2017-03-15 00:00:00 Going Green English Find out why adopting sustainability reporting standards can improve your business' marketing, employee satisfaction, and long-term profits. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Man-holding-farm-animal-near-garden-discusses-sustainability-reporting.jpg https://quickbooks.intuit.com/ca/resources/going-green/business-use-sustainability-reporting/ Should Your Business Use Sustainability Reporting?

Should Your Business Use Sustainability Reporting?

2 min read

A lot of companies actively integrate sustainability programs and principles into their operations. Some do this to satisfy regulating authorities in Canada (and elsewhere) that require certain reporting practices. However, the frequency and depth of sustainability reporting goes well beyond the simple concern for compliance; savvy companies make voluntary adjustments because they see benefits from sustainable practices.

The Basics of Sustainability Reporting

Think of sustainability reporting as covering the whole gamut of social or environmental issues related to business activities. These include:

The most common sustainability reporting standard is the GRI Standards. It’s a good place to start if you’re new, since it lays out how to collect information, process it, and then measure and compare to sustainable metrics. For a more in-depth explanation, consider “A Starter’s Guide to Sustainability Reporting,” issued by the Chartered Professional Accountants of Canada.

Why Sustainability Reporting Is a Powerful Marketing Tool

Even if sustainable practices aren’t your cup of tea, chances are pretty good that many of your clients, potential customers, investors, employees, and suppliers care about them. The movement for sustainable business operations is mainstream in Canada and the rest of the industrialized West, which means sustainability may soon be a marketing requirement (if it isn’t already). Fifteen years ago, sustainability disclosures were fairly limited; only a small number of green companies bothered. Today, however, highlighting sustainable operations is best practice by companies around the world. Today’s consumers and investors increasingly want their values reflected by companies where they work or with which they buy and sell. Sustainability reporting may show your customers that you want a better world and a more vibrant future, just like they do. They may be more likely to do business with you if one of the pleasant side effects is that it improves human rights or environmental conservation.

Sustainability Reporting Keeps You Ahead of Regulators

Every Canadian business faces regulation and compliance and takes steps to comply with them. Regulations are probably going to change in the future, especially reporting standards. You might be able to jump ahead of the regulatory game by improving your sustainability reporting today, which tells regulators that you’re proactive. It also sets you up for when more stringent regulations appear, because your business will already have systems and processes in place.

Other Practical Benefits of Sustainability Reporting

Sustainability reporting could make sense just because it helps you evaluate your business. Sustainability can be a tool for improving risk management decisions; a sustainable business maintains a strong grasp on its resource usage, company value (especially for publicly traded companies), and compliance costs. If you throw together a sustainability report, you’ll consider possible risks that are still five or 10 years down the road. It’s also possible that a focus on more sustainable practices today can save your company money tomorrow. Your supply costs or overhead may drop. Your insurance rates might fall. Your processes may become more efficient in an effort to limit resource usage. Other possible benefits include:

  • Better reputation
  • Higher employee loyalty
  • Higher customer loyalty
  • Refining your corporate vision
  • Better relations with local/provincial/federal government
  • Improved access to capital

Companies decide to adopt sustainability standards for different reasons. Whether your passion is growing your business, solving others’ problems, or fighting for social and environmental causes, you should consider sustainability reporting as one potentially valuable tool.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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