Steps organisations must ponder in sustainability reporting readiness for

As we draw closer to the mandatory reporting date for the IFRS sustainability disclosure standards set by different countries, IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures), leaders across various industries are tasked with ensuring their organisations are prepared to report.

The goal of getting an organisation ready to report on its sustainability risks, opportunities and impact can be complex and involve multiple stakeholders.

For most organisations, the process will involve finance, strategy, sustainability, procurement, IT, legal, human resources and risk functions with investments in time and resources.

While every organisation will tailor its approach to sustainability reporting readiness, it must consider some fundamental steps involving different workstreams.

Organisations must consider these three steps towards preparing their sustainability report.

The first step is the assessment and definition phase. This phase includes scoping and materiality assessment, reporting standard eligibility, and alignment assessment, including the data, systems, people, process, and controls assessment.

The outcome from these assessments in step one should be an implementation roadmap that breaks down the implementation plan for sustainability reporting into smaller specific milestones and goals, including timelines.

The second step for readiness is the design phase. It includes remediation of identified gaps (policies, actions, metrics and targets), data and technology gaps, strategy, and a new target operating model design.

In step two, organisations address the gaps identified from phase one, including the data requirements for the applicable sustainability standards. It also allows designing a new operating model for sustainability reporting to ensure a business-as-usual approach that embeds sustainability reporting across the entire organisation.

The third and final step is the implementation. It includes the assurance readiness and reporting workstreams.

This is an essential step because organisations not only begin to draft their reports using the available data but also can perform pre-assurance testing on the data and information disclosed in their report to enhance the level of reliance placed on information in their report.

The writer is a Partner at Deloitte East Africa. He is an author who writes and speaks widely on corporate reporting topics.