Who Really Cares About Your Sustainability Report? And Why?
Today it is best practice for companies of all sizes to be proactive, and transparent, reporting on their sustainability efforts. Why? Because there is growing demand from all corners as the business world continues to navigate sustainability and ESG.
Investors: Connecting Profitability with Corporate Responsibility
More and more investors—not just socially responsible investors (SRIs) but mainstream investors—recognize the direct link between corporate sustainability performance and financial performance. In fact, many studies show that a sound sustainability strategy can provide positive influence on stock price, lower the cost of capital and improve operational performance. The “non-financial” risks can turn out to be very material, real bottom-line-affecting risks.
Customers: Building Trust
Customers demand an inside look into company business decisions and leadership practices. Being transparent about your product safety measures, marketing policies and data privacy are just a few ways to turn them into brand advocates. And, if you are in another company’s supply chain, they need to know about your operations. Getting feedback from your customers is also a great way to make key operational improvements that will support your overall sustainability strategy.
Your People: Engaging Current and Future Employees
Employees are your biggest advocates and force for change as your company navigates challenges and creates your future state. In a report IOP recently worked on this employee feedback was shared with us:
“I have limited words to describe how great, how inspiring the
RL, Innovation Management / Products[integrated]report is. When I’m reading the report, I feel so proud of our company, so proud of our people! Especially when I see the innovations… mentioned in the report, I really feel our daily work [is] highly linked to company’s strategy, and contributed to the company’s growth.”
That’s just the feedback you want!
More than half of millennials say they would take a pay cut to work at a company that matches their values. 90% say they want to use their skills for good. And according to a survey commissioned by the Global Reporting Initiative, a potential employer’s sustainability report is read by about 40% of job hunters. Communicating your sustainability efforts demonstrates your commitment to corporate responsibility.
Communities Where You Operate: Building Your Reputation
Engaging with stakeholders, NGOs, governments and local communities helps your company enhance its reputation and build goodwill. These “Opinion Elites” can affect the tipping point for reputation and are a leading indicator of reputation change. Reporting goes beyond highlighting successes; it also brings to light goals and ongoing progress. In 2016, Harvard Business Review published “The Comprehensive Business Case for Sustainability,” which argues the benefits of corporate sustainability far outweigh the costs. Since, evidence has continued to mount. This recent article outlines the push and pull of opposing forces, but ends on a note of encouragement. And one of those biggest benefits is the reputation enhancement of truly walking the talk.
Your Supply Chain: Managing Risk
You should be aware of any risks in your supply chain. These can range from climate change impacts on water and agriculture to social unrest. Reporting allows you to both showcase your own commitments and examine your existing business relationships. More companies require this information from everyone inside their supply and value chains to ensure that all their partners are equally committed to being responsible corporate citizens. And, the issues are too big for any one company to solve alone, partnerships and supplier relationships are key to advancing your own goals, better to know what’s happening throughout your supply chain.
Your Innovation Engine: New Products and Services
Investing in sustainability can drive innovation. Redesigning products and services to meet environmental standards or social needs offers new business opportunities. Reporting on your efforts is a virtuous circle, your employees and customers are demanding innovative solutions and how better to foster innovation and share progress.
The Takeaway
People do care about your company’s commitment to sustainability and online, in print or as a PDF, your report is a great way to demonstrate that commitment. And, the process of reporting itself can lead to business improvements and innovation, helping the company in ways that are not immediately obvious.
How Ideas On Purpose Can Help
Struggling to effectively communicate your story? For over 20 years IOP has been helping companies of all sizes with stakeholder-pleasing sustainability reports and impact communications. Feel free to email us to get in touch if you need help with yours.
Updated: February 2024
Photo by Andre Arvizu on Unspalsh