9.1 Types of sustainability reports and their structures

Sustainability reports come in various types, each serving unique purposes. From CSR reports focusing on social impacts to integrated reports combining financial and non-financial info, these voluntary disclosures offer a comprehensive view of an organization's sustainability efforts. They follow frameworks like GRI to ensure consistency and comparability.

The structure of sustainability reports is crucial for effective communication. Key components include executive summaries, organizational profiles, governance sections, and performance metrics. Visual elements, clear organization, and stakeholder-focused language help make complex information accessible and engaging to diverse audiences.

Sustainability Report Types

Voluntary Disclosures on Organizational Impacts

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• Sustainability reports are voluntary disclosures that provide information about an organization's environmental, social, and economic impacts and performance
• These reports go beyond mandatory financial reporting to give a more comprehensive view of an organization's overall sustainability
• Sustainability reporting is not required by law in most countries, but is increasingly expected by stakeholders (investors, customers, employees, communities)

Common Types of Sustainability Reports

• Corporate social responsibility (CSR) reports focus on an organization's social and ethical impacts and initiatives
• Environmental reports specifically address an organization's environmental footprint, resource use, emissions, and conservation efforts
• Social impact reports highlight an organization's contributions to social issues and community development
• Integrated reports combine financial and non-financial (sustainability) information to show the links between an organization's strategy, governance, performance, and prospects

Widely Used Reporting Frameworks

• The Global Reporting Initiative (GRI) provides a widely used framework for sustainability reporting, with standards covering economic, environmental, and social topics
  • GRI standards are organized into universal standards applicable to all organizations and topic-specific standards
  • Over 10,000 organizations in more than 100 countries use GRI standards for their sustainability reporting
• Other reporting frameworks include the Sustainability Accounting Standards Board (SASB), the International Integrated Reporting Council (IIRC), and the Task Force on Climate-related Financial Disclosures (TCFD)

Purposes of Sustainability Reporting

• The purpose of sustainability reporting is to increase transparency, accountability, and stakeholder engagement by communicating an organization's sustainability strategies, goals, actions, and progress
• Sustainability reports can help organizations identify risks and opportunities, improve decision-making, enhance reputation, and attract investors and customers who value sustainability
• Reporting can also drive internal improvements by raising awareness, motivating employees, and embedding sustainability into business processes
• Ultimately, sustainability reporting aims to support the transition to a more sustainable and resilient economy

Sustainability Report Components

Executive Summary and Organizational Profile

• Sustainability reports typically include an executive summary or CEO statement that provides an overview of the organization's sustainability approach, key achievements, and future commitments
  • This sets the tone and direction for the report and demonstrates leadership commitment to sustainability
• The organizational profile section describes the organization's business model, products or services, markets served, and key stakeholders
  • This provides context for understanding the organization's sustainability impacts and relationships

Governance, Management, and Materiality

• The governance and management section outlines the organization's sustainability governance structure, policies, and management systems
  • This includes information on board oversight, executive responsibilities, codes of conduct, risk management, and stakeholder engagement
• The materiality assessment section identifies the sustainability topics that are most relevant and significant to the organization and its stakeholders
  • This involves engaging with stakeholders to understand their concerns and priorities and prioritizing topics based on their importance and potential impacts
  • Material topics commonly include climate change, human rights, diversity and inclusion, supply chain management, product safety, and business ethics

Performance Sections and Stakeholder Engagement

• The performance sections report on the organization's sustainability performance and impacts in areas such as environmental stewardship, social responsibility, and economic contribution
  • Environmental topics may include energy and emissions, water, waste, biodiversity, and product lifecycle impacts
  • Social topics may include labor practices, diversity and equal opportunity, occupational health and safety, training and education, and community impacts
  • Economic topics may include economic performance, market presence, indirect economic impacts, and anti-corruption
• The stakeholder engagement section describes how the organization engages with its stakeholders to understand their expectations and concerns related to sustainability
  • This may involve surveys, focus groups, interviews, advisory panels, and grievance mechanisms
  • Stakeholder engagement informs materiality assessment, strategy development, and performance improvement

