10.5 Sustainability reporting
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Businesses have traditionally focused on their performance on financial and accounting information. It is only in recent years that the business community has shifted to additional metrics — in terms of environmental and societal impact — to assess their business performance. Over the past decade, sustainability reporting has been increasingly adopted by corporations worldwide. In fact, in Canada alone, 91 percent of companies report on their sustainability and environmental, social and governance (ESG) performance (“KPMG in Canada Report,” 2022).
ESG reporting is not yet mandatory in Canada, with the exception of federally regulated financial institutions (banks and insurance companies). In Canada, the Canadian Sustainability Standards Board (CSSB) was launched in 2022 to “advance the adoption of sustainability disclosure standards in Canada” (FRAS Canada, n.d.) “The CSSB develops Canadian Sustainability Disclosure Standards (CSDS) that align with the global baseline standards developed by the International Sustainability Standards Board (ISSB) – but with modifications to serve the Canadian public interest” (FRAS Canada, n.d., para. 1).
For now, sustainability reporting currently focuses on two main goals:
- Documentation and assessment of an organization’s environmental and social impact
- Communication of a company’s sustainability efforts and progress to stakeholders
Sustainability reporting typically focuses on comparing performance in the current year to the previous year and comparing it to specific goals and targets. It can also include a longer-term focus and comparisons to other companies in similar industries and in the same geographic areas.
Sustainability reporting is also referred to as “triple bottom line” reporting, meaning that it takes into account not only the financial bottom line of a company but also the environmental and social “bottom lines” for a company. Sustainability reporting reflects the interrelated progress of a company in the three areas — also referred to as people, planet, and profit.
Sustainable data metrics
For businesses to understand and improve corporate sustainability performance, organizations need accurate carbon, energy, toxics, waste, and other sustainability data. While traditional business financial statements — such as balance sheets and net income statements — may help a business determine if it is financially sustainable (an important part of business sustainability), they are alone inadequate in measuring a company’s environmental and social progress.
Just as there are accounting standards, such as generally acceptable accounting principles (GAAP), to provide organizations with a common “language” of reporting financial information, there are also standards and processes that have been developed for organizations to measure and communicate their position and progress on sustainability.
Watch this video produced by IBM that explains sustainable data metr