What is a Corporate Sustainability report?
Corporate sustainability reports were initially often produced by multi-national corporations to provide in-depth information on the company performance in range of areas from the environment to human rights (e.g. modern slavery and child labour) and social change. Nowadays companies and businesses of all sorts of sizes publish sustainability reports from all over the world.
There are a number of different organizations which publish guidance and further information on sustainability reporting, including:
-Global Reporting Initiative (GRI) Sustainability Reporting Standards
-OECD Guidelines for Multinational Enterprises
-UN Global Compact (the Communication on Progress)
-ISO 26000 on Social Responsibility
Most reports are divided into categories such as ESG (Environment, Social and Governance). However, given the complexity of multinationals, many reports are based on more complex models and approaches.
One approach to understanding and reporting on sustainability is called the five capitals model. This model asserts that business capital is divided into 5 areas:
1. Social
2. Natural
3. Human
4. Manufactured
5. Financial
This means that all the information in the report is usually categorized into one of these different sections. This is especially common in sustainability reports and strategy because impact assessment and Audits have a background and beginning in Accounting departments. Consequently, the need for clear categories and models as well as use of terms such as “audit” are common for these types of reports.
Originally, many of these types of reports were for the purposes of environmental reporting to the government or for “problematic” businesses to attempt to improve their track record. Increasingly, these reports are created voluntarily and aligned with overall corporate strategy as well as used to inform stakeholders about targets met and future developments.
I talk a fair bit about Sustainability Marketing on this blog as a way for businesses to communicate their corporate sustainability strategy to stakeholders. There are many channels and approaches business can take in order to do this. In corporate culture, instituting an annual reporting cycle on how a company is setting strategy, and performing in specific areas with regards to sustainability is part of the answer for many as it sets up a relationship of accountability and ethos of transparency.
