Sustainability reporting is rising in value as it beds down
There is growing evidence that sustainability reporting is offering companies a competitive advantage as it evolves into a core business practice.
Competitive advantage, together with transparency, risk management and stakeholder pressure were cited as the top four motivators by business to engage in robust reporting mechanisms for their CSR agendas, according to a study.
The Ernst & Young report, published in association with the Boston College Centre for Corporate Citizenship, states there is now increasing interest among corporations and investors to demonstrate greater transparency through reporting, both as a way to ensure that environmental and social impacts are managed and to assess the quality and commitment of management.
The research surveyed 579 corporate professionals who were familiar with their companies' sustainability disclosures. It examined the costs and benefits of reporting, as well as implications for financial performance.
One key finding revealed that 50% of respondents indicated sustainability reporting gave their organisation a competitive advantage, and this heightened if issued sustainability reports were assured.
In addition, more than two-thirds of respondents stated that their organisations employed the Global Reporting Initiative (GRI) framework in the preparation of their reports, which is also the most widely used framework globally.
While data-related issues were considered to be one of the key challenges in working towards greater transparency, the actual cost of reporting is now outweighed by the financial and social advantages that it can offer, the study claimed.
Commenting on the findings, Ernst & Young's executive director for climate change & sustainability services Brendan LeBlanc said: "We were excited to see the high number of survey participants. This statistic is evidence that sustainability practices ought to, at a minimum, inform corporate strategy - there's too much at stake."