The sustainability report is an important document for companies that undertake a green marketing action. It is a report in which companies account for what they have done to improve their performance in terms of sustainability.
In this article we will see in more detail what a sustainability report is, what topics it covers and how to prepare it.
What a sustainability report is
In the sustainability report companies present the actions that they have developed for environmental, social and economic sustainability over the year and the results achieved.
It is an important document, to asses the progress of green marketing and sustainability activities both internally and externally:
- It allows the company to evaluate the progress made in twelve months, thanks to the descriptions of what has been done and, above all, to the data and figures that give the measure of the results achieved.
- It is an important tool for making the company stakeholders aware of the values and concrete actions carried out for sustainability. Customers, business partners, suppliers, local organizations and associations, potential collaborators of the company: different actors are interested in a company commitment to sustainability.
- Consequently, it is also an element of transparent communication and digital branding, if the company decides to develop a communication campaign about it on its website, on social networks, during events. This brings advantages to the company in terms of image, visibility, starting of new collaborations.
- It allows the company to plan future actions to further improve its sustainability performance. In fact, as we will see later on, in the sustainability report companies also declare their future priorities.
- It also strengthen internal human resources commitment to sustainability. The results achieved, indeed, stimulate the company management and employees to continue working on sustainable initiatives and investments.
The last point shifts attention to two other fundamental elements: the involvement of internal resources and the need to identify indicators that measure the results achieved. However, we will discuss this in more detail in the last paragraph, dedicated to the preparation of a sustainability report.
The three dimensions of the sustainability report
We have already stressed this several times: sustainability does not just mean reducing the impact of company activities on the environment. Indeed, the dimensions of sustainability are more than one:
- Environment. It is the best known dimension and it deals with the actions carried out to reduce the impact on the environment of the company activity. It can obviously covers different areas, from the management of family daily habits to the organization of a city or – of course – of the activities of a company.
- Social inclusion. It has to do with all the initiatives that target the well-being of the community and the individuals. Fundraising and awareness raising events, projects promoted by public bodies to improve the quality of life of disadvantaged groups, or the initiatives of associations and training institutes to promote the reintegration of the unemployed into work are all examples of social sustainability. Companies can promote projects like these as well, in cooperation with other actors. Alternatively, they can decide to support them through sponsorships, donations, supplies.
- Economy. It considers how an economic system, whether large or small, generates income and employment, safeguarding the well-being of people. Also a company is a small economic system, connected to larger external systems. Consequently, actions to ensure business stability, promote employment and take care of the well-being of employees are related to economic sustainability.
The sustainability report considers all these dimensions. We could define it as a summary report that explains how business activities produce value for the economy, the environment and people. Obviously, each sustainability report depends on the structure, activities and size of the company.
How to prepare it
The sustainability report, indeed, is not a rigid document, with an identical structure for all companies. Each report, inevitably, takes into consideration different areas, actions and initiatives.
Over time, however, various tools and methods have been developed to prepare it. Here are some general indications on how to proceed.
A fundamental first step is internal involvement. The management of the company must share with employees and collaborators the commitment for sustainability initiatives and the expected aims.
Then, the most significant areas of actions have to be identified, involving the company and its internal and external stakeholders. Questionnaires, internal interviews, small focus groups can be used to collect ideas and opinions on the subject. One way to systematize the results of this analysis is the materiality matrix: a graph that shows stakeholders more or less intense and direct interest in the different areas of action.
Once the sectors in which the company intends to develop its sustainability actions have been identified:
- The company prepares a structured action plan, which identifies the various interventions to be carried out in terms of environmental, social and economic sustainability. The installation of plants for the production of clean energy, the choice of suppliers who are attentive to sustainability, the introduction of training courses or measures of flexibility and work-life balance for employees are all examples of possible activities.
- Each activity must correspond to one or more result indicators: the so-called KPI – Key Performance Indicators. These are indicators that serve to measure the company progress, usually expressed as a number. For example, the reduction in the consumption of plastic bottles thanks to water distributors, or the number of participants in an awareness-raising event.
In one of the last articles we talked more in details about the standards of sustainability indicators developed at international level, which have been adopted more and more frequently by companies.
By monitoring the indicators identified, it is possible to asses the concrete results achieved by the company. The results of the first year of activity will then be compared with those of the second, in a process of continuous improvement.
The sustainability report presents the data collected and the action developed by the company. It includes different sections, such as:
- Letter to stakeholders: a short introductory text, usually signed by the company president or CEO, which presents the reasons why the company has decided to undertake a sustainability action plan.
- Presentation of company activities, as in a detailed company profile: values, core business, economic results, business model adopted, certifications obtained.
- Identification of the relevant stakeholders, including employees, customers, suppliers, distributors. Local or national associations and organizations also relevant players, as well as the media.
- Models of governance, as the methods adopted to organize and coordinate company activities. This section of the report also describes the auditing bodies and the procedures that regulate internal workflows.
- Products and services, national and international markets, distribution model.
- Any initiatives and investments in strategic areas for the company, such as R&D.
- Description of the main areas where the company has developed actions to promote sustainability and presentation of the initiatives carried out. For each action, performance indicators and related figures must be included, if possible compared to those of the previous year. Usually, at the end of this section the company presents the materiality matrix.
- Possibly, a brief description of the projects that the enterprise intends to carry out in the future.
At the beginning or at the end of the document, the company also declares if the KPI have been selected by referring to a common international standard. The GRI – Global Reporting Index is the most widespread, but there are also different standards, such as those of the International Integrated Reporting Council or others.
The sustainability report is a non-compulsory document for most companies: only larger companies of public interest have to prepare it. However, it is a document that promotes transparency in the management of business activities and, as we said, a powerful communication asset.
Do you want to embark on a path of sustainability for your company and communicate it effectively? Contact us: the Green Marketing Italia team is ready to support you.