The numbers generally speak for themselves. There is little room for interpretation: when all is said and done, the financial statements of a company based on financial data are objective in the eyes of the reader who knows how to interpret them. However, there are other types of non-financial data that, while being less objective, can still tell us a lot about how a company operates. This data can’t be found on a balance sheet, but that doesn’t make it any less relevant when it comes to perception, to the image that company wants to present to the people it interacts with. These people are the stakeholders: citizens, employees, those with an economic relationship to the company (or to the body/association, as the case may be), suppliers, local authorities, journalists and more.
Being able to identify and quantify this non-financial data so that it can be shared with stakeholders is especially important. This is precisely the objective of Sustainability Reporting, also known as Non-Financial Reporting (NFR).
The Sustainability Report in EU: legal information capsules
In accordance with directive 2014/95/EU of 22 October 2014, an amendment of directive 2013/34/EU, all businesses and large groups are obliged to write a Sustainability Report as of 2017.
This directive introduced an obligation for large companies - which can be classified as ‘public-interest entities’ - to provide a non-financial statement that must contain information aimed at increasing the level of positive perception and consensus as regards the company, affording visibility to various people involved in various ways, and making this, clearly and unequivocally, part of a sustainable and responsible business strategy.
A Sustainability Report therefore contains information on the company’s CO2 emissions and their commitment to reducing them, their use of raw materials and fuel, action taken for the benefit of the region and the community, guidelines on employee health and safety, non-discrimination of people based on sex, religion, political beliefs, and so on.
All this is done with a view to foster sustainable development based on the social responsibility of the company and, therefore, that of each country. A healthy recovery policy based on growth that is consistent and morally sound.
How can a company start to become sustainable?
The road to sustainability is paved with innovation: you have to focus on activity that leads to the creation of new products and services, new features, even entirely new production processes. This must be combined with a certain approach. We have to break old habits here, that is, we need to start constantly asking ourselves:
- What impact does the use of my product have?
- Is this a proper and reasonable use of natural resources?
- Does it alienate any users?
- Can you answer these questions with as little demand on resources as possible, and keep answering the same questions as often as possible?
It doesn’t take long to start reaping the benefits of sustainable innovation. Operative risks will be reduced, the brand’s reputation will improve, and you will draw the attention of an ever-growing number of consumers who strongly believe in using the planet’s resources in a way that doesn’t deprive future generations the chance of doing the same. All this with a view, the most relevant view, to be productive while also safeguarding the entire ecosystem, and those who live in it.
Once your business changes its mindset about the concept of sustainable innovation, internal and external communication will be fundamental for taking advantage of all the benefits listed above (benefits which, as already proved by various studies, even have a tangible impact on financial performance). The significance of the Sustainability Report - not only for companies obliged to produce it by law - but as a document that can convey all this information and amplify its value, therefore becomes ever clearer.
Sustainability implies cultural change
Sustainability is not something that happens by chance. The foundation of industrial, economic and social-political development lies in innovation and in breaking old habits for the sake of using resources sustainably: this needs to become part of our culture and become embedded just as much in the mindset of today’s managers as tomorrow’s.
We at Techedge believe in this strongly, and this is why we have developed a digital solution for producing Sustainability Reports.
Through ESGeo, we are helping many businesses define and improve their sustainable development plans: ESGeo is an intuitive platform dedicated to sustainability, capable of managing non-financial data collection using a structured and traceable process. The platform is able to cover the end-to-end process of corporate sustainability, investment and supply chains, ensuring advanced reports which are dynamically linked to the data collection process.
ESGeo is a digital platform that lets you produce ESG information with a level of precision and transparency that until now has only been reserved for economic and financial disclosure.
ESGeo is our commitment to a sustainable future: we all ought to feel that leaving future generations at least as much opportunity as we have today is our duty.
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This article is part of the series #TechedgeTalks: views and thoughts from our Industry Leaders on the main market sectors. Don't miss the next one - subscribe to our newsletter!
Other episodes of the #TechedgeTalks series:
- Virtual Showroom: a new garden for your Fashion Shows
- Dear bank, ask me if I'm happy
- Transparency is in: sustainability reporting in the Fashion industry