This informal CPD article, ‘Harnessing the Future: ESG / Sustainability Reporting as a Business Tool' was provided by FBRH Consultants, who aim to help businesses gain value by operating in much cleverer, sustainable ways.
Competition in business is, today, constantly growing, with organisations competing for resources, top talent, clients, and investments. Every business has to convince its key stakeholders that it is the right partner, while also making sure it complies with increasingly strict laws and regulations. For example:
- younger generations expect businesses and business leaders to drive social and economic change, care for the environment, and actively demonstrate how they embrace sustainability in every aspect of their operations. They take important decisions that influence business success both on a personal and professional level.
- Investors want to see that you have a plan of action and that you are not just blindly going forward - and therefore represent a high-risk investment. A key question they need an answer to is: How will your company or organisation benefit from the transition to the sustainable (green) economy?
From Stock Performance to Long-Term Success: The Advantage of High Sustainability Companies
Research carried out globally over the past years clearly shows that companies engaged in ESG/ Sustainability reporting can look to the future with optimism. According to the 2022 Gartner Sustainability Opportunities, Risks and Technologies Survey:
- For 86% of business leaders, sustainability is an investment that protects their organisations from disruption
- Four out of five leaders think sustainability helps their organisation optimise and reduce costs
- 83% say their sustainability programme activities directly generated both short- and long-term value for their organisations
Additionally, research by well-recognised institutions demonstrates that:
- 84% of Millennial investors are interested in sustainable investing (Morgan Stanley)
- Corporate sustainability and profitability are interconnected (Oxford University)
- High Sustainability companies perform significantly better than their counterparts over the long term, in both stock market and accounting performance (Harvard Business School)
Building Trust, Driving Impact
A ESG/ sustainability report is a key document for any company reporting on its sustainability performance and a tool for long-term business success, as it helps companies and organisations to gain a complete picture of all the key sustainability issues/ impacts/ risks they should address (environment, economy, people and their human rights), take action to address these effectively, minimising negative impacts, and increase their chances of succeeding in a very complex, competitive world. A sustainability report can help any business or organisation benefit from the transition to the Sustainable (Green) Economy and achieve a competitive advantage.
Many people, however, may find it difficult to read and understand bulky sustainability /ESG reports. A sustainability/ ESG report will provide useful information for experts, analysts, investors, and other specialists, but it must also communicate well with the majority of other equally important stakeholders who may not be sustainability experts. And do so in easy to understand ways, so as to build trust.
