April 25, 2016 | By isosteam |
Stimulating Progress: The Challenges & Benefits of Sustainability Reporting –
Write Up in Advance of Sustainable Brands South Africa
April, 2016—Studies suggest that non-financial reporting, otherwise known as sustainability reporting, “can build public trust, increase efficiency and mitigate risks, while also boosting stakeholder confidence, trust and loyalty.” But how can one document serve so many interests? The secret lies within the underlying systems that support non-financial reporting efforts.
Professionals in this blooming industry often refer to the practices undertaken in other countries to assess best practices. Aside from seasoned reporters, many have encountered a prolonged discovery phase where they are primarily focused on understanding the various concepts at hand, defining the sustainability vision for the company and determining what’s relevant.
Regardless of an organization’s reporting journey status, we’ve found the following challenges hinder organizations’ capacity to leverage the value that comes from sustainability reporting. By coming to terms with these universal challenges, reporters can transform barriers into leadership opportunities.
Challenges and Benefits of Sustainability Reporting
Transparency gained through reporting has enabled groups like AngloGold Ashanti to both address community conflicts and promote the social and environmental legacy changes the company is enacting. For instance, the South African-based company has introduced a two pronged strategy for environmental mine management; the first being “do no harm” and the second “managing legacies, including historical pollution and its impacts.” Toward this goal, the Company has sought approval by Ghana’s EPA for its new water management plan, sought to improve its waste management sites in and around the community, and is moving forward with plans to rehabilitate and clean up abandoned mining sites. By recognizing inherent and potential risks, the Company has established more focus dialogue with key stakeholders and advanced mitigation efforts. The sustainability report is a tool employed to continue that dialogue and demonstrate performance per commitments made.
Though groups like AngloGold Ashanti have already begun to inform strategy through the wide lens of sustainability, full integration has yet to be mastered. According to published results of a survey conducted by the South African Institute of Chartered Accountants in April 2015 3 , the practice of integrated reporting in South Africa has stimulated integrated thinking, but there is still a huge learning curve. A deeper level of understanding an experiential learning is necessary to derive benefits in the short-, medium- and long-term.
Beginning to untangle the carefully woven webs of issues, relevance, influencers and responsibilities require a systematic approach to connecting performance measures to strategic long-term objectives…and it’s no easy task. Sustainability reporting has significantly evolved since it was first introduced to the world by a few innovators in the 1990’s, but it’s no longer enough to pursue incremental change. We need disruptive, structural and fully integrated in organizations globally. It’s this move that will transform our ability to meet larger international objectives, realize the benefits associated with strategic sustainability and ring in a brighter tomorrow.
Interested in learning more? Join ISOS Group at Sustainable Brands, May 14-17 in Cape Town South Africa! We’ll be delivering a 3 hour hands-on session on alignment toward reporting efficacy!