Communicate
Explain and disclose practice and performance to inform stakeholders
Description
Enterprises, investors and financial institutions need to communicate information on their impact
The effect(s) of organisations' actions on people and the natural environment. A term used by the Platform to group enterprises, investors and financial institutions of all types. Source: Impact Management PlatformImpact
Organisation
The table below illustrates the varying information needs of stakeholder groups. These are not mutually exclusive as interests may overlap.
Primary interests | Information need(s) | Communication and disclosure format(s) | |
Regulators and policymakers | Whether the organisation is compliant with sustainability-related regulation and/or policy goals | Information as established by the policy / regulation | As set directly by the regulator (e.g. financial and sustainability reports or integrated reports, labelling, etc.) |
Investors and financial institutions | Enterprise value and whether it is protected/growing as a result of sustainability-related risks and opportunities, including the mitigation of system-wide risks. Investors with positive impact or sustainability objectives of their own also want information related to those objectives and/or associated theory of change. | Information on the organisation’s impacts, including those that may contribute to or erode value (including through the accumulation of system-wide risks), and information on the organisation’s impact management strategy, practice and performance | Shareholder meetings Investor briefings Financial and sustainability reports or integrated reports |
Clients | Whether the organisation’s product/service is meeting the client’s needs and expectations (including potentially on positive and negative impacts) | Information on safety of products/services and associated impact management practice and performance | Product labelling Advertising Sustainability reports |
Employees | Whether the organisation meets the needs and expectations of employees (including potentially on positive and negative impacts) | Information on the organisation’s impact management strategy, practice and performance, especially on employee-related issues | Internal communication Sustainability reports |
Communities | Whether the organisation’s operations (including supply chain) negatively affects them, and if it meets their sustainability and well-being expectations | Information on impacts in the organisation’s operations and supply chain, and how they are managed | Community engagement Sustainability reports |
Civil society organisations | Whether the organisation is having positive/negative impacts on people and the natural environment | Information on the organisation’s impact management strategy, as well as its practice and performance | Sustainability reports Bespoke engagements |
General public | Whether the organisation is having positive/negative impacts on one or more sustainability issues | Information on the organisation’s impact management strategy, as well as its practice and performance | Sustainability reports Media announcements |
The table above shows that, while there are multiple vehicles for communicating on impacts, reporting is relevant for multiple audiences and is therefore an important vehicle for communication. Different categories of reporting are further explained below.
Sustainability reporting
Sustainability reporting provides information about an enterprise’s sustainability
Meeting the needs of the present without compromising the ability of future generations to meet their needs or overshooting Earth’s ecological limits (Brundtland Commission). In context of impact measurement, outcomes for people are sustainable if they are within the acceptable range determined by societal thresholds, and outcomes for the natural environment are sustainable if they are within the acceptable range determined by ecological thresholds (Science-Based Targets Initiative and Kate Raworth). Sustainability is the quality of being able to continue over a period of time (Cambridge English Dictionary). Source: Brundtland Commission; Science-Based Targets Initiative; Kate Raworth; Cambridge English DictionarySustainable
Sustainability-related financial disclosure
Sustainability-related financial disclosure is used to inform the financial decision-making of investors and other financial market participants. Material information includes any information on an entity’s impacts that could reasonably be expected to influence an assessment of the enterprise’s current and future value. It also includes information on the entity’s potential contributions to system-wide risks, which can undermine investors’ sustained financial returns. For these reasons, information on how the enterprise manages its impacts (in addition to the information on its impacts) is also relevant to sustainability-related financial disclosure.
Because information on impacts and impact management may be financially material, there is a degree of overlap between information included in sustainability reporting and in sustainability-related financial disclosure.
Integrated reporting
Given the potential financial materiality of an organisation’s sustainability impacts, sustainability-related financial disclosures are increasingly integrated within financial disclosures. This is known as integrated reporting
The active consideration by an organisation of the relationships between its various operating and functional units and the capitals (or resources) that the organisation uses or affects. Integrated thinking leads to integrated decision-making and actions that consider the creation, preservation or erosion of value over the short-, medium- and long-term. In considering value, the organisation recognizes that the value created for itself (and, by extension, its providers of financial capital) is linked to the value created for other stakeholders and society at large. Source: Value Reporting Foundation (VRF) Integrated Reporting FrameworkIntegrated thinking
General principles for reporting
Regardless of the specific format and scope of disclosures, a number of data characteristics are typically sought to ensure the quality of the reporting. These may include: accuracy, completeness, reliability, relevance, timeliness, clarity and comparability, among others.
Resources
Standards and guidance for sustainability reporting
GRI Standards
Reporting standards designed to help organisations understand and disclose their impacts in a way that meets the needs of multiple stakeholders. These standards are arranged by a set of Universal Standards that apply to all organisations, and 35 Topic Standards that contain disclosures for impacts related to economic, environmental and social topics.
Use this resource to:
- Strategy:
- Identify: Identify metrics to measure for each significant topic. The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Measure, assess and value: Identify metrics to measure for each significant topic. The standards themselves provide guidance on selecting metrics to report.
