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As businesses across the industry divide continue to become more aware of issues relating to climate change, sustainability reporting is growing more prevalent. Offering an efficient means of propagating a firm’s position on sustainable development, it’s an effective tactic that improves accountability and supports ongoing CSR (corporate social responsibility) and ESG (environmental, social and governance) strategies.

But what exactly is a sustainability report? And what do you need to include when drawing one up?

In this guide, we’ll define what sustainability reporting entails, before detailing all the bases you’ll need to cover as part of a formalised written report.

What is a sustainability report and what is its purpose?

A sustainability report is a statement outlining how a business will make its operations more sustainable, as well as how close it is to meeting key objectives. It sets out an enterprise’s ESG goals, highlighting the action needed to meet targets relating to environmental, social, and ethical issues.

Sustainability reporting is considered a defining benchmark of ESG. It’s a transparent means of detailing a business’ environmental and social responsibility – two attributes that are rapidly becoming prerequisites of securing shareholder funding and customer advocacy.

The purpose of sustainability reporting isn’t solely about outward perceptions and reputation-building, though. It also presents an effective means of identifying risks and opportunities, allowing businesses to implement changes that respond to changing environmental and social best practice standards.

What to include in a sustainability report?

Now that you have a better understanding of the purpose of sustainability reporting, it’s time to look at the things you’ll need to consider as part of your individual reporting process. Sustainability reports are surprisingly far-reaching, so covering all bases is key to their success.

Below, we’ve outlined 8 things to include in your sustainability report.

1. A sustainability vision statement

An effective way to begin your report is to draw up a sustainability vision statement. Think of this as your overarching ethos on ESG-related issues; it should capture your philosophy and beliefs, and the ways in which your business can directly contribute to a more sustainable future.
When creating a vision statement, it can pay to be bold and forward-looking, but try to avoid sweeping ideas that go beyond the commercial reach of your organisation. While ESG-conscious investors will want to see a progressive approach, they may be deterred if your vision statement oversteps the capabilities and progress of your business.

2. Issues to address

From your vision statement, lead straight into the issues you’ve identified as key action points for your business. Not only does this demonstrate an awareness of the need for sustainable development, but it also effectively sets the stage for the remainder of your report – ensuring that your goals, objectives and aims carry weight.

The issues you identify are highly subjective, but typically include things like plastic waste, supply chain traceability, lack of sustainable materials, and energy wastage on your premises. An all-encompassing approach is required here, so be sure to include key stakeholders (such as managers and supervisors) from across your business to contribute to the list of issues raised in your report.

3. Current sustainability state of play

The early sections of your sustainability report are all about defining where your business is today, so transparency and honesty are critical. Here, detailing a present-day state of play can be an effective way to add context to your strategy while demonstrating the progress you’ve already made towards making your business more sustainable.

Consider where you were five years ago and where you are right now; how has a move towards sustainable practices had a positive effect on your organisation? Include data and insights where possible, and try to include real-world examples of measures you’ve implemented in order to improve ESG and sustainability.

4. Goals and objectives

Defining goals and objectives relates to the specifics of your ESG strategy. Here, it’s important to outline achievable and feasible aims which your company can take steps to address, both in the short and long term.

The fact that you’ve already identified issues and listed them in the first section of your report makes it much simpler to outline achievable goals and objectives. For example, one of your aims may be to reduce plastic waste by ‘X’ amount before 2023, or to cut energy wastage by investing in more efficient machinery or improved insulation.

Try to outline one or more aims that directly target the key issues raised earlier in the document. This demonstrates a considered approach that will bear fruit in the long term – something investors will be keen to see.

5. Clear strategy

After outlining your goals and objectives, you need to set out exactly how you’ll meet them. Consider this the meat of your report; it’s where you take each goal and outline the risks and opportunities they present, and the steps required to accomplish them.

When creating your sustainability strategy, consider the details and insights investors will want to see. For example, how much is a transition towards more sustainable working practices likely to cost? And what are the risks and rewards of such an endeavour?

A clear, considered strategy validates the feasibility of your sustainability objectives, while also providing an invaluable roadmap that you and your team can return to for future reference.

6. KPIs

As you implement your ESG and sustainable development strategy, what key performance indicators will you use to demonstrate progress and refine the project? Stakeholders will want to see a benchmarking and reporting process, so consider how and when you’ll evidence the success of your ongoing strategy.

KPI benchmarking relies on efficient data gathering and project management, so ensure you have the appropriate infrastructure in place to keep track of all ongoing sustainability development efforts. Make reference to the frequency at which you expect to see changes, too, and outline how KPIs will be reported to stakeholders and other interested parties.

7. Governance structures and implementation

An impactful sustainability development mission requires a dedicated team to drive progress and ensure consistent improvement. That’s why it’s a good idea to outline, in your report, who will be accountable for taking the project forward, and the governance measures you plan to implement to ensure its success.

Draw up a governance statement that defines how the strategy will be implemented, who by, and through what type of infrastructure. You’re essentially looking to prove that sustainable development is a key operational area of your business, with the appropriate controls, team, and procedures in place to put it into action.

8. CEO statement

Ending your sustainability report with a statement from the CEO (whether that’s yourself or someone else) is a good way to bookend the document alongside the earlier vision statement. It’s a way to re-emphasise the business’ commitment to improved sustainability while delivering a clear message of intent to shareholders, trade partners and customers.

In the statement, draw on both the vision statement and your specific business objectives, creating an amalgamation of the two that demonstrates your pledge to improve ESG practices. And finish by encouraging readers to contact you with any questions they may have, further cementing your commitment to the cause.

Have you enjoyed this guide on things to include in your next sustainability report? For more ESG-related content, click here for the full Perivan blog. Alternatively, if you need help with your corporate marketing or stakeholder communications, visit the homepage or contact our expert team today.