Although many companies understand the importance of sustainability reporting and the impact it can have on their business, actually doing it remains a challenge for a large number of them.
According to Janet Ranganathan, vice-president of science and research at the World Resources Institute, writing for the Guardian blog, there are two main obstacles that hold businesses back from effective sustainability reporting. The first is that many companies are unable to embed sustainability into their business strategy and treat it as an independent issue, and the second obstacle is the lack of tools that can enable firms to make sustainability an integral part of their daily business.
Ranganathan believes that businesses need to look at the most pressing environmental issues and the way they link to business risks to see how sustainability relates to their business. At the same time, company leaders should realise that business risks and opportunities presented by sustainability trends are too big to be addressed by a single business function, or even inside the company itself. Effective sustainability requires working together with stakeholders as well as local and national government policymakers.
Once companies are fully aware of their dependence on sustainability issues, they can turn to tools designed to facilitate the incorporation of sustainability into their core business strategies. Such tools exist and more are being developed. The International Integrated Reporting Council published a prototype reporting framework, which can be very useful to businesses in their first attempts at integrated reporting. The World Resources Institute has created the sustainability Swot framework, which looks at strengths, weaknesses, opportunities and threats for businesses. Other tools include greenhouse gas accounting frameworks and geographic water risk evaluation methods, which enable businesses to become more efficient and to reduce operational risks.