Can Sustainability Reporting Be Simple?
Sustainability is not just a catch phrase to be tossed around the farmer’s market anymore. All over the world, consumers are choosing to adopt more environmentally and socially conscious lifestyles. People are not only taking notice of unethical business practices and destructive natural resource extraction techniques, they are taking a stand against them. Consumers are willing to pay slightly higher costs to ensure that the products they purchase are manufactured with the triple bottom line of economic, environmental, and social performance in mind. No longer associated with being “green,” the concept of sustainability has now matured to include global corporate citizenship, philanthropy and a fundamentally new way of doing business.
Corporate Leadership Redefined
Corporate sustainability reporting has very quickly shifted from being voluntary to being vital. Among multinationals, sustainability reporting is rapidly becoming the norm - skyrocketing from about 300 sustainability reports in 1996 to 3,500 in 2010, according to CorporateRegister.com. While Europe took an early lead in sustainability reporting, the U.S. is poised to become its new champion. Between 2009 and 2010, there has been a 22 percent increase in sustainability reporting among U.S. companies alone. And this new push to weave CSR into organizational DNA is definitely paying off. Not only has the Dow Jones Sustainability Index outpaced the Dow Jones Industrial Index for the past 10 years, the average trading of The World’s Most Ethical Companies has consistently topped the S&P 500 since 2007.
The growing trend towards integrating financial performance and sustainability progress reflects the increasingly compatible interests of stockholders and stakeholders. At Nike, “business as usual” has been redefined as business that not only embraces the economic bottom line, but is also responsive to social and environmental impacts. Nike’s Considered Design product line incorporates sustainable practices and innovation into its powerful brand name and image, and in doing so, has positioned itself as a leader among corporations advancing meaningful change.
In addition to the more traditional CSR reporting requirements, the relatively recent introduction of the Outdoor Industry Association’s Eco-Index and the rapidly evolving Sustainable Apparel Coalition’s Apparel Sustainability Index are providing companies with new data relative to the sustainability scores of their products and materials. Companies are quickly considering how to communicate the wins and the challenges with product design, development, and manufacturing choices.
Sustainability Software Solutions
These days, companies can choose from a wide range of sustainability reporting software options that streamline the process of measuring, disclosing, and being accountable to stakeholders for organizational progress toward sustainability. International frameworks like the Amsterdam-based Global Reporting Initiative (GRI) are driving a standardization of the reporting process, making verification a lot easier. As a result, there are a greater number of businesses looking not only to newly implement the necessary reporting processes and systems, but also to enhance the quality of their existing reporting procedures.
Over the next three months, Textile Exchange will be highlighting different technology solutions that can minimize the pain of reporting and maximize the opportunities for community engagement and innovation.
SourceN's Transparia software is a web-based, subscription application that makes sustainability reporting simple, engaging, and transformative. Their solutions streamline compliance reporting by allowing collaboration across the entire financial reporting team. SourceN's technology is the foundation of SAP's 2011 SAP Sustainability Report, which serves as an excellent example of how interactive communication, cutting edge graphical design, and real-time customer feedback via social media networks can redefine the way companies build solutions in the area of sustainability.
Crowd-sourcing not only allows you to gauge the most current hot button issues, it can also help you develop materiality. Defined by the GRI as the “threshold at which an issue or indicator becomes sufficiently important that it should be reported,” materiality is essential to relevant sustainability reporting. The most interactive feature in SAP's report, the Materiality Matrix, allows users to create a personalized graph that shows which sustainability issues are most important to stakeholders as well as SAP. This dynamic feedback mechanism allows SAP to adjust their strategic design and message to reflect both stakeholder and stockholder priorities.
Sustainability Reporting Tips
Ready to take CSR reporting to the next level? Here are several considerations for organizations implementing new sustainability reporting procedures:
- Twitter it: Many companies are choosing to include social media vehicles in their CSR messages, so that both stakeholders and stockholders can discuss their policies and practices on sustainability and other social issues.
- Keep it simple: Nobody relishes the thought of turning the pages of a dusty, 64-page tome, much less the eye-strain of reading one on-line. A successful report is like the perfect mini-skirt—long enough to cover the topic but short enough to be interesting.
- Integrate: Make sure to illustrate how your sustainability strategy affects your bottom line. Identify and define the ways in which you are maximizing economic benefits while still adhering to social and environmental guidelines.
- Be Transparent: Celebrate your successes but don't just gloss over any negative sustainability impacts. Turn your less-than-stellar progress in meeting sustainability goals into an opportunity to discuss the challenges you are facing in your steady march toward sustainability, and ways you plan on addressing them.
For more information on sustainability reporting tips and strategy contact email@example.com.