Sustainability is a business approach that seeks to build long-run competitiveness without unduly compromising short-term profitability and cash flows. In order words, sustainability is a value creation approach that takes cognizance of governance, the environment, the people, and the economy, in order to enhance business/organisation productivity and survival. It is an essential ingredient for an organisation’s long-term success and this is why it is a rewarding business strategy.
In as much as sustainability reporting has over the years gained grounds in several countries in Europe, Asia, and the Americas, Africa still lags behind in taking advantage of its huge benefits. Apart from South Africa, where sustainability reporting is standard practice, other African countries remain at the bottom of the reporting commitment. Nigeria which follows South Africa on the continent in sustainability reporting unfortunately accounted for only about two percent of reports from Africa in 2014 according to GRI Africa; Africa remains on the lowest rung of the sustainability reporting ladder. To some organisations, reporting is regarded as daunting and resource consuming however, the benefits of reporting far surpass the cost of not reporting.
Although sustainability has not been made mandatory in Nigeria as in Finland, France, Germany, and the United Kingdom, to mention a few countries, Nigerian companies who operate or desire to operate in international markets (especially in countries where mandatory) require sustainability reporting for successful operations. Moreover, beyond international operations, the long-term benefits of reporting if considered, weigh higher than the level of importance attached to it in the country.
Sustainability reporting amongst other benefits improves a company’s reputation, efficiency, and productivity; boosts investor’s confidence and increases investment potential; reduces costs, engages stakeholders, exposes potential business risks and opportunities; and help avoid environmental, social, and economic risks and dangers.
Besides sustainability reporting, there are other forms of corporate reporting standards that businesses and organizations employ as rewarding business strategies. Financial reports disclose the financial situation of an organization. The Equator Principles are used majorly by financial institutions to provide standards that ensure environmental and social risks are considered in projects. The International Finance Corporation Performance Standards are used by organisations to identify and manage environmental and social risks. The Integrated reporting which is a recent standard on the other hand incorporates all the financial, governance, and sustainability reports into one whole. Sustainability however reflects in any corporate reporting standard an organization chooses therefore, knowing how to craft a sustainability report is essential for every business.
Source: CSRFiles Weekly™