Reporting with Impact

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Recognising societal contribution and impact in your sustainability reporting

This year marks the 15th anniversary of PwC’s Building Public Trust Awards. As the reporting landscape and the expectations of stakeholders have developed, so too have our Awards, and this year we are proud to shift the focus of all the awards towards how organisations have demonstrated their societal contribution and impact. Nowhere is this more relevant than in sustainability reporting.

It has been almost 10 years since we started to review sustainability reporting in the UK, and in particular the FTSE 350. While most legal reporting requirements fall on publicly traded companies, many public interest entities (PIEs), such as private businesses, develop their reporting to a similar level of sophistication as FTSE 100 companies, so for the second year we have included selected PIEs in our review. Our analysis of this year’s sustainability reporting was presented to an independent panel, which chose a winner who demonstrates ‘Excellence in Sustainability Reporting in the FTSE 350 and Public Interest Entities’, along with two further highly commended companies. These prestigious awards are presented at our annual Building Public Trust Awards luncheon, this year held on November 30th 2017. After this date, you can see the winning and highly commended organisations at www.bptawards.com.

In choosing the winner we reviewed reporting of over 200 companies and organisations. Our in-depth approach and our long history of these reviews gives us insight into what a great sustainability report looks like, and how the sustainability reporting landscape continues to develop.

Our annual assessment of private sector sustainability reports has highlighted the following trends in the state of sustainability reporting this year:

Sustainability reporting tips

Each year, we publish our sustainability reporting tips, which you can download in full above. 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 are setting a lead for others to follow. We've categorised the tips under five key questions which your reporting should answer:

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.

How does sustainability fit with your organisation’s strategy?

Organisation Overview

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

Strategy

Describe how your sustainability strategy is integrated into your core corporate strategy and demonstrate how it permeates throughout your business.

Financial implications

Illustrate how your sustainability strategy has had and will have an impact on the bottom line.

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How do you consider your priorities?

Materiality

Demonstrate that you have an understanding of the sustainability issues that are most relevant to you and your key stakeholders.

Stakeholder engagement

Explain how you engage with principal stakeholders and how this has impacted your sustainability strategy.

Risks and opportunities

Explain the key strategic risks and opportunities for your organisation that arise from sustainability issues.

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How do you monitor and manage performance?

KPIs and targets

Identify KPIs that are directly relevant to your sustainability strategy and set challenging, but realistic targets that you can review your performance against.

Governance

Provide a clear explanation of the company’s sustainability governance structure and explain how directors and staff are incentivised to deliver on the sustainability strategy.

 

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How do you consider the broader viability of the business?

Value chain

Consider relevant 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.

Future proofing

Disclose that you've considered the future resource constraints that might affect your business e.g. nonfinancial capitals including natural capital and human capital.

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How do you report with clarity and transparency?

Balanced reporting

Present information in a balanced and transparent fashion and explain where and how improvements will be made.

Assurance

Ensure the credibility of your reported content by referencing, for example, independent studies, external benchmarking, expert review panels or external third party assurance.

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Focus on Societal Contribution and Impact

For the first time, we have also looked at a company’s contribution and impact on society.

It is no longer enough for a responsible business to have a few philanthropic or environmental initiatives on the side. These times have passed, leading companies are now looking at the bigger picture, and their stakeholders are asking bigger questions. Where does our organisation fit into the world? What and how does our business contribute to society? What negative impacts are inherent in how we currently do business? Such is the business interest in this field that the World Business Council for Sustainable Development (WBCSD) has recently set up the Social Capital Protocol initiative. The initiative aims to mainstream the measurement of social impacts for business and in March 2017 launched the first version of the Social Capital Protocol that outlines a consistent process for measuring, valuing and better managing social capital. See www.social-capital.org for further detail.

A business which considers these bigger questions can start on a path to making changes which will help it to become a sustainable business, that is, one that can deliver social progress and business growth simultaneously.

Context and understanding

Organisation Overview

Provide an overview of your organisation’s key purpose and contribution to society.

Strategy

Describe how your societal contribution and impact is integrated into your core corporate strategy and demonstrate how it permeates throughout your business model.

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Governance

Governance

Provide a clear explanation of the company’s governance structure and explain how directors and staff are incentivised to deliver on the societal strategy.

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Identification

Materiality

Demonstrate that you have an understanding of the societal issues that are most relevant to you and society.

Stakeholder identification

Explain who you consider to be your societal audience.

Risks and Opportunities

Explain the key strategic risks and opportunities for your organisation that arise from societal issues.

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Performance management

Stakeholder Responsiveness

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

KPIs and Targets

Identify KPIs that are directly relevant to your societal contribution & impact strategy and set integrated, challenging but realistic targets that you can assess your performance against.

Value Chain

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

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Communication

Balanced Reporting

Present information in an integrated, fair, balanced and understandable fashion and explain where and how improvements will be made if it’s not.

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Contact us

Alan McGill
Partner, PwC United Kingdom
Tel: +44 (0)20 7212 4348
Email

Emma Cox
UK Leader Sustainability & Climate Change
Tel: +44 (0)20 7213 8150
Email

Gordon Wilson
Senior Manager
Tel: +44 (0)7841 468723
Email

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