Sustainability reports have become essential for companies to demonstrate environmental, social and governance goals, results and records through documentation and indicators. They also contribute as a guide for managing and improving their practices. Initially developed as an idealistic action by some corporate brands, reports have become a mandatory practice in recent years, driven by multilateral organizations and global companies. The financial market's explicit adherence to ESG rules for business has accelerated the need for companies to adapt to the communication of their sustainable practices.
Companies that use their reports properly should not even worry about their mandatory nature. These documents, when created with a robust management process, help the company identify risks and opportunities, increase efficiency, reduce waste, be transparent, gain credibility, establish a corporate culture, create pride in belonging, and attract and retain talent. Externally, it presents governance values in a mature and reliable way to its stakeholders. stakeholders. As a result, it acquires a better market reputation, attracts investments, enriches customer relationships and complies with legislation in an advanced manner.
Governance and the Gaps
With the growth of frameworks, standards and methodologies, such as GRI (Global Reporting Initiative), SASB (International Sustainability Standard Boards) and TCFD (Task Force on Climate-related Financial Disclosures), the need arose to standardize reports in order to ensure a common language and compatibility between companies and sectors.
The governance dimension is central in the context of the growing demand for clear, standardized and comparable reports, according to Barbara Meyer, director of Ferso. “Sustainable management develops monitoring and data collection strategies. In addition, it defines processes, procedures and policies that demonstrate the company’s resilience. Finally, management is guided by risks and opportunities, relating to financial aspects, which are constantly monitored in its business,” she explains.
In projects conducted by Ferso, the team evaluates the gaps of information required for each framework with the aim of ensuring the quality of the sustainability report. “Improvement points and action plans necessary to comply with global standards are identified. To this end, we seek to adapt the information across the company, since the information required for the reports must always be accompanied by its management method, considering risks, opportunities and how the topic is managed by senior management”, highlights the director.
Alignment
Given the use of various standards such as GRI, SASB, TCFD, the international financial market proposed the creation of reports with a common language. Thus, they were developed by International Financial Reporting Standards (IFRS), S1 and S2 standards, as well as the European Sustainability Reporting Standards (ESRS). In the case of S1 and S2, with the advantage of the reports being quantifiable, translated into number, volume and percentage. And all the information being presented together with the companies' balance sheets.
Sustainability reports, especially when standardized by these standards, represent a milestone in the alignment between sustainability and finance. This evolution strengthens corporate transparency and contributes to building a more resilient and sustainable global economy. Adhering to these standards is an essential step for companies that want to stand out in today's competitive scenario, where social and environmental responsibility and financial performance go hand in hand.
