Sustainability reporting for competitive advantage

Sustainability is a key business driver. According to the Global Trends 2030 report, by 2030, the world will need 40% more food, 45% more energy and 30% more water than it did in 2005.

It is essential that businesses respond to these challenges by becoming more sustainable; this requires the long-term planning and investment needed to design strategies that can address them.

Sustainability is a key business driver.

Companies are investing in sustainability for financial reasons, but also because it helps them innovate and attract talent. A study by KPMG found that 84% of executives believe sustainability will be an important factor when choosing where to work, while 83% expect it to play a significant role in attracting new customers.

To understand how this works at the individual level, let's look at employee engagement as an example: if you're going to work every day knowing that your company cares about its impact on society and planet Earth (as well as its employees), then you're more likely to stay there longer – and maybe even tell friends about it.

A growing number of companies are investing in sustainability for financial reasons

Investors, customers, and other stakeholders demand greater information on ESG issues. The trend has been building for years but it's now reaching critical mass: investors want to know how companies manage environmental risks and opportunities; customers want companies that care about their employees, communities and the planet; employees want to work at organisations with high ethical standards; NGOs are increasingly vocal about what they see as irresponsible behaviour by corporations.

Sustainability has become a critical success factor and growth catalyst that cannot be ignored by any company large enough to have an impact on society or its environment - even if those impacts aren't immediately visible or quantifiable (yet). This means planning for the long term instead of focusing only on short-term profits - including reporting on your own impact so others can measure how well you're doing against other organisations doing similar work.

Companies must plan for the long term and start reporting on their own impact, and that of their supply chain

Companies must plan for the long term and start reporting on their own impact, and that of their supply chain – in particular, companies listed in the UK, EU or US will need to comply with certain frameworks issued by the ISSB, EFRAG or SEC. This inevitably means that any business forming part of a listed company’s supply chain – regardless of whether or not that supplier is themselves a listed group – will need to start collecting, analysing and reporting its ESG (environmental, social and governance) data. In many cases, this data will need to be independently audited to a similar level of assurance as an audited financial report.

The world's largest corporate investors are demanding greater information on ESG issues from companies. These investors include pension funds and other institutions that manage trillions of dollars in assets. They have a fiduciary duty to ensure they're investing in companies with strong sustainability performance, as well as those that can help them meet their ESG goals.

ESG issues are important to investors, customers, employees and other stakeholders

ESG issues are important to investors, customers, employees and other stakeholders. Investors want to know how companies are addressing ESG issues because they can impact the bottom line. Customers also care about how companies address ESG issues because it affects their buying decisions. Employees want to work for a company that is socially responsible and treats them well by providing competitive compensation packages and benefits like health insurance or paid time off (PTO).

The economic case for sustainability is improving, and it's clear that businesses are taking notice. But there is still a long way to go. Companies need to start reporting on their own impact and that of their supply chain, as well as making sure they have plans in place for how they will respond if things go wrong. This means not just thinking about what might happen today or tomorrow but also planning ahead for 2050 when people living today will be elderly themselves.

Book a free consultation with us to understand how to collect, analyse and verify your supply chain ESG data.

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