As organisations continue to embrace ESG and other sustainability reporting trends, it is paramount that these reports are viewed not through the lens of compliance but from the perspective of building trust, increasing transparency, telling a unique story, enhancing the organisation’s brand and competitiveness in the short and long term.
Therefore, organisations should seek to stand out in the marketplace by telling a compelling and authentic story that provides stakeholders with relevant information about them.
Organisations should approach sustainability reporting holistically by considering the elements necessary for successful reporting. These elements range from governance to data and system requirements that enable the organisation to tell its unique story credibly.
Organisations using this holistic approach can prepare authentic reports that are tailored to the information needs of their stakeholders. Some of the main aspects of this holistic approach are as follows.
Organisations should decide on their ESG reporting strategy and key metrics to be disclosed. To do this, they should engage their stakeholders to understand their information needs using a materiality filter to ensure they report on material issues only.
Organisations should select the appropriate reporting framework that captures the ESG or sustainability-related risks and opportunities. The framework chosen by an organisation should promote accountability and ensure targets and metrics are SMART (Specific, Measurable, Achievable, Realistic and Timely).
An organisation should then design a governance process that details the responsibility assigned to various teams. This responsibility chart should include details on the control process as well as the role of the board in sustainability reporting. This process builds confidence in the organisation’s reporting.
The organisation should then design a reporting architecture and technology that facilitates reporting. It could use existing technology or newly developed or acquired systems for internal and external reporting.
The technology should integrate financial and sustainability reporting, including reporting automation and visualisation. Finally, organisations should ensure that disclosures are coherent and address the demands of stakeholders.
The reports should be tailored and address the specific operating context of the organisation.
ESG reporting is a journey, and organisations should instil a continuous improvement mindset across all levels of the organisation in line with the organisation’s reporting ambitions. This way, the organisation can keep its sustainability reporting authentic and relevant to its stakeholders.
Akinyemi Awodumila is an Associate Director at PwC Kenya. An author who writes and speaks widely on corporate reporting topics