- Communicate: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
GRI Topic-specific Standards
Reporting standards designed to help organisations understand and disclose their impacts in a way that meets the needs of multiple stakeholders. These standards are arranged by a set of Universal Standards that apply to all organisations, and 35 Topic Standards that contain disclosures for impacts related to economic, environmental and social topics.
Use this resource to:
- Measure, assess and value: The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Communicate: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts.
GRI Sector Standards
GRI is developing standards for 40 sectors to compliment their current topic standards.
Use this resource to:
- Identify: Identify sustainability topics to measure using the list of topics listed for each Sector Standard.
- Measure, assess and value: Identify metrics to measure for each significant topic. The standards themselves provide guidance on selecting metrics to report.
- Communicate: Report to all stakeholders on ‘material topics’ that reflect the organisation’s most significant impacts. The Sector Standards are a helpful starting point for identifying likely significant impacts.
Integrating the Sustainable Development Goals into Corporate Reporting: A Practical Guide
Guidance on how to integrate the Sustainable Development Goals into reporting processes.
Use this resource to:
- Communicate: Use the guidance to disclose positive and negative contributions to the Sustainable Development Goals.
CDP’s Disclosure System
Tool for investors, companies, cities, states and regions to manage their environmental impacts. The CDP Disclosure System supports companies in making their environmental impact transparent to stakeholders, better understanding how they can reduce their impact, and act to become environmental leaders.
Use this resource to:
- Measure, assess and value: Track change in performance over time. Each question in the questionnaire is scored – some with reference to social or ecological thresholds – to help the organisation determine whether it is performing sustainably on that topic.
- Communicate: Report to all stakeholders on climate change, forests and water security. The questionnaires provide a framework for companies to report environmental information to their stakeholders covering governance and policy, risks and opportunity management, environmental targets and strategy, and scenario analysis. Receive an A-D grading based on questionnaire responses.
Guidance on core indicators for entity reporting on contribution towards implementation of the Sustainable Development Goals
Guidance on core indicators for entity reporting on the contribution towards the implementation of the Sustainable Development Goals.
Use this resource to:
- Understand and implement core indicators for entity reporting on the contribution towards the implementation of the Sustainable Development Goals. The guide provides detailed methodologies for calculating these indicators and potential sources of information for data gathering.
GISD Sector-Specific SDG-related Metrics for Corporate Reporting
This report recommends a set of sector-specific, SDG-related metrics by drawing on metrics from existing standard setters and benchmarks.
The Global Investors for Sustainable Development Alliance (GISD) is a group of 30 large investment firms convened by the United Nations Secretary General. The GISD sits within the United Nations Department of Economic and Social Affairs (UNDESA) and aims to scale-up long-term finance and investment in sustainable development.
Use this resource to:
- Measure, assess and value: Identify SDG-related metrics for eight sectors. Organisations can consider measuring the metrics specific to their sector.
- Communicate: Include recommended SDG-related metrics in disclosure to stakeholders.
Standards and guidance for disclosing sustainability-related financial information
SASB Standards
Reporting standards that provide industry-specific disclosure topics and associated metrics that measure performance against 26 General Issue Categories (or sustainability topics). Management or mismanagement of performance on these sustainability topics may create, preserve or erode value for the typical company in a given industry over time.
Use this resource to:
- Identify: Understand whether a given topic is reasonably likely to materially affect the financial condition, operating performance, or risk profile of a typical company within an industry. Find industry-specific topics and accounting metrics. The standards themselves provide guidance on selecting metrics to report. Using standardised metrics helps the organisation and its stakeholders compare performance with others.
- Communicate: Report to providers of financial capital on sustainability topics that are likely to affect how value is created, sustained or eroded for the organisation over the short-, medium-, and long-term.
TCFD recommendations
Guidance that contains disclosure recommendations for information on the material financial impacts of climate-related risks and opportunities, including those related to the global transition to a lower-carbon economy. The TCFD recommendations are structured around the four pillars of Governance, Strategy, Risk Management, and Metrics and Targets.
Use this resource to:
- Communicate: Follow recommendations to structure climate-related financial disclosures. Other voluntary standards can be used in conjunction with TCFD recommendations.
Standards and guidance for integrated reporting
Integrated Reporting Framework
Reporting framework that provides principles-based guidance for organisations seeking to create an integrated report, containing both financial and non-financial information. The guidance is tailored specifically for private sector, for-profit companies, but the Framework can also be applied to the public sector and non-for-profit organisations.
Use this resource to:
- Communicate: Report to providers of financial capital on sustainability topics that are likely to affect value creation over the short-, medium-, and long-term.
Resources that set expectations on disclosure in sustainability frameworks
For all enterprises:
Ten Principles of the UN Global Compact
Principles that list how organisations should, at a minimum, meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption. The Ten Principles apply across all geographies in which the enterprise operates, and good practices in one area do not offset harm in another. They draw on several international declarations and other authoritative documents.
This resource calls upon organisations to:
- Strategy: Align strategy with the Ten Principles prioritising societal needs such as the SDGs.
- Governance: Incorporate the Ten Principles into operations to support the SDGs.
