What are the main challenges that you face when preparing a sustainability report?

Sustainability was first proposed as the goal of sustainable development. Sustainability is portrayed as having three dimensions - environment, social, and economic. It is considered to be a misunderstanding to limit sustainablity to a single dimension. Sustainabiity is relevant all levels of human activity from the global level to national, regional, community, organzations and indivisual levels. Since organizations are the basic building blocks of society, it is important to see how this perspective is different from the other definitions. Sustainability is frequently operated as a separate program with "goals" that are not aligned with the organizations strategic objectives.

In Latin America, there isn't much of a problem with choosing which standard to use when reporting. Around 80% do so using the GRI Standards, although in recent years I've seen an increase in the use of SASB. Likewise, in the future, European regulations will have a lot of influence since many industries export to that continent and will be obliged to report according to those standards.

Our first step in sustainability reporting is to understand why we are doing it in the first place - a great sustainability report is irrelevant if it’s not getting read! Therefore, come to a collective consensus about what you want to achieve - sales, framework alignment, brand awareness, regulatory obligation etc and work backwards, focussing your whole plan and implementation to achieving this goal and follow it up with supporting communications to reinforce the narrative you’ve created.

ESG reporting confronts pivotal challenges: navigating the intricacies of sustainability data, fostering information symmetry, bridging talent gaps, managing limited resources, and addressing substantial funding constraints. Balancing information sharing is crucial to prevent anticompetitive scenarios and promote interoperability in sustainability data. Tackling talent gaps necessitates multidisciplinary skill development, and overcoming resource constraints requires strategic allocation. The daunting annual funding gap of US$598 billion emphasizes the financial challenges, demanding collaborative efforts for effective mobilization. Industry collaboration and strategic investments are pivotal for successful ESG reporting implementation.

There should exist a "sustainability reporting readiness" platform or assessment which can serve as a conversation starter for organizations.

ESG data is often not found in the classic ERP, HCM or supply-chain systems and so the data isn't stored in the usual places -adding complexity to identifying ESG Reporting Data and then collating it for reporting purposes. It's surprising how much is stored in Excel, or even Word. This lack of maturity in the management of ESG Reporting Data brings complexity in automating the management of the Data, its re-use and the ability to generate future ESG Reports. It also means that as reporting eveolves, generating new reports is a challenge. At Friday, our approach is to create a Data Repository and Data Model so the source, structure and management of ESG Data is understood and repeatability of future reporting is easier.

Meanwhile, we have standardized set of data for ESG reporting (the doing no harm part) of where we can collect data and measure our progress (in reducing waste, water or energy consumption), and there are ways to apply Impact Measurement Appeoaches to measure real world outcomes that are achieved by purposesful - inntentioanally doing good (= achieving impact). These outcomes are a contribution to impact. Validation of data ins the sense of offically being audited, is still in nascent, but will be mandatory in due course, as it has become in Financial Reporting.

El principal desafío es la falta de datos. En algunos casos, puede ser difícil encontrar los datos necesarios para medir el desempeño ESG. Esto puede deberse a la falta de sistemas de recopilación de datos, a la falta de estandarización de los datos o a la falta de acceso a los datos. Incluso cuando se dispone de éstos, hay que asegurarse de que sean de calidad, relevantes, fiables, precisos, consistentes y comparables. Es necesario establecer un plan de recopilación de datos que defina temas, indicadores y fuentes. Aquí los softwares e IAs ayudan a automatizar la recopilación y el análisis. Involucrar a las partes interesadas. Las partes interesadas pueden proporcionar información valiosa sobre los datos que son más relevantes para ellas.

Managing data for a sustainability report involves ensuring relevance, reliability, accuracy, consistency, and comparability. Use tools like data management platforms and involve auditors for validation.

As the newly required data for sustainability reporting purposes is often not readily and automatically available, the data often comes from multiple sources, which often are manually derived and are therefore prone to human error. This makes it challenging to trace the data from its initial source to the final report, necessitating a systematic approach to assess the reliability and availability of required data and identify and remediate data gaps. The traceability and validation of the data will be especially relevant to the external auditors or assurance providers.

