To achieve integrated sustainability successfully, reporting the establishment of long-term monitoring processes, stakeholder engagement and setting targets for all material aspects is required. Mammatt, who heads up Ernst & Young's Climate Change & Sustainability Services department, said large organisations tend to have greater impacts on the world. This impact has led to increased pressure from external stakeholders who demand better and more accurate sustainability reporting.
A proper report should include the organisations' effect on the environment together with the well-being of its employees, suppliers, customers and the communities in which it operates. “Integrated sustainability reporting is more about management than reporting, i.e. aspects such as business strategy and systems with regards to sustainability issues, to company values and culture, to information and to gaps and shortcomings in performance,” she said.
"A key thing to remember is that it's not only about the report, because if sustainability is not integrated into day-to-day management activities, then the report is meaningless." In order to achieve this goal successfully, long-term processes of monitoring (through data collection and analysis) and stakeholder engagement (both internal and external) are required.
“This does not imply that sustainability reporting should be combined into financial information in the annual report. The report is only one outcome of the longer-term process.”
Emphasising that the requirements of investors and other stakeholders is holistic reporting, which paints a clear picture of the company's benefits, risks and negative impacts, she said the challenge in achieving integrated sustainability reporting lies in the content and assurance of reports.
“Reporting content needs to include the ‘thorny issues' so that a succinct and holistic picture is given. Achieving balanced reporting that allows for a comparison within sectors and industries, as well as taking responsibility for performance and potential impacts throughout the value chain, is required.”
When it comes to the assurance, or a ‘credibility generating mechanism', she highlighted the increasing expectation and demand for the verification of accuracy and completeness of sustainability reports. “There needs to be separate assurance processes and statements for financial and sustainability information, as put forward by Principle 9.3 of King III. Importantly, assurance on sustainability reports content must be carried out by reputable and independent assurance providers,” concluded Mammatt.
