Organizations today are increasingly incorporating principles of sustainability and ‘Triple Bottom Line - People, Planet and Profits’ in their businesses. Considering a variety of issue like environment, climate change, human rights and economic crisis, public disclosure about the role of a business has caught up the attention of stakeholders, investors and general society. Thus, transparency assured in the form a reporting framework like sustainability reporting is an opportunity for businesses to drive up their operations and increase their organizational value like never before.
A sustainability report is essentially a report published by an organization emphasizing on the economics, environmental and other social impacts caused by its everyday operational activities. It acts as a vital source to drive a firm towards a sustainable global change- one that encompasses long term profitability with ethical behavior, social justice and environmental care. Recording the organization’s governance and strategic model, it can describe its commitment to a sustainable global economy.
Sustainability reporting offers a number of advantages to the reporting firm. A 2009 analysis done by the audit firm EY of more than 200 independent empirical studies showed that there was a close connection between a corporate’s social and environmental performance and its financial performance. Higher levels of transparency lead to better firm liquidity, decreased bid-offer spreads and increased share price. Also, when companies report their sustainable initiatives they are able to convince potential sources of capital of their competitiveness, thus attracting investors and more stakeholders. Firms can now anticipate risks, improve agility in processes and prepare measures of mitigating these risks. This also put forwards the case of shortage of natural resources. The discipline of sustainability reporting can help the organizations to maintain focus and gain insight into how to better utilize these resources.
Maintenance of regular reports help firms gather data and develop new means of information collection. This helps in innovating processes, reducing wastage and gaining valuable foresight into the potential areas of growth and development. Global reporting Framework (GRI) has provide a complete Sustainability Reporting Framework and is used as a de-facto standard of Sustainability reporting around the world. It enables corporates worldwide to assess, benchmark and disclose their sustainability performances and targets. The largest database of sustainability reports can be accessed through the United Nations Global compact initiative.
Sustainability reporting is therefore an effective medium to engage with stakeholders, local bodies, global communities, and participate in inclusive discourse that can benefit society at large.
Business Ethics