Sustainability reporting – how to get started Living Stone

Sustainability reporting – how to get started

By | Sustainability

Whether you’ve decided to start with sustainability reporting because your company is required to, or because you simply want to share your sustainability story, a good first step is to make sure you understand the regulations that apply to your company, and how they are currently being addressed.

Sustainability reporting in the EU: obligated?

In Belgium, for example, large enterprises employing more than 500 people are now legally obliged to report on their social and environmental impact. This is in line with EU Directive 2014/95/EU, which stipulates that large companies in member states must now disclose information on their sustainability and diversity practices, effective for financial years beginning on or after January 1, 2017.

The EU rules on non-financial reporting only apply to large public-interest companies with more than 500 employees. This covers approximately 6,000 large companies and groups across the EU, including listed companies, banks, insurance companies, and other companies designated by national authorities as public-interest entities.

While the EU directive offers general guidelines on non-financial reporting, member countries are able to define and align the regulation with local reporting requirements. For example, 80% of EU countries have enlarged the definition of companies that fall into the directive’s ‘public interest’ heading, extending it to include municipalities, public utilities, health insurance companies, state railways, and others.

Countries can also choose the framework for their national laws, using the EU framework, their own national framework, or a recognized international framework. They can also choose if or how penalties will be applied for non-compliance.

» Get a free analysis of your sustainability report «

Sustainability reporting: SDG and GRI

Whether your company is legally obliged to report on its sustainability practices, or chooses to do so, there are two generally accepted models for sustainability reporting: SDG and GRI.

Sustainable Development Goals

The Sustainable Development Goals (SDGs) are part of the United Nations Global Compact’s Agenda 2030. The 17 SDGs chosen by the UN are aimed at achieving a better future for all, including ending extreme poverty, fighting inequality and injustice, and protecting our planet. Companies can use the SDGs as a guide, or framework, to direct their sustainability strategies, choosing an area or areas to focus on (i.e. clean water, no poverty, gender equality, climate action, etc.), and communicate about their progress.

While four in 10 of the biggest companies across the globe have begun to mention SDGs in their reporting, [i] according to a report on SDG reporting authored by KPMG, the framework for reporting on corporate efforts toward the SDGs is still pretty uneven. Some companies have selected ‘priority SDGs’, and report on their achievements toward these specific SDG goals. (Interestingly enough, not many are reporting on instances where corporate practices might negatively impact an SDG.) So far, Germany, France and the UK are leading the way with SDG reporting, compared to other countries.

Global Reporting Initiative

GRI stands for the Global Reporting Initiative, an independent international organization based in Amsterdam that has pioneered sustainability reporting since 1997. GRI’s Sustainability Reporting Standards cover economic, environmental and social issues. They’re available as detailed, downloadable guides that you can use to prepare your sustainability reports.

With the GRI Standards, it’s similar to the SDGs in terms of selecting priority issues to focus on. Certain areas that are covered by the GRI indices will be more relevant to you as a company (e.g. for a transport company, making progress in cutting CO2emissions will probably be more material than wanting to reduce the company’s waste volumes). The GRI encourages companies to focus on the GRI indices that will have the biggest impact, instead of all of the indices.

Linking SDGs to GRI reporting standards

To understand how to link Sustainable Development Goals to GRI reporting, GRI, along with UN Global Compact, and the World Business Council for Sustainable Development (WBCSD), has developed a guide called the SDG Compass. It’s designed to help companies figure out how to align their sustainability strategies to the SDGs, as well as measure and manage their contribution to the Sustainable Development Goals.

Integrating sustainability goals with your B2B marketing

Another important link is between your company’s sustainability practices and your B2B marketing and corporate communication programs. Your stakeholders – prospects, customers, employees, partners, suppliers, investors, communities – want to know how you are being sustainable. Make it easy for them by highlighting your sustainability story wherever you can.