Assurance and Credibility

• The assurance section provides information on any external assurance or verification of the sustainability report to enhance its credibility and reliability
  • Assurance can be provided by accounting firms, sustainability consultancies, or specialized assurance providers
  • Assurance standards include ISAE 3000 and AA1000AS
• Credibility is also enhanced by using recognized reporting standards, setting clear targets and commitments, reporting consistently over time, and being transparent about challenges and areas for improvement

Structure of Sustainability Reports

Clear and Logical Organization

• Sustainability reports should have a clear and logical structure that guides readers through the content and helps them find the information they need
• Common sections may include introduction, strategy, governance, stakeholder engagement, materiality, performance by topic or pillar, and appendices
• The use of headings, subheadings, and sections can break up the content and make the report more navigable and user-friendly
  • Headings should be descriptive and informative, not generic (e.g. "Reducing Our Carbon Footprint" instead of just "Environment")

Visual Elements and Storytelling

• Visual elements such as graphs, charts, tables, and infographics can help to present complex data and information in a more accessible and engaging way
  • Graphs can show trends and progress over time (emissions reductions, diversity representation)
  • Tables can provide detailed performance data in a structured format
  • Infographics can combine text, images, and data to convey key messages or explain processes
• The use of storytelling and case studies can help to bring the sustainability report to life and make it more relatable and memorable for readers
  • Case studies can showcase specific sustainability projects, partnerships, or outcomes (community development initiatives, supplier audits)
  • Employee or stakeholder profiles can provide personal perspectives and experiences

Language, Tone and Stakeholder Focus

• The language and tone of the report should be clear, concise, and accessible to a broad audience, avoiding jargon and technical terms where possible
  • Explanations or glossaries can be provided for necessary technical concepts
  • An 8th-grade reading level is a good target for general audiences
• The report should be designed with the needs and preferences of key stakeholders in mind, such as investors, customers, employees, and communities
  • Different stakeholders may have different information needs and interests
  • Tailored communication products (summaries, fact sheets, videos) can complement the full report

Sustainability Reporting Formats

Print and PDF Reports

• Print-based sustainability reports can provide a tangible and immersive reading experience, but may have higher production costs and environmental impacts compared to digital formats
  • Recycled paper, soy-based inks, and carbon offsets can reduce environmental impacts
  • Print reports can be useful for in-person meetings, events, or mailings
• PDF-based sustainability reports can be easily distributed and accessed online, but may not be as interactive or engaging as other digital formats
  • PDFs can be downloaded, searched, and printed as needed
  • Accessibility features (tagged PDFs, alt text) are important for inclusion

Web-Based and Integrated Reports

• Web-based sustainability reports can offer interactive features, multimedia content, and real-time updates, but may require more technical expertise and resources to develop and maintain
  • Interactive charts and graphs allow users to explore data
  • Videos and animations can bring stories and concepts to life
  • Online reports can be easily updated and linked to additional resources
• Integrated reports that combine financial and sustainability information can provide a more holistic view of an organization's performance and value creation, but may be more complex and challenging to prepare
  • Integrated thinking involves considering the connectivity and interdependencies between sustainability and financial factors
  • Integrated reporting can break down silos between sustainability and finance teams

Choosing Appropriate Formats

• The choice of sustainability reporting format should consider factors such as the organization's resources, stakeholder preferences, and communication objectives
  • A mix of formats (print summary + online detail) can serve different needs
  • Surveys or focus groups can gauge stakeholder format preferences
• Regardless of the format, sustainability reports should adhere to recognized standards and guidelines, such as the GRI Standards, to ensure consistency, comparability, and credibility
  • Standards provide a common structure and set of disclosures
  • External assurance can verify compliance with standards