Sustainability reports: what are they, how to develop one and their benefits

Making a sustainability report is important to communicate to the stakeholders the economic, environmental and social impacts of your company. Why is it important to communicate my company's performance? What do we have to include in the report?

Let's check what is a sustainability report, why is it important and how to make one.

What is a Sustainability Report?

A sustainability report is a document that shows the economic, environmental and social performance of a company. With this document, companies can identify their contribution, negative or positive, to sustainable development.

Generally, the contents of a report depend on each company; however, these must include economic, environmental and social aspects. Reports usually encompass a year and communicate the initiatives implemented, their progress and results, as well as investments and labor improvements. In terms of environmental impacts, companies report their actions to manage their emissions, measures taken to reduce the impacts and their results. It is important to be transparent about the negative aspects, as it allows companies to communicate the improvements to implement, to demonstrate real and concrete progress, thus increasing the trust of their customers and partners.

Why it's important to make a sustainability report?

More and more clients and investors are taking into consideration the economic, environmental and social performance of companies when deciding whether to invest in them or not. A report allows stakeholders to learn about a company's impacts so that they can make objective decisions about whether to support that business.

Sustainability reports provide transparency on the economic, social and environmental impacts of companies, which allows knowing their level of commitment to a sustainable development.

Should your company make a sustainability report?

Making a sustainability report is beneficial for some companies. If your customers and investors are showing concern about the environmental and social impact of your business, making your performance in these areas transparent can be beneficial.

Similarly, if you are interested in increasing your competitiveness, communicating your impacts will strengthen your commitment to the environment. In addition, publishing a sustainability report will allow you to focus marketing to new market segments that are interested in social and environmental wellbeing, as well as strengthen trust with your current customers.

It's important that companies communicating their impacts are in a position to make transparent the information requested by the standards or by stakeholders, creating a more direct dialogue.

It's also relevant to mention that in order to be able to make this type of report, you must have sustainability integrated within your business, as well as having a measurement and data collection system that allows you to comply with the requirements of a sustainability report.

Which are the benefits of making a sustainability report?

Making and publishing a sustainability report is voluntary, however, it grants various benefits to businesses.

Which are the types of Sustainability Reports?

Although making a report is voluntary and the contents depend on the level of transparency to which a company is willing to commit, it's possible to follow standards that specify the contents.

Here, we explain two types of reports.

Sustainability reports standardized by GRI

Currently, the most widely used international guideline for making reports is the Global Reporting Initiative (GRI) standards. This standard provides a common language for organizations, which will guide you in the correct communication of your company's impacts. Likewise, GRI created these standards to promote comparability between different companies, enabling greater transparency and accountability.

GRI standards have requirements and recommendations for organizations to effectively communicate their impacts, facilitating the understanding of these by their stakeholders. These are divided into two series: the universal standards series and the thematic standards' series. The first series consists of three universal standards, GRI 101: Foundations, GRI 101: General Information and GRI 103: Management approach, where the principles for making reports are presented, as well as the requirements in accordance with the GRI, among other things.

The series of thematic standards are subdivided in economic, environmental and social areas, these are used to guide businesses on how to communicate their impacts for each particular subject.

The reports that follow the GRI standards deliver a balanced representation of the positive and negative contribution of a company to sustainable development.

Sustainability reports that do not follow a standard

When it comes to reporting a company's performance, you can do so either by following a standard, such as the GRI, or without following one. Sometimes meeting the established requirements by a standard might mean disclosing more than a company is willing to. In those cases, we suggest not following a standard, instead publish what is of interest to your clients or stakeholders.

When making a sustainability report without following a standard, it's important to identify the topics of interest of the stakeholders, What information is useful? Which indicators to include? Which results are more interesting? These are the questions you should ask yourself when choosing the contents of the report.

Though it's not compulsory to follow a standard, you can use the GRI documentation as a basis to identify the critical content of the reports.

How to choose the best consultant to make a sustainability report?

Carrying out a sustainability report is not simple. The standards for this type of studies have a specific technical complexity, so we recommend that you consult with a specialist with experience in this topic.

If you want reliable results, it is necessary to choose a provider that knows the methodology very well. In addition, it is important to consider the characteristics of the service, since your consultants could be limited to do the study alone or support your marketing team in communicating the results to the public correctly. It all depends on your objectives.

Overview

In conclusion, sustainability reports allow communicating and making transparent the economic, environmental and social impact of a company and can be used to increase competitiveness, strengthen and manage the company's performance, and to strengthen the confidence of stakeholders. To achieve these advantages, it is necessary to define the contents of your report and consult with an expert in order to meet the company's objectives.