In today’s business climate, sustainability reporting works as a tool for commercial resilience. Businesses that report on their sustainability annually and adopt sustainable practices are better placed to adapt to regulatory change and consumer demand.
Sustainability reporting is the process of communicating a business’s environmental, social and governance performance. It can include disclosure of your carbon emissions, a carbon reduction strategy, social value and any further information about a business’s impact on the environment and society.
Sustainability reporting is mandatory for several businesses in the UK (usually large businesses) under regulatory schemes such as Streamlined Energy and Carbon Reporting (SECR), the Energy Saving Opportunities Scheme (ESOS) and Corporate Sustainability Reporting Directive (CSRD).
These regulatory impacts create a knock-on effect for smaller businesses within their supply chain to practice sustainability reporting. For example, Tesco has called for businesses across its supply chain to adopt sustainable reporting practices, such as disclosing their carbon emissions and setting net-zero targets to support Tesco’s Net Zero strategy. To maintain a strong relationship with key stakeholders in their supply chain, smaller businesses will have to adopt sustainability reporting, even if they are not compliant.
Why is this happening?
Larger businesses working towards net zero cannot achieve a credible net zero transition in isolation because their scope 3 is comprised of other indirect sources of greenhouse gas emissions within a business’s value chain. In simpler terms, a business’s scope three emissions could be your scope one and scope two emissions – to achieve net zero businesses must reduce at least 90% of their emissions across scopes 1,2 and 3 and offset remaining unavoidable emissions.
Sustainability Reporting; A forward-thinking solution to commercial resilience
The value of sustainability reporting stretches further than meeting regulatory requirements and stakeholder pressures. Sustainability reporting gives businesses a unique opportunity to strengthen their commercial resilience in the global fight to halt climate change.
The UK business sector accounts for over 20% of the UK’s total carbon emissions. Soon all businesses will need to report on and have a viable strategy to actively reduce their carbon emissions. Businesses already contributing to the decarbonisation of the sector will be recognised as leaders paving the way in their industry and gain competitive advantage over their peers.
Growing awareness of the climate emergency from investors to employees and consumers has made it imperative for a business to practice sustainability reporting or risk missing out on new business opportunities, commercial growth and employee retention because purposes aren’t aligned.
Sustainability reporting helps their bottom line too. Increased sustainability efforts can provide huge operational cost savings through reduced carbon emissions, energy consumption, waste, and water usage – all supporting reduced operation costs.
Future-Proofing your business
Laws and regulations are strengthening in the UK as we aim to hit net zero by 2050. As a result, many businesses are proactively reporting on their sustainability performance to stay ahead of the curve and maintain a competitive advantage, avoiding rushing to catch up with better-prepared competitors and avoid non-compliance fines.
Credibly highlight your sustainability commitments
There has been an increased demand for proof of a business’s social and environmental commitment from stakeholders, such as consumers, employees, and investors. Many businesses have also seen this ask in bids, tenders and funding rounds. Effective sustainability reporting can help highlight your commitment to sustainability, build trust with your core stakeholders and support new business opportunities.
Increasing business transparency.
In today’s climate, there are increased demands for transparency and trust. Many businesses have come under scrutiny because of their lack of transparency or ‘green claims,’. By reporting on sustainability, organisations can be more transparent and accountable by publishing their reports and action plans in the public domain. Effective sustainability reporting gives your stakeholders a clear image of your sustainability efforts now and how they will evolve in the future.
Through our three-step process, we help members Measure, Engage and effectively and authentically Communicate their sustainability – backed with robust third-party verified data. Learn more about Planet Mark’s Business Certification.