Oct 26, 2023
Sustainability strategy is a crucial foundational document that outlines a company's environmental, social, and governance objectives, focus, and performance metrics. Developing and implementing the strategy is equally significant for larger and smaller companies, as it enhances the company's value and reputation among various stakeholder groups, including investors, employees, customers, partners, and the general public.
Steps for compiling a sustainability strategy
Define Your Purpose and Objectives:
Clearly outline why you want to create a sustainability strategy and what your specific objectives are. What environmental, social, and governance (ESG) goals are you trying to achieve?
Stakeholder mapping and engagement
Identify key internal and external stakeholders who are relevant to your sustainability efforts. These may include employees, customers, investors, suppliers, local communities, and regulatory bodies. Mark them down to the strategy and engage them (eg via small questionnaires, 1:1 meetings and interviews, or simple phone calls) to understand their expectations and concerns.
Materiality assessment
By engaging internal and external stakeholders (such as the management team, key experts in the company, employees, owners, main partners, and customers), assess your organization's current environmental and social impacts. In other words, identify material areas, risks, and opportunities - what are the key ESG factors influencing your company and your business, and on the other hand - how does your company and -business impact the environment, people, and communities. The identified and prioritized areas should be the main focus of your sustainability strategy.
Target setting
Establish specific, measurable, achievable, relevant, and time-bound (SMART) goals for material issues identified and prioritized. Align also with UN Sustainable Development Goals (pick and choose the goals your company and ESG targets can contribute to).
How to compile a Sustainability report
Compiling a sustainability or ESG report is a process that involves collecting, analyzing, and presenting data related to your organization's environmental, social, and governance performance. Public reporting on sustainability-related goals as well as supporting action plans and progress reports indicates transparent governance and commitment to ESG matters. Going forward, the EU Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards will provide clear guidance to companies that will be subject to reporting obligations in the coming years.
Here are the main universal steps to compile a sustainability report.
Determine your objectives
Define the purpose and goals of your sustainability report. Consider whether you want to disclose specific metrics, demonstrate your commitment to sustainability, meet regulatory requirements, or engage stakeholders.
Engage stakeholders
Identify key stakeholders, both internal and external, such as employees, customers, investors, suppliers, and NGOs. Consult with them to understand their concerns, expectations, and what information they would like to see in the report.
Set reporting standards
Decide which reporting framework or standards you will follow. Common frameworks include the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the Task Force on Climate-related Financial Disclosures (TCFD). Choose the one most relevant to your industry and objectives.
Identify areas/topics of material importance to your company, and collect related data
Identify and prioritize the most material (significant) aspects and indicators that should be covered in your report. Collect relevant data related to environmental, social, and governance aspects. This may include carbon emissions, water usage, employee diversity, community engagement, supply chain practices, and more. Ensure data accuracy and consistency. For value chain ESG topics, you can use a tool like Esgrid to collect and analyse data effectively.
Define reporting boundaries
Clearly outline the scope of your report. This includes which parts of your organization are included, which data is relevant, and any excluded areas.
Report writing
The report should include sustainability goals aligned with your organisation's values and long-term strategy. It should also include actions taken toward the goals, related achievements, shortcomings, and risks. Organize the report by sections, such as an introduction, materiality analysis, data collection, performance highlights, goals and targets, and a conclusion. Clearly communicate your achievements, challenges, and future plans. For visual appeal and user-friendliness, Use graphics, charts, and infographics to help convey your data. Make the report accessible in both digital and print formats.
Review and verification
Consider having the report reviewed by internal stakeholders and external experts to ensure data accuracy and adherence to reporting standards. Some organizations also choose to have their report independently verified.
Making the report public
Publish the report on your website and distribute it through relevant channels. Use social media, press releases, and other communication methods to promote your report. Note that reporting is done regularly, most often once a year.