Communication on Progress
Participating in the UN Global Compact requires a commitment from organisations to report annually on efforts to operate responsibly in four areas: human rights, labour, environment and anti-corruption.
Use this resource to:
- Communicate: Submit an annual Communication on Progress on implementing the Ten Principles of the UN Global Compact.
OECD Guidelines for Multinational Enterprises
One of the main (and government-backed) international instruments on Responsible Business Conduct (RBC) setting out principles and standards on RBC. Regulators reference them in regulation.
This resource calls upon organisations to:
- Strategy: Align strategy with the expectation to avoid and address negative impacts of their operations, while contributing to sustainable development in the countries where they operate.
- Governance: under construction
- Identify: Set objectives with reference to minimum safeguards on topics such as: human rights, labour relations, employment practices, public health and safety, bribery and extortion, science and technology and taxation.
- Measure, assess and value: under construction
- Implement: Embed due diligence across business operations and in the value chain in order to identify, assess, mitigate, cease and prevent adverse impacts on people
- Communicate: under construction
SDG Impact Standards for Enterprises
Practice standards that provide a common language and a system for integrating sustainable development issues, the Sustainable Development Goals and impact management into business and investment decision-making. These practice standards also outline the ‘ABC’ classification methodology, which helps organisations assess whether an impact ‘Acts to reduce harm’, ‘Benefits stakeholders’, or ‘Contributes to solutions’ in relation to the SDGs.
Use this resource to:
Set up processes and embed practices that orient an organisation towards achieving the SDGs. The SDG Impact Standard contains practice indicators that are relevant to several actions. Use the links below to access guidance for different practice indicators. Alternatively, view the whole guidance document here.
Principles of Social Value
The Principles provide the basic building blocks for organisations that want to make decisions whilst taking social value into account. They are intended to help organisations optimise value for all stakeholders materially affected by an organisations activities. Practice Standards are available to help organisations implement each principle to a point where they are accountable for their activities and are making decisions to optimise value.
Use this resource to:
- Set up processes to include social value data in management decision-making.
B Corp certification
Certification awarded when an organisation achieves a score of 80 on the B Impact Assessment.
Use this resource to:
- Become B Corp Certified. Organisations undergo verification including interviews, submitting documentation, and as necessary site reviews, to increase confidence that the company’s score is accurate and the required 80-point score has been achieved.
For investors and financial institutions:
Reporting and assessment framework
Tool to report on responsible investment activities annually.
This resource calls upon organisations to:
- Communicate: Report on firm-wide and portfolio or strategy-specific investment practices.
Operating Principles for Impact Management
Principles describe essential features of managing investments into companies or other organisations with the intent to contribute to measurable positive social or environmental impact alongside financial returns.
This resource has mandatory requirements for signatories.
This resource calls upon organisations to:
- Strategy: Define strategic impact objectives consistent with the investment strategy alongside managing strategic impact on a portfolio basis.
- Governance: Commit to following the principles and periodically having progress of adoption independently verified. The Principles can be applied to an entire investing organisation or an individual fund.
- Identify: under construction
- Measure, assess and value: Assess potential negative impacts of each investment.
- Set targets and plan: under construction
- Implement: Respond appropriately to information on actual and potential impacts.
- Communicate: Use Principle 9 to enable public disclosure of alignment with the Principles.
SDG Impact Standards for Private Equity Funds
Practice standards that provide a common language and a system for integrating sustainable development issues, the Sustainable Development Goals and impact management into business and investment decision-making.
This resource calls upon organisations to
- Measure, Assess and Value: Develop an impact management and measurement framework
- Set targets and plan: Set portfolio level impact goals.
- Implement: under construction
- Verification, assurance and certification: Disclose how the SDGs and sustainability are integrated into decision-making and report on performance
PRB Reporting and Self-Assessment Template
Signatories to the Principles for Responsible Banking (PRB) must use the reporting and self-assessment template as part of the requirements of the Principles.
Use this resource to:
- Show progress on implementing the Principles for Responsible Banking;
- Provide transparency about impacts and contributions; and
- Assess if PRB requirements are being met and obtain assurance.
Impact Standards for Financing Sustainable Development (IS-FSD)
Practice standards to support donors in the deployment of public resources through DFIs and private asset managers, in a way that maximises the positive contribution towards the SDGs. The Standards are harmonised in approach with the UNDP SDG Impact Standards suite, the IS-FSD constitute a framework, ensuring that collectively (with the SDG Impact Standards for PE Funds, Bond Issuers and Enterprises) they help to connect actors across the system using a common language and approach for integrating SDG impacts in the investment strategy and throughout the investment process and governance structures.
This resource calls upon organisations to:
- Strategy: Set impact objectives framed in terms of the SDGs and country priorities
- Governance: Set up processes and embed practices that are aligned with the SDG Impact Standards.
- Measure, assess and value: Understand whether all relevant information is being actioned to understand impact. The Standards outline how baselines, social/ ecological thresholds and other contextual information should be included in assessment of whether an underlying asset is contributing to the SDGs.
- Set targets and plan: under construction
- Implement: under construction
- Communicate: Disclose how impacts are managed and measured
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