Sustainability Reporting: Ensuring Future Profits
Continued
What’s Next?
In the coming months, I will elaborate on a variety of related topics that are briefly introduced below. They will be presented in roughly the same order that companies typically learn about, adopt and optimize their use of SR.
Changing stakeholder concerns: a driver of SR adoption
One of the first things that drive companies to produce some kind of sustainability report is the recognition that the absence of such a report is a topic of concern amongst some critical stakeholders. Corporations have many stakeholders, and potential concerns run a wide gamut:
- Employees are asking to see their company’s SR
- Some form of carbon regulation may occur in the U.S
- Large sales are being lost to corporate customers who require their suppliers to have produced some SR
- Lack of SR precludes the company’s stock from being bought by certain classes of investors
- Negative publicity surrounding an incident overshadows the company’s many positive, but unpublished accomplishments
Business benefits for doing SR
Although there are a variety of business benefits for producing some kind of sustainability report, companies frequently embark on the process to satisfy a marketing or communications need. It takes time to recognize that there are other business benefits, including improved employee retention, increased brand loyalty, improved operating efficiencies, new business opportunities, and increased share price.
Business benefits for integrating SR within a company’s management reporting
Once a company recognizes that some of the information produced in a SR is useful for running the business, it’s on its way to a more integrated understanding of SR as a part of management reporting. When this occurs, companies are likely to modify their SR for business relevance and to want to merge their SR process with the rest of their management reporting processes, thus leveraging the business information assets and processes they already have in place.
Maximizing the value of SR
Most large corporations already collect, manage and possibly even report on SR-relevant data whether in the form of environmental and/or economic data submissions, internal HR practices or facilities management. Maximizing the value of SR means lowering its cost of production and raising the value of the information it provides. For example, this may include better leveraging work already being done, and being able to calculate what kinds of information not currently tracked would be most useful for future management decisions such as capital budgeting.
Erik Thomsen is Chief Science Officer at Electric Mind, a software and services company one of whose verticals is the use of business-aware semantic technologies to automate the production of financially relevant sustainability benchmarks and reports. He can be reached at
ethomsen@electricmindinc.com
