What is the Future of Sustainability Reporting?
In September 2020, 90% of ASX200 companies produced a sustainability report. This number has drastically increased over the previous 10 years.
These sustainability reports are fantastic for shareholders to get an annual update of each company's commitment to an economically, socially and environmentally sustainable future.
However, as an increasing number of companies publish these reports, the function of these reports will start to change.
In a world where we receive information on current events within seconds of it happening to our phone, 12 months between sustainability reports is a long time to wait.
Already, companies are making use of their social media to talk about what they are doing to tackle economic inequalities, social injustices and climate change. This is important for customers, clients and employees but does not do much for their investors who rely more heavily on quantitative data.
For investors who are looking to invest in companies with a strong commitment to sustainability, it is important that this report is easily digestible, comprehensive while not being overwhelming and speaks to what they need to know to guide their investment decisions.
The question can also be asked as to why many companies invest in producing an expensive report in a format that very few people would read. This has lead to the rise of innovative reporting solutions such as social media sustainability reports or video summaries.
It goes to the age old idea: if you give someone a 300 page document, they'll probably read zero pages, maybe two tops. If you give someone a four page documents, they'll probably read all four pages. While comprehensive sustainability reports are important, high-level summaries serve and equally important, if not more important role.
Furthermore, sustainability reports are usually a separate report to a company's annual report or are sometimes tacked on the end of the financial performance. Sustainability reports need to be fully integrated into the company's reporting cycle. This ensures sustainability is treated as a core component of the business, not a tacked on after-thought. By talking about sustainability in line with reporting on company financials, this shows that sustainability truly goes to the core values of a company.
As the need for public insight into businesses' sustainability practices grows, this landscape will change increasingly rapidly over the coming years. Sustainability reports will be revised, renewed and reinvigorated.
If you want to make sure you're getting the most out of your sustainability reporting for your customers, clients, staff and investors, contact us to chat about the exciting new options you could pursue for your sustainability report!