Do you want your company to grow it rapidly? The secret is getting to understand and deliver what stakeholders want. This is why ESG sustainability reporting has become central to most operations of companies today. They are demanding environmental, social, and governance (ESG) disclosures that can help in making the right decisions about your company. 

Employees want to understand if their company is focused on equality and empowerment, while investors want to assess the potential for their returns.

ESG sustainability reporting has created the roadmap for disclosing a company’s social, environmental and governance impacts. Despite this channel for communication, some stakeholders have raised concerns that the reports they get are not sufficient to help them make the right decisions. 

If you make an ESG report of poor quality, the chances are stakeholders will start doubting it. In this post, we will tell you how to harness the full potential of ESG sustainability reporting.

Optimizing the Potential of ESG Reporting

There are a number of ways that you can use to optimize ESG sustainability reporting benefits, and we are going to highlight the most common:

•       Engage with Stakeholders and Let them Drive the Report

Stakeholders have developed a huge appetite for change. It is not just transparency. This presents businesses with strong cases for them to take action to win their affection. As a business, you need to identify these stakeholders to understand their needs and strive to deliver it. Take the example of customers as important stakeholders in business operations. By engaging them, they indicate what you should focus on more, meaning that they are not just the consumers of the report, but also the drivers of the process.

When the sustainability report is finally released, they will say, “yes, this is what we wanted.” Customers will buy more, while investors will want to be associated with the future of the company. This is all you might need to drive more sales, raise more capital and take the enterprise to the next level. 

•       Use ESG Sustainability Reporting for Compliance

As the effects of climate change and others that are related to poor sustainability become clear, regulatory organizations, professional bodies, and stock markets are demanding focus on sustainability. For example, the SEC in the United States is working with market participants on the adequacy of sustainability disclosures with the aim of reviewing them. 

Another example is the Hong Kong Stock Exchange, which has set the bar even higher for all listed companies. The secret to enjoying optimal stakeholder support is targeting to deliver or surpass what these regulatory authorities want. 

•       Use ESG Reporting to Cut Down the Cost of Operations

For some companies, especially in manufacturing, it is not uncommon to get their management emphasizing on the costs associated with ESG reporting. This is indeed true, but a closer look demonstrates that when done well, the cost can be pushed down significantly. 

Take the example of an ESG sustainability reporting process that recommends an overhaul of the machinery in a manufacturing facility. When the entire process is done, the cost of production will come down because of high efficiency, implying that you can even sell the products at a lower cost to win a bigger market share.

This post has demonstrated that although ESG sustainability reporting is still in its early stages, it has a huge potential when applied properly. Particularly, it is important to ensure you have the right ESG sustainability reporting software to guide you in the entire process. Remember that once you start the process, the focus should target progressive improvement to build on the current successes.