With the growing awareness of the environmental impact caused by industrial activities, there is an increasing demand for organisations to take greater responsibility in tracking their operations’ effects on the environment (planet) and society (people). The sustainability discourse aims to determine the most effective ways to ensure that economic activities incorporate the costs and benefits of their environmental and social impacts.
However, this is a challenging task. One relatively easier and more tangible approach is to monitor our progress in achieving sustainability objectives. There is a need for a transformation in the sustainability reporting landscape, both globally and within our local operating contexts.
The current practice of hurriedly producing an annual sustainability report during the time between finalising annual accounts and its release needs to change. Reporting should be viewed as a powerful strategic tool that goes beyond mere compliance with regulatory and governance requirements. The sustainability report has the potential to be much more than a box-ticking exercise. It can serve as a means to demonstrate leadership, effective stakeholder engagement, and management; influencing the industry’s future direction.
Undoubtedly, the proliferation of frameworks, guidelines, and standards for sustainability reporting—currently numbering over 600 globally—has made the process complex and intimidating. Nevertheless, it underscores the importance of sustainability reporting for organisations striving to answer the question: How can we improve the way we report our activities?
There are also questions as to how sustainability benchmarks can be standardised across the board. Which ones should organisations generally adopt? Finally, what should be the attitude of organisations in Nigeria towards sustainability reporting? We consider these points in this article.
Which standards should organisations generally adopt?
In Nigeria, the Global Reporting Initiative (GRI) is the adopted reporting standard. To effectively implement this standard, organisations need to understand the GRI requirements specific to their industries and align their organisational goals to embark on their sustainability reporting journey. These goals should outline the monitoring and evaluation plan for each sustainability target, tracking the progress and achievements made.
This may require restructuring the frequency of reporting sustainability and, more importantly, how monitoring, evaluation, and learning are conducted within the organisation on a monthly or quarterly basis, which can then be consolidated into the report, reducing the reporting burden. It is essential to determine who should take leadership in sustainability within the organisation. Can sustainability reporting be disclosed quarterly rather than only at the end of the year? Can there be sustainability champions at every department level and up to the board level? When leadership members are committed to ESG and sustainability, the reporting process becomes effective and impactful, closing the feedback loop and making reporting a dynamic process.
Resourcing and skill development are also crucial considerations as businesses navigate the rapidly-evolving ESG reporting landscape. Developing a comprehensive and future-ready ESG reporting strategy becomes essential, enabling businesses to anticipate new regulations, respond to customer and investor needs, future-proof their operations, and maintain competitiveness by aligning with current voluntary standards and frameworks.
What should be the attitude of organisations in Nigeria towards sustainability reporting?
While the conversation often revolves around sustainability reporting for larger organisations, the importance of SMEs prioritising sustainability thinking should not be overlooked. SMEs have the opportunity to differentiate themselves in the marketplace and explore innovative solutions within agile and experimental environments. Starting the sustainability journey may be challenging within the complex environment, but it is not impossible.
Commitment to monitoring and evaluation is another crucial step. This involves collecting and verifying sustainability data using reliable and transparent methods. Regular sustainability audits and the use of data management systems ensure data accuracy and integrity. Engaging stakeholders in the reporting process is equally important to address their needs and concerns. Stakeholder consultations and opportunities for feedback should be incorporated into the process.
Organisations should communicate their sustainability performance concisely and meaningfully to stakeholders. Visual aids such as infographics or charts can be used, along with providing context for the reported data. Continuous review and improvement of sustainability reporting processes should be a part of the organisation’s practices, including measuring progress against goals, benchmarking against peers, and seeking feedback from stakeholders.
While the discussion continues on who takes the lead in sustainability thinking within society, shared responsibilities among the public, private, and third sectors are crucial to building better communities and societies for all.