Sustainability reporting is more than just compliance. It’s a strategic tool that can drive long-term success when done right, providing transparency, building trust, and improving decision-making.
More and more evidence shows companies who invest in their sustainability efforts and embed it into their organization’s DNA experience more competitive advantages. This includes better long-term returns and stronger investor relationships. Global consulting firm McKinsey surveyed a group of Chief Investment Officers and more than 80% responded saying that ESG is an important factor in their investment decisions. Companies including sustainability in their business decisions and operations also increase talent retention. According to a survey by IBM, more than 70% of respondents say that environmentally sustainable companies are the more attractive employers.
With these competitive and business advantages that come from investing in sustainability, companies should not center compliance as their main driver to invest in efforts. Compliance requirements and mandates may shift and change, and while it’s necessary to ensure that your organization is compliant, it should not be the main reason you move forward with sustainability. In fact, with the extra runway time provided by regulations such as the CSRD through the Omnibus Simplification Packages, companies can use this period to internally align on efforts, ensure the necessary roles & responsibilities are divided out, track their performance, and implement the necessary controls and adjustments to ensure smooth reporting and greater confidence.
Here are some tips and tricks for how companies can set themselves up for success in sustainability reporting and experience those long-term successes.
Key Reporting Standards to Follow
To understand and benchmark performance in relation to others in a similar industry, companies can leverage global reporting standards and frameworks for consistency and accuracy.
One of the key areas of progress made for sustainability reporting is creating a shared language. For over two decades, companies and leading parties were using differing methodologies, terminologies and tools to report on their sustainability performance, which created discrepancies and made it difficult for investors and stakeholders to benchmark performance on a global scale.
As of today, the push for standardization continues and significant progress has been made as a result. Now, companies can choose from a handful of globally recognized standards and frameworks to report their progress. A key goal of this harmonization is to make disclosures comparable across organizations and industries, and to prevent greenwashing. In other words, companies are increasingly expected to report on all material topics relevant to their sector, not just those that reflect positively. This includes:
- International Sustainability Standards Board (ISSB): The ISSB builds on the foundation set by groups like the Taskforce of Climate-Related Disclosure (TCFD) to develop standards for disclosure, meet the needs for investors, and facilitate interoperability within the disclosure landscape. Within the ISSB we have two key standards – IFRS S1 and S2, which provide a framework and a set of requirements for companies to communicate sustainability-related risks and opportunities over the short, medium and long-term.
- Carbon Disclosure Project (CDP): A global nonprofit running the world’s largest environmental disclosure system, with over 24,800+ companies reporting their environmental impact, covering over two-thirds of market capitalization. CDP focuses on environmental transparency and driving action for a sustainable economy.
- Global Reporting Initiative (GRI): An independent nonprofit providing standards, tools and training to assess and report on environmental, social, and economic impacts for nearly three decades. The GRI is used by 71% of the world’s largest 100 companies, according to their 2024 report.
- Sustainability Accounting Standards Board (SASB): Founded in 2011 to develop industry-specific sustainability standards. As of 2022, the SASB is part of the IFRS Foundation. According to the IFRS website, over 3,200 companies in 80+ jurisdictions use the SASB standards.
In addition, many companies also reference other relevant standards and tools, including:
- ESRS
- VSME (voluntary)
- GP and LP questionnaires
- Invest Europe
- SDGs
- TCFD
- SFDR
- EDCI
- EET
Each of these plays a role in supporting credible, comparable, and sector-relevant disclosures. For a deeper dive into how all these compare, and when to use which, explore our guide to key ESG reporting frameworks, standards, and regulations.
Lessons from Leading Companies
To get an idea of how the shared language and standards can be adopted, we can look to organizations who are taking a leadership approach in disclosing their impact.
Companies like Hill & Smith made internal commitments to significantly reduce its carbon footprint and environmental impact, including measuring Scope 3 emissions. Through their efforts to embed sustainability across the company and align on the importance of calculating and disclosing impact, Hill & Smith were able to increase their CDP score from a ‘D’ to a ‘B’ within one reporting cycle. Read more about Cority’s work with Hill & Smith here.
On a global scale, companies like Patagonia have taken a leadership approach in not only recognizing the importance of sustainability, but also taking bold, never-done-before steps towards climate action. From becoming the first ‘benefit corporation’ to ‘going purpose’ instead of going public, Patagonia is a worldclass example of how prioritizing sustainability and the planet does not deter from making more profit, but actually helps in meeting business goals and creating a stronger brand reputation.
Leveraging Technology for Efficiency
To ensure the correct processes are set and the reporting process is smooth, technology can play a key role here. Here are some tips and tricks that companies can embed within their sustainability efforts via technology:
- Create a data management strategy and set up automations to streamline how data gets into the system. Leverage multiple data capture options and integrations with other business systems to ensure accuracy and standardization
- Set achievable goals and monitor progress accordingly. Leveraging a software tool that includes targets and initiatives can help make this process easier, providing capabilities to define initiatives and seamlessly enabling organizations to set this in motion.
Note: As the market continues to shift and change, so do stakeholder expectations. Having a tool that enables organizations to be agile in their efforts is key – ensuring that targets and initiatives can be updated accordingly to reflect the latest requirements. - Leverage global disclosures and standards to ensure consistency and enable benchmarking. Reporting up to established, reputable organizations such as the CDP and GRI, helps to boost the credibility of sustainability claims and makes it easier to share the information out to stakeholders and investors.
At Cority, our Sustainability Cloud solutions provide companies with all the necessary tools and solutions to streamline data collection, performance reporting, and disclosure alignment in one place. The flexibility and configurability of the tools enables organizations to create their strategy to match their long-term goals, update accordingly based on evolving requirements and needs, and ensure continuous compliance with the latest regulations and mandates.
