needed to proactively learn from past experience and get better at reporting.
Essentially, companies that decide to carry out sustainability reporting should ensure that there is alignment between their overall business strategy and the issues which their stakeholders believe are materials. Putting themselves in the shoes of their target audience will also help them focus and represent the information in the most relevant way.
Find out more about the training here, and sign up. See you there!