Building public trust: Sustainability reporting tips

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Good practices in sustainability reporting

Building Public Trust Awards, December 2015

Sustainability reporting is high on the agenda of both policy makers and companies. Public scrutiny is increasing and organisations see the benefits of reporting on and managing their impacts on society. Our annual assessment of private and public sector sustainability reports has highlighted four particularly positive developments amongst top performers this year:

  1. Top performers articulate a broader understanding of the sustainability impacts of their operations as well as impacts up and down their value chain. Advanced reports are also quantifying and measuring these impacts.

  2. Most organisations have conducted a materiality assessment, including engaging with key stakeholders, to understand and articulate their most significant sustainability impacts. The next step for forward thinking organisations is to assess these issues in light of the Sustainable Development Goals and consider how they can contribute towards the UK's performance.

  3. Top reports seek independent assurance for their reporting to lend greater credibility to their data.

  4. Integrated reports are no longer exceptions but have become a more widely accepted benchmark of top quality reporting and many organisations are demonstrating their journey towards integrated thinking.

For the seventh year running we have given out awards for the best sustainability reporting in the FTSE100, FTSE250 and public sector. Each year, we also publish Sustainability Reporting Tips. These tips highlight leading practice in sustainability reporting and help make companies’ reporting on sustainability more effective. In both the private and the public sector, the organisations following these tips in their sustainability reporting are setting a lead for others to follow.

Provide an overview of your organisation’s key activities and the environment in which you operate to contextualise your reporting to the reader. 

 

Tips to make your reporting more effective:

Basic

Introduce the reader to your organisation by giving an overview of your size, operations and activities.

Intermediate

Contextualise your sustainability activities in relation to the remit and objectives of your organisation.

Advanced

Explain both the direct and indirect sustainability impacts that might arise from your organisation’s role or activities.

Clearly describe your sustainability strategy over the short, medium and long term. Demonstrate how this is integrated into your core corporate strategy and permeates throughout your business.

Tips to make your reporting more effective:

Basic

Demonstrate how your sustainability strategy is integrated into your core business strategy and aligned with core objectives.

Intermediate

Clearly describe your sustainability strategy over the short, medium and long-term.

Advanced

Report on structures, systems and action plans which allow your sustainability strategy to permeate throughout your organisation.

Identify KPIs that are directly relevant to your sustainability strategy. Explain why they are relevant and how they are defined. Set and review your performance against challenging, but realistic targets.

Tips to make your reporting more effective:

Basic

Disclose sustainability KPIs most relevant to your business, including historic performance data to show trends over time.

Intermediate

Set specific and quantifiable short-and-medium-term targets for these KPIs.

Advanced

Disclose financial implications behind KPIs.

Present information in a balanced and transparent fashion. Acknowledge the negative and positive impacts of direct operations and report how this has informed your strategy. Celebrate success, but also avoid glossing over negative sustainability impacts or poor performance against targets. Explain where and how improvements will be made.

 

Tips to make your reporting more effective:

Basic

Report progress against all targets, whether performance has been good or bad.

Intermediate

Explain poor performance and how you will address it going forward.

Advanced

If you reach targets ahead of schedule, set more challenging targets going forward.

Explain the key strategic risks and opportunities for your organisation that arise from sustainability issues to show that you have considered the impacts that external sustainability factors might have on the success of the business.

Tips to make your reporting more effective:

 

Basic

List out the risks and opportunities relating to sustainability that the organisation is managing.

Intermediate

Describe the action plan in place to address these risks and opportunities.

Advanced

Disclose the relevance and financial implications of these risks and opportunities.

Demonstrate an understanding of the sustainability issues relevant to you and your key stakeholders; report only those of material importance.

Tips to make your reporting more effective:

Basic

Report which issues you have identified as material and why.

Intermediate

Report on the process that was undertaken to determine material issues and which key stakeholders were involved.

Advanced

Focus your reporting on your material issues, linking them to your strategy and KPIs.

Illustrate how your sustainability strategy has had an impact on the bottom line. Identify and define potential means of maximising economic benefits going forward.

Tips to make your reporting more effective:

Basic

Identify cost savings, investments and efficiencies arising from sustainability projects.

Intermediate

Discuss long-term financial implications of your sustainability

Advanced

Report financial data related to potential risks and opportunities to demonstrate the business case for sustainability.

Consider relevant extended upstream and downstream value chain aspects of your business in order to take account of all environmental, social and economic impacts, both positive and negative.

Tips to make your reporting more effective:

Basic

Consider the positive and/or negative impacts of your supply chain and/or your products and services in your sustainability reporting.

Intermediate

Report quantitative data on material impacts across your value chain, both positive (e.g. energy-saving products) and negative (e.g. human rights in the supply chain) and strategies in place to address these.

Advanced

Set specific targets for material value chain impacts and report on progress towards them.

Explain how you engage with principal stakeholders and how this has impacted your sustainability strategy and reporting. Make your reporting accessible and easy to read in order to engage a broad range of stakeholders. 

Tips to make your reporting more effective:

Basic

Identify the key internal and external stakeholders to your organisation and describe how they have been engaged.

Intermediate

Describe the issues that stakeholders have identified as important and how these have been addressed.

Advanced

Show linkage between stakeholder consultations and your materiality, strategy and risk and opportunities planning processes. Consider alternative media for communicating messages from your sustainability report.

Provide a clear explanation of the company’s sustainability governance system and how it fits into the overall governance structure. Explain how directors and staff are incentivised to deliver on the sustainability strategy and the goals set.

Tips to make your reporting more effective:

Basic

Identify the board member responsible for sustainability issues and outline your sustainability governance structure.

Intermediate

Showcase how sustainability governance permeates through your business, e.g. through department heads with sustainability responsibilities.

Advanced

Report on how staff are incentivised to deliver on the sustainability strategy throughout the company, and include financial and non-financial incentives (e.g. remuneration, employee awards).

Ensure the credibility of your reported content by referencing, for example, independent studies, external benchmarking, expert review panels or external third party assurance. Where assurance is used the opinion should clearly state the scope of work.

Tips to make your reporting more effective:

Basic

Reference independent data, e.g. external benchmarking, to ensure the credibility of your reporting.

Intermediate

Obtain internal or external assurance over the sustainability data you report.

Advanced

Include the assurance opinion, which should clearly state the scope of the work, the assurance standard followed and the work completed, in the report.

Disclose that you have considered future resource constraints that might affect your business. For example, constraints around non-financial capitals including natural capital and human capital.

Tips to make your reporting more effective:

Basic

Disclose significant use of non-financials capitals, e.g. water, land, timber.

Intermediate

Explain whether you expect that the availability of any non-financial capitals might be restricted in the future

Advanced

If you anticipate possible constraints, describe your strategy for managing this risk.