Sustainability reporting is still optional for most businesses. But that doesn’t mean you’re off the hook when it comes to being strategic. In fact, for sustainability reporting to be truly meaningful and worth your time, aligning it with corporate strategy is key.
Sounds simple, right? Unfortunately, this often seems to get lost in the CSR reporting process, as companies scramble to pull together and organize all of their data and stories.
The Global Reporting Initiative (GRI) tried to address this challenge in the latest version of its guidelines for sustainability reporting, G4. Specifically, the guidelines push companies to identify and report on issues material to their business – that is, focus on the sustainability issues that actually matter for your company, not just the ones you want to highlight or think you’re supposed to cover. This should result in a report that is more closely aligned with the overall strategy and business objectives of the company.
As I recently received my G4 certification, two things became clearer: first, determining materiality is a critical place to start in terms of producing a more strategic report, and second, materiality can seem daunting for those who are in charge of their company’s CSR report.
In many cases, it may make sense to seek an outside partner who can help you wade through the possible universe of material topics. However, you definitely want to be prepared with some initial ideas on the most likely material issues for your organization.
Below are five tips for starting to review materiality and beginning an effective sustainability reporting process:
1) Review your current CSR activities.
It’s likely that your current CSR program – even if it’s a “program” in only the loosest sense – is hitting on the issues that matter to your business. Map out what you’re already doing, including the data you’re already tracking.
2) Audit your peers’ reports.
Certain sustainability topics are material to your entire industry, so reviewing which issues your peers cover in their reports is an easy way to benchmark for your own reporting.
3) Consider the “Big 5”: energy usage, waste, water, safety and health, and community involvement.
These are the issues that matter to most businesses. Think through each one and apply the common-sense test for your own company. Maybe safety and health is less of an issue in a services company, but it’s definitely material for manufacturing companies. See how easy that is?
4) Listen to your stakeholders.
Listening to your stakeholders can be done informally by identifying which questions you already get on a regular basis. Quite simply, if you’re hearing about a topic over and over from your stakeholders, it might be material – and it should at least be up for discussion. You can also do a more formal survey and ask stakeholders to help you rank the issues.
5) Check out the GRI guidelines.
Even if you don’t plan to do an official GRI report, the guidelines will help you consider what’s possible in CSR reporting. Reviewing GRI is also a good way to double-check yourself after acting on tips 1 through 4.
Yes, sustainability reporting remains largely optional, but it needs to be strategic. Focusing on issues that are material to your business will result in a CSR report that’s more focused and more meaningful to you and your stakeholders.