Why corporate sustainability reporting is important for business

Corporate sustainability reporting could be divided into different types depending on the size of the company, areas of operation, and the markets in which the company operates. Large multinational businesses would have sustainability framework standards set up for global businesses, whereas smaller companies could develop their own report based on Key Performance Indicators (KPIs) that are specific to their business. The reporting of smaller organizations would also broadly follow the internationally recognized guidelines and standards for corporate sustainability reporting.

There are various types of corporate sustainability reporting frameworks that companies can choose from. The Global Reporting Initiative (GRI) was started in 1997 by an NGO, the collaboration of Environmentally friendly economies. GRI sets up consistent corporate sustainability reporting standards for companies to voluntarily report on their ESG performance. The International Standards organization (ISO) similarly lays down specific standards for ESG reporting. The ISO 26000 addresses the core areas relating to corporate social responsibility. 

Additionally, businesses can also apply for sustainability certifications. Certification is an important aspect of corporate sustainability, wherein organizations would undergo an assessment by a third-party auditor and earn a certificate attesting compliance with the standards. Certifications are tangible means for customers and investors to recognize the organization’s commitment towards ESG goals. The Benefit Corporation (BCorp) certification recognizes that a business adopts a stakeholder approach (workers, customers, suppliers, community, and the environment) wherein it balances purpose and profit.

There are also certain certifications that deal with specific aspects, for example, the Fair-Trade certification implies that producers have been adequately compensated for their produce (fresh fruits and vegetables, coffee beans, tea, cocoa, etc.) and the products have been sourced responsibly. The BCorp and the fair-trade certification have been widely adopted in the United States.