As investor interest in sustainability performance grows and companies come under more regulatory pressure to disclose their impacts, businesses are increasingly directing significant resources to external reporting. Disclosing progress in line with rigorous reporting frameworks and respected analyst surveys is integral to improving transparency and lowering reputational risk. However, with no single global standard for reporting, preparing responses for diverse frameworks and surveys can be costly and time-consuming, especially for sustainability reporting. Companies therefore need to look at how they can use technology to streamline the reporting process. Providing robust responses in a structured, efficient way is vital to improving the quality and accuracy of their reporting efforts, as well as the comparability of sustainability data.
Here, we explore best practice in responding to multiple sustainability frameworks and surveys, and consider the role of software in improving reporting performance.
- Establish a bedrock of data
Once you’ve identified the most appropriate frameworks and surveys for your business, one of the biggest challenges is dealing with slightly different sets of criteria and the inevitable overlap that occurs on key topics (both quantitative and qualitative). Overcoming this barrier starts with establishing a solid base of information from which you can draw for every reporting project.
In order to capture, report and audit data in a seamless, transparent manner, we recommend maintaining a ‘bedrock’ of quantitative data and integrating an underlying system of data capture with corporate reporting functionality. Adopting proven technology to identify information that’s relevant for multiple frameworks can save time and costs and improve accuracy. It’s then simply a matter of adjusting the information for the survey or framework in hand. Similarly, it’s important to remain alert to new and changing requirements as frameworks evolve and adapt your bedrock of data, as appropriate.
- Collate responses efficiently
As the reporting burden grows, software plays an ever more important role in the collection and management of sustainability data. In addition to providing smart ways to organise and identify or ‘tag’ requirements from different surveys, it’s also possible to consolidate information from existing data management systems.
By using advanced software, companies can streamline the process of requesting, reviewing and collating responses across multiple reporting frameworks. Essentially, the system provides a central online repository for all your social and environmental data. Look for one that is GRI-certified and CDP Gold-level approved and contains an in-built library of common frameworks, including GRI, CDP, UN Global Compact, EIRIS, and the Dow Jones Sustainability Indices (DJSI), as well as allowing you to create your own customised frameworks.
With an elaborate information management system, you can tag relevant sections of a framework or survey with keywords relating to specific topics (such as water or governance) within your underlying bedrock of data. Additionally, you can batch together common questions in a central location, assigning specific questions to relevant colleagues and managing content through a predefined review and approval workflow. Every question is tracked by the system, allowing you to compare responses from previous years, and check where changes were introduced. Meanwhile, users can check progress at a glance or extract information to support their daily activities.
- Towards more streamlined reporting
As companies seek increasingly sophisticated technical solutions to help overcome the challenge of responding to multiple frameworks, they should partner with a software supplier that is collaborating with framework owners to further streamline the reporting process. For example, investment specialist RobecoSAM, founder of the DJSI, integrates the company’s Corporate Sustainability Assessment (CSA) questionnaire into the systems of partnering software suppliers, using a globally respected business reporting computer language (XBRL) so that users can tag and add relevant sustainability data automatically to the CSA. The CSA (and supporting documents) can then be transferred directly to the DJSI reporting platform, avoiding the need to manually copy information across.
Structuring data in XBRL format standardises it, reducing loss of quality when it is shared, making it more accessible to consumers of the data (such as investors and ratings agencies) and potentially offering synergies between different reporting standards.
Similarly, the Sustainability Accounting Standards Board’s (SASB’s) standards are integrated in some systems, giving companies the opportunity to streamline their SASB reporting and submit sustainability information more efficiently for Form 10-K reports (required by the US Securities and Exchange Commission).
It is extremely unlikely that a single, global standard for sustainability performance will emerge in the short or even medium term. Therefore companies need to ensure they can streamline the process of reporting to multiple frameworks – doing this successfully should begin with choosing the right software partner to work with.
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