How Often Should Businesses Create Sustainability Reports?
You may have heard that you should be doing sustainability reports at least once a year. But what if this frequency is not the best for your business? It’s important to understand your company’s specific needs and find out what will work best for you. If you’re unsure, there are ways to determine how often sustainability reports should be in order to get the most benefit for your business.
What is a sustainability report?
A sustainability report is a document that summarizes a company’s environmental and social performance. The report includes data and information on greenhouse gas emissions, energy consumption, water use, waste production, and other aspects of a company’s sustainability initiatives.
Many businesses create sustainability reports in order to assess their environmental and social impact, identify areas for improvement, and track their progress over time.
Why is creating a sustainability report important?
There are a number of reasons why businesses should complete sustainability reports. Some of these reasons include:
Identifying areas for improvement
If you don’t know where you are going, any road will get you there. The same principle applies to sustainability reporting—without knowing what needs improvement, it’s difficult to make changes and improve upon your sustainable practices. By completing sustainability reports, businesses can identify areas where they need to focus their efforts in order to become more environmentally and socially responsible.
Being transparent is one of the key tenets of sustainability reporting. By completing sustainability reports, businesses can demonstrate to their stakeholders that they are open and honest about their environmental and social performance. This builds trust between a company and its stakeholders, which is essential for any sustainable business operation.
Maintaining compliance with regulations
Many governments have put in place regulations that require businesses to complete sustainability reports. Completing these reports is one way for businesses to ensure that they are meeting all of the necessary compliance requirements.
Sustainability reporting is also a great way to measure a company’s performance. By comparing data from previous sustainability reports, businesses can track their progress and see how they are doing in terms of becoming more environmentally and socially responsible.
How often should businesses create sustainability reports?
There are a number of factors which will affect how often you should do sustainability reports. Regulations, the industry you are in, and the day-to-day operations of your company can all be taken into account when trying to figure out how often to do these reports.
If there are governmental regulations in place that mandate how often sustainability reports must be completed, then you will need to adhere to those regulations.
Currently, there are 31 countries that have some degree of mandatory sustainability reporting, including:
United Kingdom: In the United Kingdom, quoted companies are mandated to provide an annual report that covers their diversity and human rights initiatives along with their greenhouse gas emissions.
United States: The US Securities and Exchange Commission (SEC) requires all listed companies to issue annual reports on their environmental compliance expenses. In addition, the New York Stock Exchange (NYSE) requires listed companies to issue and maintain a code of business ethics in order to be traded.
European Union: The EC Directive on Disclosure of Non-Financial and Diversity Information (2013) requires large companies and public-interest groups to issue annual reports on environmental, social and employee-related matters, such as corruption, anti-bribery, and human rights regulation compliance.
China: China has seven regulations and regulatory bodies that require some variety of sustainability reporting. The Environmental Information Disclosure Act requires corporations to disclose environmental information relating to ESG impacts. In addition, annual resource, pollution, waste disposal, and human rights performance can be reported on annually (on a voluntary basis) to access grants and government funding.
India: The Securities and Exchange Board of India requires large, India-based companies to issue annual Business Responsibility Reports. These reports are mandatory, and cover many aspects of ESG impacts covered in standard sustainability reports (e.g., waste disposal methods, greenhouse gas emissions, etc.).
The industry you are in can also play a role in how often sustainability reports should be completed. For example, if you are in the mining industry, then you may need to do them more frequently than other industries because of the inherent environmental risks associated with the industry.
How your company operates on a day-to-day basis can also be a factor in how often sustainability reports should be completed. For example, if your company is constantly making changes or implementing new initiatives, then it would make sense to do sustainability reports more frequently in order to track the progress of these new efforts.
Stakeholder interests should also be taken into account when trying to determine how often sustainability reports should be completed. For example, if you have a lot of activist shareholders who are interested in the environmental and social performance of your company, then you may need to do sustainability reports more frequently in order to keep them happy.
Bringing It All Together
So, how often should businesses complete sustainability reports? The answer to this question depends on a variety of factors. That said, most businesses find that completing a sustainability report at least once a year is a good way to ensure that they are on track and meeting their goals. However, competing reports more or less frequently may make sense depending on the aforementioned factors.
Some businesses choose to publish sustainability reports more frequently, such as every six months or every quarter, to provide a more up-to-date snapshot of their environmental and social performance.
Completing a sustainability report is an important step for any business that wants to be environmentally and socially responsible. The frequency with which a company should complete a report depends on a variety of factors, but most businesses find that completing a report at least once a year is a good way to ensure that they are on track.