Do youwantyourcompany to growitrapidly? The secret isgetting to understand and deliverwhat stakeholders want. This iswhy ESG sustainabilityreporting has become central to mostoperations of companiestoday. They are demandingenvironmental, social, and governance (ESG) disclosuresthat can help in making the right decisions about yourcompany.
Employeeswant to understand if theircompanyisfocused on equality and empowerment, whileinvestorswant to assess the potential for theirreturns.
ESG sustainabilityreporting has created the roadmap for disclosing a company’s social, environmental and governance impacts. Despitethischannel for communication, some stakeholders have raisedconcernsthat the reports theyget are not sufficient to help themmake the right decisions.
If youmake an ESG report of poorquality, the chances are stakeholders will start doubtingit. In this post, wewill tell you how to harness the full potential of ESG sustainabilityreporting.
Optimizing the Potential of ESG Reporting
There are a number of waysthatyou can use tooptimizeESG sustainabilityreportingbenefits, and we are going to highlight the mostcommon:
- Engage with Stakeholders and Let them Drive the Report
Stakeholders have developed a hugeappetite for change. It is not justtransparency. This presents businesses withstrong cases for them to take action to wintheir affection. As a business, youneed to identifythese stakeholders to understandtheirneeds and strive to deliverit. Take the example of customers as important stakeholders in business operations. By engagingthem, theyindicatewhatyoushould focus on more, meaningthatthey are not just the consumers of the report, but also the drivers of the process.
When the sustainability reportisfinallyreleased, theywillsay, “yes, thisiswhatwewanted.” Customerswillbuy more, whileinvestorswillwant to beassociatedwith the future of the company. This is all youmightneed to drive more sales, raise more capital and take the enterprise to the nextlevel.
- Use ESG SustainabilityReporting for Compliance
As the effects of climate change and othersthat are related to poorsustainabilitybecomeclear, regulatoryorganizations, professional bodies, and stock markets are demanding focus on sustainability. For example, the SEC in the United Statesisworkingwithmarket participants on the adequacy of sustainabilitydisclosureswith the aim of reviewingthem.
Anotherexampleis the Hong Kong Stock Exchange, which has set the bar evenhigher for all listedcompanies. The secret to enjoying optimal stakeholder support istargeting to deliver or surpasswhattheseregulatoryauthoritieswant.
- Use ESG Reporting to Cut Down the Cost of Operations
For somecompanies, especially in manufacturing, itis not uncommon to gettheir management emphasizing on the costsassociatedwith ESG reporting. This isindeedtrue, but a closer look demonstratesthatwhendonewell, the cost can bepushed down significantly.
Take the example of an ESG sustainabilityreporting processthatrecommends an overhaul of the machinery in a manufacturingfacility. When the entire process isdone, the cost of production will come down because of high efficiency, implyingthatyou can evensell the products at a lowercost to win a biggermarketshare.
This post has demonstratedthatalthoughESG sustainabilityreportingisstill in itsearly stages, it has a hugepotentialwhenappliedproperly. Particularly, itis important to ensureyou have the right ESG sustainabilityreporting software to guide you in the entire process. Rememberthat once you start the process, the focus shouldtarget progressive improvement to build on the currentsuccesses.