Transparency enables all stakeholders to understand your approach to sustainability. It allows them to identify shared objectives and potential opportunities for collaboration.
Transparency also allows stakeholders to monitor performance and hold companies to account – thereby driving up standards across the board. By being clear about their sustainability goals and the challenges achieving them, companies can establish a dialogue and build mutual understanding.
Incorporation of international standards allows companies to demonstrate alignment with robust and well-recognised frameworks for responsible business.
ISO and BSI have published a number of sustainability-related standards including ISO 26000 – Social Responsibility, ISO 14000/14001 – Environmental Management, ISO/PC 277 – Sustainable Procurement, and ISO 20121 – Sustainable Event Management.
The United Nations advocates Ten Principles as part of the Global Compact, which aims to encourage sustainable business. This complements and supports related UN initiatives such as the Principles for Responsible Investment (PRI) and Sustainable Development Goals (SDGs).
For many companies, reporting is the entry point to sustainability. The process of collecting and managing data provides a baseline to set priorities and assess future performance.
The Hong Kong Stock Exchange published the Economic, Social and Governance Reporting Guide (ESG Guide) to encourage more widespread and standardised ESG reporting among listed companies, and to help them meet the rising expectations of investors and other stakeholders for non-financial information.
The Global Reporting Initiative (GRI) is an independent, multi-stakeholder initiative which provides the world’s most widely used standards on sustainability reporting and disclosure. The GRI G3.1 and G4 reporting frameworks are used by many of the world’s largest corporations.
Both the ESG Guide and G4 require companies to focus on the issues that are most relevant or ‘material’ to their business. Materiality assessment involves considering how different parts of the business and its value chains may have an impact on, or be impacted by, the issues listed in sustainability standards and reporting guidelines.
The assessment process involves both internal evaluation and external engagement with a range of stakeholder groups. This helps to ensure that the issues prioritised by a company reflect the concerns and interests of those affected by its strategies and activities. Publishing the results within a sustainability report helps stakeholders understand which issues have been prioritised and why.
While stakeholder engagement plays an important role in shaping materiality assessment, such intermittent or one-off engagements may have limited value in the long run. To build trust and real openness, more regular and in-depth engagement is required. This has the added benefit of providing helpful insights and input from stakeholders
Reporting and stakeholder meetings are not the only means through which companies can build dialogue. Social media, employee forums, cross-sector summits and community outreach all provide opportunities to discuss sustainability issues and strategies in a transparent and inclusive way.
Find out why it’s important to be inclusive.