Reporting of sustainability and Environmental Social Governance (ESG) has evolved significantly over the years. Several organizations have matured and become leading examples; illustrating how reporting has been a way for them to better inform stakeholders, and as a tool for them to reflect on their journey and upgrade their approach to sustainability or ESG.
As reporting matures and as more organizations are embarking on the ESG reporting journey, we have also been witnessing a tremendous growth in reporting initiatives such as the CDP, the Global Reporting Initiative (GRI) standards, the Task Force on Climate-related Disclosures recommendations, several other specialist reporting frameworks such as GRESB, and the use of the United Nations Sustainable Development Goals (SDGs) as a reporting framework. This illustrates the complexity of ESG in view of specific contexts in which different organizations operate, but also calls for consistency and consolidation.
As the EU is producing a sustainable finance taxonomy which will become a reference point for non-financial reporting, insight can be also be obtained from best practice and experience. Reflecting on our experience, Arup provides below a few pointers, tips and guidance for ESG reporting.
Arup supports organizations from different sectors including the Real Estate, Infrastructure and Finance sectors in communicating their sustainability story clearly and transparently through reporting facts, strategy and insights. As part of the reporting process, we point to the importance of getting materiality right (as well as how), data analysis, getting insights from engaging case studies, and presentation.
Materiality, transparency and demonstrable outcomes are key components of a good sustainability report. The first step in preparing a sustainability report is to understand the material topic areas that will inform the priorities that an organization should set targets against and report on. Several approaches can contribute to a good materiality assessment, such as the following;
Being able to prepare an engaging sustainability report requires input from various teams, particularly if their operations are worldwide. Horizon scanning is an important method of identifying and reviewing the key sustainability issues and trends that impact the organization, reflecting the areas of its operations. This can consist of a review of regulations and international agreements of strategic significance as well as reviewing the key organizational policies and management systems. Peer benchmarking analysis looks at the material topics that industry peers and competitors report on and adds further insights into the general trends and challenges within the industry to inform the material topics.
At the start of each reporting cycle, we find it is essential to engage with staff across the reporting organization to discuss ESG or sustainability aspects, their material topics and strategic objectives to confirm whether these are still relevant. From our experience, that process is a guarantee of scoping sustainability in a pertinent way to which staff can then also relate and support through to implementation.
Speaking to various parts of the business is indeed an important step in gaining insights into the various teams that influence decisions that affect sustainability, for example, the procurement, sustainability and senior management teams. It is also important to understand the views of external stakeholders such as customers, investors, tenants, communities. Ways to engage with these stakeholders can be through questionnaires, interviews and workshops to understand their concerns. This level of engagement means that organizations have a level of information to be able to appropriately prioritize their material topics within the report.
Through these steps, we can enable our clients to develop a clear understanding of what their material topics are, and get inspiration from best practices and trends in the industry. Understanding these also helps organizations to understand and develop high-level commitments and strategic objectives to report progress against year on year.
The GRI has proven to be a great tool to understand how to conduct stakeholder engagement to inform the priorities of sustainability initiatives and the content of sustainability reports. More high-level frameworks including the TCFD and the SDGs can also be used to assess materiality and address climate-related risk.
Data Analysis & engaging case studies
Data analysis forms a large part of communicating the sustainability story, as this is used to measure performance against targets and objectives that have been set. These can include water and energy reduction measures and increasing waste recycling and diversion rates, as well as social related data.
Another aspect of developing an engaging sustainability report includes the preparation of insights or case studies to showcase where sustainability has been at the forefront of change. For the Real Estate industry, this can include inefficient buildings that have been targeted to improve the tenant experience, increase energy efficiency or improve resilience. It can also consist of the installation of modern technologies in pumping, chillers and storage systems. In preparing these case studies, we find it essential to work with facilities management teams to gain insights into how it was improved and collected data, photographs and quotes to demonstrate the improvements made.
Each time sustainability reports are prepared, it is also crucial to consider different ways to develop the right approach that suits the reporting organization that is engaging, inspiring and informs internal and external audiences appropriately. This tailored approach evolves sustainability reporting with new types of information, clear design and engaging imagery.
Arup also develops new ways to describe, present and publish these reports. For example, interactive pdfs add another layer of engagement. These can include video footage such as interviews or activity days; which can be hosted on the website. The use of stylistic photography, creative graphics designs and multi-media underpinned with sustainability data are engaging ways to present a report. Working closely with copywriters and infographics teams, we think we can better understand how to shape the right stories and bring complex ideas and technical information to life.
From our experience, we can say that while it is paramount to report the right information once properly scoped, it is as important to also communicate content that is visually engaging, and which can bring messages to life and to showcase sustainability credentials through case studies for example. After all, reports also need to inspire innovation through storytelling that can bring sometimes complex ideas and technical information to life.
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