Sustainability Reporting: An Important Tool in Promoting Corporate Responsibility
As transparency and accountability continue to be driving forces in business leaders’ decision-making processes, corporate reporting is important. Whether about an organization’s finances or sustainability efforts, reporting provides clients, consumers and investors useful information when deciding which organizations and businesses to support. Sustainability reporting, in particular, addresses the growing demand by significant market segments for trustworthy information on corporate social responsibility and environmental, social and governance (ESG) efforts.
Organizations that choose to publish sustainability reports are able to communicate to their consumers and investors the social, economic and environmental effects of their activities on communities. As the world grows to value corporate sustainability initiatives, transparent reporting lets consumers and investors know which business leaders are taking the issue seriously.
Sustainability Reporting as a Standard for Sustainability Initiatives
A sustainability report is a useful basis for future policies or measures for improvement. Reports show business leaders which practices were successful in achieving their goals and which ones lacked positive results. Organizations get a better sense of their historical progress by comparing data from old reports to data from the latest one, thus empowering them to reinforce or revise their corporate strategies.
The Singapore Exchange’s (SGX) decision to make sustainability reporting mandatory for its listed companies proves the growing importance of green initiatives in the corporate setting. The SGX’s decision was influenced by its aspiration to promote corporate transparency and sustainability among the businesses in the country. We can expect more organizations globally to answer the call for the promotion of corporate sustainability in the future.
Companies that Benefit from Their Sustainability Reports
The information presented in sustainability reports is often used as the basis for the following year’s green initiatives. Many well-established organizations use these reports as a way of tracking the progress of their sustainability initiatives over the years. This allows them to make necessary strategic adjustments. The following are some companies whose sustainability reports are instrumental in helping them get better every year.
- Coca–Cola’s Water Stewardship
Coca-Cola's " 2013/2014 Sustainability Report " states that the company was able to improve its water efficiency by 8%, a significant improvement since 2010. It was also able to replenish 108.5 billion liters of water to communities all over the world through the company’s various water projects. With drought continuing to be a serious issue in certain parts of the world, the company’s community-centered efforts to replenish the water they use is helping to promote water management to local communities—a smart decision for a company that heavily relies on water to create its products.
- McDonald’s Energy Efficiency
In " The Good Business Report ," McDonald’s 2014 sustainability report, the international food chain was proud to share that over 130,000 of the equipment used in its franchises were energy-efficient, helping the company save 142 gigawatt-hours of energy for the year. These results are the direct outcome of the company’s 2013 sustainability report, " Our Journey Together. For Good. ," which laid out five specific priority areas (sourcing, planet, food, people and community) for the company to focus its CSR and ESG efforts on. Under "planet," McDonald's plans on increasing energy efficiency in its franchises by 20%, a goal it hopes to reach by 2020. With franchises that run 24/7, McDonald’s energy efficiency goals are positive steps towards offsetting its overall energy usage.
- Nike's Resource Management
While the sporting apparel manufacturer has yet to publish its sustainability report for 2014, its " FY 12/13 Sustainable Business Performance Summary " shows how far the company has come since starting its reports back in 2001. Part of Nike's sustainability strategy is to reduce its materials-related impacts. The company, taking its product design seriously in its attempt to reduce the waste from its global supply chain, launched an evaluation tool for its footwear and apparel designs. Material sustainability for the designs is considered a major factor in measuring sustainability, representing 40% of the total score for footwear and 60% for apparel sustainability indices. Nike is nearing its goal of 10% reduction in waste from finished products and shoeboxes, as it was able to reduce waste from its footwear by 8.6% and waste from its shoeboxes by 3% in 2013.
Sustainability reporting has helped all three companies come up with better sustainability strategies through the evaluation and presentation of its yearly data. In Coca-Cola’s case, the company’s continued campaign for water stewardship speaks volumes about its determination towards corporate responsibility. Their promotion of the efficient use of water and their measures to replenish local community supplies help keep the issue of proper water management relevant in the public eye. While McDonald’s already had many sustainability initiatives in place, in 2013 it was able to set its focus on five key areas, thus helping them refine their overall sustainability strategies. Lastly, Nike’s sustainability reports empowered the company to develop new and innovative ways to promote sustainability throughout its supply chain. The company prides itself in regularly updating and upgrading its sustainability initiatives in order to better accomplish its goals.
FCS' Sustainability Solutions
For companies to successfully generate sustainability reports, they need to be able to properly monitor and interpret their data. FirstCarbon Solutions (FCS) , as a longtime partner of CDP, offers a number of services that monitor and review clients’ data, in an effort to achieve transparency and improved performance. Our expertise provides you with sustainability solutions that help reduce operational costs, eliminate waste and improve sustainability performance.