More and more companies are going one step further than adopting sustainable business models – they also report their sustainability activities.
This increase has arisen from the large number of applications received by the Italian Public Relations Federation (FERPI) for the 56th edition of the Reporting Oscars, an initiative run in collaboration with the Italian Stock Exchange and Bocconi University.
Many predicted that the hardships of 2020 — with the health and economic crises that the pandemic unleashed — would push sustainability aside. However, FERPI president Rossella Sobrero was shocked to see the opposite taking place, as companies displayed strengthened resolve to implement the principles of sustainability.
A total of 287 applications were received, a figure that has grown constantly in recent years and that shows the sustainability reporting is now an essential commitment for Italian companies.
Many of these companies are not legally obliged to make a non-financial declaration based on Legislative Decree No. 254 of 30 December 2016, but still took the voluntary step to provide sustainability reporting through a Social Report, Environmental Report or Integrated Report, which is the most comprehensive and complex form of reporting.
Before we look at the reasons why so many companies are taking this choice, let’s try and understanding what sustainability reporting really means.
Sustainability reporting: What does it mean?
To produce a sustainability report, a company first needs to gather as much information as possible to analyze its activities and look at its social, environmental and economic impact.
Acquiring and evaluating this information gives companies the opportunity to pause and reflect on their activities. They can see what has worked and what could be improved, thus monitoring the impact they’ve generated.
Furthermore, the reporting data gives companies the knowledge they need to plan future actions and achieve their sustainability goals.
Sustainability reporting can therefore be seen as an opportunity for self-analysis – a chance for companies to learn about their limitations and potential, before taking action aimed at overcoming the former and realizing the latter.
Now that we have a clearer idea of sustainability reporting, let’s try to understand why companies of all shapes and sizes should embark upon this venture.
Why is sustainability reporting important?
There are a range of reasons why companies want to report on their sustainability activities. These include the reputational benefits that derive from publishing sustainability reports, as well as the competitive advantage that doing so can give them over other companies in some sectors.
However, the biggest reason companies decide to engage in sustainability reporting is linked to the demands of three specific groups: investors, stakeholders and the company itself.
Increasingly, investors are asking companies for access to non-financial information because they believe this is an important part of assessing enterprise value, which is now thought of as a combination of social, environmental and economic impact.
LarryFink, the president of financial giant BlackRock, states: “In order to assess sustainability risks, investors must have access to relevant, coherent, quality public information.” Fink’s appeal to CEOs to align their businesses with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFC) and the Sustainability Accounting Standards Board (SASB) shows just how important an ability to assess and communicate their sustainability is to the future performance of all companies.
Stakeholders also need the ability to access this precious information.
This group is much more varied than investors. The term “stakeholder” refers to consumers, employees, local communities around the company…anyone who interacts with the company, whether directly or indirectly.
In this case, the demand for information derives from the need to assess the company and understand where it stands on certain issues, so that stakeholders can make their decision on it.
Last but not least, sustainability reporting is an activity that responds to the development needs of the company itself. As we’ve already seen, sustainability reporting in the form of a Social Report or Integrated Report allows companies to measure their non-financial impacts. Market research shows that companies who are doing more to incorporate sustainability within their business models – from production to strategic planning to operations to risk management – are those that ultimately see healthier, more solid growth.
The growing demand for sustainability reporting provides the key impetus for companies to go from merely stating their intentions to actually taking concrete action to achieve ESG goals.
For us at Way2Global, helping companies to optimize the way they communicate their commitment to sustainability in any language is an honor and a privilege.
Our translators are highly qualified to translate and optimize any form of reporting.
Thanks to the close coordination of project managers, we’re able to provide a multilingual translation service that celebrates the efforts being made by companies in the field of sustainability, allowing you to share best practices in other countries and trigger a virtuous, international cycle.
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