I recommend using the self-declaration to ISO26000, which is the international standard for sustainability. The self-declaration consists of 50 questions, asking how your company works with sustainability, your business model, stakeholder analysis and your materiality assessment. It is important you get your self-declaration verified by an accredited third party organisation to achieve transparency and truthfullness. By having your report verified you also eliminate the risk of greenwashing.

El objetivo no es saturar con cantidad, sino impactar con calidad. En este sentido, las infografías y ayudas visuales emergen como herramientas poderosas. Permiten sintetizar información compleja en formatos más digeribles y atractivos, facilitando la comprensión y retención de la información. Este matrimonio entre texto e imagen es clave para una comunicación efectiva. Una infografía bien diseñada puede transformar un reporte denso en una narrativa visual clara y envolvente, asegurando que el mensaje no solo llegue, sino que también resuene con la audiencia, propiciando una mayor interacción y entendimiento de los puntos cruciales presentados.

Communicating sustainability report results requires analyzing data to identify trends, risks, opportunities, and impacts. Use clear, engaging formats like print, web, video, or storytelling techniques such as case studies and infographics.

En primer lugar, las herramientas de análisis de datos pueden ayudar a simplificar el proceso de análisis, en especial cuando hablamos de grandes volúmenes, pero es crucial la manera en la que utilizamos la narrativa. Es una herramienta que nos ayuda a comunicar ideas complejas. Debe ser informativa pero también atractiva para involucrar a las partes interesadas Debemos conocer a nuestra audiencia y adapte el mensaje a ésta. Es importante tener en cuenta las diferentes necesidades y expectativas de las partes interesadas a la hora de comunicar los resultados.

Translating raw data into meaningful insights and communicating them effectively in the sustainability report can be daunting. This challenge involves not only analyzing data to identify trends, achievements, and areas for improvement but also presenting these findings in a clear, engaging manner that resonates with different stakeholders. Utilizing visuals, stories, and case studies, alongside adhering to recognized reporting frameworks, can enhance the clarity and impact of the communication.

Aligning with Stakeholder Expectations: Meeting the expectations and interests of stakeholders requires engagement and feedback. Lack of Commitment: Organizational leaders may lack understanding or commitment to sustainability issues. Data Standardization and Integration: Integrating diverse data sources and lack of standardization can pose challenges. Time-Consuming Process: Sustainability reporting can be time-consuming, especially for smaller companies.

Balancing honesty with positivity is tricky. You want to highlight your achievements without falling into the trap of greenwashing, where your efforts sound as exaggerated as a fisherman’s tale. It is like writing a dating profile for your company: We are eco-friendly, love long walks on the beach (cleanups), and our carbon footprint is as tiny as a mouse wearing baby shoes.

Organizational governance is the system by which and organziation makes and implements decisions in pursuit of its objectives. Organizational governance is present in every organization as one of its core functions. Governance enables the leadership to take resp;onsibioity for the risks associated with its activities and make decisions to embed sustainability into the organization. Governance enables the leaders to take resp;onsibility for the risks associated with its activities and make decisions to embed sustainability into the organization. Effective leadership is critical to the success of the governance system. Governance seeks to make sustainability part of how the organization operates.

En algunos casos, la sostenibilidad puede estar desarticulada de la estrategia y la gobernanza general de una organización. El compromiso del liderazgo es fundamental. Si la dirección de la compañía no está comprometida, será difícil lograr una integración exitosa. La dirección debe estar involucrada en el proceso de integración del informe de sostenibilidad y proporcionar orientación y apoyo para garantizar su integración. Un análisis de la materialidad ayuda a identificar los temas que son más relevantes para una organización. Estos temas deben ser priorizados y alineados con la estrategia y la gobernanza general de la organización. Y todo ello sin olvidar que deben asignarse recursos suficientes (tiempo, personas y capital).

