What is Sustainability Reporting?

Feb 20, 2022 | by Yosy Christy Natalia

Sustainability Reporting—the definition and the purpose

In layperson’s definition, the term sustainability reporting can be described as the ability to keep something maintained at a certain rate or level. With respect to the environment and ecology, sustainability means preventing the depletion of natural resources and its restoration to maintain ecological balance.

Sustainability reporting involves corporates, industries communicating the impact of their operations on the environment and ecology and other issues tied to sustainable living and the future. Businesses and companies across the globe adhere to United Nations Sustainable Development Goals (UN SDGs). Mapping corporate effort against SDGs is one of the most common ways of assessing impact.

The purpose of sustainability reporting

Besides assessing a company’s effort toward mitigating risks to the environment and ensuring a sustainable, ethically powered future, sustainability reporting goes a long way in enhancing the brand value and investment-worthiness of a business. Customers and stakeholders are socially aware like never before and want to bet on businesses that have a greater agenda than simply reaping profits. 

Sustainability reporting vs impact reporting 

Sustainability reporting involves a broad spectrum of environmental, ecological, social, and governance parameters. While it overlaps with impact investing and socially responsible reporting, there are clear markers of distinctions between them.

Think of sustainability reporting as an umbrella concept. Many a time, a company’s impact vision may not fall under the traditional concept of sustainability. It could be too aligned to ethical, societal issues. This is where the dissimilarity between sustainability and impact reporting comes in. For example, a company involved in checking and curbing drug abuse will measure and assess its effort and report on the impact created accordingly. 

Differences and similarities

Sustainability reporting does not include businesses with a more ethically grounded approach and vision as opposed to the ESG criteria which categorically look at the environmental, social and governance efforts and impact. 

In fact, issues revolving around inclusivity, consumer protection, human rights, women empowerment, et cetera and associated impact fall under socially responsible reporting. 

However, there are impact organizations that are tied to environmental, ecological and other sustainability-aligned parameters. The communication of their impact with the public and stakeholders falls under the ambit of sustainability reporting.   

In a nutshell

Sustainable reporting is more like a blanket term that includes analyzing and communicating efforts in line with economic growth, environmental protection, and social progress. Ensuring corporate responsibility while fighting climate risk and environmental destruction comes under sustainable investing and reporting with ESG investing and reporting forming a vital part of it. Impact reporting shares a room with sustainability reporting but goes on to include a broad spectrum of issues that are also ethically grounded. 

Impact leaders are turning to adopt a mixed-bag approach that includes clubbing all forms of reporting frameworks to ensure social and environmental benefits to society and a better, more sustainable future. 

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