The importance of sustainability reporting in business is only gaining momentum. Per KPMG’s Survey of Sustainability Reporting released in November, nearly all of the world’s largest 250 companies report on sustainability (96%) and have published carbon targets (95%).
Larger companies around the world, including 50,000 in the EU and 10,000 internationally exposed to the EU’s Corporate Sustainability Reporting Directive, are required to meet mandatory reporting requirements set to take effect in 2025. These companies are dependent on complex supply chains with vendors and partners located across numerous different countries. Many companies further downstream are also electing to voluntarily adopt measures aligned with regulatory frameworks to prepare and align.
So, what can companies do to start reporting on sustainability?
- Determine materiality - starting with an assessment of the most material ESG factors to your business is critical to prioritizing focus areas. Double materiality, the concept of assessing the impact of a business on the environment and society as well as the environment and society's impact to a business’ financial performance, is the cornerstone of CSRD and is becoming the standard for materiality - already used by almost half of the world’s largest companies
- Implement a strategy - beyond setting targets, thinking critically about what specific initiatives your business should focus on as well as the relevant KPIs to track progress is instrumental to the success of a sustainability strategy
- Establish systems and processes - sustainability reporting relies on structured systems and technologies. Implementing software tools to collect and analyze data, as well as working with a sustainability professional to align with the relevant frameworks (GRI, CDP, SASB, ESRS, etc.) for your business will streamline the process - saving time, money, and resources
- Execute - once able to collect the relevant data and information, your business will be well positioned to not only meet regulatory requirements, but also capitalize on new revenue opportunities, reduce potential risks, and build a sustainable business model for the future
So whether motivated by complicated jurisdictional regulatory compliance or looking to improve information for customers, employees, investors, or other stakeholders, businesses are and will continue to prioritize sustainability as an operational focal point.
At Clearyst, we’re here to be your company’s partner in navigating sustainability reporting, compliance and optimization - no matter where you are in your journey. Reach out to learn more.
Click here to access KPMG’s Survey of Sustainability Reporting