Why integrating sustainability is important
The increasing awareness of worldwide megatrends such as climate change, inclusive capitalism, improved corporate stewardship and better corporate governance has powered sustainability up the corporate agenda in recent years. Belief in business to lead the way in creating a better society has risen and investors are increasingly focused on environmental, social and governance (ESG) issues when making their capital allocation decisions. Consumer trust in business is becoming ever more valued within organisations and integrating sustainability considerations throughout operations is essential if a company is to be recognised as a good corporate citizen.
Our guest speakers, experts in the field of integrated reporting, provided valuable insights into the benefits of adopting integrated reporting: an approach to communicate how the various aspects of a company’s operations, such as strategy, governance, performance and prospects, create value over the short through to long term. Considering the effect that non-financial factors have on value creation and how this is shared across all stakeholder groups is crucial.
Integrated reporting is enhancing the way that organisations think about, plan and report on the story of their business. Adopting integrated reporting helps companies to think holistically about strategy and plans, make informed decisions and manage key risks. This builds investor and stakeholder confidence and improves future performance – and it all starts with integrated thinking. This style of reporting, which is gaining traction internationally, is becoming the pre-eminent means of driving more authentic, comprehensive and meaningful information about all aspects of an organisation’s performance and value creation story through to stakeholders.
In fact, numerous studies have unearthed links between integrated reporting and corporate success, with companies that have adopted integrated reporting showing outperformance in terms of:
- higher market valuation;
- greater stock liquidity;
- better understanding of strategy by investors; and
- more dedicated investor profiles.
Communicating your sustainability story
Luminous’ own Senior Sustainability Consultant, James Whittingham, presented a session on communicating your sustainability story: setting the context for the increasing focus on sustainability and providing practical advice on how to tell a more compelling story of value creation.
The UK leads the world in terms of corporate reporting and disclosure, and the breadth of mandatory disclosure requirements is growing. The Task Force on Climate-related Financial Disclosures and the Financial Reporting Council’s proposed changes to The Stewardship Code are two forthcoming changes which will affect sustainability reporting and need to be taken into account. The regulatory environment is placing increasing demands upon preparers of reports and navigating these latest changes and best practice developments is crucial to telling your sustainability story in a compelling and authentic way.
Four steps to telling a better sustainability story…
Gauge where you stand among your peers and how you measure up against key standards and indices (the Carbon Disclosure Project and Global Reporting Initiative, for example).
Develop a position
Progress your thinking on key policies, define and express your purpose, and set a strategy aligned to the relevant UN SDGs.
Tell the world about what you are doing. Inspire your employees, customers, shareholders and other stakeholders alike.
Open all channels
Ensure you deploy a multi-channel approach to telling your story – use the whole ecosystem of communications from website, to social platforms to sustainability reports. Remember, there are many ways to reach your key audiences.
To tell a better story is a game of three halves – first an organisation needs to get its sustainability strategy right, for example setting the right tone from the top with executive sponsorship internally and externally. Secondly, it needs to get its reporting right – by clearly articulating what its key, or material impacts are and how it manages sustainability matters, day to day from the shop floor to the board room, avoiding jargon and using win-win examples. Thirdly, it needs to use great design to embrace the opportunity to share its personality with the world.
All in all, it was a great #illumination event made even more memorable by it marking the launch of the inaugural issue of ‘Sustainability Matters’ (available online here), our new thought-leadership publication.
If you would like to know more about how your organisation can better integrate sustainability throughout your operations, reporting and communications, please get in touch at firstname.lastname@example.org