An effective sustainability reporting cycle, which includes a regular program of data collection, communication, and responses, should benefit all reporting organizations, both internally and externally.
Transparency about non-financial performance can help to open up dialogue with internal and external stakeholders such as customers, communities and investors, and demonstrate leadership, openness and accountability. Demonstrating that your organizational values align with those of your stakeholders and that you “walk the talk” will help you to foster trust and confidence, maintain your license to operate, and increase customer and employee loyalty. In addition, sustainability reporting can help you differentiate yourself in a competitive job market in order to recruit top talent.
The sustainability reporting process generates reliable, relevant and standardized information on your sustainability impacts and performance. The regular analysis of strengths and weaknesses and engagement with stakeholders that is necessary for sustainability reporting, can enable more informed decision making, lead to more robust organizational strategies, and drive continuous improvement. Companies that have a continuous improvement process in place reduce their operational, value chain, regulatory and reputational risks over the short- and long-term.
Measuring sustainability performance can help companies to meet regulatory requirements effectively, avoid costly breaches, and gather necessary data in a more efficient and cost-effective way. Internal management and decision-making processes can be examined and improved, leading to cost reductions by monitoring issues such as energy consumption, materials use, and waste. Additionally, having a sustainability report can help to reduce the burden related to responding to multiple stakeholder requests for information.
A growing number of companies see sustainability reporting as a means to drive greater innovation through their businesses and products to create a competitive advantage in the market. Companies seen as leaders and innovators can be in a stronger bargaining position when it comes to attracting investment, initiating new activities, entering new markets, and negotiating contracts.