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Why sustainability reporting and mindset are good for business
More than half of East Africans reported to have experienced economic crimes including sustainability fraud in the last two years. FILE PHOTO | SHUTTERSTOCK
Globally organisations are embedding ESG (Environmental, Social and Governance) standards across their businesses. From strategy to operations and reporting, business leaders recognise the importance of long-term thinking.
The frequency of adverse disruptions from technological innovations, social issues and climate change has meant that organisations have to embrace a sustainability mindset for today and the future.
Society and stakeholders, in general, are also placing demands on businesses to do more in serving the interest of the broader collective rather than those of a select few.
Multiple analyses and studies have conclusively demonstrated that organisations that embrace ESG can grow their businesses and improve their long-term competitiveness and value creation.
Such companies experience revenue growth and cost reduction in the long run.
Therefore, organisations should ensure that sustainability reporting is treated as a critical part of overall corporate reporting strategy because this will provide investors and other stakeholders the much-needed insight into the long-term viability of the organisations, which is essential in light of the adverse disruptions in the operating environment.
Sustainability reporting also leads to better decision-making by management. Organisations that prepare sustainability reports have a good appreciation of the big picture of not just what impacts their business but what impact their organisation has on society.
Such organisations avoid short-termism and are likely to be more innovative when navigating risks and opportunities facing their business.
By preparing sustainability reports, organisations can communicate to stakeholders their long-term sustainability agenda and business model transitions; some of these could be in power consumption, supply chain standards and climate commitments.
These areas are becoming central to investment strategies and could provide easier access to finance for such organisations. The benefits of sustainability reporting are numerous, and organisations should take advantage of these reports.
