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Albert Vilario Alonso Follow

Consultant in Corporate Social Responsibility, Sustainability, Reputation and
Corporate Communication,and integration of people with disabilities.
Nov 3 6 min read

Four future trends in

sustainability reporting.

Photo by Eduardo Snchez on Unsplash.

Note: This article was first published in Spanish and can be found here.

The already existing project of the Global Reporting Initiative (GRI) on

trends in sustainability reporting (and of which we spoke on the blog about
its preliminary results) has been taken a step further and its conclusions
have been also published some months ago.

This is the Future Trends in Sustainability Reporting, available only in

English, that has been carried out by the Corporate Leadership Group
(CLG) on Reporting 2025. The CLG is composed of 13 companies from
different sectors and regions, which held various meetings during the
period in which the study was conducted, as they did with the main experts
and representatives of the stakeholders.

Of the 17 trends presented by GRI at the Forum on Sustainability Trends

and Reports held in November 2015, the CLG chose four to investigate and
better understand the effect they would have on their own companies and
sustainability reports. These trends are climate change, human rights,
wealth inequality, and information and technology.

Climate change.
Climate change tops the global agenda and is one of the most mature and
evolving trends in sustainability and corporate information.

In 2016, the World Economic Forum declared the failure in mitigation and
adaptation to climate change as the main global risk in terms of
impact. Climate occupies a prominent place in the 17 Sustainable
Development Goals (SDGs) that are already attracting significant interest
and early adoption, and many organizations already disclose information
about climate change.

The Organization for Economic Co-operation and Development (OECD)

and the Climate Disclosure Standards Board (CDSB) took stock of the
spread of climate change in the G20 countries and found that corporate
reporting practices are improving rapidly.

Among the priorities to explore and improve information on climate change

in corporate reports, the GLG recommends organizations to:

Contextualize and internalize more the challenge of climate

change: Learn as much as you can from the best practices, but be sure
to review the materiality analysis and the most relevant aspects of
climate change for each sector and organization, and improve the data,
the metrics and the reports accordingly: If the emphasis is on the supply
chain, the priority could be to understand the risks in your supply chain
and calculate your scope 3 emissions. If the companys products and
services influence the use of energy and the emissions of others, the
design and manner in which they are delivered may be of greater
importance.

Try to understand the interconnections of climate change and

other issues.

Establish and achieve long-term goals (beyond 2020), based on

scientific objectives.

Determine how to align the interests and activities of the reporting

organizations with governments, taking into account the different
national plans on climate change and the multinational nature of many
reporting organizations.

Develop a clear and concise narrative of the vulnerability of the

organization in the light of climate change and the shared challenge it
presents.

Focus on behavior change: what should people and organizations do

to address the challenges related to energy consumption and emissions?

Human Rights.
In this area, we observe two megatrends that will be fundamental for
business operations and will demonstrate the interconnectivity of the trends
that were explored by the CLG:

The emergence of hyper-inequality and the opportunity for

shared prosperity: The business plays a fundamental role in the way
in which wealth is created, but also in how it is distributed. Respecting
and protecting Human Rights is fundamental for the equitable
distribution of resources.

The worsening ecological crisis: The need to transition towards a

low carbon economy creates an opportunity to find solutions that benefit
the most vulnerable: those who often remain without environmental or
ecological protection also often experience a lack of Human Rights and
social protection, especially in long and complex supply chains.

The expectations of corporate reports on the many facets of Human Rights

are growing day by day and due diligence in that area is now the minimum
expected. Investors, rating agencies, and regulators seek information
about this diligence and through benchmarking they will be provided with
simple and quick comparisons.

The priorities and next steps to be taken to improve the report on Human
Rights according to the GLG are to:

Understand better the Human Rights, not only as a material

problem for the organizations but with a more detailed understanding of
the importance and of the rights that run the risk of having the most
severe negative impact through the activities of the organization and its
commercial relationships. To achieve this, Human Rights impact
evaluations must be carried out.

Create awareness and disseminate knowledge through the company

and its supply chain is essential.

Companies must explore how their HR departments can help

compliance with Human Rights.

Integrating respect for Human Rights throughout the supply chain

is perceived as the greatest challenge.

Companies are interested in platforms to share supply chain

information since hundreds and thousands of suppliers in any supply
chain cannot be monitored or audited by a single organization
effectively.

The work of risk analysis of the supply chain and the audit are a first
step to identify the risks in Human Rights.

Wealth inequality.
Addressing inequality of wealth is increasingly seen as a fundamental
prerequisite for a sustainable economy, with a number of key stakeholders
and experts focused on the issue and how it connects with access to
financial resources, education, health, etc. With the increase in hyper-
inequality and all the risks it presents, a crucial opportunity arises to
agree on what shared prosperity is.

When analyzing the sustainability reports of several companies, it is evident

that wealth inequality is rarely addressed directly as a mega trend or part of
the broader operational context that affects the business.

The members of the CLG consider that the priorities to explore and improve
the reports on wealth inequality are to:

Start somewhere, for example by looking at the organizations own

operations and their employees with a social rights perspective and then
considering expanding the limits of this evaluation to include the
supply chain.

Look for more information and details about where the organization has
made investments at the community level and monitoring in the future.
Consider how the organization has already achieved or can gain access
to essential products and services (eg, food, water, energy) globally or in
the local communities in which it operates. Explore impact and
measurement based on results, despite the challenges of
intermediaries in supply chains, different jurisdictions, different
activities, etc.

Consider what can be the most important impact of the company related
to the wealth inequality and develop KPIs related to that impact.

Data and technology.

The CLG observes an acceleration of the amount of data available,
even in real time: more data have been created in the last two years than in
the entire previous history of the human race. Data consumption ways
increase through value chains, including network networks and the so-
called internet of things.

Regarding corporate reports, data and technology are often seen as an

opportunity and a challenge to the same extent.

These challenges include ensuring sufficient internal understanding on

the part of the client, the creation of an awareness for the proper use of
internal systems that provide comparable data of high quality, or the need
for more analytical tools to better understand the data.

Online reports are seen as opportunities as an innovative tool to

communicate data effectively, the incorporation of sustainability data
(including its timely collection and presentation) into objectives and
performance management systems, or the monitoring of both positive as
well as negative impacts of sustainability aspects.

As priorities in the improvement of sustainability reports through the use of

data and technology are mentioned:

The use of data and technology to approach stakeholders in

different ways.

The use of technology to facilitate data collection, moving towards

more sophisticated and centralized data systems.

Exploration and a better understanding of the needs of different

stakeholders, and the adaptation of the presentation of data
accordingly.

Presentation of information to stakeholders more effectively (for

example, with infographics or report microwebs).

Included resources and next steps.

Finally, the report contains a section with a set of useful resources for
organizations that wish to report, to help better understand the trends
mentioned in the document. This section also includes a list of the new GRI
standards and the disclosures related to each trend, as well as documents
and articles related to each topic.

Once this report is published, the GLG is already working during 2017 and
2018 on a new project that aims to understand the interdependencies
between business and the SDGs and highlight emerging best practices
in the generation of reports to support companies towards a robust
disclosure of the Objectives.

Climate Change Sustainability Sustainable Development Reporting Human Rights

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Albert Vilario Alonso Follow

Consultant in Corporate Social Responsibility, Sustainability,
Reputation and Corporate Communication,and integration of people
with disabilities.

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