Video transcript: Why is sustainability reporting such a priority and how can firms ensure that value creation is at the heart of their reporting

Transcript

Why is sustainability reporting such a priority at the moment?

Clearly new regulatory requirements require companies to be transparent about the sustainability risks and opportunities they face. But it's not just about compliance. Reporting opens opportunities to improve decision making across environmental, social and profitable outcomes, enabling businesses to focus efforts to where improvement and action is required.

What are the benefits of high quality sustainability reporting?

Reporting creates value for businesses in a number of key ways:

First, it informs strategic planning. Sustainability reporting plays a key role in assessing progress against strategic goals, benchmarking against competition, and helps to prioritise action. It helps give a holistic view of the company to investors and wider stakeholders, who are increasingly concerned about sustainable issues.

Second, strong sustainability reporting can provide wider access to capital markets and other sources of finance. Comprehensive reporting demonstrates how businesses are future proofing the company, and so can increase access to more long-term investment opportunities. We are also seeing evidence that consumers are concerned about sustainability, and increasingly expect this to be reflected in the products and services we all buy.

Third, enhanced sustainability reporting provides the data insights needed to make better decisions and build a robust response to sustainability related risks and opportunities. Risk management is strengthened. An effective evaluation of sustainability-related risks across your value chain can help you build a competitive advantage, and your business becomes better equipped to manage sustainability risks, and adapt to the climate transition.

And, lastly, robust reporting builds greater trust with stakeholders. There is growing stakeholder demand for greater transparency and the information that businesses share needs to be relevant, reliable and trusted. Clear and meaningful sustainability reporting will help you share your sustainability story and improve your reputation with customers, suppliers and society, as well as improving talent attraction and retention.

How can businesses ensure that value creation is at the heart of their reporting?

There’s many steps I’d suggest businesses can take:

Done well, sustainability reporting unlocks long-term value. Leaders need to act now to seize a competitive advantage that will stand the test of time. To start, ensure you have a clear strategy, set out your vision and ambition, and most importantly, ensure you have senior alignment across the organisation. This is vital in accelerating change and defining your narrative as an organisation.

From risk management, to product development, to data systems - you need to ensure you are able to get the data and information you need to understand the full impact across the business.

And, finally, work with your stakeholders and customers to make sure you understand what their needs are. They may need or want more than just the regulatory requirements, and if you provide deeper insights, they will almost certainly appreciate it. And in being proactive, you’ll be met as trusted, genuine leaders, passionate about making a difference. So take the time to understand this - in the long run it's going to be beneficial to both profits and planet.