How to Make Sustainability Reporting?

How to Make Sustainability Reporting?

In parallel with the increasing and drastic effects of climate change, binding norms on sustainability began to be part of our lives. Thanks to commitments of countries and companies to carbon emissions and the regulations made for this, encouragement of environmentally friendly transformation and investments; measuring and reporting sustainability performance has become necessary. 

According to the research the McKinsey, sustainability, which is among the three issues that CEOs take heed of, is strengthening its place in the agendas of companies as an increasingly. In this context, sustainability reports have gained a necessary and important status at least as much as the balance sheet of companies. 

What’s Sustainability Reporting 

Sustainability reporting defines the disclosures companies will make regarding their activities’ positive and negative effects on the environment, society, and economy. It includes Environmental, Social, and Governance (ESG) objectives, explaining and communicating progress towards those objectives. 

A set of standards accompanies sustainability reports that enable it to evaluate and compare sustainability reports, including sustainability performance as part of overall performance statements more effectively. Using the sustainability reporting standards such as GRI or CDP, it is possible to manage your processes by including sustainability reporting in your corporate social responsibility programs. Also, European Commission requests non-financial reports such as GRI and CDP from companies with over 500 employees. But using all these standards isn’t necessary, it’s just frameworks that guide companies in their sustainability reporting. 

3 Major Things in Sustainability Reporting 

  • Sustainability reports definitely should include a part that transparently announces the company’s environmental impacts. While providing clear data on negative effects such as carbon and water footprint, it should also include information such as what has been done against their solution, and environmental improvements. The environment is the essential area in sustainability reporting. Taking actions and corporate social responsibility steps in this area are necessary for a high ESG score and investor support. 
  • It should include in its report how the organisation contributes to the society serves and stakeholders with policies and how it positions them in its business model. At this point, the roles and responsibilities of company employees in sustainability activities should also be introduced. If sustainability training has been provided to employees, this should also be included in the report. 
  • A detailed information of the company’s financial and operational performance should be included in to report, especially details of R&D projects. R&D projects will be interesting as these reports mainly appeal to stakeholders and investors. It is important that these projects are expressed clearly and intelligibly. 

What Should Be Include in Sustainability Reporting? 

  1. A section that provides an overview of your business and the market environment in which you operate, which will make your report clear to the reader. 
  2. Short-, medium- and long-term sustainability strategies and their integration with your business 
  3. KPIs that are directly relevant to your sustainability strategy and a description of why they are relevant and how they are defined 
  4. Evaluation of risks and opportunities associated with your sustainability steps and strategies 
  5. Demonstrating to your key stakeholders how your sustainability strategy is having an impact on profitability 
  6. Identifying the value chain and evaluating it together with your sustainability strategies 
  7. Include independent research, external benchmarks, and expert opinions that will make the content credible 
  8. Use of easy-to-understand visual and graphic designs to support all content 

Benefits of Sustainability Reporting 

Improving Corporate Reputation 

Being a transparent organisation and reporting positive action is one of the surest way to build public trust in businesses. A Boston College and EY survey found that more than 50% of respondents who published sustainability reports said they helped to improve their company’s reputation. Indeed, sustainability reports contribute to the formation of consumer confidence in terms of embodying the positive actions taken by organisations for the future. 

Meeting the Standards for Employee Satisfaction  

Employees are always the main stakeholders of organisations. It is also a vital target audience for sustainability reporting. As it contributes to the retention and loyalty of employee, sustainability reporting affects company performance and allows positive transformation to begin within the company. 

Supporting Capital Access 

Studies show that companies that rank high in terms of sustainability face fewer capital constraints when compared to firms with lower sustainability scores. With the sustainability trend in recent years, we see that investments are reoriented towards more sustainable technologies and businesses. Thus, it is aimed to support low-carbon, climate-resistant systems and create a circular economy with the help of financial instruments. For this reason, sustainability reports will be a good reference source for you to present yourself to investors.  

Understanding the Environmental Impact 

Sustainability reporting is an excellent opportunity to measure and plan for companies’ environmental impact. Integrated data from the entire company provides the chance to look at the company’s effects from a broad perspective, from corporate operation to the supply chain. If there is a negative environmental effect, it also ensures a chance to compensate for it. Particularly, it helps to make their supply chains more efficient and to reduce the losses, waste, and environmental footprint in this process. It creates awareness of the carbon footprint of the products and the company. Depending on all these, it brings the opportunity to cost savings. 

Steps of Reporting 

  1. Planning the purpose, audience and expected outputs of the report 
  2. Assigning or creating a responsible sustainability team 
  3. Identifying the framework and preparing stakeholder surveys or other response formats accordingly 
  4. Identifying and planning sources to provide data for the report 
  5. Compiling and evaluating data from different offices and departments 
  6. Checking the collected data and making the final reading 
  7. Adding a message from the chairman of the board 
  8. Preparing for the communication infrastructure and presentation of the report 
  9. Designing the report 

Wrap Up 

A typical Sustainability Reporting can take months. You can guess that there are too many steps and all of these steps have many sub-steps. Even if the implementation phase is perfectly planned, you may experience a long and exhausting process. It’s always a good idea to get support for your reports at this stage! 

Using carbon accounting platforms, especially while collecting and processing the data, will ease the workload. In the same way, recording and monitoring all data digitally before the process causes you to have a qualified data set even before you start reporting. 

Faradai Sustain  

With our Faradai Sustain solution, we facilitate the processes of sustainability reporting by enabling complex reporting processes to be tracked from a single platform. We help you save both time and cost by preventing people-driven errors that may occur in data entry.


Irem Altiparmak 

Marketing Assistant at Faradai