Is it a fashion "must" or is it really essential for an innovative company?

What is the Sustainability Report about?

Can a company suddenly find out something that causes its share price to plummet?

Could it be that positive corporate financials temporarily mask a flawed or inefficient operation?

Can changes in legislation or standards force companies to make significant operational changes and thus incur heavy costs?

Just think of the automotive industry and its entire supplier environment, from steel mills to plastic injection moulders, software developers and even safety consultants. There are so many organisations directly or indirectly affected by, for example, international environmental regulations to avoid global warming. A major issue in the financing of these companies is also the performance they can be expected to deliver in, say, the next five years, given the development costs of adapting to environmental change.

But we can also think of the giants of the food industry. The social and environmental problems of Nestlé® cocoa suppliers, for example, could significantly undermine the company's image and performance. Nestlé is a multinational corporation with a very large subcontractor base whose production value is far greater than its domestic GDP, meaning that its stakeholders can have a significant economic and social impact.

Mobile phone manufacturers, or their subcontractors the battery manufacturers, could overnight find themselves in a difficult situation with the depletion of a rare metal mine or the introduction of national measures that make extraction, still very cheap today, in mines in typically underdeveloped countries more expensive.

The future of companies - which is what investors are most concerned about - is only tentatively indicated by the financial data (balance sheet, profit and loss account, textual report) of the last three years, and the trends in quarterly reports only show problems when trouble is already within the gates.

It would be good to have something that shows non-financial data and information about companies beyond the financial data in order to give a more certain picture of their future.

The future of a company is not only of interest to its investors. It is important to its suppliers, who look to it for revenue and who plan their operations to meet their customers' needs. It is important to its customers, who trust the company's products and services and incorporate them into their own products and services. It is important to its employees, who want to achieve their future, their careers, through this company, and provide for themselves and their families through the income they earn from it.  It can be important to the professional organisations in which this company participates. It can be important to the city where this company operates as a taxpayer and employer. It may be important to legislators, economic or political decision-makers. It can be important to all those who are affected in some way by the existence and operation of the company: they are its stakeholders. They are the ones to whom the sustainability report is addressed.

In order to ensure that companies do not avoid certain issues when reporting, standards have been developed that should be followed in a serious report. Not only should data be reported, but also who the company's stakeholders are and how these groups have been defined. It should say what the company considers to be important issues and why, and what it does not and why. There are, of course, standard topics that all reports should cover - such as the company's presentation, the main parameters of its economic activity, economic performance, corporate governance, social responsibility, equal opportunities.

When the report is ready, communication with the stakeholders is fortunately initiated.

In the case of service providers operating in the digital space, perhaps one of the most important things to communicate to the cooperating network (investors - customers - suppliers - employees) is the security of operations, the communication of all the data that demonstrate or guarantee the continued secure operation. Another important element, given the pace of technological development in the digital environment, is to demonstrate flexibility and adaptability.

Communication to customers and potential customers is mainly aimed at building their confidence and positively influencing any decision in favour of the company. It can also be used to suppliers, partly to strengthen confidence, but also to present requirements and future expectations. In fact, it is worth communicating to all stakeholders, since it is precisely because of their status as stakeholders that they can have an impact on the company, as members of the network of collaborators in which the reporting company operates.

It's good to talk about things! It helps us understand each other and adapt together to a changing environment.

Ultimately, this is the benefit that well-run and innovative companies get out of reporting!

chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram