Value of sustainability reporting – Why is it important?

While it used to belong purely to the domain of very environmentally friendly or community-minded companies, sustainability reporting has become a common practice in the 21st century. As many as 95% of the Global 250 (world's biggest companies) issue sustainability reports, the benefits of which include gaining the trust of their shareholders and stakeholders.

Issuing reports on non-financial aspects of business performance can benefit a company by increasing its competitiveness, investor trust and employee loyalty, as well as creating an easier access to capital.

Sustainability reports are often looked into by analysts when assessing the management quality and efficiency of a company. Companies that issue these reports are required to collect information about processes and impacts not measured thus far. In addition to creating greater business transparency, this data can also be used as indicator for change and point out, for example, how to reduce the use of natural resources, how to increase efficiency and improve performance…

It is necessary to have a standard framework in order to make sustainability reporting as helpful and useful as possible to managers, executives, analysts, shareholders and stakeholders. The most widely adopted framework today is the Sustainability Reporting Framework by the Global Reporting Initiative (GRI).

Some of the advantages of sustainability reporting include:

• Better company reputation
• Meeting the expectations of employees
• Easier access to capital
• Increased efficiency
• Waste reduction