Tag: Year-End Reporting

ESG (Environmental, Social and Governance) is a hot topic. Investors want more reporting and transparency.  Non-financial reporting frameworks expect transparency on issues from climate change to forced labor.  The Board has questions.  And nobody expects it to fade any time soon.

It’s often “all hands on deck.”  But increased activity doesn’t always translate into effectiveness or efficiency.   Even companies that created Chief Sustainability Officer positions years ago are overwhelmed by new requirements, risks and demands.  One poll of over 300 Internal Audit professionals revealed that ESG “lives” in Environmental, Compliance, Investor Relations, or other departments.  There is no consensus on the right home.  Who should lead ESG?  What does “good” look like?  And how will things get done efficiently, effectively, and aligned with business objectives?  Read More

Time to wrap up your company’s performance for year-end. You’re focused on sales, profits, changes over the last year, and preparing for financial auditors. It’s also a good time to do exactly the same for Sustainability reporting. Small- and Medium-sized enterprises (SMEs) and private companies, in particular, may still be developing bits and pieces of Sustainability programs. Annual Sustainability reporting and planning takes a back seat to financial reporting and planning.

These five tips make great New Year’s Resolutions for Sustainability reporting and planning.

Begin with what you’ve got. Environmental, Safety, Homeland Security, and other regulations require reporting. Specific industries are subject to additional regulations, such as the Public Utilities Commission for utilities. Your industry may have an industry standards group or code of conduct that requires external reporting. If your company already reports this information somewhere, why not use it in your Sustainability report? Stakeholders do not see the totality of all this information – and it may be helpful for you to see it compiled all in one place. The basis for this reporting may differ, such. For example, some reporting may include manufacturing, office, and sales fleet, whereas other reporting includes operations only. Some reporting may include the company-owned operations only, and other reporting includes companies, investments, and franchises. Take care that the basis for all Sustainability reporting is consistent.

Use a cross-functional team. People in different roles will know about existing reporting, or other company programs or projects that other people don’t know. Staff from Purchasing, Sales, Operations, Environmental, Investor Relations, Human Relations, Safety, and Communications will bring different perspectives. This needn’t be a big, time-consuming effort for everyone – just get their input. If your company doesn’t have individuals in each of these functions, then scale your team appropriately; in any case, use more than one person. An external perspective can also help you. An outside resource has experience with many companies, reporting metrics, stakeholders’ expectations, and mistakes others have made in Sustainability reporting. Some consultants will perform a full-blown verification audit of the Sustainability report. Auditing is great, but your company may not be ready for it. There are many other ways to use a consultant in a supporting role and at reasonable cost.

Use common frameworks. There are several reporting frameworks for Sustainability. Customers, investors, and non-governmental organizations (NGOs) all have their own. The Global Reporting Initiative is perhaps the most commonly-used framework for comprehensive Sustainability reporting. It is scalable, and suitable for SMEs. The Carbon Disclosure Project (CDP) has a reporting framework for greenhouse gas (GHG) emissions only. CDP data from publicly-traded companies is available via Bloomberg to traders on the floor of the New York Stock Exchange. The CDP also has a prototype “water footprint” reporting framework. Using a common framework saves analysts time and money (and saves you from responding to many of their questions). It also makes your Sustainability report look more professional.

Only report what you know. Systems, procedures, controls, and the quality of data and information for Sustainability may not be as complete or as reliable as the systems you have for operations or financial performance. This is normal. Report only the data and information that can be supported by calculations, back-up data or information. Don’t guess. Consider an example where your company wishes to report on the total amount of fuel used by your company’s sales force. If you don’t have this information, don’t blindly guess “1000 gallons”. However, if the company has records that show $2100 was spent on fuel, and you can estimate the average price of fuel was $3.50 per gallon, then you have support for an estimate of 600 gallons.

Look ahead. As your company compiles your year-end Sustainability report, you’ll think “gee, I wish we had done ‘x’” or “it would be great to have data on ‘y’.” Yes, it would. While it’s fresh on everyone’s mind, and while you can create the best business case, make these improvements now. Gathering data for new reporting metrics (such as the number of gallons of fuel purchased) can take a while to implement. Work out the kinks early, so you have good data for next year. Don’t say the same thing next year – say it about something else.