How can businesses report better on their sustainability operations?

sustainability reporting

Stakeholders are increasingly focused on sustainable development, and businesses have to embrace this paradigm shift to not only generate profit but create value. Businesses, big and small, are under more pressure to prioritise sustainability operations and long-term value creation for shareholders. KPMG reports that almost all the world’s top 250 businesses are reporting on sustainability now. 

The connection between long-term value creation and corporate sustainability initiatives is more apparent today than ever before. Companies can recognise higher long-term business value by embracing sustainability on operational and strategic levels. Continue reading to discover the importance of sustainability reporting and how businesses can better report on their sustainability operations. 

Why is sustainability reporting important? 

Sustainability reporting allows businesses to communicate their impacts and performance on various sustainability topics that span social, governance, and environmental parameters. Reporting enables companies to practice greater transparency surrounding opportunities and risks they face which provides stakeholders with further insight into performance besides simply the bottom line. 

Maintaining and building trust in governments and businesses is vital to establishing a sustainable worldwide economy and a prosperous world. Each day, decisions are made by governments and businesses which have direct effects on their stakeholders, like decisions relating to labour organisations, financial institutions, citizens, civil society, and the amount of trust they have in them. These decisions are very rarely based on just financial information. 

They often consider opportunities and risks related to a range of long and short-term factors. These very decision-making processes are increasingly incorporating sustainability-related topics. Businesses all over the world are embracing the concept of sustainability and ESG reporting, and a number of standards have arisen that enable a wide range of stakeholders to compare and evaluate sustainability reports efficiently.  

One of the most widely adopted frameworks is the Global Reporting Initiative Standards. It is related to other kinds of non-financial reporting, like Corporate Social Responsibility (CSR) reporting and triple-bottom-line reporting. Stakeholders play a vital role in identifying non-financial opportunities and risks for businesses. The transparency acquired by involving several stakeholders in decision-making processes results in better decisions and builds trust in businesses. 

The advantages of sustainability reporting

There are numerous advantages of sustainability reporting. For example, it increases understanding of opportunities and risks, which is vital for business performance and short-term and long-term growth. For example, sustainability reporting helps you gain a competitive advantage in global markets and better manage a company’s performance.  

Sustainability reporting also emphasises the connection between non-financial and financial performance. Not to mention, it influences long-term policy, management strategy, and business plans and reduces costs, improves efficiency, and streamlines processes. Sustainability reporting assesses and benchmarks sustainability performance concerning codes, laws, norms, voluntary initiatives, and performance standards. 

It also helps businesses avoid publicised environmental, social, and governance (ESG) failures. Beyond that, sustainability reporting allows for the comparison of performance between businesses and industries internally. There are also external advantages to sustainability reporting. Some of these include mitigating negative environmental, social, and governance impacts and enhancing brand loyalty and reputation. 

Sustainability reporting enables external stakeholders to comprehend the enterprise’s true value, along with intangible and tangible assets. This kind of reporting demonstrates how the business influences and is encouraged by expectations regarding sustainable development. The main benefits that come from sustainability reporting, which can be identified as the primary drivers are enhanced reputation, improved access to capital, meeting expectations, waste reduction, and increased efficiency. 

How businesses can enhance sustainability reporting 

Sustainability reporting has immense power to drive transformational change. It is the language that will bridge the trust gap between society and business and enable the market to allocate capital where solutions have the greatest impact. Sustainability reporting is also a vital tool for engaging stakeholders, improving internal processes, and persuading investors of the value of sustainability.

Unfortunately, many businesses today are failing to tap into the potential value of sustainability reporting. Either that or their reporting is not meeting the mark. Below we will share some guiding principles so you can better report on your sustainability operations to improve engagement and awareness with your core stakeholders. 

Demonstrate true commitment as opposed to just compliance

Just because your business creates and releases a sustainability report does not show that you are committed to responsible business. Sometimes, it can be obvious from reading these reports that a business is not truly committed. 

