Where to start on your journey of sustainability reporting

Staying quiet on sustainability is no longer an option for most companies. As a result, you may be in the process of developing your approach to sustainability. This is where you can consider an impact report to start your journey on reporting your sustainability impacts. This can then be used to build on and improve disclosure year-on-year to provide an increasingly robust and rounded picture of your sustainability performance.

Impact reporting is still in its infancy, certainly compared with traditional financial reporting. But, there has been a gradual increase in the rise of this type of reporting as companies are expected to demonstrate how they are contributing to society, as well as generating financial value. An impact report sets out a company’s impact on society based on its business model. It can act as an important tool to convey the beginning of your company’s sustainability narrative and ESG strategy. Sustainability reporting, whatever form it takes, should exist to build trust with stakeholders. It is important to note that openness and transparency are key, and presenting a balanced, genuine and authentic story, rather than a polished and perfect one, is essential to building trust with stakeholders.

To provide some clarity between an impact report and a sustainability report, please see below. An impact report can act as more of a principles-based document that focuses on high-level content and drives connectivity of information (for instance, between your annual report and corporate website). It can be used beyond financial reporting means, for wider stakeholders, such as customers and employees. On the other hand, while a sustainability report is principles based too, it contains a clear sustainability strategy, specific disclosures and metrics and tends to be metrics and data based. Ideally, an impact report would work as a stepping stone toward a sustainability report.

Now you have an idea of what an impact report is, here are some practical steps for you to consider. This will form the content of the impact report: 

Consider your company’s ESG story

• Storytelling in sustainability reporting and communication is a vital way to engage your audiences. Think about your company’s purpose, it’s place within its industry and society, and how this could create a bespoke ESG-related narrative that could distinguish you from your competitors, as well as tell a powerful story to your stakeholders about your positive impact. 

Start looking at the positive and negative impacts of your business mode

• It is important for you to understand your impacts to illustrate your company’s responsible approach to business. Consider evaluating your company’s value chain to identify the impacts your business activities have on sustainable development, in terms of economic, environmental and social impacts.

Gather performance data, where possible

• While storytelling in sustainability reporting is important, reporting must also be evidence-based. We’ve noticed that many first-time reporters may not yet have a complete set of performance data relating to the areas they want to talk about and can be reluctant to put data in the public domain. However, it is best to scrutinise the data and include what you can in order to allow stakeholders to have as complete a picture as possible and to demonstrate a commitment to transparency.

Consider the best channel

• Consider the purpose of your reporting. For example, which key stakeholders are you trying to reach, inform and engage – from employees and partners, to investors, customers and other stakeholder groups – and what do you want them to do with the information? If reporting is aimed towards investors for example, a chapter in the annual report may be most suitable. On the other hand, if informing customers is paramount, then an impact report can work well, which can be published on your website and social media. 

Thinking ahead, consider the following steps to further your sustainability reporting journey. These steps will ensure you’re on the right track to creating a sustainability report: 

Consider a materiality assessment

• The next step towards making your sustainability reporting more robust is to conduct a materiality assessment. A materiality assessment can be defined as a formal engagement exercise can be undertaken with a company’s stakeholders to determine their interests and concerns in relation to the company.

Consider sustainability reporting frameworks

• We have noticed that first time reporters often look to the Global Reporting Initiative (GRI) framework to cut through the complexity of sustainability reporting. However, the large number of different criteria set out in the disclosures can be quite daunting. As a starting point, consider understanding and using the GRI reporting principles, which sit behind the guidelines, and can help to build the foundations of a robust approach to reporting. 

We can help if you are not sure how to start your sustainability reporting journey. Based on your business we can provide expert advice about which type of report would be best for you. Get in touch with us, we'd love to help! 

See our guide Navigating through the sustainability reporting landscape for more information about how to start your sustainability reporting journey.