82% of US companies and 66% of European companies cited transparency as the primary factor influencing their corporate reputations.
Transparent reporting of sustainability performance is important, and not just to investors and ratings agencies.
Business customers are also requesting information about a company’s environmental footprint.
This puts pressure on companies to focus on sustainable procurement policies, distribution and logistics, and water and waste consumption, all while evaluating new sources of energy. And while each of these focus areas has potential environmental benefits, each one also has a potential financial impact.
Evaluating the return on investment of potential capital expenditures and reporting on their bottom-line impact requires the attention of the CFO’s finance team.
One of the best ways to communicate corporate sustainability practices is to publish transparent and consistent sustainability reports that centralize all of a company’s sustainability data.
- Transparency. Whether a company issues sustainability reports on a stand-alone basis or integrates them into its financial reports, third-party assurance enhances the transparency (and credibility) of corporate reporting. Most CFOs have vast experience in the world of third-party assurance providers, and this experience can greatly benefit corporate sustainability teams in selecting and working with a provider.
- Consistency. Companies release information through a variety of channels, so they must ensure that their data remains consistent across various reporting platforms and within the different business units of multinational corporations.
|Actions to consider|
- Think of sustainability issues when contemplating significant capital expenditures.
- Evaluate the benefits of including sustainability information in financial reports.
- Push for transparency in sustainability performance and obtain third-party assurance for external reports.
- Watch for inconsistencies in sustainability communications across all channels to minimize the need for restatement.
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