Do the words ‘sustainability reporting’ fill you with dread? Because it’s perceived as a complex and time-consuming process, due to the lack of a standardised framework?
If so, you’re not alone. However, sustainability in business isn’t a passing trend. It’s here to stay and is a great way of making sure your company remains ahead of competitors as well as focusing on decarbonising your emissions.
Sustainability reporting is where you share your environmental, social and governance plans, goals and progress towards them with the public. This helps customers, employees and investors see how well your business is doing in terms of meeting sustainability goals.
These environmental, social and governance goals aim to help your company manage its impact on the environment and society.
But in order to report sustainability, you need to know how your company is performing and to report it accurately. You need to understand where your data is and how to access it and collect it. For example, if you use solar panels or solar carports or any type of renewable energy, you can easily collect data around this.
Or perhaps you are starting out on your sustainability journey and your employees’ travel for work creates a large carbon footprint. You can begin by measuring this and then bringing in solutions such as solar carports where you can create your own energy and employees can charge electric cars to reduce your emissions.
It can be confusing for business owners as there is no one standardised framework for all businesses to follow and to make it more complicated the sustainability landscape is constantly evolving to keep up with new laws.
The good news is that the government is expected to introduce new measures in March 2025 to help standardise reporting which aim to make reporting easier for all businesses.
However, until then there are currently several frameworks you can follow depending on the size of your business.
This was introduced in 2019 and requires publicly traded companies as well as large limited liability partnerships (LLPs) and academy trusts to report energy use, carbon footprint and green house gas emissions in their annual reports.
These measures are now overseen by the International Financial Reporting Standards (IFRS Foundation) a not-for-profit, public interest organisation established to develop high-quality, understandable, enforceable and globally accepted accounting and sustainability disclosure standards.
Just to add to the confusion, the IFRS has taken over from the now disbanded Taskforce for Climate-Related Financial Disclosure Reporting run by the FCA.
The International Sustainability Standards Board (ISSB) standards (also known as IFRS standards) cover areas like sustainable investment labels, disclosure requirements and restrictions on using sustainability-related terms in product naming and marketing to avoid greenwashing.
The guidelines aim to help companies disclose climate-related financial risks and opportunities to investors, lenders, insurers, and other stakeholders and standardise UK sustainability reporting to make them more consistent with international standards.
In 2023 the UK government announced that UK Sustainability Reporting Standards will be published by March 2025, and aligned to the ISSB standards which will help provide a clearer framework for companies to work from.
They include two standards; IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S1 Climate-related Disclosures.
If you use these standards as a framework you will be asked to describe areas such as:
• The board’s oversight of climate-related risks and opportunities
• Management’s role in assessing and managing climate-related risks and opportunities
• Climate-related risks and opportunities the organisation has identified over the short, medium, and long term.
The ESOS is a mandatory energy assessment scheme for UK organisations that meet the qualification criteria.
The four-yearly audit includes assessments of energy use, transport and industrial processes to identify tailored and cost-effective measures to allow businesses to save energy and achieve carbon and cost savings.
Once companies start their sustainability reporting journey it soon becomes clear that introducing green measures such as renewable energy sources is a no brainer to a sustainable future for their business, customers and the planet.
And don’t forget this also means looking at what is termed as ‘Scope 3 emissions’ such as when a company buys, uses and disposes of products from suppliers.
An easy way to start would be looking at how your suppliers package their products, and making sure they’re recyclable or whether suppliers use electric vehicles. Or consider how much of your energy usage you can switch to renewable sources, such as solar panels installed on your roof or in your car park.