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Driving sustainability commitments into action: the power of reporting and Assurance

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Sustainability in today’s world refers to social equity and economic development – not just environment protection. With the global climate crisis becoming an urgent concern and demanding urgent attention, the focus on sustainability has become paramount.

Businesses are no exception to this; by focusing on sustainability, they can reduce their ecological footprint, promote social wellbeing and achieve economic gains. Any organization’s stance toward sustainability is a business imperative – not just an ethical aspiration.

This is where sustainability reporting becomes crucial. It allows businesses to relay a clear picture of their sustainability efforts, its impacts and performances to stakeholders – thereby earning their trust and reinforcing brand reputation.

Transparency unveiled: the value of sustainability reporting

Sustainability reporting is a means for organizations to communicate their environmental, social, and governance (ESG) performance to stakeholders. It stands as a critical tool for businesses striving to substantiate their dedication to environmental and social responsibility.

Sustainability reporting provides vital information about an organization’s impact on the wellbeing of the ecosystem and society, along with its financial performance. This integrated reporting approach provides a comprehensive view of an organization’s sustainability commitments and progress toward its goals.

More than words: the benefits of sustainability reporting

There are several benefits to having a robust sustainability reporting mechanism. First, it amplifies the transparency of an organization’s sustainability efforts. This not only heightens the trust of stakeholders but is also a useful tool in risk management and in unearthing opportunities connected to sustainability.

Second, it gives organizations the opportunity to objectively assess their sustainability performance, spot gaps, and devise improvement strategies. It provides a robust structure that enforces commitment and responsibility to sustainability objectives, thus promoting a culture of ongoing enhancement in sustainability performance. 

Sustainability reporting also carves out a competitive advantage for organizations. Amidst customers and investors becoming more ‘sustainability aware,’ organizations that manifest and execute authentic commitment on sustainability can distinguish themselves and reinforce their brand’s reputation.

The importance of Assurance in sustainability reporting

While sustainability reporting initiates the journey toward achieving sustainability goals, assurance plays an indispensable part in conscientiously validating these reports. Assurance, typically rendered by an external third party, includes corroborating the data, systems, processes and controls related to the conveyed sustainability information of organizations.  

By subjecting sustainability reports, environmental disclosures and corporate practices to rigorous examination, Assurance professionals provide independent validation of a company’s environmental performance. This process enhances the reliability and credibility of sustainability disclosures, helping companies differentiate themselves from greenwashing competitors. It also helps in building trust through transparency.

Beyond the pages: the continued impact of Assurance

Beyond boosting the reliability of reports, assurance inspires organizations to streamline their reporting process, thereby augmenting the quality of unveiled information. It lends organizations a helping hand to identify faults in their data compilation and reporting practices, offering the opportunity to course correct these shortcomings and enhance their sustainability performance.    

Additionally, sustainability assurance offers valuable insights to organizational leadership about the efficacy of their sustainability strategies, the performance of their internal controls, and the achievement of their sustainability commitments. Assurance does not end with a one-time validation of sustainability claims; instead, it facilitates a process of continuous improvement.  

 

Assurance … and the future road map of sustainability

To sum up, sustainability reporting and assurance are mutually dependent and crucial practices that organizations need to espouse for fulfilling their sustainability goals. They not only bolster transparency, enhance credibility and foster continuous improvement, but also pave the way for informed decision-making and strategic planning.  

Embracing these is a win-win situation for organizations, which helps boost their sustainability performance as well as drives their overall business in today’s environmentally and socially conscious economy. As consumers demand greater transparency and accountability from organizations, the need to combat greenwashing has never been more pressing.

The call for sustainability is a call for survival, growth and prosperity in the long-term – of the business, the society and the planet.

About the author:

Rekha Jayakishan is the Climate Change and Sustainability Services (CCaSS) SRA Leader for Assurance practice, EY Global Delivery Services India LLP, and is responsible for driving the Sustainability Reporting and Assurance practice. 

A keen thought leader with a deep passion and commitment to sustainability, Rekha has been part of GDS since its inception.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.