Mind the Gap
There are multiple challenges to standardising sustainability reporting and disclosure: differences between sector, industry, locality, stakeholder preferences and corporate culture.
Promises and attempts have been made to align reporting; the World Economic Forum’s framework and the UN’s Sustainable Development Goals are good examples. One of the most recent was The Value Reporting Foundation (merger of International Integrated Reporting Council and the Sustainability Accounting Standards Board) which released the International Integrated Reporting Framework in 2021.
But the irony remains that, whilst organisations have started working together to align reporting, this results in the release of more frameworks for consideration.
There are still no accepted norms and confusion remains about which you should use, when. We regularly use 13 different frameworks in our work and analysis. If you consider your industry peers, you’ll find misalignment in the frameworks used for reporting progress.
But this is not where the confusion ends. There are not only different frameworks to guide your disclosure, but there are also numerous analytics software which track non-financial performance.
Multiple stakeholders refer to third parties for performance data, whether its MSCI, Sustainalytics, or Dow Jones. The same company can generate wildly different scores for non-financial performance because each ratings agency uses different sampling techniques, weightings, priorities and terminology.
Communicating consistent, complete and reliable information through strong governance cuts through the confusion.
In this sense, consider the International Integrated Reporting Framework a useful tool your business with useful guidance on improving the authenticity of your actions and communication. To use the framework to track change, data is required. Assessing where you are at stimulates the conversations and action plans your business needs to bring about positive change in a manageable way.
Start small, start today.