Is your business ready for environmental and ethical reporting?
Ian Guest, Environmental Compliance Consultant, discusses the increasing importance of business transparency and provides tips on how businesses can prepare for forthcoming environmental and ethical reporting legislation.
Corporate social responsibility (CSR) is increasingly becoming a fundamental initiative for many businesses. Driven by the development of social media, stakeholder expectations (especially those of investors) and legal compliance, businesses are now required to be transparent, to communicate any issues with products and suppliers, and to produce sustainability strategies to try and counteract these issues.
The emergence of mobile devices means that the pressure on businesses to demonstrate good practice has increased. Consumers now have quick and easy access to all sorts of information, as a simple search on a mobile phone or tablet enables a consumer to make an informed and speedy choice about a product they wish to purchase or a business they are looking to deal with. This pressure has created the need for companies to be more transparent and for them to take action where necessary.
Last year a number of companies integrated CSR into business strategies and publicised actions. For example, in response to consumers’ increasing awareness of food sustainability, the food and beverage industry responded with a number of initiatives. These included charitable initiatives for excess food products and coalitions that committed to support 100% sustainable palm oil.
More companies now publicly support the UN Sustainable Development Goals and have integrated these into corporate strategies. Incorporating these goals will provide companies with a clear structure for corporate reporting and will enable companies to demonstrate action on global priorities.
Many companies are taking steps to be more transparent about environmental and social performance within supply chains, as well as making significant efforts to demonstrate responsible sourcing practices. Marks & Spencer is one such company that launched an interactive supplier map for this very reason, and on 30 January their Director of Sustainability, Mark Barry, sent the following tweets from the Marks & Spencer Human Rights Conference in India:
“Transparency is key to putting Human Rights at the heart of how business does business.”
“Partnership is vital to M&S’s approach to human rights.”
“Business can only protect human rights by rigorous risk mapping, policies and audit.”
EU Non-Financial Reporting Directive
2017 to 2018 will be the first reporting year for companies affected by the EU Non-Financial Reporting Directive. This Directive requires large public interest companies, with more than 500 employees, to disclose social and environmental performance.
Although the UK has already implemented the Companies Act, which requires large companies to cover certain non-financial matters in strategic reports, the new Directive means that additional requirements will need to be met and further information will need to be provided. For example, detail on how policies addressing diversity will be implemented.
What should your company be doing?
With the emergence of new legislation and increasing external pressures, what can your business do to prepare for more performance reporting?
I have put together the following checklist to help get you started:
- Get a grasp of stakeholder expectations. What will your customers and shareholders want to know about your company?
- Identify any changes your business wants to make and how they plan to achieve these. Don’t try and tackle every issue at once. Instead identify meaningful targets that relate to the actions the business can take and change you can affect
- Prepare for additional reporting requirements by implementing performance measures and putting together a robust data collection plan
How Valpak can help
Valpak has extensive experience in gathering and analysing packaging data; therefore, my team have been having discussions with companies that are looking to collect ‘additional’ data to meet the requirements of areas such as FSC, REACH, conflict minerals, the Modern Slavery Act and supplier performance on ethical issues.
These discussions mirror wider trends, as companies wish to improve data reporting to aid performance management.