We can help you get started with sustainability reporting, including what framework to choose, and how to apply the SDG or GRI reporting models into your sustainability reporting. And we can help with ideas on how to maximize your sustainability story in your marketing communications. Contact us to find out more.

banner-free-analysis-sustainability-report

 

[i] ‘SDG Reporting: What good looks like and why it matters,’ KPMG, Lead authors: José Luis Blasco, Adrian King, Santhosh Jayaram. https://home.kpmg.com/au/en/home/insights/2018/02/how-to-report-on-the-sdgs.html 

Sustainability in B2B companies

Missed opportunity: are you optimizing your sustainability reporting?

By | Sustainability

First things first – is your organization already reporting on its sustainability practices? More and more companies are engaging in sustainability reporting, as this study from KPMG demonstrates, for all kinds of reasons. For some it’s now legally mandatory. In Belgium, for example, large enterprises employing more than 500 people are now legally obliged to report on their social and environmental impact. This is in line with EU Directive 2014/95/EU, which stipulates that large companies in member states must now disclose information on their sustainability and diversity practices, effective for financial years beginning on or after January 1, 2017.

The EU rules on non-financial reporting only apply to large public-interest companies with more than 500 employees. This covers approximately 6,000 large companies and groups across the EU, including listed companies, banks, insurance companies, and other companies designated by national authorities as public-interest entities.

As an SME, should you report on sustainability?

What about small, or medium-sized companies? For now, there is no legal requirement for SMEs to disclose this information. Still, lots of them are doing it. Why? Because the world is changing, and so are the expectations of today’s business partners. As customers and investors become accustomed to reviewing the sustainability practices of large companies when making decisions, they’ll increasingly expect to know about the sustainability efforts of their smaller business partners, too.

The reason that the EU directive isn’t being applied to SMEs – for now – is the belief that having to do this kind of reporting places a disproportionate burden on smaller companies. But is that true? It is the case that at smaller companies, high-level execs are more likely to spend most of their time on sales, rather than financial reporting, and they might not have the bandwidth to add to their reporting resources. Small companies’ markets are usually smaller – focused on a niche, a region or a country, for example, rather than the entire world. And in terms of ‘impact,’ it can be hard for a small organization to see how its activities can make much of a difference to global issues like poverty, or human rights. For many SMEs, it can seem like there’s not much to actually report on.

The truth is, sustainability reporting for small and medium sized companies can be very powerful. First of all, through the analytical process of reporting, businesses gain insight into their own performance, and can identify ways to improve. And second, even if you’re a smaller company, it makes good business sense to offer greater transparency and highlight your sustainability practices. Your audiences want to know about your approach to sustainability, no matter what size of company you are. In fact, many organizations require proof of sustainability before they’ll partner with you. And third – effective sustainability reporting can actually increase your company’s valuation.

» We’re organizing a free infusinar: “Why include sustainability in your B2B marketing story?” on Tuesday 16 October.

How can SMEs join the sustainability discussion?

So what’s the best way for a small or medium sized company to join the sustainability discussion, and effectively present your sustainability practices?

To start, make a list of the sustainability aspects that are relevant for your organization. Or, even better, ask your stakeholders to make the list together with you. For some companies, water consumption is more critical than carbon emissions, for example. Then highlight the responsible activities your company is engaged in, relative to these aspects.

Some examples: Has your company taken steps to ensure fair practices for everyone involved in producing your product, all the way along the value chain? Are your products made using recycled materials? Or what about your offices or manufacturing sites? Does your facility practice water conservation? Have you switched over to LED lighting? Have you embraced new business models, such as leasing instead of sales for example for lighting systems, roofing systems or any other type of ‘product’? Or are you reducing your CO2 footprint by promoting car sharing, company bikes, etc.?