Sustainability should matter and be important to the organisation, to the extent that it is intertwined with its mission and vision, and business strategy. Embedding sustainability with the core business will greatly build up credibility in your reporting.

It will also allow for this agenda to support your strategic and commercial aims. All those working in management should care about the planet and act on sustainability. This clear commitment from management can be shown through an opening statement from the CEO or senior decision maker in your report. 

The sustainability report should explore social and environmental opportunities and risks, as well as any financial implications. ESG-related risks are very important because they account for almost all of the world’s top risks concerning likelihood and impact. Ultimately, failing to focus on these risks can be very damaging to your business.

Comprehend your stakeholders’ and company’s needs

The very first thing you must do for enhanced sustainability reporting is to comprehend your stakeholders’ and company’s needs. This will allow you to make sure your report focuses on what is most important to your business and stakeholders. 

Sustainability is a big issue, so this is often easier said than done. Therefore, the process of prioritising and identifying issues, or as it is otherwise known, materiality, could prove invaluable for making sense of the landscape and comprehending which problems are a priority to your business. 

Think about reporting frameworks

Sustainability is contextual, and the key is to present your performance regarding the broader demands and limits placed on society and the environment. Think about what your role is in a net-zero world, for instance. The good news is there are tonnes of frameworks that can help businesses do exactly this. 

All businesses should and can use the Sustainable Development Goals (SDGs), for example. These can help them to assess how their business can contribute to a greater world. A lot of organisations also set greenhouse gas emission reduction targets that align with climate science through Science-Based Targets. 

It may also benefit you to take a look at the Global Reporting Initiative (GRI), as it is the most widely used sustainability reporting standard worldwide. This standard helps businesses to comprehend and share the effect of business on essential environmental problems. 

In order to further enhance the disclosure of businesses on environmental and climate data, the European Union passed the Corporate Sustainability Reporting Directive (CSRD), which is a result of the European Green Deal’s climate change aims. It will be rolled out in a phased approach from 2023 and requires businesses to report on how sustainability issues affect their business and how their operations impact people and the planet. 

While it is yet to be rolled out, it shows how these reporting frameworks will become mandatory and the importance of improving sustainability reporting now. Reporting standards have a vital role to play in ensuring information is presented consistently and comparably by a range of companies, reducing the risk of failure to report performance in a transparent way or greenwashing. This consistency improves both the efficiency of disclosures and the understandability of the information reported.

Monitor and measure performance

Monitoring and measuring performance is also a critical element of strong sustainability reporting. You first need to identify the right KPIs and metrics for your business. These should align with the key priorities and impact areas identified and underpin your strategy. 

You should also consider setting goals and targets to start reviewing your performance each year. These should include short, mid, and long-term aims. You also need to report on your performance in a balanced way. This is where transparency is particularly important. 

Think about where you should release the report

As a final note, you should also think about the channels you should release your report on. Consider where your audience is and exactly who you are trying to influence and engage. A stand-alone sustainability report is a crucial part of your communications.

However, integrating stories of achievement and your message across wider channels could improve incredibly . Some of these channels may include your social media accounts, website, and annual report. These channels will allow you to reach a much bigger audience of stakeholders and enhance engagement so your report in itself can have an impact. 


Sustainability reporting allows businesses to be more transparent regarding the opportunities and risks they face. This gives stakeholders deeper insight into performance besides your bottom line. Many enterprises are already embracing sustainability reporting. However, more businesses need to as soon it will be mandatory for businesses to disclose how their business operations impact society and the environment.

Therefore, the time to improve your reporting on your sustainability operations is now. The main takeaway when it comes to sustainability reporting is to show a genuine commitment to sustainability and work on connecting tackling environmental issues to your business mission and vision. To learn more about how you can make your business operations more sustainable, browse our online sustainability reporting course which make this topic practical and accessible.

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