A key challenge in sustainability reporting is ensuring that sustainability initiatives are fully integrated into the company’s core business strategy rather than being treated as standalone efforts. If sustainability goals and business objectives appear disconnected, the report may lose credibility with stakeholders. Additionally, it can be challenging to demonstrate the financial value of these initiatives, such as cost savings from energy efficiency or reduced risks through sustainable supply chains. This becomes incredibly challenging when investors expect clear links between sustainability efforts and overall business performance. It is crucial to show how these initiatives contribute to long-term financial success.

Integrating sustainability considerations into the overall corporate strategy is crucial for long-term success and responsible business practices. Obtaining commitment from top management and board members and getting relevant leadership support is essential for successfully integrating sustainability into the corporate strategy.

Sustainability reports should articulate how the company is managing material sustainability matters and their impact to business strategy and model. Metrics and indicators in sustainability reports should be linked to strategic objectives and risk appetite. Progress made on these metrics should be incorporated into the criteria for determining the performance and pay of executives and other senior leadership roles.

Organizations operate in an uncertain world. Whenever an organization seeks to meet its objectives, there is a chance that everything will not go according to plan. What lies between the organization and its objectives is uncerainty. Uncertainty represents a deficiency of information that leads to an incomplet understanding of what can happen that would either threaten or enhance the organziation. More information can be found in: https://amzn.to/33klga3

Encourage research and innovation to develop sustainable products, services, and business models. Explore opportunities for new revenue streams that align with sustainability goals.Foster a culture of sustainability among employees. Provide training, awareness programs, and incentives to encourage sustainable practices within the workforce. Stay informed about and comply with relevant sustainability regulations and standards in the regions where the company operates. Be proactive in anticipating and adapting to changing regulatory landscapes. Establish a feedback loop for continuous improvement. Regularly review and update sustainability goals and strategies based on changing circumstances, emerging risks, and stakeholder expectations.

Deadlines are tight, and sustainability reports are no exception. It is a sprint to the finish line with your team cheering you on, or more realistically, groaning in unison. The office turns into a scene from an action movie, complete with dramatic background music. We have got 24 hours to finalize this report! you declare, and suddenly, you are Bruce Willis, saving the day with a perfectly formatted executive summary.

- In the initial days, reporting requirements will be less and gradually it will enhance more. - In the upcoming days, stakeholders are going to demand more information regarding Sustainable activities

In my experience, one of the most challenging aspects of creating a sustainability report is instilling the value of transparency. Companies find it very difficult to communicate their shortcomings, such as accidents, spills, or unmet goals. Many people still think of it as an advertising brochure. However, it's the consultants' job to gradually change this mindset among our clients.

Many view "sustainability" through the activities of the people in the organization responsible for the program. An organization is a social entity that has objectives, a deliberate operating structure, a coordinated activity system, and is linked to its external operating environment. Oranizations create different kinds of "sustainability programs' to meet the needs to communicate effectively with all stakeholders. From the perspective of an organization, sustainability is the capability of an organization to transparently manage its responsibilities for environmental stewardship, social well-being, and economic shared value over the long term, while being held accountable by its stakeholders. This is organizational sustainability.

In the race to showcase their sustainability efforts, many companies have increasingly turned their focus towards data collection, reporting, and narrating their activities. Transparency and accountability are crucial. But instead of addressing real challenges and providing solutions, many are bogged down by the demands of reporting. It is imperative that companies and countries prioritize actionable solutions. By focusing on real callenges related to access to water, sanitation, health, clean air, water and minimizing harmful substances, climate action can be effectively addressed. Focus needs to be on reporting where the improvements are to be made in these areas in every company, town, city and country.

Challenges faced when preparing a sustainability report : 1. Data collection complexity from diverse sources. 2. Ensuring data quality, consistency, and reliability. 3. Engaging stakeholders for relevant information and feedback. 4. Navigating through various reporting frameworks and standards. 5. Aligning reporting with business strategy, ensuring compliance, and driving continuous improvement.

The challenge in sustainability report is that it has volumes of scattered repetitive data and information, which does not align to overall strategy and vision of an organisation - especially in the initial years. But as organisations mature and realise that to be sustainable they have to embed such practises, then it becomes part of strategy, KPI, processes, policies and controls within an organisation.