A sustainability report is an organizational report that gives information about economic, environmental, social and governance performance. Sustainability reporting is not just report generation from collected data; instead it is a method to internalize and improve an organization’s commitment to sustainable development in a way that can be demonstrated to both internal and external stakeholders.
- 13.1: Describe Sustainability and the Way It Creates Business Value
- A primary goal of any business is to maximize shareholder or owner wealth and thus continue operating into the future. However, in making decisions to be profitable and to remain in business into the future, companies must think beyond their own organization and consider other stakeholders. This approach is a major goal of sustainability, which is meeting the needs of the present generation without compromising the ability of future generations to meet their own needs.
- 13.2: Identify User Needs for Information
- The concept of the triple bottom line expanded the role of reporting beyond shareholders and investors to a broader range of stakeholders – that is, anyone directly or indirectly affected by the organization, including employees, customers, government entities, regulators, creditors, and the local community. Naturally, companies may feel their first obligation is to their present and potential investors. But it also makes good business sense to consider other stakeholders.
- 13.3: Discuss Examples of Major Sustainability Initiatives
- Three of the most well-known reporting frameworks are the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and Integrated Framework. Each framework relies on materiality (how significant an event or issue is to warrant its inclusion or discussion) as its basis of reporting, but each describes it slightly differently.
- 13.4: Future Issues in Sustainability
- Sustainability reporting is still relatively new and its use is not yet mandatory. But from the standpoint of materiality, companies should disclose information if it has become important enough to influence the decisions of users of financial information.