The power of sustainability communications to amplify intent
As the world moves forward, businesses must increasingly align their actions with sustainability commitments. In Europe, regulations have already taken a significant leap forward with the Corporate Sustainability Reporting Directive (CSRD). The era of walking the talk is fast approaching.
The most recent development was the inauguration of two global standards, IFRS S1 and IFRS S2, based on the International Financial Reporting Standards (IFRS) framework for accounting that more than 140 jurisdictions have adopted. Issued by the International Sustainability Standards Board (ISSB), they require businesses to combine financial statements and sustainability-related disclosures in the same reporting package.
“The ISSB Standards have been designed to help companies tell their sustainability story in a robust, comparable and verifiable manner,” stated Emmanuel Faber, ISSB Chair, at the launch.
“We know that better information leads to better economic decisions.”
A matter of perspective
Better information is always a matter of perspective. A PWC article on how CSRD is resetting the value-creation agenda points out that sustainability reporting isn’t just about more disclosures. It’s also about leaders having outside-in and inside-out perspectives and strategies on sustainability in their management practices.
“It’s no longer enough only to report your business’s impact on climate change, human rights and corruption. You must also report the impact climate change could have on your business,” said Elin Nilsson, CSRD expert at Goodpoint, in an interview with Spoon Agency earlier this year.
“This means reporting must be based on a so-called double materiality analysis. And that, in turn, means disclosure of sustainability risks that could financially impact your business, such as extreme weather conditions.”
Therefore, leaders must identify short-term and long-term sustainability-related risks and opportunities and integrate them into the company’s core strategy. It also means that every C-suite member is responsible for financial and non-financial sustainability-related priorities and reporting.
Now that companies are prioritising sustainability, it becomes equally important for them to increase the focus on communicating those efforts.
“Not only should companies invest in compliance with rules and regulations and correct reporting, but they would also do well to deploy credible sustainability communication to inspire employees and stakeholders in the wider value chain to action,” stated Michael Wagemans, Head of Sustainability for KPMG Belgium.
Keeping the trust
A July 2022 WEF article points out that the biggest challenges in sustainability-related communication are misinformation, mistrust and a lack of immediate benefits to the audience.
The good news is that businesses are in a sweet spot as far as trust is concerned. People view businesses as competent and ethical and expect them to do more on social issues. Edelman’s 2023 Trust Barometer revealed that people trust businesses more than any other institution in today’s volatile world.
Edelman’s research also revealed that company newsletters received the highest trust level, far ahead of mainstream media, search engines or social media. That’s why it recommends that clients go direct to the end user with important information.
How can your business effectively talk to stakeholders about sustainability? Spoon has extensive experience helping global companies communicate their efforts across multiple channels. Get in touch with us here.