Seven Must-Ask Sustainability Report Questions

by | Oct 28, 2010

There are seven questions CEOs, boards and other executives should ask to understand how sustainability reporting impacts their organizations, according to a new report from Ernst & Young.

These questions will help organizations examine internal processes to collect and analyze non-financial data, which could help generate long-term benefits such as better measurement of the company’s “triple bottom line” performance, greater stakeholder trust, improved risk management, and increased operational efficiency, says the company.

The report, ” Sustainability reporting: Seven things CEOs and boards should ask,” finds with more than two-thirds of the Fortune Global 500 companies publishing some form of sustainability report, they are becoming more important as a way for them to achieve their business goals including cost cutting and improved efficiency, says Ernest & Young.

In addition, sustainability reporting has become a tool for companies to report on their non-financial data, which is increasingly demanded by employees, analysts, customers and other stakeholders.

Case-in-point: A mid-2010 Ernst & Young survey of 300 global executives at large corporations revealed that 43 percent believe equity analysts consider factors related to climate change when valuing a company.

The Federal Trade Commission (FTC) recently proposed several revisions to its “Green Guides,” including new guidance on marketers’ use of product certifications and seals of approval, as well as claims for renewable energy, renewable materials, and carbon offsets.

Ernst & Young says reporting on “green” product development will provide companies with the opportunity to document the basis for any claims they make. It also will help them collect environmental information about their products as their customers develop supplier sustainability initiatives.

The seven questions discussed in the new report include:

–Who issues sustainability reports?

–Why report on sustainability if you don’t have to?

–What information should a sustainability report contain?

–What governance, systems and processes are needed to report on sustainability?

–Do sustainability reports have to be audited?

–What are the challenges and risks of reporting?

–How can companies get the most value out of sustainability reporting?

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