Disclosing sustainability metrics, targets, certifications or reporting has become essential for organisations seeking to demonstrate to clients or customers their impacts on and commitment to environmental and social responsibility. Studies have found disclosing relevant sustainability metrics leads to further revenue and investment, but disclosing the wrong metrics or communicating it incorrectly could lead to labels including greenwashing, blue washing or white washing. Sustainability reporting frameworks were driven by stock exchange listing, but if your company is not publicly listed, there are other frameworks and certifications that help to standardise or give you guidance on how to measure and assess your business sustainability impacts in the right way.
If you are a publicly listed company:
Selecting the most appropriate framework and indices to monitor and disclose publicly will depend on your industry. The general disclosures framework most often used is either Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB). SASB provides recommendations on what to disclose based in your industry which is helpful for providing standardisation.
The two main frameworks on climate disclosures include Carbon Disclosure Project (CDP) or Taskforce on Climate-related Financial Disclosures (TCFD). If it is not already mandatory to disclose through TCFD through listing in an international stock exchange such as a G7 country, you will be required to use TCFD within the next year or two. Australia is one of those countries moving to mandating TCFD for listed companies over a certain size.
A major contributor to standardising the reporting frameworks is the International Financial Reporting Standards (IFRS) who are combining recommendations from many leading frameworks such as SASB (now part of IFRS), TCFD and CDP. IFRS will release S1 and S2 within a few months which include industry specific general reporting framework in S1, and climate disclosures in S2.
Public companies may also join an index or external sustainability rating to show customers their sustainability standards. However, like choosing the right framework, metrics and indices, it is important to choose the right rating to prevent misconceptions and greenwashing, blue washing or whitewashing.
If you are a private company:
Private companies who are exposed to sustainability conscious clients/customers or want to market to that target audience disclose relevant information such as operations and supply chain inputs on their website by way of improving transparency and reassurance. What you decide to measure and assess will depend on your stakeholders interests.
Certifications will help decide what is important for your industry to disclose as they have assessed what stakeholders want to see. Disclosures may be carbon emissions, sourcing organic materials, managing risks to modern slavery or avoiding ingredients such as palm oil. A certification also indicates to the customer you have met industry standards in data collection (if that certification is reputable). Below are some certifications which may be relevant but there are many more and it is worth investigating the right one for your business.
- General (including financial institutions): B Corp, Carbon Neutral, Carbon Trust, Responsible Business Alliance, Ethical Trading Initiative, SA8000, Reconciliation Australia
- Construction: ISCA, Green Building Council, NABERS, NAtHERS, Passivhaus
- Building Materials: Steel Sustainability Australia, GECA, Environmental Product Declaration, Australian Made and Owned, Cradle to Cradle.
- Food: Marine Stewardship Council, Rainforest Alliance, Australian Certified Organic, Fairtrade International
- Travel: Green Globe, Earthcheck, GSTC, Ecotourism, Biosphere Responsible Tourism
- Skincare: COSMOS, Leaping Bunny, Vegan Society, ECOCert
- Hospitality: Sustainable Restaurant Association
If you would like to know more about sustainability reporting, certifications, indices or ratings then contact Highlight Sustainability.