From strategy to successful execution of sustainability reporting 

Successful sustainability reporting is a deliberate process and results from strategic decisions and plans taken by organisations. FILE PHOTO | SHUTTERSTOCK

Successful sustainability reporting is a deliberate process and results from strategic decisions and plans taken by organisations.

Sustainability reporting communicates pertinent information about an organisation’s future viability to stakeholders.

Therefore, sustainability reporting does not occur in a vacuum but is the consequence of deliberate actions from strategy to implementation.

The role of reporting is often misunderstood in an organisation’s sustainability journey.

Some organisations tend to take a marketing or spin view to sustainability reporting to project themselves favourably, leading to greenwashing and other adverse impacts on credibility, trust and brand value.

In addition, some organisations apply a compliance-driven mindset to sustainability reporting without tailoring or developing bespoke reporting due to the absence of an overall strategy across the organisation.

These organisations fail to reap the full benefits of sustainability reporting because they cannot show a linkage between embedding sustainability in their strategy, the transformational impact on their business model and the opportunities it presents.

As such, it is difficult for such organisations to identify projects that qualify for sustainable finance because their reporting is disconnected from strategy.

Sustainability and ESG (Environmental, Social and Governance) standards must be embedded in an organisation’s strategy. They form the basis for the strategic choices and opportunities an organisation pursues.

Over time, organisations have recognised that these issues and standards are essential in assessing their future financial fortunes.

Today, social problems in communities are no longer externalised but have become the headaches of businesses as it takes more than financial capital to remain competitive in the future.

For example, an organisation should have sustainability embedded within its purpose. This way, the organisation can connect its purpose to its long-term financial fortune in a sustainability context.

Organisations that draw this link can easily identify projects suitable for sustainable finance and that provide investment returns similar to conventional financing.