1 Interrogate your impacts, risks, and opportunities 1 Interrogate your impacts, risks, and opportunities 2 Articulate the real-world change you want to make 2 Articulate the real-world change you want to make 3 Take an impact oriented approach 3 Take an impact oriented approach 4 Money talks: gain buy-in by speaking the language of finance 4 Money talks: gain buy-in by speaking the language of finance 5 Inspire action beyond the report 5 Inspire action beyond the report How to leverage your sustainability reporting as a strategic tool Five top tips from RY Globally, reporting frameworks are shifting from voluntary to mandatory. And whether that shift directly impacts your business or not, the bar for best practice has undoubtedly moved upward. Higher expectations have been set for the quality and volume of disclosures, and double materiality is here to stay. Some have complained about the “burden” – but in our eyes, there’s so much more to reporting than publishing a PDF each year. Done right, reporting isn’t a “burden”, it’s a tool for transformation. One that ensures business resilience and inspires action. But how? Having advised sustainability teams around the world, our sustainability strategists at RY share five top tips to make reporting matter. 1 Interrogate your impacts, risks, and opportunities Your materiality findings should inform your strategic approach. A strategy grounded in impact is one that prioritizes the most relevant issues for a business. But don’t be mistaken, “not material” does not equal “not strategically relevant”. That application of a materiality threshold can be a blunt tool for a nuanced reality. Impacts, risks and opportunities can fall below the threshold for a multitude of reasons; negative impacts and risks may be well mitigated and conversely, positive impacts or opportunities may not be realized due to a lack of attention. That’s why at RY we strongly caution against disregarding impacts, risks and opportunities that fall below the materiality threshold. Instead, we recommend interrogating the “why” behind the finalized assessment to identify emerging impacts that should remain front of mind, then carefully constructing a strategic architecture that responds to the qualitative findings of your double materiality assessment. 2 Articulate the real-world change you want to make Businesses often publish a report because they have to, without stopping to ask why? As a result, disclosures can feel somewhat arbitrary and reporting lacks direction. Goals, performance, and actions can feel disjointed and with no clear overarching ambition. Often, this is symptomatic of a lack of cohesive strategic sustainability direction. We recommend taking inspiration from the NGO field and carrying out a Theory of Change exercise. This is about identifying and articulating the long-term, real-world change you want the business to create and then working back to understand the interim changes – a.k.a. actions – needed to achieve it, as well as the barriers that might hinder progress. Use this framework to create an intentional approach to reporting, one with a clear ambition in mind – creating change for the better. 3 Take an impact-oriented approach Once you’ve crafted your business-specific strategic architecture and you’ve articulated your ambition to create real-world change, attention turns to setting goals. All too often, these goals focus on incremental change or “doing less bad”, rather than creating meaningful, positive impact. When it comes to reporting, this is about going beyond disclosing what you did (input), instead telling audiences what you achieved (outcome). Rather than stating “we provided training to 40 farmers”, we’d love to see a move towards reporting on the resulting improvement in soil health as a consequence of farmers implementing the techniques learned through that training. 4 Money talks: gain buy-in by speaking the language of finance Getting buy-in at senior levels is vital, but difficult. Sustainability is often seen as a costly “nice to have” and reporting as a time-consuming compliance exercise. Even at the most well-intentioned organizations, money is the driving factor in decision-making. Until recently, we haven’t successfully put a financial value on sustainability. Now – through double materiality – we can point to the most succinct evidence there is: the bottom line. Sustainability can be reframed, no longer just a cost to implement change but a business fundamental to mitigate risk and realize opportunity, ultimately bolstering business resilience. It is no longer a question of can we afford to take action, but can we afford not to? Reporting can be used as a lever for these internal discussions and should tell the story of these risks and opportunities – in the context of the company’s bottom line – to inform strategic decision-making. 5 Inspire action beyond the report There has been a lot of focus on disclosure, but disclosure is not the same as communication. Communication is vital: to tell the story of the business, prove resilience to investors, ignite action from colleagues, and build trust with customers and clients. The solution, in our eyes, is authenticated storytelling. This means turning disclosure into a clear story. Emphasize how sustainability-related dependencies, risks and opportunities connect with the value chain and link to the business model. Show how your business is transforming to respond to this. Convey your sustainability strategy in your own unique way. And share examples and stories that convey your impact, progress and lessons learned. Once you’ve unlocked this story within your report, there’s a great opportunity to tell it further and more widely. Consider the audiences you want to reach and ask what are they interested in and how do they engage with your business? Leverage content from the report – as well as the content that might not have made the legislative cut when pertaining to “non-material” topics – and re-purpose it in varied delivery formats to create a multi- dimensional communications ecosystem that’ll resonate with the right people. Reporting should be a tool to rally your organization around transformational change.” Radley Yeldar