Why is Sustainability Reporting important
The value of sustainability reporting is that it ensures organizations consider their impacts on sustainability issues, and enables them to be transparent about the risks and opportunities they face. In today’s world it’s not good enough to simply make claims about your level of sustainability. Now, organizations need to provide tangible, credible demonstrations of their level of sustainability, by following proper guidelines for sustainability reporting.
This way organizations build trust among customers and all stakeholders, which in turn directly impacts the bottom lines. As per the business axiom – you can’t manage what you can’t measure; transparency is a currency that builds trust, which build businesses.
So in a nutshell, sustainability reporting can have four major benefits to any organisation:
- - It is a useful risk management tool.
- - It can help generate savings.
- - It helps in better decision-making.
- - It helps in increasing stakeholder trust.
Sustainability Reporting as a tool for better risk management
Some have argued that sustainability reporting and risk management are actually ‘two sides of the same coin’. Considering risk and sustainability together is noteworthy, as sustainability, in grand, strategic terms, is about realizing business resilience, and an opportunity to enhance transparency and partnership. Sustainability shapes a business’ future operating environment, its corporate perception, while at the same time bringing resilience and efficiency into the business.
In simpler terms, both enterprise risk management (ERM), and sustainability reporting are functions primarily focused on the identification and prioritization of risk, with primacy on internal reporting, external disclosure and transparency. In fact, sustainability reporting can be thought of as a first among equals in terms of the mitigation strategy.
Moreover, sustainability reporting has become important tool in better risk management with modern businesses – in addition to the traditional risks – increasingly facing social and environmental risks, which manifest themselves over a longer term, are largely outside the organization’s control, and often affect the business on many dimensions.
Managing such risks require making investment decisions today for longer-term capacity building and developing adaptive strategies; and a good sustainability report helps in that.
Read more on why sustainability reporting is vital for businesses in Singapore at InCorp Global.
