Sustainability reports can communicate a company’s performance and impacts on sustainability topics, including but not limited to climate, environmental, social and governance issues.
- What is the purpose of a sustainability report?
- Why should companies produce a sustainability report?
Sustainability reporting has a number of benefits. By producing a sustainability report, companies can:
- Improve their sustainability performance by identifying issues which may affect their performance and evaluating where they are performing well and where they can improve
- Clarify purpose by reviewing current initiatives and long-term plans which helps to reflect on how the company is addressing strategic issues
- Enhance stakeholder engagement as sustainability reports provide a credible way to communicate and engage with customers, suppliers, employees and wider society by providing reliable information on sustainability performance and priorities
- Improve financial performance; evidence shows that good sustainability performance enhances financial performance and access to capital
- What are the steps to produce a sustainability report?
Ipieca recommends the following 6 steps to produce a sustainability report:
- Develop a reporting plan
- Engage stakeholders
- Select material issues
- Develop the report narrative
- Develop the report data
- Provide assurance
More details on the above steps, why they are important and how to carry them out can be found in ‘Module 1: reporting process’ in the Ipieca-IOGP-API Sustainability reporting guidance.
- Why is it important to engage stakeholders?
You may benefit from engaging your stakeholders by asking their views on your company and the sustainability issues you face before preparing your report. This can make your final publication more relevant, accessible and credible. Once published, stakeholder engagement can help prompt conversations on key issues, and provide an opportunity to demonstrate how you are using the outcome of engagements to improve your reporting and potentially the way you operate in the future.
- What is materiality?
A material issue is any topic that – in the view of management or stakeholders – affects or may affect a company’s performance significantly and informs external opinion.
- What are reporting indicators?
Once you have identified your material issues, you will need to select indicators that provide evidence of your performance. The Ipieca-IOGP-API Sustainability reporting guidance offers information on a range of typical issues relevant to many oil and gas companies, along with indicators that demonstrate how the issues are being addressed.
- What is a report narrative?
Textual content about material issues that takes into account the key points to address, and which is supported by relevant indicators and reporting elements.
- What is a reporting boundary?
The boundary will detail which locations, activities, assets, employees and processes are covered by your report.
- What is the reporting scope?
This outlines the issues and topics to be included in a sustainability report.
- What stakeholders are interested in sustainability reports?
There is a growing interest in how companies are managing sustainability issues, with a diverse range of stakeholders interested in a company’s sustainability report:
- Shareholders and investors
- Regulators (national and international)
- Capital providers, investment funds, research houses, rating agencies
- Non-governmental organizations
- Local communities
- Employees
- Customers
- What is assurance?
This is an opinion on the quality of the reported information. This can be done through a company’s internal assurance process or by an external third party. External assurance can enhance the credibility of your report and is often looked upon positively by rating agencies, which evaluate or rate the sustainability of companies. These rating are often used to inform investors’ decisions.