Why digital sustainability data will transform disclosures

Eric Hespenheide of GRI tells EY Reporting that we are at the dawn of a new era of corporate disclosures.

We are on the cusp of a new era: the way we capture, analyze and use sustainability data is about to be transformed. We are moving from an era where sustainability information is collected and reported, to one in which stakeholders – including companies themselves – use this information to learn more about their organizations, their risks and opportunities, and to make better decisions.

Over the past decade, we have seen a dramatic increase in the number of companies measuring their sustainability performance; there are now several thousand organizations monitoring these impacts and reporting on them every year. While the increasing number of disclosures is certainly a welcome trend, we must ensure that both the quality and utility of that information remains a key focus of reporting. Well-designed, quality data should be at the heart of the strategic decision-making process, and this can lead us toward a more sustainable economy and world.

In response to a wide range of global social and environmental challenges, the international community has increased its efforts toward creating a more sustainable world. In 2015, it took two major steps forward: the launch of the United Nations Sustainable Development Goals and the Paris Climate Change agreement. These are important principles with international support but, as with any principles-based approach, they are simply “pledges” until they come into action and are measured with actual data and information to demonstrate real progress toward these goals. That is the value of reporting, and with these global goals, sustainability data has become more important than ever before.

This is reflected in GRI’s Sustainability and Reporting 2025 trends analysis, which estimates that digital data on sustainability will be the main tool guiding our efforts to tackle the immense issues of the social and environmental agenda such as climate change, human rights, ecosystems protection and waste management. Society expects companies and governments to produce and share almost real-time data across open platforms, which includes information on their supply chain partners and also offers an overview of total impacts by region. This data will be easy to access and analyze.

Expected changes

The main findings of our analysis indicate a number of expected changes for sustainability disclosures over the next 10 years:

• New format and multiple information sources: There will be a formal shift from annual reporting to the frequent exchange of sustainability data.
• New content, new focus: This will move toward the macro challenges faced by society and will put the supply chain in the spotlight.
• New role for stakeholders empowered by information: There will be almost real-time interactions through various channels.