There are many ways to do business in a sustainable way. At Living Stone, we can help you build your sustainability marketing story and put it into practice so that it reaches your stakeholders.
Contact us for more information

Free info session

Living Stone is bringing together two sustainability experts (Maarten Geerts & Marjola Maes) to share their insights at our free info session: Why include sustainability in your B2B marketing story?” on Tuesday 16 October.

why you should be talking about your company’s sustainability practices Living Stone

Why you should be talking about your company’s sustainability practices

By | Sustainability

If a tree falls in the forest, and there’s nobody there to hear it – does it make a sound? It’s the same for your organization’s sustainability practices. If you’re not actively promoting your sustainability initiatives, you’re missing a key opportunity to strengthen your company’s reputation and perception in the public eye, as well as your corporate valuation.

Report your social and environmental impact
Many organizations don’t talk about their corporate responsibility programs. Or if they do, it’s limited to a mention in the annual report, in line with their national reporting regulations. New reporting rules, including the EU Non-Financial Reporting Directive, which requires large companies to publish regular reports on the social and environmental impacts of their activities, mean that companies are starting to articulate their positions on a range of issues, including environmental protection, social responsibility and treatment of employees, respect for human rights, anti-corruption and bribery and diversity on company boards.

In Belgium, large enterprises employing more than 500 people are also legally obliged as of this year to report on their social and environmental impact. Across the EU, many companies are still finetuning their sustainability reporting approach. In countries with existing reporting rules on corporate responsibility, including Germany, Sweden and the UK, the new EU directive has been aligned with existing requirements. In countries where the rule is new, the approach and law is still under determination.

But even where sustainability reporting is the norm, these initiatives aren’t, in many cases, crossing over to B2B marketing and communications. Climate change is one example. What is your company doing to limit carbon emissions, locally as well as throughout the supply chain? And how do these initiatives benefit your company, your customers, etc.? How is your organization making a difference?

If you’re not talking about your organization’s response to climate change, you’re not alone. Even though we’re seeing the impact of climate change across the globe, a recent KPMG study[i] of 4,900 companies from around the world showed that only 28% referred to the financial risk of climate change in their annual reports. And of those 28%, how many are publicizing their approach to managing this risk?

The truth is, for many organizations, sustainability reporting is a fairly new speciality. But as it becomes more prominent, it’s critical to incorporate it into all B2B communications – even for smaller companies for whom the new EU reporting directives don’t apply – yet.

» We’re organizing a free infusinar: “Why include sustainability in your B2B marketing story?” on Tuesday 16 October.

Why is sustainability reporting important?
There are numerous reasons:

Your investors and customers are increasingly making decisions based on their perception of your company as a responsible global citizen. If you’re not communicating about your sustainability achievements, they won’t know about them. And that will be a competitive disadvantage.
More ratings agencies (DOW, Moody’s, Nasdaq) now rank for sustainability. To gain investors, you need a good ranking. And new ratings agencies (Sustainalytics, Standard Ethics, etc.) that focus on sustainability rankings for public companies are gaining ground. Large banking/finance groups are already taking into account these sustainability rankings to allocate (advantageous) loans.
You need to be sustainable to operate in many markets, and bid for business. Many authorities and governments and also large companies require proof/transparency before they’ll partner with you. Because your activities are as important to their sustainability ranking as their own operations, the entire value/supply chain is taken into consideration: not only the company itself is evaluated, also the organizations and people they deal with are taken into account.
There’s a huge perception value in promoting your sustainability practices – for your employees, your community and your business partners.
Why bury your sustainability achievements in your annual report? As a B2B marketer, you’re perfectly positioned to champion your organization’s sustainability initiatives widely, and make it easy for your audiences to understand your focus on sustainability. It’s not just ‘greenwashing.’ Communicating about your sustainability efforts helps create a competitive advantage.

Want to learn more?
Living Stone is bringing together two sustainability experts (Maarten Geerts & Marjola Maes) to share their insights at our free infusinar: “Why include sustainability in your B2B marketing story?” on Tuesday 16 October.

[i] ‘The road ahead,’ The KPMG Survey on Corporate Responsibility Reporting 2017, Lead authors: José Luis Blasco, Adrian King. https://assets.kpmg.com/content/dam/kpmg/be/pdf/2017/kpmg-survey-of-corporate-responsibility-reporting-2017.pdf