Compulsory Sustainability reporting is a must for large companies in the EU
Building a company is no easy task and, once built, everything should be done to maintain and increase its value. This is why sustainability reporting (also known as CSR reporting) is vitally important not only for a company in ensuring the sustainability of its performance and its longterm profitability but also for the economy of the company’s home country.
Moreover, according to Directive 2014/95/EU (we can say more about it later) large companies operating in the EU must disclose relevant nonfinancial information regarding their activity to their stakeholders. Let’s not forget that we live in the information age: information is freely and instantly accessible throughout the globe. Complete transparency is a fact, so building a relationship based on mutual trust, transparency and honesty between a company and its shareholders, clients, investors, employees, NGOs or local communities is key to its survival and long-term prosperity in the digital age – as is dealing responsibly and conscientiously with its environmental impacts.
What exactly does the directive say? Which companies must issue a sustainability report?
According to Directive 2014/95/EU large companies operating in the EU (companies, that is, with more than 500 employees) must disclose relevant non-financial information to their stakeholders. This is in order for investors, employees, customers, suppliers to have a complete picture (and a reliable one, too) of a company’s development, performance, position and, not least, of the impact of its policies and activity. Companies are required to disclose vital information on their policies, principal risks and outcomes, including environmental, social and employee issues, respect for human rights, anti-corruption and bribery matters. The directive applies from 5 December 2014 and EU countries must incorporate it in their national law by 6 December 2016.
Why are the Global Reporting Initiative’s (GRI) Guidelines the best sustainability reporting framework?
Sustainability becomes more and more a reference point for the changes taking place in today’s companies, markets and society itself towards a truly sustainable global economy and a company needs reliable, trustworthy allies in this new era. GRI has pioneered sustainability reporting since the late 1990s and provides the world’s most widely used standards on sustainability reporting: 80% of the world’s 250 largest companies issue Corporate Social Responsibility (CSR) reports in accordance with the GRI Guidelines and, in total, more than 5,000 organizations across more than 90 countries have used the GRI Guidelines for their sustainability reporting. What’s more, the UN Global Compact, which Directive 2014/95/EU suggests that companies use in preparing their statements, has adopted the GRI Guidelines as the recommended reporting framework for companies to communicate on progress made.
How, in general terms, is a sustainability report based on GRI-G4 prepared?
By following four basic steps: a) Identify your i mpacts on the environment and stakeholders. From the moment a company is founded it will have impacts not only on the environment, but also on its stakeholders. What are these impacts? Sharing relevant information with the right people (your most significant stakeholders) will offer you invaluable feedback on the impacts of your company’s policies, operations and practices, as long as the information shared is accurate, honest and complete.
b) “What you cannot measure you cannot manage, what you cannot manage you cannot change”: your company’s objectives and targets should be SMART (Specific, Measureable, Attainable, Relevant, Time-Bound).
c) Take Action. Set targets to minimize your negative impacts and increase your positive impacts on the environment and the company’s stakeholders dealing openly, responsibly and conscientiously with these impacts.
d) Report your Continuous Performance Improvement (CPI) and do so by entering and following the Plan-DoCheck-Adjust cycle: Plan: Identify and analyze a problem. Do: Develop and test a potential solution. Check: Measure how effective the solution was. Adjust: Implement the improved solution fully.
What are the benefits of sustainability reporting for a company?
More and more, globe are choosing individuals and companies across the services and products based on how socially responsible a company is, taking into account not only the company’s good CSR practices but, also, the practices of its suppliers. By engaging with GRI CSR reporting a company utilizes a framework that allows it to identify and manage risks and embrace opportunities – and, above all, contribute to the creation of a sustainable global economy. Sustainability reporting will help a company: a) identify and evaluate problem areas before they become unwelcome surprises and discover unexpected opportunities ahead of its competitors, b) gain access to new markets and clients, c) attract funding, d) attract, motivate and keep its employees enhancing its reputation, e) gain competitive advantage as sustainability reporting is still not common practice across all business sectors, f) build a solid relationship, based on mutual trust and respect, with its stakeholders, proving that it acknowledges and takes action to minimize its negative impacts.
Can you tell us more about FBRH?
FBRH is the only Certified Training Partner and Organizational Stakeholder of the Global Reporting Initiative (GRI) in Cyprus. FBRH is also one of three companies, which are GRI Certified Training Partners in the UK. Since 2008 we have managed (preparation and communication) 30 CSR reports for major corporations based on the GRI Guidelines. We combine a detailed, specialized knowledge of the GRI-G4 Framework with many years of hands-on experience in Research, Communication, Advertising, Marketing, cutting edge technology, providing new media tools for effective corporate communications.
So, how does a company start with its sustainability report?
By attending (the CSR team) the FBRH 2-day GRI-G4 Certified Masterclass, which provides participants with the knowledge, skills and abilities required to successfully start and complete a sustainability report. For more information, please visit our website: