With 50% of 2021 already down the line, the indicators are that this will be the year of sustainability reporting.
Hitting the fifth-year benchmark of the Paris Agreement while wrestling the effects of the COVID-19 pandemic, the central role of businesses’ focus on sustainability could never have been more critical. According to the UN Secretary-General, Antonio Guterres, sustainability reporting is going to be even more important.
If you are a manager or investor looking forward to joining or strengthening your efforts in sustainability reporting, you might want to start by checking the latest trends. Here are the five main sustainability trends that will shape 2023 and the future.
What is Sustainability Reporting?
Before looking at these trends, let us start by answering the big question, “What is ESG reporting? This is a way of disclosing sustainability data to enhance the visibility and transparency of a company, with the target of highlighting the environmental, economic, and social impacts caused by a company.
The process goes beyond creating a report. Good sustainability reporting offers you the opportunity to relook, rethink and craft new strategies for success. It is time to look beyond the horizon and draw new lines for success. Some of the main benefits that companies focusing on sustainability report include:
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- Lower cost of operations.
- Stronger brands on the market.
- Faster growth and success.
- Higher staff satisfaction.
- Low rates of staff turnover.
- Satisfaction from helping to address the global issues in society.
The Main Trends in Sustainability Reporting
Growing Demand for Accurate Data
When the ESG sustainability reporting framework was developed, some of the defining principles were accuracy and credibility. However, achieving them has been a major challenge.
According to one of the McKinsey studies, investors indicate that reports are not conclusive to help them make good decisions.
Now, more stakeholders, including regulatory bodies and investors, are demanding greater transparency in the reporting.
When you provide the right sustainability data, the trust from different stakeholders is likely to increase. One of the best ways of achieving this is using advanced sustainability management software.
For example, Diginex Solutions allows you to integrate sustainable reporting for higher accuracy.
Dominant Themes in Sustainability Reporting Include Climate Change and Human Rights
In the latest Carrots and Sticks Report, which was created through collaboration between the University of Stellenbosch Business School, the Global Reporting Initiative (GRI), and the UN, the commonest themes in sustainability reporting include climate change, human rights, and anti-corruption. COVID-19 pandemic has exposed some of the huge inequalities that have long been hidden in value chains. Now, stakeholders are demanding that organizations take full control and communicate their impacts not just within their production lines but also in the entire supply chain.
The Growing Importance of Scope 3 Climate Actions
If you ask most entrepreneurs and managers about their effort to cut down effects on global warming and climate change, they will be quick to highlight operations in their own operations. However, the efforts at your factory alone might not be enough to wrestle the mammoth problem of global warming. This is why companies are being encouraged to look at the indirect emissions that happen on the supply chain.
Think of a company that deals with food processing. Even if it adopts efficient machines and cuts down wastes with a huge margin, the effect can be negated by suppliers using unsustainable production processes. This implies that you also need to capture the data about the efforts for sustainability in the entire supply chain.
Sustainability reporting is expected to continue defining the globe in the remaining part of 2021 and beyond. Therefore, you better take a closer look and check for innovative ways to take sustainability to the next level. So are you ready? Start by acquiring the right sustainability management software.
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