Sustainability Reporting Checklist

A developing trendIn the next few years it is likely that the content and coverage of such reporting will reach even further into mainstream business practice, seeking to demonstrate the integration of environmental and social issues. In practice, links between environmental, social and financial risks, the materiality of environmental and social issues and company performance will increasingly shape and drive company strategy and behaviour.Support for your approach to reportingTerrafiniti LLP has extensive experience in the field of non-financial reporting; working to establish best practice and also directly with companies.Through our work with companies and as part of major sustainability reporting awards, we have developed a range of services and approaches to assist organisations in developing their strategy for reporting and assessing their existing reporting.From these approaches we have developed a set of essential questions to ask when developing or assessing your reporting. Increasing transparency & accountability The pressure for such non-financial reporting comes from a range of stakeholders, including NGOs, community groups, investors, and regulators. Non-financial reporting should not be confined to multinationals or large companies. Impetus is also growing for small and medium sized enterprises (SMEs) and public bodies to produce reports which reflect their environmental and social performance.What’s in a name?Sustainability reports can go by many different names: CSR reports, CR reports, reports to society, corporate citizenship reports and many others. At their heart however, all such reports should focus upon the important (termed material) environmental and social impacts and implications of an organisations activity (often termed “non-financial” aspects). In this guidance, we have used the terms “sustainability” and “sustainability reporting”.Non-financial reporting should not be confined to multinationals or large companies. How to use this guidanceThe following guidance can be used in two key ways: ? To assess your current reporting – look at your report and use our questions to gain a picture of its alignment to best practice. ? To develop a best practice approach for your reporting- best practice reports cover the issues and detail highlighted by our questions.Social and environmental issues are becoming recognised as important sources of business value and risk. An increasing number of drivers are prompting companies to disclose their approach and demonstrate performance in these terms. For more information call +44 (0)1737 843 787 or e-mail info@terrafiniti.comSustainability reporting checklistSustainability reporting checklist | Page 1System/Methodology/ApproachSustainability reporting presents a narrative on the management of sustainability within an organisation. As such, it should be clear from a report that the company takes a strategic, systematic approach towards management and reporting. The use of formal and informal management system approaches and the use of reporting guidance are therefore essential aspects of best practice.Does management of sustainability: ? Utilise a formal Environmental Management System (e.g. ISO 14001, EMAS), or an informal systematic approach (e.g. use of UN Global Compact)? ? Utilise a recognised sustainability reporting approach (e.g. Global Reporting Initiative)? ? Mention external, independent indicators of commitment/performance (e.g. Ethos Institute Indicators, principles from ISO 26000)?Leadership and stakeholdersSustainability should be managed as part of normal business practice, alongside any other business priority. To put it simply, if something is important to you, then it should be treated as such. In addition, increasing importance and value is being given to the role that stakeholders can play in identifying key environmental and social priorities and in enhancing the value of your sustainability activities. ? Does the report have a statement from the Chairman and/or CEO? ? Does management identify the contribution of sustainability to overall business strategy? ? Is there a clear description of company sustainability vision and values? ? Is stakeholder engagement a clear part of the sustainability management approach? ? Is there a clear description of the stakeholder engagement process?GovernanceDisclosure of governance processes (how management takes place) and especially sustainability governance are an essential part of a good report. Such information provides an indicator of the importance that the company places on such issues and also the extent of embedding of environmental priorities within overall business priorities. ? Is there a clear description of how sustainability is managed within the company? ? Are overall sustainability governance structures clear? ? Is there a clear description of identified stakeholder issues? ? Are there dedicated structures to support sustainability?Focus – material issuesSustainability management, and therefore reporting, should focus primarily upon those environmental and social issues and impacts that are most relevant and significant (material) for the company and its stakeholders. Therefore the material issues focussed upon should be those most closely aligned with the delivery of core business and not those associated with peripheral or “good news” stories. ? Is there a clear process for the identification of material/business relevant sustainability issues? ? Is the identification of material sustainability issues integrated into: ? risk management? ? governance processes?Sustainability reporting best practice questionsSustainability reporting checklist | Page 2Performance and continuous improvementReporting should be able to tell an evolving story. How has a company progressed against its stated aims and objectives and how is its performance improving? The disclosure of clear objectives and targets, alongside the disclosure of performance, whether positive or negative, allows the company to communicate its commitment clearly to investors, employees and wider stakeholders. Comparison with sector best practice is also a useful way of demonstrating progress/the distance still to travel. ? Does the report explain how long term objectives are identified? (E.g. is there a clear link between the way that issues are identified and managed with the objectives are set?) ? Is year on-year performance disclosed? ? Is performance against stakeholder identified issues specifically disclosed year-on-year? ? Are performance data normalised as well as absolute (e.g. CO2 production given as a total tonnage and as tones per unit of production/turnover)? ? Does the report note performance of the company relative to sector best practice?Openness; telling the whole storyTransparency and accountability are key themes in sustainability and reporting should reflect this. Not only through communicating practice across the whole organisation, but also in discussing and acknowledging the wider implications of social and environmental trends for the organisation’s strategy, policy and marketplace over time. It is through such analysis and disclosure that an organisation can really create value through sustainability; by interpreting, understanding and communicating the implications of social and environmental trends. ? Does the report give its reader a comprehensive picture of a whole organisation? ? Are case studies given focussing on material issues? ? Are difficult issues openly discussed? ? Are the implications of “big picture” trends and issues discussed?Third Party Statements, Assurance and VerificationAn independent third party assurance statement is considered to be a fundamental requirement for good practice in reporting. Assurance statements can cover “softer” content including policies, governance structures and processes in addition to the assurance of hard data. In addition, feedback from assurance providers can provide a useful dialogue on continuous improvement. ? Does the report have an independent statement which comments on the quality/veracity of the contents of the report? ? Does the statement use a recognised formal Assurance methodology e.g. AA 1000 AS, ISAE 3000 or COS 3410N? ? Does the statement comment on previous performance and indicate key future issues for consideration?More help and support We hope that this guidance is valuable to you in understanding and developing your approach to sustainability reporting. It is a taster of the wider tools and approaches we have developed for supporting best practice. To discuss how we can create value for you please contact Joss Tantram (Partner, Corporate Sustainability) on +44 (0) 1737 843 787.www.terrafiniti.com