1. Sustainability reporting is moving in two different directions; tension is evident
On one hand, many reports are going further towards pure-play disclosure compliance where many reporters are adopting the ‘inline XBRL CSRD Sustainability Statement’ content.
On the other hand, we are still seeing the classic creative and descriptive sustainability reporting approach very much in play.
Both have a purpose. “Human-readable” sustainability reporting is still highly relevant while machine-readable sustainability reporting makes things clear for ESG analysts (or robots!). However, reporters may find their resources stretched when trying to do both.
2. One size doesn’t fit all
There is no clear alignment behind one single approach to the structure, accessibility and navigability of reports. Different companies employ a variety of strategies, tools and techniques depending on their intended audiences and approaches.
At one end of the spectrum there is consolidated reporting, where all sustainability information is included within the Annual Report. At the other end, are those organisations who opted for a more fragmented approach – providing multiple distinct downloads for each sustainability topic. And of course, many companies choose to address sustainability issues in an accessible and engaging standalone report, often published on the same day as the Annual Report.
As sustainability reporting enters an increasingly prescribed and regulated era, it will be crucial for reporters to critically evaluate their choices and make conscious, strategic decisions about the purpose and structure of their reporting.
3. Focusing on material topics is key
A credible materiality assessment will help to govern sustainability strategy and content of the annual sustainability report.
Be confident in your materiality assessment and use focused material topic definitions. Move on from ‘everything and the kitchen sink’ going into the report and focus on truly material topics, of which there may be only three or four.
Show evidence of more creative actions and projects that tackle the issues in complex systems, to break away from ‘cookie-cutter’ lists of standard material topics. Credibility may well arise for corporations when they demonstrate that actions and campaigns align with programmes that create real grass-roots impact.